May 4, 20224 Minutes

As the nation continues returning to its daily routine, can we accept that the challenges we are facing as an industry may be the, “new normal”?  They say, “old habits die hard”, and in the construction world, we are confronted with this reality daily.  In an ever-changing world, our industry is experiencing continuous strains on how we’ve traditionally done business.  While many products and services are being streamlined, age-old construction practices are being forced to keep up.  As a leader in the rapidly developing multi-family sector, we know all too well the market-driven constraints that are increasingly impacting projects.

We are looking inward at our own processes and services to work effectively during this wave of changing market conditions.  Material escalations, supply chain shortages, lending requirements, and a declining labor force continues to have significant impacts on every step in the building process.  In this uncharted new climate, traditional preconstruction strategies will no longer suffice.

Considering the current trends in this explosive market, we are working with developers and design teams to lead strategies for increased preconstruction productivity and predictability.

Mitigating Escalation

With supply chains being extremely backed up, we are recommending that clients expedite their financial processes to be in a position to secure materials prior to the start of construction, helping to mitigate on-site shortages, delays, and cost premiums.  This is a significant shift from the traditional process in which design teams complete drawings prior to contract execution, construction financing being secured, and Construction Administration.  Early owner commitments grant us the ability to procure credible trade partners and process submittals; which tends to be one of the requirements to mitigate potential cost escalation.  Being prepared to quickly review and turn around these submittals can directly impact what you pay and when you receive your materials.  Forethought, communication, and stream-lined decision making helps everyone involved keep projects on-track and on budget.

Overcoming Limited Trade Partner Resources  

Due to increased project start volume and current market conditions; traditional trade partner bidding strategies are less effective than they once were.  Difficulties locking trades due to current market demand, is at an all-time high and the standard process of bidding at each stage of design if often not achievable.

With the shift construction companies are experiencing in trade partner commitments being anywhere from 6 to 12 months out, it is necessary to have the ability to make subcontractor selections earlier, which increases the security in pricing and confidence in the schedule.  To do this, we are pulling contract negotiations forward, so we are prepared to execute an agreement, if necessary, with any key subcontractors or suppliers at any time.

In this new normal, taking a traditional competitive bid process with subcontractors may end up costing you in the long run, potentially paying a premium for less qualified, or altogether unavailable, resources.  Earlier owner involvement in the trade partner selections will equate to confidence in project teams and quality work.

These recommendations are not cure-all solutions to all preconstruction approaches as each project is different and the constraints at a specific point in time may vary.  With a chance to reflect on tried-and-true practices that have stood the test of time, we are challenging ourselves, our clients, and our trade partners to do something different, embracing change and seeking positive outcomes in a new normal process.