Project Planning for the Uncontrollable

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The promise of shorter timelines and lower costs has made design-build the dominant model in industrial construction. But both time and budget are subject to uncontrollable circumstances like extreme weather, labor shortages, and trade war tariffs. Food distributors, processors, and manufacturers should work with their design-build firm to put strategies in place to overcome these challenges.

 

Pre-fabrication Offsets Labor Crisis

Whether a greenfield project or a plant modernization, the shortage of skilled tradespeople can increase the cost of a project or delay its completion. In fact, a 2017 survey published by the Associated General Contractors of America (AGC) indicates that nearly 80% of construction companies have been unable to find the workers they need, holding up projects.

But, the way a project is designed and specified, and how the building is constructed, can mitigate the labor shortage. For example, Donald Olsen, vice president of Design Operations at ESI Group USA, says designers can specify products and systems that can be prefabricated in a factory in lieu of field fabrication. In the same vein, the builder can work with subcontractors to shop-fabricate subsystems and deliver them to the site for installation rather than building onsite.

Contingencies Mitigate Tariffs

Steel and aluminum tariffs also contribute to a design-build’s timeline and costs. To date, design-build experts indicate that approximately 60% of the material cost increases are directly related to tariffs. Fortunately, a design-build firm can plan and budget to offset the impact of these costs. The design-builder should obtain price quotes from subcontractors, equipment suppliers, and material suppliers. “Potential cost impacts derived at the pricing phase should be communicated to the owner before a contract commences,” says Tim Nguyen, senior vice president of ESI. “Typically, suppliers will hold prices for a fixed time and the owner should be made aware of that.”

Additionally, if an owner procures other materials (process equipment, product racking), they are already aware of price escalations. Nguyen says this should be discussed at proposal development, scheduling, and final contract. “The design-builder, in conjunction with the owner, should appropriate cost contingencies to mitigate cost overruns for both parties,” he says.

Weather Data Adjusts Building Schedules

Delayed or extended work activities during unpredictable weather is another major challenge for owners and builders. If possible, try to determine how many days will be lost to weather-related events and incorporate that “make-up time” into the schedule.

“While weather is unpredictable, historical data can provide insight to build “weather days” into the build schedule,” says Olsen. “The data can also be used to revise the schedule to accomplish certain work tasks ahead of local weather trends.”

Climate.gov reports that one day of lost productivity on a $200 million construction project might cost an owner up to $250,000 in labor, leased equipment, and contractual penalties. Thus, it is prudent for designers and contractors to develop a structure that suits local weather conditions. For example, if the building needs to be constructed during the winter months, the designer can specify a wall system advantageous to those conditions (insulated metal wall panels vs. EIFS).

While impossible to control the uncontrollable, it is possible to mitigate potential issues using prefabricated components/systems and designing a structure conducive to local weather conditions along with proper scheduling. Furthermore, Olsen says: “A design-build firm that specializes in food facility projects understands the inherent difficulties of constructing in an operating facility and dealing with food safety issues, while an inexperienced design-builder will be outside their depth of knowledge. That inexperience will end up costing the owner time and money.”

Quick Facts:

  •  80% of construction companies can’t find skilled workers.
  • 1 day of lost productivity from bad weather on a $200 million construction project can cost an owner up to $250,000 in labor, leased equipment, and contractual penalties.
  • Tariffs account for 60% of construction materials increases.

Client Testimonial:

“ESI’s project management capabilities demonstrate how they take pride in the quality of their work, the safety of their job sites and the satisfaction of their customers, vendors, and suppliers.”

“We are pleased to have partnered with a firm that shares the same vision and value and look forward to ESI serving our needs in the future.”

– Craig Saladino, Saladino’s