2023 Construction Costs

Posted on February 17, 2023

2023 CONSTRUCTION COSTS: ARE WE SEEING ANY RELIEF?

It’s hard to believe that we are three years outside of the onset of COVID-19. Even now, its effects continue to shake up the world.

In March 2020, the construction industry saw a historical spike in pricing, an overall increase of about 20-30% in a matter of 12-16 months. Owners were forced to increase budgets or consider value engineering alternatives. Contractors were potentially out dollars for projects already bid and on-site job shutdowns and quarantines created high demand and extensive backlogs. 2021 saw little relief with unprecedented rates of inflation.

It’s the beginning of 2023 and you may be asking yourself, is now the time to build? The short answer – yes. With three years under our belts, Bush Construction has established and refined processes to assist in accounting for pricing changes and supply chain delays. And even better news, we’re starting to see surging material costs plateau.

Better planning with the three Cs: Contingencies, Communication and Collaboration

By now, it’s no secret you may be paying more for a new build or renovation than three years ago. With Bush on your side, we can help you navigate these changes and complexities. Ensuring your budget and timeline are met starts with proactive planning using the three Cs: contingencies, communication, and collaboration.

Contingencies

In commercial construction, a contingency refers to money (often a percentage of the total project cost) reserved to cover unexpected project costs that arise after the construction starts. Contingency budgets have been a part of the Bush process, but have become even more important in recent years as we navigated unpredictable material costs and labor shortages.

So how is a contingency budget typically used?

Materials: Design professionals and builders must think about materials. What happens if the manufacturer changes, creates variations, or discontinues a product chosen specifically for a project? The price fluctuates! Room should be left in the budget to swap out design materials for sometimes more costly, yet available, options.
Changing or unpredictable conditions: During estimating, it’s often difficult to account for unforeseen or differing conditions. Not every project site is ready to build on from day one. Old foundations may be buried on site unknowingly, the weather could damage or postpone progress, and much more. Factoring in a contingency would help cover this.
Wish Lists: Excess funds…it happens! Owners should consider a wish list. The team may end up with an excess of money allotted to the project. This would allow for project betterments previously thought to be out of reach. For example, higher-grade flooring.

To learn more about contingency budgets, check out our blog.

Communication

Changes happen quickly in this high-cost and supply chain environment, which means efficient and clear communication with project teams and with owners is even more important.

Typically, an owner may need to engage multiple firms to take a project from concept to completion. That’s not necessary with Bush. As a full-service team, we offer integrated services in architectural design, construction, and real estate development. With open lines of communication between our departments, clear, quick, and transparent communication with owners is just part of the package. We work hard to avoid delays and miscommunication that are common issues in the construction industry.

We’ve recently enhanced our ability to more accurately and effectively communicate costs to owners with our addition of Destini, an estimating software that makes Bush more efficient. Since it is cloud-hosted, anyone on our estimating team can input and access real-time cost data at the office or at home. We are also working to expand historical cost information in the database to more quickly and efficiently estimate future projects. With sky-high interest rates and long lead times creating higher prices and longer projects, Destini aids building owners in managing their expectations for cost.

Collaboration

During the construction phase, we partner with subcontractors and suppliers, which takes a high level of ongoing collaboration. Bush has worked to put an emphasis on subcontractor relationships, but we’ve honed in even deeper on those relationships to help manage the volatility of the economy.

Subs and suppliers are often the first to know about price changes and supply chain issues. Leveraging our relationships and remaining in constant contact throughout each project allows us to alert owners quickly and pivot plans to try to avoid delays and budget increases.

What to expect from construction pricing in 2023

The future looks bright. In the last six months, we have seen construction prices start to plateau and even trend down in a couple scopes.

Lumber was a huge problem, and those prices have come down. HVAC rooftop units are still in high demand, and electrical switchgear maintains long lead times. However, we’re able to anticipate these patterns and plan accordingly.

Though many things have changed since 2020, one thing remains the same: the importance of selecting a construction partner that can guide you through the process.

Contact our team today to get started.

Construction Tip: 12 Terms to Familiarize Yourself With

Posted on March 14, 2022

As with any industry, the commercial construction industry has its own set of acronyms and key terms. What’s the difference between a contingency and an allowance? When do OAC meetings start? Having a general understanding of these key terms helps alleviate confusion between an owner and the general contractor and/or designer. We believe specificity and clear communication are keys to providing our clients with a great construction experience.

12 Common Commercial Construction Terms

Contingency: Money, often a percentage of the total project cost, reserved to cover unexpected project costs that arise during a project. For example, a contractor starts excavating a site and hits bedrock. To remove it, different equipment needs to be brought in and the excavation takes longer than originally estimated. Contingency funds would be used to pay for this unexpected cost.
Allowance: Funds set aside to cover a known cost of an unknown amount. For example, an owner wants to use tile flooring in their front entryway so the contractor budgets for a standard tile material that costs $5 per sq/ft. The owner ultimately selects an $8 per sq/ft option and agrees to pay the $3 per sq/ft amount by which the actual tile exceeded the allowance.
Consequential Damages: Damages to an owner’s business indirectly resulting from a breach of contract and which are generally foreseeable but not defined at the start of a project. For example, delays in the completion of a project for a manufacturing company result in the company’s inability to complete contracts for its customers.
Liquidated Damages: A sum of money the contractor agrees to pay the owner, typically for each day the contractor completes the project late. For example, a contractor pays the owner of an office building $1,000 per day for every day the office building is completed after the contractual completion date. The amount cannot be so great that it would be considered a penalty. Liquidated Damages are typically accompanied by an equal and opposite Early Completion Bonus.
Punchlist: A list of scope items that must be completed before a construction project is declared complete. Examples might include: replacing a damaged ceiling tile, touching up paint or ensuring dirt in light fixtures is cleaned.
Substantial Completion Date: The date an owner can occupy the building for its intended use. For example, if there’s a long lead time on carpet that isn’t available to install in a conference room, the lack of carpet in that room doesn’t prevent the office building from being used.
Final Completion: The date the project is fully and satisfactorily complete, Including the completion of all punchlist items. The contractor can receive final payment upon final completion.
OAC (Owner, Architect, Contractor) Meetings: Periodic meetings between the owner, architect and contractor to discuss the progress of a project.
Change Request: A contractor’s request of the owner to compensate for something that needs to be modified on the project. For instance, the owner may be considering adding a door to a room. This change is made to the design documents and sent to the contractor for pricing. The contractor issues a Change Request for the additional door.
Change Order: A formal change in a project’s scope, often also impacting construction costs and completion dates. In the Change Request example above, when the owner approves the Change Request for the additional door, a Change Order is issued which formally adds the door to the project for the agreed price and (if applicable) a completion date extension.
RFP (Request for Proposal): A document created by a property owner that announces, describes and solicits cost proposals from qualified contractors for a specified project. It’s common for public entities like schools or other government agencies to issue RFPs.
RFI (Request for Information): A means to clarify ambiguities or fill in gaps in information that appear in the plans or specifications. For example, a concrete subcontractor needs more detail on rebar placement than was shown on the plans, so they submit an RFI to the contractor who either responds to the RFI or forwards it to the architect/engineer for a response.

Registration Full For “Build Like a Girl” Workshop

Posted on March 6, 2022

Bush Construction and the Girl Scouts of Eastern Iowa and Western Illinois announced their “Build Like a Girl” workshop on Saturday, March 5 from 8:00 am to noon at is full. The workshop will offer 16 curious Girl Scouts in 6^th – 12^th grades the opportunity to build a bird house using blueprints and hand tools like tape measures, saws and hammers at Bush Construction’s warehouse (2902 Indian Road, Davenport).

Participants will earn their Woodworking Badge and a Fun Patch specially designed by Bush.

“I’m thrilled we’re partnering with the Girl Scouts, an organization that continually offers new ways for girls to learn about and explore the world, again to offer this widely popular workshop,” said Stephanie Hintermeister, Project Coordinator at Bush Construction. “Based on feedback from last year’s workshop, we learned it was the first time some participants ever stood at a workbench nonetheless used a hand tool. Because we pair each participant with a member of our construction team, they walk away with an understanding of how to use the tool safely and confidently.”

The workshop is a part of Bush’s efforts to kick off Women in Construction Week (March 6-12), to help raise awareness and celebrate the work of women in the construction industry. Women make up approximately 10% of the workforce, however, the number of women actually working on job sites is much smaller.

“Last year’s program was such a valuable opportunity for Girl Scouts to gain the technical skills of the construction field while discovering new career possibilities. Each girl walked away from the event with newfound confidence and we are grateful to partner with Bush Construction to share that experience with another group of girls,” said Aimee Williams, Girl Experience Leadership Manager for Girls Scouts of Eastern Iowa and Western Illinois.

Bush Announces 4 Employee Promotions

Posted on February 3, 2022

Studies show employees look for new employment opportunities when they become concerned about their career growth. As a result, career advancement paths are critical to employee retention and overall job satisfaction. At Bush, we offer career tracks across departments and continuously look for ways to grow and challenge every team member. Chris, Ryan, Patrick and Richard’s performance met every expectation, and we’re pleased to announce their promotions.

Bush Construction Employee Promotions

Chris Porter | Superintendent II

Chris has been promoted from Project Superintendent I to Project Superintendent II. Since joining the team, Chris spent a brief stint assisting in estimating where he reviewed his project’s information before moving on-site at the Wilson Building in Clinton. Chris has played a key role in successful job site management and his ability to facilitate solutions to challenges that pop up in historic restoration projects is impressive. We’re excited to have Chris take the next step in his career at Bush.

Ryan Dean | Preconstruction Manager II

Ryan began his career at Bush as a Project Engineer Intern. Since then, he’s risen from Project Engineer to Project Manager and most recently Preconstruction Manager I. Ryan has flourished in his role as Preconstruction Manager thus his promotion to Preconstruction Manager II. Ryan exemplifies Bush’s commitment to providing clients with a great construction experience and embodies what it means to be a great team player. Ryan’s career progression has been through his own willingness to grow and learn. Keep up the good work, Ryan!

Patrick Turner | Project Manager II

Patrick re-joined our Team in May 2021 and jumped right into running successful projects. His keen eye for detail and ability to listen before acting has provided the opportunity to improve internal processes and strengthen relationships with owners and sub-contractors. Patrick’s drive, commitment to grow and ability to clearly communicate are just a few reasons why he’s been promoted from Project Manager I to Project Manager II. Patrick’s efforts will continue to make our construction team stronger and more efficient. Congratulations on a well-deserved promotion, Patrick!

Richard Henning | Project Manager I

Richard joined Bush Construction as a Project Engineer, and we’re delighted to announce his promotion to Project Manager I! Richard has taken the reigns and successfully been running a very large historic development project, the Clinton Culinary project and many others. He’s shown great drive and initiative in learning the ropes, and we couldn’t be more excited for Richard’s future at Bush.

Jon Davidshofer Begins New Chapter at Bush Construction

Posted on January 24, 2022

Bush Construction is pleased to welcome Jon Davidshofer to its leadership team as Director of Development. In this role, Davidshofer will lead the strategy for all development and redevelopment projects.

“Jon has hit the ground running, and he’s an exciting addition to our team,” said AJ Loss, Bush Construction President/CEO. “Jon’s experience in the financial and economic growth industries will help deliver a personalized customer experience to our investors, commercial real-estate agents and city officials. He’s keenly aware of every step that needs to be taken throughout each phase planning, development, design and construction. We’re fortunate to have Jon lead our development efforts.”

“I’m excited to join the Bush Construction team and be a part of their growing organization,” said Davidshofer. “Being able to work with the internal design team, while also having the luxury of working with the whole construction department will greatly benefit my role as Director of Development. The team shares a common desire to grow the development department and I feel the quality of work that people don’t see behind the scenes will be appreciated and respected by the communities in which we serve.”

Dena Waddell-Genz Joins As Executive Assistant

Posted on December 22, 2021

Bush Construction announced Dena Waddell-Genz has joined the team as Executive Assistant to the President and COO. Waddell-Genz joins Bush Construction from MoboTrex where she spent four years as the Executive Assistant to the President/CEO and replaces Erica Sellnau-Allan who has been promoted to Head of Employee Engagement.

“Dena’s former experience at MoboTrex and John Deere World Headquarters brings a powerful combination of organizational management and decision-making skills,” said AJ Loss, Bush Construction President/CEO. “We’re committed to challenging and growing our people so that they can provide customers with a great construction experience, and we couldn’t be luckier to have Dena help us get there.”

“I’m thrilled to join Bush Construction for so many reasons,” said Waddell-Genz. “The Executive Assistant position is a role that I’ve had a very deep passion for, and I look forward to working with such a fabulous array of team players! Additionally, what I love most about Bush Construction is the work-life balance and the feeling of being appreciated by my coworkers. This is definitely the business environment I have been searching for, and I look forward to many years of dedicated service.”

Self-Perform vs Sub-Contracting for Small Construction Projects

Posted on December 1, 2021

When a commercial general contractor is hired to “self-perform” work it means the project is completed directly by the contractor’s own skilled labor force. Typically, a contractor will self-perform activities such as demolition, carpentry, casework, doors, and hardware, framing drywall, masonry, and other specialty tasks.

When to Consider Self-Perform over Sub-Contracting

Self-perform works well for projects that are smaller in scope or those that require a fast turnaround. For example, a facility upgrade, a backlog of maintenance projects, or when the contractor is already on-site and asked to assist with an additional project.

While self-performing doesn’t work for every construction project, selecting a contractor with these capabilities brings many benefits to business owners, including:

Cost efficiencies – results in a more efficient and streamlined construction process, saves time, money and eliminates additional service fees.
Increased control – relies on the contractor’s thorough experience to create and maintain schedules and ensures the project is completed on time and on budget.
Faster project starts – takes advantage of the contractor’s speed and flexibility to directly assign its team to a job site.
Quality assurance – benefits from the contractor’s talented team of high-skilled laborers that have a history of working together on multiple project types across many industries.

Bush Construction’s Self-Perform Capabilities

With years of hands-on experience and training, our skilled workforce will deliver an exceptional outcome no matter how big or small your project is. Whether you need help installing new doors or cabinetry, replacing baseboard trim, changing the flow of your entryway or common area, our trained carpenters are dedicated to working with you, and with little disruption to your business.

If you’d like to learn more about Bush Construction’s self-perform capabilities or with assistance budgeting future projects, fill out the Contact Us form below.

Meet the Team: Colin Freese

Posted on September 2, 2021

We are so excited to welcome Colin Freese to our team. Prior to joining Bush Construction, Colin was a Senior Designer/Mechanical Engineer, proficient in using CAD and a multitude of other programs to design products for clients. We held a rapid-fire with Colin and learned a lot!

Where did you grow up?

I grew up in Ida Grove, Iowa.

What high school & college did you attend?

I graduated from Odebolt-Arthur/Battle Creek-Ida Grove High School(OA-BCIG High School) and after that attended the University of Iowa.

What are your hobbies?

I like to play golf, pick-up basketball, and league sports like softball and volleyball.

How do you feel about working for Bush?

I’m excited about working for Bush and ready to contribute.

What are you most excited about?

I’m most excited to be able to see the projects I’m working on progress in real-time with my own eyes, something that I didn’t get the opportunity to see at my previous job.

How do you feel about the slight shift in your career path?

I’m feeling more enthusiastic about construction than I did about manufacturing, and that makes me feel more confident about my choice to pursue this opportunity with Bush.

Meet the Team: Ryan Welborn

Posted on August 2, 2021

Ryan pictured with his wife and three little girls

Continuing our “Meet the Team” series, we’re kicking off this week profiling Ryan Welborn, Director of Construction. Ryan is a highly respected problem-solving machine with a sense of humor and a genuine love for his family.

Where do you live?

Orion, IL

What do you do at Bush Construction?

I manage projects under construction and provide guidance/support to fellow associates who are managing projects of their own.

Who has influenced you most when it comes to how you approach your work?

My father. If you work hard, more often than not, good things will happen.

How do you prefer to start your day?

I like to start really early in the morning before the family gets up with a cup of coffee organizing for the day to come. By the time they are awake, I have typically caught up on the random things from the previous day and can spend time focusing on getting them ready for school and daycare.

How do you prefer to end your day?

Hanging out with my wife and three little girls.

Bush Construction Interns: Where Are They Now?

Posted on July 29, 2021

I interned at Bush Construction the summer after my sophomore year in undergrad (2016). The summer after my junior year I interned at Larson Engineering in their St. Louis office and worked there part-time throughout my senior year as well. After graduating from Southern Illinois University Edwardsville in 2018, they hired me full-time. I worked in their St. Louis office for one year. I then transferred to the New York City office in the summer of 2019 where I have been for the past two years.

I graduated from Iowa State University in December 2019 and currently work for Beck Group in Dallas, Texas. My project experience since interning at Bush started with building Dickies Sports Arena in Fort Worth. I am currently working as a Project Engineer on a Hospitality Center at American Airlines Headquarters as well as working on the preconstruction/construction for a project on the University of Texas at Arlington’s Campus. I loved my experience at Bush Construction and learned a lot working under Ryan Welborn. He helped jumpstart my passion for building!

After interning at Bush Construction, I graduated in May 2020 with a B.S. in Construction Management from the University of Northern Iowa. I am currently at Streamline Architecture and Artisans as a Design Intern – however, I do a lot as a Project Manager for our Artisans team and a Marketing Coordinator for our coffee shop, Iron + Grain. This fall, I will be attending Kirkwood Community College in their Interior Design + Architecture program. I am really grateful for my time at Bush Construction and in the construction industry in general because it will help me in my future career as an Interior Designer.

I interned at Bush Construction the second semester of my senior year at North Scott High School through the summer leading up to my first year at Iowa State University. It was an awesome experience!

This summer I have been interning at Power Construction in Chicago, IL. The project I’ve been working is One Chicago, which is a $500M development set to be the sixth tallest building in Chicago upon completion early next year. My time working on this project and living in the city has been wonderful—a life-changing experience!

I am heading into my junior year at ISU and absolutely love the atmosphere and culture. I’m involved with American General Contractors, the ASC commercial team competition, playing trumpet in the band, and extra roles I have taken on as a resident assistant. I like to stay busy and there are plenty of great opportunities to do so!

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2023 Construction Costs

2023 CONSTRUCTION COSTS: ARE WE SEEING ANY RELIEF?