In today’s construction environment, accurately forecasting costs and resource needs is critical for ensuring project success. Virtual Design and Construction (VDC) combined with fabrication offers powerful tools for unlocking install throughput at the jobsite, but firms struggle to measure both the productivity of the VDC organization itself and the marginal productivity gains to the overall construction project from using VDC and fabrication. What are my historical rates of modeling or spooling in VDC? Have those improved over time? For every dollar I invest in VDC and fabrication, what is my return in project margins and improvement to throughput as measured by field-install days and total days saved in construction schedule? We will focus on the former: our goal is to help contribute ideas and solutions as to how the MEP industry can measure throughput and improvement of the VDC workflow. To start, a key challenge lies in budgeting - specifically, creating a detailed, realistic VDC budget that creates the basis against which an MEP firm can compare actual results and pursue continuous improvement. 

We’ll take a deep dive into the concept of Model-Based Budgeting (MBB) in VDC, using real-world insights from industry professionals to explore best practices, challenges, and how detailed measurement of actuals can improve project competitiveness. 

1. Model-Based Budgeting: How VDC Teams Approach Budget Creation 

VDC Budgeting typically involves estimating the total cost of modeling and coordination as a percentage of the overall field hours (or field plus shop hours) for a project—often around 10-15%. However, this general approach does not set the company up to determine performance by VDC work phase or type, critical framing to develop an understanding of performance bottlenecks.

VDC Specialists – How Does a Detailed Budget that Improve the Company?

VDC Specialists base their initial budget off of existing engineering and estimating models — including the electrical subcontractor’s initial takeoff. This method allows the VDC manager the ability to back into an understanding of total expected linear footage of conduit by diameter. These two categories are budgeted separately due to the impact of coordination on different diameter conduit categories tends to differ substantially.

• Small diameter conduit (1 ¼" and smaller): This typically receives less priority in VDC coordination and is modeled at a lower rate than larger conduit. More complex and greater number of transitions results, which increases the total time for modeling, relative to larger-diameter conduit.

• Large diameter conduit: General contractors tend to give more priority in spatial planning for these components, which reduces the modeling complexity and decreases time to model per linear foot on average.

Modeling Insights 

• Fitting ratios: Smaller conduit tends to have a higher fitting ratio due to the lower priority given in coordination increasing the need for more bends and offsets. This means that modeling small-diameter conduit might require more effort than the initial estimates suggest, making it crucial to track and analyze these variances during the project lifecycle. 

  
  

2. Measuring Actuals: Tracking Time and Identifying Outliers 

For VDC teams, the most significant advantage of model-based budgeting is the ability to measure actual performance against initial estimates, at a level of detail that gives them an actionable understanding of their business that they can apply to their next project. By tracking hours spent on VDC work phases and categories that provide unique factors that result in meaningful ranges in VDC hours per “unit” of the given task, teams can adjust budgets to the specific requirements of each project, leading to more accurate forecasts and more competitive bids. 

How VDC Specialists Uses Historical Data to Track Progress 

Heath Robertson, founder of VDC Specialists, shared how his team has been refining their budgeting and measurement practices over time. Initially, they tracked outcomes like linear feet of conduit, the number of spool sheets, and other key metrics across projects. However, they didn’t know how to leverage this data—until they brought in an actuary to help organize the data and present it categorically, in trendlines over time. 

• Historical Data Collection: The team started with basic time-tracking: counting prefab sheets and measuring the number of hours spent per sheet. For example, one project revealed that it took approximately 15 minutes per prefab sheet. If the next job requires 1,000 prefab sheets, they could project 15 minutes x 1,000 sheets = 250 hours. 

• Tracking Variances: Over time, they refined their system by tracking outliers—such as unexpected delays caused by RFIs, scope changes, or meetings that eat up project hours. They used data to identify and understand why projects deviated from the norm and adjusted for these insights in future bids. 

  
  

3. How Detailed Budgeting and Actuals Tracking Improve Competitiveness 

The Competitive Edge of Granular Budgeting 

How does the detailed measurement of actuals impact a company’s ability to increase competitive positioning in bidding for projects? The answer lies in the ability to dial in project margins more accurately. Instead of relying on a broad margin range of, say, 10%, contractors who track detailed metrics can narrow that range down to 1-2%, giving them a clearer understanding of project profitability. 

• A More Precise Margin Range: By using historical data (e.g., linear feet of conduit, spool sheets, and fixtures), contractors can estimate job costs with high precision. This level of detail reduces the uncertainty and risk associated with bidding, and ultimately, increases the likelihood of a successful, profitable project.

• Schedule and Time: Excellent understanding of historicals allows the firm to highlight their ability to meet (and beat) schedule demands – or have an intelligent discussion with the GC and Owner regarding the feasibility of the modeling and coordination phase of the project. This sophistication and ability to execute against a promise increases the attractiveness of the firm to the GC and Owner.

• Profitability and Risk: In the construction world, margins are tight and subject to variability — often one department requires coverage from the others to hide a negative result vs budget. The more precise initial estimates are, the more you can shift the odds in your favor and understand what really drives project-level financial health. 

  
  

4. Does Project Type Impact VDC Budgeting? 

While the most important cuts for budget detail may be in material category, i.e. small vs large-diameter conduit, project type also greatly impacts VDC budgeting.

• Data Centers: These tend to involve more large-diameter conduit, which requires more detailed coordination and modeling, thus increasing overall VDC budget allocation. 

• Hospitals: Often there is less overhead space to work with, which increases coordination complexity and, in turn, fitting ratios go up. By consistently applying historical data, a VDC team can normalize these project types into their budgeting models, ensuring that each estimate accounts for the nuances of the specific project without overcomplicating the process. 

  
  

5. Has This Process Changed the Organization? 

Implementing detailed measurement of actuals and using historical data has had a significant impact on how teams track time and budget, as well as how they handle scope creep and change orders. 

• Impact on Tracking Time: Tracking time for different aspects of the project—such as telecom, medium voltage, and branch power—has allowed teams to better allocate resources and estimate costs more accurately. 

• Team Leads and Accountability: Teams now rely on real-time reports pulled from the model, which compare expected hours against actual performance. This allows team leads to identify when projects are off-track and make adjustments on the fly, ensuring that no unexpected change (e.g., a bulletin or RFI) goes unnoticed. 

• Automating the Process: The integration of time tracking and reporting through tools like Revit and PowerBI has automated much of the process, reducing administrative overhead. However, it still requires a hands-on approach from team leads to ensure that data is properly collected and that the team remains aligned with project goals. 

  
  

Conclusion: The Power of Model-Based Budgeting in VDC 

As VDC continues to evolve, model-based budgeting is becoming an essential tool for improving project accuracy, profitability, and competitiveness. By moving beyond the standard lump-sum VDC estimates and into detailed VDC estimates and budgets, contractors can become more competitive in bids and set themselves up for continuous improvement. The framing, detail of modern VDC budgets provides the basis against which VDC contractors can identify bottlenecks and improve their organization in a measured, strategic way.

Invest the time upfront to create detailed budgets, and track actuals against that framework. This will improve your bottom line and give you a competitive edge in an increasingly competitive industry. 

About the Author

Since 2018, VDC Specialists has built a highly skilled US-based team, delivering constructible electrical models on complex and high-profile projects nationwide.  Our experience spans tens of millions of square feet of Data Centers, Labs, Hospitals, Battery Plants, and Stadiums.  Focusing on increased field efficiency and project planning, VDC Specialists excels on large and fast-paced projects, solidifying their name as the premier choice for Virtual Construction and BIM modeling solutions for electrical contractors. Connect with Heath on LinkedIn.