Innovative Steel Subs brought in early, save time and money.

We all know that every General Contractor out there wants to save time and money on their project. That's how they increase their bottom line and keep their clients happy, but the strategies that most GC's use is to make those savings in the "buyout" phase at the last minute because some of them think that offering a project to a Subcontractor at the very last minute will help them get the most competitive price and increase the impact of a bid between those subcontractors. I can definitely speak from a lot of experience that this is a common practice in the steel industry, and I'm competitive so I do get excited when a client (GC) calls me and "begs" for a quick price at the last minute because they are behind schedule and need to get their project bought out. Knowing that they "need" this quote quickly and that I could have a contract coming to me in the immediate future, is a rush to get that quick "win". However, when I sit back and think about this situation there are several thoughts and questions that run through my mind.

1. Did this GC wait on this scope intentionally or are they normally "last minute" type of managers that are going to be building off the cuff, or are they planners?
2. If this GC is a "planner", then why did they wait until the last minute to push the buyout of this package? Are they hoping that I will give them a lower price to close the deal, because it's practically dangling in front of me? Are they hoping that I bid the project so quickly that I overlook something and make a mistake?
3. If they are NOT planners, and they are behind schedule, late, or unorganized, do I really want to work with them?

All of these concerns can be eliminated if the GC understood that Innovative Steel Subcontractor's (ISS) are out there, we are experienced in the industry, design-build, and value-engineering. We are willing to put forth a greater effort on their projects to capture repeat business and more profitable projects with clients we trust. The best way for these ISS's to clearly show their value, and separate their company from the herd of steel companies, especially in Southern California, is for them to offer money saving ideas and expedited schedules. This is not a very common offering in my experience. Quite a lot of GC's simply give a contract to an inferior steel company simply because the scope looks right and they have the lowest price. This can lead to several issues that could be the topic of other articles, but for the sake of this article it would eliminate or severely reduce the possibility of finding creative ways to save money and expedite the schedule.

An Innovative Steel Subcontractor could offer VE ideas on structural steel and misc metals that have never been considered by the Architect or Engineer, because their approach is totally focussed from another angle, and ISS's will isolate their package and look for ways to improve it. The most experienced builder usually has so many different trades, and conflicts to manage that they simply cannot spend any major amount of time on improving the steel package. The ISS could offer alternatives to reduce the actual amount of material, or simplify the manufacturing or installation process if given enough time to get those options submitted and approved. If GC's made an effort to give an ISS more time to research and plan, there are several areas that can be cost effective, and create savings on the Schedule and Budget (S&B).

1. The Design/Build Process managed by the GC allows the ISS to be an intricate part of their team in the very early stages of design, providing some general guidance and a rough budget for the steel package at every milestone of the process. The ISS could not only provide the budgetary numbers but add insight on any complexities surrounding certain materials, designs, or specific applications. This could steer the designers away from high costs or long lead times that otherwise would of been unknown. It also allows the ISS to maintain a budget through out the process and guide the Owner/GC towards a more informed design/cost basis.
2. Purchasing Power allows you to secure the material early and efficiently which directly effects the S&B, which of course, you know. Steel is a commodity, and since there is currently over $130B allotted to construction in Southern California, you have to plan ahead to secure materials at good prices and on schedule, or you will pay healthier prices for material and be at the mercy of your supplier to stay on schedule. With larger projects there are substantial savings by purchasing materials directly from the steel mills, but they could have 3-6 month lead times on that material.
3. The Constructibility and Coordination with other trades can be improved by taking the time to find areas that could possibly be fabricated in larger pieces in the shop prior to delivering. They can then be erected in larger pieces or sections, which improves the schedule and saves money on field labor. You can also look at ways to eliminate extra mobilizations for the steel erectors or other trades by making minor changes to the design or the sequence of construction. The steel structure can sometimes be changed slightly in the early stages of design, and it drastically reduces the construction schedule by allowing the erectors to install complete sections of the structure and release it to several trades at once without the need to return. Some designs might allow decorative awnings, accents, canopies, or even wall sections to be made in large sections, possibly pre-manufactured, and installed in a fraction of the originally estimated time. This has to be planned prior to complete drawings with the intentionality toward the swift installation.
4. Fabrication Scheduling can directly increase or diminish your profit margins on each piece of steel. The cost to process and fabricate each piece of steel can be multiplied several times over the estimated cost once the initial fabrication schedule has been missed. Most fabrication plants have multiple shifts of processors, handlers, fabricators, and welders that fill the foundational schedules and produce 90% of their material, but the other 10% of those items fall out of the intended schedule and are processed at higher rates because the talented men have to work overtime or after hours in order make the delivery date. The S&B offset each other like oil and water. You can plan to meet both, but if one doesn't line up it usually upsets the other. Being ahead of schedule allows the plant managers to efficiently sort the work into their system and make creative adjustments that will improve the bottom line and insure a quality product on schedule. This will also improve the organization of the shipping which increases efficiencies in the field. Efficiency in the field starts with organized fabrication and shipping, which saves tens of thousands of dollars. This effort to start organized and deliver in sequence will allow the GC to save days on his schedule in several areas at a time because the erectors can be drastically productive. Chaos and confusion in sequential shipping slows down the erector in the field and obviously the other trades, but it always comes back around full circle to reduce productivity in the shop until the confusion is eliminated. The exact costs associated with these inefficiencies are very difficult, if not impossible to track because the confusion causes panic, and the managers know that an extra cost in the shop is minuscule compared to the impact of caused by delaying the field erectors, so they pull all the punches necessary to get the steel on the truck at the last minute. Costs can swell in those situations, and so we work hard to avoid those situations and stay ahead of the field schedule.
5. The Installation Strategy starts in the very early design phase and develops as more information is becomes available. The strategy for erecting the steel could be the most vital part of this entire experience. Some projects look amazing throughout the design and planning phases and then fall apart as the steel starts going up because of conflicts that should have been realized or the lack of organization. If the erector is not prepared, and organized the installation of the steel could be the most painful part of any project. However there are also other projects that look basic or mediocre throughout the design and planning phases, but then are impressively productive once erection starts. This is what we all strive for; Under promise and over deliver! With the right amount of planning and preparation the installation can be the very culmination of all your previous efforts. It's fulfilling and rewarding when the steel literally flies into the air and creates a structure in merely a few hours or days.

This scenario is not always a viable option, but it's always best to trust the professionals that have dedicated their careers to building structures with steel products. Allow them to inform you of what is absolutely necessary and give you options that might be better suited for that specific project. The steel package is only part of your project, but a well designed steel package can build momentum and set a high standard for your project.

Best Wishes to all you Builders, and Be Safe!

Daniel J. Williams / Director of Business Development / MSI - Fabrication and Erection