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April 24, 2019

University Scores $65,000 Savings on Athletic Facility Construction

Client Profile

Industry: Higher Education
Number of Students: 30,000+
Geographic Footprint: New York
Entity Type: Public University

Construction area in distanceIssue

A state university wanted to review its construction costs for a new athletics field house.
The university was using a lump sum contract for the roughly $15.4 million construction
project, and it requested assistant from CBIZ to help control change order costs.

Solution

Our team audited the construction change orders, reviewing subcontractor labor and
equipment costs, insurance and bond rates, and allowance usuage.
We discovered that the construction manager had included a performance and payment
bond rate of approximately 1%. On closer examination, CBIZ determined the contractor’s
actual costs supported a bond rate of .44%, dramatically lowering change order pricing
costs. Our team identified additional overbillings within change order pricing that reduced
billings by over 2%. We also discovered a 5% overstatement of proposed subcontractor
labor rates.

Outcome

By bringing in a construction cost review team at the beginning of the field house
project, the university proactively identified savings opportunities. It cut over $65,000
in construction related expenses from its change orders and eliminated potential
overcharges.

2019 Business Tax Planning Supplement


Copyright © 2019, CBIZ, Inc. All rights reserved. Contents of this publication may not be reproduced without the express written consent of CBIZ. This publication is distributed with the understanding that CBIZ is not rendering legal, accounting or other professional advice. The reader is advised to contact a tax professional prior to taking any action based upon this information. CBIZ assumes no liability whatsoever in connection with the use of this information and assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

CBIZ MHM is the brand name for CBIZ MHM, LLC, a national professional services company providing tax, financial advisory and consulting services to individuals, tax-exempt organizations and a wide range of publicly-traded and privately-held companies. CBIZ MHM, LLC is a fully owned subsidiary of CBIZ, Inc. (NYSE: CBZ).

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