funding to offset these escalating costs.” Weber says: “Our projects are typically designed without a lot of bells and whistles to keep costs down already, so there are not a lot of items owners are interested in cutting for the overall quality of construction to offset rising prices.” Design/builders and owners need to have open conversations about pricing expectations. “This situation is really out of the builder’s control,” says Weber. But it helps when we can show owners documentation from vendors showing price increases and shipping delays.” But he points out that there is a breakeven point when considering schedule impact versus increased cost. “We have had a few customers willing to pay the additional structural steel costs to get construction started two to three months earlier and save on the overall project duration. But there is a point of diminishing returns with this, depending particularly on the size and scope of the project.”
3. Start Early
If you are even considering a project in the near future, Weber recommends completing these tasks as early as possible: • Begin construction documents while estimated costs are being obtained. • Get geotechnical exploration work completed early, even if the project won’t start until the following year. • Plan contingencies into capital expenditure requests for escalating costs. • Award subcontracts early to get submittal, and shop drawing review completed right away to prevent vendor procurement holdups on long lead items. “Most importantly, be patient with the contractor and understand that this is a global issue and there are very few things that can be done to offset the effects of this unprecedented situation,” he says.
FEATURED PROJECT ESI NAVIGATES RISING COSTS FOR PFG EXPANSION
P
erformance Food Group (PFG) selected ESI to design and construct a 152,623-foot expansion to its Reinhart facility in Mount Pleasant, PA. This includes freezer space, cooler space, refrigerated dock, dry warehouse, a truck maintenance facility, and related site improvements. The expansion will also include a 50-foot high Multi-Shuttle Automated Storage & Retrieval System (AS/RS), and a two-story office expansion will boast flexible configurations. PFG, the parent company to Performance Foodservice, Vistar, and PFG Customized, delivers more than 150,000 food and related products to customers across the United States. This project is expected to take 14 months to complete, and while ESI is optimistic this schedule is attainable, Jason Weber, project manager, ESI Group USA, says material availability could have an impact.
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Also impacting the project is the cost of those materials. In some cases, vendors, and suppliers to ESI’s subcontractors are not willing to uphold the pricing provided in their proposals. “This is because these folks have been hit with price increases as well,” he says. “This situation is really unheard of, but we are trying to navigate this situation with subcontractors and the owner.” Some suggestions Weber and his team have made to offset cost and availability issues are using different wall panels, different types and thickness of roof insulation, concrete floor thickness options, and the level of office finishes. “ESI has a long-standing partnership with PFG and will work on their behalf
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to ensure a quality facility is constructed for the best value that will perform for their needs today and in the future,” says Weber.
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