Production Management

Construction Cost per Square Foot Building in USA

The cost of factory buildings today differs not only with the type of construction but also with the location. Regional cost variations are sometimes large. For light-duty, steel-frame buildings, the cost of construction can be as low as $5 per square foot.

Construction Cost per Square Foot Building in USA

General-purpose buildings are more likely to cost from $10 to $20 per square foot in India. In the USA and Australia it is between $115 and $125; in Canada it is between $140 and $160 (CAD).  Most custom-build houses cost the range of £1,500 to £2,000 per square meter.

For special-purpose buildings, the cost per square foot may be less than the suggested maximum for general-purpose buildings, but it could be much more. It depends on the building erected and the nature of the process to be housed in it.

Construction contracts are generally of two kinds. These are the cost-plus contract and the fixed-cost contract. The first of these—the cost—plus contract may be either cost plus a flat amount or cost plus a fixed percentage of cost. Of these, cost plus a fixed amount is better, since it does not encourage running up the cost when changes are made during construction.

The cost-plus contract has one advantage : on buildings taking a long time to construct, labor rates and prices of materials may change during the period of construction; in this situation, the cost-plus contract makes the necessary adjustments easier. Perhaps the more commonly used building construction contract, however, is the fixed-price contract. Renegotiation clauses will permit a change in the originally agreed price whenever materials and labor costs change enough during the construction period.

Of course, when the plans are altered, the building cost will go up. Given proper specifications and plans, the contractor can be held to the contract, so the resulting building will be high quality. Once plans are drawn, bids are requested. The low bidder is awarded the contract unless financial irresponsibility or other factors preclude such an award.

Once the building is completed, the customer company’s engineers must inspect and accept it before payment is made in full. Even then, the final payment is delayed for a time to make sure everything is right, Partial payments will usually have been made, of course, upon completion of each stage of construction.

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