Shaping the Industry

ThinkstockPhotos 513792676By Michael J. Vardaro

As we embark on 2017, three trends in the construction industry will undoubtedly shape the industry. All eyes are turned to the impact of the President-elect’s infrastructure mandate and to what extent it will dominate the early part of his administration. This country’s infrastructure inventory is in dire need of work; how and when that work gets done remains to be seen. In addition, offsite construction technology and the design/build project delivery method will continue to transform projects.

Greater Utilization of Offsite Construction Technology

Moving ahead, new technologies will continue to impact construction. In certain projects, off-site fabrication can be more efficient and less costly. As is true with any new technology, the design and construction teams must structure projects differently to realize the perceived benefits. This concept has been embraced by modular construction projects with varying degrees of success.

Modular technology offers the ability to compress a construction timetable by beginning work off-site, before that work would otherwise be ready to commence on a conventional site. Also, off-site fabrication can be done for subcomponents of a structure, especially advantageous where sophisticated technologies are incorporated, such as in hospitals.  Additionally, new technologies such as those permitting the assemblage of parts of a building on the ground – instead of hundreds of feet above – can increase productivity while minimizing construction accidents.

Growing Use of Design-Build

Use of design-build project delivery method should grow in 2017.  With proper implementation and increased early collaboration, certain types of projects can realize cost and time benefits.  There have been recent successful high-profile projects that reiterate the benefits of design-build and places that have not historically embraced the system, such as New York, have seen legislative activity and increased interest in its use. Also of note, M&A activity in the AEC space has created more firms with the ability to provide design and construction expertise “under one roof.” These AEC firms are likely to be better positioned to help realize the benefits of design-build.

Investment in Infrastructure

President-elect Trump has proposed a $1 trillion infrastructure plan, but regardless of political party affiliation, there is recognition that the United States has many major metropolitan centers in desperate need of overhauls. Voters in 22 states approved more than $200 billion in ballot initiatives for transportation projects in the 2016 elections. The biggest projects include $120 billion over 40 years to expand roads and transit in Los Angeles County; $54 billion over 25 years to expand light rail and bus routes around Seattle; $4 billion for road and transit projects around Atlanta; and $3 billion in Clark County, Nev., for road construction and maintenance.

These projects are not all shovel-ready and will require a fundamental rethinking of the way infrastructure is designed. But, with a general consensus that complex infrastructure improvements need to be funded, the opportunity is greater than in many years. Non-traditional thinking about project planning and implementation may lead to the greater use of solutions such as public-private-partnerships for funding, executing and operating large-scale public works. 

Michael J. Vardaro, managing partner at Zetlin & De Chiara LLP, is a former construction worker with a degree in civil engineering who focuses his practice on construction litigation, drafting and negotiating construction contracts, and providing advice to a variety of construction industry clients.

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