Cost Planning & Budget Control in MEP Projects
Extensive and effective Cost Planning in Construction on any scale of project will help you a great deal throughout. Especially when it comes to MEP projects, where three crucial systems are involved, detailed cost planning and control become quite essential.
The reason for this is that MEP systems take up around 44% of the total project’s budget. Indeed, that is a huge portion, but apart from that, these systems are also responsible for the performance of a building. Thus, making the integration of these systems in a building more and more critical.
Therefore, a detailed explanation on how to plan, manage, and control MEP costs from start to finish is what you require. In this article, we will cover everything you require.
PROACTIVELY PLAN EVERY ASPECT OF CONSTRUCTION BY FOLLOWING THIS INFORMATIVE AND EASY-TO-UNDERSTAND GUIDE.
Understanding Key Cost Components
There are three major components that you need to understand. This means that you have to carefully plan and manage your budget for the following components:
1) Mechanical System
This system consists of an HVAC unit along with ductwork, piping, and controls. Its role is to regulate the environment of a space. These systems are the most expensive among MEP costs, depending on the type of equipment, along with its operational costs.
2) Electrical Systems
This system is responsible for distributing the power to the entire structure. An HVAC unit will also require power from the electrical system. This means that a mechanical system is dependent on electricity for functioning. Other than mechanical, it is also responsible for lighting, fire alarms, and other appliances.
3) Plumbing Systems
These systems fulfill the requirements of water supply and drainage of a building. While this component is the least expensive one, it can cause financial challenges when an unforeseen site condition is encountered.
Other than these key components, there are also fire protection systems. This system encompasses standpipes, sprinklers, fire pumps, and a suppression system. This system is also dependent on both electrical and plumbing systems to carry out its operations.
Financial Planning Through Different Project Phases
Conceptual Design
This phase establishes the initial financial structure for the MEP design. In this phase, the cost for MEP design is usually estimated by analyzing the area, system complexity, and building type.
There are other cost factors that are a must to consider, such as building location, market situation, and any specific requirements of the project. For efficient Cost Planning in Project Management, considering all of the above will lead to better budget control right from the start.
Schematic Design
MEP designs become clearer in this stage. In this stage, MEP equipment is measured, and systems that need to be installed are identified. Note that in this stage, value engineering is the most impactful. This is because systems are being evaluated, and alternatives can still be found.
Developing the Design
MEP designs become more specific and detailed. This phase provides information, such as systems specifications, material takeoffs, and comprehensive MEP drafts. The MEP Cost Estimating Services become more elaborate and precise in this phase of a project.
After this phase, all the essential information is now obtained. Thus, leading to estimating the precise materials and labour cost estimates.
Discovering the phases through which you need to plan your costs, it is also necessary to control your project’s budget.
Strategies to Control the Budget
Organized Budget Breakdown
To have the ultimate control over your budget, you need to break it down into multiple classes. This can be done based on the system, area, or project’s phases.
This breakdown must be approved by all the major stakeholders, and any change must be scrutinized thoroughly before approval.
Tracking & Reporting
Tracking the costs provides a clear picture of the financial feasibility of a project. By tracking the finances, you can keep tabs on purchase orders and more.
Reporting the expenses regularly will allow you to efficiently manage the project’s costs. This can be done by comparing the actual expenses to the budget.
Change Order Management
In any MEP project, a change order can happen, which will require instant modifications or alterations. Thus, you need proactive change order management to handle them without disturbing the budget. Furthermore, a change order must be clearly described and recorded.
Contingency Planning
A continuous fund must be incorporated in the budget right from the initial design stage rather than when an overrun occurs. This will help you greatly in keeping your project streamlined.
Cost Controlling Techniques & Tools
Earned Value Management
This technique provides you with a detailed approach to measuring performance efficiency. You need to compare the value of completed work to actual and planned costs.
Value Engineering
This technique will reveal or identify cost-effective alternatives for MEP systems without compromising their operational efficacy.
Building Information Modeling
Coordination in MEP projects done with BIM enables you to control costs by reducing any conflicts in the field work, proactively managing change orders, and handling any rework proficiently.
Construction Estimating Software
To control costs, accuracy in the MEP estimates is a must. This definitive accuracy can be acquired by utilizing advanced construction estimating software, such as:
- Quest Estimating
- Trimble
- FastDuct
- FastPipe
- On-Screen Takeoff
- RS Means
- ConEst
- Mc Cormick Systems
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Ending Remarks
Cost Planning in Construction for MEP projects is no small task. In fact, it can be extremely probable if done without proper planning. You have to carefully assess all the aspects of your project. This assessment will provide you with the information about your project’s financial prospects. You must carefully consider some things that can make the expense go up. Also, you will have to see if you can take charge of the project’s finances. So this post will explain how to cost plan your MEP project and what you need to bring in as cost control against your budget.
