Design and Construction Market Outlook Forum

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

To Join our sessions


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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