Voice/Data/Video Design/Build:Contractor Opportunities, Customer Advantages

The number of electrical contractors that provide design/build services for traditional electrical work has been steadily growing for decades. “The advantage of design/build is that the owner gets to deal with one entity that is responsible for both design and construction,” Susan Williams, manager of communications for the Design Build Institute of America, Washington, D.C., said. Design/build construction also provides greater opportunities for innovation. “Designers and construction personnel are working together, generating a more creative environment,” she added. Secondly, Electrical Contractor magazine’s “1999 Contractor Profile” report stated that more than 50 percent of the work being performed by electrical contractors with sales greater than $1 million was by design/build methods. That number had grown to 59.6 percent of all contracctors in the 1999 survey. Of these, more than half reported purchasing voice/data/video (VDV) products. Together, these factors point to the same growth of design/build services in the VDV market as in the traditional electrical market. Further, EC’s “2000 Reader Profile” reveals that 72 percent of the largest contractors ($10 million plus) performed VDV design/build work. What does VDV design/build entail? A design/build project begins with interviewing the end-user about both financial and technical requirements. “Then, after determining the budget and the customer’s requirements, the contractor must choose the distribution medium, such as copper, fiber, coaxial, wireless, or satellite, coordinate those areas of the facility that require connectivity first, and then finally design the system with growth in mind,” Bob Doran III, president of Capital Electrical Construction Co., Inc., Leavenworth, Kan., said. At all times, he emphasized, the design/build contractor must be prepared to offer value-engineering suggestions to keep the project within budget parameters. Capital Electric’s engineering department has long offered traditional electrical design/build services. When its DataCom division was formed to respond to the growing demand for high-tech telecommunication and data installations, the company saw the opportunity to provide its VDV customers with a one-stop solution by including design/build services. Capital Electric’s VDV design/build offerings include transient voltage surge suppression, programmable logic controllers, human-machine interfaces, power quality surveys, and system startup for a wide range of VDV projects. “Offering design/build services allows you to be keenly aware of what your customer’s requirements are,” Doran said. “It is essential to listen closely to the customer’s needs and to provide a system that fits in with what the customer envisions,” Mike Barbagelata, vice president of operations for the security systems division of McMillan Electric, Inc., San Francisco, Calif., observed. McMillan focuses on customizing systems to fit the customer’s needs and on translating those needs into reality. The company began its VDV division to respond to the growing number of opportunities presented by the marketplace and to offer a full range of design/build services to both its high- and low-voltage customers. McMillan views offering design/build services as part of its strategy to add value to its services and to provide total systems solutions to its customers. Almost 85 percent of the company’s VDV projects are design/build. Northwest Electric Technology Systems (NETS), New Hope, Minn., advises approaching design/build projects by determining exactly who will be using the system that is being installed. “We listen closely to the customer’s expectations to design a system that will do the job,” Bob Thompson, NETS president, said. Then, after the installation is complete, the company maintains the new system as part of its service offering. As a strictly low-voltage electrical contractor, Northwest specializes in audio and security systems for the commercial, industrial, and institutional markets. “We offer customers a full range of services, from system design to the installation and maintenance of VDV systems,” Thompson said. NETS has been offering design/build services since its inception. “Offering design/build services helps ensure that the system is both designed and installed correctly and fulfills the customer’s requirements,” Thompson observed. In the beginning, only about half of the company’s projects were design/build. Today Thompson estimates that as much as 90 percent of Northwest’s projects are delivered to the customer that way. “Design/build is a multi-faceted process,” added Tom Knight, manager of the information technology systems (ITS) division of Berwick Electric Co., Colorado Springs, Colo. He estimates that 25 percent of the company’s time on a design/build project is spent on investigation. Company designers first meet with the owner to determine his or her needs, then with the technical staff that will actually be using the system to ensure that their needs are met within the owner’s specifications. “Design/build in voice/data/video work means communicating closely with the building owner to ensure that you completely understand the entire scope of the project,” Jim Peterson, Berwick’s president, added. Design/build work also includes ensuring that the system being designed can handle future growth, even though anticipated growth is difficult to determine. “Focusing on the future forces the customer to reevaluate its needs,” Peterson said. Berwick offers customers a full range of electrical and VDV services to the commercial, industrial, and institutional markets. “The ITS division provides a full spectrum of design/build services, from consultation through design and installation,” Knight said. Working directly with the owner, the company gains a fuller understanding of the customer’s current and future needs, which helps them to design the best system possible. “Berwick has offered design/build services in its traditional electrical work for at least 20 years, so it seemed a natural progression to offer the same kind of full service to our low-voltage customers,” Peterson said. Design/build increases the company’s control over its jobs, and allows Berwick to work with vendors to maximize efforts that benefit customers and fulfill their requirements. “Our expertise also allows customers to evaluate the systems they want based on current technology and to develop their communication systems based on their projections of growth,” Knight added. “Designing a structured wiring system entails receiving certification from various manufacturers,” Richard Potts, president of TEL Vi Communication, Fenton, Mo., observed. The advantage for both the contractor and the customer is that after the system is designed and installed to the manufacturers’ specifications, the contractor can warranty the system. “Design/build also requires that you have the expertise on staff for whichever types of systems are being installed.” After being awarded a contract, TEL Vi’s team of specialists meets with the owner, facility engineers, MIS staff, and end-users of the system to determine everyone’s specific needs. “Our job is to consider all the needs of the individuals that are using the system being installed so that we can design and build a system that will meet and satisfy all those needs.” TEL Vi has also offered design/build services since its inception to help the end-user decide what its structured cabling needs are and to design an integrated telecommunications package for the facility. “About half of the company’s projects are design/ build,” Potts observed. “Design/build means constantly educating company personnel on the national codes, as well as educating the technicians in the latest products and installation methods available,” Bill Bryan, president of Newtech Electric Co., Joliet, Ill., said. Companies that are going to succeed in the design/build area of the VDV market, he added, must be committed to customer satisfaction and to assembling the resources that will provide them with the tools and systems they need. Newtech is a small custom systems specialist that performs close to 80 percent of its video and security projects through design/build, and nearly 30 percent for its voice and data projects. “We chose to serve the low-voltage market because we saw the potential of the intelligent building systems market,” Bryan said. The company designs and installs electronic fire alarm and VDV systems, computer data cabling, and CATV, card access, and integration systems. “We’ve offered design/build services since the beginning to better provide customers with the latest technological products and information and to provide a single source for their needs,” Bryan said. Market potential “The potential of design/build for the voice/data/video market is as great or greater than the traditional electrical portion of construction and retrofit projects,” Doran observed. It is not uncommon in VDV environments for the technology and systems infrastructure budgets to equal or exceed the electrical budgets. “As people become more and more dependent on telecommunications, data, security, and video, the design/build market will grow to meet the demand.” To get started, a contractor must either possess a diverse skill set in the systems industry, or be able to learn quickly. Besides technical issues, the electrical contractor who wants to enter or succeed in this market must be aware of the business issues of the architectural, engineering, regulated utility, and property management and development communities. “Staying on top of the industry, with its evolving standards and methods of data transmission, is a never-ending challenge,” Doran said. Barbagelata agrees that, particularly in the San Francisco Bay area, the potential for the VDV design/build market is quite large. “There are a lot of dotcom, Internet-based, and high-tech firms that are growing rapidly here. They understand the benefits of having a service-oriented company that can provide them with solutions, understand their corporate culture, and keep pace with their growth.” To break into the market, Barbagelata advises, the electrical contractor must dedicate itself not only to training in the technologies, but also to understanding VDV estimating techniques and the different products that are being installed. “The architectural and engineering communities are having difficulty catching up fast enough to the voice/data/video design/build market, generating unlimited potential for electrical contractors,” Thompson said. He also predicts that design/build will become the most common delivery vehicle for VDV projects because it is the most cost-effective and efficient form. To get started, Thompson said, determine what part of the market to focus on, recruit people with experience in your chosen niche, and invest in continued VDV systems and products training. “The best course to success is through a long-term commitment and investment to the market,” he said. “As more electrical contractors perform voice/data/video work, design/build services will become a natural progression,” Potts said. But breaking into the VDV market first takes a great deal of research, expertise, and long-term investments in training. “The voice/data/video market is driven by a different mentality than traditional electrical work and requires different training and different installation methods.” A contractor that is successful in traditional electrical work is not ensured success in VDV without these long-term commitments of resources. Design/build benefits First and foremost, the customer gets a single source of contact for the entire project, from design through installation and maintenance. “Also, having an electrical contractor design the voice/data/video system allows the company’s information technology (IT) staff to perform their jobs and not spend time on system design,” Doran pointed out. The customer that hires an electrical contractor with design/build expertise also gets exactly what he or she wants. “Design/build, whether in traditional electrical or voice/data/ video work, is a team approach that allows customers to ensure that the system will satisfy all of their needs and requirements,” Thompson said. Knight agrees. “Design/build helps the electrical contractor assist the customer on focusing more on future needs and on ensuring that the system being designed will support new technology as it develops,” he said. Furthermore, customers who use a design/build electrical contractor’s services gain access to information on technology that may not otherwise be easily available. Staying within budget is another key advantage for the customer. “In negotiated design/build contracts, the details are worked out during the design process, creating fewer, more expensive, changes during installation,” Potts said. In addition, since customers depend on the contractor’s expertise to account for system growth, they can get ideas and suggestions from the designer. Where’s the market going? “Training will continue to be the key to staying on top of the industry,” Doran said. “It is accepted in the industry that the skill set required to perform and design limited energy systems is different than traditional electrical contracting skills.” Doran predicts that contractors will embrace this fact and continually train existing staffs, supplemented by industry specialists migrating toward electrical contracting. Thompson agrees that contractors need to change their attitude towards the market. He sees contractors trying to become “dual” high- and low-voltage contractors without making the requisite changes in how they conduct business. “Voice/data/video is a market that requires a different kind of skill set than traditional electrical contracting,” he said. Barbagelata anticipates more growth in the VDV design/build market because of the Internet and future advances in computer hardware and network capabilities. Knight also predicts that more contractors will provide integrated communication solutions for their customers. “Electrical contractors need to evolve and develop resources to meet the needs of the new communications industry.” In the future, Potts said, more companies will specialize in providing particular types of systems. “The technology for voice/data/video systems is complicated and the necessary investment in training and equipment means that a contractor must perform the types of jobs they do best to get a return on that investment.” Finally, the residential segment has great future potential for VDV design/build contractors, according to Bryan, as more technologies are incorporated into new home construction and more telecommuters require the same levels of technology that are found in the office. BREMER is a freelance writer based in Solomons, Md. She can be reached at (410) 394-6966 or by e-mail at dbremer@erols.com.

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