As we enter the second quarter of 2023, we expect the supply chain challenges and associated increases in construction costs which have become commonplace since the pandemic to persist.

These price hikes and shortages are consequences of high fuel costs, labor shortages, and geopolitical events. Did you know approximately 50% of construction materials used in the United States come from overseas? Certain materials, particularly mechanical and electrical components, have become increasingly hard to procure in a timely manner. Manufacturers are pushing delivery dates by weeks and even months.

A recent example: On Cannect Wellness’s project, which relies heavily on the mechanical system to create the finely-tuned environment required for cultivation, we were given Roof Top Unit lead times between 25-35 weeks. To meet our client’s expectations and maintain the construction timeline, we had to shift our process.

During preconstruction we identify materials and equipment with a long lead time, defined as greater than 10-12 weeks. We work in tandem with the design team and our consultants to identify these items and explore viable substitutions, providing input for cost and time. When we are brought in during design development, procurement for long-lead items can start while the design is refined and finalized. In addition to tracking long-lead items, we establish a benchmark and controls for the entire budget during this process so that the client can translate their design decisions into relative spend and make these early decisions. Once the general space layout is defined, typically at the time drawings are issued for MEP engineering, we will solicit competitive pricing for all materials with long lead times and procure materials with sign-off from the client.

Once construction starts, constant and consistent information is critical to accommodating material or equipment delays. Armed with an understanding of when materials and equipment will arrive, our Project Management team provides the project team with weekly procurement updates. Our Project Superintendent uses this information to sequence work based on anticipated delivery dates. At the weekly project meeting, the BIG team shares an ongoing assessment of the schedule to ensure that though some work may be out of sequence, we can capitalize in areas while waiting for long lead items.

In the case of the Cannect project, we began material pre-purchase over a month ahead of mobilization and were able to find alternates that cut off 10+ weeks from the original lead times by working this system with our consultants.

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Each week our entire Project Management team meets to discuss current projects, lessons learned, and industry trends. At least once a quarter, we will take a topic discussed internally and expand on it here.