Finding Efficiencies in a Tight Market

As is the nature with most repositioning work, the majority of RFPs that come across my desk are set up as occupied, phased, hard bid jobs that often require substantial night-work. With robust construction in cities across the country, like Washington, DC, these are quickly becoming less attractive jobs for subcontractors, who are already strapped for labor. They’re becoming more and more selective about the projects they pursue. So how do you take this typical repositioning effort and transform it into something that is more attractive for subcontractors to bid, while keeping the needs of the landlords and tenants in focus? The answer is partnering with a general contractor early in the process.

Engaging an experienced operations team early in the preconstruction planning (beyond just budgeting efforts) on tough, technical jobs like major core renovations or lobby upgrades can pay dividends. In most cases, a repositioning project will take place in an occupied building. Through early engagement the right partner can help you reduce the impact to tenants, lower costs by consolidating phases, reduce change orders through constructability and sequence reviews, increase the appeal to subcontractors by limiting night work, and enhance flow and productivity by developing a detailed phasing plan.

Like Night and Day

A good general contractor will look at the project from the landlord’s perspective, using a construction lens. For instance, reducing night work will increase your project’s appeal to the subcontractor market and ensure more competitive bids. Creating a highly detailed phasing plan during preconstruction can reduce night work and consolidate phases, which can shorten the project schedule. A shortened project schedule limits the landlord’s liability with regards to tenant complaints and requests for rent concessions. It also reduces direct costs for the general contractor and subcontractors, reducing the project’s overall budget exposure.

Don’t be afraid to be an open book

Hard bid jobs are appealing for most clients because, in theory, they get the lowest number from the market at the start of the project. However, unexpected issues arise almost as soon as the contractor is brought on board and the team begins to really dig into the project and develop the work plan with all the project’s stakeholders. Since it is impossible to communicate every aspect of a project through an RFP, often late engagement can result in costly change orders and longer project durations.

Partnering with a general contractor that has a strong operations lead, early in the design process, gives landlords greater visibility into cost and schedule drivers. Through an open book bidding process, the contractor and client can work together to ensure the project is being properly scoped and the most competitive pricing is being captured. More importantly, the price remains consistent throughout the project. The teams can then share savings after they complete the project.

Early planning allows the team to be proactive instead of reactive. They can use discovery to identify hidden costs and develop creative solutions. For example, most landlords contract security through a third party. A lobby renovation may affect security. Partnering with your general contractor, you can weigh out your options, like deciding between hiring additional security guards or rerouting foot-traffic, based on their impacts to costs and tenants.

Allow your general contractor the time to create a tailored approach to your project and each of your tenants. Retail tenants and office tenants have different priorities and your phasing approach should address all of them. Through early engagement, unnecessary impacts to your tenants and costs can be avoided.