Cost Management

Common to every project is the need for reliable project cost information very early in the project life cycle. Most projects have a need to reconcile budget constraints with design alternatives. The earlier in the process this reconciliation takes place, the better the overall solution can be.

The Austin Method® was designed specifically to optimize the tradeoffs that preliminary design and estimating activities are intended to produce. Based on Austin’s historical cost database and the experience of our project team leaders, opinions of cost can be provided in as little as a few weeks, given some outline definition of scope and an assessment of the level of complexity of systems the project requires.

Baseline Estimate

Austin establishes a Baseline Estimate for the project that forms the basis of cost control throughout the project, including design, procurement and construction.

As the project advances through design and Austin’s team further defines the project expectations and requirements, the Baseline Estimate shifts up or down. Options for cost savings are discussed with the client along the way. In addition, the full project estimate is updated following each 30/60/90% design review to ensure adherence to the bottom-line cost target.

Should the project cost begin to exceed budget, cost reduction actions will be implemented, with recommendations for reducing cost – all while maintaining the project’s functional integrity and quality.

The cost for materials, labor and subcontracts is continuously monitored against the estimate throughout the duration of the project. Any variances are discussed with the client. Monthly, Austin provides the client with a Job Condition Statement, summarizing the baseline estimate, approved scope adjustments, project cost to-date information, projected cost to complete, and updated projected cash flow.

Cost Control

Cost reduction alternatives are most effective during the design and procurement phases. After these phases, the savings potential is greatly reduced. Austin conducts more in-depth value engineering studies during design, identifying the most cost-effective materials, equipment and systems without jeopardizing the functionality of the facility and considering capital cost versus operating cost options.

Austin utilizes a comprehensive initial planning process followed by strict management and transparent, open-book competitive procurement to manage suppliers and ensure cost control and timely delivery of materials, supplies and services. Austin procures the project in the most economical manner and manages subcontractors to meet cost targets and common goals, including safety, schedule and quality workmanship.

In addition, Austin works with the client to develop a Cost Risk Matrix during the initial phases of design. Each risk identified in the matrix, such as scope creep, weather and market conditions, includes mitigation strategies. The Cost Risk Matrix is maintained through the entire project and reviewed during each Project Coordination meeting.

Austin’s objective in every project is to achieve an optimal scope for the budget and then deliver that scope within the budget. This provides clients with the best assurance that their capital investment provides the greatest return on investment the facility allows.