Program Wants vs. Budget Realities

In the Business section of last week’s New York Times, an article discussed the rise of government spending on construction for roads, schools and sewage plants (http://nyti.ms/1D3Dhcv). Granted, the Obama Stimulus Plan certainly jump-started these sectors in ’09 and ’10, they plateaued in ’11 and ’12 as pressures to curb spending mounted. Today, however, with unemployment dropping; local, state and federal coffers are starting to rebound and has created a moderate uptick in funded construction spending.

While all complain about wasteful government spending, it is not necessarily wasted when it comes to the actual construction of Higher Education projects – at least in Georgia. That’s because larger Higher-Ed projects are often overseen by a Project Management firm, like BDR, that can help drive cost efficiencies that can often expand the scale and scope of the project without going over budget. Or, we can complete the project under budget and return unused funds to the State.

While we cannot speak for all Program Management firms, we found a great way to address program wants vs. budget realities. Broadly speaking, we take a lean approach to construction design and execution that is comprised of the following steps:

1. Step #1 Define Program Scope with Owner

2. Step #2 Prioritize Wishlist items

3. Step #3 Begin pricing early in the pricing to include the pricing of alternates

4. Step #4 Establish Owner decision dates for add alternate construction options

Every project is different with their own set of complexities, budget realities and timing so the aforementioned process may not be as linear as described. However, we’ve found that applying these principles maximizes returns that allow both the University President and CFO to be far more satisfied when the ribbon is cut.