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Design-Build Projects: Clear Communication Is Key

What is a design-build project?

A design-build project is one that is not necessarily drawn or engineered, but one that has some sort of written scope and building footprint to use.

Design. (di zīn’)(verb). To prepare plans for work to be executed

Build. (bild) (verb). To cause to be constructed.

Design-build. (di zīn bild) (verb) To prepare plans resulting in construction.

Design-build estimates are often confused with budgets. They are not the same. (That is not to say that a budget cannot turn into a design-build.) Because most owners have fiscal restraints that affect their capital investment, they depend heavily on the estimator to develop accurate cost forecasts at every stage of the project. Therefore, an estimator must have a comprehensive understanding of the costs of labor, materials and equipment, and the means and methods of both design and construction in order to accomplish the “design-build” task.

How do design-build projects come about?

Often design-build projects will result from a municipal or state Request for Proposal (RFP) based on a written scope. Relationships between general contractors, building owners, and an electrical contractor may also result in the parties developing a design-build project. Relationships are not only key to developing a solid business, but can lend a comfort level to owners or GCs to the point where that comfort level influences project development. An electrical contractor might “be in the right place at the right time.” Or, an electrical contractor submitted a budget price for a project based on conceptual scope which later turns into a design-build project. The design-build process may be faster and more efficient than a conventional design-bid-build project.

What/who is involved in a design-build project?

The complexity and scope of design-build projects will vary based on the needs of the owner or ultimate user of the building. There is a huge scope/cost difference between a project requiring simple “lights and plugs” versus one that involves the entire infrastructure of a building, including the electrical service, HVAC requirements, circuiting, lighting, branch power, and any customer needs for wiring of specialty machinery. Depending on building use (e.g., an office building versus an industrial or manufacturing plant), the complexity of scope will change as well. Building use should always be taken into account when completing a design-build project.

Better results will ensue when everyone involved in the project is involved early on and communicates their goals clearly. This team might include the owner/developer, general contractor, electrical contractor, mechanical contractor, plumbing contractor, fire protection contractor, the site contractor, architect, and engineer. All of these players may not necessarily be involved in every project. Involvement simply depends on the scope of work and the expectations of the client.

Understanding your client expectations and needs (and also code issues!)

Client expectations for design-build projects should be determined as early as possible, saving time and money for everyone involved. Communication cannot be underestimated! Ask questions! Ask questions! Ask questions!

Example: a line from an RFP that states “lights and receptacles to code” and the project is a proposed office building. To some, this may mean 2’ x 4’ lay-ins to equitably light each room and at least one receptacle on each wall, and telephone/data outlets.

Local and national codes dictate a certain foot candle output based on occupancy, but not necessarily the style of the light fixture itself. Esthetics cost money!! Again, client expectations come into play. They may expect direct/indirect aircraft cable hung fixture versus an industrial shade or simple 2’ x 4’ lay-in. Parabolic lenses are more expensive that prismatic. Does the customer have the expectation of a parabolic lens because the office is for the president of the company? Exit and emergency lighting must also be considered because by code, exits must be marked and emergency lights help mark the path of egress from a building in case of an emergency. However, there is a huge cost difference between providing light fixtures with emergency ballasts versus wall mounted emergency battery units.

There are no placement requirements for receptacles in office buildings. However, the expectations of the client might be at least one on each wall, probably more. Also, will there be a need for special receptacles, such as GFIs or IG receptacles? Will the proposed building have a dedicated computer room that might potentially need a special grounding system underneath the floor?

What is the ultimate goal of a design-build project?

The goal of a design-build project/estimate is to identify the true costs of items to determine along the way if the cost of that item is feasible to the owner or developer. Identifying the proper scope will always be a crucial element of this process. A minimum/spec job will cost less than a building designed to purpose/function. Code issues and utility company requirements must be considered.

What kind of building is it?
What is the building construction?
What are the needs of the potential tenant(s)?
Did the customer give you a list of equipment that will need wiring?

Cost efficiencies and energy rebates of certain types of fixtures may be important. If the design-build project were to be based strictly on “cost to install,” the developer may be satisfied but the owner or tenant may not be. In the long run, the total life cost of the fixture will be more important, especially as energy costs rise. The installed cost of a T5 fixture will be higher, but the life cost will be lower due to lower energy consumption and utility company rebates.

CAD drawings and engineer’s stamp

In the process of a design-build project, you will be relying on a CAD operator to draw the building and its systems for you. CAD drawings are efficient since any changes or modifications can be easily made and replotted for further review. You can expect to pay, depending on your area, about $50-$75 an hour for CAD services.

Once the customer is satisfied with the design and the drawings are done, an engineer will need to review them and provide an engineering stamp. Please ensure that the engineer you use is licensed in the state where the project is taking place. If not, see if the local jurisdiction will accept an engineer’s stamp from another state. Engineers typically charge by the page, with fees ranging from $200 to $400 a sheet, or a percentage of the total electrical cost. Check around. Ask your local businesses who they are using for this task.

What are the risks and potential pitfalls?

The largest risk an electrical contractor takes in design-build projects is doing all the work, only to have the developer take the design and proposal and put it out to bid. The lighting and switchgear vendors who have helped the electrical contractor may lose out too. Word to the wise, be careful! No one likes to work for free but if developers can get a building designed for free, they will!

Sometimes an architect will be involved in the early design phases of a project. If so, the architect should be involved in all stages of the process as well. Many times accent lighting, illuminated handrails or landscape lighting will not be defined early in the process; this can become an issue after all the building loads have been calculated and subsequent switchgear has been designed. If you have given the client a Guaranteed Maximum Price (GMP), you should be aware that these architectural design changes will impact your bottom line!

Finally, electrical contractors should always consider whether they can actually meet the needs or requirements of the RFP. Please consider all parts of the scope of the project. If the project requires high/medium voltage work, do you have the experience level or have you established partnerships with other electrical contractors in your area with that expertise? This is especially critical for a smaller EC who takes on a larger project. Other systems to consider are tel/data, low voltage systems, and specialty communication..

Can I make any money working on design-build projects?

You most certainly can! The key to design-build projects is to foster communication about expectations, code requirements and design requirements throughout the project. If you have detailed your proposal/scope (as a lawyer would), you should have no problem being comfortable with your price and margin. If you have done a detailed take-off from your plans, you will have identified your true cost, which is the starting and ending point of any electrical project.

The design-build process can be a rewarding one, especially if you have made a profit! The key to success is to fully understand your client’s needs, the building use and construction, and the team that will be involved in the process. Clear, continuous communication with all parties will ensure that the project is completed on time to the team’s satisfaction. There is a huge difference between designing to a minimum/spec versus designing to a purpose/function. As long as you understand what type of project you are involved with, you will then understand how to proceed and ultimately make a profit.

Why Generation Y

Generation Y and Baby Boomers–why we need them: If you are one of the myriad of contractors who looks for skilled tradesmen or estimators, you will certainly know that there is a shortage of both! This acute shortage holds back many companies from expanding. It is estimated that at least 70% of construction companies have difficulty finding and recruiting qualified workers. With the unemployment rate at 4.4% (down from 10% in October 2009), the shortage will undoubtedly get worse.

Why is there a shortage?

How exactly did this shortage happen? There are a number of contributing factors. Baby Boomers, those born between the years of 1943-1964, are aging, and many are retired or close to retiring. Millennials, those born in the 1980s to late 1990s, have been raised with a college versus “trades” focus. In fact, there has been limited social acceptance, and in some cases, a stigma, of having a job in the trades versus one that requires a 4-year college degree. Statistics point to the fact that this shortage will be further exacerbated by the following: The number of adults, aged 18 to 26, is expected to decline over the next 5 years, and the number of those younger is expected to stay flat for the next 10 years. However, there are 80 million people between the ages of 10 and 30, so despite the decline, the available number of employable adults is still rather large.

The solution seems simple but it’s not.

It is clear that the construction industry as a whole, with the help of state and/or federal funding, needs to make technical education a priority in high schools and community colleges. However, many states, not to mention the federal government, appear to be cutting expenses rather than investing in the future of the technical education system. That doesn’t help with the public’s somewhat negative perception of careers in construction. With so much emphasis on college education, a career in the trades often has been looked down upon. As a result, there hasn’t really been definite career paths available to those that are interested so they can use their ambition to train and ultimately land a job in the construction field.

A career in the trades can be lucrative though… especially for Generation Y

A job in the trades can be financially compelling, especially for Generation Y. Consider this. A four-year college education can run somewhere between $100,000 to $160,000 plus interest on student loans. Trade school can run somewhere between $6,000 and $30,000 depending on the trade and the duration of the schooling. At the high end, then, a student would save $130,000 (plus interest) on schooling and they would be able to work at their trade during schooling, immediately making money.

There are also other advantages of a career in a trade. Most of the trades are experiencing growth ahead of other professions. Jobs for electricians, for example, are experiencing a 14% growth rate and this rate is projected to last until at least 2024, well ahead of other jobs. Jobs for estimators are on the rise as well! Industry professionals say that the estimator shortage across all trades is approximately 150,000 and from what we see, that number is probably much higher. As demand increases for seasoned estimators, so do salaries. In effect, a person could start off in the trade as an apprentice and work his or her way into an office position in estimating or project management, catapulting their earning capacity to that rivaling a college graduate! An attractive consideration for Generation Y, for sure.

A job in the trades also offers job security that is unrivaled in any other industry. Skilled trade labor cannot be outsourced to another country, like so many jobs have been of late. Another advantage? Unlike many professional careers, a skilled tradesman’s work is done at the end of the day and there is no reason to check emails or stay “plugged in” to the job. And, unlike a desk job when at times it feels like you are getting little accomplished, there is a sense of satisfaction from manual work done skillfully.

Untapped potentials?

So we still haven’t solved the problem of getting people into the construction field. I think that there are more people available than what the Bureau of Labor and Statistics estimates. Consider those that are unemployed. There are “discouraged workers” who have stopped looking for work because they don’t think there are any available jobs. What if training was available? Would they move toward the trades?

There are also two groups of individuals that the construction industry could tap—returning veterans and women. Some tradesmen are returning veterans and due to illness or injury they cannot work in the field anymore, but they can still be a valuable sources to the trades. How about training them for positions in estimating or project management? Positions for women are also available in construction trades, although women have not been “traditional” construction workers. However, with groups reaching out to women to join the trades, they can be viable construction workers. The National Association of Women in Construction estimates that in 2014, women accounted for 8.9% of all people working in the construction industry, and in construction, women earn on average 93.4% of what men make. In terms of the construction estimating field, opportunities for women are vast and women traditionally make better estimators than men!

How will the trades catch the interest of Generation Y aka the Millennials?

The Millennials (Generation Y) are an interesting group. They grew up with the Internet, cable television, video games (the sophisticated ones!) and so much more. They literally have the world at their fingertips. This group has been labeled “self-absorbed,” “special” (think about ‘everyone gets a medal’ and participation trophies), and “coddled.” On the flip side, this group is team oriented, interested in learning (especially where it involves technology), and in finding their place in a corporate culture that promotes from within.

Communication is the key with this group of young people, but it’s not the “old-fashioned” methods that work. It’s a collaborative approach to work; it’s using social media; it’s using training to keep them interested and moving forward. Mentoring works well here, especially when paired with a mentor that can effectively communicate with a person that may not be the best communicator. (Let’s face it. Texting is not the best form of communication yet it is the preferred method over talking on the phone or emailing.) Keep in mind that in general, the construction industry isn’t one to coddle; it’s all about production and at times “trial by fire.” However, if a company uses a proactive approach to effective developing and managing this unique group, it would help to bridge the gap in the workforce deficit.

Technology also offers huge appeal to Generation Y. When advertising a position within your company, use the words that they want to hear—software, advanced methods, tablets, efficient new methods to completing a task. It all helps. When recruiting, also consider the use of social media. This generation is the most plugged in to social media than any other. Believe it or not, “having a life” is also extremely important to this group. They expect flexibility. Yet the construction industry is not usually flexible. Flexibility comes when the work is getting done despite taking Facebook or phone breaks, versus the old-fashioned coffee or smoke break. Are they really that different from each other? Perhaps it is just a matter of perspective.

Moving Forward

Construction is moving at a fast pace with a growth rate of 22% per year. The shortage of qualified workers must be addressed sooner rather than later. The reality is that the younger generations are different and as such, a different approach must be used to attract and retain these workers. Corporate culture must shift a bit from what used to work with the Baby Boomers towards what will work with Generation X and Generation Y, also known as Millennials. For Generation Y, work is a means to an end yet they are looking for a “quality of work” environment that respects their opinions, offers a career path, promotes teamwork, and has a dynamic, changing environment that is not boring.

Industry trade associations must band together to collectively appeal to this group. Social media must be at the forefront of this campaign—Twitter, Facebook, Instagram, YouTube and LinkedIn are all vehicles to deliver the message. The companies that do the best job of recruiting, managing, training and retaining newer members of the trade will be the most successful; it certainly is a long-term project. It’s going to take construction companies of all trades to think differently, unlike any time in the past. As the industry ages, we will not have a choice but to employ new methods to attract and retain new workers. It’s not going to be easy but it is going to be absolutely imperative as the economy rebounds and even more construction takes place. What will you do to ensure that this happens?

Quotes and Expenses: Checking your take-offs for accuracy

Quotes and expenses are highly detailed and an important step throughout your estimating process. Check your take-off for accuracy with these steps!

Summarize your estimate
Sort the material cost from high to low
Does everything that is supposed to have a cost associated with it have one?
Does anything look unusual? (Sometimes in our rush to get things done, we type fast and “fat finger” an entry…for example, you might have wanted to enter a quantity of “7” but you ended up typing “77” or worse yet “777,” which can really throw things off.)
Sort your labor column from high to low. Does everything look normal?

Some other tips!

For every 100’ of EMT in your estimate, you should have at least 10 couplings.
For every junction box, you should have an average of 3 to 4 wire terminations.
For every 100’ of pipe (EMT, PVC, rigid), you should have at least 3 times the wire, or 300’ plus slack, plus 100’ of ground wire.
For an average job, your material cost plus quotes should equal 1/3 of your cost.
For every project, you should know the square footage. The ratio of labor hours to the project square footage can be telling. For a labor intensive job, this ratio should be 20-25%. Conversely, for a less intensive job (building core/shell), this ratio could be 10% or a little lower.

Generally, you should always complete a detailed take-off versus “square footing” the cost of a job. However, if you keep good historical data, an average cost per square foot for a particular building can be helpful to check to see if your numbers are “in the ballpark.”

Quotes

When you receive quotes (especially for lighting), check the quantities.

Does the quote match the counts that you provided the vendor? Often the vendor uses the first set of counts that he is provided, but they may not match yours. Differing quantities (high/low) can make a difference in your bid price (and the bid price of others), so be careful!
For gear quotes, check the bill of material.
Does it contain all the items from the riser?
Is it the right manufacturer?
Sometimes the items that a particular vendor doesn’t carry are simply excluded from his quote, and he might not tell you about it to make his price look “better.”
If your project requires “attic stock” or “spare materials,” make sure those are included in your quote.
Specialty testing can be an expensive item to miss. Make sure you know what you own, and be sure to include the price in your estimate.
Buyer beware! Ultimately it is the bidder who is responsible for everything on the drawings, not the vendor!

One last word about vendors. If you do not cultivate relationships with your vendors, they will be less likely to work with YOU on bid day. In today’s bidding world, you need every advantage you can get, so relationships become even more important. You won’t get the “whisper” number on bid day if you do not have a relationship with your vendor.

Direct Job Expenses

Direct job expenses (DJE) are costs that are directly related to the project. This includes:

Lifts, scaffolding, staging or ladders.
A place to store your material for the project which may include a trailer for a field office with fax/phone/network connections, computers, phones, copiers and furniture.
A site vehicle/shuttling costs. Depending on the site, you may also have to include money for parking or if the lot is remote, money to shuttle your workers from the lot to the site.
Depending on the tools being used on the project, it may include the appropriate training and certification that your electricians will need in order to work on the site.
- This could include lift specific training, harnesses and PPE, and NFPA70E and OSHA 10-30 training. If your project requires this, it is best to cover these expenses, and make sure you can have the training completed in time to start work on the job in case you are awarded the project.
If there is a generator or large switchgear on the project, rigging should be included as a DJE, as well as the cost of permits to complete the rigging such as “over the road” or “wide load” permits.
Check for “factory witness testing” and load bank testing also. Often general contractors will require a designated person at the factory to witness the testing of the generator.
Finally, don’t forget to include money for small tools! They can account for 2-3% of the labor cost of the entire project.

As with the take-off phase, checking your take-off and applying quotes and direct job costs takes time.

6 Construction Industry Trends for 2017

As the economy and construction begin to pick up, certain trends have begun to emerge. Here are the top trends to watch for in 2017:

Collaborative project delivery methods will become more popular. The days of design-bid-build domination might be winding down, as experts expect collaborative approaches to become more common for projects. Design-build, public-private partnerships, and integrated project delivery are three of the most often-cited methods that are altering the industry and are likely to gain ground in 2017.
The labor shortage will continue to plague the industry. One trend that the industry hoped would fade away is, instead, raging on. The skilled labor shortage is a major concern for firms across the U.S. as employers struggle to staff their job sites.
Offsite/modular construction will gain a stronger foothold in the market. Experts predict that offsite construction will continue to grow in 2017 as quality, time, and labor concerns make alternatives to traditional construction methods more attractive.
Construction costs will rise due to materials and labor. One of the most common concerns industry experts cited for 2017 is the escalating cost of doing business. With rising material and labor costs, firms will likely struggle to maintain their margins in the coming year.
The sustainable construction movement will consider changing its message. The incoming Trump administration has implications beyond infrastructure, as sustainable building leaders are now considering the possibility of altering their messaging to ensure the movement continues.
Construction firms will face increased scrutiny and prosecution of safety and fraud incidents. The construction industry continues to face increased scrutiny for safety violations and incidents amid a building boom. Experts predict that 2017 will see continued heightened attention to job site safety from agencies and law enforcement.

Tips for Women to get into Electrical Contracting Industry

An increasing number of women-owned contracting firms are helping to level the playing field in a traditionally male-dominated industry.
While current statistics reveal only 9.5 percent of National Electrical Contractors Association (NECA) members are women-owned businesses, this number has tripled in the past 15-20 years and reflects a trend seen in physically demanding, tech-centric fields everywhere.

Here are some tips for women looking to get into the field:

Networking is very important for electrical contractors, and many jobs are won based on relationships that you build with each other in construction.
Participation in groups such as Women in NECA is extremely beneficial.
Get certified as a WBE. Certification as a Women’s Business Enterprise (WBE) is very important if you’re looking to do automotive industry work, federal and/or state work.
Encourage teamwork; it helps to foster a team-based approach involving men and women who all bring something different to the table.
Believe in yourself; don’t give up hope when you’re down.

These tips are just the beginning of what woman are capable of doing. Woman are strong and have a bright future in the electrical industry.