What is a Geotechnical Investigation Really Worth?

"You pay for site investigation whether you do it or not".

It’s a well quoted saying from Professor Littlejohn in the 1990s. I thought I would delve a little deeper into what it actually means though. It links nicely to my recent articles and posts about value and price not being the same thing.

Professor Stuart Littlejohn completed some research in the 1990s for the Institution of Civil Engineers (ICE). He found that the amount of money spent on site investigations ranged from 0.3% of the tender value for government clients to as little as 0.1% for developers and builders. This is shown below. Interestingly, they thought that they had spent much more.

Other numbers floating around usually range from 0.5% to 1% of total project costs. In my experience this is typically only for high risk, complex projects and is, sadly, a rarity.

But none of this really addresses what the geotechnical investigation is actually WORTH.

I have included the image below from Mott Mcdonald’s Highways project in at least one of my articles and again in another of my posts. But I am going to include it again here too!

The Roads and Traffic Authority of New South Wales have concluded the following:

The simple fact is, that doing a decent geotechnical investigation SAVES MONEY and REDUCES RISK of construction blowouts, delays and, in the worst cases, some kind of failure.

Using the ICE information above, here is an example:

If a construction project costs $10M and the geotechnical investigation spend is $100k (1%), then it is possible that there is a 75% increase in construction cost. So an increase in cost of $7.5M. If we double the geotechnical investigation cost to 2%, then the increase in construction cost could be reduced to only 62%.

This represents a saving of $1.3M by spending only an additional $100k. A pretty good return on investment of 13 times.

Clearly, this is a simplified and somewhat amplified example. But the message is clear; get involved with geotechnical engineering early. Spend the money to get the correct investigation, using a variety of methods to provide the best possible information for you to manage your risk and save you money.

Simple right?