The Life Cycle of a Construction Project
Construction projects have many cogs and wheels turning at any one time keeping them going, but the whole life cycle of a project encompasses more than just the construction phase. Any one project, whether tenant improvement or new construction, can be broken down into five phases.
Take a journey with me into the five phases of construction and for this journey imagine the following:
You've just recognized you are outgrowing your current office space. You currently rent 3,500SF of space.
Phase 1: Initiation
This is the idea phase. Fresh, new, and exciting plans are beginning to take shape in your mind. In this phase you'll begin answering the "who-what-when-where-why" questions and your internal Q&A may look something like this:
Q: What are my needs?
A: A space larger than 3,500SF (probably between 4,200-5,000SF), I'd like to keep renting because the possibility of owning a building that large seems daunting
Q: Why this project?
A: I've grown my staff 3-fold since I began my lease. There's no room to grow here and our staff takes up so much of the parking lot we barely have room for patients. Our neighboring suites often complain about lack of parking for their customers.
Q: When do I need to be relocated?
A: My current lease is up in 2 months! I won't be able to relocate for another year at best, if I find the right location.
Q: Who needs to be involved in the construction process?
A: Being the sole owner I can make my own business decisions, but I'm going to need a realtor. I also need to include my current landlord at some point. I need to get a better grasp on costs associated with construction also, so an architect or a general contractor who can provide budget figures. Down the road, I'll need to get in touch with a banker regarding loans. I will need to find a construction team for the actual construction.
Q: Where am I planning this project?
A: I really like the community I'm in now. Most of my patients are from nearby and I don't want to become inconvenient or out of the way for them. I would like to stay nearby within 10-15 minutes from my current location.
In this phase you are researching locations, people, and maybe evening creating a vision board of what you like in offices. You are dreaming, but you are in the beginning phases of setting your plan into action. By the end of phase 1, you will have found your location and team and be ready to plan for your future office.
Phase 2: Definition
This is the planning phase. You've done your research, you've found your location and narrowed down your team. For this example, we are going to say you are going with an architect and a competitive-bid to choose your GC.
During Phase 2, you meet with your architect and provide him guidelines for your new office. You know you will need a minimum number of patient rooms and have discussed future needs. The layout is created to optimize flow of traffic. The architect sends out the plans to a select list of 2-5 General Contractors and the rest of this phase is out of your hands! Whew...
The remainder of Phase 2 is handled by the General Contractors reviewing the plans and RFIs (requests for information) answered by the architect and/or engineer (if applicable).
At the end of the bid process, GCs provide their bids to your architect for you and they to review. You may ask questions, or have your architect ask questions, to any of the GCs regarding their work history, bid price, etc. or request an interview with them to get a better understanding of their project management practices.
Your final step in Phase 2 is to select your General Contractor.
Phase 3: Execution
Let's get this project rolling! Hold on.... first you need to initiate your contract documents with your general contractor. The benefits of a signed contract and terms is obvious, for both you and the contractor. The time for this phase varies and is dependent on the size of the project, alternates that need to be accepted/denied from the base bid (if requested), and the type of loan you will be using. Your bank may request to be involved in this process, especially if using an SBA loan. Phase 3 could take 1-2 days or up to 30 days.
Ok, now.... Let's put this plan into motion? Finally! after all the dreaming and planning you can see work taking place! The GC has provided a schedule and is supervising the project progress. Clear and open communication between the site superintendent, project management and yourself has been established.
During this phase, you can focus as much or as little on the project itself. It is in the hands of professionals who manage this everyday, but it is still your new space!
You may find yourself wanting to make changes as the project progresses and you can visualize yourself in the space. You can request pricing for those changes and be provided a "Change Order" document with a price for the item. Some changes may delay the finish date, so make sure you are aware of that before accepting if completion date is important!
Most, but not all, municipalities issue a Certificate of Occupancy or Temporary Certificate of Occupancy prior to you being allowed to move furnishings into your space. At the end of this phase, your new space will be ready to occupy.
Phase 4: Maintenance
A commonly overlooked (and underappreciated) phase of construction is the maintenance phase. This is two part.
1: Punchlist: A punchlist is a list you (or the architect) provide to the GC prior to final payment. The project is well done and complete, but small things have come to light. For instance, you notice an exam room pocket door that doesn't run so smoothly on the tracks or a section of base appears to be peeling from the wall in your reception. Small items, that were apart of your contracted price that need to be addressed, fall on a punchlist.
2: Post-project maintenance: This is where your warranty items fall in Phase 5 (and your warranty terms should have been included in your contract documents!). For our team, KC Constructors, all work performed by us or sub-contractors are warrantied for 1 year from the time you receive occupancy. It's not often and they aren't large, but warranty items like lighting ballasts, some minor flooring issues, or door closures seem to come up more often than other things.
Phase 5: Closure
Closure and Maintenance go hand in hand, and often are combined into one phase. Closure will actual occur prior to Phase 4 - Step 2! Closure is when the finished project is handed over! You get the keys to your new space. The contractor provides warranty documentation, balance reports (as applicable), and after receiving final payment heads off to their next project. You are now practicing in your new space!