Preconstruction Project Review (PPR)
For equity or debt investors in new development projects, discovering and resolving potential problems, oversights or errors that could result in cost overruns, project delays or potential litigation prior to any construction project start-up should be a high priority. NDDS’ Preconstruction Project Review (PPR) is designed to provide the client with the information necessary to make a well-informed decision regarding the potential risks of the project. The PPR report includes a comprehensive in-depth review and analysis of construction project information, documentation and budget, which outlines various factors that may impact the construction cost and schedule of the project. The PPR report consists of two portions – the Document Review and the Cost Review.
Document Review
The document review portion includes an independent evaluation of the site development and construction drawings and specifications manual for completeness, appropriateness, and accuracy, and conformance to applicable governing codes. Documents to be reviewed can consist of the following (as available):
- Construction contract(s)
- ALTA Survey
- Geotechnical reports
- Civil engineering drawings and specifications
- Structural engineering drawings and specifications
- Architectural drawings and specifications
- MEP drawings and specifications
- Project schedules
- Agreements (between borrower/general contractor, borrower/architect or engineer)
- Verify conformance between contract documents and the construction loan agreement
- Permits
- Will-serve letters for utilities including water, sanitary sewer, gas, electric, telephone
- Copies of any public works agreements for required on- or off-site work
Cost Review
The cost review portion includes an evaluation of the proposed budget with an analysis of the adequacy of the construction hard cost budget and contingency to complete the proposed development within the project schedule timeline. Documents to be reviewed can consist of the following (as available):
- Construction hard cost budget
- Development budget
- Loan hard cost budget
- Conformance of the project hard costs to complete the scope of work included in the plans and specifications
- Comparison of the project budget to those of other similar projects
Construction Progress Monitoring (CPM)
Construction project schedule delays, unapproved materials substitutions, and cost overruns can result in delayed return on investment, a potentially less valuable/desirable asset, and budgetary shortfalls which may require the outlay of significant additional capital. NDDS’ construction experts perform periodic construction progress monitoring visits to ensure that the project is on schedule, in conformance with approved plans/specifications, the funding disbursement requests are appropriate for work completed in place, and that the project budget includes sufficient funds to complete.
NDDS provides an unbiased assessment of the work in progress for both Lenders and Owners (independent of the general contractor and design professionals) and makes recommendations based upon the analysis that the client may use to make funding decisions. These construction loan monitoring services can be tailored to meet the specific needs and requirements of each individual client, and can be provided on projects at the preconstruction phase or those currently under construction. NDDS is able to provide these services on a nationwide basis.
During the process, NDDS can perform the following:
- Periodic site visits to document/evaluate the quality, quantity, and status of work completed
- Verify that work in place conforms with contractor’s application for payment
- Confirm the project status conforms with the construction schedule
- Confirm that work in place conforms with approved plans and specifications and no substantive changes are made without client knowledge
- Review and evaluate all change orders
- Review available lien waivers
- Confirm and document the inventory of stored materials on or off site
- Evaluate the adequacy of funds to complete the project
- Review and document special inspection reports
- Provide a client-specific written report with photographic documentation, a summary of findings, and recommendations for the disbursement request