Supply Chain Alternatives Specific to Construction Projects
As consulting civil engineers, architects, and planners, KSA’s role is to design built environments that meet the client’s specific needs and industry quality standards. The selection of materials and equipment should be recommended because of their quality, durability, and cost, not based on their availability or lack of availability due to post COVID supply chain restrictions.
When we consider our aviation clients, construction materials and equipment delays are particularly disruptive due to the nature of the work being performed. In comparison, when working on a road or street project, contractors can usually divert traffic around the construction area, or in some cases work on half of the roadway at a time, while maintaining some limited traffic flow through the site. At an airport, it’s not always possible to divert airplane traffic to an “alternate” runway, and obviously, closing half the runway to work on the other half is not an option either.
In 2022-2023 and for the foreseeable future, the country’s supply chain delays do not appear to be self-righting or improving at the pace that it was degraded. Assuming that this is our new reality, KSA has thoughtfully and methodically established a few strategies to help mitigate construction delays due to the current supply chain slow-down. Those action items are as follows.
Optional Supply Chain Solutions or Alternatives:
1. Designation of a “Procurement Period”
a. In many cases, KSA has been successful in working with both the client and governmental agencies to establish a contracted procurement period once a construction contract is awarded. This allows time for the contractor to procure and take delivery of the necessary materials prior to starting work or closing major components of the airport. The result - delays are mitigated while the airport is still operational, and the closure window for construction is drastically minimized.
2. Interim Milestones with Liquidated Damages
a. As the consulting engineer, and acting as an advocate for the client, KSA can assist with the contractor documents that could include specific language to mitigate delays. This language could be in the form of establishing contractual milestones for particularly critical stages of completion that impact the client’s ability to perform their primary mission, knowing that there may be supply chain delays. Once these milestones are negotiated and in place, if they are not met, then liquidated damages would be triggered according to the contract to cover the client’s extraordinary costs for operational workarounds. The key to being successful with this approach is communication and awareness of the milestones and that the damages would be enforced when necessary. This enforcement element should motivate the contractor to prioritize material approvals and orders and should also provide motivation to closely monitor deliveries.
3. Equipment Pre-Procurement Plan
a. For more traditional municipal projects such as rehabilitating aging infrastructure or construction of new water or wastewater treatment plants, there is the possibility of accelerating the procurement of equipment needed for construction. This equipment pre-procurement plan is one alternative that does come with some risk to the owner of the project, but as an action item, can dramatically impact the project timeline. Some federal funding sources may prohibit this process, but, when possible, this alternative can save significant time once construction begins.
b. How does it work? Essentially, as the consulting engineer, KSA would make recommendations for materials and equipment as part of our normal consulting process. The difference, in this case, is that the owner of the project would begin to procure the materials and equipment before a contractor was selected to perform the work. This allows materials and equipment to begin making their way to the job site during the selection process of the contractor. The risk is, that the owner must provide the funding up front, perhaps prior to being available from the funding agencies. Once the equipment arrives onsite the equipment would need to be and properly stored and transferred to the contractor for installation.
c. Alternately, to avoid some of these risks but to accelerate the equipment procurement process somewhat, the equipment can be pre-selected, and once the contractor has been selected and is under contract, can quickly submit shop drawings and place orders for equipment that is needed for the project.
4. Bid Alternatives during the Contractor Selection Process
a. Traditionally, before potential delays caused by the supply chain, contractors were asked to submit their best bid for the work that they were competing for. To help mitigate delays due to availability of materials and equipment, it is recommended that contractors provide bids with more than one option regarding materials and equipment. These alternatives would be requested/required by the Request for Proposals. Both options or alternatives need to meet or exceed the design criteria established by the design engineer. In the end, cost and availability will impact the option that is ultimately used for the project.
Lastly, when faced with projects that are timely and need to be completed quickly, KSA almost always recommend and provides the following action items on construction projects.
1. Resident Project Representative Observation
2. Preconstruction Conferences
3. Review and approval of submittals, drawings, RFI’s & Pay Applications.
4. Daily Construction Reports.
5. Tracking Material Inventory On-Site.
6. Conformed Documents
7. Periodic site visits by engineering and project management teams
8. Change Order/Claims Assistance
9. Punch List
10. Final Completion Inspection
11. Record Drawings
For more information about how to minimize supply chain delays for your public infrastructure project, contact KSA directly at 877.572.3647 or online at ksaeng.com.
By Hunter Hilburn, CEcD, EDFP & Caroline McCarty
Contributions and Technical Review by John Reidy, P.E., Craig Phipps, P.E., Craig Clairmont, P.E., LEED, Jonathan Farmer, P.E., Shriram Manivannan, P.E., and John Selmer, AIA, NCARB, LEED AP, BD+C, GGP
