It’s hard to believe that electrical contractors still carry the “installer of product” stigma—especially when an ELECTRICAL CONTRACTOR report indicates that design/build projects account for 46 percent of contractor revenue.
The contractor is evolving from merely an installer of product to designer and specifier faster than the industry mindset is changing. It is this installer reputation that ELECTRICAL CONTRACTOR is revamping with the results of our latest survey—“Electrical Contractors: Their Key Role in Design/Build Projects”—in conjunction with Renaissance Research & Consulting, a New York marketing research firm.
Conducted from April to July 2004, 9,000 ELECTRICAL CONTRACTOR readers were selected, with a total of 917 responses in this time period. Keep in mind, not all the numbers represented in the charts are out of 100 percent of respondents. Also, some questions were based on a “yes” or “no” answer; since a company can work in a variety of ways, the respondent may have checked “yes” to multiple choices.
How much work is design/build?
Respondents were asked how much design/build work they completed in 2003 and how much revenue these projects earned. The survey found that a large majority—83 percent of contractors—performed some kind of design/build work in 2003. In contrast, the study found that 70 percent simply installed what was given to them, following other’s specs and drawings (see Figure 1).
The most telling indication of how much work is design/build lies in revenue. According to the report, design/build projects accounted for the primary source of revenue for 38 percent of contractors, compared to the 13 percent that did no design/build work at all (see Figure 2).
Who are these contractors?
While firms of all sizes work on design/build projects, the study found that smaller firms (defined as having one to nine employees) are most likely to work primarily on design/build projects. Design/build is the primary source of revenue for 48 percent of smaller firms. All other size firms, from 10 to 19 employees to 100+, do design/build work, but would not define it as a primary revenue source (see Figure 3). Only 24 percent of large firms work primarily on design/build projects.
When broken down into different types of electrical contracting, 90 percent of design/build contractors work on traditional power/lighting projects. Within power quality and automation control systems, 60 percent perform design/build on backup power projects and 45 percent work on fire/life safety systems (see ¬ Figure 4).
For contractors who work in communications, low-voltage and alternative energy systems, a surprising 65 percent perform design/build on communications/data systems projects. The number of contractors who do design/build on alternative energy projects, however, is extremely low, topping at 9 percent for solar/photovoltaic projects.
What types of design/build projects?
When broken down into sector, 42 percent of design/build projects are on new construction, while 32 percent are in modernization and retrofit, and 27 percent are within maintenance, service and repair (see Figure 5).
As for types of electrical work performed, an overwhelming majority of contractors (68 percent) who have done design/build have done so on power distribution. Numbers for total building automation, low-voltage systems, security/life safety systems, and sound and video drop dramatically from there, hitting 12, 10, 5 and 4 percent respectively.
A hearty52 percent of contractors who performed design/build work do so on commercial/industrial/institutional (CII) construction. Single-family residential is the next highest with 35 percent, followed by 8 percent working within multifamily residential construction.
An overarching theme
While this particular study only focused on design/build, other magazine studies have had similar results. The residential study, as well as the “2006 Profile of the Electrical Contractor” (ELECTRICAL CONTRACTOR, July 2006) revealed that more contractors are moving into the design/build area, while fewer are simply installing what is given to them. This is great news. By getting involved in the design/build process, contractors are making their jobs more relevant within the industry, increasing job security and staying power. EC
HAYDEN is a former associate editor for ELECTRICAL CONTRACTOR.