Moderator: Shannon Gustine, Director of Operations, Hensel Phelps Panelists: Brian Antonsen, VP Mechanical Construction, McKinstry Brad Hinthorne, AIA, LEED AP BD+C, Managing Principal, Perkins + Will Bart Rickets, CEO, Lease Crutcher Lewis Steve Tatge, LEEP AP, Executive Director, Project Delivery Group University of Washington
“What started out as a healthcare issue is now an everything issue” Brad Hinthorne, Perkins + Will
“We can’t plexiglass and HVAC our way out of this” Steve Tatge, University of Washington
Firms throughout the Pacific Northwest are working tirelessly to keep employees safe, meet their contractual obligations, and remain financially stable amidst great uncertainty and a changing landscape. In a webinar held June 9, 2020, moderator Shannon Gustine and four panelists looked at how Covid is impacting their organizations and the overall industry. Here’s what they had to say.
Here we are, three months into the new normal and counting. Firms throughout the Pacific Northwest are working tirelessly to keep employees safe, meet their contractual obligations, and remain financially stable amidst great uncertainty and a changing landscape. Moderator, Shannon Gustine, and our four panelists take a look at how Covid is impacting their organizations and the overall industry. Here’s what they had to say.
What Are the Biggest Challenges You’ve Faced Over the Last Few Months?
Across the board firms are trying to figure out how to remain economically stable amidst waves of uncertainty. Revenue pipelines are being disrupted as business models collapse under the strain, and projects are started, stopped, accelerated, or paused. National firms are balancing competing priorities as offices face different difficulties at different times, and for different periods of time. Working with dozens of general contractors across the state and around the country, trade partners are managing multiple approaches to safe work policies. Vertical transportation continues to be a challenge, and everyone is keeping an eye on state requirements as construction projects move forward.
Preparing for Future Phases
In addition to asking employees to wear a face mask, maintain social distancing, frequently wash their hands and use hand sanitizer, companies are using mobile apps, and QR scanners to record answers to health-related questions for daily monitoring and track and trace purposes. Others are limiting or staggering the number of employees in the office or at a job site at any given time.
How is the Cost of Managing Covid-19 on Project Sites Being Managed?
It depends on contract language and can vary based on location. Oregon initially set up a fund that reimbursed costs associated with Covid-related jobsite modifications like handwashing stations. Construction teams can work together to increase efficiency at check-in, and explore different ways to engineer installations. Some firms have added split shifts to de-densify job sites without adding to project costs or pushing out the schedule.
Changes in Office Layouts
It’s a work in progress. Architects are seeing a significant uptick in requests for space layouts that reflect social distancing standards and the need for lower density. Future square footage demand is unknown, but it will vary across industries to reflect the nuances and needs of each. As the situation evolves, the need to educate end users about what is effective and feasible is becoming more apparent.
On the bright side, there is a groundswell of collaboration between trade partners, architects, engineers, and contractors pulling together to solve problems, work through supply chain issues, and deliver projects. The impact of small acts of kindness are important to keeping morale up, and cannot be underestimated right now. Simply taking time at the beginning of a meeting to check in on everyone and show interest in them personally, will go a long way. It has also been necessary to develop essential work practices for different job sites across the region, including subcontractor networks, and inspectors and building officials so they know site protocols for accessing job sites and keeping projects in line.
Even the best metrics don’t predict what’s going to happen next. Regional fundamentals are still in place and well-diversified firms should weather the storm better than those focused on one market or client. Low interest rates, increased competition, and a need to place capital are spurring some developers to move forward on projects. Financing office and multi-family projects may be difficult without significant preleasing, and some lenders and developers in the Senior Living market have put paused projects as they rethink their approach. In Higher Education, University of Washington’s project pipeline is intact in the short-term, but projects will likely face increased scrutiny during the approval process as financing becomes more complex. Design-build is well suited to respond to the current conditions given increased competition, de-escalation in materials and equipment, pricing shifts, and pre-fabrication. Trust and psychological safety are critical indicators of project and team success, but how to build this in a virtual environment is another challenge facing the industry.
Long-term Impact to Supply Chain
Firms are looking at domestic suppliers for materials and machinery as issues with elevators and escalators increase, and China experiences glitches in its supply chain. Perception is reality, and firms are looking for more control over manufacturing and delivery of inputs. Supply chain issues are influencing the move toward Lean work and prefabrication.
One Big Thing Coming Out of Covid
People are being kinder, showing empathy for others, and reassessing their priorities. Many are demonstrating a willingness to learn, to share knowledge, and to move the industry forward.