BALANCE SCOPE & BUDGET: One challenge that a materials testing and inspection firm encounters on a regular basis is that of balancing scope and budget. In reality, it should not be that complicated, but when you only get to load, or unload, one side of the scale, and there are numerous external forces pushing the other side up and down, achieving and maintaining balance can become a continuous struggle. The testing firm can only control how he employs his own resources such as field labor hours, site visits, laboratory tests, coordination time, data processing and reporting time, and other items such as tools, special equipment and even project specific facilities. But variables such as how frequently, to what extent, and sometimes even how efficiently, those resources are utilized are significantly influenced, or outright controlled directly, or indirectly, by others. All of the resources employed by the materials testing firm have real costs associated with them, hence, the more resources committed to a job, the more expensive that job becomes to both the providing firm and the paying client. And the reality is, changing client demands, and any resulting scope growth, are often major contributors to blown budgets. Now, having said that, my ultimate objective here is not to deflect budget responsibility, but instead, my goal is to provide some insight into how budget problems develop and how clients and materials testing providers can, and should, work together as a team to keep the materials testing scope and budget properly aligned with each other.
WIN THE JOB FOR THE SAKE OF WINNING: For the construction contractor estimators out there, most of you don’t need me to tell you this, but for a service like Contractor Quality Control (QC), the real distinguishing factor you should be focused on when comparing QC bids is the unit rates, not the extended total project cost. Obviously, you need to look at the total extended cost, but it is in your best interest to assure yourself that the QC resources shown in the bid are reasonably consistent with the defined project requirements, if any, and your own QC service expectations for controlling quality. The extended total cost is only as accurate as the quantities by which the unit rates are extended, and while I don’t want to get too bogged down in a discussion on unbalanced bidding, rest assured that there are no winners when a materials testing QC contract is won by plugging in unrealistically low hours and numbers of tests just to keep the bottom line artificially low. Typically, budgets that are conceived with no correlation to realistic project minimum requirements are doomed from the start, and the unfortunate reality is that this can ultimately impact project quality. For the owners out there, you have a role here too. If the owner wants to mandate that a Contractor QC program exist on their job, then the full scope of that program, materials covered, test frequencies, and measurable deliverables also needs to be defined in the specifications at bid time. The more explicitly defined the requirements are, the more likely that a contractor’s bid will reflect those requirements, and if the project is properly priced from the beginning, then theoretically, budget overruns will be less frequent, and when they do exist they will be due to known, planned, and defined scope changes.
UNPLANNED SCOPE GROWTH: Even when the materials testing firm is experienced and knowledgeable enough to prepare a realistic and responsible initial cost estimate that will satisfy the project requirements as written, in the end, our clients still usually have complete control over how the construction work is scheduled and sequenced, how rigidly the specifications will be enforced, and when we are invited, allowed, or required, to be on the project. Above and beyond the contract specifications and agency guidelines, the magnitude of materials testing resources ultimately required to complete a given project will vary significantly depending on the contractor’s philosophy and approach to scheduling construction activities, the client project manager’s approach to quality assessment, the contractor superintendents or agency inspectors influencing the work on grade, and the level of involvement of any of the external overseeing entities. When left unchecked or ignored, some of these variables can lead to significant materials testing budget overruns, but that need not be the case. Rather than look for reasons to justify violated budgets after the fact, a materials testing firm can seek to eliminate overruns before they ever happen by acknowledging that construction projects are extremely chaotic, have constantly changing needs that are not always predictable, and hardly ever go exactly as planned. By embracing the fact that project success is largely determined by the effectiveness with which key project individuals communicate their needs and expectations to each other, excuses should not be necessary. The reality is that sometimes the materials testing budget is set by agency project managers, or contractor clients, based on rigidly fixed project percentages or severe funding limitations, and are not based on specific project features or a direct correlation with testing requirements. When that is the case, the challenge of the materials testing firm is to develop a scope that meets the general objective of compliance assessment while still staying within the prescribed budget. While making the scope fit the available budget works in theory, in recent years it has become apparent that there is often an unintentional disconnect between the client project managers and estimators who formulated and approved our initial project service scope and budget and the subsequent client individuals requesting our services in the field during construction. In order to avoid the budget issues that can result from this potential disconnect, the materials testing firm must go to great lengths to proactively communicate with the ground level service requestors so they are aware and appreciative of the scope of service assumptions that guided the budget, and to assure that they are continuously kept abreast of actual cost accumulation in relation to budget status. By continuously communicating throughout the project, service adjustments can be jointly developed when necessary, and in turn, potential budget issues can be avoided.
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