Constructing a veterinary hospital from the ground up poses many risks, such as work delays, cost overruns, contract disputes and pricey mistakes. Challenges are common with such projects, but they can be incredibly impactful when functionality, safety and patient care are paramount. A strategic approach is required to help practice owners navigate the issues.
Here are 10 essential ways to ensure your construction project stays on time and on budget and meets the highest standards.
1. Careful Contracting
The foundation of any building project is the contract. A well-drafted agreement defines each party’s expectations, responsibilities and risks. A veterinary hospital contract can be complex because of all the medical equipment, specialized spaces and regulatory requirements.
Construction contracts should avoid one-sided terms that shift all the risks onto the builder or practice owner. Proper risk allocation ensures that issues are handled by the appropriate party, reducing the likelihood of disputes.
For example, a conflict might arise between a contractor and practice owner over delays, cost overruns or substandard work. The builder might claim nonpayment and threaten to file a lien. The owner could argue that the work breached agreed-upon specifications. However, a carefully drafted contract anticipates such a problem, ensures the contractor won’t file a lien and provides a mechanism for resolving the dispute so that the project stays on schedule.
2. Obtain Third-Party Cost Estimates
Hospital projects often involve complex systems and expensive medical equipment. To avoid budget overruns, the practice owner should get independent cost estimates from builders and suppliers specializing in veterinary construction. This step ensures the initial design and selected materials align with market conditions and realistic prices. Engaging an outside consultant to verify cost estimates helps safeguard against financial surprises and provides an objective second opinion as the project progresses.
Here’s an illustration: A veterinarian hires a contractor who provides a rough cost estimate for building and outfitting a new hospital. As the project gets underway, multiple issues occur:
- Building materials: The contractor underestimates the price of steel and concrete due to market fluctuations, resulting in a 15% cost increase.
- Permits: The city zoning office updated its requirements for new commercial buildings. The contractor didn’t account for the cost of additional permit-required work.
- Equipment: The veterinary hospital requires specialized equipment in its treatment rooms, surgical suites and diagnostic labs. The contractor did not factor in those costs.
Ultimately, the project costs 30% more than estimated, putting a strain on the veterinarian’s budget and requiring additional bank loans. The owner could have avoided the crisis by seeking multiple cost estimates or consulting with an independent project manager.
3. Establish a Firm Budget
Practice owners should create a precise spending plan from the outset and ensure the architectural team is aware of any financial constraints. The contract should require designers to revise their plans at no additional cost if the initial bids exceed the budget by a set percentage. A well-managed budget will help keep costs under control throughout the project.
Failing to budget correctly can lead to problems such as this: A veterinarian hires an architect and outlines her vision — modern exam rooms, a surgical suite, an imaging room, and separate spaces for emergency care and boarding. However, she did not communicate a firm budget during the early design phase and instead gave the architect and contractor minimal financial constraints under the assumption that the costs would be manageable. As the design evolved, pricey issues arose involving expensive finishes and an upgraded HVAC system. Without a fixed budget, the project cost the veterinarian tens of thousands of additional dollars.
4. Add and Delete
One contractual method that might avert the situation above allows for options depending on the final bid. For example, higher-end finishes may be added if the project’s cost is lower than budgeted. If the budget is inadequate, a less expensive HVAC system may be substituted. This strategy allows the project to proceed without costly delays or redesigns.
5. Peer-Review the Design
Have an independent architect scrutinize the design before the groundbreaking to uncover errors, omissions or inefficiencies. A thorough peer review ensures an accurate design and a smooth construction phase.
6. Verify Constructability
A hospital’s design must be functional and realistic. By having experienced contractors or project managers carefully review the design, a practice owner can avoid costly rework during the build phase. This extra step ensures the hospital will be functional and achieve the highest standards.
7. Set a Reasonable Schedule
Rushing the work to meet an ambitious schedule can lead to shortcuts, poor workmanship and costly mistakes. Allow enough time for the proper completion of each stage of construction. Consider an extension if delays occur due to weather, material shortages or unforeseen site conditions.
The importance of a realistic schedule is demonstrated by a project that rushed to completion to coincide with a practice owner’s busy season. Although the contractor promised that the job would wrap up by the owner’s deadline, significant delays arose during the permitting process, postponing the job start by several weeks. Due to the compressed timeline, the construction crews worked overtime, and the rush to finish led to poor workmanship in the wiring and plumbing, requiring additional inspections and raising the overall cost.
8. Submittals as Communication Tools
Throughout the construction phase, submittals such as shop drawings are vital for ensuring the work team is on track. These documents allow the contractor to confirm that the design’s intent is followed and that all systems and components meet the specifications. A periodic document review by the contractor, designer and practice owner identifies potential issues and aligns the project with the owner’s expectations.
9. Check Construction Activities
A veterinary practice owner should regularly review the project’s progress and on-site work. This hands-on oversight can be especially helpful during complex builds.
10. Audit the Bills
Examining contractor invoices helps keep projects on track and prevents cost overruns. Audits can uncover issues like overbilling or fraud. Financial appraisals also help ensure the contractor adheres to all contractual terms, including compliance with labor laws and safety regulations. Audits are an additional expense, but they are a small investment compared with the cost of not catching discrepancies.
In one matter we handled, a veterinarian hired a general contractor who had good references and submitted a reasonable bid. However, the practice owner did not double-check the invoices during construction and relied on assurances that everything was proceeding well. The owner belatedly learned that the contractor had marked up the materials by more than 30% above the market price and had invoiced the same materials on multiple occasions. The veterinarian was unsuccessful in recovering the overpayments.