Abstract
Profit margins are tight for general contractors, averaging under 3% (Construction Financial Management Association). Further, competition for projects can be very fierce, so any opportunity for increased profit or a competitive advantage in bidding bears consideration by general contractors. Cost segregation studies represent such an opportunity but the feasibility of a general contractor providing them has not been studied. A cost segregation study allows a property owner to accelerate the depreciation of certain portions of a building thus reducing tax liability and increasing cash flow. Because the information needed for a cost segregation study can be found in a detailed estimate, the general contractor is well prepared to provide this service to owners on private projects. This study explored the learning curve required for a general contractor to provide them. The results suggest that following the initial learning curve, a general contractor can offer this service, likely resulting in additional profit or a competitive advantage in bidding
Recommended Citation
Bigelow, Ben F.; Robinson, Jeremy; and Killingsworth, John
(2016)
"Contractor Feasibility in Providing Cost Segregation Studies From Detailed Estimates: A Case Study,"
The Professional Constructor: Vol. 40:
No.
1, Article 8.
Available at:
https://open.clemson.edu/aic-journal/vol40/iss1/8
