The Design Burden

Nov 1, 2007 12:00 PM, By Beck Ireland, Staff Writer

Risky business

Correll isn't exaggerating when he mentions risk. “You have tremendously more at risk if you're putting together a budget for a job — and have a contract that makes you live with it — even before the design is complete,” he says. “You really have to have the personnel to allow that to happen, all the way down to the superintendent in the field and the area foreman. ”

Not only does an early estimate pose a risk for contractors, but it may also create more work. At Guarantee Electrical, sometimes the estimators are required to complete an estimate more than once on a job. They must also use their expertise in estimating using incomplete plans. “Our estimators have to be able to fill in the gaps that aren't on the drawings,” says Juan. “Sometimes the basics are there but not all the detail that are on a final set of documents. They have to be thinking about the big picture and how to fill the gaps in those early stages.”

In addition, estimates are only one part of the work with which the pre-construction group at the firm is tasked. “Our pre-construction group is more than just putting estimates together,” Juan says. “We're actually helping manage the design and budget process through design to make sure that when it goes into construction the design's complete, it's constructible, and it's within budget.”

For most electrical contractors, being more involved in the design process means developing a repertoire of new skills to become more proficient in the design collaboration process, expertise traditionally not required by the work specialty contractors perform. Not every electrical contractor is equipped to deliver projects using methods that call for a command of design and planning. “You can't just go to the Yellow Pages and get a number for a contractor that can do this,” Correll says.

To stay competitive, many firms have either developed business units or hired additional staff versed in design, engineering, and project management. “You used to be able to do a million-dollar job with one supervisor,” Correll says. “You can't do that anymore.

Sidebar: Design-Build

“Owners are finding that the project delivery time almost across the board is quicker when you're dealing with design-build because you're not going through another step,” says Brian Jordan, executive vice president, Helix Electric, Inc., San Diego. “You've got the person that's actually installing the work designing it. Time is money, and if owners have six months less carrying charges for their loans because they're getting the project built faster, then that keeps their costs down.”

In 1993, only one state authorized design-build on public-sector work, according to the Design Build Institute of America (DBIA), Washington, D.C. Currently, Alabama, Michigan, and Rhode Island are the only states that don't authorize its use on public-sector work, although that may soon change in both Michigan and Rhode Island where there are bills that would authorize it being considered by the state legislature. In addition, the private sector's use of design-build has increased steadily in frequency and application in the last 30 years. It has become more common in the United States on commercial and institutional projects, as well as in the industrial and power sectors.

“More public agencies are moving toward the best-value- or performance-based types of procurement, especially the federal government,” Jordan says.

Sidebar: Design-Assist

Design-assist is considered a hybrid between design-bid-build and design-build. The design-assist method is when a general contractor procures the services of an electrical contractor early in the design process to provide value engineering and field detailing services.“The designs are further along,” says Brian Jordan, executive vice president, Helix Electric, Inc., San Diego. “Then the contractor steps in to develop them to a greater extent, past the conceptual stage.”

In the past 10 years, the popularity of the design-assist method has grown, in part due to the countrywide reach of many engineering companies. “When out-of-state architects wants to have control of the MEP design under their contract, they need help locally to complete their design,” says Leo Correll, executive VP, Delta Diversified Enterprises, Inc., Tempe, Ariz. “Local contractors know the local requirements. That's where a local contractor becomes very helpful in the design — to bridge that gap between what's required locally, what the owner wants, and what's going to be put on paper.”

Many electrical contractors prefer design-build over design-assist. “In design-assist there have already been certain decisions made and certain directions taken,” Jordan says. “Input can be more limited, and we may not be able to have the cost impact for an owner that we could if we get in earlier.”

Sidebar: Construction Management (At Risk and Multi-Prime)

“This method is becoming an industry standard across the board,” says Leo Correll, executive vice president, Delta Diversified Enterprises, Inc., Tempe, Ariz. “There used to be a difference in public and private projects. Private was ahead of that process more than public, but a lot of the universities and a lot of municipalities are also using that delivery method. They hire the general contractor to put together the team, the MEP, and the designer. Then the manager develops a budget for the project and completes the design. If for some reason the project couldn't be built from the budget that was developed, then the municipality would put a bid out on the street for quoting.”

Very rarely do electrical contractors act as the construction manager. However, they are sometimes hired by the construction manager who is appointed by the owner. Many of the larger general contractor firms are switching to a construction management at-risk role. “More and more, general contractors are doing less and less of the actual work and are becoming more like construction managers at risk,” says Brian Jordan, executive vice president, Helix Electric, Inc., San Diego. “They're basically the owner's agent, but guaranteeing a set price for the project.”