Before a project reaches the field, decisions made during planning, budgeting and design can have a significant impact on cost and schedule.
Shannon Construction estimators Kevin Kilinsky and John Beck spend their days reviewing drawings, developing budgets, talking with trade partners and tracking the factors affecting construction costs. We asked them what they are seeing in the market now, where they are finding opportunities for value engineering and what owners considering projects in late 2026 or 2027 should have on their radar.
Big picture, what trends are you seeing in estimating and bidding right now?
Kevin: We’re doing a lot of budgets right now. There are plenty of projects being considered, but we’re seeing them spend more time in the planning and development stages before moving into construction. That makes ongoing budgeting throughout design especially important.
John: We’re also seeing strong subcontractor participation when projects go out to bid, which gives us good coverage across a number of trades. On the office side, we’re seeing some changes in how spaces are being designed too, including denser footprints and a return to more individual offices compared with some of the open-concept layouts we’ve seen in recent years.
What are you seeing with material pricing?
John: Material costs continue to move. Metal studs and aluminum are two areas we’ve been watching closely, with noticeable increases over the last several months. It’s important to keep checking current pricing as a project moves through design because numbers from a few months ago may not necessarily reflect where the market is today.
Kevin: Steel is another one we’re watching. Demand associated with data center construction is putting additional pressure on steel pricing and availability. That can have an impact on other projects competing for the same materials, so it’s something we’re keeping an eye on as we develop budgets.
Are there materials, equipment or building systems where lead times are still a concern?
John: Electrical equipment continues to be a big one. Certain electrical switchgear and generators can still have lead times of a year or more. Steel is also becoming more of a procurement consideration.
Kevin: Data center construction could put additional pressure on some of those materials and equipment. Skilled labor availability is another factor we continue to account for when looking at both cost and schedule.
Are you seeing changes in what owners require as part of the bid process?
Kevin: We’re seeing more RFPs where owners are evaluating more than just the final number. They want to understand the contractor, the proposed project team and how that team plans to approach the work.
John: The submissions themselves have become more detailed too. We’re seeing more prequalification requirements, technical proposals, estimating schedules and project-specific information. It gives owners an opportunity to evaluate qualifications, approach and team experience along with cost.
Are you noticing changes in the types of projects coming across your desks?
John: We’re still seeing a mix of office, retail and industrial work. We’re also seeing demolition and make-ready projects, along with tenants making targeted improvements or refreshing existing spaces rather than always undertaking a complete renovation.
Kevin: Tenant retention continues to be important for building owners. We’re seeing owners look strategically at improvements that can help existing tenants make better use of their spaces and keep properties competitive.
Where are you finding the best opportunities for value engineering?
John: Lighting packages are a big one. We also look for opportunities to reuse existing doors, frames, flooring and other materials that are still in good condition. Finish selections can make a difference too. Wall coverings, acoustical panels, millwork and decorative wall panels are all areas we evaluate for potential savings. Sometimes something as simple as using an accent paint color instead of a wall covering can provide the same visual impact at a lower cost.
Kevin: HVAC controls are another area worth evaluating, because they can represent a significant cost. We also look at many of the same finish and material selections John mentioned. The goal isn’t simply to reduce cost. It’s to identify where the budget can be used most effectively without sacrificing function or creating maintenance issues down the road.
“The goal isn’t simply to reduce cost. It’s to identify where the budget can be used most effectively without sacrificing function or creating maintenance issues down the road.
What are the advantages of involving the estimating team early in a project?
Kevin: One of the biggest advantages is being able to provide progress budgets as the design develops. That gives us the opportunity to identify cost impacts and value-engineering options along the way instead of waiting until the drawings are complete to compare the design against the budget.
John: It gives the owner more control over the cost of the project. Early involvement also gives the team time to identify long-lead items. If we know a project is moving toward construction, there may be opportunities to plan for or release certain materials and equipment earlier rather than waiting until the entire design is complete.
What’s something you’re seeing in estimates or bid requirements that owners or design teams might be surprised by?
John: Electrical code requirements can have a bigger impact on renovation projects than people expect. When we get into an older space with antiquated lighting or controls, current code requirements may mean upgrades need to be incorporated into the project. Identifying those conditions early helps everyone account for them in the budget and design.
We’ve also had a positive experience recently with permitting timelines in the City of Pittsburgh. From what we’re seeing, the process has been moving more efficiently than it has in recent history.
Kevin: Another important piece is making sure the project scope, design goals and budget stay aligned as the design develops. The earlier the owner, design team and contractor can establish those parameters together, the more useful our budgeting can be and the easier it is to make informed decisions along the way.
If an owner is budgeting a project for late 2026 or 2027, what should they be thinking about now?
John: Labor rates are something to account for. If construction isn’t starting for six months or a year, the labor rates in place when the work is performed may be different from what we’re pricing today.
Kevin: The same is true for materials. Pricing continues to change, particularly in areas where demand is putting pressure on supply. A budget developed today needs to account for when the project will actually be purchased and built.
The more information we have early, and the more decisions that can be made as the design progresses, the more accurately we can price the work and help the team plan ahead.
Planning a project?
Early budgeting can help identify cost, procurement and scheduling considerations while there is still time to evaluate options. Connect with Shannon Construction to start the conversation.
