Wolgast Blog

Sharing Your Budget Streamlines the Pre-Construction Phase

Posted by Cory Sursely on Wed, Oct 24, 2018 @ 02:54 PM

BarBWe use this blog to help educate potential construction clients on how to build their buildings more efficiently and economically.  I am posing a taboo view in this edition, but all in an effort to save the building owner weeks and maybe months of time on their pre-construction phase.  By giving a contractor a ballpark budget before design and/or estimating starts, an owner can take a shortcut in the preliminary phase and get to construction sooner.

Realistically, we understand that sharing a budget feels risky because it shows the owners “full hand” so to speak in poker terms and he or she could feel like it reduces the opportunity to negotiate.  However, for Design/Build Construction, by knowing our client’s budget we can design a building that can be accomplished comfortably for the owner, rather than one that causes sticker shock and then adds time for redrawing.  Having an owner’s actual budget at the start, helps us to provide valuable consultation to the owner regarding allowances for materials and finishes.  Also, we will know upfront if we need to scale down the building and by how much if the numbers need to be tweaked when estimating is complete.  Knowing a budget for General Construction, lets us discern if we are a fit with our full service offering (including insured contractors, precise estimates, guaranteed completion dates, warranty, full-time supervision, self-performed trades, etc. to protect the owner’s interest), or if the owner is willing to accept a more risky and lesser value option for their construction needs.

We’ve been estimating and constructing buildings for over 70 years and have a good idea of what a competitive price for a scope of work may be, considering variables like the time of year, how busy our subcontractors are, and material pricing fluctuations to pinpoint a precise final price.  Therefore, we can save everyone a lot of time if the owner’s budget is significantly under what we speculate the cost would be and the owner isn’t willing to change their scope of work.  In turn, we can help them make a business decision before they spend any money on design or go through the estimating process.

Contact Rick Suitor or Dr. Michael Shepard at 800-WOLGAST to discuss your project and budget and to see if our services are well suited to design and/or build your business investment.  In return, we will provide a competitive and accurate estimate and offer professional construction services!  This is just one shortcut to construction and happiness that we can offer.

Tags: Good for Business, Professional General Contractor, Risk Management

Preparing Your Business for a New Buyer

Posted by Cory Sursely on Fri, Feb 17, 2017 @ 10:50 AM

BusinessOwner.jpgBruce has owned his business for more than 30 years and he’s ready to retire.  He is five years under the retirement age and has no children to take over this operation he has poured his blood and sweat into for most of his life.  Bruce has a few options.  He can close the doors, walk away, and lay off his staff of 25.  He can sell the business and the building to an interested party and use the money to supplement his retirement savings.  Or, he can find someone who wants to buy the business and then lease the building to him or her, keeping rental income for continual cash flow.

To supplement his retirement the second two options are the most appealing.  Bruce has employees to think about and having extra cash in his pocket would be beneficial.

Bruce begins to think about how he can make his business attractive to a buyer and among other things, he realizes that even though he has kept up with repairs, the building could use an overhaul after 35 years.  His HVAC system could be more efficient, his flooring is worn out, the lunchroom is a little drab, his conference room doesn’t function as well as it could, and there are areas that could change to help workflow.  There are many things that a remodel could do that would help him to attract a serious buyer and sweeten the deal if the new owner doesn’t have to turn around and renovate the building.

A renovation can also drive traffic to a business because community members are curious to see the changes (note: depending on the industry).  Promoting a remodel is a great marketing tool.  So increased traffic can help Bruce recover some of the expense of the updates and a freshened building can help attract a buyer to set him on his way to a comfortable retirement.

If you have any questions about remodeling your business or options for leasing your building to a future owner, please contact Wolgast’s, Rick Suitor-Business Development, to set you in the right direction.  If you’re a little further from retirement, you may want to start your succession planning now and keep Wolgast in mind for future renovation needs.

Tags: Leaseback, Good for Business, Risk Management

The Inside Scoop on Construction Manager at Risk Delivery Method

Posted by Cory Sursely on Wed, Feb 24, 2016 @ 10:17 AM

Steel-Erection.jpgBy hiring a Construction Manager at Risk (CMAR) you’re getting a construction consultant on your team who handles all aspects of your building from design through warranty for a guaranteed maximum price. The CMAR oversees your project and can even hire the architect on your behalf, working with them to see that your design goals are recognized within the allotted budget. Then they complete all the pre-construction activities and hire the contractors as if it were the CMAR’s own project. The CMAR oversees the construction of the building through completion and any warranty issues.

Typically, a CMAR is most suitable for large, complex projects that may include multiple buildings or a year plus duration to construct. Clients that use this method of construction will be able to focus on their business while the undertaking of building their substantial building is professionally managed by construction experts.

Below is a list of five discoveries you’ll learn from working with a CMAR:

  • Constructability and application reviews will help mold your building design for efficiency, provide better opportunity for a reduction in change orders, likely reduce cost of construction activities, and save time on the schedule.
  • Selection of prime contractors based on value rather than low bid will provide a better quality building with less rework and or possibility of lawsuits. This is another means to save on the budget and time.
  • Your scope doesn’t have to be complete for construction to start. With the contractor being completely familiar with the project goals, site work and in some cases foundation work can start before the plans are complete.
  • CMAR is not always the least expensive delivery method due to the complexity, more risk being transfered to the construction manager, and (in some instances) working with an incomplete scope of work. However, if it was easy you wouldn’t need their expertise to complete the project. You likely will still be saving money over alternative methods of construction because of complications that can arise otherwise.
  • If they weren’t already, your CM is going to be overly diligent in monitoring the budget and schedule because if anything is out of line, it will go against their predetermined profit for the project.

Due to the nature of this construction delivery, it is ordinary for a relationship of trust to develop among the team. The CMAR will treat the project as their own and make decisions that will result in the best quality for the budget and schedule duration providing a superior building as a result. For more information regarding Wolgast’s CMAR service, please call us at 800-WOLGAST.

Inquire Here

Tags: Construction Management, Good for Business, Risk Management

Four Key Site Selection Factors before Purchasing Commercial Property

Posted by Cory Sursely on Tue, Feb 09, 2016 @ 02:21 PM

siteselection.jpgWhen searching for commercial property you can and should rely on your realtor for many key details and features of the site that will benefit your business. That being said, there are details that only a Design/Build partner can help you make a more complete, educated decision. With the Architect and Contractor on the same team, they will review the site together and determine obstacles and costs quickly. Specifically, Design/Build contractors are looking for infrastructure, constructability, and challenges of a site that could potentially add cost to a construction budget or schedule.

Our Site Selection Evaluation services include the following:

  1. Space Availability - for instance, when you contract with a Design/Builder, the team architect will be able to offer building layout options including the appropriate parking lot space needs per ordinance requirements. This will help you determine if the arrangement will work well for you.
  1. Regulatory Restrictions - a search for municipal codes and ordinances that may flag obstacles for your intended use.
  1. Utility Search – your budget will increase if utilities aren’t readily available.
  1. Overcoming Site Challenges - should you discover that the site has challenges; you may be able to make alterations so that it will be suitable for your use. The key to using a Design/Build contractor is that the industry professionals can provide an educated, ballpark estimate to help you make a go or no-go financial decision. For instance, if you need to clear more of the site than you anticipated, there’s no road to your property, or if the site isn’t level and extensive accommodations need to be made to your foundation, it may still be worth the investment for your business goals or it may be cost prohibitive, but you won’t know without a rough estimate of the associated costs.

By adding a trusted Design/Builder to your team prior to shopping for commercial property, we can walk the site with you, check the background on the property, and provide assistance with your selection process to avoid headaches and unexpected expense.

800-WOLGAST | mshepard@wolgast.com

Inquire Here

Tags: Design/Build, Professional General Contractor, Risk Management

What to Do with an Old School Pool?

Posted by Cory Sursely on Tue, Jan 12, 2016 @ 11:53 AM

PoolBlog.jpgSchool Districts with older pools that no longer pass inspection, or pools that are simply underutilized, we have an answer to your dilemma. Other School Districts who have faced this problem just closed the door to their pool room, others use the pool shell to store old desks, chairs, old athletic equipment, general storage, etc., but this is obviously not the most efficient use of space. Plus there is still additional expense of insurance coverage and for the heating costs of the large area.

So why do they keep the unused pool shell? Because the cost to update is typically too much for schools that are already financially strapped. When you consider the expense of demolishing the concrete around the pool to gain access to cracked tubes, digging deeper and wider to comply with new regulations (in some circumstances), then rebuilding or resurfacing the pool walls/floor, it could reach $1M to get it functioning again. Plus, the shrinking of some Districts or the lower interest in swimming can make it less appealing to keep up with maintenance costs. So what’s a School District to do?

In the last few years, we have remodeled pool areas for a handful of School Districts. At Northview Public Schools, we converted their existing pool into a fully functional community fitness center including a 3-lane walking/jogging track.

Northview had several issues with their existing pool. The ceilings and lighting needed updating; the bleachers needed to be replaced; the diving well was not deep enough; there were not enough lanes; and it was costly to maintain. As a part of their 2011 Bond Planning, the District sought voter approval to build a new Natatorium that would include a new swimming pool and convert the existing pool space into a fitness center that the community would be able to utilize.

The Community supported the proposal and the project began with infilling the existing pool; laying down athletic sports flooring; adding new fitness equipment; replacing existing windows with new, more efficient windows; and later completing the 3-lane suspended walking / jogging track.

A new 13-lane competition pool was completed with enough pool depth to support diving and a shallow area that is used by the Community Swim Group.

At Mt. Morris Consolidated Schools, the District decided that they no longer needed the pool, but could use room for an auxiliary gym instead. This would have required an addition to their school to make room if they hadn’t decided to modify their pool area as an alternative. We also in filled the pool and created a solid level surface with a rubber gym floor to morph the room into their needed gym space. Without the pool, the district is now able to hold practice at reasonable hours for all sports, they’ve eliminated the additional maintenance, HVAC, and insurance cost also.

Similarly, at Montrose Public Schools, we converted their pool into a needed auxiliary gymnasium space with a wood gym floor. Other schools have been able to convert their old pools into dry storage space.

If your School District has an underutilized pool or one in a state of disrepair, this may be the solution for you and as experienced Construction Managers of old school pool conversions, we are the team for you to contact! Please call Rich Ramsey at 800-965-4278 (800-WOLGAST) to discuss your options.

Tags: Schools, Construction Management, Risk Management

Popularity Increasing for Design/Build

Posted by Cory Sursely on Wed, Sep 03, 2014 @ 10:58 AM

PlansAccording to the May 2013, “Design-Build Project Delivery Market Share and Market Size Report” by Reed Construction Data and RS Means Intelligence, Design/Build construction delivery method has taken an additional 9% of the construction market since 2005 and General Construction has lost 10% of the market share in that same time.

We recognize that the movement isn’t happening at rapid speed, but almost 10% brings it up to 40% of the overall market share.  Another study, “The State of Design-Build”, December 2010, by Design Build Institute of America uncovered that Design/Build professionals believe the biggest reason building owners haven’t rapidly adopted Design/Build is because it’s unknown to them and therefore seems risky.  Is that true? 

Wolgast was the first to bring Design/Build to mid Michigan in the 1970’s.  We saw early on the benefit of having the architect and the contractor on the same team.  It meant more continuity and collaboration, which would create a smoother construction project and therefore protect our clients from discrepancies in plans and change orders to remedy the parts that don’t translate during construction. Also, the cost for construction is determined earlier, so business owners can make an educated decision for their business without getting too far into the design process.

In actuality, Design/Build works so well because the construction experts are reviewing the plans while they are being drawn to ensure their constructability.  Therefore, once a shovel hits the dirt, there are very few setbacks, which in turn creates a quicker construction schedule, a reliable budget, and a happy building owner.

No setbacks mixed with the ability to get permits, pricing and materials earlier, makes Design/Build the fast track to construction delivery.  In some instances, the project can be completed months earlier than if it were delivered via General Construction Delivery Method.

As we are able to educate more people about what Design/Build is and the level of efficiency involved in constructing the building, we believe that it will continue to grow its market share.  To gain the insight that you will need to help you make a business decision, download our white paper, “Why Some Business Owners Don’t Do Design/Build, but Should”, or “Fast Track”.  We can also answer any of your questions, so please leave a comment or call us, 800-WOLGAST.

Tags: Medical Office Construction, Design/Build, the Wolgast Way, Dental Office Construction, Good for Business, Risk Management, Manufacturing Construction

What is the Design/Build Method of Construction?

Posted by Cory Sursely on Mon, Aug 25, 2014 @ 11:17 AM

Design/BuildWe've been providing Design/Build services for almost 40 years and we're curious if it's a well known term among those who haven’t previously been involved with the construction of a commercial building.  Have you heard the term before?  In a nutshell, it’s a method of construction delivery in which the building owner executes a single contract with one entity to provide architectural/engineering and construction services.

In other words, a building owner hires one company to interpret and define the project scope, provide architectural design, bid the project, obtain permits, and then construct it.  The Design/Builder handles the entire project on the owner’s behalf per open communication and agreed upon contractual parameters.

This method uses the same qualified and licensed architects that a building owner would use in other construction delivery methods and provides the same caliber of design.  However, with the architect and contractor as one entity, there is frequent collaboration on the constructability and the budget during the design phase, which helps the project run smoothly or with very few surprises during the construction phase.  Fewer surprises equals a budget and schedule that you can rely on throughout the project.

This team collaboration during design allows for permitting, material ordering, and when needed demolition or site work to start earlier than with the traditional General Construction method (a.k.a. Design-Bid-Build).  That’s why it’s considered the fast track to construction, which means the project can be completed, months faster than with General Construction.

Design/Build is best suited for busy business owners including doctors, dentists, manufacturing, banks, and other businesses who don’t have their own construction department on staff, or who may not be familiar with commercial construction.  The Design/Builder becomes the construction department for these busy firms and the advocate for all things construction.

Hopefully this blog has clarified how the Design/Build method can help business owners efficiently build or renovate their office or plant, if not, here is the perfect opportunity to ask your questions.  Or for more information on the benefits and how Design/Build saves time and money, download our white paper “Why Some Business Owners Don’t Do Design/Build, but Should”.

 

Why Some Business Owners Don't Do Design/Build, but Should

Tags: Medical Office Construction, Design/Build, the Wolgast Way, Scheduling, Dental Office Construction, Good for Business, Risk Management, Manufacturing Construction

Ample Estimating Time Can Lower Price of Construction

Posted by Cory Sursely on Mon, Nov 11, 2013 @ 10:41 AM

Another Money Saving Tip for Construction Clients

TimeObviously, planning a construction project doesn’t happen overnight.  In most cases, the client has a set occupancy date when construction has to be completed either to satisfy a contract they have acquired or to meet their seasonal market (to name two).  During that construction project time frame, planning through completed project, there are five main activities that need to take place, which include design, cost estimating, obtaining regulatory approval, acquiring materials and construction. 

Because design is so important to get right before a shovel ever touches the dirt, it can sometimes take a little longer than expected with multiple revisions for some clients.  On the other end construction has to start by a certain date, so field operations will push to have materials ordered and permits in hand quickly, otherwise the building won’t be ready for that set occupancy date.  So what gets “crunched” in the middle?  The cost estimating, or in other words, the part that affects your pocketbook the most.

In any given industry, all business men or women are looking to cover their costs and make a certain profit.  Similarly, contractors in the construction industry are certainly trying to cover their costs and have high hopes that they may make a profit on any given project, therefore, when they aren’t given enough time to estimate the cost of materials and labor, they tend to round up to make sure that they at least cover their costs involved.  The guesswork created by this time crunch can make the price of the project inflated.  Alternatively, when subcontractors have enough time to determine the exact cost of materials needed and plan for the manpower it will take to cover the work, they’re able to feel more comfortable estimating exactly what their cost and profit will be and are then able to provide a more accurate, un-inflated price.  All subcontractors prefer to bid when there is adequate time to provide a safer, more satisfactory and competitive bid for all parties involved.

Estimating is a process with many steps.  Once the design is established (or in the case of Design/Build-- mostly established), the general contractor issues the plans to three or more subcontractors to request their bids on each trade.  The trades then in turn estimate the amount of material needed and make contact with their vendors and suppliers for the current cost of materials. Then the vendors need time to estimate their costs and provide a hard number to their subcontractor.  The subcontractor also looks at the plans to estimate the staff and hours needed to do their portion of the work.  Simultaneously, the subcontractor is most likely pricing several jobs at one time while trying to manage their work load.

Therefore, factoring in all the different trades involved in any given building project, allowing more time for bidding/estimating process to secure those hard, accurate numbers, a building owner can possibly save themselves tens-of-thousands of dollars.  So, it’s in every potential or current building owner’s best interest to start planning their construction projects early and prevent the time crunch during estimating.

Tags: Design/Build, the Wolgast Way, Scheduling, Good for Business, Risk Management

The Good and the Bad of How Contractors Lower Their Bids

Posted by Cory Sursely on Mon, Sep 30, 2013 @ 08:51 AM
lowering bid

In a competitive bid situation, contractors can go to the extremes to lower their bids, especially when work opportunities are scarce.  In the end, a business owner may like the price, but may not like the final results.

The Bad

      1.       Materials  Using non-commercial grade materials is definitely a money saving tactic, but in a commercial setting where you have repetitive use from staff and customers, durability is important.  Maintenance or replacement costs can make these materials more expensive than using quality/commercial grade materials in the first place.  Be sure to ask questions about the materials included in a bid and do your research.

      2.       Labor  A contractor can be inexpensive because they’re inexperienced, ill equipped, or uninsured, which will lower their bid price.  And even if your general contractor is qualified, he may choose subcontractors who aren’t.  Their work, in many instances, can slow down a schedule with redos and end up costing more money as the schedule drags on and through maintenance costs in the future.  Find out if your contractor and subcontractors are bondable and have insurance and warranties on their work.

      3.       Change Orders  Change orders happen for various reasons, for instance, an owner wants to make a change during construction, a design element doesn’t translate exactly during construction, an unknown environmental issue reveals itself during construction, or something known was omitted in the drawings and specifications.  Reputable contractors will attempt to avoid change orders for every job they bid by obtaining clarifications prior to the bid submission, to minimize additional out of pocket expense for the customer.  Some contractors will use change orders to make up for the profit they lost by bidding the job too low.  Trusting business owners may believe that they’re getting everything necessary to build their building, but eventually find out that the contractor didn’t account for known municipal codes or unclear drawings and specifications.  It isn’t possible to avoid change orders 100% of the time, but be sure that you compare your bids “apples to apples” and ask questions about discrepancies before you select your contractor.

The Good

      4.      Value Engineering  This is the practice of a contractor reviewing your plans and specs and doing their research to find economical ways to build without losing the level of quality or design elements that the owner worked out with the architect.  By offering voluntary alternates, the general contractor finds comparable materials, applications or time/money saving measures to provide the same quality product the owner expects.  This is the “good way” to lower a bid and the best value (quality + price) when comparing bids.

 

Wolgast is a general contractor in Saginaw, Michigan who works throughout Michigan.  We strive to provide the best value to our customers and eliminate surprises, so that they will continue to work with us in the future.

Tags: Professional General Contractor, the Wolgast Way, Good for Business, Risk Management

Certificate of Need and Your Design/Build Contractor

Posted by Cory Sursely on Tue, Sep 17, 2013 @ 09:16 AM

Ambulatory Surgery CenterWhether you’re in support of the Certificate of Need (CON) program or feel constricted by it, it still governs the expansion of Michigan’s medical industry.  And as we discovered recently from the government’s response to McLaren’s public grievance after being denied relocating from Pontiac to a new hospital in northern Oakland County, the CON isn’t going away any time soon.  The debate seems to be getting more and more heated lately with those against it arguing for an open market approach to drive down cost and those for it are claiming that the medical industry needs to be regulated to keep a high standard of care at an affordable cost.

Furthermore, as we hear in the news more often, medical groups are having difficulty securing their CON in saturated Metro Areas of Michigan because a premise of the CON is to drive medical care to regions where there is less medical access.  A positive note is, due to regionalism and urban sprawl, there are new populated pockets where medical services are less saturated and CONs are still available.

As a design/builder that has been through this process several times with our medical group clients, we wanted to offer you some insider tips to getting through the CON application.  First and foremost, it’s important to build your team of CON/Design/Construction experts before you even look for your property.  Enlist your CON consultant and contractor to help you find an area that has CON capacity and also will accommodate your building/parking lot size.  Additionally, you’re architect plays a big role during the application period as you’ll need to submit schematic drawings, project narrative, site development plan and design fees, in the CON submittal package.  The contractor provides the estimated cost of the project, which is also required with the application.  And, obviously, having a CON consultant on the team provides an expert when navigating around the requirements and bringing all the necessary documentation together with accuracy, so that there are no setbacks from missing or incorrect information during the application process.  It could save you two weeks or more in your review time and provide insider know-all and advantages.

When you work with Wolgast Corporation as your design/build expert, we already have an established team of architect, engineer, medical construction specialists and CON consultant that has been through the CON process together.  We’ve helped doctor groups find suitable locations with available CON credits and also with renovations, additions and new builds to help them grow their surgery centers.  Through our Design/Build construction service, we satisfy all necessary requirements to help you move through the application process as efficiently as possible.

Learn more about our Design/Build construction services below, or call Dr. Michael Shepard to discuss how we can help you expand, 800-WOLGAST. 

Design/Build  the Wolgast Way

Tags: Medical Office Construction, Design/Build, the Wolgast Way, Design, Good for Business, Risk Management