The combination of labor shortages and cost increases for raw goods is having an impact on the construction industry, particularly commercial and industrial projects. Labor shortages inevitably result in higher wages and increases in administrative costs for contractors and subcontractors. Combine that with price increases for materials, equipment, and long lead times, and you have a recipe for project overruns or even contractors who cannot complete a bid award.
For building owners, CFOs, and facility directors, this can create a nightmare scenario, where a low-bid award encounters lengthy delays and unexpected cost increases that don’t provide added value to the project. For contractors, a long bid-to-build timeline can result in a project that eats away profitability or even costs the company. In addition, sourcing materials at bid-estimated costs can become a challenge, or even impossible when price wars start for key components.
This scenario is difficult, but not impossible to accommodate. It’s one that an experienced specialized contractor, like Greenland Enterprises, can mitigate through a combination of established vendor and subcontractor relationships, strategic design-build planning, buying power, and creative problem solving. If you are involved in a current construction project, preparing bid documents, reviewing bids, or planning a project for 2019 or 2020, Greenland Enterprises recommends having a conversation with all interested parties to get a full understanding of how they plan to manage labor and raw good price increases.
As always, the team at Greenland Enterprises is happy to discuss your project and share our extensive design-build expertise. Contact our corporate office today at 757-864-0640.