Mechanical Contracting Trends and The Design-Build Process

Development is moving towards a new design-build model inviting the trades to participate earlier in the process and here’s why:

Mechanical contracting trends are evolving and this is good news for Canada’s development industry. Construction is a fast-paced business with projects ranging from detached residential housing starts and multi-family development to large-scale commercial and industrial builds. In B.C. alone, the construction industry accounts for nearly 10% of the province’s GDP.

Major projects proposed and happening now in B.C. increased 5% to $349 billion in March compared to the previous year. Statistics Canada forecasted nearly $33.4 billion worth of new construction investment in B.C. in 2021.

Factor in the speed at which Metro Vancouver’s population is growing, and you have a development environment that is ripe for innovation. Developers and general contractors are consistently seeking new ways to increase efficiencies and reduce costs where traditional planning methods are being reevaluated and refined. 

The Traditional Construction Process

Typically, the development team invites mechanical contractors and other trades to the table after the design plans are already in place. The challenge with this model is that the developer does not have design input from trade professionals upfront, which often results in construction issues once the building has started, materials are purchased, and boots are on the ground.

Each trade bids on a project and works from a set of engineered drawings or blueprints. Consultants traditionally construct designs and prepare the project documents to an Issued For Tender (IFT) classification.  The tender goes out for bid, each trade interprets the designs and provides a cost analysis based on their industry experience and what they know at that time. This is always open to interpretation and we know that if ten people review the same drawings they would all read them differently. When important details of the project are unknown or unclear it can negatively affect various aspects of the build that could have been resolved in the planning process.

Bids are submitted and often the developer hires the lowest bidder (but not in all cases), soon discovering there are new factors and costs once the project’s details are fully uncovered. By this time, it’s too late to go back to the design phase and project costs may end up significantly higher. Often the developer is overwhelmed with RFI’s (Request For Information) and Change Orders to solve newly discovered design-build challenges.

Design-Build Transformation, A New Model

The Design-Build process is going through an evolution where developers and builders are moving towards bringing trades into the design and planning phase earlier on at conception. This approach creates greater efficiencies, reduces headaches and saves an average of up to 3% of the project’s costs. It may not sound like much but on a $50 million build, that can mean big savings.

Inviting the trades to participate in the decision-making upfront with input on the best way forward and an opportunity to bid on the project once all the details are known increases process effectiveness for all involved.

Typically, contracts are put in place stating that if the conceptual bid is within a certain percentage of the IFT drawings standards the project can be directly awarded. Having the Structural, Mechanical, Electrical and Plumbing (MEP) trades involved from conception gives the key sub-trades early buy-in and a clearer understanding of the entire project. This allows for stronger negotiations of equipment and material expenses upfront providing cost certainty to the owner.

In summary, having the trades involved from the start provides familiarity with all of the development players and reduces unknown risks, resulting in production efficiencies, higher morale, a smoother build and significant savings for the project.

We see this new direction in the construction process as a trend that will continue to be adopted and welcome the opportunity to assist our clients in achieving an exceptional design-build outcome and a greater return on their investment.

by Curtis Thomas, President of Warrior Plumbing

Statistics source:
https://www.westerninvestor.com/british-columbia/bc-builders-weathered-pandemic-but-storm-clouds-are-forming-3953626