Our Construction Cost Review Process

Over the past 30 years, we have developed and refined standard approaches, processes and procedures to auditing costs that are customized for the unique circumstances surrounding each construction project and contract. Our Contract Compliance Services team focuses on providing assurance that construction costs audited are commensurate with the terms and conditions of underlying contracts and appropriate based upon the underlying agreements. To the extent that costs do not correspond with the terms and conditions of underlying contracts or should be borne by another party, we identify both the specific cost as well as the cause of it and then focus on providing sufficient basis for resolving issues.

Our construction cost review process typically includes the following activities:

Review, analysis and abstraction of contract terms and conditions
Identification of areas of primary risk and identification of ambiguities in contract terms
Recommendations for clarification or improvement of ambiguous or inadequate contract terms
Recommendation of risk mitigation processes, procedures and tools
Recommendation of improvements to owner’s processes, procedures and controls incorporating industry best practices
Review of contractors’ bids and proposals prior to award for compliance with contract terms and conditions, including assumptions, exclusions, burden rates, etc.
Detailed comparison of contractor billings to the terms and conditions of the underlying contract(s) focused on identified areas presenting a high degree of risk
Detailed labor, burden and mark-up analysis
Identification and documentation of costs billed in excess of contract terms
Verification of compliance with relevant terms and conditions of contracts such as insurance, bonding, letters of credit, minimum wage rates, target market, residence and local content
Computation, audit and verification of amounts due under guaranteed maximum price contracts and shared savings clauses
Verification of costs incurred for public purpose
Presentation of our findings and recommendations pertaining to recovery of amounts over-billed
Assistance with recovery, negotiation and settlement of disputed amounts and issues
Assistance and support with course of action dictated by project owners, findings and contractor response

By utilizing our construction cost audit services, clients receive an independent assessment of risks and construction costs that invariably lead to cost savings. If involved at project inception, we can assist in identifying risk and recommending adequate processes, procedures and controls that contain costs and assist in keeping projects within budget and contract expectations. If we are involved on an ongoing basis throughout the project, we can review invoices and pay applications and identify costs in excess of contract terms thereby giving clients adequate information to contain and control costs as and before they are incurred. On an after-the-fact basis, our audits identify specific issues on which costs are based and quantify costs by issue in order to provide clients with sufficient relevant information to identify and contest costs in excess of contract terms. Invariably, the savings and value received by our clients far exceed fees incurred for the service. It is not uncommon for EAS to identify overbillings in the range of 3% to 5% of total costs audited.

Construction Program and Project Advisory Services

EAS professionals provide construction program and project consulting services to owners, developers, and lenders of constructions projects. By utilizing our program and project advisory services, clients are able to monitor, track and control construction costs. When leveraged over an entire program, it is not uncommon for clients to save millions or tens of millions of dollars in construction costs. On a program basis, savings on the order of 50 times EAS fees are not uncommon. These services include:

Assistance in developing or refining program structure and organization
Assistance in structuring financial terms of contracts
Benchmarking industry costs and market price levels
Change order negotiation support
Change order scope and pricing review
Change order tracking
Compliance monitoring
Contingency and allowance tracking, review and assessment
Establishing contract oversight controls
Establishing monitoring, tracking and reporting requirements
GMP and cost savings amount review and determination
GMP tracking, monitoring and audit
Identification, recommendation and implementation of risk mitigation processes, procedures and tools
Invoice and pay application review
OCIP audit and monitoring
Ongoing monitoring and oversight
Participant role and responsibility identification
Pricing and fairness assessments
Target market and other special program monitoring and audit
Value engineering assessment and support