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The Art of Lowering Costs

There are no manuals, but there are experiences, and during the construction process the stars and the universe either shine upon you or not. It is that simple in this matter.

With the understanding that it is necessary to hire consulting professionals (architects or engineers), capable of developing good plans based on the client’s real budget, and who have carried out the pertinent studies, we have to undertake and understand the following tasks:

  • Ensure work is executed with the certified guarantees from the College of Engineers and Architects of Costa Rica CFIA, through construction processes with companies who employ certified professionals in charge, that provide a real guarantee of 5 years, yes, 5 years, against earthquakes and storms, but also against bad decisions or bad execution of their staff, who in the end, only do what they know how to do. Therefore, let’s not hold the workers responsible, but their leaders; remember the saying, «it is the skinniest dog that gets the fleas».
  • Processing projects in a timely manner, and not getting stuck along the way. Even when working in stages, having the paperwork up to date and on time avoids delays that are later transferred to costs.
  • To include external works is a very difficult and complex task, but if the project is well analyzed from its inception, all those works – external and accessory – that require a budget can be verified, in order not to «ask for favors» from the client or reluctantly, do certain tasks for free. It is very important to see the project as a whole and play the whole game, metaphorically waiting to be replaced at half time (like a soccer match).
  • Structural engineering is very important, all that hidden money that is spent in gray work – rebar and concrete – is essential to manage this in a sensible and well calculated way. A large part of this depends on the «good» structural engineer of the plans, but also on the vision and experience of the architect builder. Any overspending on this matter, will  later be outweighed in the finishes touches. There is no turning back from this point. Time machines have not yet been invented, so make responsible and conscientious decisions in time.
  • Earthwork is not a game using heavy equipment to do and undo at will, like enthusiastic children. Moving or touching what shouldn´t be moved or touched is very expensive. In the absence of a trained engineer in charge, you will end up paying and spending more than necessary and overpaying the tractor company, and as they say here in Costa Rica, «in troubled waters, fishermen profit». Therefore, do not touch your land unnecessarily, the construction company will thank you for it.
  • The first months of gestation in pregnancy require a lot of attention and care from the parents, as well as affection. The baby listens and feels everything around him. The same happens in a construction project; after months of gestation of the project (studies, plans, procedures and permits) there is a time for everything, to prepare the preliminary work, facilities and services ready, to draw the project, to have the papers up to date and permits; everything ready just BEFORE the construction staff enters, lest the baby is born and nothing has been prepared, neither the room, nor the cradle, nor the clothes or even the bottle is missing!
  • Having been through the trenches of construction, gives one an immutable value, understand how to work under hard conditions, and understand how to do the basics, and being a 4×4 all terrain worker allows for courage, will and sacrifice. Therefore, the construction group should not fear the rain, lightning, or the harsh sun, there is no better time to start a construction, for us builders flush, winter and summer are the same, people who are afraid of bad weather and difficult conditions, better get a cafeteria.
  • Having electricity and water is a blessing, not having them at some point is also a blessing. Sometimes it happens and both scenarios make us always think about being more conscious with the use of electricity or water services. And sometimes provides the opportunity for getting creative about not using as many resources; that is sustainability, think about less consumption! So, if you have an ASADA or AYA letter, or an ICE post over there or over there, photograph them in a frame, frame them and put them in your living room, that is a very valuable work of art.
  • Value engineering means people who think beyond the visible and obvious to save energy and, therefore, money. Value engineering without value is people who are not interested in the project and very comfortably blame it on the Costa Rican seismic code. So, the most important thing here is to ask the right questions at the right time, and not wait to see what happens or make modifications on the way. This is doubly expensive. Hence, before building, having a good and healthy value engineering will avoid overspending, double or triple!
  • «Good budget, healthy budget» are very different concepts. One is where people only imagine by references – usually not the best references – , and the other is where the people in charge of the construction budget with plans, science, mathematics and statistics. After all, being healthy depends on our daily habits, being well is something subjective, healthy habits decide our future. In the construction field, having healthy habits in economy is fundamental in an organization, after all its health is the most important thing.
  • Quotes and quotes, 2 to 3 different options for the purchase of materials or finishes, not only allow us to have a better cost or price, but also, that a single supplier or contractor is not allowed to get embedded in all the projects. As is in everything in life, HEALTHY competition offers us more opportunities; no monopoly is good, but neither is «fully breaking down» or cutting purchases a good idea. What is good, nice and cheap does not mean the best either, so much caution in decisions, and it is always better to compare «apples with apples».
  • Ideal manpower is not to have many people in the construction. Too many people in the field does not mean better results, as costs skyrocket like a water leak. Choosing trained, experienced and considerate staff is fundamental for having substantial savings. The biggest costs of construction fall on this aspect (almost 45%), its logistics and operation, social charges, camp expenses etc.Therefore, scheduling projects with qualified personnel is better even if you have to wait longer to start; having a «work plan» that is fulfilled up to date ensures the budget, and that they are good and decent people is a great investment.
  • Projects in stages are the most costly, since it will be necessary to restart work, contracts and leave planned structures for the future. Resources, such as leases and transportation are not used, and procedures must be restarted again. Therefore, having a clear objective and budget for the project from the beginning is the best idea, and understanding that if everything is done at the same time, it will always be better. If there is no other option but to do different stages, it is better to plan them from the beginning and not as you go along.
  • Working construction by administration will always be better than by closed contract or the famous «turnkey». Project administration is about 15% savings – not expenses. Additionally, you have a cost and time control of the project up to date, and the client can be aware of the different purchases and important decisions of the project, as part of the company. Although one allows you to have a fixed and invariable amount over time no matter if it rains, the dollar exchange rate goes up or down, or the contractor is sick or does not answer, the other system by administration, allows you to ensure the completion of your project and lower costs, with joint decisions without much bureaucracy. Therefore, it is not the same contractors who build houses, to those organizations that manage funds.
  • «Extras» are not the same as «upgrades and improvements». Extras are charged by the turnkey contractors and are usually a profit for them – they are usually quite expensive – the upgrades and improvements are a reinvestment in the project, sometimes visible, sometimes not, but they are always a profit for the project. Let’s avoid the «extras» and encourage the «upgrades and improvements», but if possible, having neither is always better.
  • Errors and warranties indeed exist, but more important is the fact that serious companies that respond to these exist and have the initiative and responsibility to address them. Regardless of the reason or cost, the important thing is to comply. In our case, my department is precisely this, quality control and warranty, and I use my best experiences and knowledge for better construction practices and the most reasonable decisions within the possible, sometimes even against my colleagues, partners, staff or even the same client. For me, the most important thing is the healthy and correct development of the project, and here a bigger saving than money, is the time and quality.
  • Running is not the same as going fast. The first leads us to disorder, confusion and excess of expenses for involved, as client requests and details are left behind. The second, allows us to have a proper pace and time to think correctly and better, as the saying goes «he who runs too fast soon stops». It is better to row at a constant pace and rhythm, with the same strength, so, we reach the goal more confidently and less tired.

Lowering costs does not depend on the market, the exchange rate (this is momentary and a game of witches) or avoiding mistakes or unforeseen events. It rests on the shoulders of those in charge of an organization, who have the integrity, will, initiative and motivation necessary to carry out not only a construction project, but also a healthy and clear work plan, and a correct project plan.

“Saving» is not the same as «not overspending», just as «mistakes» are not the same as «omissions». It all depends on our good habits, savvy decisions and of course wise desires. Therefore, plan your projects with a well defined timeframe, schedule them with a serious organization, be clear about the real budget available, and to have enough information at hand. This is the best way to accomplish the task within reasonable margins. After all, it is the construction business and anything can happen, but this is the art of lowering costs. It is not magic, it is pure science, mathematics and statistics.

Thank you very much.

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