C3MG: CONSTRUCTION COST MANAGEMENT SERVICES

Cost Management - A Proactive Tool!

C3 Management Group, Inc. is the first firm in the Pacific Northwest to offer clients the full services of Cost Management. Cost Management is a comprehensive program of accurate cost estimating, Scheduling, plus project management and tracking. An integration of value engineering and constructability review techniques occur with each project to explore optimum solutions for total cost control. Our cost managers provide ongoing, proactive participation with the project team at all phases of planning, design and construction. We target areas of potential cost overruns, constructability issues, and can develop value-added alternatives to keep clients in control of the project costs and overall project success.

Systems Approach

C3MG's cost management techniques utilize an approach, which summarizes the construction project into 12 major building systems using the standard sixteen 16 CSI divisions as subcategories of each system.

The advantage of estimating a project in building systems is accurate data collection and management of information. Building systems costs are narrowly defined for each facility type and therefore have consistent cost ranges. CSI cost ranges vary widely as specific selection of materials and trades vary. Not all CSI trades are included in each project whereas the typical building systems such as superstructure, floors and roof are consistently included in each and every building project.

With consistently narrow ranges of historical cost data, C3MG can easily determine which systems in a specific project are cost effective and which, if any, are cost prohibitive. Through our cost management approach, cost control during the planning and design phases is achieved by focusing and targeting for optimum cost effectiveness of the building systems.

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Documentation

C3MG provides construction cost estimates during the programming, planning, predesign, schematic, design development, and construction document phases of any project. In addition, C3MG provides cost estimate review of other estimates as an independent and unbiased party to ensure project costs are valid. Information is typically presented to designers and owners in the following building systems:

Uniformat Building Systems:

· 01 Foundations

· 02 Substructure

· 03 Superstructure

· 04 Exterior Closure

· 05 Roofing

· 06 Interior Construction

· 07 Conveying Systems

· 08 Mechanical Systems

· 09 Electrical Systems

· 10 General Conditions, Overhead & Profit

· 11 Equipment

· 12 Sitework

At each successive design phase, C3MG provides a complete estimate based upon the design documents, rather than attempting to "tack-on" evolving detail. This method accurately reflects the scope presented at each phase of the progressively complex design.

As with the schematic and design development phase estimates, C3MG provides a complete estimate of the project at the construction document phase. Depending on whether the contract is to be bid or negotiated, C3MG generates the estimate in either a Uniformat and/or CSI format. This reporting flexibility enables the designer to accomplish last-minute fine tuning based on the Uniformat output, creating a highly cost sensitive project, yet enables the owner to accomplish a trade by trade contract negotiation working from the knowledge of a contractor.

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The C3MG database - our foremost reference

C3MG has on file cost data from over thirteen years and 2,500+ first hand projects covering an entire spectrum of project types, from wastewater treatment plants and underground utilities to hospitals and school facilities. When cost models are generated for your project's, it is routine that C3MG's cost engineer will have several similar projects from which to generate cost models for typical cost comparisons.

Current material, equipment and labor costs are constantly updated using project specific location information and stored in C3MG's cost database. C3MG's cost management software quickly and easily manipulates this cost database providing you with extremely usable, customized reports.

Although C3MG has a very extensive database, a well designed project in a unique setting is certain to have obscure elements which require the cost engineer to integrate external data. C3MG maintains an extensive network with material and equipment vendors and subcontractors who to furnish quotes for these items.

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Cost/Benefit Analysis

A C3MG Cost/Benefit Analysis is a systematic evaluation of a capital project's benefits to the owner/user as compared to its life cycle costs. Thoughtful interpretation of the owner's organizational purpose or mission is extremely important when creating a meaningful value analysis. It is necessary to quantify both the tangible and intangible benefits of the project to make useful recommendations on project alternatives.

C3MG believes there are a number of alternatives available to solve any capital problem including:

· Purchase

· Lease

· Construct

· Lease Development

· Remodel

· Do Nothing

In order for C3MG to determine the least costly means of solving a problem, it is necessary to perform a financial analysis of alternatives. In order to perform an analysis of financing capital alternatives, one must have an understanding of financial decision-making techniques used to evaluate flows of money associated with the alternative solutions and those solution's total costs - an understanding C3MG's CPA's and CCE's have the experience and background to be highly capable of applying to our client's projects. Techniques include Present Value Analysis and Life Cycle Cost Analysis.

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Present Value Analysis

A Present Value Analysis involves accounting for the time value of money over the life of the project or over the life of the facility "need". The underlying principle is that money spent (or saved) now is worth more than money spent in the future. When projects span multiple years, it is necessary to adjust costs that will be incurred in future periods to account for the time value of money. This ensures that numbers are stated on a comparable basis when looking at alternatives.

For application to construction cost estimates, project costs are inflated to the midpoint of the construction schedule for that element of work. For application to the comprehensive cost/benefit analysis, life cycle and finance costs will be inflated on a sliding scale through time to the endpoint of the facility "life".

Life Cycle Cost Analysis

A C3MG Life Cycle Cost Analysis compares total costs of alternative solutions by calculating the initial capital costs of the project and the anticipated operating, maintenance, and future facility capital costs. C3MG then incorporates a discount rate which reflects the time value of money in conjunction with an economic life span which is set according to the project owner's facility agenda.

A broad range of considerations: Life cycle costs are often misunderstood to be exclusively a function of mechanical and electrical equipment energy and capital costs. C3MG's experience tracking life cycle costs shows us that while granted - M/E costs take an important share of the life cycle costs - there are other important issues as well. These include architectural considerations which impact replacement costs and energy consumption; programming considerations which impact facility use, wear, and tear; and landscape and architectural considerations which impact maintenance labor costs.

An integration of disciplines: Because of the broad range of considerations that go into the preparation of a thorough life cycle cost analysis, careful orchestration of the project's cost manager, programmer, building designer, landscape architect, and mechanical and electrical engineers is required. Our leadership capabilities ensure that appropriate input from all of the relevant consultants will be included, so C3MG is able to provide meaningful feedback throughout the planning and design process. This enables our clients to produce planning documents which are highly life-cycle cost sensitive.

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C3MG Estimate vs. Average Bid

C3MG contends that a cost management firm's key qualification is its ability to estimate construction costs accurately. The narrower the range between estimated and actual costs for a given scope, the higher quality the estimate. 80% of C3MG's work is for repeat clients. Our clients return because our product is completed and delivered on schedule and, on the money! Evidenced in the table below, C3MG's cost estimates fall within 2-4% of average bid results - a performance record worthy of the most cost-sensitive owner's confidence.

Project Name & Location	C3MG Estimate	Avg. Bid	Variance
Port of Seattle SeaTac Main Terminal Expansion, Phase I SeaTac International Airport	$3,645,163	$3,508,000	+3.91%
WWU Ridgeway Commons Dining Facility	$1,736,598	$1,673,683	+3.76%
UW Music Building Remodel	$552,598	$533,000	+3.68%
King County North SeaTac Park Phase I	$3,707,949	$3,577,365	+3.65%
U.S. Coast Guard Alameda Seawall	$7,685,000	$7,422,345	+3.54%
	$207,800	$200,964	+3.40%
CWU Science Facility	$30,307,400	$29,331,000	+3.33%
WWU Science Facility One	$16,280,900	$15,765,665	+3.27%
Edmonds School District No. 15 Martha Lake Elementary School	$5,454,280	$5,284,300	+3.22%
State of Washington Department of Corrections Center 512-Bed Housing Center	$11,095,659	$10,756,000	+3.16%
Snohomish School District No. 201 Central Elementary School	$3,393,016	$3,294,707	+2.98%
Port of Seattle Terminal 30	$5,798,755	$5,639,943	+2.82%
Seattle School District No. 1 Dunlop Elementary School	$10,695,665	$10,420,324	+2.64%
	$14,406,389	$13,824,253	4.21%
King County (Metro) Alki Interurban CSO Project West Seattle Tunnel	$23,874,977	$23,307,048	+2.44%
WSU Consolidated Information Center	$11,635,000	$11,171,667	4.15%
City of Federal Way Civic Theater	$1,755,435	$1,716,833	+2.25%
EWU Science Building, Phase I	$6,267,700	$6,134,804	+2.17%
UW Southwest Campus Utilities Extension Tunnel	$7,216,091	$7,100,742	+1.62%
King County Richmond Beach Pump Station	$10,806,518	$11,319,037	-4.53%
Seatte School District No. 1 Whittier Elementary School	$9,329,620	$9,197,175	+1.44%
	$10,485,434	$10,053,071	4.30%
Clallam Transit Authority AOM Facilities	$4,771,589	$4,705,713	+1.40%
Clallam Transit System Maintenance/Operations/Admin.	$4,771,589	$4,705,713	+1.40%
Camas School District No. 117 Skyridge Middle School	$10,864,000	$10,750,000	+1.06%
Seattle School District No. 1 Latona Elementary School	$8,915,352	$8,864,711	+0.57%
Arlington School District No. 16 Arlington Intermediate School	$4,471,004	$4,452,984	+0.40%
	$8,593,845		#DIV/0!
U.S. Army Corps of Engineers Chief Joseph Dam	$1,864,759	$1,858,050	+0.36%
King County Goodwill Games Aquatic Center	$10,311,125	$10,285,808	+0.25%
King County Cedar Hills Landfill Area 4 Closure	$5,600,675	$5,589,070	+0.21%
Western State Hospital Renovation	$8,079,382	$7,447,866	8.48%
BCC Learning Resource Center	$7,942,220	$8,339,975	-4.77%
City of Seattle Cedar River Watershed Public Facilities	$2,866,115	$2,861,140	+0.17%
	$7,527,046	$6,768,719	11.20%
Gray's Harbor PUD No. 1 Administration Building	$1,481,773	$1,482,133	-0.02%
North Kitsap School District No. 400 Kingston Junior High School	$5,116,599	$5,118,441	-0.04%
WSU Bohler Gymnasium Addition	$6,830,000	$7,435,000	-8.14%
	$6,560,000	$7,168,667	-8.49%
	$6,511,880	$6,130,800	6.22%
	$6,497,150	$6,174,000	5.23%
Edmonds School District No. 15 Hazelwood Elementary School	$3,736,475	$3,739,595	-0.08%
Bellevue Community College Bookstore & Student Services	$3,094,594	$3,102,500	-0.25%
State of Washington Department of CorrectionsCedar Creek Corrections Center	$1,377,994	$1,382,909	-0.36%
	$5,900,000	$5,504,720	7.18%
Edmonds School District No. 15 Mountlake Terrace High School	$19,609,607	$19,686,500	-0.39%
WSU Child Care Facility	$1,231,214	$1,240,200	-0.72%
	$5,469,000	$5,180,286	5.57%
U.S. Navy P-305 Child Development Center	$2,317,000	$2,337,009	-0.86%
State of Washington Dept. of Natural Resources Building	$37,320,818	$37,643,666	-0.86%
Seattle Center Children's Theater	$5,300,351	$5,537,586	-4.28%
U.S. Army Corps of Engineers Aerial Delivery Facility McChord AFB	$3,991,378	$4,027,208	-0.89%
Northshore School District No. 417Northshore Elementary School No. 20	$6,887,049	$6,961,435	-1.07%
Latona Elementary School	$9,343,636	$9,445,336	-1.08%
City of Redmond Fire Station No. 16 and Maint. Facility	$2,012,335	$2,035,584	-1.14%
	$4,716,887	$5,132,833	-8.10%
WSU Engineering Teaching Research Laboratory	$17,787,147	$18,027,460	-1.33%
State of Washington DSHS Green Hill Juvenile Campus	$29,900,000	$30,307,400	-1.34%
Port of Seattle Main Terminal Lighting Improvements	$1,521,209	$1,543,109	-1.42%
WSDOT/WSP Bellingham Headquarters	$4,322,099	$4,539,190	-4.78%
	$4,309,906	$4,497,000	-4.16%
	$4,297,763	$3,957,094	8.61%
Seattle School District No. 1 Franklin High School Historic Renovation	$18,700,000	$18,972,500	-1.44%
	$4,035,536	$3,472,200	16.22%
U.S. Navy P-103/P-302R Fleet Headquarters Building	$8,477,751	$8,605,153	-1.48%
Mukilteo School District No. 6 Olivia Park Elementary School	$4,646,412	$4,723,500	-1.63%
	$3,746,532	$4,008,566	-6.54%
	$3,738,905	$4,072,873	-8.20%
Port of Seattle Fisherman's Terminal	$4,588,523	$4,668,179	-1.71%
	$3,727,573	$3,334,438	11.79%
	$713,714	$726,261	-1.73%
Edmonds School District No. 15 Seaview Elementary School Modernization	$5,169,502	$5,262,599	-1.77%
North Kitsap School District No. 400Suquamish Elementary School	$1,297,476	$1,320,939	-1.78%
State of Washington Department of Corrections Clallam Bay Correction Center	$15,056,807	$15,338,580	-1.84%
Seattle Center Northwest Meeting Rooms	$3,802,098	$3,873,541	-1.84%
	$2,901,917	$3,235,375	-10.31%
CWU Archives Building	$2,885,299	$3,084,144	-6.45%
Columbia Theatre Elderly Housing	$1,982,815	$2,026,850	-2.17%
City of Bonney Lake Public Safety Building	$2,538,000	$2,595,787	-2.23%
	$2,725,544	$2,966,429	-8.12%
	$2,630,000	$2,767,462	-4.97%
	$2,603,468	$2,737,850	-4.91%
State of Washington DSHS Western State Hospital Building 17 North & 9 East Renovations	$8,351,894	$8,542,929	-2.24%
WSU Food & Human Nutrition Facility	$10,439,068	$10,697,668	-2.42%
WSU Holland Library Addition	$21,197,000	$21,733,419	-2.47%
City of Seattle Meter Testing Facility	$2,206,645	$3,169,856	-30.39%
State of Washington DOC Washington Correction Center for Women	$1,277,264	$1,309,664	-2.47%
	$527,218	$540,610	-2.48%
Denny Way/Lake Union CSO Project, Mercer Street Tunnel	$36,468,000	$37,414,736	-2.53%
	$1,779,715	$3,241,053	-45.09%
King County Denny Way/Lake Union CSO Project, Mercer Street Tunnel	$36,468,000	$37,414,736	-2.53%
General Services Administration Border Station	$2,732,794	$2,803,886	-2.54%
	$1,574,175	$1,715,766	-8.25%
King County (Metro) South and East Transit Base Improvements	$4,103,230	$4,211,193	-2.56%
Alderwood Water District Maintenance & Operations Facility	$3,360,000	$3,452,854	-2.69%
Redmond City Hall Remodel	$1,441,252	$1,321,233	9.08%
Longview School District No. 122 St. Helens Elementary	$5,426,499	$5,580,954	-2.77%
State of Washington Labor & Industries Building	$47,180,000	$48,626,467	-2.97%
CWU Black Hall Renovation and Addition	$13,743,665	$14,183,500	-3.10%
Intercity Transit Lacey Transit Center	$1,140,573	$1,177,766	-3.16%
UW Husky Stadium South Stands	$1,207,321	$1,289,333	-6.36%
South Central School District No. 406 Foster High School	$11,318,000	$11,695,485	-3.23%
	$1,122,100	$1,253,125	-10.46%
	$997,769	$870,037	14.68%
GRCC Child Care Center	$933,183		#DIV/0!
WSU Bohler Gymnasium Demolition	$904,000	$868,839	4.05%
	$865,954	$799,945	8.25%
University of Washington West Campus Parking Facility	$6,350,000	$6,567,849	-3.32%
	$686,067	$717,225	-4.34%
	$658,154	$694,301	-5.21%
	$600,800	$790,785	-24.02%
South Central School District No. 406 Cascade View Elementary Modernization	$5,936,466	$6,147,449	-3.43%
Port of Seattle SeaTac Airport Parking Improvements SeaTac International Airport	$2,595,597	$2,694,556	-3.67%
	$523,982	$594,532	-11.87%
	$393,765	$372,545	5.70%
	$263,000	$202,250	30.04%
King County North Creek Pump Station	$8,464,000	$8,802,400	-3.84%
WWU Haggard Hall Renovation & Addition	$10,485,434	$10,053,071	4.30%

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