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DCD Design Cost Data

Implementing Offsite Construction and Prefabricated Building Systems

Roy Griffith

Posted: August 28, 2018 | Project Management

A recent Lean Construction Institute owner survey found that, of “typical” projects, 61 percent were behind schedule and 49 percent were over budget. Even among their “best” projects, 21 percent were behind schedule and 17 percent over budget. In that same survey, owners indicated that prefabrication was the leading method to keep schedules and budgets in line.

Prefabrication and offsite construction have a number of advantages – foremost, they are increasingly seen as reliable ways to improve cost and schedule certainty, as well as a strategy to address the skilled labor shortage in today’s construction market. By using offsite construction and prefabricated systems, owners and project teams are successfully overcoming or significantly reducing the risks associated with traditional construction methods. 

Owners, architects, engineers, and general contractors who have experienced the benefits of prefabrication first hand know that prefabrication:

  • Solves skilled labor shortage and improves quality. With offsite construction, work is performed by fewer workers and in climate-controlled factory settings. Offsite construction allows skilled craftsmen a safer and more productive place to do their job; quality can be monitored and guaranteed throughout the production process.
  • Compresses construction schedules and reduces project site and neighborhood impacts. According to the Modular Building Institute, offsite construction can deliver projects between 30 and 50 percent faster than traditional methods. Offsite construction occurs simultaneously with the site and foundation work, and schedule delays due to weather and other external factors are significantly reduced since much of the construction takes place in a controlled environment. Additionally, having much of the work done offsite, with materials arriving pre-kitted or pre-assembled, along with being erected more quickly than traditional construction, results in significant reduction of impacts to jobsites and neighboring communities and businesses.
  • Delivers early cost certainty. By engaging in the design process early, the project’s design team and other key players align on requirements and arrive at reliable budgets very early in the project. It is this early collaboration and transparency, supported by modern methods of project delivery (design-build, progressive design-build), that gives all parties visibility into factors affecting the bottom line of a project’s budget and flexibility to develop and drive toward target value design.

The Big Question: How Do We Get There from Here?

Prefabrication and offsite construction represent a major paradigm shift for owners and project teams. To leverage prefabrication, the construction industry must evolve culturally and modify processes to achieve improved outcomes. Prefabrication and offsite construction should be reviewed as being a part of the strategy from the outset of a project. The nature of prefabrication requires solid team work, early design decisions, and a continuous iterative estimating process throughout. Ideally, owners will consider offsite construction even before a project is conceived, so they can achieve improved schedules, cost certainty, and reduced risks that are inherent with offsite construction.

Who’s on the Team?

Traditionally, key project design partners include the architect, engineer, MEP designers, and subcontractors. The shift toward offsite construction demands bringing additional partners to the table, namely design-build manufacturers of prefabricated building systems. Every bit as much as their MEP design-build counterparts, prefabricators are intimately familiar with the intricacies and complexities of their respective trades and crafts, and the impacts which transitioning to prefabrication will have on the entire team. Bring them on as early as possible and help drive the discussions that will deliver the greatest values possible for the owner and the project.

Estimating Implications – Considering the Whole Picture

Estimators are not immune from the changes necessary to help the industry leverage prefabricated building systems. There is a trap that estimators can fall into easily when communicating project costs to owners, namely offering first cost analyses and evaluations that don’t take into account the offsite construction savings that the owner can realize from prefabrication. For instance, an integrated façade system comprising a precast architectural façade panel with integral plant-installed glazing and insulation does not easily align with traditional CSI codes. How do you effectively price and communicate a comparative cost analysis when traditional methods reinforce the “way it’s always been done”, and don’t themselves support systems innovation or true apples-to-apples comparisons?

Similarly, a first cost evaluation may show little or no difference between a cast-in-place or prefabricated concrete structure, and might lead an estimator or construction manager to say, “It doesn’t matter which approach you take, Mr. Owner, we are more familiar with cast-in-place, so let’s go with that.” However, if the prefabricated structural system approach could save three months on a schedule and allow an owner to open an office or a campus housing unit to tenants more quickly, wouldn’t that be of significantly greater value to the owner and the project?

Owner Values

There are other values to the owner beyond compressed schedule and cost certainty. The prefabricated systems approach – driving work offsite – will reduce the number of worker days at the jobsite, resulting in less jobsite traffic and reduced construction impacts. These benefits may help owners or developers meet their obligations and better address risk or restrictive mandates in their project development agreement.

Become Part of the Solution

Increased owner interest and wider acknowledgment of the benefits of offsite construction and prefabricated systems are driving change in an industry that is not traditionally known for its speed in adopting new ideas and technologies. However, these methods will offer a significant opportunity to teams (designers, builders, estimators, and manufacturers) who do adopt them and are driven by a mission to bring continuously greater value to owners and the communities their projects serve.

About the Author: Roy Griffith is the director of corporate development at Clark Pacific, a leader in the design, manufacturing, and construction of prefabricated building systems. Driven by innovation and a unique approach, Clark Pacific bridges the gap between construction and manufacturing to deliver high quality, cost-effective buildings on budget and on time.