Client Profile
| Industry: | Higher Education | | Number of Students: | 30,000+ | | Geographic Footprint: | New York | | Entity Type: | Public University | |
Issue
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.
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