Cutting Energy Costs in Construction
By Scott Pinyard
6 min read
The value of utilizing commissioning agents
All developers have been through it – as new properties are designed and constructed, costs and budgets clash with project needs, wants and pie-in-the-sky wishes. As the design process progresses, a project takes shape that is closely trimmed by budget and time constraints.
There are multiple factors that are causing the budget crunch. First, shrinking labor pools have meant rapidly escalating labor costs – according to Turner Construction, building costs nationwide have risen 1.29 percent in the first quarter of 2017 alone – and there’s no end in sight. With fewer younger workers entering the trades, and older workers retiring, there are fewer and fewer workers available. This shortage of workers, coupled with increased demand for construction, has led to higher construction bids and significantly tighter schedules.
Second, new and updated energy codes are requiring more expensive building methodologies and technologies. Construction methods that have been in practice for years are being replaced with new and improved processes – processes which contractors need to learn and practice to perfect and, in general, demand ever higher skill levels. This state of flux gives rise to increased costs as contractors cover their learning curve, and additional time and effort.
Third, we want to schedule our projects to minimize the time and interest expense before a building is occupied. Schedules are compressed. There is an adage in the construction field that you can have two out of three conditions: good pricing, good quality or fast schedule. If you want good pricing and good quality – this takes time. If you want your project fast and with good quality – this adds to budget.
Finally, much of the HVAC equipment installed in today’s buildings has been commoditized. There is relatively little performance difference between individual manufacturers’ versions of condensing boilers. So manufacturers are attempting to differentiate with proprietary controls. Each component now comes with its own controls that must be programmed properly and be able to “talk to” the other components in the heating and cooling system. These controls do increase visibility and operational efficiency, and have a significant impact on long-term operational costs. However, there is an increase in the amount of time required to install and properly program, leading to additional construction costs.
At this point you’re likely asking: “Given these cost increases, why would it make sense to spend additional money on a commissioning agent?” or “If the project team is ‘doing its job’ then why do we need a third party to verify their work?”
The answer is simple and may sound repetitive: schedule and budget. The same factors that drive construction costs and timelines, also drive the speed at which the entire project team needs to complete its projects. As with the contractors, design and development teams are faced with new programs and requirements that demand their attention and time. Often, tasks that used to be considered part of the scope are dropped due to price and time pressures.
This is where commissioning becomes an investment that pays dividends.
Commissioning Cost Savings
The role of a commissioning agent can be summed up like this: to work as the owner’s representative to make sure that the building is designed and delivered in the most efficient and economical means possible. The commissioning agent works collaboratively with the project team to minimize construction costs, as well as long-term operational costs. Through design, construction and first year occupancy, the commissioning agent is constantly on the hunt for construction and operational cost savings.
Depending on where you’re building and what type of building certification program you’re using, commissioning may already be required. Many municipal districts require commissioning, and more and more states are incentivizing the utilization of third-party sustainability programs (e.g. LEED) which require the service. Regardless of whether commissioning is required, it’s important that your project team understands that it’s commissioning an investment that pays back. Careful vetting of the commissioning firm (similar to vetting of investments) will help maximize the return on their fee.
During the design phase, the commissioning agent reviews plans and specifications, looking for both operational and construction efficiencies. This is the first point in the process where the commissioning agent can save the team money – a fresh set of eyes reviewing drawings for opportunities to reduce construction cost through materials or processes changes will save the project money before any construction starts.
Examples that we have seen in our commissioning practice have included:
- Selection of alternative materials or HVAC equipment
- Change in design of HVAC system
- Reduction of HVAC equipment required
- Change in construction phasing or planning to reduce contractor costs
- Reduction of change orders during the construction phase
The second opportunity for a commissioning agent to reduce costs is during construction. The agent conducts multiple site visits during construction to review progress and assure that the building is being constructed to plan. Some of the measures Sparhawk Group has uncovered during construction include:
- Equipment installed in wrong locations
- Equipment installed backwards
- Lack of insulation/water/vapor barriers in exterior partitions
- Improperly installed or programmed building controls
By inspecting construction as it progresses, these errors can be caught early and rectified with minimal delay. Left on their own, any one of these errors could cause significant delays in the construction schedule, which can cost the entire project team dearly.
The final opportunity for the commissioning agent to save money for the project team is during the contractor’s warranty period. The first year of operation is critical to a new building – it’s when all the systems are tested against real world conditions and any lingering problems become readily apparent. If any system fails to function properly, the contractors are responsible for the repairs. The commissioning agent is key in this process. During the first year of operation, the agent visits the building, interviews the staff and reviews operational data to ensure the building is running as planned. Without this intervention, many problems may go unnoticed and end up costing the owners down the road.
Conclusion
In these times of rising costs, shifting standards and rapidly evolving code and program requirements, commissioning is an effective way to reduce construction cost, minimize risk to budgets and timelines and ensure that your building is running as efficiently as designed.
Story Contact:
Scott Pinyard, Senior Consultant, Sparhawk Group
spinyard@sparhawkgroup.com
