Making the Switch to Design/Build

Bob Sturgeon was neck and neck with another good remodeler in a heated bidding contest for a plum job back in 2001. Sturgeon lost the contract - and it was the best thing that could have happened to him.

"I'd put so much time into bidding," says Sturgeon, owner of Westside Remodeling in Thousand Oaks, Calif. "I was completely discouraged at the loss of that job." Since opening for business in 1985, Westside had risen from handyman jobs to high-end projects. But Sturgeon was dragging his feet about switching to design/build and its no-competitive-bidding approach. That lost job "put me over the top," he says. "I went design/build on the very next call and sold the job."

Not that Sturgeon hadn't been urged for some time to go design/build. The Westside staff - owner/salesman/estimator, production manager/estimator, two lead carpenters and some laborers - was already a good fit for a design/build operation. The other contractors in Sturgeon's Remodelers Executive Roundtable group had been on his case for two years. He told them he didn't feel comfortable handling project design because he had no design training. The other contractors weren't having it. Sturgeon recalls the following exchange with a design/build remodeler from Minnesota.

Minnesota: "Do you do plumbing on your jobs?"
Sturgeon: "I sub it out, but I do it."
Minnesota: "You can do the exact same thing with design."
Sturgeon: "But what do I know about design?"
Minnesota: "What do you know about plumbing?"
 

The RER group members had even given Sturgeon copies of their design agreements, contracts and other design/build documents; he just hadn't used them. When he lost that bidding war, though, Sturgeon "put all the paper together and did it."

Sturgeon completed his first design/build projects in 2001 and early 2002, contracting the design to architect Kerry Gold of Agoura Hills, Calif., with whom he had worked well on previous jobs. One of those early jobs - and one that propelled Westside toward success as a design/build company - was updating a 1960s house in Thousand Oaks for the Cvjetnicanin family.

Debugging the design
Before George Cvjetnicanin called Sturgeon in October 2001, he had eliminated two other candidates for the job - a high-end company with good design ideas but steep prices, and a one-person operation with lower prices but vague design ideas. Cvjetnicanin heard about Westside from a friend who knew both Sturgeon and one of Sturgeon's employees.

Cvjetnicanin and his wife wanted to open up and modernize the compartmentalized living area in their house, revamp the kitchen, and relocate glass doors to capture spectacular canyon views. Though unfamiliar with design/build, Cvjetnicanin liked the process Sturgeon described in their initial phone conversation. "I explained that I come out there, talk with you about what you want, do an initial takeoff and take some digital pictures," Sturgeon says. "Then I come back with a design agreement. If you sign it, I'll have my architect come out."

In the first meeting, after examining the house and discussing the job, Sturgeon presented an initial budget of approximately $91,000 and asked the homeowners to sign a design agreement. The estimate looked fine to Cvjetnicanin, and the $1,500 design fee pleasantly surprised him, especially when compared with the much higher figures the first bidder had thrown around. The design process, covering conceptual plans, modifications and full design development, "did not cost that much at all," Cvjetnicanin says. Besides, "we liked where Bob was going." The Cvjetnicanins signed. Within days, the forces moved in. Sturgeon and Gold met with the Cvjetnicanins to discuss the design in more detail. They met five times during the next three months. "It was impressive that they'd spend time to get a feel for what we wanted," Cvjetnicanin says. Sturgeon, Gold and production manager/estimator John Treuhardt then combed the property from attic to crawl space, doing further measurements and analyzing the structure. Once plans were drafted, lead carpenter Jim Patton scoured the house as well.

Sturgeon says Westside would not have taken the time to do so much pre-construction analysis if the firm were not design/build and just one of several firms bidding on the job. With a design agreement, though, time spent upfront became a good investment.

The plan was "getting debugged as we went through the house," Sturgeon says. This, too, impressed the homeowners. "They did a lot of research to try to avoid surprises," says Cvjetnicanin. For example, interior walls were going to be removed to open the living space, but Patton discovered a difference of 1 to 1 1/2 inches in floor levels from room to room. "I knew we had to build up the floor," he says. Raising the floor set off a chain reaction, requiring ceiling heights to be raised. Also, "the blueprints showed changing out the header over the fireplace," Patton says. "I crawled in, and there was a header already. It just needed to be modified."

The homeowners wanted a walk-in pantry in the kitchen, but there was no room for one. When the cabinet designer saw the plans, he advised against it and devised a design with more counter space and cabinets. The Cvjetnicanins joined Sturgeon at the cabinet showroom to see the three-dimensional design on a computer and agreed it was a better idea.

All these changes were reflected in the final construction drawings, forestalling surprises and delays during production. At each stage of design refinement, Sturgeon gave Cvjetnicanin an updated construction estimate, so when it was time to sign the construction contract, the homeowners felt well-informed about the final estimate.

Optimistic estimating
Demolition started in May 2002. To shield the Cvjetnicanins from construction commotion, half the house was set up as living quarters. A hall clerestory was closed with drywall (as the plans specified anyway), an interior door installed and a temporary kitchen set up. "We were very comfortable," Cvjetnicanin says.

Although Westside had caught significant construction issues beforehand, a few emerged once production was under way. One involved tying in headers and some of the joist framing for the new, coffered ceiling. Patton says details on this issue were overlooked in the blueprints. A seasoned remodeler who ran his own company in Pennsylvania for 14 years, Patton devised a solution. He gave a rough drawing of what to do to Treuhardt, who redrew the plan and passed it to Gold, who approved it. Treuhardt says the change was taken care of without delay because, in the design/build manner, "the lead and the architect work well together before something becomes an issue."

Another surprise was more costly. The plans called for replacing the stone on the fireplace with drywall, tile and a site-built wood mantel. In the attic the chimney was brick, so everyone assumed the fireplace was brick with stone veneer. But after a demolition subcontractor cleared a 2x3-foot hole, it became clear that the fireplace was solid stone. Westside firred out, drywalled and rebuilt the hole, and then drywalled over the rest of the fireplace.

Toward the end of the job, Westside ran into trouble with the kitchen cabinets. The stain did not match the sample the cabinet company had given to the owner, a few cabinet fronts were wrong, deliveries were late, and some base shoe had to be run. "These are all minor things," Treuhardt says, "but they were an issue because they held up other things." All told, the cabinet troubles set back production by 2 1/2 weeks.

The fireplace and cabinet problems cost Westside time and money. "As a design/build remodeler, we have to take responsibility for everything," Sturgeon says. "We are paid to do the estimate and design, so whenever something comes up, it's on us." But those problems also bought him a valuable lesson: "Don't pin yourself down with optimistic estimating." Westside now includes a contingency line in its job-estimating spreadsheet as insurance against such surprises.

As far as Cvjetnicanin is concerned, Westside's performance in remodeling the house was just about perfect. "Bob really works hard at keeping things under control," he says. "The cost did not get out of hand. Jim [Patton] was fantastic." The project was not finished on time but was "still very close," adds Cvjetnicanin. "We've gotten a lot of compliments" on the house. "It was a very positive experience. If I could think of a complaint, I'd give it to you."

Revising the process
Sturgeon is slightly more critical. "The job ran 95% perfect," he says. But he's going for 100%. Since the Cvjetnicanin job was completed, Sturgeon has been fine-tuning Westside's design/build job-management procedures. "It's a much better thought-out process," says Treuhardt, incorporating "checks and balances between sales and production." For example:

• áWestside has developed checklists and procedures to systematize every aspect of a job.
• áIt now uses an estimating spreadsheet that Sturgeon says is "so detailed - every single thing you do is in there."
• áBecause subcontractors' bids for tile and granite work caused slight slippage on the Cvjetnicanin job, Westside put together systems "to verify all bids to the penny twice" before any work is done, Treuhardt says.
• áHaving learned from the framing issue on the Cvjetnicanin job, Westside always gets input from lead carpenters on estimates.
• áWestside now makes sure all products are selected before construction and are listed in one place, with contact names and numbers. Most of the products were pre-selected on the Cvjetnicanin project, but the record was poorer on other jobs. Now, Westside doesn't waste time tracking down selections.
• áCabinet delays on the Cvjetnicanin job held up painting and finish electrical, which in turn delayed final inspection. Now Westside is an Omega Cabinet dealer, and cabinets come pre-finished and complete.
• áAnd, just to ensure that he can assign the right person to the right job, Sturgeon is adding a few architects to his stable of contacts.

Unlikely as it might seem, everyone at Westside is happy about new weekly company meetings. The whole staff meets Wednesdays at 7 a.m. to go over all numbers and review job progress, company goals, new systems and forms. Patton, for one, says, "I like my job better now. I still go out and run the job, but I'm in the office, too. I like the change of pace." He adds, "I'm excited the way things are going. I see a lot of promise for the company."