Future Proofing for Sustainable Design

No matter the budget, every project can implement practical design strategies to improve energy efficiency, reduce water consumption, and create healthier and more productive indoor environments. That said, first costs can often limit owners’ ability to implement solutions like solar photovoltaic (PV) systems or rainwater capture and treatment systems. While there are a variety of local, state, and federal programs and incentives that should be explored, some projects simply do not have the construction budget to include certain strategies at the onset.

Rather than abandoning these strategies all together, design teams should encourage owners to take a phased approach and ensure critical infrastructure and capacity is incorporated into the project to allow for easier and cheaper future implementation. One example of this approach can be highlighted with solar photovoltaic systems.

The National Renewable Energy Laboratory’s (NREL) has tracked and modeled solar photovoltaic system costs since 2009. Each year the NREL has released a report benchmarking the costs for residential, commercial, and utility-scale systems. The NREL analyzes the capital costs (using bottom-up accounting for all system and project development costs) and the levelized cost of energy for such systems.

The graph below highlights the decade-long trend of declining costs for rooftop PV systems. As technology improves, new incentives are offered, energy costs rise, and pricing drops, the return on investment (ROI) for a PV array continues to become more favorable.

Installed PV Roof Array Costs ($US / Watt)
*https://www.nrel.gov/solar/market-research-analysis/solar-installed-system-cost.html*

If first cost constraints don’t allow for a PV system, but an owner wants to maintain flexibility to install one in the future, the following should be considered when designing a new facility:

Conduct basic energy modeling to understand facility loads and set goals around PV production to right size the PV system.
Conduct a solar site survey to understand sun potential of the site.
Evaluate building orientation and roof design to optimize sun exposure.
Ensure the structural design of the building and roof account for future loads for a PV array so there is adequate capacity to handle the additional loads of the system.
Based on the size of the expected PV array ensure that the electrical room is adequately sized to accommodate a future transformer and other gear.
Ensure there is adequate space next to the main electrical panel to allow for dedicated future PV service panel.
Consider running additional electrical conduit (EMT) from electrical panel to roof.
Consider the need for battery storage and identify space to accommodate.

Value Engineering Done Right: Avoid a Frankenstein Design

Value engineering (VE) can be an effective process to align an owner’s budget with design strategies that provide the best combination of function and value, but if applied incorrectly can also yield a final solution not reflective of the original design intent and project ambitions: a Frankenstein design of mismatched parts.

In a traditional design-bid-build process, Value Engineering is often initiated after construction documents are issued for bid to reconcile scope and budget. At this point the process is often reductive, and an owner must make difficult decisions on what to defer or remove from a project. Significant VE changes in late stages of design can trigger costly redesign efforts, impact permitting, and delay the project schedule.

An integrated design-build process avoids these issues because budgeting is done in parallel with design, not just at the end of it. Key subcontractors are engaged by the design-builder to provide accurate market pricing, evaluate product availability, and collaborate with the design team on alternate solutions that honor the design intent and offer a reduced cost or schedule benefit.

Early in design an owner can understand the cost of each major scope category and its impact on overall project costs. Based on this data design decisions can be prioritized and evaluated against how each strategy supports key goals for the project. Scope can be added, adjusted, or removed to balance the overall project costs throughout the design process. This gives the owner more control and influence over the design and a better final product. In this way value engineering is additive and yields a project that’s more reflective of the original design intent and ambitions.

News: Talke USA named finalist for Houston Business Journal’s Landmark Award!

We’re excited to share that The Houston Business Journal has named our Talke Business & Transportation Center (BTC) project in Mont Belvieu as a finalist in the Industrial category for this year’s HBJ Landmark Awards.

Synchro provided full design-build services including master planning, architecture, interior design, project management, and construction for the project.

Click here for more information about the award and to view the other finalists.

Re: Design-Build Contracts & Competitive Bidding

One common misconception is that working with a design-build contractor prohibits a competitive bidding process. The reality is that there are many ways to structure a design-build contract so that a competitive bidding process can be maintained while also taking advantage of the cost and schedule savings that a fully integrated design-build process can yield.

How does a General Contractor Generate Revenue?

Most general contractors subcontract a significant portion of the labor and material costs on any given project to companies specializing in specific building trades. A typical new construction job may have twenty or more subcontractors working on it. One key responsibility of a general contractor is to develop a project schedule that efficiently coordinates the work of these subcontractors to drive the overall construction process. A general contractor also manages the overall project costs, provides oversight and coordination of all on-site construction activities, and administers other project components such as billings, project insurance, site safety, site security and quality control.

Typically, the labor associated with these efforts is captured within a project’s general conditions. The general conditions also include project direct costs like trash hauling, temporary toilets, jobsite offices, temporary fencing, material handling and other expenses not included in subcontractors pricing and required to deliver the job. The overall cost of general conditions is determined primarily by the project scope and schedule to complete. Overhead costs and profit margin are captured in project fees.

On a typical new construction project, the fee and general conditions represent 10% or less of the overall project costs. This means that over 90% of the project costs are materials and labor of the subcontractors.

How Can Design-Build Yield Cost Savings?

In a typical design-bid-build process, where drawings are complete before bidding occurs, most owners don’t receive accurate pricing information until construction documents are issued and sent out for bid. If bids are not aligned with the owner’s budget, then costly redesign efforts may be required that can impact the permitting process and delay the overall project schedule.

In a fully integrated design-build process preconstruction efforts begin at the same time as design. Milestone construction pricing is provided at each phase of design through engagement of key subcontractors, so the owner receives more accurate pricing data, product availability, and lead time information from the market. This reduces the risk of major surprises and helps the owner prioritize design decisions and direction.

On a design-build project, an overall project schedule is also developed early in the design process, and opportunities to accelerate the overall schedule are identified. Issuing an early site design or structural package for permit approval can allow construction to start while the rest of the building design is completed, thereby reducing the overall project duration.

How Can I Structure a Design-Build Contract to Maintain a Competitive Bidding Environment?

Although there are many ways to structure a contract and the ideal way varies based on the project type, goals, and drivers, the following steps outline how to utilize a design-build contract and still maintain a competitively bid environment:

Once the project scope is defined enough for full architecture and engineering services to be proposed, sign a design-build contract with only the design services locked in.
Ensure that the design-build general contractor is providing milestone pricing as part of their scope of work at the end of each phase of design (schematic design, design development and construction documents).
Use each milestone pricing exercise to adjust scope, prioritize design direction, and ensure the budget and other project drivers are being met.
After the design development milestone pricing, negotiate the fee and general conditions with the general contractor and lock these costs in contractually.
Require the general contractor to competitively bid the major scope components and drivers of overall project cost to three or four subcontractors.
Require the general contractor to provide the subcontractor bids, as well as a summary of the bids and recommendation of “best value” for your approval prior to issuing any subcontracts.