Building Communities: The Importance of Exceptional Construction in the Public and Municipal Space
Construction Manager at Risk Vs. Design-Build: What’s the Best Method for Your Next Project?
In construction, the first step in any project is determining a project delivery method that ensures the best outcome. Two popular methods that we offer at Miles-McClellan Construction are design-build and construction management at risk (CMR), which while similar in some respects, also have distinct differences that can be the defining factor in executing a project that is well-planned, goes smoothly and leaves all involved feeling satisfied with the results.
Keep reading to learn more about these delivery methods and when they are best utilized.
An Overview of CMR and Design-Build Project Delivery
First, it’s important to understand how these methods are different on a base level. With CMR, one of our skilled project managers commits to delivering a construction project within a guaranteed maximum price (GMP). That construction manager will be your consultant throughout the project, doing whatever it takes to ensure that all aspects of the projects are being handled properly and that there is a smooth transition from one phase of a project to the next.
With design-build project delivery, the design-build contractor teams with the chosen architect to complete construction based on your project needs and wants. Because of this partnership between contractor and architect, an established guaranteed cost is provided early in the process, allowing you to secure funding faster.
Advantages of CMR
Every strategy has its unique strengths. Let’s explore those in a CMR collaboration.
- If you have an architect who has worked well for you throughout the years, CMR allows you to continue working with the architect who understands your business and vision, while the contractor keeps that vision within budget.
- Because the construction manager is involved early in the project, they can provide valuable input during the design phase, which can lead to more accurate cost estimates.
- When a GMP is established from the very beginning, overrunning the budget is less likely.
- CMR fosters a sense of collaboration with everyone involved in a project, including, owner, designer, architect, stakeholders, etc., which leads to better communication and problem-solving.
- With CMR, the owner sets and leads the design while being financially responsible, giving the owner more control.
- We recommend CMR as the form of project method delivery for more hands-on owners.
Advantages of Design-Build
Now let’s explore the benefits of design-build project delivery.
- If your construction project contains multiples of the same type of building (for example, maintenance complexes, a tradition K-12 school, banks, and public institutions such as fire stations, police station, post offices, etc.) design-build is a very effective choice.
- The design-build contractor holds all of the risk for the owner by contracting with both the architect and subcontractors.
- With design-build, the design-build contractor and architect are partners, creating a situation that requires less checks and balances.
- Design-build can significantly reduce the overall project timeline, as both the construction and design phases of a project take place at the same time.
- We recommend design-build for owners who want to focus on their business instead of taking on the responsibilities of the construction on a heavily funded project.
Still Have Questions? Let Us Put You on the Right Track!
Overall, there is a give and take to both delivery methods that should be taken into account when considering your next project. If you still have questions and would like insight from construction experts with decades of experience, contact us today and let’s build excellence while finding your ideal construction solution!
2024 Q1 Economic Indicator
Contrary to earlier predictions of a recession in early 2024, the AIA and FMI now suggest a potential slowdown in the back half of 2024. While our indicators do point to a deceleration, our internal data and anecdotal evidence consistently demonstrate the robustness of the construction industry, which does not align with the notion of a significant downturn.
To summarize the AIA and FMI reports, they expect an increase in construction spending between 2-3% in 2024, followed by a rise of 1% in 2025. Accounting for the anticipated slowdown of construction over the next two years, the AIA points to three factors that, when combined, cause banks to tighten up lending, resulting in difficulty in getting projects started:
- Rising long-term interest rates.
- Higher construction input costs with input prices remaining 35% to 40% higher than pre-pandemic rates.
- Construction labor costs are continuing to rise at a 4% annual pace.
Despite the AIA Billing Index remaining below 50 for 9 consecutive months and the Dodge Momentum Index staying low for the past 10 months, the Charlotte and Columbus construction markets are still brimming with potential. Contractor backlogs, as measured by ABC and FMI, saw an increase at the end of Q1. This positive trend is mirrored at Miles-McClellan, where our backlog is higher today than it was at the end of Q1.
As you read the full report, you will learn more details about these numbers and trends.
Recent MM Bidding Experience
Immediately below is a summary from one recent bid effort, but it indicates what our teams are experiencing as they continue to price projects for our clients actively.
Sharing a recent bidding experience, Brad Bloomberg, MM Vice President, expressed, “Our most recent bid was for a local office remodel in downtown Columbus. The project primarily focuses on updating elevator lobbies, restrooms’ finishes, lighting, and ceilings. We had a prequalified list of limited subcontractors invited to the project. While the coverage was average on drywall and fire suppression, we received feedback from painters, electricians, and HVAC contractors that they were too busy with the existing backlog over the summer months to take on any new work.”
- Painting: 2 bidders of the 7 invited.
- Electrical: 2 bidders of the 10 invited.
- HVAC: 1 bidder of the 10 invited.
- Flooring: 2 bidders of the 6 invited.
- Drywall & Demo: 4 bidders of the 5 invited.
- Fire Suppression: 3 bidders of the 6 invited.
This level of bidding activity is typical for the summer months. We will monitor the trends and report on contractor backlogs in Q3.
Miles-McClellan Construction Director of Field Operations Steve Parsons Discusses the Benefits of Owner’s Representation in Construction
Construction projects are complex and require effective management of many different moving parts, such as groups of subcontractors, estimating costs and supervising work to ensure it is of the highest quality. Our owner’s representation services offer support during the planning, design and construction cycles of a project, and allow a project to meet the owner’s expectations in terms of scope, quality, schedule and budget. We customize our owner’s representation services to be flexible based on the owner’s needs, and the owner decides how much involvement and decision-making authority we receive. This leads to exceptional results with a project completed on schedule and on budget.
In this interview with Miles-McClellan Construction director of field operations Steve Parsons, learn about his experience being an owner’s representative and how it has allowed him to “save the day” for his clients.
Let’s Hear More From Steve Parsons:
Q: What experience do you have as an owner’s representative on projects?
A: Greasecycle’s Charlotte facility was my first assignment as an owner’s representative. I look forward to my next opportunity as an owner’s representative.
Q: Why do you like being an owner’s representative for clients?
A: As a contractor, it is rewarding and challenging to experience the owner’s vision and assist them with their project’s planning, financial and schedule goals.
Q: What do you bring to the table – why would a client want to work with you?
A: Experience. I have fourty-four years of commercial construction experience with a diverse and long list of successful projects.
Q: Can you name an example of “how you saved the day” for a client?
A: During COVID-19 and Greasecycle’s project, we were advised that the lead time for the electrical switch gear equipment would be twenty-eight months after it was approved and released due to severe supply chain issues. This was unacceptable for a project with a goal of completion within nine months. Through my electrical supply contacts, I sourced a used and refurbished switch gear from a supply house in California and finished the project by the nine month deadline.
Q: Do you have any specific advice for those in the construction industry working as an owner’s representative for clients?
A: Be a good steward. Treat concerns and your client’s money like you would your own. Think outside the box of a typical contractor and bring creative solutions to the table. Listen to the owner’s concerns and draw down on all your experience. Pride the owner with your professional advice. Advise the owner of the risks before they become a problem. Always be fair but firm with everyone.
Do you want to make sure your next construction project goes smoothly, on time and without numerous unforeseen obstacles? Then learn more about our owner’s representation services and contact us if you have any questions.
Building Excellence from the Beginning: The Benefits of Construction Management at Risk
For over 46 years, our customers have trusted us to build excellence and find smarter solutions for all their construction needs to ensure the best possible outcome for any project. With comprehensive Construction Management at Risk (CMR) services, our strategic approach to crucial components of a construction project that include project and risk management, project cost estimate and budgeting and design and engineering services, we help our customers minimize risks, control costs and get projects completed on time and at the highest standard of excellence.
How Does Miles-McClellan Construction Approach Construction Management at Risk?
As with all of our projects, the process begins with one of our talented leaders serving as Project Executive and committing to delivering a construction project within a guaranteed maximum price (GMP). From there, the Project Executive takes on the role as consultant throughout the development and design phase, and does everything possible to ensure a project is prepared and ready to enter the next phase.
How Can Construction Management at Risk Benefit My Next Project?
In our experience, CMR with Miles-McClellan Construction provides several benefits that ensure a project is successful from beginning to end. These include:
- Projects Completed on Time – When a construction manager is involved early in the process, they can optimize the construction schedule and plan for multiple aspects of a project, including delivery of materials, procuring labor and equipment, coordinating various timelines, etc. Ultimately, this allows for increased speed of project execution.
- Construction Managers With Decades of Experience – Our construction managers have decades of experience, and are dedicated to client satisfaction and building excellence. They have worked with clients of all sizes in all industries, and found ways to overcome a variety of construction challenges. Learn more about their approach to construction and why they are the best in the business.
- Enhanced Synergies Between Stakeholders- Talented construction managers have the ability to foster a culture of collaboration and transparency amongst stakeholders involved in a project, which allows stakeholders to identify areas for improvement and construction managers to adapt and plan for changing project requirements. This goes a long way in enhancing stakeholder satisfaction.
- Cost and Pricing Transparency- As stated earlier, one of the hallmark features of CMR is the creation of a Guaranteed Maximum Price (GMP), which provides owners with cost certainty and transparency and ensures that projects remain within allocated budget constraints. This requires significant planning and cost monitoring from construction managers, and helps minimize the risk of budget overruns.
Ready for Project Success? Then Ask About Our Construction Management at Risk Services!
We believe in building excellence before construction ever begins and have the talent and expertise to provide a seamless and efficient design process that leads to exceptional results. Contact us to learn more about our CMR services and experience on time, on budget construction!
From Concept to Completion: The Value of Owner’s Representation Services in Commercial Construction
Commercial construction projects are complex and involve multiple moving parts. Tasks such as organizing logistics, estimating costs and supervising the quality of work take time and experience. The result if not done correctly? Construction mistakes that can cost an owner millions and completely derail critical deadlines and schedules.
At Miles-McClellan Construction, we consider ourselves an extension of your team, and our owner’s representation services offer full support and service throughout the lifecycle of a construction project. We offer these services at varying levels based on your needs, and as the owner, you decide how much involvement and decision making authority we have as your representative.
Our owner’s representation services include the following:
Team Building- Creating a cohesive construction team you can trust.
Budgeting- Providing accurate and conservative budgets.
Inspections- Evaluating quality and specification conformance.
Schedules- Monitoring timelines and managing decisions.
Meetings- Meetings allow us to make client needs our focus and priority through the entirety of a project.
Discover How Our Owner’s Representation Services Allowed Greasecycle® to Save Money and Reduce Stress
Greasecycle®, a company that provides comprehensive grease services and sustainable waste solutions, partnered with Miles-McClellan Construction on a new 9,000 SF recycling facility for cooking oil and grease trap waste in Charlotte, NC. This project included the complete renovation of an existing building, site work, new process equipment and below ground storage tanks. Through our owner’s representation services, we guided them throughout the project in the following ways:
Permitting- Miles-McClellan Construction led the design team in securing permit approval from the County’s zoning, traffic, civil, architectural, mechanical and electrical departments. We also worked closely with the County Fire Marshals to secure their approval.
Team Formation- We vetted, selected and interviewed all contractors to build the best possible team. We ensured that there were industrial process professionals on-site and managed every part of the construction and the process systems to maintain timely project completion.
Change Order Review- We required all change order requests to be broken down in detail and thoroughly reviewed to ensure fair costs for additional requested work.
Contract Resolution- Miles-McClellan Construction resolved all contract disputes by leading all negotiations without the need for expensive legal actions.
The Result? Owner’s Representation That Paid for Itself
Our owner’s representation services saved Greasecycle® 7%, a total of $457,330, of the overall construction budget by dividing all work into numerous contract packages and providing thorough and detailed scope descriptions and schedules within the bid packages to the prospective contractors. Pretty impressive when you consider that our fee was $164,185!
Check out our case study to learn more about his project.
Our owner’s representation services keep our clients covered from beginning to end of a construction project, regardless of size or scope. If you’re ready to build excellence with owner’s representation services that allow you to save big and stress less, then contact our team!
Miles-McClellan Construction Vice President Matt Recchiuti Discusses His Experience Working With Industrial Clients
The construction landscape is vast and diverse. While it certainly includes those impressive commercial skyscrapers, remarkable retail centers and highly anticipated residential complexes, there is one realm of the industry that doesn’t always get as much media attention but is equally as important – the industrial sector. Industrial construction includes manufacturing, distribution, factories, power plants and other specialized facilities. Industrial construction structures, and the many fields and industries they allow to do the important work they do, are the backbone of this country and lay the groundwork for economic growth and future innovation.
In this interview with Miles-McClellan Construction vice president Matt Recchiuti, he sheds light on his unique journey working with industrial clients and best practices for building excellence in the industrial construction sector.
Let’s Dive Into Matt Recchiuti’s Industrial Construction Journey:
What experience do you have working with industrial clients?
The majority of my career has been spent in the industrial sector. I’ve worked with Honda, The Scotts Company, Core Molding Technologies and Hirschvogel among others. Whether it’s a new build in a green field, or a renovation/addition in an existing facility, the planning and coordination to manage our construction schedule with the daily operations of our industrial clients, and meshing the two together, is what is the most satisfying.
Why do you like working with industrial Clients?
Over the past 19 years, I have been able to build long-lasting relationships with our industrial clients built on trust, respect and confidence in Miles-McClellan Construction and our team. They know that we understand their needs and unique requirements while also recognizing that production is king, and we are merely secondary in their daily planning and preparation. The challenges that exist in trying to coordinate a schedule and daily activities, while appreciating their management team’s priorities and deadlines is what makes my team’s job rewarding.
What do you bring to the table – why would a client want to work with you?
Experience!!! The myriad of projects that our team has completed in occupied facilities without stopping production allows us to bring about solutions and know how to solve their unique and ongoing needs to fit out their space, all while not sacrificing their goals and quotas. Understanding that even the most well thought-out plans will encounter hiccups or unforeseen challenges that add more complexity. Finding a way to navigate around those challenges and pushing toward the finish line is what makes our job exciting and rewarding.
Can you name an example of “how you saved the day” for a client?
We save the day with each and every time critical, “must be done by” scenario that we are presented with, when we find a way to complete the project on time when there doesn’t appear to be a chance in hell of hitting the schedule goal. Often, we are only given a week or a small shutdown window to complete our projects because production starts back up on a certain date. The scheduling of multi-shift, around-the-clock operations, which often includes scheduling activities by the hour, and coordinating all of the trades along with other ongoing projects, is where my team excels.
Specific advice for those in the construction industry working with industrial clients?
Understand that no job is impossible. There is usually always a way if you’re willing to look at alternative solutions and find a new way of doing something that is outside of the norm.
We are proud of our work within the industrial sector, and have seen firsthand how it helps the community and benefits society. If you have an industrial construction project or would like to learn more about our approach to industrial construction, contact us today!
2023 Q4 Economic Indicator
The follow excerpt it taken from the FMI 2024 North American Engineering and Construction Industry Overview, First Quarter Edition.
“Best case assumptions for our forecast is for a recession in 2024, likely sometime during the first half of the year. These expectations are based on a range of predictive economic indicators, but especially the inverted yield curve. The duration of the economic contraction will depend on the U.S. policy response, but as with historical cycles, the impact on the construction industry will likely be longer lasting.”
All the lead indicators presented in our Q4 2023 Economic Indicator continue to reflect a downward trend and support the statement made by FMI above. Additionally, what we are experiencing in the market only supports this story further.
- We have watched private bidding opportunities almost completely dry-up. We attribute this to current interest rates, owners’ fear of a recession, and the sheer number of vacant office spaces available.
- With less private bidding opportunities we have had to jump into the public bid market which makes up just over 90% of our total bid opportunities. For the first two months of 2024, in both Columbus and Charlotte, we have seen an average of 6-8 general contractors per bid list, when a year ago at this time there were only 2-3 bidders per list.
- Our teams have also seen a wider geographic area of subcontractors bidding on projects. Previously our subcontract bidders were contained to the Columbus market. Now we are receiving bids from subcontractors we have never received bids from before, including out of state firms from West Virginia, Michigan, Indiana, and Illinois.
- Additionally, the sheer number of bids that we are receiving per subcontractor trade has more than doubled. Previously, we would receive 2-3 bids per trade category, and now we are receiving 6-7, the only exception being mechanical, electrical and plumbing. We are still only receiving 2-3 subcontractor bids in these skilled trade categories, and we assume that is because of a shortage in skilled labor in Columbus driven by the number of large, technical projects.
Blueprints and Beyond: Industrial Construction That Shapes the Nation
For over 46 years, we have been building excellence with construction projects of all sizes in a variety of industries. Throughout that time, some of our most memorable projects have been in the industrial sector.
Industrial construction involves building highly specialized structures and facilities for manufacturing, warehousing and fulfillment operations. At Miles-McClellan Construction, we regularly do work for clients in the industrial sector that includes food processing facilities, pharmaceutical facilities, automotive and aerospace manufacturing facilities, chemical and material input facilities, as well as warehouse and distribution center construction, research and development laboratories and more. These types of industrial projects are the backbone of American industry, and foster innovation, create employment opportunities and drive technological advancement.
Our experience in the industrial construction sector has taught us one important lesson – working in industrial environments is very unique for a variety of reasons. It often involves being surrounded by heavy machinery and equipment, and safety precautions are the top priority. Also, the construction team and the client must have open, transparent communication at all times to meet important deadlines and schedule demands. And usually, industrial construction projects are done in occupied facilities, which adds another level of complexity to these projects.
As the construction company with over 46 years of experience building excellence and exceeding client expectations, we are experts at overcoming construction obstacles and challenges. In the words of Matt Recchiuti, Miles-McClellan Construction Vice President, “There is usually always a way if you’re willing to look at alternative solutions and find a new way of doing something that is outside of the norm.” Let’s take a look at some of our most memorable industrial construction projects.
American Honda Midwest Consolidation Center: Troy, OH
- Project included work on a 500,000 SF domestic parts supplier distribution hub, an 80,000 SF mezzanine within the warehouse and 49,000 SF procurement operations support office.
- We were able to incorporate many sustainable elements into this project, including a stormwater runoff that is redirected to a permanent pond that also serves as the sole water source for landscape irrigation, extensive use of light-colored concrete pavement and highly reflective roofing material to reduce heat island effect. Project achieved LEED Gold certification.
- Project was completed a month ahead of schedule and on budget.
- Received an ABC Excellence in Construction Award.
Honda Aircraft Co. World Headquarters and Research & Development Facility: Greensboro, NC
- The campus has 2 buildings. The first building houses over 150 employees, boasts a flight operations room, and an opulent VIP/Lounge specifically designed for current and future customer arrivals. This building also received LEED Gold certification.
- The second building is a 170,000 SF research and development facility. While this building is not part of the LEED Certification, we diverted 85% of waste from landfill on this portion of the project.