Creating Success With Trade Partners And Subcontractors

Knowing the value of subcontractors and trade partners is important to facility managers when running projects of all sizes.

By corepics

By James Dougherty

In today’s economy, challenges with labor, supply chains, and materials inflation are driving the need for extreme efficiency in all types and sizes of facility projects. Traditionally, disparate teams involving contractors, trade partners, and subcontractors can break down, causing challenges and delays. Yet in today’s economy—or in any economy—relying on the unique expertise trade partners and subcontractors bring is essential to delivering projects that exceed expectations in terms of quality, cost, safety, and schedule.

While this is a daunting challenge, building strategic relationships with trade partners before projects begin can substantially improve outcomes. First, it’s important to understand the difference between trade partners and subcontractors.

• Trade partners are brought onto the team as early as possible, typically during design. They actively participate in developing and implementing plans to maintain schedules and control costs. They are aligned with common project goals and agree on shared incentives, risks, and rewards.

• Subcontractors are brought in much later, typically after the design is complete, when they go through a competitive bid process. They are often excluded from the design process, which can lead to inefficiencies, scope gaps, and administrative strain. And they have little, if any, communication with the owner.

The Impact Of Different Delivery Methods

Successfully achieving milestones relies on coordinated efforts between multiple companies. As such, the project delivery method used will play a substantial role in the team’s success. Three of the most common methods include:

• Design-bid-build: This is the traditional approach used for most projects. After a request for proposal (RFP), the owner contracts with different companies for design and construction. Because pricing and parameters are based on the RFP, projects are typically subject to multiple change orders, cost overruns, and delays.

• Design-build: In this case, the owner manages a single contract with a design-build entity. This reduces risk and cost and allows for some overlap of design and build processes. Because subcontractors are typically still competitively bid, there is less accountability and bigger probability of scope gap and strain from change orders and RFIs. While an improvement, it does not provide early cost and schedule certainty.

Integrated project delivery (IPD): This process focuses on building a high-performing collaborative team. The team, formed early on, may include the owner, general contractor, architect, engineers, and major trade partners. The team uses project chartering to align around common project goals like maximum allowable cost, schedule, and Conditions of Satisfaction (CoS). This approach requires more initial involvement from the owner, but results in a significantly improved project experience for all team members. It is a reinforcing cycle that continuously improves the performance of IPD teams.

Why Include Trade Partners

Truly integrating trade partners requires a different mindset and different processes. However, their early investment and integration benefits all stakeholders in three distinct ways.Subcontractors

1. Trade partners work with high-performing teams toward shared goals and CoS, which is reinforced by a shared risk and reward strategy. Trade partners ensure the execution of their scope supports the overall project goals, considers the impact on their team, and is consistent with the CoS.

2. Early collaboration with trade partners adds their expertise to the design and execution plans while they are still being developed. Lean tools such as Target Value Delivery and Last Planner System align teams on scope, cost, schedule, and execution. These tools combined with early planning in the project life schedule reduce RFIs and change orders, and improve project execution.

3. Early alignment with trade partners accelerates project schedules, often cutting months off the schedule compared to a design-bid-build or even a design-build project. The ability to proactively identify challenges and swiftly execute mitigation measures is invaluable to keeping a project on schedule, which is critically important with today’s supply chain and economic challenges.

Trade Partner Value

Traditional procurement processes use competitive bids based on interpretations of design drawings and unrealistic schedules. These bids typically have numerous clarifications and exclusions that lead to countless change orders, delays, and overruns. In reality, the lowest bid seldom equals the highest value and less often reflects the final cost.

Early investment in the expertise of trade partners helps teams foresee and avoid expensive hurdles and delays. Incorporating trade partners as part of a high-performing team aligned around common project goals and CoS, ensures they can identify innovative ways to achieve cost targets and shave time off project deliverables.

Most importantly, IPD and collaborative teams help achieve safety, quality, cost certainty, and speed to market. Embracing this new paradigm for facility development will lead to greater successful project execution and a superior project experience.

Dougherty, PE, LEED AP, ONEsolution™ Director has been a key CRB team member since he started in 2015 as a mechanical engineer, working on some of the company’s first ONEsolution projects. His hands-on experience with clients like Merck, Emergent, KBI Biopharma and more has helped grow the ONEsolution delivery method to what it is today. Dougherty is an active member of industry organizations including the Lean Construction Institute, the American Society of Heating, Refrigeration, and Air-Conditioning Engineers, and the International Society of Pharmaceutical Engineering.

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