Today’s transportation costs have owners searching for ways to save precious funding dollars as well as get the quality project they expect. With the cost of materials and labor rising, contract bids often exceed planned budgets. As a result, many owners find themselves scrambling to cut costs. One area often targeted is Construction Engineering and Inspection (CEI). Reducing inspection hours, reducing the number of inspectors, reducing minimum required certification levels, and paying for less project management are all ways owners try to reduce costs. But what is the cost to the owner? Are these sacrifices worth it?
What is CEI?
To answer these questions, it is important to define CEI and understand its cost relative to the total cost of a project. CEI is a means whereby owners can hire specialized inspectors and managers to oversee construction projects. Typically, CEI personnel come from in-house staff and consulting firms that specialize in the industry. Owners can specify the level of education, qualifications, and experience that the personnel must have to meet their specific requirements. The total cost of a project is comprised of development costs, which can be estimated at 10-15% of construction costs, construction costs or the awarded amount, and CEI, which is estimated at 8-15% of the awarded amount. In comparison, the design and CEI costs are small compared to the total project costs. Yet many owners are tempted to cut CEI and sacrifice its benefits, instead choosing to gamble that the project will be constructed according to the plans and specifications
What are the benefits of CEI and the cost of sacrificing it?
CEI is the owner’s only representation during construction. It provides the “eyes and ears” for quality in the field. It provides a written record of construction, including accurate as-built plans. It is the owner’s method of preserving the design intent and proper spending of tax payer dollars. Less inspection will most likely lead to increased change orders and claims. Sacrificing inspection means owners relegate themselves to weaker positions without a meaningful presence on the project, and allowing substandard work to be performed through lack of construction oversight. In short, less inspection results in costly quality issues, reduced project life, and increased maintenance costs. These costs translate to poor stewardship of public funding and an overall poor reputation with the public. There should be no doubt that the benefits and value of CEI far outweigh any perceived savings in sacrificing them.
Clearly, sacrificing thorough CEI is not a wise choice. CEI is a small portion of the total cost of a project. It provides great benefits at a small cost, preserving the design intent and protecting the construction quality of a project. The cost of less inspection is much greater than the cost of thorough CEI. Responsible owners should evaluate these factors and review the entire project development process for ways to save funding. By working with industry professionals, owners can provide the most cost-effective, quality projects possible. There is a high cost to sacrificing thorough CEI…and owners can’t afford to pay it, and tax payers don’t want to.
