bid. If three contractors are bidding on your project, the architect will typically develop a spreadsheet with three vertical columns. At the top will be the name of each construction company. Below those names will be a series of horizontal line items, including, for example, plumbing costs, electrical costs, millwork cabinetry costs, flooring, fire sprinkler system, and painting. The goal is to ensure an apples-to-apples comparison. If a line-item cost is missing from one of the contractor’s bids, the architect will call the contractor to see if this overlooked cost might be included in another line item. If two of the contractor’s costs for a particular line item are similar, and the third is substantially lower, the architect will again call to ensure that this lower cost indeed covers all the requirements pertinent to the line item in the construction documents. Architects act much like the referee in a basketball game, making the players play within the rules. Rely on them to navigate you through this sometimes very tricky process.
The architect and the contractor are both qualified to design cabinets for your new office, but it may be preferable to have your architect be responsible for cabinetry design and include the drawings in your construction documents.
Beware of the contractor trickery that involves allowances. Let’s assume that the architect has called for specific lighting fixtures for your new office in the construction documents. Two of the bidding contractors quote you a similar cost for these light fixtures. The third quotes you an “allowance” for these fixtures of a much lower dollar amount. What the allowance indicates is that the contractor will only cover the costs of these fixtures up to a maximum of this lower dollar figure. The remaining costs will be added onto your final construction costs. This is a ploy to gain an edge on competitors by appearing to have a lower bid. Any time allowances are involved, the total cost quoted for your project ends up being a mirage.
Completing the Design Phase for Your New Office
The interior design phase of your construction documents is typically done by the architect during the time that the engineers are working on their piece. Occasionally a contractor, rather than an architect, does this for a client after the bidding process, which can present several disadvantages. First, the bids you receive from the contractors will probably contain multiple allowances because no firm design decisions have been made in your construction documents. The other disadvantage to having a contractor do the design phase after tenant improvements have begun is the risk of delays. Often the design items you choose after construction begins have a long lead time or are on back order, forcing the contractor to put your project on hold until the items arrive. This time constraint may force you to accept less desirable alternatives.
Contractor
Tenant improvement costs will likely be the single biggest expense you will incur when opening your new dental office. They are also the expense that can fluctuate the most from the beginning to the end of your project, often wreaking havoc on your budget.
Hire a contractor who has experience building dental offices. An inexperienced company may underbid the project, not fully understanding its complexities and underestimating the time necessary to complete your project. If you live where experienced contractors are unavailable, it becomes even more important for you to get everything on paper to avoid expensive change orders.
Ask contractors for a bid that includes a full-time superintendent. A salaried employee of the construction company that you hire, the superintendent is the most important person involved with the construction of your project. He or she is responsible for ensuring that all the tenant improvements are built according to your plans and making sure that none of the subcontractors deviate from the plans to save costs. The superintendent coordinates all the various subcontractors and makes sure they show up as scheduled. He or she is the person who works closest with your dental equipment consultant/ supplier to make sure your equipment requirements are met. Warning: When a construction company takes on more projects than it can handle, the superintendent will often end up being assigned to several projects at once, leaving you with only a part-time manager. Inevitably, less supervision over the numerous subcontractors involved means more mistakes and delays during tenant improvements.
Hire a contractor who has experience building dental offices. An inexperienced company may underbid the project, not fully understanding its complexities and underestimating the time necessary to complete your project.
Avoiding change orders saves significant backend construction costs. You can also save additional costs on the front-end of your project. When you and the architect made decisions during the design phase of your plans, many may have been based on esthetics, without you really knowing the total cost. If even the lowest bid ends up being higher than your budget, value engineering can play an important role in bringing that cost back in line. When value engineering, the contractor will make suggestions about what you can substitute in place of the design decisions specified in your plans and tell you the resulting lower costs involved. Most contractors are familiar with the cost of materials. A contractor who is good at value engineering can save you a lot of money, and it only costs the contractor a little bit of time. Of course, for this to work, you are going to have to make concessions with your previous design decisions.
Sometimes a dentist will already have a relationship with a contractor he or she likes, or has the name of one highly recommended by a trusted colleague, and may elect to bypass the traditional bidding process. This can be to the dentist’s advantage, but only if the contractor is willing to attend all the design phase meetings with the dentist and the architect. If the dentist clearly states a budget for tenant improvement costs, the contractor can concurrently value engineer the project as the design phase progresses, guiding the dentist and architect in making decisions that keep final costs on target. In the construction industry, this process is called a negotiated bid.
One other tip for protection against financial catastrophe: Insist that your contractor purchase performance bonds and payment bonds that guarantee contractor performance and shield the dentist from contractor default. The American Institute of Architects (A.I.A.) has standardized performance bonds and payment bonds that guarantee contractor performance and shields the dentist from contractor default. Insist that your contractor purchase these standardized bond forms used by the A.I.A., which have repeatedly held up in court and passed the test of time.
When you and the architect made decisions during the design phase of your plans, many may have been based on esthetics, without you really knowing the total cost. If even the lowest bid ends up being higher than your budget, value engineering can play an important role in bringing that cost back in line.
Technology Specialist
The technology specialist has the biggest learning curve of any of the vendors you will need to hire for your project. “Plug-and-play” results can be realistically expected only if all the pieces of this complex puzzle have been judiciously planned, designed, and implemented (installed). The value of dental experience in this arena cannot be overestimated.
Planning for technology installation in your new office takes a great deal of research and due diligence. The first step should be to understand the practice management software and capture (imaging) software, the foundation of any digital office. The design stage consists of determining where the technology equipment and devices will be located in your office, and what they require to properly function. A critical element of the design phase also involves validating all the individual components as to how they need to be integrated, programmed, and set up. This validation process is a key step towards ensuring a problem-free installation, and demonstrates the value of experience. Trial and error can be very expensive and frustrating. The specialist’s previous experience with a variety of digital and radiology equipment will also be a huge advantage to both you and your staff during training, an important element of the installation phase.
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