What Is Preconstruction?
Preconstruction is the term used to describe the process leading up to work on any construction job. In this initial planning phase, stakeholders set expectations, scope out the work, and plan a schedule for the project from start to finish.
The preconstruction phase is essential for a successful construction project—without careful, detailed consideration and planning, serious complications can arise. The more thorough each participant is during preconstruction, the smoother the whole project will be and the more likely it will finish on time and on budget.
Stages & Stakeholders in Preconstruction
Within the preconstruction process, there are several stages that typically occur sequentially.
1. Request for Proposal (RFP) Phase – Owners & GCs
With an idea for a construction project in mind, the property owner, often in partnership with a general contractor, will make preliminary estimates and send out a Request for Proposals from architectural firms.
In this stage, the owner and GC are looking for a firm with clear ideas about how to implement the project design, including guidance on style for the building and space, as well as a reasonable budget and timeline.
After reviewing a number of proposals, the owner and/or GC chooses a firm to work with.
2. Design Phase – Architects & Engineers
After the owner or GC chooses an architectural firm, building architects, landscape architects, and engineers, among other team members, begin designing the project. The architects may present multiple options in the form of sketches with rough estimates for the owners to choose from. A final design will be selected and a preliminary budget agreed upon.
3. Construction Document Phase – GCs/Project Managers & Architects
The architects will now prepare plan drawings and technical specifications that will be needed in the bidding phase as well as for permits. Thoroughness and close attention to detail are essential at this stage to set the rest of the project up for success.
If the team is effective in this phase, it can significantly reduce time-consuming changes later in the project, and can help to keep the project on budget. When construction documents are completed, the GC or Project Manager will submit the documents to the city and secure the necessary permits for the project.
4. Bidding Phase – GCs & Subcontractors
The bidding phase involves obtaining and reviewing estimates from multiple specialty contractors in each trade required for the project. The general contractor conducts their own estimate for each trade, and has a rough idea of what a reasonable bid will be. When bids are submitted, the GC reviews them and selects subcontractors based on price, as well as experience, reputation, specialization, and other factors.
When subcontractors have been chosen, contracts are finalized and actual construction can begin based on the agreed upon timeline.
Subcontractor Roles & Responsibilities in Preconstruction
Subcontractors (also known as specialty contractors) are vital to the construction process, but get involved at the later stages of preconstruction. While general contractors typically manage the project, subcontractors perform the work of the trades (although there are self-performing general contractors who do some or all of their own construction work).
When the bidding phase begins, so does subcontractor involvement.
How Subcontractors Find Projects in Preconstruction
The bidding phase can occur in a variety of ways:
1. Invitation to Bid from a GC
If the general contractor has prior relationships with the specialty contractors needed for the project, they may reach out personally and invite them to bid on the project. This is usually the preferred method of subcontractor procurement by both parties—it’s the simplest option for subcontractors and best for GCs who know they can trust the subs they’ve worked with in the past to get the job done.
The GC could email the job specs to the subcontractor, or they might send an invitation to bid directly via an online plan room, where the sub can then download plans and specs for examination.
2. Online Plan Rooms
If a GC doesn’t have a particular sub in mind for a trade, they may post projects in an online plan room for anyone to bid. Plan rooms allow subs to search by location, trade, and other factors to find available jobs that fit their niche. Specialty contractors can then download plans and specs just as they would if they were invited to the job by the GC.
3. Bid Management Platforms & Construction Publications
Bid management platforms allow subs to seek out projects before they’re even available for bidding. Subs can search by location, trade, etc., similar to a plan room, but they can access projects that are still in the design phase, giving them the advantage of foresight into what’s coming in the future.
Platforms and publications like this allow subcontractors to be proactive, reaching out to GCs they have existing relationships with about upcoming projects and becoming aware of shifting trends in the market so they can adjust accordingly.
When a specialty contractor has decided to bid on a job, they access the plans and perform a takeoff, or measurement, of the blueprints to determine the quantities of materials needed. Takeoffs can be done manually on printed blueprints or digitally, using takeoff software. Most subcontractors are moving toward digital takeoffs for speed, accuracy, and cost reduction.
After getting measurements in the takeoff process, the subcontractor must make an estimate for the job, taking into consideration cost of materials, labor, equipment rental, overhead, and more. In the past this process was often manual, repetitive, and error-prone, with estimators retyping data into Excel sheets. Now, more and more subcontractors rely on estimating software to make the process smoother and to mitigate the risk associated with costly mistakes.
The final step in bidding on a project is to create the proposal that is submitted to the GC. This should be a professional-looking document that portrays the subcontractor’s brand in the best light. In addition to including a total price and breakdown of costs, the proposal should include the sub’s company logo, as well as standard terms and conditions. A good estimating software will include the ability to generate a proposal directly from the estimate.
Important Factors for Subcontractors to Consider During Preconstruction
While the bulk of a specialty contractor’s work is in performing their trade, the preconstruction phase of the project is just as important as the field work. To ensure a successful and profitable project from start to finish, subs must focus closely on the following factors.
- Time management. Finding ways to streamline the preconstruction process is extremely important and is the only option for specialty contractors if they hope to make strategic decisions and grow their businesses. Too often, takeoffs require so much time to complete that bidding becomes a race against the clock, leaving room for errors and snap judgments that can be costly down the road.
- Accuracy. Mistakes in preconstruction can cause a subcontractor to lose bids or, if they do win, can seriously disrupt the project later. Traditionally, much of the estimating process involved duplicating work and retyping data. This method can lead to typos and other simple human errors that throw an estimate off. Even if the company then manages to win the bid, if the numbers are off, they will be responsible for covering the extra costs that ultimately eat into profit.
- Communication and relationships. A common goal for both general and specialty contractors is to establish relationships with each other. This makes for a smoother process from start to finish and involves less risk than agreeing to work with someone unfamiliar. To develop these relationships, it’s important for subs to be responsive and thorough in their communication. They should reply to inquiries quickly and clearly, and they should make an effort to be visible in their communities and industry organizations, ready to build their professional networks.
- Software solutions. Technology can exponentially improve preconstruction for subcontractors, but it should be carefully chosen. Looking at functionality to ensure the software will truly perform as needed is important, as well as considering which other types of software it can integrate with. Sometimes the price of one platform can be justified by replacing two or three other tools. Additionally, the support and ease of use can make one type of technology stand out among others.
Potential Challenges in Preconstruction
No matter how much planning goes into bidding, challenges will arise—it’s the nature of the business. Here are some common issues and how subs can overcome them.
- Over- or underbidding. In general, either of these inaccuracies tends to stem from inexperience or fear. Specialty contractors who are just getting started in commercial construction may be unfamiliar with how long a job will take or the amount of materials required, and they might ballpark a bid as a guess. More established subs can still experience these issues if they’re overly concerned with winning work. Anxiety over not having enough work can cause overbidding (out of a need to recoup lost revenue) or underbidding (out of desperation to win the work even at the expense of profit margins). Neither of these situations is sustainable.
- Waste and indirect costs. Specialty contractors may be experts at estimating labor hours and materials needed, and still find themselves with costs at the end of a project that were not planned for in the original bid. This is often due to not accounting for waste and indirect costs. Waste can be the amount of materials that end up scrapped due to mismeasurements or mistakes, but it can also be lost time because of sick crew members or time management problems onsite. Indirect costs (overhead, equipment rental, etc.) are often overlooked but should always be factored into estimates to offset these non-measured costs that aren’t directly related to the project but still incurred by the business.
Solving Preconstruction Challenges with Data
Creating accurate estimates means having a clear understanding of time and costs. Specialty contractors can develop their skills in this area by paying close attention to previous work. Gathering data on the jobsite and comparing actuals to estimates upon project completion should become a habit.
After enough analysis, subs can begin to spot trends and avoid potential pitfalls. They gain a feel for how much waste to plan for, how many true labor hours will be required, which suppliers are reliable, and how timelines might change throughout a project, among other factors.
Developing preconstruction expertise can set a company up for success in completing construction projects, improving future bids and developing an excellent reputation with general contractors, and growing the business.