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The pre-construction phase is the most important phase. This phase sets the budget, the location is selected, the design team is selected, the contractor is chosen, and the contract is negotiated that will be used. This is the most vital phase of any project because this is where the most cost savings can happen. If the budget is not calculated correctly, if the location isn’t a fit for the overall project, if the contractor isn’t qualified, or the contract has clauses that adversely affect the end result, the client could be looking at excessive budget increases and long project delays.
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The owner's representative (OR) can assist in creating the overall budget based on loan requirements and what is feasible. The OR brings together all the pieces of the project including third party testing, general contractor quotes and owner-furnished equipment (OFE) to create an overall budget.
A general contractor (GC) would not be involved in the overall project's budget but would simply quote and contract for the work shown in the drawings and specifications.
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An OR can assist with the selection of the property that will fit your overall plan.
A GC makes improvements only to an existing space or builds the building on the land purchased.
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The OR can guide the owner on the design drawing process (there are 3-4 drawings phases that take place prior to the final 100% permit set of drawings is issued). The OR will also assist with value engineering, which takes the design plans and finds alternative products, for cost savings and keeping the project within budget.
The GC would give you a quote per the drawings presented. However, they would not necessarily be in communication with the designers and due to this lack of communication and information, change orders can become more frequent during the build. A change order during the project typically results in an increase in the contract amount.
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The OR can assist with the request for qualifications/proposal (RFQ/RFP) to ensure that the contractor selected is the right fit for the project.
Since this is the selection of a GC, the owner would normally get price quotes and make a determination without expert guidance on the overall contract and terms.
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The OR will analyze the contract and offer recommendations on the terms and conditions to ensure that the Owner executes a contract that will be the most advantageous for the overall project.
Without an OR, the owner would typically sign the agreement presented by the GC and may miss pertinent clauses for payment terms and liabilities that may increase the cost of the project over time.
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