A recent survey by Dodge Data & Analytics and Sevan Multi-site Solutions of owners who have multi-site construction and contractors who do that work reveals some vastly different positions on “critical success factors” in the construction process. The survey findings were reported in a Dodge Smartmarket Insight titled Challenges and Opportunities in Multi-Site Construction.
The report provides a discussion basis for a conversation between those owners and contractors that we think is revealing and findings that disclose the need for better relationships and conversations between the owners of multi-site projects and their contractors.
The basic conclusion is that when there is trust and a close working relationship between the owners and contractors, there can be substantial savings in construction costs and in “build times” across those projects. When the owners strive and drive for the cheapest and fastest with little or no regard for their contractor partners, the projects suffer, the budgets suffer, and the long-term operational costs are higher. The study reveals the disparity of perception between the owners and contractors.
The survey and interviews were conducted with 37 contractors- 31 general contractors, 2 construction managers, and 4 specialty contractors. On the owner’s side, 25 interviews were held with 28 participants from 13 owner organizations mostly in the retail, restaurant and hospitality sectors. The study covered nine (9) areas and clearly showed the need for better communication among the parties to “level up” the perceptions from each side.
The nine findings were:
Sourcing
- Attractive to bid – 56% of owners believe that they know what makes a multi-site project attractive to bid, but 84% of the contractors did not believe that the owners knew why they bid the multi-site projects.
- Long Term Relationships- 92% of the owners said that they frequently formed long term relationships with their contractors, but only 35% of the contractors agreed.
- Sharing Future Construction Plans – 76% of the owners said that they frequently tell the contractors about their future construction plans, but only 19% of the Contractors agreed with the owners.
- Site bundling – 52% of the owners said that they frequently bundle sites together. Only 27% of the contractors agreed.
Scope of Work – According to the study, “Less than a third of contractors believe that owners frequently:
- Set program-level goals (30%)
- Use countdown schedules (24%) or playbooks (24%)
- Solicit contractor feedback on scope, etc. before bidding (30%)
- Delay start to ensure scope/schedule coordination (11%)
Technology – Both agreed that electronic signature and document management, data sharing, and tablet-based reporting were used to improve efficiencies on the multi-site projects.
Permitting - 92% of owners reported that permitting had a negative impact on the projects and 57% of the contractors agreed. 52% of the owner group said that they kept up to date on permit-related requirements, but only 21% of the contractor group agreed.
Lessons Learned – Only 36% of the Owners rated themselves highly effective at collecting and applying lessons learned. Contractors rated themselves at only 12% in collecting and applying lessons learned. The owner’s ability to identify the true causes of delays and overruns were only rated effective by 19% of the contractors. Forty-eight percent (48%) of the owners said that they were able to share lessons learned in time to impact remaining projects, but only 5% of the contractors agreed. Owners (64%) rated themselves at “consistently reinforcing the continuous improvement process while 89% of the contractors disagreed.
Talent - Skilled Labor Shortage – 95% of the contractor group said that the current shortage of skilled labor was increasing project costs while only 68% of the owners agreed.
Safety - 67% of the owner group reported that they had high safety expectations on their jobsites while only 46% agreed and fully a third of the contractors said that they had never received any safety directions for their work.
Procurement - 27% of the contractors reported that the owners used program managers on their projects and that the procurement of materials and equipment is a part of the manager’s scope of work. Sixty percent (60%) of the owners reported that they handle procurement with internal staff “most of the time.”
Payment - Seventy-one percent (71%) of the contractors and 76% of the owners agree that the owners pay in less than 60 days.
The one area that both parties agreed on was that when the parties can be brought together to plan and coordinate multi-site projects before the construction has begun, the results are quite apparent. Unfortunately, it appears that the owners and contractors have different perceptions about the process, and it is also apparent that there is plenty of room for improvement in the multi-site project builds.
I would wonder what the results of a similar survey for schools and colleges would produce. That might be an area where Dodge Data & Analytics might take a look.
You can read the Smartmarket Insights at: http://images.marketing.construction.com/Web/DDA/%7B292de6b7-f2a0-4997-af06-e8567564be0b%7D_Multi-Site_2019_SmartMarket_Insight_12Apr.pdf
There is also a summary of the study in AWCIConstructionDimensions in an article titled Strengthening Contractor and Owner Relationships Drives Greater Success in Multi-Site Construction Programs.
