When beginning any construction project, one of the most intimidating and difficult processes is accurately predicting your final cost. Confusion often stems from the tension between what is required to complete the project and who ultimately orders and pays for it (assumes the risk). At Langer Construction, we first bring clarity by defining the types of costs associated with construction.

Construction Cost: The work that the General Contractor is responsible to provide and pay for out of their contractual arrangement with the Owner.  

Soft Cost: The items that the Owner is responsible to provide and pay for outside of their contract with the General Contractor.

Project Cost: The full cost of the project and is the number that your financing agency wants to know. It incorporates ALL costs that are allocated to the project.  

These terms seem rather simple, right? So, why is this at times so difficult to understand?

The management of construction projects is done differently based on your wishes and the General Contractor you’re working with. Every General Contractor in this industry approaches a project differently depending on their sophistication and standard contracting method. For example, one General Contractor’s standard approach may include providing a figure for kitchen equipment within the budget. This figure can be included or excluded depending on the Owner’s preference, but it is a point of discussion at the very least. On the flip side, a competing General Contractor may leave the kitchen equipment to the Owner and not address it at all.

There needs to be a level of trust and mutual understanding between project partners.  

Below is a chart that shows what the General Contractor and Owner are responsible for and what is variable (i.e. can move between parties depending on the specifics of the project.)

It is important to know the benefits of having a General Contractor provide as much of the “project cost” as possible. Although you will be charged a fee, one must weigh the long-term benefits against a nominal fee.

How much of your project do you want to manage? How much risk are you willing to take on?

While you may save money on a product or service if you manage it yourself – “in-house” – you’re taking on a significant amount of liability. You’re responsible to have the product or service ordered, delivered, and installed correctly. It must be the correct part, according to the right specifications and codes, and it must be paid completely. If it were managed by the General Contractor, these responsibilities would fall on the General Contractor.

A General Contractor should reduce your risk.

Langer Construction’s entire business is built around the ordering and approval of products and services. We have systems in place to fully review all products and processes to ensure they meet the Owner’s specifications and fit into the systems around it. We make sure that every decision and every detail aligns with the project scope and is in the Owner’s best interest. We manage projects, details, budgets, and contract negotiations with subcontractors, ensuring that each subcontractor meets acceptable insurance requirements prior to being on site. We have payment procedures in place to guarantee that all the companies, unions, vendors, and subcontractors associated with the scope of work are fully paid and that all lien waivers are received to insure a clear title at the end of the project.

Our goal is to provide a “project cost” that includes everything in the project with a clear understanding of who is responsible for each detail.

When the decision has arrived to choose your General Contractor and partner, you need an expert at the center of your operations; a General Contractor who can manage the work that needs to be completed and knows who is responsible. Trust Langer to have your best interests in mind.   

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