Contractors play many new roles

By DAN McTAGGART
Construction Associates

Plan-spec jobs have been the lifeblood of general contractors, but the industry is rapidly changing.

Many general contractors choose not to compete for the award of a contract based on the minimum scope of work that can be interpreted or required in the design documents. In that scenario, the contractor can end up in an adversarial position with the architect and usually the owner or client as well. The design-build team approach can be a much more desirable method for owners and contractors alike.

The design-build team may consist of several consultants, including engineers, architects and the general contractor. The team will start the project with building and site parameters and a description of how the parameters relate to the budget of direct costs (construction) and indirect costs (consulting fees).

The project team provides cost analysis as the design documents are created, thereby sharing fiscal responsibility for the overall construction process. That way, as the plans evolve, changes to the building or site and their impact on the budget can be quantified as they are made.

Even before design has started, a full-service contractor can work on the project during site analysis. In doing a site analysis we use topographical surveys to do a cut-and-fill profile in order to balance the site using native soils; gather soils information to determine the time of year construction can begin; and develop a plan and budget incorporating alternative uses for weather-sensitive materials. For example, on a 25-acre site like the Underwood Johnson Corporate Park in Redmond, the predevelopment work resulted in substantial cost savings.

Value engineering before construction allowed Bio-Control to build its new facility on a challenging site at 32nd Street and Richards Road. The construction team included Construction Associates, Lance Mueller Architects and Northwest Engineers.

By having a contractor on the team at the inception of a project, the team can profit from feedback on the preliminary design documents as they relate to the budget and the construction schedule. Contractors can provide structural and architectural details that are cost-effective and offer a perspective based on sequencing and the proposed construction methods or alternatives.

For example, during the early planning of an office/industrial park, we provided an analysis of storm water detention methods and determined it was more cost-effective to use a cast-in-place concrete vault than a detaining pipe. An additional benefit of the underground vault was increased parking and site coverage that provided for a larger structure with more leasable space.

For contractors to be truly full-service in today's marketplace, we must go beyond design-build and factor in operations. We need to understand how the owner, occupant or tenants' businesses will operate in the facility we are constructing. Knowing the flow of materials, people and information gives us insight into the requirements of wall heights, column spacing, energy, sound and insulation needs. This insight enables us to put together cost/benefit packages so decisions and solutions relate to the budget.

While examining the current needs of the building tenant, it is also important to anticipate expansion and growth needs. How will changes in operations affect the employees, their training and learning curves and productivity?

Another possibility that can arise when a full-service approach is used is working with the client to gauge whether it might be more profitable for the owner/developer to build in extra space to lease to other tenants. If that is done how will it affect financing, permitting and capital reserves for equity requirements?

The United Medical Services office building, for example, was initially proposed as a 24,000-square-foot facility for the single tenant and was changed through the design-build process into a 33,000-square-foot, multi-tenant building to take advantage of efficiencies developed on the site and use of an existing structure.

For this project our title was general contractor, but we also coordinated the financing and permitting effort for the owner and worked with leasing and property management companies to develop tenant improvement allowances, standard office shell improvements, security systems and common areas. Proformas and equity requirements were established in the financing package that worked within the budget parameters for the expanded project.

We are currently in the preconstruction phase on a 43,000-square-foot building for an owner that will occupy two-thirds of the project and lease the balance. We began with the building type and structure and its relation to future occupancy. An analysis of the roof structure system, metal versus composite metal and wood, not only pointed out cost savings in the roofing, but allowed for more efficient column and bay spacing.

Prior to developing final design documents other issues were reviewed including: shear wall location for tenant spacing and future flexibility, fire protection systems and mezzanine structure. The final design documents incorporated these analyses and resulted in an estimated cost saving of 10 percent.

More and more, the competitive advantage for a general contractor is to be equipped to work with clients on all aspects of a development, from site acquisition and permitting to financing and leasing.

For an out-of-state developer, we pulled together and led a team that arranged for financing, site inspection and acquisition of a six-acre site on which to build an Office Max. Prior to construction of the Office Max store, we were involved in permitting the building, parceling off the Office Max site through a binding site plan, mitigating an on-site wetland, and improving the entire site for other users. The developer was then able to sell the Office Max as a leased investment.

Plan-spec projects will continue to be used, especially in the public sector and for large corporations that are developing prototype projects.

However, when building for companies that will own, operate and/or occupy their property, the team approach that incorporates everything from the footprint of the building on a site to what is the most cost-effective HVAC system, is proving to be the most beneficial for owners, architects, contractors and tenants alike.

Copyright © 1998 Seattle Daily Journal of Commerce.