Best Practices for Mitigating Construction Risk
With continuing supply chain bottlenecks, unpredictable material and equipment costs and challenging installation site conditions, contractors have to be on top of their game to deliver quality builds on time and on budget.
Now more than ever, construction managers must possess a high level of skill, planning capabilities, connections, ingenuity and diligence to stay on top of materials and equipment procurement, consistently monitoring the arrival of materials, scheduling subs, managing long lead time items and dealing with construction logistics.
The following are key best practices for achieving just that.
Market Conditions
One of the best ways to keep material and equipment costs down is early procurement. This strategy helps to minimize the potential impact of material shortages and price escalation.
Currently this approach is particularly important with roofing materials, windows and cooler panels, but applies to many other products including all electrical equipment such as gear, meter banks, transformers, panels etc.; HVAC equipment like rooftops, make up air, residential unit systems; and elevators.
When early procurement is not executed, in most cases, more money will be spent buying those items down the line.
Another important approach is identifying alternative materials and equipment that can be utilized in the event that the preferred items are not available or prohibitively expensive.
For example, sourcing products like flooring, siding, windows, glass and some equipment overseas can lead to cost savings if the project can afford to wait the extra time for delivery.
Through this process, both domestically and overseas, it’s important to develop strong relationships with suppliers and vendors to help strengthen one’s supply chain. This can include negotiating fixed-price contracts with suppliers through the duration of the project to reduce the impact of market fluctuations.
Ultimately, it’s important to maintain a contingency budget to absorb unexpected increases in material costs.
Fast Tracking
To keep a project on schedule, a number of strategically identified tasks will need to be fast tracked.
This begins with conducting a thorough analysis of the project requirements to ensure that fast-tracking is necessary and feasible.
Next, critical path items are identified and the project team works together to develop a detailed schedule to support the fast tracking of demolition, site work and foundation work.
Through this process, a rigorous quality control process should be implemented to ensure that work is completed to a high standard.
All relevant permits and approvals must be obtained before work begins to avoid delays. Progress should be closely monitored and the schedule adjusted as necessary to avoid delays or errors.
Anticipating Long Lead Items
As noted, critical long lead items must be identified early in the project. Some critical possible examples for foundation/site work include reinforcement for deep or conventional foundations and utility items such as grease traps, storm traps, triple basins, manholes, etc.
If strong relationships have been established with suppliers and vendors, this will help ensure that long lead items are delivered on time. It’s also possible to negotiate the early release of long lead items, stored material payments or material down payments in order to secure material pricing and keep the project on schedule.
In the event of unexpected delays with the delivery of long lead items, it’s important to maintain a contingency budget and a back-up plan to make up for unexpected delays in the delivery of these long lead items.
Site Constraints and Logistics
For best practices in working around site constraints and logistical challenges, a thorough analysis should be conducted to identify potential issues and then a detailed plan should be developed.
This includes working closely with the local authorities to ensure that all permits and approvals are obtained before work begins. It may also be possible to secure permission to use public space, if needed.
By establishing clear lines of communication with all stakeholders—including local residents and businesses—this will help minimize disruption. In addition, subcontractor input is a must.
Finally, the Implementation of a robust health and safety plan will help ensure that all workers and visitors to the site are protected.
Successful Execution
Contending with some of the most unpredictable supply chain issues, lead times and price escalations in modern history requires the skill and savvy of an experienced contractor.
To learn more about how Summit Design + Build can bring your next project to fruition, contact us here.
About the author
Barbara Horwitz-Bennett is a seasoned architectural journalist, covering the design and construction industry for the past 20+ years. She writes for numerous industry magazines and creates content for AEC firms and product manufacturers.
