1:00PM –1:25PM

Abstract:
Project Cost Determination
Cost is often times the single most important consideration when it comes to building a laboratory or technical facility. Yet, determining the actual cost to design and build one of these facilities presents many challenges. These projects are generally complex in nature and "systems" driven, and each facility will possess its own unique functions requiring careful planning in order to provide accurate estimates and cost-effective solutions.

Why a Formulaic Approach Doesn't Work?
For many years, the buyers of construction services have sought simple solutions for determining their budgets for the construction costs of laboratories and technical facilities. The simplest solution is a formulaic cost estimate based on an average cost per square foot for a set of laboratories and technical facilities already built. This formulaic approach to cost estimation has proven effective for certain types of standard construction projects with repetitive specifications, such as office buildings and retail centers. However, it's not as simple to apply this formulaic approach for other more complex facilities. Each industrial, analytical and R&D laboratory or technical facility has its own functional requirements and environmental considerations, and using an average cost per square foot in budgeting for commercial and industrial laboratories leads to three possible outcomes, two of which are undesirable. These outcomes include project cancellation because the projected construction costs exceed the funds authorized for the laboratory, or the project runs over budget when the costs are finally determined during the bidding process - typically a time when it is difficult to obtain additional funds or, the project is completed within the original budgeted amount. In the absence of a careful analysis of the primary building systems necessary to support the science or processes required by the laboratory or technical facility - the probability of a "square foot" estimate coming in within the actual costs of construction is extremely improbable. Remember - the average cost per square foot is just that, an average; and this mean value can represent the costs from a wide array of disparate facilities.

Managing the Project Budget
In order to manage the project budget, accurate conceptual estimating is imperative and must address the individual needs of the facility early on in the project. The estimate should reflect an appropriate facility for the laboratory or technical facility owner's immediate and long-term needs which can be based on minimal design criteria so long as the right information is gathered by a qualified laboratory consultant or estimator. Developing an accurate conceptual estimate produces positive outcomes because it allows for accurate budgeting of the laboratory and related technical systems for the project.

Benefits of Developing a Conceptual Estimate
The development of a conceptual estimate by a qualified laboratory design and construction team early in the planning stages of these projects can be critical to the ultimate approval and funding of the new facility. An experienced team that understands the functional requirements along with the special materials, building codes, and other variables involved in building a laboratory or technical facility provides a design that is neither under or over engineered - and the estimated costs can be accurately forecast in a way that is not possible with a simple formulaic approach based on an average cost per square foot. The key is selecting a Design-Build team early in the process that brings significant experience to both the design and cost determination process. This ability to quickly develop an estimate that is within 10-15% of the ultimate facility costs allows Owners to confidently move forward with funding requests and approvals.

Decisions Tied to Costs
A laboratory and technical facility consultant can also provide support by helping with decisions typically tied directly to cost such as whether to own or lease a building, or to design and build a new facility, or renovate/convert an existing building, or where to place a laboratory or technical facility within a building. These are other important considerations that a qualified team can help determine.

Cost Control
Determining and controlling cost in the design and construction of laboratories and technical facilities requires significant knowledge and understanding of the systems within these complex facilities. And, there is no simple straight forward method for determining these costs. The client's needs are considered in conjunction with all the elements of design, engineering and construction. Value engineering can be included in each aspect of the project in order to save additional costs in the event that the desired design cannot be implemented within acceptable budgetary guidelines. And, when these issues are addressed up front with a project delivery team in the early phases of the project, there are typically few surprises during the project. Thus, the project's completion schedule is known and most importantly, cost is controlled. This cost effective analysis of the owner's needs, and the development of true costs early in the conceptual phase of a project - is a time proven approach to the development of a new laboratory or technical facility.

Intended audience: Managers, Directors or End Users of laboratories, cleanrooms, or other technical facilities

About the speaker:
David Skinner, Executive Vice President

David joined LCS in 1994 after working as a CPA for eighteen years. For the last nine years, David has used that expertise as Vice President and the Chief Financial and Administrative Officer for LCS. He brings over 25 years of experience in the construction and real estate industries to LCS. A 1972 University of Texas graduate, David became the Executive Vice President for Fuqua Development, a residential/commercial development and construction firm in Houston. David managed all finance, administration and marketing operations for Fuqua, and was responsible for land acquisitions, advertising and both interim and permanent financing. After leaving Fuqua, David moved to Mac Haik Enterprises (MHE), a commercial real estate development and investment company, as the Vice President of Finance where he spent four years overseeing their finance and administration. Under David's supervision, MHE built and managed over 1,000,000-square feet of commercial office space. MHE also owned three auto dealerships, charted a new Savings & Loan and managed the fitness centers in the office complex. In 1987, Mechanical Specialties International named David Vice President. During the next three years David was responsible for the finance and administration for this design and laboratory facilities contractor. In a departure from the construction industry, David became the Vice President and General Manager for the Enbee Company. In this role, David was responsible for finance, administration, warehousing and marketing for the largest distributor of promotional products in the Texas Gulf Coast market.