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How to Break Through Client Skepticism of the “New Normal” in Job Costs

Ask LEMOINE Vice President of Preconstruction J.D. King what his biggest challenge is these days, and his response is quick and to the point: Communicating the ”new normal” in job costs to project owners.

Project costs have been steadily rising in recent years due to the COVID pandemic, the skilled labor shortage and rising labor costs, interest rate hikes, inflation, supply chain disruptions, and increased competition for materials, among other factors. 

“We are now settling into the ‘new normal’ of where costs are,” J.D. says, “and no one trusts the numbers.”

J.D. understands his clients’ skepticism: “Prices of trucks have gone up radically, and I don’t believe they should cost that much. But if I look at the market and what’s contributing to those price increases, the data tells a clear story and I have to agree with it.”

The same price escalation + price mistrust phenomena is happening in construction, he continues. “If you want to build an MOB (medical office building), the cost has escalated 30-40% over the last three years, and people are having a hard time understanding that spike in price.”

With four offices serving the state of Louisiana, LEMOINE also has a presence in Texas, Alabama, Virginia, and Puerto Rico. The 50-year-old company’s core markets include healthcare, education (both K-12 and college/university), commercial, and a burgeoning disaster services business unit. While LEMOINE puts in place more work in the state of Louisiana than any other contractor, the competition in today’s construction environment is tough.

There are a lot of great general contractors out there, says J.D. The key to winning work with clients is to “build trust in this turbulent construction environment and prove that you’re the right construction partner to do the work for them.”

J.D. King, VP of Preconstruction

J.D.’s proof these days is delivered via Join, which he calls a “decision-making platform.” J.D. was an early adopter of the platform, used on collaborative projects by LEMOINE, its design teams, and owners to:

  • Visualize complex project data
  • Allow stakeholders to quickly understand decision impacts
  • Make informed, team-based decisions
  • Improve team clarity and reduce risk

As an example of how Join helps build trust among collaborative teams, J.D. uses LEMOINE’s Lafayette High School project as an example. “During preconstruction of the project, structural steel was through the roof,” J.D. says. “So, in between the DD and CD design phases, the team collaboratively decided to use CIP (cast-in-place) concrete for the structure. Then concrete began to escalate rapidly, and the team went back to specifying structural steel.”

“This was a huge decision on a 300,000-sq.-ft. high school,” J.D. says, but Join helped the architect, structural engineer, and owner more easily collaborate and consolidate all relevant information into one place. 

J.D. says his teams are now using Join not only for work in progress but for project pursuits.

“We’re actively building confidence in the numbers we are presenting to our owners,” he says, “and we’re doing that with Join Forecasting.”

Using Join Forecasting, LEMOINE now has all its estimates in one place, creating a reliable environment of historical costs. If a healthcare owner wants to know how much an MOB (medical office building) is likely going to cost, J.D. and his team can find all similar MOB projects in Join and within minutes run a comparative analysis–including location and time-based escalations–to provide the client an accurate estimate of what their project might cost.

“Having those data points builds confidence and trust,” J.D. says. “Clients are increasingly using LEMOINE for feasibility studies and go/no go decisions. If an owner sees in Join that the budget doesn’t align, they know that they either need to get additional funding for the project or cut scope. They can trust our data because it reflects LEMOINE’s entire pipeline of construction and as the biggest builder in the state of Louisiana, our database is not only robust, it’s current.”

“Two years ago, one of the big drivers in precon was early release packages,” J.D. adds. “Today, it’s long-lead procurement. Tomorrow it will be something else. The ‘new normal ’in construction is continual change. Join Forecasting helps our customers navigate these ever-changing market conditions by giving them the most reliable information available about project costs. We are thrilled to be able to offer our clients proof of costs, with receipts, which gives them new trust in our data and confidence in our teams.” 

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Lafayette HS

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