Selling Space in the Frame: The Age of the Services Contractor

Creating certainty in the construction process is now directly impacting on the roles of the contractor and sub-contractor within a build. Technology is focusing the mind of the trades and services from doing something efficiently to creating greater productivity and thus positioning themselves to be involved in the design process much earlier. As a result we appear to be on the cusp of a shift in the status of who drives the design û should it be the services contractor?

Path to Prefabrication

The initial formal signs of change in the services sector of construction in the US date back to early 2002 and are defined by the research conducted by the Mechanical Contracting Education and Research Foundation. Their industry analysis of the opportunities and threats to members culminated in the publication of the report entitled ôFive Key Trends for the Future of the Mechanical Contracting Industryö, published in March 2005.

It was within this research that the question was asked of the mechanical contractors industry ôwhy does it seem like I am doing the work of the General Contractor without the pay?ö. The research focused clearly on the emerging technologies and the opportunities they presented to the trades in relation to developing closer relationships with the design process in order to improve productivity and reduce costs.

The report establishes a timeline of industry change where the mechanical and electrical contractors have a real opportunity to lead project design by 2020. It may however be much earlier than predicted given the current pace of prefabrication and the development of the ôframeö of services that are built off site, something which is changing the entire nature of subcontracting services.

The report also clearly advocates a move towards reverse tendering, something that Mitchell Brandtman canvasses as an innovative procurement technique and a direct outcome of setting the cost strategy at the concept and design phases. The result is an executable file that becomes the project’s living cost plan and provides all the elements to set a firm pricing schedule for the project. In non-competitive markets, reverse tendering reduces risk, expedites and simplifies the tender process by placing the focus on rates rather than the uncertainty that can manifest through tender or auction.

Future Form – Permanent Modular Construction

Much more recently industry organisations are focusing attention on how quickly prefabrication is changing and we are already moving towards permanent modular construction as a viable build option in large scale commercial projects.

In the US the Modular Building Institute, who represent more than 250 companies operating in 15 countries, are championing the development of permanent structures offsite in a safe environment that are being delivered to site, integrated with less waste and greater quality control. Some industry commentators are citing that building lifespans of more than 50 years are achievable.

Whilst prefabrication is clearly not a new concept, product improvement and increased demand have brought it back into the spotlight. Currently the key saving is time; however improvements in technology and large scale manufacturing will also lead to cost reductions.

When McGraw Hill released its ôSmartMarket Report: Prefabrication and Modularizationö in 2011, it specifically recognised the re-emergence of prefabrication and modularized components and how BIM technology was enabling their greater integration. Of the 800 architecture, engineering and contracting (AEC) professionals surveyed, more than two thirds reported significant productivity gains, including:

  • 66% reporting that project schedules are decreased – 35% by four weeks or more
  • 65% reporting that project budgets are decreased – 41% by 6% or more
  • 77% reporting that construction site waste is decreased – 44% by 5% or more

Prefabrication and modularization not only has the ability to enable trends, such as BIM, but it also becomes more prominent because of these technologies. By bringing multiple innovative technologies and processes together it improves productivity in the industry by implementing different systems to achieve the desired outcomes, rather than simply speeding up the same myopic process which will not achieve true productivity gains in the long term.

The highly acclaimed T30 Hotel in China is an example of this and continues to steal headlines for its success in modular construction. The building was erected in just 15 days with over 90% of construction taking place in manufacturing sites, streamlining processes that removed impractical and tedious tasks and resulted in impressive eco-credentials. Whilst it may be some time before Australia embraces this level of engineering in prefabrication , Mitchell Brandtman is working closely with a number of the key players in the modular and prefabricated industry to develop new products.

Expanding the Scope and Blurring the Boundaries for Subcontracts

The trend toward prefabrication of building components has the potential to blur or change the traditional subcontract boundaries entirely here in Australia. BIM is already enabling prefabrication of services racks in corridors and risers. These racks are being fabricated by the mechanical services subcontractor who is allowing the space for electrical, hydraulic and fire services to be installed by those subcontractors in the mechanical subcontractor’s workshop. The other services subcontractors are then charged for the benefit that has been created for them.

In the US it’s a slightly different experience where the mechanical subcontractor is using his own plumbing and electrical staff to complete the work that was traditionally done by other subcontractors. In effect US mechanical subcontractors have expanded their traditional scope to include multi services within building trunk zones and this trend has reduced the scope of the electrical, fire and hydraulic packages.

It will be interesting to see if the US approach becomes the norm in Australia. At a time when our balance of trade figures are already heavily skewed by imported consumer goods in Australia, utilizing local innovation and technology can produce a highly valued product that will be more cost-effective and adaptive to our needs than one mass produced off-shore and sent by ship.

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