Within the next year or so, design/build in electrical construction is expected to reach a tipping point where more than 50 percent of all projects (by revenue) will be completed using the design/build delivery method. Given this, it is important for electrical contractors to ensure they are developing strategic plans for their companies around enhancing their design/build capabilities. With this increasing use of the concept, electrical contractors must learn about the opportunities and risks the design/build method creates.
Engineering News-Record reported that, domestically, design/build revenue increased 22.8 percent in 2006. Much of this dramatic increase also is attributed to the blossoming of building information modeling (BIM) use.
What the research shows
According to “Design Build Methods for the Electrical Contracting Industry,” a research project conducted for Electri International—The Foundation for Electrical Construction Inc., on behalf of the electrical contracting industry, the vast majority of electrical contractors (more than 75 percent) increased profitability when working with design/build. Design/build allowed the electrical contractor to move away from price being the main criteria for selection.
It is clear that the marketing and sales efforts of the electrical contractor shift when moving from bidding work in a traditional mode to design/build. Developing the sales and marketing expertise that target owners and governmental agencies with a focus on selling design/build services is a necessary ingredient for a successful move into these markets. Likely to be required are additional resources and a deep competency in BIM (perhaps as an owner expectation). The electrical contractor may have to help both the owner and general contractor understand the benefits and cost savings resulting from incorporating BIM into their preconstruction and construction efforts.
As another area of focus, contractors should ensure they have adequate professional liability insurance coverage. Additionally, contractors report that when using design/build, greater project management skills are required of their staff—primarily based on the increased decision-making responsibilities.
Other surveys say
Renaissance Research & Consulting Inc.-, on behalf of -ELECTRICAL CONTRACTOR, found 83 percent of respondents had performed design/build work (results are from 2003), with design/build representing 46 percent of the revenue generated by these firms. An additional 13 percent of revenue was reported on projects where the electrical contractors made substantive changes to the design documents, in effect offering up substitutions that would mimic (at least to a degree) what would be expected from a design/build contractor.
Within the survey, the types of completed design/build work varied widely. Among the most common were the following:
- All aspects of traditional power
- Many aspects of power quality and automation/controls
- Communications/data systems
- A number of different types of leading-edge work
- Maintenance, modernization and new construction
Another area that provided great opportunity to the electrical contractor was substitutions.
- Contractors successfully made brand substitutions more than 50 percent of the time when the specification was for a “single or proprietary” brand.
- Contractors successfully made brand substitutions more than 75 percent of the time when the specification was for “multiple,” “equal” or was “performance” based.
This is a strong indicator that owners need to let the electrical contractor identify best value products, and one could suppose these products allow employees to have greater familiarity and, therefore, will lend to a higher productivity during the construction process.
Experiences with design/build
Penn State University conducted an additional study for EI with the goal of summarizing what electrical contractors have experienced with design/build. Of those responding to the Penn State survey, 75 percent said using design/build provided better opportunities for success than the traditional design/bid/build system. Some benefits of using design/build identified in the survey follow:
- Contractors could specify locally available materials.
- Contractors could create a more -consistent product.
- By using the whole team’s knowledge, the best value could be obtained for the client.
A significant amount of information is available for electrical contractors looking for information that would allow them to more fully develop their design/build capabilities. Simply focusing in on the design efforts ignores the impacts on other parts of their organization. The contractor must focus on its project-management skills and risk-management policies. It also must ensure sales and marketing efforts match the needs of its design/build clients.
FEDERLE is the McShane chair of construction engineering at Marquette University in Milwaukee. He can be reached at email@example.com.