Construction cost saving: where it is really possible, and where saving costs dearly
Construction cost saving starts with the question of where the money really goes: into materials, into labour, or into the time the site is open. In many projects cost can be reduced precisely through the programme, the ordering and the design, rather than by cutting quality. I have experience in quantity takeoff and in checking alternatives for reducing cost, on the developer's side and on the contractor's side.
Four places where construction cost saving is possible
| Lever | How it works | Example |
|---|---|---|
| Shortening the programme | Fewer months of site overheads | Two months less, times 60,000 shekels a month, is 120,000 shekels |
| Shortening processes | Early decisions, samples and approvals; early ordering of items with a long delivery time | Windows that arrive a month late hold up all the finishes |
| Procurement and import | Comparing the full landed price, not the unit price | The table below |
| Value engineering | An alternative equivalent in function, at lower cost, approved by the designer | A tile size that reduces cutting waste from 10% to 5%: on 2,000 m², 100 m² less |
The first lever is usually the largest. How to calculate monthly overheads is explained on the site overheads page, and how to build a programme that can be shortened on the construction schedule page.
An example of shortening a process: approving samples of flooring, cladding and windows often takes several rounds. If each round takes two weeks and there are three rounds, that is six weeks. When the approvals run in parallel with the frame rather than after it, they come off the critical path. And in the tile example: 100 m² less, times 80 shekels per m² for illustration, is 8,000 shekels, with no change at all in function.
A worked example: the landed price of imported flooring
For illustration only: 2,000 m² of flooring is needed. You add 3% for breakage and 2% for reserve stock, and order 2,100 m². The price abroad is 30 shekels per m² lower than the local supplier's.
| Item | Shekels |
|---|---|
| Price difference: 2,100 m² × 30 | 63,000 |
| Less: sea freight, customs brokerage and release | 12,000 |
| Less: taxes and customs duty by product classification (an assumed example) | 6,000 |
| Less: storage and transport to site | 5,000 |
| Less: testing and compliance with the standard | 4,000 |
| Less: financing an early payment and a long delivery time | 3,000 |
| Balance | 33,000 |
Out of a potential 63,000, the example leaves 33,000. Now the risk: a shipment that is a month late and holds up the finishes costs a month of overheads, 60,000 in our example, and wipes out the whole difference. So importing makes sense when the order goes out early enough, with slack in the programme. The gap between a price list and market price is covered on the construction price list vs market price page.
Imports and mandatory standards: what to check before ordering
Cheap material that does not meet the standard should not go into the building. Before ordering from abroad, check:
- Whether an official, mandatory standard applies to the product. Such a product has to show conformity with the standard to be released from customs supervision.
- Which risk group it falls into. The route changes with the group: an importer's declaration, a model approval, or a laboratory test of the shipment. There is also conditional release to the importer's warehouses until the conformity approval is received.
- What the designer requires. Products for the structure, waterproofing and fire protection need the approval of the relevant consultant, even if they meet the standard.
- How long it takes. A laboratory test and the queue for release go into the programme, not only into the price.
These terms appear in the import glossary of the Standards Institution of Israel. The exact list of products and requirements changes, so check it for each product before ordering.
Where construction cost saving turns out expensive
| Area | What gets cut | What it may cost later |
|---|---|---|
| Waterproofing | A layer, a detail or a flood test | A leak that requires taking up the flooring and redoing the waterproofing |
| Soil and foundations | Trial boreholes, or the geotechnical consultant's supervision | A change of foundations in the middle of the work, with delay and cost |
| Safety | Guardrails, fencing or a works manager | A safety order, a financial sanction and a claim by an injured person |
| The bill of quantities | A general bill with no descriptions and no "the price includes" | Variations during construction, and disputes in every account |
On soil and foundations, check against the soil report and with the geotechnical consultant and the structural engineer before any change. Safety, and why it is cheaper than the alternative, is covered on the site safety officer and works manager page.
The rule: construction cost saving is tested on the landed price and on the programme, not on the unit price. A difference of 30 shekels per m² is not worth a month's delay.
A checklist before deciding to cut cost
- The difference in the full landed price, after all the associated costs.
- The effect on the programme, especially on the critical path.
- Written approval of the alternative by the designer and the consultants.
- Whether the alternative meets the mandatory standards, and who checks it.
- What happens if something goes wrong, whether a delay, a rejection or a repair, and who bears the cost.
Every saving starts with a quantity takeoff that shows where the money really is. A quantity surveyor can point to the large items, and that is where it is worth looking for alternatives.
Frequently asked questions
Where should I start if I want to reduce cost?
With the programme and the monthly overheads. Every month the site is open costs money, even when the work is not moving forward.
Is importing from abroad always cheaper?
No. Only after freight, taxes, testing, storage, financing and breakage, and when there is slack in the programme, can you tell whether any difference is left.
Can the bill of quantities reduce cost?
Indirectly, yes. A detailed bill with full descriptions and "the price includes" clauses reduces variations and disputes, and lets you compare quotes on the same basis. It does not lower the unit price, but it prevents surprises in the final account. More on that on the construction variations page.
What is value engineering?
A systematic review of alternatives that give the same function at a lower cost, approved by the designer and without compromising the standards.
Who can check alternatives on my project?
A quantity surveyor for construction projects who calculates the quantities of each alternative and compares them by full cost.
Have a project? Tell me briefly what the project is and what already exists. When the project is a good fit, I usually reply with focused questions and a written quote.
Contact me for a quote* Created with AI for marketing, for illustration only. Not reviewed by Yaakov Avital and not professional advice. Every project must be checked on its own by a professional quantity surveyor and an engineer.