ROI for Design/Pre-Construction Investment

• According to a study conducted by the University of Florida on the effect of pre-construction planning on cost and sustainability, the average saving cost of pre-construction planning is largely dependent on the investment in the implementation of pre-construction plans.
• A survey conducted by the project revealed that companies that invested more in implementing some pre-construction planning method had more cost savings in their projects.
• The study established a linear relationship between the % cost savings (Y) and the % pre-construction planning (X) as thus;
•  Y = 0.0483(X) + 7.1891. Where the R-Squared value or the coefficient of determination is given as; (R^2) = 0.0012.
• Another report by Plan Grid suggests that pre-construction cost represents between 1-3% of a given project's total cost.
• This means that "for a $5 million project, an owner would spend up to $150,000 on pre-construction services."

Triangulation

• Based on the above claim, that pre-construction cost represents between 1-3% of the total cost of a given project, replacing (X) in the above equation (Y = 0.0483(X) + 7.1891) with 1% and 3% (in order to determine the saving cost range for a construction project);
• When (X) = pre-construction planning cost = 1%, then, (Y) = cost savings = 7.2374.
• Also; when (X) = 3%, then, (Y) = 7.2374 × 3 = 21.7122.
• Therefore, the amount saved per dollar invested during the design/pre-construction stage of a construction project ranges between $7.2374 to $21.7122.