FEATURE ARTICLE, JUNE 2005

KEEPING UP WITH THE CONTRACTORS
Technology is the most important factor in driving down job cost while improving the finished product.
Jaime Lackey

Like all facets of real estate, the construction industry is changing at a fast pace these days. To keep up with their competition and to meet client demands, contractors are building with shorter schedules, they are learning about energy-efficient systems and designs, and they are utilizing new technologies to make their jobs more efficient and cost effective.

“With the economy and interest rates like they are, it seems that owners are moving faster than ever,” notes Steve Mitchell, vice president of Bartonville, Texas-based Royal Seal Construction. “Contractors are being asked to complete their projects in a shorter amount of time so that the owners can open for business sooner. This requires contractors to improve scheduling, deliveries and coordination of the trades to minimize down time and delays due to lead items and subcontractor backlog.”

Technology

Technology has played a large role in the ability of contractors to complete projects in shorter timeframes.

“From a project management perspective, technology speeds everything up,” explains Kyle Whitesell, senior project manager of Arlington, Texas-based Bob Moore Construction. “We can identify and address issues more quickly, resolve them faster and save time out in the field. We have more avenues for immediate communications with developers, architects, subcontractors and suppliers, so our ability to respond and correct efficiently is increased dramatically.”

Mitchell notes that paperwork is decreasing: “Owners can send out bid documents over the Internet and project management on the Internet is increasing.”

Costs

Technology also helps with cost estimates for projects, says Garre Waddell, vice president of Amarillo, Texas-based Commercial Industrial Builders, Inc. “Estimates are automated, and unit costs easier to track and more accurate.”

This is especially beneficial as costs of construction materials have been volatile recently. Larry Knox, vice president of preconstruction with Bob Moore Construction, explains, “In our industry we use a lot of raw materials, so we’re always going to be particularly vulnerable to price spikes. In the past year, however, the price spikes for petroleum-based products, steel, gypsum and concrete have all been more extreme than what we’ve witnessed in the past. Suppliers are less willing to commit to pricing for any length of time, and getting a projected price estimate for a few months down the road can really present problems. Couple that with developers’ desire for us to give them pricing numbers that we can hold to — and it becomes a bit of a squeeze.”

Mitchell expects construction materials costs will continue to be a challenge. He says, “More and more countries around the world are modernizing and building. This is going to put a strain on the raw materials needed for construction. If the rapid pace continues and shortages do occur, prices will rise. Another factor that will affect construction will be the rising interest rates. As borrowed money becomes more expensive, owners begin to slow expansions or rethink size of the projects due to the cost of borrowing. This could slow the pace of the current construction market dramatically.”

However, advances in technology may provide solutions to get around high materials costs. For example, Bob Moore Construction is currently working on a project that is using a new type of stencil finishing for tiltwall panels. This finish provides the look of brick and it costs much less than adding bricklayers to the exterior.

Energy-efficient systems are also playing into building costs. Mitchell explains, “Lighting, energy management systems and controls, thermal glazing and insulation values are all moving to the forefront of designers’ attention and are playing a more important role for the owners in considering operating costs as part of the total cost of a project.”

The Future of the Industry

Mitchell believes that more owners should consider the system of partnering, through which owners would work with a team from the initial planning phase of a project throughout construction all the way to completion. He says, “Problems could be solved more quickly and efficiently. Input from team members during all phases could avoid costly errors and omissions. And change orders could be minimized by cooperation of all of the team working together. Bidding a project always gets the owner the lowest price but it also gets the owner the most change orders and aggravation.”

Whitesell of Bob Moore Construction indicates there has been some progress in collaborative work in the construction industry. He says, “There is a blurring of the line between the developer and the general contractor. GCs are coming into the design process earlier. We’re now working with the design team as they develop the plans. We provide a necessary check/balance for costs, and by getting involved sooner our inputs are easier to implement. It’s a real team approach with the developer and the architect and the GC that enhances the building’s usability, desirability and ‘constructability.’ Projects approached in this manner just seem to run more smoothly for all parties involved, and we think our clients are happier with the quality, schedule and cost.”

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