Storage Development: Cleary Defined

September 1, 2004

8 Min Read
Storage Development: Cleary Defined

Storage Development: Cleary Defined

Cost-effective solutions to the construction process

By Bret Ellis

The most important aspect ofself-storage construction is proper planning. Building should be treated likeany other business venture and pursued with a complete understanding of theprocess. You have to plan before you can determine your costs. Identifying the key elements of your project and providingsufficient information to achieve your vision is difficult and should be givenits due course.

The construction process for self-storage is similar to any other type of project management. The better prepared and informed the players, the more likely they are to reach a cost-effective outcome that reflects theinitial concept. There are three components to development that will yield asuccessful storage site:

  • A clearly defined scope of work

  • A clearly defined schedule of values

  • A clearly defined line of communication

Scope of Work

Preplanning is not limited to blueprints; however,construction plans are the most effective means of delivering an ownersprogram to the builder, local municipalities and product vendors who will beinvolved in the project. Poor plans can create a domino effect that leads to delays,extra costs and even a final result that does not meet the owners desires.

A fatal mistake made by many inexperienced developers is toskimp on the architectural package. Neglecting to prepare an adequate design canhave tremendous impact on the overall project. In fact, architecture is one ofthe most common sources of extra costs and claims in the construction industry,neck in neck with civil costs at 30 percent.

A complete architectural design package defines the exactscope of work expected from the builder and the final product you expect. Think of contract documents as an instruction manual forensuring your vision of the facility is what actually gets built. They are thetranslation of your ideas into a universally accepted format for construction.The plans and specs are the medium through which your facility will be built andare a crucial part of your business plan. Following are some guidelines tocreating a quality set of construction documents:

  • Commit the funds. Architectural fees average between 2.75percent and 6.25 percent of overall construction costs (exclusive of landvalue).

  • Pick the right architect. Has he worked in the industrybefore? Talk to past clients and references. Was the architect promptin responding to problems? Did the developer incur extra costs due toshortcomings in the contract documents? Talk to the contractors who built thearchitects projects and ask about the quality and completeness of the plansand specs.

  • Instruct the architect of your intent. Define your programand its requirements by specifying what you want to build. Try to provide acomplete description of the physical attributes of the facility. Includeservices to be provided, any special construction issues, amenities to beoffered, aesthetic expectations, and any specific ideas you have with respect tothe final product.

  • Create an exit plan. If you need to walk away from theproject for any reason, you need to be able to do so amicably and without unduecosts. To achieve this, always ask your architect to divide his fees into thefollowing categories: code research, schematic drawings, civil package,architectural and engineered drawings, permitting, and site visitation andconflict resolution (usually an hourly rate).

  • Participate in the process. Define milestones in thedesign process and conduct a thorough review. If you need assistance in planinterpretation, bring help along. A qualified general contractor or constructionmanager can often identify shortcomings in the contract plans and specs thatcould later turn into change orders and extra costs. It is important to conductthis review often enough so your designer doesnt get off on a tangent, whichcould produce the need for corrections and the redrawing of plan sheets. A goodarchitect should welcome this review process, as he will want to get it rightthe first time. Redrawing does not make money for an architectural firm.

  • Question everything. Code interpretation is difficult atbest. Looking at issues from all angles allows for different interpretations.

  • Contract the work. There are several prewritten contractdocuments supplied by the American Institute of Architects (AIA) that can beused with your architect and contractor to protect all parties. They have beentried and tested in the courts and are an excellent method of defining the scopeof work, methods of payment, time frame and general conditions of the project.To get a listing or more information, visit

Schedule of Values

A schedule of values is the tool used by the design andconstruction industries to break down the construction estimate intounderstandable, separate items of work. The numbering system used is called theConstruction Standard Index (CSI). It is globally accepted in construction andwill be consistent from coast to coast. The CSI-formatted schedule of valuesallows for a better understanding of the costs to be incurred and a morethorough bid review. Insist that the potential contractors use the format ofyour choosing (or your architects) to assist you in the selection process.

There are several distinct advantages to requiring theschedule of values from potential contractors. The developer can use it to lookfor potential cost savings or overruns in the estimate. For instance, if yourfoundation costs are coming in twice as high as projects previously built, youmay need to re-evaluate the design. Short or under-bid items should also raise ared flag, since they can lead to delays or even additional costs. Its important to realize the lowest bid is not always themost cost-effective. Often, a bid that is substantially lower than those of thecompetition indicate items of work were missed in the estimates.

The schedule of values is highly effective in managing monthlydraw requests. If your schedule indicates your contractor is 80 percent completein item 04-200, Unit Masonry, it is easy to verify by on-site inspection whether this isaccurate. Without the breakdown, many items might get overpaid in advance, andyour ability to manage the project is decreased. AIA forms G702 and G703 are thepreferred documents for draw requests. When used together, they provide foraccurate billing and payment procedures using your schedule of values, retainagepractices and previous billings to ensure you pay the right amount against thecontracted sum.

Line of Communication

Construction management is the marshaling and allocation ofresources required to build the intended project as outline in the contractdocuments. These resources include labor, materials, equipment, architecturaland engineering services, time, and money. The process involves organizing awide variety of skilled workers and specialists; leading them in the implementation of the plan; monitoringprogress against baseline objectives; and making adjustments toensure the original goals are achieved. Its not an easytask. But as in any field, the better informed the team members, the more aptthey are to succeed.

Proper methods of communication must be determined andconsistently used so all players in the project know what is expected of them,when it is expected, and how they are to accomplish it. Verbal communicationdoesnt work adequately for construction, especially when it is provided atfield level. A tradesperson standing 5 feet deep in concrete will notalways remember the owner told him to tell the superintendent to tell theproject manager that the paint for the office walls should be tan. Issuesimportant enough to be stated in the field are important enough to write down.

Over the years, a series of communication tools has beenadopted by the industry to clarify issues, stipulate intents and outline costs.Your architect and contractor should be familiar with most of them and welcometheir implementation. The terms differ as you cross the country, but the intentand content remain the same:

  • Requests for Information (RFI)The RFI typicallyrepresents communication between the contractor and the architect. Informationregarding plan interpretation, differing site conditions, and generalconstruction requests is addressed in this format. As an owner, you shouldrequest to be copied on all this correspondence to stay informed and understandthe ongoing issues that could affect your project.

  • Requests for Pricing (RFP)An RFP is originated by youor your architect when you need to know what an addition to the project willcost prior to beginning the work.

  • Cost Proposal (CP)This is the reply to the RFP fromyour contractor. You can insist these proposals are also broken down into aschedule of values.

  • Change OrdersThese are issued after cost proposals areagreed upon and authorized for construction. Change orders become a legalcontractual document, and again, the AIA is a good source. It is also importantfor an owner to realize change orders can actually save money in some instances.Credit or no-cost change orders are common in construction and, in someinstances, are necessary to keep a project on budget. Creative construction management or value engineering can helpidentify these issues.

Along with understanding and using the proper method ofcommunication, it is important to ensure the right people are being properlyinformed. Before the project begins, always determine who will be therepresentative and main contact for the contractor, architectural firm andowner. Make sure they are available, prompt, authorized to make necessarydecisions, and have adequate knowledge to perform their designated tasks. Forinstance, the architects draftsman is not qualified to make design decisionsthat relate to structural issues, code requirements or life-safety issues.

Construction is a complicated process that can often lead todisputes. Following the three rules outlined above does not guarantee yourprojects will be free of challenges, but it will reduce the number of problemsyou have and greatly enhance your ability to address and resolve issues whenthey arise. This simple concept of properly planning your project, organizingyour costs, and informing participants is nothing new. Businesspeople use thispractice every day to succeed in their ventures. Why should one of your largest investments be treated any differently?

Bret Ellis is president of New Orleans-based Ellis ContructionInc., a full-service general contractor licensed to work in Alabama, Florida,Georgia, Louisiana, Mississippi and Texas. The company provides feasibility studies, preconstructionwork, design/build and general contracting, and construction management. For more information, call 800.924.0036; e-mail [email protected];

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