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How Does “Green” Affect Your Construction Estimate?

Posted: July 19, 2016 | Estimating

By Reed C. Thomas
(Excerpted from Standard Estimating Practice, published by
BNi Building News)

To understand how a green design might affect your construction estimate, there are a few basic principles you should understand.

Goals and Strategies

Any building starts with goals. A green building is no different, and will include all of the normal types of goals plus green or sustainable goals.

All of these are achieved through the design and construction process by means of employing different strategies with which to accomplish them. An example of a strategy would be to design and build a two-story steel-frame building with a flat roof. The goal of providing indoor air conditioning might be achieved by using heating and cooling units on the rooftop.

For a green building, an example of a sustainable goal might be to reduce the amount of energy consumed for this building by 30%. There are many different strategies that could be employed to achieve this, from how the building is oriented on the site, to providing a thermally efficient envelope and more efficient HVAC systems.

Estimating green buildings is no different than estimating any type of building, but there are two main situations that may require you to approach the preconstruction differently. The first is to separate out and track any cost premiums that might be associated with the project’s green strategies. The second is to research and provide cost analyses of different green strategies for the project before the design is finalized.

New/Different Strategies and Products

Your green building estimates may be affected by new or different strategies and products. These strategies could be harvesting rainwater for irrigation, or installing a green roof or solar photovoltaic panels. Different products could be bamboo flooring or low VOC5 sealants and adhesives.

Your first responsibility is to learn about these and understand what is involved with each one. It is probably worth your while to consider becoming accredited or certified in any rating system you find yourself working with. These credentials not only help you understand and include any items they require, but they are also professional credentials for your career.

What Are We Comparing To?

Every owner has different criteria for their building and what may be a premium cost for one might not be for another. For example, “commissioning” is a pre-requisite for any LEED® project, with an additional credit available for more extensive commissioning.

On some types of projects, such as healthcare, this would be standard procedure and not a premium cost, while on others, such as retail, it probably would be a premium. If you are tracking green cost premiums, you need to be able to answer the question: “Would this owner or architect require this strategy or product on their building if this project was not going green?” If the answer is “Yes,” then we have no premium. If “No,” we can then look more closely at this item to see if it comes with an additional cost.

Are You Tracking Cost Premiums?

If you are tracking cost premiums, there are many different ways to do this. Whatever method you may use, it is important to have an organized system and stick with it through all of your pricing rounds. Because you will probably be following a rating system for your project, it is recommended that you use that rating system to organize and track your cost premiums.

If you do recognize that a particular strategy will be a premium cost for your project, then you will have to do a separate estimate for each of these to determine its cost impact on your project. Be sure to recognize any costs savings in other categories that might offset an additional cost in another. An example of this would be that more money spent on a thermally-efficient exterior wall and roof system results in a smaller and less expensive HVAC system.

This can get a little involved, because some strategies affect many different aspects of a building and affect more than one credit. An example of this would be putting a green roof on a building. Green roofs are usually more expensive than other types of roofing. But, besides adding green space to a project, they enhance the thermal efficiency of the roof itself and will also help in calculations for storm water detention. They may also last longer, as the vegetated layer provides protection against the ultraviolet rays of the sun that deteriorate many roofing membranes.

First Cost Versus Life Cycle Cost

This brings us to our next consideration in estimating costs for a green building. We have been talking about a project’s “First Cost,” or initial construction cost, but for a complete picture, we need to look at what the life cycle costs will be for any strategy or product that is incorporated into the building.

Life Cycle Cost (LCA) refers to considering all costs associated with a particular strategy or product over its normal lifespan. First Cost is a baseline, but then we have to know what the product or system’s expected life will be. To know the LCA, we need to estimate the operational costs, the maintenance costs, and possibly its replacement cost.

Indirect Costs

Another aspect of a construction estimate that might be affected by a green project is indirect cost (anything not considered a direct cost to build a building, but necessary for the proper completion of the work). Things like General Requirements, Logistics, or Scheduling and Phasing can sometimes be affected by a green strategy or product. That green roof we mentioned above might have a different sequencing than a single membrane roof, and might actually add time to a project because of installing the vegetation at the end. LEED® requires documentation of your green construction-related activities that may add work to your project management and field supervisory personnel. On a larger project, this could mean adding an additional person(s) to your project team.

A credit that relies solely on the contractor to plan and implement is Construction Waste Management. Many contractors are now incorporating this as a standard practice in their projects. But each project is unique and the distance to available waste recyclers alone might add additional costs to this strategy; on some projects, it could even be a cost savings when recycling rebates are factored in.

Be sure also to account for the various additional consultants and services that may be required for a green project. Commissioning is required, and often by a 3rd party commissioning agent. Many times there is a separate LEED® consultant contracted for the project. There are the rating system registration and certification fees, and sometimes there are testing costs and modeling costs. Normally, all of these are contracted and paid directly by the owner or design team, but if it is not clear in the documents, then you have to clarify where these costs are to be included.

These are reasons why you need to be familiar with the rating system you will be using. You need to know which credits the project is targeting so you can determine if there are any premium costs, or see what the accurate cost for the project is – even when you are not tracking premiums.

This is an excerpt from the book “Standard Estimating Practice 9th Edition” which offers approved procedures and standards for estimating construction from the American Society of Professional Estimators. Published by BNi Building News and available at