Plan and Cost Reviews

Plan and cost reviews are a critical component of both construction loan monitoring and affordable housing program construction monitoring. Our plan and cost reviews help lenders and PHAs evaluate and mitigate risk on their construction projects before construction begins.

Our team of engineers and construction experts review every line of the construction contract and all of the planning documents to ensure that everything is coordinated, in line with the requested investment amount, and will meet the lender’s or PHA’s expectations. We leverage real-time construction industry knowledge to ensure costs are in line with current market values and that plans are fully detailed and constructible.

GLE’s plan and cost reviews include the examination of the contract’s Cost, Constructability, and Contingencies.

Cost Review

We evaluate requested fund amounts to ensure that costs are appropriate for the job and timed appropriately, to avoid front-loading and cost padding from the contractor or developer. We inspect every line item as well as the draw schedule.

• Line items. An average commercial construction contract will contain between 50 and 250 line items. These include windows, drywall, concrete, grading, utilities, and much more. Our team is deeply involved in the construction industry on a daily basis, and evaluates each of these items according to current market costs, materials, and best practices.
• Draw schedule. It is not uncommon for contractors to attempt to excessively front load costs to improve their cash flow. This increases risk for the lender. Because our team includes active construction professionals with deep experience, we understand the order in which construction must occur, and when each trade should be scheduled on the critical path. We also have our fingers on the real-time cost of labor and materials for every stage of construction, and when it is appropriate and correct to issue funds for each stage. We evaluate your buyer’s contract to determine that the timeline is reasonable, correctly ordered, and that the value of each draw matches the market value for work to that point, on a line-by-line and stage-by-stage basis.

Constructability

A poorly designed or inadequately detailed construction plan will cause excessive change orders and rework. Both are costly, eroding the value of loans and decreasing the developer’s ability to stay within budget. Our construction industry experts and engineers review every aspect of construction plans to ensure that they are adequately detailed, account for real-world conditions, and that they are unlikely to create conditions that lead to excessive change orders and rework. When we uncover gaps at the outset, more complete and constructible plans can be developed to protect the project.

Contingencies

Even the best-made plans run into contingencies. This is true for both renovations and new construction. In addition to reviewing costs and constructability, our team will review allowances for contingencies to ensure they’re in line with industry standards and the specific conditions of the individual project.

Besides cost, constructability, and contingencies, our team also reviews the contract to ensure that it provides for adequate insurance, liquidated damages, time to pay, and off-site storage. Contact us to find out more about plan and cost reviews as well as complete construction loan monitoring and affordable housing program construction monitoring services.