Five Questions Owners Should Ask Before Approving a Capital Project
Capital projects can improve safety, appearance, operating efficiency, and tenant satisfaction. They can also create unexpected cost and schedule problems when the scope is not clearly defined.
1. What business problem are we solving?
Begin with the reason for the project. Is the work required for safety, code compliance, tenant retention, operating savings, or asset positioning? A clear objective makes it easier to judge whether the proposed solution is appropriate.
2. Is the scope complete?
Owners should understand what is included, what is excluded, and what assumptions the contractor is making. Ambiguity in the scope is one of the most common causes of change orders.
3. Have the bids been normalized?
The lowest price is not always the best value. Each bidder should be evaluated against the same scope, schedule, insurance requirements, and quality expectations.
4. Who is responsible for oversight?
Someone should verify progress, document issues, review invoices, and keep ownership informed. Clear oversight protects the owner without interfering with the contractor’s responsibility for the work.
5. How will success be measured?
Define the expected completion date, budget, closeout requirements, warranties, and final acceptance process before the project begins.