Design and Construction Market Outlook Summary and Slide Deck, Nov 5, 2021

Design and Construction Market Outlook Forum

Upcoming Design and Construction Market Outlook Forums
In upcoming sessions, we will be discussing:
Residential Construction
Office Construction
Infrastructure
Education
Science/Technology
and
The New Normal

To Join our sessions

SUMMERY  AND SLIDE DECK

Review / Download the slide deck her

 

Session Presenters

  • Blair Tennant – Associate Principal, Vermeulens
  • Brad Wendler, Senior Project Manager, Vaughn Construction

Market Outlook, Vermeulens

  • AIA billings index is showing 8 months of increasing design contracts and 10 months of increasing inquiries
  • construction volume is at an all-time high; mainly driven by residential construction whereas non-residential volume is down 3% from peak
  • unemployment is beginning to settle, which implies peak employment, pressure on wages, and difficulty finding workers
  • commodities: steel futures are projecting a decrease in material costs

Recommendations, Vermeulens

  • anticipating 0.5% escalation per month for Q3, Q4 2021, and 2022
  • recommending 3% – 5% in bidding contingency for price shocks and margins as backlogs rebuild
  • consider alternative delivery methods
  • design add alternates in the magnitude of 10%

Design-Assist Procurement, Vaughn Construction

  • things to consider before using design-assist: market conditions (labor material costs), schedule, and complexity
  • contracting is easy: one for preconstruction and one for construction
  • do not recommend GMP early: bid to DA contractor on 100% construction documents
  • contract multiphase projects using the same techniques of detailed proposals, open book documentation, audit, and bid/buy events for each phase
  • when proposing get rates, use auditors, totally open book, competitive nature for all line items and subcontracts
  • escalation tracking: a level field with commodities and schedule
  • some trades can lock in early when quantities are known; cost avoidance with prebuy activities and procurement
  • cons: avoid GMP contracts as everything becomes a change, accountability measures against real data, poor teamwork where CM does not lead and filter, poor value where the team does not have a process, integration between design team or design-assist when doing the drawings
  • lock in hard dollar amounts at 50% construction documents when you know your job and can trigger buys; use contingency online item basis for prebuy risk
  • how to avoid toilet paper rush: 25 times the normal number of people in line, suppliers can help spread and smooth demand to a happy medium

Next Session – December 3, 2021

  • Design-Build and Design-Assist Contracting, Big State Electric
  • Design-Build Contracting, the University of Texas at Arlington
  • Higher Education Survey Results, Gensler

Reports and Slide Decks

expand each section for the agenda and access the pdf file

November

October

August

  • ▼Q2 Market Highlights & Insights on the Infrastructure Deal, August 6, 2021

    Agenda:

    ■ Blair Tennant: Q2 Market Outlook review
    ■ Richard Vermeulen: Are we dealing with escalation, inflation, or COVID-related issues?
    ■ Richard Vermeulen: A look into the current infrastructure bill and what It means for the market
    ■ Kevin Moses, Big State Electric: Market conditions from an electrical contractors perspective
    ■ Brent Bertrand, DSI: Market conditions from a mechanical contractors perspective
    ■ Dan Doherty, Shamut: Market Conditions from a general contractors perspective

June

May

April

March

February

January

December

November

October

September

August

July

June

May

April

March