Recently, we gifted our staff with custom WPE branded Rubik’s cubes as part of an internal employee engagement event. It’s no secret – engineers love a good puzzle. And it wasn’t long before the competition began to see who could get it to line up first.
Like that Rubik’s cube, the A/E/C industry keeps twisting and turning in new directions. As soon as we get one side to line up, another seems to slide off course and we’re back to problem-solving mode. For a long time, projects were scarce, and backlogs suffered. Now that the work is lining back up to be done, labor shortages, material costs and delivery times don’t line up with it.
It’s all hands on deck to shift, pivot, twist and turn our typically linear processes to deliver projects and solve problems for clients and owners. In this edition of Plains Talk, we’ll dive further into the challenges being faced industry-wide, as well as the creative solutions we’re using to puzzle them out.
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Finding Non-Linear Approaches to Design Delivery |
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The traditional delivery methods in the A/E/C industry typically fall into a design-bid-build (DBB) or design-build (DB) model. These approaches either assemble all members of the design team (design-bid-build) or both the design and construction team (design-build) and follow a linear path from a conceptual phase, through design development, and into construction documents and, ultimately, construction itself.
Along this path are generally accepted milestones and scheduling expectations that have become norms for engineers, architects, contractors and most importantly, owners. But over the course of the last year, our industry has seen our ability to execute these delivery methods in a traditional fashion turned upside down. While work has returned in most industries following the slump of 2020 – the challenges being faced now center around the ability to procure material and get that work done.
Labor Shortages
Perhaps the first domino to fall has been a shortage of workers on both the design and construction side of the coin. Many architecture and engineering firms are rigorously recruiting to keep up with the backlog of projects coming through the industry this year. But even once the design is delivered, there is frequently a lack of bidders to perform the work because once again, labor is in short supply.
For some owners, contractual stipulations are also limiting bidder interest. Many government entities utilize a liquidated damages clause, which specifies a predetermined amount of money that must be paid as damages for failure to complete the work on time per the contract. Contractors understand elements out of their control, like material costs and delivery times, may interfere with their ability to execute an agreement and are therefore reluctant to bid on these projects. Projects with liquid damages clauses are seeing elevated pricing and reduced bidder interest.
A recent survey included within the ACEC Q2 2022 Business Sentiment report indicated that 90 percent of engineering firms are seeking to fill at least one open position within their firm. The median number of openings is six for all firms surveyed. This shortage in the talent pool will continue to burden the design industry just as the shortage of skilled tradespeople has had a negative impact on the construction industry for several years.
High Prices
Simple economics of supply and demand then comes into play. Fewer bidders mean less competition for the work, resulting in higher bids. Couple that with the soaring cost of materials, and budgets are being squeezed tight.
Equipment Delivery Times
But budgets aren’t the only concern. Like all goods, the delivery time for system equipment is staggering. Some items, like switchboards and RTUs, are estimated out a full year. Obviously, this makes scheduling and planning difficult for designers and contractors – and the entire delivery process frustrating for owners. Increased energy efficiency requirements within the industry set to take effect in January 2023 are also impacting pricing and lead times for some HVAC equipment.
Frustrating as these challenges may be, make no mistake, the DBB and DB processes are still alive and well. It’s simply now become our job as designers to step outside our long-held linear execution and be flexible and creative to find solutions for our clients. For example, our team has begun identifying equipment with extremely long lead times early on so we can put them on order before design is even complete. We’ve also changed construction phasing to help reduce upfront costs, worked to identify additional bidders through our network of contractors, and incorporated opportunities for grants and rebates where available.
Check out the project profiles in this edition of Plains Talk for examples of how these solutions have made a difference for our clients.
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Authored collaboratively by WPE leadership.
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Working Backward Underground |
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SDSTA 3650L Pump Room Rehabilitation |
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Design teams typically name projects according to the building or room type being designed – an office, school, first floor, or restroom for example. But when it comes to the Sanford Underground Research Lab, we talk not in terms of spaces, but depths. Hosting world-leading research experiments in physics, biology, geology, and engineering takes a special degree of environmental control, in some cases reaching down as far as 5000 feet.
We’ve supported work at the SURF for the South Dakota Science & Technical Authority at various depths and facilities, but most recently we’re partnering to rehabilitate the pump room at the 3650L – the 3650-foot level of the Ross Shaft. Due to deteriorating conditions for the equipment, many system components need to be replaced to maintain safety and laboratory operations. This includes the pump, motor, medium voltage starter, transformers, piping within the existing pump room, as well as the surrounding space.
Obviously, schedules are important to a world class research lab. But with current manufacturing and delivery delays, getting equipment on site (no matter what site that may be)…appeared tricky. To be proactive, our team worked backward. Early on, we identified the equipment with the longest lead times and put them on order while the design process was being executed. Ultimately, we noted that the pumps would create the biggest headache with a lead time in the range of a year. By ordering them early on, we got the ball rolling, and were also able to put the Owner in contact with the manufacturer directly for future pumps.
In doing so, some of the expected waiting time was absorbed into the ongoing design effort.
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Daren Beckloff, P.E. has more than 30 years of experience in electrical utility design and is the manager of the WPE Power Division. He was the lead electrical engineer on the 3650L pump room rehabilitation.
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Michael Heinrich, P.E. is a Mechanical Engineer and head of the Rapid City Mechanical Department. He was the lead mechanical engineer on the 3650L pump room rehabilitation.
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Bringing On Sub-Contractors Prior to Design Completion |
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Our Sioux Falls office is in the design phase of a new industrial project in the Sioux Falls area which is utilizing a Construction Manager (CM) delivery method.
Traditionally, this process would take the design to completion prior to bidding out the sub-trades and bringing the full contracting team together. Due to the nature of this project and the long lead times of the mechanical and electrical equipment, the CM has elected to bring on the Mechanical-Electrical-Plumbing (MEP) sub-contractors early to aid in the budgeting and procurement of equipment, as well as to function in a design-assist roll on the project.
The anticipation is by about a 50 percent CD set of design documents, the major pieces of the MEP equipment and gear will be able to be ordered. This will allow the long lead times of delivery to be partially absorbed into the project schedule while the design is being completed.
Additionally, this project is sending the footing/foundation package out for an early bid as well as the structural package for the facility.
This process is not without risks and burden on the design and contracting team, but with the proper team approach, everyone contributes to limiting those risks and burdens.
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Marty Christensen, P.E., is a Principal Mechanical Engineer and Building Services Division Manager for West Plains Engineering. He has been with the firm since 1994, and is currently supporting this project both in
a design capacity, as well as in the interface with the CM delivery process.
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West Plains Engineering News |
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That’s right folks – THIRTY!
Electrical Designer Harlan Osterloo joined WPE after graduating in 1992,
and has been a member of our Sioux Falls office since. His experience is nearly unmatched, but just as important is the friendship, kindness, and fun he brings
to our company. We are grateful for the many years he’s spent with WPE,
and look forward to many more!
Congratulations Harlan!
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Let's have a round of applause for Nick Carr celebrating 5 years with WPE!
Nick is a Mechanical Designer in our Sioux Falls office and joined the team after graduating from South Dakota State University in 2017. He's been involved in more than 100 projects over the past 5 years and has quickly become a critical member of our mechanical department in Sioux Falls.
Congratulations Nick!
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Welcome Parker! We're excited to have another Jackrabbit alum in our ranks!
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Summer is the official season of interns, and we're thrilled to have some outstanding up-and-comers joining us for the next few months. The future of the A/E/C industry is bright! |
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Let's all welcome a new face in Sioux Falls - Jacob Wolf! Jacob is a student at The University of Texas at Dallas, and is working with our electrical team. |
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And in Iowa...our Cedar Rapids team added John-Paul Buss to the crew. John-Paul is a student at Benedictine College in Atchison, Kansas and will work with our mechanical department. |
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Rapid City, SD | Sioux Falls, SD | Casper, WY | Cedar Rapids, IA |
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