Critical Contracting
Take away the dressing gown that ties in the back, and a mechanical contractor can start drawing a lot of parallels between the relationship with an engineer and the relationship with a physician.
Like P.E.s, M.D.s may:
- keep you waiting for an answer;
- talk more than listen;
- never admit a mistake;
- withhold information (for your own good);
- and, above all, know a whole heck of lot more about it than you do.
Then again, there may be a better way to work together - at least between contractor and engineer.
We visited J.F. Ahern Co., Fond du Lac, Wis., last summer when they were wrapping up the first phase of its part of a $49 million three-phase plan to expand and renovate St. Agnes Hospital, also located in Fond du Lac. Work included inpatient and outpatient facilities; a new 100,000-sq.-ft. diagnostic and treatment facility, and a new 150,000-sq.-ft., four-story tower housing emergency, surgical and intensive care units.
The $9 million mechanical project required more than 65,000 feet of plumbing pipe, 1,000 plumbing fixtures, 35,000 lineal feet of heating pipe, plus 45,000 feet of sprinkler pipe and 3,000 sprinkler heads.
The well-diversified mechanical contractor was well suited to provide a one-stop shop for the work needed. Ahern ranked 20th in PM's 2003 Pipe Trades Giant list, with $104 million in “pipe trades” volume, including $48.27 million in fire protection; $23.55 million in piping; and $7.06 million in plumbing revenue. And it's certainly a plus that the firm has been a long-term provider of mechanical work for the overall Agnesian HealthCare network.
While mechanical aptitude was a given, it was the attitude between Ahern and the engineering firm for the hospital job, Harwood Engineering Consultants, Milwaukee, that set the work apart.
“Healthcare construction represents the top of the mountain in terms of complexity of design,” says Patrick J. Geraghty, D.E., C.I.P.E., vice president of Harwood. Engineers and contractors need to factor in layers of mechanical systems, including medical gas, each in close proximity to the others, different codes and standards for different types of care within the facility, and the so-called “defend in place” strategies to protect immobile patients from fire without necessarily removing them.
“Also, hospitals represent businesses in which tens of millions of dollars are at stake,” Geraghty adds. “So there is tremendous pressure from getting a commitment to build to moving through the bricks-and-mortar stage to putting new patient care in place as quickly as possible - all without disrupting the patient care that may already be in place.”
That's a tall order in the case of St. Agnes. Essentially two floors were being added, with the early work built over the ambulance entrance, which meant the whole emergency room had to be temporarily re-located on the opposite side of the building. In addition, the four-story tower we mentioned earlier had to be constructed over an old steam tunnel that supplied an entirely different wing of the hospital. That's just to name a couple of the complications that were status quo.
Together Ahern and Harwood used a “design assist” approach to the project, which, ultimately, wrapped up the first phase a month ahead of schedule.
“We want to create a long-term relationship of trust among the engineer, contractor and owner,” Geraghty explains. “The foundation of this relationship is clear and concise communication throughout the design and construction phase.”
The result is a collaborative decision-making process that pools together resources and talents of all team members involved, ensuring a cost-effective project while maintaining the highest level of quality, and, ultimately, exceeding the owner's expectations.
“Without this approach, we could have spent a lot of time administering a contract instead of building a job,” says John D. Ransom Jr., P.E., Ahern's plumbing department manager. “That's a big difference.”
Gone, as a result, are the animosity and competition for knowing what to do in a traditional bid-and-spec relationship.
“In the old model, an engineer would develop a design that essentially the whole marketplace could read into,” Geraghty explains. “You wouldn't know which contractor would ultimately be selected, even though you may have known which contractor would have been the best pick.”
Above all, the traditional way meant an us vs. them approach with no questions asked. Of course, there were plenty of questions, and the real difficulty didn't come from the work as much as the paperwork to get the real work done right. And from a customer service standpoint, the low-bid contractor didn't have much of an incentive to ensure the construction got done differently than on the engineer's drawings.
New Prescription
With the design assist approach, both engineer and contractor work on the preliminary engineering and design stages and develop a guaranteed maximum price budget based on conceptual drawings.“From that point, it's up to both Ahern and Harwood to figure out how we can deliver the most value for that amount of money and meet, of course, all the conditions that the customer has set,” Ransom adds.
We certainly don't want to portray this type of approach as an informal, make-it-up-as-we go process. Far from it. We are, after all, talking about engineers and contractors, reputations and millions of dollars at stake. However, there is often more than one way to perform the work, and the key to the process is an ability to bounce ideas off each other and for both parties to be open to suggestions.
Here's a simple one identified early on about a product specified that many wouldn't give a second thought about - pipe hangers. When Red Knopps, Ahern's plumbing project manager, saw that the preliminary specs called for steel buttress hangers, he suggested copper band hangers instead. “They're about a couple of pennies a piece vs. a couple of dollars - and we're talking about thousands of them,” Knopps adds.
In other cases, it wasn't as much product selection, big or small, but the routing the piping would take. Standard practice calls for piping to run down hallways, but Knopps moved it into the patients rooms, which opened up space for his crew and saved them a lot of time.
“From an engineering standpoint,” Geraghty says, “there may be five different ways to solve a problem. All five meet the code and all five could be constructed. So engineers may select one and put that one down on paper. However, field conditions may alter that choice. With a design assist approach, we can play to each other's strengths. Relying on everyone's expertise works to everybody's advantage.”
Knopps seconds that notion by recounting the piping work that needed to be done after-hours above the operating rooms.
“It was a night-and-day difference between how the piping was designed and how we ended up installing the work,” Knopps says. Once he spent time popping enough ceiling tiles, Knopps reacquainted himself with the piping already in place - with much of it put up there a few years ago in a past install. Knopps figured there was a better way - a solution that ended up using half the amount of pipe and took six nights of late work instead of the several weeks originally planned.
“I don't know how you'd put a cost-savings on this, but the back-and-forth communications to make quick decisions on changes like these, sometimes over the phone, are big money-makers and time-savers,” Ransom says. “Under the old scenario, if you had a question about a plan, you sent a written request for information, and there's also a construction bulletin that goes out, too. Three days later or a week later, then you'd have to deal with a big change order. And then it's time to debate what it will cost. Meanwhile, a general contractor has poured a wall, and there's pipe that needs to go through that wall.”
Making a quick, possibly less formal, decision represents a big cultural change for many engineering firms, Geraghty says. “If we need to improve on anything for ourselves, it would be our pace - our way of approaching decisions. Contractors may be actually busy installing the pipe while we're still evaluating drawings and specs.”
There can be a considerable amount of leeway in product selection and installation using this method - and then again, sometimes not. Discerning the two requires the confidence of all involved.
The design assist approach works best when everyone is friends, or at least friendly. But considering, this is business, no matter how much you get along with one another, everyone still has to have a thick skin.
“Because of the early involvement in design assist and the ongoing communications process, we know what their hot buttons are, and they know what our hot buttons are,” Ransom says.
Hospital Upgrades For Aging Baby Boomers
Anyone interested in a promising market may want to check into the nearest hospital.Simply put, more people are spending money on hospital care.
According to a 2003 study by the accounting firm of Price Waterhouse Coopers, the most important source of growth for the nation's hospitals between 1997 and 2001 was volume - both in terms of population growth and increased use per capita.
The aging Baby Boomer population is an important factor for hospitals to modernize their facilities in terms of new construction, renovation or both. Boomers are just entering the 55-to-64 age group, where inpatient days per thousand are 58 percent higher than in the 45-to-54 age group, and 121 percent higher than in the 35-to-44 age group. Over the next 10 years, hospital days per thousand for this group will increase by 7 percent.
In many areas of the country, hospitals must reinvest in aged physical plants in order to effectively respond to increasing demand for services as well as the changing nature of this demand. The report says that the average age of hospital plants increased from 8.2 years in 1992 to 9.6 years in 2001, an indication that investments in medical facilities fell behind in the 1990s. Meanwhile, healthcare construction rose nearly 17 percent in 2002.
In addition to an aging population, here are some more highlights from the report pointing to a hospital construction market that's stable and improving:
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