Experience Talks: Advice for Those Looking to Get into D-B
Contractors experienced in the design-build (D-B) process have plenty of advice for those who have not stepped into either the commercial or residential design-build arena, but strongly desire to do so. Some of the responses provided to The NEWS:
• John Trickel, mechanical engineer, VGI Design (consulting firm in Des Moines, Iowa):
1. Be connected with your community.
2. Be properly capitalized.
3. Hire qualified, loyal, and committed people.
4. Recognize safety and other training is essential and part of your business plan.
5. Don’t do anything for free. Everything has value.
6. Plan the work. Work the plan. Don’t do anything willy-nilly.
7. Don’t try and be all things to all people.
8. Get plenty of sleep and take a vacation at least once a year.
9. Most projects must be reviewed and sealed by a professional engineer. If you can’t have one on staff, find a good engineering partner to work with and stick with them. Engineers and quality contractors need each other, so recognize the risk and value for both. Be a team.”
• Steve Clay, TDIndustries, Ltd. (Dallas, Texas):
1. Be sure you have proper insurance, especially adequate errors and omissions insurance.
2. You must have at least some in-house engineering capability.
3. You must cultivate relationships with local mechanical/electrical/plumbing (MEP) design engineering firms to supplement when projects exceed in-house capacity and to successfully work with the local engineering community to help them understand the benefits of contractor-led design-build, as well as eliminate their concerns that you may be taking market share away from them.
4. A significant marketing effort will be required to help your customer base understand the value of design-build.
5. Complete the design-build project with a happy customer that would recommend the process to others. One of the biggest battles to fight is a customer who has had a bad experience with design-build.
• Joe Nichter, president, Tri-City Mechanical (Chandler, Ariz.): “Large mass projects - typical of industrial and institutional - have labor inefficiencies built into their crew rates and thus estimating rates. For example, where a large project has 50 workers, a more typical commercial project has only five. The five tend to be more closely supervised, more competitive, and, thus, the estimating factors used in such projects are smaller. So be prepared to monitor closely the non-productive time and re-work.
“In regard to overhead, large project contractors require expanded overhead support to their projects. SG&A can differ by a factor of two or three between these markets. The skill levels of the office support are different and usually require more expertise for the different trades. In addition, it is not uncommon to have a staff of in-house engineers. Design-build also requires a different level of insurance coverage.
“In regard to vendors, a need for more qualified and specialty vendors are required for larger commercial projects. Pre-planning is essential to well-run projects and requires good turnover meeting from estimating to the field, so a clear scope can be presented to the on-site team.”
Publication date: 01/08/2007
• John Trickel, mechanical engineer, VGI Design (consulting firm in Des Moines, Iowa):
1. Be connected with your community.
2. Be properly capitalized.
3. Hire qualified, loyal, and committed people.
4. Recognize safety and other training is essential and part of your business plan.
5. Don’t do anything for free. Everything has value.
6. Plan the work. Work the plan. Don’t do anything willy-nilly.
7. Don’t try and be all things to all people.
8. Get plenty of sleep and take a vacation at least once a year.
9. Most projects must be reviewed and sealed by a professional engineer. If you can’t have one on staff, find a good engineering partner to work with and stick with them. Engineers and quality contractors need each other, so recognize the risk and value for both. Be a team.”
• Steve Clay, TDIndustries, Ltd. (Dallas, Texas):
1. Be sure you have proper insurance, especially adequate errors and omissions insurance.
2. You must have at least some in-house engineering capability.
3. You must cultivate relationships with local mechanical/electrical/plumbing (MEP) design engineering firms to supplement when projects exceed in-house capacity and to successfully work with the local engineering community to help them understand the benefits of contractor-led design-build, as well as eliminate their concerns that you may be taking market share away from them.
4. A significant marketing effort will be required to help your customer base understand the value of design-build.
5. Complete the design-build project with a happy customer that would recommend the process to others. One of the biggest battles to fight is a customer who has had a bad experience with design-build.
• Joe Nichter, president, Tri-City Mechanical (Chandler, Ariz.): “Large mass projects - typical of industrial and institutional - have labor inefficiencies built into their crew rates and thus estimating rates. For example, where a large project has 50 workers, a more typical commercial project has only five. The five tend to be more closely supervised, more competitive, and, thus, the estimating factors used in such projects are smaller. So be prepared to monitor closely the non-productive time and re-work.
“In regard to overhead, large project contractors require expanded overhead support to their projects. SG&A can differ by a factor of two or three between these markets. The skill levels of the office support are different and usually require more expertise for the different trades. In addition, it is not uncommon to have a staff of in-house engineers. Design-build also requires a different level of insurance coverage.
“In regard to vendors, a need for more qualified and specialty vendors are required for larger commercial projects. Pre-planning is essential to well-run projects and requires good turnover meeting from estimating to the field, so a clear scope can be presented to the on-site team.”
Publication date: 01/08/2007
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