(Editor's Note: This article is a follow-up to Joe Kelly's full profile report in the July issue. It focuses on design/build results from the profile.)
During the past two decades, construction has evolved from a business of one captain and many lieutenants to more of a collaborative business in which many captains work together for the greater good. This approach—pushed by owners and designers seeking ways to improve efficiencies and productivity—has sent more responsibility down the line to all the subcontractors, especially electrical contractors (ECs) who can perform a variety of systems work in addition to electrical.
Instead of being called in to only install what someone else designed, ECs increasingly are being called on to lend their expertise to make the design right the first time.
According to the 2010 Profile of the Electrical Contractor research study, performed by Renaissance Research & Consulting, New York, the degree to which ECs performed on a design/build (D/B) or design/assist (D/A) basis in 2009 actually went down, but only because of the economic crisis that slashed across all construction markets. New construction was down, which thinned out the amount of D/B projects. No job type or job site was immune to the recession. However, despite the hindrances of the economy, ECs remained a trusted collaborator on the design team, as the statistics showed.
Compared to ELECTRICAL CONTRACTOR’s 2008 Profile, the percentage of firms working on a D/B or D/A basis slumped from 77 percent to 71 percent in the 2010 profile, mainly due to a decline in D/B or D/A work among ECs with fewer than 10 employees—those hit hardest by the economy.
Level of involvement
According to ELECTRICAL CONTRACTOR’s 2010 Profile, 71 percent of all ECs performed “any” D/B or D/A work in 2009. As in the past, larger firms are more likely than smaller firms to have engaged in D/B or D/A work. While 65 percent of ECs with less than 10 employees performed “any” D/B or D/A work in 2009, about 86 percent of the firms with 10 or more employees reported performing “any” D/B or D/A work.
Overall, electrical contractors gained an average of 40 percent of their revenue from either a D/B or D/A basis in 2009. This marks a decrease of 7 percent from the 2007 results, but again, it is tied closely to the decrease in new construction that mostly affected the smallest electrical construction companies.
D/B work was done on 30 percent of projects while D/A was used as a bidding method on a mere 10 percent. Still, 52 percent of all ECs’ revenue comes from the traditional design/bid/build method. Less than 10 percent comes from “other” bidding methods. There are still a lot of opportunities out there to get involved in D/B and D/A projects.
As far as the amount of influence ECs have on projects, more than 80 percent report having a “medium” or “high” ability to influence the overall electrical design or specifications with building owners or design team members. About half of those surveyed describe their level of influence as “medium” while one-third of those surveyed characterize their level of influence as “high.” We know ECs are seriously involved in the design process, but when they join the team depends on several factors.
When they get involved
Across the total sample in the 2010 reader survey, about 20 percent of ECs say they now get involved earlier in design collaboration, while 55 percent report “no change” and 13 percent say they now get involved later in the process. The trend still indicates high levels of overall collaboration by ECs early in the design process, as 75 percent get involved at the same point they had in the past or earlier.
Very large companies (those with 100-plus employees and with 50-plus employees) are more likely than smaller electrical contracting businesses to report getting involved earlier while firms with less than 10 employees are more likely than larger firms to report “no change” in when they get involved in design. This is no surprise, as the larger firms tend to have more resources and the experience to collaborate on large-scale D/B and D/A projects from the beginning planning stages.
In addition, these larger firms tend to have the sophistication and resources to employ building information modeling (BIM) software capabilities, which gets them to the design table sooner as it is increasingly becomes an industry standard. McGraw-Hill Construction defines BIM as “the process of creating and using digital models for design, construction and/or operations of projects.” In its 2008 SmartMarket Report on Building Information Modeling: Transforming Design and Construction to Achieve Greater Industry Productivity, McGraw-Hill Construction indicated that the largest increase in BIM usage would come in the “contractor” category, which was also the “lightest use” category. About 38 percent of contractors will be heavy users, up from 23 percent the previous year. Only 12 percent expect light use of BIM, compared to 45 percent the previous year. In addition, the McGraw-Hill report found that 82 percent of BIM experts believe that BIM has a very positive effect on their company’s productivity.
Therefore, expect increased adoption of BIM among contractors in general, which should lead to adoption among subcontractors—including ECs—if they want to get involved earlier in the design process. BIM is the technology that gets ECs invited to the design table earlier and was also among the categories where future interest in taking training far outpaced past interest. This technology, and its corresponding training, could net your company instant respect with owners and general contractors.
Incomplete plans and specs
Another way ECs are gaining respect is in the completeness of plans and specs. About 83 percent of ECs report receiving plans and specifications that are incomplete—where their company is responsible for completing the design documentation. These ECs indicate that plans and specs are incomplete 45 percent of the time on average. Let’s break that down by construction type.
Between 20 percent and 30 percent of ECs who work on single-family, multifamily and commercial/industrial/institutional (CII) construction say a higher percentage of the plans and specs they now receive is incomplete compared to five years ago. In addition, between 50 percent and 60 percent of ECs who work on each of those building types say the completeness of plans and specs is no different than it was five years ago.
Only about 10 percent who work on each building type say that a smaller percentage of plans and specs they now receive is incomplete compared with five years ago. Compared to the 2008 Profile, there is no change in the percentage of ECs that says a higher percentage of CII plans and specs is now incomplete versus five years ago.
However, a smaller percentage of ECs says the residential plans and specs they now receive are incomplete (in single-family housing: 24 percent incomplete in 2010 versus a directionally higher 28 percent in 2008, and in multifamily housing: 22 percent incomplete in 2010 versus 31 percent in 2008). This could be attributed to less work in the residential market in 2008 and 2009.
In the case of multifamily housing, there was a corresponding increase in the percentage that said there was “no difference” in the completeness of plans and specs they now receive compared with five years earlier. However, with single-family homes, there was a small but significant increase in the number of ECs that say a lower percentage of the plans and specs is now incomplete.
As was the case in 2008, electrical contracting companies with 10 or more employees—who we know tend to derive a higher percentage of their revenue from CII projects—are also more inclined to say a higher percentage of CII plans and specs they now receive is incomplete. Only 22 percent of companies with fewer than 10 employees say a higher percentage of the CII plans and specs they now receive is incomplete versus 42 percent of firms with 10-plus employees.
Compared to firms with fewer than 10 employees, significantly more ECs with 10-plus employees say a higher percentage of the plans and specs they now receive is incomplete in the following categories: line work, single-family housing and multifamily housing. The only exception to this trend is power-generating stations/substations, where there is no difference by number of employees.
Brand selection and substitution
Survey respondents were shown a list of four options and were asked what percentage of the specifications that their company receives falls into each category. On average, a single brand is specified about 25 percent of the time. In all other cases, different factors (multiple brands, “or equal to” or performance--specified) come into play. Note that a single-brand specification is far more common among electrical contracting firms with fewer than 10 employees than among larger firms. In contrast, “or equal to” is most common among firms with 10–19 employees, while “performance--specified” is least common among ECs of this size. The proportion of single brand versus multiple brands across the total sample is consistent with the 2008 Profile. Overall, ECs are able to make brand substitutions about 70 percent of the time. (Read the full report here.)
After examining the data and talking to electrical contractors, it is clear that ECs are gaining respect at both the design table and on the job site as trusted specification partners. They must deal with incomplete plans and specs and choose brands. The trend toward performing design/build or design/assist work will increase when the economy turns around and BIM adoption becomes more widespread. Early BIM adopters will have the most influence, earlier in the project life cycle, than those who adopt later. Does your company get an early invitation to the design table?
KELLY, former editor of ELECTRICAL CONTRACTOR, is a Baltimore-based freelance writer. Reach him at firstname.lastname@example.org.
Tables and figures contained in this article come from the data generated by this year’s ELECTRICAL CONTRACTOR Survey, which was conducted by New York-based Renaissance Research & Consulting Inc. (www.renaiss.com), an independent marketing research firm that specializes in market research for the construction industry.