If anyone is in need of a General Contractor, Dyna should be on your short list.

Thanks for the question. Ultimately, we place our owners/ clients at the top of the accountability chain for their budget and schedule. All projects have continuous opportunities for cost savings (and of course, cost increases) and we like to provide that type of information to our client on a weekly (daily) basis. As much as we pride ourselves on providing complete documents and a solid process/ system for building, things change both due to desires of the our clients and the inherent complexity of custom construction. We provide a pre-construction budget that can, following our advice, be delivered upon. Period. We keep the budget in the estimate phase to allow for us to have a series of victories (beating our targets) and deal with the 100’s of little contingencies.
We obtain nearly all fixed (and competitive) bids for any package of work that can be defined clearly. We tend to eliminate or deal with less certain parts of work which tend to drive up costs (uncertainty = extra $$). For example, we obtain framing bids for the major part of the structure, and may choose to hold out some portion of component blocking, or additional shimming (or whatever) so that the framing contractor isn’t scared into over-inflating his bid. We can then have a little bucket of funds in a line item to get that other work completed when its clearer (and less concerning) to the people performing that work.
I think its key in this discussion to underscore that our fee for the project is fixed- that is, an exact dollar amount. We don’t tie our fee to a percentage of the cost of construction- this typical part of the GC structure has always escaped our simple minds: I could never look somebody in the eye and honestly say that I’m going to do all I can to REDUCE costs for you, if my fee (and how much I make on the project) are directly proportionate to the total of the costs (costs rise, what I make rises?!). Again, my mind works simply so I’m assuming that others have resolved this for themselves to operate under that structure.

A great historical time to build and I look forward to seeing something great happen! Thank you for blogging about your experience and decisions.

It’s always best to build and know your expectations are going to be met. I have watched your tumblr site evolve into what I consider expectations. Having this knowledge, your C.M. decision has established your understanding of risk.

I feel that the your getting the education, expectation and financial impact that may arise well laid out. Another consideration, I feel, is that BUILD is feeding families that they know and care about and at the end of the day this is incredible!

Thank you for building during these times, I hope that I can see this home! Appreciate the transparency, willingness to go the distance and passion to build!

Can’t wait to see the house (online), keep up the great work and inspiration! It’s wonderful to know and trust those working for you.

Architecture and Building is a passion and finding comfort with both is great! Your evaluation of cost scenarios is awesome and establishes both can exist. We fall into the category of building, and don’t have the degrees; however, the passion for building remains the same.

If it’s worth doing, it’s worth doing right! We love building the inspiration and making an experience fun, establishing expectations is great. I feel your experience will be wonderful. It’s not about discounting he/she said about costs/design, it’s about doing it, and being apart of something! We love building and knowing that at the end of the day, it’s about relationship’s, and knowing you have made something a difference.

As a builder, I love how much you shared, it’s about doing something that is the expectation of all involved. You hired a design/build firm. Your decision to design/build is awesome!… Builder’s do offer experience, products and timelines which is our mark in a passionate industry of quality! Thank you for learning the world, via a website! Cannot wait to see the experience unfold! Relationship cannot break, unless we have a rusty chain. You have shared your decision.

We love to build, and share this passion of building like you are doing!

I do hope to see your home in magazines, websites and potentially personally?

This subject comes up quite often in political consulting–my field of profession for the last decade–and shares a number of commonalities. Some campaign managers prefer one approach, others steadfastly insist on the other. Here’s how it breaks down:

Contracting through specialists

This is common practice by 98% of campaigns. Under the direction of the campaign manager (or in extreme cases, the candidate himself), individual vendors are brought on board: A firm to design your logo/identity/branding, another to build your website, another to prepare and design your print and miscellaneous collaterals (pins, bumper stickers, yard signs, etc.) plus additional costs involving print and mailing houses, radio spot producers, television commercial production, ad spot buyers for both mediums, videographer/photographer for your campaign, the list goes on depending on the range and scope of the campaign.

The Good: Like going with G.C., the sell is that by farming out all the various projects, everyone will competitively fight for their piece and keep everyone else honest. And with the flexibility to choose consultants and firms for each task, you can maximize the talent under your control, while corralling costs by encouraging competitive bids.

The Bad: It never, ever works that way. Here’s what really ends up happening: Your campaign manager picks all their friends they’ve worked with in the past, fielding a range of costs that are generally 15 to 30% higher than they should be, upon which a 15% consulting fee is placed by the campaign manager himself, raising actual costs per vendor nearly 50%. If any subcontracting is involved–such as if the web firm brings on a graphic designer–the costs jump by another 15 to 30% for that individual service. In the end, you end up with a fairly accurate 80 to 150% jump in actual costs, not unlike the first firm you discussed your terms with. You’re also the sucker that pays for all the kickbacks back and forth between the firms keeping each other in business.

You also have to worry about the person calling the shots getting out of control. I’ve seen some pretty astonishing examples of this, namely:

1. I was contracted by a project in 2007 to do a $2,000 conversion from a static site to WordPress backend. The reported “cost” on the FEC reports showed a website project in excess of $250,000. No lie. The person who hired me walked away with $248,000 in pure profit, but the organization–having trusted this person–also trusted them to accurately assess costs. Not all clients are this stupid, right?

2. In 2008 I produced a series of direct mail pieces and tabloid-format newspapers for a VERY prominent conservative organization based in Colorado for a modest but complete fee. The previous executive director who had been fired for unrelated issues had estimated the costs in excess of $300,000, essentially intending to contract someone for a similar fee to mine, while paying off his own house in the process. The board of this very prominent organization, despite their bureaucratic bean-counting tendencies, was fully prepared to spend that much.

I won’t say that going with specialists is a bad route, so long as you’re willing to fan lots of money out to lots of different people to make them your friends. But if you hire someone whose job is to get your cheeseburger from McDonalds, your fries from Wendy’s, your drink from Sonic and your ice cream from Dairy Queen, you can bet the total meal cost is probably going to eat a $20 bill, rather than the 8 bucks it’d probably be to get a Big Bacon Classic meal with an iced tea and a frosty yourself. This whole broken, unaccountable system is what leads to…

In-house full-service firms

In-house guys provide it all. In campaigns it means they whip up solid logos, design and deploy the websites, design all print and materials (in addition to all post-production work, since they usually have fantastic relationships with the print house and know how to prepare templates with minimal prep required), record radio ads with a Shure and Soundtrack Pro, film television ads with a Sony HD handicam and Final Cut Pro, make the spot buys themselves, and send out at least one person in an already-existing position (likely a field director or driver) to also handle a camera on the campaign trail.

The good: Your costs are miniscule and your logistic efficiency multiplies tenfold. Remember, in the process of all this, your logo guy isn’t having to shoot his work to all other parties, there aren’t six different people involved in the production of a direct mail piece, and so on, and so forth. Everyone’s in the same office sharing resources. The candidate also benefits from a more direct, intimate working relationship at all stages of production, better articulating his goals and message, as opposed to a fragmented hailstorm of consultants who all report in occasionally.

The bad: In-house guys may not necessarily be quite as talented as specialists, nor may they cover quite as many options. With a good in-house firm, you can bet the farm on a solid 85% effective rate to going full-scale, at a fraction of the cost. There’s a few benefits you won’t have, but going from 85 to 100 is not a linear graph, it’s where the curvature leaps considerably.

In the end, campaigns can be won and projects more thoroughly completed because quality control is suddenly a hell of a lot cheaper, you can afford to do more than you originally budgeted, and you’re having a great time working with a firm that’s taking a direct interest in your well-being. If the need to sub-contract a few services out arises, proceed with caution and make sure your primary firm involves them in the process as organically as possible.

The bottom line: People you know and trust running in-house shops are making their money by providing a wide array of services at far lower margins than their counterparts, most likely because they detest people who arbitrarily inflate the cost in order to snag a few suckers who didn’t do their homework. More likely too, is your in-house guys know the business a lot better too. From the sounds of it, you’ve made a great decision for the time being.

Kevin (and the rest of the Build gang), what are the reasons for design/architecture/build firms not to offer fixed cost-style contracts? Risk mitigation factors in, I’m sure (tough especially for small companies, I imagine); and I guess the AIA doesn’t welcome design+build with wide-open arms anyhow?