As contractors grow, their market strategies will evolve, and that usually means earlier involvement in projects. Preconstruction services are a growth strategy whether that is just better planning after award to improve field productivity or being involved with the customer from the initial concept of a project.
Bechtel's Business Development Philosophy
“If you are really in the game, you’ve got to understand what’s happening in governments and markets and see a deal before they put it out to bid. If the first time I hear about a big project is when the proposal is on the street, then I don’t have a good win plan.” – Riley P. Bechtel, Retired Chairman of Bechtel
While 99.9% of the contractors in the market are well below Bechtel's scale and influence, it is important to remember they started with a single piece of equipment and truck just like every contractor out there. Lots of lessons in their history since 1898 that any contractor can learn from.
STAGES OF A PROJECT
All projects go through these stages with five of them being formally defined by the American Institute of Architects (AIA). There are correlations to BIM Levels of Development / Detail (LOD) and Royal Institute of British Architects (RIBA) Plan of Work.
- Concept / Programming / Pre-Design: Project goals are clarified; site and feasibility are evaluated. It includes site analysis, existing conditions, space-needs, adjacency studies, budget/finance check, risk assessment, and high-level schedule.
- Schematic Design (SD):Tests concepts and layouts, aligns with program, code, site, and budget; produces plans, massing, and a preliminary cost opinion.
- Design Development (DD): Fixes size and character of the project; develops structural, MEP, and architectural systems; refines materials; updates cost.
- Construction Documents (CD): Coordinated drawings and specs suitable for permitting, pricing, and construction; further refines the estimate.
- Procurement (Bidding / Negotiation / Contracts): Issuing bid documents, answering RFIs, evaluating bids/proposals, and assisting with award of the construction contract.
- Construction
- Operation / Facility Management
- Decommissioning / End-of-Life
LEVELS OF PRECONSTRUCTION (CONTRACTORS)
This is not meant to be prescriptive but rather a model for thinking about different levels of preconstruction including the skills and experience of the people involved.
- Not every contractor will have the capabilities to add value throughout all five levels.
- Not every project and project owner will benefit from all five levels of preconstruction services.
- Only a few of those project owners will compensate you for the preconstruction services including an advantage on winning the construction work.
- Nearly every contractor will benefit from improved preconstruction from project award through the start of on-site construction work.
The levels have to do with how early the preconstruction involvement begins.
- From Construction Award to On-Site Start
- Early Stage of Construction Documents (CD)
- Early Stage of Design Development (DD)
- Early Stage of Schematic Design (SD)
- From the Conceptual Stage
This fifth and highest level is often an executive level person who is looking at the broader market and political environment. They have a wide range of relationships adding value to the project owner from site selection and permitting through financing and tax incentives.
Bechtel defined this at the highest level:
- If we don't have a client; we find one.
- If there's no project; we assemble one.
- If there's no money; we get some.
Wherever you are at in your business or career, you should always be working to move one level higher. If your current clients don't value those capabilities, the next ones will. That is part of growth. While there are a lot of projects that are still awarded mostly on the basis of the lowest qualified bid, more and more projects are moving toward some form of alternative delivery including CM-at-Risk.
