Well, that’s exactly what you’re doing when you sign a “Cost-Plus-Fee” (CPF) or “Cost-Plus” Contract for your custom Construction Project! Left unchecked, you will overpay for the work. Not you “might” overpay, you will. But you don’t have to anymore. Naples Custom Home Cost Consulting (NCHCC) is that “check”. We offer expert Owner’s Representative Construction Services to Clients anywhere in FL…and beyond.

So, you’re considering a proposal from a Builder for a project. How do you know the pricing is accurate? Maybe you have multiple proposals that vary considerably. Why is that? How do you go about comparing them?

Most custom construction projects are built using CPF contracts. CPFs are used because there are many unknowns that preclude Builders from determining a total, hard cost for the work, so they can’t offer a Fixed-Price. With a CPF, the Builder agrees to construct the project for a certain, lower Fee (usually a percentage of the actual, total costs) than what they would typically charge. In exchange for this concession, the Owner agrees to take on the cost-risk that the Builder normally would.

The Owner, then, is responsible for all of the Project’s costs – no matter what they end up being or how they come to pass.

Each Builder has the same motive – to be awarded the Contract. They presume that price will be the Owner’s deciding factor. Because of unknowns on custom jobs, each Builder is afforded considerable leeway when compiling their numbers. Therein lies the Owner’s problem:

CPFs not only empower Builders to provide pricing that’s incomplete (too low), they actually incentivize them to! Why risk losing your job by providing you a complete, accurate Cost Estimate that will be higher than what you’ll get from competitors? Since the cost-risk lies with the Owner, Builders can’t be held accountable to their Estimates. Further, with CPFs, Builders usually have little-to-no formal obligation to control the Owner’s costs. And why would they try when, in fact, they make more money the higher the costs are! Indeed, the more expensive the job, the higher the percentage of money Owners will unnecessarily overpay gets!

So, how can you know how legitimate any Estimate you’re considering at this point is? The answer =you can’t. And that is why, when you contract for a custom construction project, you are buying something without knowing how much it costs!   

 This is when you need to bring in a home building consultant, like NCHCC! How does NCHCC control construction costs and save you money? We perform the diligence that Builders don’t (because they don’t have to). They are reactive, we are proactive. We apply unique insights acquired over 25+ years of firsthand construction experience in FL to provide diligent Owner’s Rep services to Clients that have, or are considering, a project. As Cost drives the entire process (see Video), we’ve

developed – and now offer – a complete slate of Cost Management-specific services (see inset pic) that few other home building consultants do. Our specialty? Reconciling the Contracts and Estimates that Builders propose so that you avoid cost pitfalls and are empowered to make well-informed decisions.

Already signed a CPF with a Builder? Project already underway? We can be brought on to any Project, at any time just about anywhere. It’s never too late to gain – and maintain – control of your Project’s costs.

Investor that has, or is considering, a Spec home or renovation of an existing property? At NCHCC, we make you money by saving you money! By adding value to the job, we increase the equity in it and your ROI.

The goal is always the same: build the Project for the lowest cost, as quickly as possible and without sacrificing quality. At NCHCC, we strive to strike the optimal balance between Cost, Duration and Quality on every Project, without undermining Builders. Let us solve the equation on yours.

Know where you stand before you sign a Contract or take a stand if you already have. The sooner you call NCHCC, the better!

There are (3) main variables to a Construction Project – Cost, Duration (Schedule) and Quality. The overall goal is always the same: build it for the lowest cost, as quickly as possible and without sacrificing quality. But what is “the lowest cost”? How can one know that a job could have been done faster? Define “quality”.

Without clear answers to these questions, one can’t definitively say that they’ve fallen short of, reached or exceeded the goal. How close one comes to meeting each of these (3) “conditions” of the goal, then, is a matter of opinion – it is subjective.

Cost, Duration and Quality are all intertwined. A high-quality product will necessarily take longer to build than if it were less so. The work can be done faster, but at a premium price, etc. Schedule can be defined, but is notoriously hard to maintain and track. Quality is dictated by the Plans and Specifications, which themselves vary from Project-to-Project. There are established minimum Standards, so Quality can be better measured, but not universally. Ultimately, Quality is perceived.

But, (2) things are certain: 1) none involved want the construction to take any longer than it has to and 2) none want a low-quality product.

So it is that Cost is pushed to the fore. It can be measured – easily and by most everyone. It is flexible – affecting Cost, effects Duration and Quality. Cost stands apart because it controls and can itself be controlled. Cost trumps Duration and Quality. It serves to drive the entire process. How it is managed will determine whether a Project is successful – or not.

The overall goal is always the same: build the Project for the lowest cost, as quickly as possible and without sacrificing quality. It is like a math equation. It is Cost that will dictate the outcome of that equation.

By definition, Custom Construction projects are subject to change. And do they ever! Constantly, in innumerable ways. Changes to a project’s Scope of Work act as added variables to the equation, complicating it ever throwing it out of “balance”. Custom jobs, therefore, require a level of diligence that most Builders struggle to meet, much less maintain.

At Naples Custom Home Cost Consulting, we are Project Cost Management EXPERTS who strive to strike the optimal balance between Cost, Duration and Quality on EVERY Project. We balance the equation and see it through to a solution that best serves each Client’s unique wants and needs.

Let NCHCC “do the math” for you on your Project.