Why Cost Optimization in Construction is Important

A case for government to mandate AEC firms use optimization solutions to keep projects on budget and on schedule.

Should the government mandate AEC firms use technology optimization, companies will be more capable of adapting as needed and keeping projects on budget and on schedule. 

On March 31, President Biden unveiled his $2.25 trillion infrastructure bill. And there was joy in the offices of AEC (Architectural, Engineering and Construction) firms across the country.

Putting the politics aside related to how it will be paid for, what project types will be included, and when the work will take place, there are some concerns.

After all, in 2009 President Obama signed the $787 billion American Reinvestment and Recovery Act. At the time, the US was in the midst of the Great Recession. President Obama said it included “shovel-ready projects” as a way of giving hope to beleaguered Americans who were out of work and desperate to see the economy pick up.

However, in 2010, President Obama told the New York Times, “The problem is that spending it out takes a long time, because there’s really nothing – there’s no such thing as shovel-ready projects.” While this may have surprised and disappointed the President and other politicians as well as the general public, those in the AEC world are well aware of the time it takes to move a project forward.

Turning back to the latest massive infrastructure bill, the question is, what can be done so that this bill meets expectations and can be deemed a success? One way to gain the approval of government watchdogs and the public is to ensure taxpayer money is well spent.

This is particularly challenging since construction projects are notorious for being late and or over budget. In fact, FMI, a management consulting and investment banking firm dedicated  to engineering and construction, infrastructure, and the built environment found that 90% of all global infrastructure projects are either over-budget or delayed.

One of the main reasons for this is the extreme complexity in these projects which is difficult to cope with using traditional methods. Fortunately, new technology including AI-powered optimization software, has become prevalent in the construction world. And those who use optimization software are better equipped to keep their projects on track and help them recover when delays occur. All of this leads to better maintenance of budgets.

Because optimization software can help infrastructure projects reduce waste and stay on schedule, the government should mandate that general contractors commit to using the software. With this commitment, the public can feel more confident that taxpayer funded projects are being carefully considered.

Other countries, including the UK, are starting to require more optimization technology. This can be seen on the HS2 project, a high-speed rail line that will span much of the country. The project website notes technology and optimization need to be included in the process. Further, it states, "Design decisions should help optimise the value of taxpayers’ investment over the short- and long-term."

One of the challenges of infrastructure projects is that each one is unique. Clear and exact precedents simply don’t exist, which makes project management more challenging as teams are constantly recreating the wheel. Therefore, even though construction projects are typically well planned out, the chance that they will hit bumps in the road is high. At that point, when the team has to come up with a solution, is where projects either stay on budget and schedule or go astray.


"Design decisions should help optimise the value of taxpayers’ investment over the short- and long-term."

HS2 Project Team 100+ miles high-speed railway project in the United Kingdom

Like the famous quote from Mike Tyson, "Everybody has a plan until they get punched in the mouth," project teams are challenged to determine the best way forward.

One example of technology optimization is the ALICE platform. It helps users address the inevitable variability of construction projects and gives teams the ability to reschedule quickly and efficiently during a job. 

The Koula Tower, a 41-story mixed-use tower in Honolulu, is currently under construction. Serving as the general contractor for the project is Hawaiian Dredging Construction Company (HDCC), and they are using ALICE to optimize the project. 

James Abeshima, project director at HDCC, said “ALICE was instrumental during pre-construction for Koula tower, helping us to identify the most efficient schedule for the project. But in construction, circumstances inevitably shift during a build. With ALICE, we have the confidence that we can tune our schedule on the fly and manage the unexpected without jeopardizing our schedule and cost targets.” 

Now that the infrastructure bill became law, those in the AEC world can celebrate. Should the government mandate AEC firms use technology optimization, companies will be more capable of adapting as needed and keeping projects on budget and on schedule. Such results are sure to satisfy government watchdogs and the public.

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