A Six-step Business Plan that Showcases the Benefits of Design-build
More on Design-build — An Engineer-led Opportunity
Last month, I discussed the benefits of HVAC infrastructure design-build (DB) opportunities for HVAC consulting firms and HVAC contractors. The two main reasons for pursuing DB HVAC infrastructure projects were twofold:
- The consultant-contractor team is in direct contact with the client and in control of the project success; and
- If we did a good job, we found ourselves in a position to provide repeat business opportunities for a job well done rather than simply having the low price.
That said, I’ll be continuing this discussion this month, getting into a little more detail as to the obstacles, solutions to these obstacles, and the six-facetted business plan to DB project delivery services:
1. Focus on the core business: HVAC equipment and systems.
Comment: Don’t go beyond the core business. There were plenty of opportunities with the clients and prospects all having HVAC issues and concerns.
2. HVAC target opportunities (refer to last month’s target opportunities) show that clients are in need of DB partners.
Comment: Each of the issues, concerns, and emergency response needs required engineered solutions based on construction involvement, so this DB firm was configured to have its own team of engineers, estimators, mechanical contractor labor, and project management in-house. Today, this could also be accomplished with a joint venture between a consulting HVAC engineering firm and an HVAC contractor with a service department that is committed to ongoing project opportunities and not a simple, single-job joint venture.
3. DB can be a cost-effective method to create an opportunity when a client doesn’t want to invest upfront in pre-engineering and estimating funds but will agree to proceed if the scope, cost, and timeline meet the client’s requirements.
Comment: For my role, I was in charge of engineering and estimating, and we created the team estimating process so that we could draw upon key individuals, at one time, in a conference room and fast-track and document a proposed solution(s) scope of work, timeline, and fixed price — or not-to-exceed price — for the client. This eliminated more cumbersome work in silos and enhanced the ability to pass information on and get questions going back and forth. It allowed us to create a scope of work based on consensus, which also eliminated any time from being wasted debating issues and concerns.
4. Establish a quality control process to monitor, measure, and benchmark all aspects of the DB process from the proposal to the client’s acceptance of the project.
Comment: Quality control of the DB process was critical to being continuously proficient and efficient and led to our creation of a standardized concept package and unit estimate costs, e.g., cost to furnish and install a base-mount pump based on historical data. It totally eliminated the need to produce preliminary design documents and then have an estimate takeoff completed. Weeks and labor hours were saved to the point the team could scope out a proposal in as little as two days and no more than four days based on the job’s existing conditions. Knowing if the sale was not closed all this time would become overhead cost. If the project was sold, this preliminary engineering time and estimating cost were included in the overall project cost.
5. Include within each DB proposal a one- or two-service contract on major equipment that would ordinarily not be serviced in-house by the client.
Comment: In discussions with our clients, many of them institutional organizations, we learned that it would be beneficial to include the first couple of years in a service contract in our DB proposal because, quite often, the facility manager/client would have trouble getting the funds to purchase a service contract after the work was done.
6. With quality control focus there had to be a commitment to continuously improve the DB process to create more opportunities, make a profit, and exceed client satisfaction.
Comment: Establishing a number of databases pertaining to the different parts of the DB process was critical to the continued success based on our quest to constantly receive feedback from the team, the client, and the budget-to-actual estimates.
Based on my own experience throughout that year, 1985, and not being a consultant to an architectural firm or a subcontractor to a general contractor from then on, I found DB was a hybrid for most HVAC consulting engineers and HVAC contractors who wanted to “break the mold” and take the lead.