Roundtable: Building, Construction & Design
This month, Utah Business partnered with Dentons Durham Jones Pinegar to host a roundtable event featuring Utah’s building, construction and design leaders. Moderated by Bruce Bingham, partner at Hamilton Partners, the group discussed supply chain problems, labor shortages and the need for more CTE education in Utah. Here are a few highlights from the event.
How are supply chain problems affecting you?
Brian Tolley | Director, Private Contracts | Ralph L. Wadsworth Construction
You have to manage expectations with the owner. You have to have contingency planning. The key that we’ve really tried to focus on is communication and the follow-up. Don’t just rely on what you hear today—maintain that follow-up with your suppliers throughout the process. It has to be ongoing and regular.
I think it’s imperative that owners engage the contractors early. What I see is a lot of owners are going back to low-bid, which creates even more problems. Construction management provides so many ways to combat this.
Concrete has some major headwinds. As the fly ash supply continues to shrink in the US, that is only making the concrete issue worse. We’re putting more concrete powder in mixes that we used to supplement with fly ash. There are fewer imports into the United States now than there were two years ago. Imports are harder to find and source than they have been in the past.
It hasn’t necessarily been steel and concrete that’s impacted decisions in design as much as things like switchgear and long-lead items that we know will turn our schedules upside down. What it’s done has pushed more for bid packages and earlier bid packages so we could begin to order gear and equipment much earlier in the process than we would do normally.
Larry Curtis | Principal | FFKR Architects
When wood construction started to skyrocket, what that did was force our owners to start looking at going taller and increased density, so we got steel and concrete more involved. With the concrete shortages, it’s forced our hand over to steel. So yes, [the supply chain] has changed how we look at things. A lot of our projects switched from wood to concrete and now from concrete to steel.
Even within the steel group, [the supply chain has] forced selection of products. Open web joist is a prime example over the last two years. Typical industry standard is that we can get those things onsite in maybe six months. All of a sudden, you’re hearing suppliers saying 20-24 months. Construction schedules just can’t tolerate those [lead times]. In a lot of our projects, when open web joist became the controlling factor, we switched from all open web to wide flange sections. And while it’s got a tonnage increase, it’s time versus money. Multiple projects went through redesign to say, OK, eliminate what is traditionally a more economical product and put something in its place that we can get in a more timely manner.
In our pre-construction cycle, long lead procurement purchasing is a big thing that we’re focusing on right out of the gate. We’re bringing that up at the forefront so [owners] understand the constraints and potential timelines. We’re having to push some clients to say, “You might have to purchase some items prior to traditionally what you would like to do”—now that becomes a monetary discussion as well. Things might need to be bought out of sequence in order to meet desired schedules. If they don’t want to do it, they know they might not hit a certain date. A lot of our big owners are willing to make those purchases upfront in order to maintain those schedules.
A year ago, lumber, joist and deck was the big hot-button, then it’s been gear, and now it’s concrete and mechanical products. It’s a testament to how much work and complexity goes into delivering certainty to an owner while things are still ever-changing. We have a weekly meeting with all of our offices to talk about issues on projects and what issues are being foreseen. That’s where it gets really difficult: what’s next? What supply issue is next, and how can we prepare for that so the owners have certainty on their projects?
When you’re anticipating bringing the contractor on and you want your building done in 20 months, but he’s got to buy a transformer that’s 24 months out, it doesn’t work. On the design side, when we don’t have the pre-con or the contractor involved, we’re pushing harder for those. You need to get under contract and sign an agreement with local utilities in some cases, especially the smaller ones, so that they go buy your transformer and get it coming, which may have to happen six months before the contractor even bids the job. From a procurement standpoint, we’ve been more creative. On the design side, acknowledging that we need to be integrated into the overall team end goal, as opposed to just our design, is important.
We’re trying to build relationships with our suppliers and contractors and get their input during the design process. That’s been helpful. One thing I’ve noticed recently is that owners are accepting the fact that there are long lead times and higher costs, but they’re wanting to hold us to the fees that we had before any of this, though our costs have increased. We’ve had to pay our engineers more to retain them because there’s a lot of desire to recruit engineers that we’ve spent a lot of time training. It takes two years to get an engineer fresh out of school trained up to where he’s valuable in our industry.
"Utah has always risen in tough times and I'm very optimistic about the future."
How are your superintendents working?
Superintendents are invaluable. They’re in a tough spot because they’ve got pressure not only from their employer to keep their costs at bay, but there’s pressure from the customer or the owner for all the time constraints that we’re dealing with. They’re the ones in the middle, so they deal with a lot of pressure in that regard. The old [superintendents who] are tried and true are starting to ride off into the sunset—they’re retiring. We’re having to bring on a new batch of younger superintendents and we’re seeing a lot shorter training period for assistant superintendents before we try to roll them out and get them going on their own.
This is an excellent topic because our core business is building things, and it’s kind of remarkable how many people entering the industry want to avoid going out and building things. When motivating them to understand what the business is, there’s no better place to start than in the field. In 2022, 10,000 baby boomers per day reached retirement age. In nine years, 100 percent of all baby boomers will reach full retirement age. If you look at your superintendents, those are some real gems. They are what makes our world work. I have high hopes that companies are doing something about it to replicate this knowledge. I also think it’s a great opportunity for the younger folks to have some drive, because it’s going to be remarkable in the very near future.
I think superintendents are the unsung heroes of the construction industry. They’re not a group that really draws attention to themselves. They’re on the job site day-in and day-out trying to solve the triangle of quality, schedule and cost. They’re the ultimate problem solvers. Every building we can see out these windows has rested on the shoulders of a superintendent. But the last two years are burning out our superintendents. Mental health is a really big issue in our industry, and it’s something that still needs to be addressed.
I sit in this meeting every year and report that the average age of an electrician is getting older and older. It’s late fifties now, so it just shows how much of the workforce is retiring. On the optimistic side, there are some really bright people coming into the construction industry. We’ve created a whole department with people that have 30-40 years experience of coordinating information for the installers so the tradesmen or women installing are getting the information a little more detailed for them. We’re also creating another layer of more experienced people for supervision and mentorship to help shore up some of those younger guys. We need to figure out how we can support some of these younger people coming into the trade because there is a shortage.
First, I’m going to echo the importance of the superintendent. They’re irreplaceable. The fact is, there is a very limited pool of good superintendents out there and we’re all competing for those individuals. The other aspect of that is we’re all in niche markets, and those superintendents can focus on those individual niches and can become extremely proficient in those. I firmly believe that as we’re building projects, we need to be building people. We need to be building superintendents internally.
Today’s tradesmen and women are different. They have a different mindset than we’ve seen in the past. We’re training our superintendents to deal with some soft skill issues. Gone are the days where you push a schedule across and say, “Here’s the schedule you need to commit to.” We’re having to collaborate with them and say, “How can you accomplish this? Here are some big-picture milestone goals. Where do you fit in? [What] resources do you have? Do we need to get other people involved in this discussion?” and try to get them to commit to the schedule and make it their schedule.
As we look at labor issues, do you have more bidders?
Braden Moore | National Development Director | Big-D Construction
We’ve been short on labor in our industry for years. The only way to solve that is all of us making this industry more attractive for people to want to be in and making it a place that they want to work. The only way to solve this is to have a place that people want to stay. How do we give people more benefits? How do we help their mental health? We have a mental health initiative now and a whole team to help with that. We have a two-year training program for superintendents. Attracting more people to the industry is something that we’ve all been working on for years and years, and in my mind, the labor issue is not going away. It will be there for the next couple of years until we have projects that do cancel.
Mark Harris | Senior Principal | Reaveley Engineers
The labor market on the professional side of our industry is a big challenge as well. We’re having big markets, national-level consultants and contractors coming to Utah. [They are] hiring our people and offering them substantial salary increases while saying they can work anywhere they want. Those things are very attractive, especially to some of our young people. Retention of staff and acquisition of new staff are presenting real challenges.
Jeff Palmer | EVP | Layton Construction
I think it should be stated that this industry, whether it’s design or construction, is a great career. I’m so glad we’re hearing more and more that not everybody needs a four-year degree. For so many years, that’s all we heard. You can go to college and still work in construction, but college isn’t for everyone. The trades are so important, and this society shuts down without construction.
Aaron Metcalfe | VP, Marketing & Business Development | Hogan & Associates Construction
We’re very much involved with the school districts. I would like to see more emphasis from the state to trickle down to the districts on career and technical (CTE) education and how important that is.
Troy Gregory | President & CEO | Hunt Electric, Inc.
We’ve had a lot of success in educating the teachers on what the career paths are. Once teachers understand there’s a really good career path and a good alternative for some of their students, they’ve been an important part of what’s helped us be successful. We’ve been recruiting out of high schools for over 10 years. The last statistic I heard was that over 65 percent of my workforce came straight from high school. We have a bunch of women electricians now, and that’s awesome. We’ve put a big focus on that.
Allen Clemons | Consultant & Associate | Colliers
If you and every architectural engineering and construction (AEC) member in this industry aren’t engaging your school district and your area’s work-based learning program, you’re missing out. We’re terrible at marketing our industry. We don’t have “Grey’s Anatomy” or “Law and Order.” There’s no TV show. The last movie I can recall about construction or a general contractor was “Multiplicity” with Michael Keaton.
Celestia Carson | Principal | VCBO Architecture
Looking around the room, we could use more women at the table in this industry. When we talk about labor shortages, there’s this whole market that isn’t very well tapped into. It’s a great career for everybody and there are certainly a lot of opportunities, but it’s very difficult to be what you don’t see. There needs to be more visibility of women in construction, design and in engineering overall.
What is going to happen in Utah in the future?
I think our growth will continue. I hope we can build on our leadership, can remember how we came and stay that way with all the people who are moving in with different views. Utah has been number one for a number of years for a reason, and I hope we can keep that.
Brent Bateman | Attorney/Shareholder | Dentons Durham Jones Pinegar
I think that working from home is here to stay, but it’s going to lose a lot of its luster. I think that we’re going to see more of an increase in the use of commercial areas than we’ve seen in the last year or so, but not back to the level that we’ve been at before. I think people are going to continue to come here because it is such a wonderful place. I also think that it’s all about housing. We’ve got to solve that problem.
Larry Curtis | Principal | FFKR Architects
One key factor is going to be the creative nature with which our government leaders are approaching development and creating walkable cities that are going to increase density and hopefully improve our position in the country.
Carl Tippets | President | Pentalon Construction
I think there’s some bumps in the road ahead of us, but I’ve got a lot of confidence in leadership—in the government and in the business community—to figure out what those bumps are and navigate them.
Brian Tolley | Director, Private Contracts | Ralph L. Wadsworth Construction
I think the challenges that we’ve experienced and discussed aren’t going to go away, but there’s so much potential and opportunity to change, modify and be creative. Utah has always risen in tough times and I’m very optimistic about the future.