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The bottom line for any construction project is cost.  Modular buildings cost less because of labor and material cost savings.  Factory-construction maximizes labor effort and minimizes material waste. Modular buildings have an economic advantage over most other forms of site-related construction because of our labor cost savings and our control over material purchasing and waste. 

Below is a cost comparison for a 6,000 square foot building.  The example compares a site-constructed wood frame structure against a commercial modular building.  Both buildings are using the same basic specifications and they will look almost identical upon completion. 

Site Built Construction versus Modular Construction with basically the same quality specifications.

Site Built using Wood Frame
Modular using Wood Frame
Size Facility
 Very Nice 100' x 60' Facility
Very Nice 100' x 60' Facility
Total Building Costs
$450,000 - $600,000
$300,000 - $450,000
 Building Cost per Square Foot
$75 - $100 per square foot
 $50 - $75 per square foot
Turnkey Site Development Costs
   Utility Installation Contingency
Total Project Costs
$590,000 - $740,000
$440,000 - $590,000
 Project Cost per Square Foot
$98 - $123 per square foot
 $73 - $98 per square foot
Land Cost Contingency
Permanent Commercial Facility
Permanent Commercial Facility
(Click here to see another financial example)

Generally speaking, it is more expensive to apply interior and exterior finishes on a job site than to install those same finishes in a quality-controlled factory setting.  Carpenters, electricians and plumbers working on an assembly line get more actual work done in a day and cost less than the typical subcontractor doing the same work at a job site.  On a typical job site you can expect cost overruns due to bad weather in the form of construction delays and damages to your building products.  Site subcontractors waste valuable time traveling between multiple jobs, finding the right tool for the work, picking up parts from various suppliers and organizing their employees.  Factory-construction brings the work to the labor force and provides them all the tools, equipment and support services required to get the job done.  Let's face it, labor is the most expensive cost element in any construction project.

The old saying “Time is Money” is right on target with modular construction.  The factory assembly line maximizes the productivity of workers thereby driving down your cost per-square-foot. Henry Ford revolutionized manufacturing when he put the theory to work making automobiles.  We use the same concept except utilizing construction trades. Factory production allows the different construction trades to get more work completed each day by moving the actual building to the worker, providing them with quality tools and providing parts on demand.  Factory production does not suffer from delays associated with bad weather.  Our factory crews are working under roof and out of the elements.  The materials we use to construct your building are protected from weather damage.  We can purchase materials in bulk from manufacturers.  All this helps to reduce our costs which also reduces your price. 

When comparing your building options it is important to remember that your real cost is not just what you are paying, but what you are buying. In addition to comparing specifications, scope of work and installation criteria, you should consider the overall appearance of your finished building. Will the finished facility be a welcomed addition to your neighborhood?  Will the building design satisfy your long-term space needs and aesthetic expectations?  What will the building look like in five years?  Will you still want the facility?  Modular construction provides you the option of removing the building.

When evaluating your building costs, you must include your overall project costs for a complete estimate.  Below is an example of a typical site-constructed public school.  Notice the additional 23.6% required to determine the final projects costs.  Actual construction costs accounted for 76.4% of the total, but an additional 23.6 % was required for completion.  Of course, the percentage breakdowns would be different for a modular project, but the concept is the same.  You must evaluate total project costs to understand the complete financial impact of your project.  When evaluating your modular construction project, it would be a mistake not to include the additional costs associated with site preparation, utility connections, foundation, sidewalks, decks, ramps, parking, landscaping, permit costs, professional fees, communications and any other items required for occupancy. 

Your Specifications, Scope of Work and Installation Criteria are determined after you have established your Project Objectives.  The first step in the planning process is to perform a complete customer need evaluation and review those needs in light of your overall project plan.  From that information, you can establish your Project Objectives. 

1. Your Specifications determine what actual materials will be used to construct your building.  This is a critical cost element when establishing your budget, but remember that your main point of concern for the long term is to create the most functional use of space possible. 

2. Your Scope of Work will determine which subcontractor is responsible for what function at the job site.  Proper definition of job site responsibilities (Scopes of Work) will help you to control those unexpected future surprise costs in the form of 'Change Orders'.  Change Orders are a normal part of construction, but proper planning can minimize most of these surprise costs which can absolutely wreck your budget.  I have witnessed contractors actually plan their projected profits coming in the form of future change orders because the architect for a public bid project had poorly written specifications and unclear scopes of work. 

3. Your Installation Criteria is a modular building term because it determines the appearance of your building after your construction project is complete.  Since modular buildings are installed a couple feet above the finished grade, it creates a unique planning feature for our industry.

You determine your budget by understanding your building specifications!

For more information, please contact

Modular Building Associates (MBA)
or call
 (972) 745.4622 (4MBA)

Thank you.

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