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Brian Kassalen is director and leader of the construction industry with Baker Tilly, a Chicago -based consulting, fiscal and guarantee firm. Opinions are typical of the author.
As inflation, work and rates continue to push the construction industry, contractors seek opportunities to protect the margins of benefit. Artificial intelligence offers builders new ways to keep themselves competitive and profitable before projects even begin.
Project estimates and ia
Construction is an industry where most of the work is awarded to large contracts, so that any tool that helps the success of a contractor in the estimation of the project through the completion of the project is extremely valuable. This is where Ai enters.
AI can significantly improve the accuracy of the development of offers through algorithms to estimate the potential costs based on data collected from a wide range of sources: past offers, databases of the supply chain, market data and contracts records available publicly.
Brian Kassalen
Permission granted by Baker Tilly
When asked correctly, the AI reduces the risk of human error and accelerates the process of estimation and analyzes the key prices and variables of the project in seconds instead of the days.
The appropriate data
Although the role of AI in construction is relatively new for building contracts, a phrase dates back to the first days of computer science is still true: “garbage, garbage.”
It is essential that contractors understand that the quality of the data it uses and determines the usefulness of their output. If the data is defective, inaccurate or biased, the exit of the AI will also be defective or incomplete.
For example, if a contractor is developing a competitive offer for a construction project, they usually consider the cost of raw materials, subcontractors, work and teams and could spend days even weeks, reviewing documents and manually collecting information. These sources of data could be from the same company or external.
AI can also use design data directly from construction information modeling platforms. Instead of relying on static calculation sheets or manual quantity takeoffs, AI systems can read BIM models to identify specific materials, quantities and elements, and then apply a smart cost mapping to each unit. This integration allows estimators to adjust prices in real time as design changes occur, supporting a more flexible and sensitive budget.
AI does not replace BIM: It works next to it, turning the data of the raw model into shareable and specific visions of cost during the design and pre -construction phases.
This level of accuracy becomes especially important once the contractor’s offer is accepted and prices are blocked, unless the change orders are approved. If an estimate is disabled, it can reduce profit margins or turn the project into a financial loss.
Through the use of predictive analytics, the AI can mark and quantify the potential risks early, including market volatility, labor shortage or scope lagoons. These views can be integrated into unit cost estimates to create more resistant offers and help avoid expensive surprises.
Negotiation
The AI can also be used in negotiation, especially to address potential problems proactively, allowing the justification of particular marks in a contract. In addition, if unforeseen changes cause additional delays or expenses after the agreement of the contract, the IA may be useful for finding a common ground between two negotiating parties.
For example, instead of presenting incomplete or delayed exchange orders, contractors can use and to produce faster justifications and data based on both scope and costs adjustments. This can lead to more appropriate approval of project owners and reduce disputes during the reconciliation of final costs.
With better data in advance, contractors are less likely to face disagreements later on what the change was worth.
Safety
Contractors must also be aware of privacy and security when they use and to develop offers. A closed and owner system can help prevent external dissemination of estimates, offers and sensitive information.
On the other hand, if the contractors use Open source to develop offers, they risk exposing this information to the competition, losing the confidence of users and potentially violates data protection regulations.
At least, contractors need to evaluate their hardware, software, licenses and security controls to ensure a safe environment for the deployment and use of the AI.
Where to start
With the changing industry so quickly, many contractors are lost to start their journey into integration of the AI. Some companies are “all”, while others are in a “waiting and voice” approach.
For the contractors of the fence, the first step is to recognize the need for change and begin to have exploratory conversations on how the IA can be integrated into the tender process and other aspects of the construction. A third party who has experience in integrating the IA can help a contractor develop an IA strategy to help in the tender and negotiation process.
As in all AI, human supervision will remain necessary in the bidding and negotiation process. Technology can save thousands of manual work hours and improve accuracy, allowing work force to use its time in more strategic tasks.
Contractors must also admit that the integration of AI into the construction tender is more than a unique event. By its nature, the use of AI by contractors continues to evolve.
