The Price is Right

Last month we were bidding a large, multi-year project in Washington DC when our proposals started to come in for our subcontractor bids. It isn’t uncommon to have a wide variance in bid price for various bid packages, but this project had incredibly large swings in prices. This made me think about why this phenomenon occurs during the bidding process, what it means, and how to make the best sense of it. It is our goal in the construction industry to select the lowest possible price for qualified bids that best meet the scope of work, encompass the desired level of quality, and meet the schedule. Unfortunately, wide variances during bid date can be a red flag that one or more of these goals will not be met. How does one determine whether an abnormally low price is real?

It isn’t uncommon to have price variations in the American economy. Just run a simple Google search on a basic retail commodity you are interested in purchasing and you will find prices that fluctuate by as much as 20%. In the city limits of Kansas City alone you will find gasoline prices varying from $1.74 to $1.99. Purchasing the construction of an office building or the restoration of a historic landmark, however, is slightly more complicated than filling a tank of gas. When we get a low bid for a project, we call on our internal Spanish Inquisition to determine the proposal’s validity.

A loose specification will open the door for lowball pricing. If the construction documents fail to define materials, means, and methods with precision, the opportunity for interpretation can create unhealthy deviations. Failing to specify explicit materials by listed manufacturers, including performance criteria, is critical. It is also important to have a substitution process to be approved by the architect rather than allowing unapproved equals. If we get a low bid on a scope of work, we will drill the bidder on all of the details to be certain he has included all the important components. It is often discovered during this interrogation that non-complying materials have been submitted, or that the bidder missed quantities. We often uncover bidders who disregard serious elements of a proposal because they didn’t spend the time to review the specifications and assemble a meaningful bid. In some cases we have found unscrupulous bidders attempting to manipulate the specification in their quest for a low price.

Low prices are often a result of misinterpretation of the desired level of quality for a project. Although the owner, design team, and contractor have a clear understanding of the quality intent, subcontractors might not invest in understanding the critical factors of their bid. After they are awarded a contract, they might deviate in ways that can go unnoticed by the construction team. For example, using different primers might result in paint failure, changing sources for aggregate can alter masonry performance, and abbreviating labor processes can adversely affect installations. There are numerous examples of construction travesties out there that were a result of a subcontractor substituting an inferior material such as an altered installation clip. A thorough post-bid interrogation as well as ongoing quality control checks and balances throughout the construction of the building can prevent this from happening.

Finally, a low bid can be an indicator that the schedule will be at risk. Low bidders often arrive at their price because they have missed something. That something is often the project schedule. We include scheduling as part of the post-bid interview. We ask in detail, how the subcontractor intends to meet the schedule. We want to know the total labor hours, broken down by month, and broken down further by individual dedicated to the project. If it is a complicated discipline, we might ask for backgrounds of the people dedicated to the job. We also want to know about other projects the subcontractor will be working on at the same time to identify capacity conflicts. If the subcontractor has weak answers to any of these questions, the schedule will be in jeopardy.

The bidding process doesn’t need to be a game of Russian roulette. I am amused by the cartoon of the astronauts on the space shuttle talking prior to takeoff saying, “Do you realize we are about to take off in a rocket that was built by the low bidder?” If you want your project to take off and land smoothly, you might want to invest the time upfront asking the tough questions before you get into bed with an unqualified subcontractor. 

Re-View is Known for Courting Business

Re-View has an impressive portfolio of work on courthouses in the United States, working on projects from Arizona to Washington DC. The traditional county courthouse is often the most impressive architectural structure in its region. We are always amazed at the distinct architectural styles and how these iconic buildings define a community.

One aspect of the architecture of the typical county courthouse that always stands out is the windows. Architects used the fenestration to make these buildings truly magnificent. We have worked on massive monumental windows, triple-hung units, frames and sash that are bent on a radius, and artistic stained and leaded glass. The associated woodwork and trim on a typical courthouse window is often incredibly detailed and integrates with interior woodworking. Window hardware on these courthouses is frequently a highly custom design with unique finishes. We have seen locks and lifts that look like jewelry for the window.

Most of these projects are grand in scope, involving hundreds of windows. Re-View is uniquely qualified to perform custom window restoration and replication on large projects. We specialize in the restoration of both wood and steel units, and are one of the largest manufacturers of totally custom wood window replicas. We also have a great deal of experience in improving the energy performance of historic windows by using weather stripping, changes in glazing technology, or implementing secondary glazing.

One of the reasons Re-View enjoys working on county courthouses is that every project is unique. No two projects have been alike. Whether we are working on wood or steel windows, every courthouse has a distinct set of challenges that makes our business exciting.  

Failing Forward

Make a Success of your Failures

I have always had a proclivity for dwelling on the positive. It is probably some “half-full” mentality that was drilled in my head as a child. Or maybe it is a deep-seated need to impress that was a result of trying to gain my parents’ attention in a family of five kids. So when someone asks how about the state of my business, I can recite all of the great things that are going on at Re-View with an upbeat flair. I was thinking about this behavior last week as I was on a project site correcting a product failure. You haven’t spent much time in the construction industry if you’ve never had a failure, and if you have tenure and still profess total success, you’re probably lying to yourself. I am a firm believer that the way a company manages a failure makes all the difference in how they will succeed in the future. Let’s take a look at how the construction industry can utilize failures as opportunities to grow.

Re-View has had its fair share of missteps over the past 22 years. It sometimes seems that every new venture is loaded with hoops to jump through and landmines to avoid. Many of our setbacks cost the company a great deal of money. When we dove into this business over 20 years ago, there was very little information on the proper protocol for restoring historic windows. There also wasn’t much guidance on how to manufacture custom wood window replicas on a large scale, so we had to forge through the learning curve. We’re still learning today. Our most recent challenge had to do with capillary tubes not functioning properly on insulated glass sent to a high altitude project. Our company’s philosophy has always been to look at these costly challenges as opportunities to learn. We quickly figure out a correction, implement the remedy, and proceed onward as a stronger company that will avoid such mistakes in the future. Failures are merely a cost of education.

What are some of the landmines for the construction industry today?

There are a host of new technologies emerging for the construction industry: new developments in drone surveying, 3D printing, netzero construction, smart helmets, and 3D building scanning to name just a few. It is very common to lose a great deal of money and productivity when applying a new technology because of the time it takes to learn, train, and adopt the new way of doing business. The implementation of new technologies is burdened with setbacks. Think back on how long it took to take advantage of CAD, computerization, and communications. It wasn’t too long ago that it was rare to find someone who had an e-mail address. Technology is a necessary struggle for all construction related companies. The important thing is to be on the leading rather than the bleeding edge of technology.

New product developments can also be fraught with potential failures. Not only does a revolutionary material not have a proven track record, but the installation methods are also untested. That is a double jeopardy. Many new products are put through a battery of accelerated laboratory testing to determine whether they can perform as intended. Unfortunately, Mother Nature often does not act in the same manner as the lab tests conducted by scientists. Depending upon the product, it might require experienced installation techniques that can take a subcontractor many years to perfect. The industry is full of great products that failed due to improper installation. Do you really want to be the guinea pig for such ventures?

Selecting who is to be on the project team is also a potential landmine. If you have a design firm that doesn’t have experience in a particular line of work, the project gets off on the wrong foot and everyone has to struggle through the details. Also, you don’t want a general contractor to cut his teeth on a building that has features that are foreign to his background. And let’s not forget all of those hungry subcontractors who will take a job regardless of their expertise. I can tell you stories of the hundreds of woodworkers who claim to be window manufacturers, but in reality have no such training. In addition to experience, the company’s background in the same size of project is almost as important. Factors such as financing, bonding, and capacity can crater many efficient companies that are out of their league on a mega project. As a result, I am seeing more stringent prequalification standards for special projects and a growth in Integrated Project Delivery where architects, contractors, and subcontractors form a team at the design stage.

Finally, let’s not forget the human element that is responsible for Murphy’s Law. Having a lax safety program will create problems on a project, cause delays, and increase costs. The good companies are learning from their injuries to avoid them in the future. The best companies are anticipating potential hazards before they happen and developing procedures to eliminate the possibility of an injury. Quality of work is another human element that can be perfected by inspecting failures. If one takes the time to dissect a punch list and develop procedures to avoid mistakes in the future, everyone is happy. The best companies are working towards a zero punch list mentality where work quality is built into the system.

I like the quote from Winston Churchill that says, “Success is stumbling from failure to failure with no loss of enthusiasm.” If you are able to ingrain that attitude in your company culture, you will be a success in the construction industry. It may also make the situation a little more tolerable when you have to hunker down and make things right on a project that has gone wrong. 

Unconventional Convention

If you’ve been in the construction industry for long, you are no stranger to attending a convention. It seems like most associations that have a significant presence will assemble the loyal following once a year to learn more about surviving in the industry. I have been to large conventions like AIA, CSI, IWF and NAHB as well as smaller niche gatherings like state or national preservation conferences. They are often a good source of education and entertainment as well as an excellent opportunity to network with others. So with that as a backdrop, I attended the Window Preservation Standards Collaborative (WPSC) Summit last week to speak on the topic of the business of window preservation. The summit hosted 50-60 preservationists to the Campbell Center in Mount Carroll, Illinois for four days of seminars on the science of window restoration. Although this assembly pales by comparison to the thousands that attend an AIA convention, it amazes me what can happen when a small group of passionate people connect.

The members of the WPSC remind me of Martin Luther King’s following as they marched across the bridge in Selma, Alabama. Here is a small group of craftsmen and artisans who have assembled to conduct battle with the mega-corporations of the window industry. Instead of using massive advertising budgets to promote the message of window restoration, this collection of skilled preservationists rely on a grassroots effort of educating the industry on the economics and common sense of restoring historic windows. On one end of the bridge you have this small group of craftsmen armed with the proven science of historic window construction. On the other end you have the massive juggernaut of the window industry promulgating the illusory economics of window replacement. When one takes the time to study the facts, the truth of restoration prevails.

This assembly was more like Woodstock than a national convention, and like Woodstock there were some of the best practitioners of the trade represented. During the four days, attendees were exposed to the finer details of wood and steel window restoration, storm window manufacturing, business practices, and testing of restored windows. After spending four days at the program one would definitely come to the conclusion that window restoration makes sense because historic wood and steel windows are built to last for centuries. The evidence proves that the act of replacing a window with an expected lifespan of 300 years with a 20-year replacement is irresponsible behavior. Since replacement windows are not designed to be repaired, the collaborative has aptly renamed them “disposable” windows.

What amazed me the most about the summit was the subtle message that many of our construction practices of the past have undisputed validity in modern means and methods. The construction industry is constantly being tempted by new technologies that promise performance and no maintenance, only to prove to have spurious lifespans and overstated performance. Disasters such as EIFS, aluminum wiring, plastic plumbing pipes, synthetic slate roofs, and Chinese drywall are just a few examples of failed products that were once paraded as technological breakthroughs. Maybe we just need to pay more attention to the proven methods of the past and accept the fact that the simplicity tested over time may be the most revolutionary solution for current construction challenges.

Re-View Project Highlight: Knox County Courthouse

The Knox County Courthouse in Knoxville, TN was built in 1885 and continues to serve as an office for several county departments. Tennessee's first governor is buried on the courthouse lawn.

Re-View was contracted to restore the historic wood windows. Our craftsmen removed the window sash and shipped them back to the Re-View restoration plant to be restored. We restored the frames in situ, refinished the frames, and installed new perimeter sealants. All of the finishes were removed from the sash to permit a complete restoration of the wood. Re-View fabricated replica sash for units that had been replaced with inaccurate replacements. Our craftsmen installed the restored sash into the refurbished frames and installed exterior storm windows for energy efficiency.

Pictures of the Building

Before/After

Photos from the Plant

Installation

Is LEED Dying

The LEED Program's Green is Beginning to Turn Brown

As I was riding my bike to work this morning in 82 degree temperatures, I thought about how silly it was that you could get an extra point towards a LEED certification for having a bike rack. I didn’t need a bike rack when I arrived at my plant, I needed a shower. Or shall I say, my employees needed for me to take a shower. This made me reflect upon how little I have seen LEED related projects on the drawing boards for new projects. What was once the great movement that was touted by all in the construction industry as a revolutionary way to consider construction, is now becoming a waning fad just like granite counter tops and brightly colored Croc shoes. How has the LEED program met with such a precipitous decline?

I wrote a post over two years ago about how the construction industry needed to wake up and see that the LEED program was adding very little value to the construction process. At the time, LEED was very popular and I felt like I was being heretical to oppose such a venerable institution. I certainly wouldn’t want to be perceived to be an irresponsible capitalist who scoffs at construction stewardship. Back in 2012, the LEED program was having a profound effect on realigning priorities in the construction industry and changing the way we looked at energy consumption and resource utilization. Architects were standing in line to gain certification and building owners were jumping through hoops to achieve a platinum level certification. I felt that the program had grown to the point where the costs were beginning to exceed the benefits. Here we are in 2015 and all that hype has dissipated because of a number of factors.

After you suffer through a LEED certified project, you have a better understanding of what costs are associated with achieving such a designation. The costs of registering the project are just the beginning. Most people who are experienced with the certification complain about the massive administrative costs associated with documenting compliance. Other costs such as increased design expenses, energy modeling, installation of monitoring devices, and testing that has become part of LEED’s latest version add a substantial amount to the project. Finally, we have the cost of construction which is amplified by demanding features such as FSC-certified wood and local sources for building materials that restrict one’s ability to source equal products at a lower cost. Some estimate that pursuing a LEED certification can increase the total cost of construction by over $1 per square foot.

The administrative burden is another reason that LEED has lost popularity. Everyone in the construction process from the owner, designer, contractor, subcontractors, and suppliers spend thousands of hours to research alternatives and provide documentation in an effort to meet the requirements. The last thing our industry needs right now is another reason to delay construction. For instance, our company has to spend one complete day per year to undergo a Forest Stewardship Council (FSC) certification to be able to provide the required FSC wood for a LEED project. It became such an exercise in nonsense, I recently told FSC we would pass on the renewal this year. If we run into a LEED project that demands FSC wood in the future, I will apply any associated fees to the costs of the project.

Let’s face it, from 2000 to 2012 it was exciting to get on the LEED bandwagon. The construction industry was in the dumps and everyone was looking for something to distinguish their company in a desperate attempt to generate revenues. Building owners were willing to pay more to brand their structure as LEED certified. Developers could charge more per square foot, corporations could benefit from positive public relations, and suppliers could charge more for certified materials. LEED gave the industry new hope during a lethal recession. We find ourselves in a different position today. Since there are over 50,000 buildings that have been certified over the years, the panache associated with a gold or platinum level certification has significantly diminished. The survivors of the poor economy have climbed out of the recessionary doldrums and are back to work. The last thing we are looking for now is a program that offers additional cost with little benefit.

In an attempt to keep growing in popularity and become more than just a passing fad, LEED attempted to justify its program by producing a biased study of the benefits of certification. The New Building Institute (NBI) produced a study documenting the difference in energy consumption between LEED-certified buildings and existing construction stock. NBI concluded that LEED buildings were 25-30% more energy efficient relative to conventional buildings. Very few people are aware that NBI is a non-profit largely funded by the USGBC which is responsible for LEED, or that the board of directors of NBI has members from the USGBC, When the study was evaluated by independent agencies, they concluded that there are no significant reductions in LEED buildings compared to similar structures. So why go through the pain of certification if there is no real benefit?

In conclusion, I think the LEED program will be looked at as that moment of excitement when the industry was reeling from one of the worst recessions in history. The stockholders of the USGBC will retire with their millions generated from the program, and architects will have to print new business cards without the LEED professional certification. Hopefully the industry will remember some of the valuable principles outlined in the program so we can continue to construct outstanding buildings.

I think it’s time for a shower. The flies are starting to take over my office and people are avoiding me.

The Replacement Treadmill

Re-View worked on this project 17 years ago where we restored the existing steel windows. Several openings had louvers and needed a new window installed so the construction team specified a wood replacement window to fill these openings. We installed what is known as one of the best wood replacement windows in the industry.

The industry has a negative impression of historic steel windows. They can be costly to restore and most often contain lead paint. They are also poor performers from modern energy efficiency standards. The glass is single pane and is clear so the R Values and shading coefficient ratings fail to compare to modern replacements. As a result, many of these windows are replaced. The industry has interpreted "Green" to mean high energy efficiency ratings rather than durable products.

The industry fails to recognize the true value of historic steel windows. They are designed to perform for hundreds of years with little maintenance required. But since the industry is focused on energy efficiency, they are replaced with energy efficient replacement windows that need to be replaced every 20 years. The picture below documents the condition of the wood replacement window compared to a restored steel window.

When you evaluate whether you want to restore or replace a historic window, ask yourself if you really want to get on the replacement treadmill?