Commercial

Look Beyond CSI Divisions to Find Real Cost Savings

Breaking Down the System to Disrupt It

How Well Do You Know Construction Costs?

For those of you in the AEC industry, here is a simple test to determine how much you know about con­struc­tion costs. Pick any building type you are most familiar with, and then answer the following questions:

  • What is the average cost of con­struc­tion per square foot?
  • What is the average cost per square foot of an exterior wall assembly?

The chances are that you can answer the first bullet, but for even the most seasoned cost esti­ma­tors, the second question is more chal­leng­ing. It’s one that would require a lot of work with a lot of different sub­con­trac­tors to figure. 

In fact, at a recent Bautex pre­sen­ta­tion to a group of cost esti­ma­tors, project managers and site super­in­ten­dents, not a single person could come up with a rea­son­able answer. As walls are one of the most important com­po­nents of a building, knowing the cost per square foot of a wall is a key piece of infor­ma­tion that should be readily available to archi­tects, cost esti­ma­tors and con­trac­tors: Those that are charged with pro­tect­ing the budget in an ever-tight­en­ing market have a difficult road ahead.

According to Turner con­struc­tion, con­struc­tion costs have climbed 5.51% nation­al­ly from 2018 to 2019 and 22% since 2014. This expo­nen­tial growth is straining all of our resources, and we are spending more and more time trying to figure out how to save money. Yet the easiest way to reduce costs, a reduction in the total square footage of the building, is a recipe for disaster. 

No one likes to build less of a project to save money; certainly not the client who ends up with less square footage of what they need to run their business.

The Current Cost Estimating System

So, why don’t we know the cost of a wall? 

The reason is pretty simple: We often spend most of our time looking at the big picture and fail to under­stand how it all comes together. It’s easy to come up with a total cost of con­struc­tion per square foot (you know the total of both the dollars and the square footage), but it is nearly impos­si­ble to break out the cost of the exterior wall. 

While you can measure the square footage of exterior walls, nowhere do we sum the cost of the wall system. The reason for this is that the structure and building envelope is typically a designed assembly that pulls together a broad range of materials from different manufacturers. 

This, in turn, means that all are purchased and installed by a fairly large number of trades in, what can be, a com­pli­cat­ed series of steps. This makes decisions about how to design and construct a building a real challenge, espe­cial­ly when attempt­ing to under­stand the true economics of each option.

Much of this blame can be placed on the system that we use to generate cost estimates. We have all been taught the benefits of following the CSI system of breaking down costs by division. 

These divisions allow complex systems, such as an exterior wall, to be broken down by each of its parts. Steel studs are in Division 5, the exterior finish is in Division 6, the wall insu­la­tion and vapor barrier are in Division 7, etc. Each Division typically means a different sub-con­trac­tor and separate pricing. 

When looking across a whole wall assembly, the number of elements to price may be between 5 to 9+ products. Addi­tion­al­ly, within indi­vid­ual bids from subs, the cost of the exterior wall is often mixed with addi­tion­al scope of work not related to what is being studied.

METAL STUD FRAMING

Assemblies

  • Interior gypsum board 
  • Batt insu­la­tion
  • Metal stud framing 
  • Exterior sheathing
  • Fluid-applied air & moisture barrier
  • Exterior insu­la­tion
  • Struc­tur­al steel
Bautex Masonry Wall with Layers

But, assuming you are able to get the costs per square foot of exterior wall per division for each of the wall com­po­nents, what do you do next? 

Right, you look for cheaper options within each division. It’s only natural to look at how the cost breakdown is made and run through each line item looking for alter­nates. The challenge with this approach is that the cost of the material is rarely more than 45% of the total bid. So, finding alter­na­tive materials that are 10% cheaper (a good win) results in nominal savings, if at all. 

Why? When asking for a price per square foot of the exterior wall, you need to corral a lot of people, and the more you touch, the more their indi­vid­ual general con­di­tions (mark-ups) begin to impact the bid. 

With as busy as everyone is, general con­di­tions are going up faster than the cost of the product. This means that when subs are asked to price different options, they rarely budge much from their initial bid. While the product cost may be less, the sub­con­trac­tor is not motivated to give it all back to the con­trac­tor and owner. There is too much work out there to spend the time going through price reduction options through our tra­di­tion­al esti­mat­ing systems. 

So, when an architect or an owner asks how much cheaper one wall system is from another, it can be very difficult to provide a real number. In the end, the decision to use one wall system over the other is based on inac­cu­rate or incom­plete infor­ma­tion that may end up actually increas­ing con­struc­tion costs in the long run.

Break the Cycle By Breaking the System

Let’s follow the money in the old system. The more subs you touch, the more general con­di­tions drive the cost. The more products you have, the more subs you need to build the wall. The way to break the system is to figure out a way to reduce the number of materials, by finding a wall system that requires fewer parts. 

Tra­di­tion­al wall systems are not the answer; you have to look for more inte­grat­ed systems that work across CSI divisions, not for product alter­na­tives within each division. Doing so may require you to think dif­fer­ent­ly about the wall, but the inno­va­tions that disrupt CSI divisions can help you bridge the gap between the budget and the cost estimate, and be the key to main­tain­ing the integrity of the design, total square footage of the project, and a suc­cess­ful project outcome.

Bautex Block is one such system. 

While it is often viewed — incor­rect­ly — as similar to CMU or other concrete products, Bautex Block is a product that actually spans into other divisions. While it has found a home within Division 3 Concrete, Bautex Block inte­grates foam into the product during its man­u­fac­tur­ing that serves as thermal insulation. 

When combined with a simple fluid-applied membrane to prevent air and moisture infil­tra­tion, Bautex Block elim­i­nates several products within Division 6 — sections that contain thermal insu­la­tion (con­tin­u­ous rigid insu­la­tion and cavity insu­la­tion) and difficult to apply sheet and joint-taped vapor barriers. 

It can also eliminate several products in Division 5 (struc­tur­al steel and light gauge framing), as well as simplify the attach­ment of sheathing elements, and it can reduce/​eliminate several details that require joints sealants and compounds to overcome typically found in Division 7.

BAUTEX BLOCK

Assem­blies

  • Interior gypsum board 
  • Bautex Block
  • Fluid-applied air & moisture barrier
Bautex Masonry Wall

The benefit of fewer systems means that it’s quicker to build than other systems that take a complex sequence of multiple subs to create a water-tight envelope. The quicker a con­trac­tor can get dried in,” the less sus­cep­ti­ble they are to weather delays and can start the instal­la­tion of interior Mechanical/​Electrical/​Plumbing systems and interiors. 

Even without con­sid­er­ing the impact of weather delays, the con­trac­tor will expe­ri­ence an overall reduction in con­struc­tion time. A few weeks of savings can also reduce the overhead to manage the project to com­ple­tion by the general contractor. 

Save them time, reduce their weather delay risks and reduce the number of subs to coor­di­nate with, and con­struc­tion costs will def­i­nite­ly come down. A big win for general con­trac­tors; a huge win for building owners.

Bautex Timeline Gantt Chart

The Cost Back-Check

This almost sounds too good to be true, right? We under­stand, so we wanted to validate that the claims we have been making about cost, number of materials, number of subs and con­struc­tion time do, in fact, play out as we have claimed. 

In the fall of 2018, Bautex had an oppor­tu­ni­ty to bid on a municipal project that was based on a prototype design where the team wanted to know the true costs of different wall options. This was an essential task that they needed done to drive down con­struc­tion costs on multiple projects. 

The Bautex Wall System was put up against a number of standard” wall types where the total cost of the wall and the total timeline of con­struc­tion could be estimated. It was the perfect scenario for Bautex to go head-to-head with other wall systems; the same project design, with a single cost estimator based in South Texas, and a blank sheet of paper for each wall system (nothing could be hidden within mark-ups). 

The con­struc­tion man­age­ment team was able to develop an inte­grat­ed budget and a con­struc­tion timeline for each of the different wall assem­blies using the same method­ol­o­gy for each. A level playing field for a dis­rup­tive tech­nol­o­gy such as Bautex is tough to come by, so we asked to see their results:

Bautex Comparison Table

The fact that the Bautex Block was less expensive for this project than concrete masonry or even concrete tilt panel makes sense for most people after digging into the details. But seeing that Bautex Block beat metal stud framing by 12% is usually a surprise for most who assume that light framing is the cheapest way to build any building. This fact may support why over 90% of the projects that have been con­struct­ed with the Bautex Block would most likely have been metal stud framed projects.

However, the real surprise for the esti­mat­ing firm was the fact that even in the com­par­i­son with metal stud framing, they iden­ti­fied a reduction in con­struc­tion schedule using Bautex, which will translate to even more savings for the owner than is rep­re­sent­ed above. Against concrete masonry and concrete tilt panel, the time reduction and budget savings were even more significant.

First Costs Are Only Part of the Story

If you have made it this far and you believe in the first-cost savings, the next logical step is to ask about long-term per­for­mance and main­te­nance. The good news is that in the same way Bautex Block was designed to disrupt the cost system, it was also designed to disrupt the per­for­mance chal­lenges of the wall.

In other words, by using few materials with inherent per­for­mance char­ac­ter­is­tics — including resilien­cy, occupant health, life-safety, thermal effi­cien­cy, moisture pro­tec­tion, sound reduction and long-term main­tain­abil­i­ty — a Bautex Block wall will out­per­form each of the wall assem­blies listed above. 

This means that normal Return on Invest­ment (ROI) or Net Present Value (NPV) cal­cu­la­tions are irrel­e­vant since a Bautex wall is both less expensive to build AND less expensive to maintain, plus yields an immediate return. This makes the decision to use Bautex Block even more attrac­tive. For more infor­ma­tion about the per­for­mance features of Bautex Block, check out the other technical blogs in our story hub.

Take back control of your budget and deliver on-time with a Bautex Block wall.