Gain the necessary knowledge to price construction work based upon value, rather than cost and competition.
Construction contractors have experienced significant fee erosion since the 2000s. Contractors have been compelled to decrease their fees by competition and owners who want the bottom dollar. Fee erosion encourages contractors to cut corners, over-price changes, and in some cases use creative accounting practices to enhance their eroded fees. Such practices can leave contractors one project away from financial ruin, and dissatisfied owners. This information will show you a better way of pricing construction work.
Rather than pricing work based on the lowest cost to meet the specifications, and competing for the lowest fee, contractors can effectively market their services by offering to price their services based on the value the owner expects to receive from the completed project. Value-based pricing will help contractors make a fair profit and leave owners more satisfied that they are getting the value represented by the contract price. Other businesses have been using value-based pricing for years. The construction industry can follow their lead, effectively using value-based pricing for both negotiated contracts and competitively bid projects. Failing to utilize value-based pricing will result in continued fee erosion and the aftereffects a low fee has on a construction project. This information will provide architects, engineers, contractors, subcontractors, suppliers, local and state government administrators, attorneys, and others who are either in or do business with those in the construction industry with the necessary knowledge to price construction work based on value, rather than cost and competition, to promote a win-win outcome between owners and contractors. This information is critical to anyone who contracts for construction work.
Learning Objectives
- You will be able to identify the different pricing methods.
- You will be able to recognize how to implement an effective value-based pricing strategy.
- You will be able to discuss value-based bids.
- You will be able to explain the pros and cons of the different pricing methods.
Agenda
Overview
- What Is Value-Based Pricing?
Pricing Methods
- Pros and Cons of Different Pricing Methods
Developing and Implementing Value-Based Pricing
- Strategy
- Estimating
- Tracking Value
- Improving Value
Marketing Value-Based Pricing
Bidding Value-Based Price Bids
- Requests for Proposals
- Evaluating Bids
Conclusion
- Question and Answers
Speakers
Scott D. Cahalan,
Smith, Gambrell & Russell, LLP- Partner in the construction law section of Smith, Gambrell and Russell, LLP, an AmLaw 200 firm
- Adjunct professor of design and construction law at Georgia Institute of Technology
- General counsel to the Georgia Utility Contractor’s Association
- Practice includes all aspects of design and construction law from drafting and negotiating prime contracts, subcontracts, and purchase orders to mediating, arbitrating, and litigating construction disputes
- Drafted form construction contracts for the Associated Owners and Developers, a national organization
- Recognized by Chambers USA and Georgia Super Lawyers
- Frequent author and lecturer on construction law
- Member of the State Bar of Georgia, Northern District of Georgia, and 11th Circuit Court of Appeals
- J.D. degree, with honors, University of Georgia; B.S. degree in construction engineering, Iowa State University
- Can be contacted at 404-815-3711, scahalan@sgrlaw.com, or scott.cahalan@gatech.edu
Who Should Attend
This live webinar is designed for project managers, contractors, subcontractors, engineers, attorneys, architects, estimators, presidents, vice presidents, developers, owners, principals, suppliers, buyers, administrators, contract managers, and accountants.
