Construction Audits: Our Experts Can Save You Money
Have you ever wondered whether you were being billed correctly by the GC for your construction costs?
Did your project manager, architect, engineer, or construction management firm oversee the project for you and review all the construction costs?
Did your in-house audit group and / or your in-house accounting group review all invoices related to the construction project costs?
Have you completed a construction project of $1 million or more within the last 3 years?
If you answered Yes to any of the questions above, then our Construction Audit services are right for you. Get peace of mind by letting our Construction Audit experts afford you the opportunity to recover lost dollars that are inevitably part of the construction process, as well as give you the time to get to your other projects.
We have performed Construction Audits for Our Clients on all types of contracts comprising over $1 billion in billed construction costs, saving our clients many millions in the process. Our team consists of former Big 4 engineers with real world construction experience, as well as construction finance experts. So, when you work with us, you are getting Big 4 construction advisory and audit experience without the cost, from people who know construction.
We do not take the place of your architect, engineer, audit staff, or project manager; we supplement their services by taking the necessary, detailed financial review of your construction project and your construction contracts to the next level—beyond what they would do. Our team of Construction Audit experts levels the playing field through our in-depth knowledge and technical expertise of the various types of construction contracts and related processes. Our Construction Audit experts also ensure you pay only what your construction contract allows. We do this by physically going to your contractor’s office and reviewing all project related costs. A proper Construction Audit can only be conducted at the general contractor’s offices, because only the GC has all the detailed information supporting the project costs.
Construction projects are among the largest and most complex financial expenditures undertaken by many entities. Construction contracts are complicated and include pricing agreements such as Lump Sum, Guaranteed Maximum Price, CM At Risk, Fixed and Unit Price, Time and Materials, and Cost Plus. All contract types can and should be audited.
Most parties to construction contracts do not experience large construction projects everyday, so it is unlikely they will have the appropriate internal expertise to negotiate, manage, and perform construction audits of these contracts. On the other hand, this expertise is a core competency of the contractor being engaged; and, the contractor will have a dedicated staff focused solely on maximizing its profit from all the various provisions in the construction contract. (Do you?) As a result, many owners end up with ineffective expenditure controls for these construction projects and place too much reliance on their contractors, architects, or accountants to review their construction project costs.
Therefore, it is critical and highly advisable for a final construction audit to take place to ensure that the construction costs billed by the contractor and payments made by the owner are appropriate. Unfortunately for too many business owners, one of the most important steps in the construction process is overlooked, the final Construction Audit.
Our Construction Audit services help clients to identify actual and potential overpayments, overcharges, failures to recoup reimbursable expenses, etc., that may occur as a result of oversights due to the complex inter-relationships of contracts and the massive amounts of paperwork involved in the various transactions.
Furthermore, due to the language in many construction contracts, it is imperative that the owner quantifies its claims against the contractor for excessive billed costs and owner costs prior to final payment, unless a reservation of rights accompanies the final payment. (Please carefully review your construction contract for this language or forward it to us for a free analysis.)
Also, many construction contracts contain language added by the owner stipulating that if a construction audit is performed and a certain percentage (for example, .5%) of overall construction costs are identified as overcharges, then the general contractor agrees to pay all Construction Audit fees. IF you have this language in your construction contracts, then our services could be free. If not, please send a note to your attorney to add this language to the construction audit provision in your next construction contract.
We have reviewed construction project costs ranging in value up to $400,000,000 and have earned cost reductions for our clients on almost every construction project audited regardless of the contract type, i.e., Lump Sum, Cost Plus, Guaranteed Maximum Price, etc. Our clients consist of some of the largest and well known companies in the following sectors: health care, hospital, K-12 school, higher education, retail, automotive dealer, hospitality, office, manufacturing, and development. However, we have been proud to serve all types of project owners including family-owned businesses, biotech, sports arenas, etc. Whether your contract is Lump Sum, Cost Plus, Cost Plus with a Guaranteed Maximum, with or without Shared Savings, CM At Risk, Bid or Negotiated, it should be audited. Our team has earned significant savings for our clients on all types of contracts.
CCC’s fees are not typically the lowest, but our results are comprehensive and thorough. We started our business in 1996 offering contingency fee services, so we only got paid if we saved our clients money. This meant that our findings had to be fair, reasonable, objective, and independent, so that the Construction Managers would refund the money to our clients based on the negotiated language in the construction contract. While we rarely perform contingency based audits today, we absolutely maintain the highest standards of objectivity and independence. Your Construction Managers will recognize this throughout the Construction Audit process, which ultimately helps result in fair, expeditious, and amicable settlements.
Our Construction Audit services are typically provided under a fixed fee or hourly agreement depending on the scope of the project. We will work with you to develop a fee structure that meets your needs.
One of our most important goals throughout our Construction Audit process is that we conduct our business being very sensitive to the ongoing relationships between our clients and their contractors. We realize that they are your long-term partners (as we hope to become) and maintaining that relationship is a top priority for us.
Construction Audit provisions are standard language in most AIA contracts that your general contractors use on an every day basis. Accordingly, GCs are very aware of your audit rights. In fact, often a GC is happy to have an audit, since it may actually result in an expedited final payment; because after our Construction Audit, you will be confident that the amount you are paying is correct.
Please contact us today so our Construction Audit experts can explain more about our Construction Audit services. By utilizing our team, at the very least, you will gain peace of mind knowing that you were billed correctly; but more than likely, you will realize a significant savings right to your bottom line.