Designing to Reduce Construction Costs

This paper describes interrelationships between engineering design, construction, and operation costs for a facility, and shows how the level of influence over those costs decreases precipitously as the project evolves. The level of influence is by far the greatest during engineering and design, while actual expenditures at that stage are relatively small. The level of influence concept can be helpful in forming contractual arrangements that minimize the suboptimization of costs for one party at the expense of overall project costs and benefits. Contractual arrangements should be drawn so as to assure that current construction and operations knowledge will be injected in the design process. Construction Management and design-construct, if appropriately tailored to the needs of a particular situation, can be helpful for this purpose. A second important conclusion is that efforts to suboptimize design costs by requiring competitive bidding for professional services are likely to produce much higher project costs in the long run.