Hospital projects go through a series of estimates as the drawings become increasingly more detailed, until they are ready for the contractor to give a final bid, says James Young, III, vice president of hospital project management for Lillibridge Healthcare Services, a certified cost consultant who specializes in healthcare construction projects. Even then, "final" is a relative term; the contractor's bid cost is a baseline figure to which hospital-required changes and charges for unforeseeable circumstances are added by change orders, says Young.
Cost estimates may be developed by the project's architect, a construction manager, a professional cost estimator, the hospital's in-house facility manager, or a facility planning or project management consultant. Young says hospitals increasingly are bringing a builder to the planning table during early design, seeking to improve cost estimates by having the builder and architect talk through issues as the project design is being developed.
Cynthia Hayward, an architect and principal in Hayward & Associates LLC, cautions that estimates should be viewed with a skeptical eye.
- The architect, who may be awarded the design contract, may understate the complexity of cost of the project out of fear that, if true costs are known, the hospital might downsize it or scrap the project entirely.
- The construction manager, who may ultimately be responsible for delivering the completed project on budget, may tend to overestimate its cost to give some "wiggle room" for his or her success.
Even when all parties are acting responsibly, an accurate estimate is difficult to obtain. The construction manager is able to provide the best estimate after detailed drawings and specifications are completed. But hospital leaders may be reluctant to commit to a project or to commission detailed drawings until they have a cost estimate, Hayward says.
A cost estimate that is artificially high may prompt the whole project to be reenvisioned, which adds to its ultimate expense. Meanwhile, a project cost that is unrealistically low will result in budget-busting change orders as the project unfolds.
Publication Date: Sunday, February 01, 2009