Modular Done Right: Better Planning. Smarter Builds. Vol.01

Cost Predictability and Value Engineering with Volumetric Modular Construction

In the construction industry, managing project costs is a constant challenge. Unexpected expenses, fluctuating material prices, labor shortages, and weather delays all contribute to budget overruns. Developers, investors, and general contractors need a construction method that reduces financial uncertainty while maximizing value.

Volumetric modular construction offers a cost-predictable alternative to traditional site-built methods. By shifting much of the construction process to a controlled factory environment, modular building helps lock in pricing early, reduce waste, and optimize efficiencies—all while maintaining high quality and code compliance.

In this article, we’ll explore how modular construction ensures cost predictability and how value engineering strategies make modular projects more cost-effective without compromising performance.

The Challenge: Cost Overruns in Traditional Construction

One of the biggest financial risks in any construction project is cost overruns. In traditional construction, the budget set at the start of a project rarely matches the final cost. Several factors contribute to budget uncertainty:

Material Price Fluctuations – Rising costs of lumber and other materials can inflate budgets.
Labor Market Uncertainty – Skilled labor shortages drive up wages and create delays.
Weather-Related Delays – Rain, snow, extreme heat, or cold can slow down site work, increasing project costs.
Change Orders & Scope Creep – Modifications during construction often result in unexpected expenses.
On-Site Inefficiencies – Material waste, theft, rework due to errors, and job site logistics all add to project costs.

How Modular Construction Delivers Cost Predictability

Volumetric modular construction addresses these cost risks by providing a more controlled and predictable process. Unlike traditional construction, where pricing variables shift throughout the project, modular construction locks in pricing early and minimizes financial surprises.

Key Ways Modular Construction Ensures Cost Predictability:

Fixed-Price Contracts – Modular manufacturers like Guerdon offer fixed pricing at the start of production.
Bulk Material Purchasing & Price Locking – Materials for modular projects are pre-purchased in bulk, securing lower prices.
Reduced Labor Costs & Predictability – Factory-based labor reduces reliance on expensive subcontractors.
Minimized Weather Delays & Disruptions – Factory construction is unaffected by adverse weather conditions.
Lower Financing & Carrying Costs – Faster completion allows developers to generate revenue sooner.

Value Engineering: Maximizing Cost Efficiency Without Sacrificing Quality

Beyond cost predictability, modular construction also allows for value engineering (VE)- the process of optimizing design and material choices to reduce costs while maintaining quality and functionality.

At Guerdon, we collaborate with developers, architects, and general contractors early in the process to identify cost-saving opportunities without compromising the building’s integrity.

Optimized Building Layouts – Standardized module designs reduce waste and maximize efficiency.
Efficient Structural Systems – Engineered wood framing optimizes material use while maintaining strength.
Material Substitutions for Cost Savings – High-quality materials are sourced at lower bulk prices.
Energy-Efficient Building Designs – Tight construction tolerances improve insulation and reduce long-term utility costs.
Streamlined Site Work & Reduced Waste – Modular minimizes on-site waste and simplifies foundation work.

Case Study: Coliseum Connections – Affordable Housing Through Modular Construction

Coliseum Connections is a 110-unit affordable housing transit village located adjacent to the Coliseum BART station in Oakland, California. This project demonstrates how modular construction can accelerate timelines and reduce costs while delivering high-quality housing.

The developer selected modular construction to gain both time and cost efficiencies. This approach resulted in a 20–25% reduction in construction time compared to conventional site-built methods. Coliseum Connections was completed in just 16 months—four months faster than the estimated 20-month timeline for traditional construction. Additionally, the project realized an estimated 10% savings in overall construction costs. On a $40 million development, this amounted to approximately $4 million in savings.

Sustainability was also a priority for this project. Coliseum Connections was designed to achieve Greenpoint Rated Silver certification, further reinforcing the environmental benefits inherent in modular construction. Reduced material waste, factory-controlled energy efficiency, and a streamlined installation process contributed to the project’s sustainability goals.

This case study highlights how modular construction can provide cost certainty, accelerate project timelines, and support green building initiatives, making it an ideal solution for affordable housing developments.

Why Developers Choose Guerdon for Cost Predictability & Value Engineering

At Guerdon, we provide developers with a cost-efficient, high-quality modular solution that eliminates budget uncertainty and maximizes project value.

Our Competitive Advantage:

Fixed-Pricing Contracts – Lock in your budget early, avoiding market fluctuations.
Value Engineering Expertise – Optimize costs without sacrificing design or quality.
Faster Completion & Revenue Generation – Reduce carrying costs and start earning sooner.
Lower Labor & Material Waste – Factory efficiencies drive down costs and reduce on-site labor.

Ready to Build Smarter?

If you’re looking for a construction method that delivers predictable costs and optimized efficiency, volumetric modular construction is the solution. Contact Guerdon today at 208-345-5100 to discuss how we can help you maximize your project’s value while keeping costs under control.