Study: Strengthening contractor and owner relationships drives greater success in multi-site construction programs

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Ontario Construction News staff writer

A recent study from Dodge Data & Analytics, in partnership with Sevan Multi-Site Solutions, explores critical success factors for multi-site projects, from the perspectives of both owners and contractors.

Multi-site work is an often-overlooked area of the construction industry that represents a significant volume of work, whether through a series of small projects across hundreds of locations, as seen with new signage installed in big box retail stores across the U.S., or through construction programs of new buildings and major renovations.

According to the report, titled Challenges and Opportunities in Multi-Site Construction SmartMarket Insight, the most important factor contributing to the success of these programs is the strong relationship developed between building owners and contractors, and the findings take a close look at the opportunities for improving upon that relationship.

“We see clear evidence that established relationships between contractors and owners built on trust and performance produce better results in overall cost and schedule than simply a ‘race to the bottom’ on price alone,” Sevan Multi-Site Solutions executive vice-president Steve Kuhn said in a statement. “When the right contractors are selected for the right reasons, the outcomes are typically better for all stakeholders,”

As part of the research, Dodge and Sevan examined nine major areas that impact the success of multi-site projects: how owners source firms for their programs, managing changes to the scope of work, the impact of technology, dealing with permitting issues, how to convey lessons learned through a large program of work, how to address skilled labor shortages, enhancing safety onsite, managing material and equipment procurement, and how payment terms influence an owner’s ability to attract companies.

For many of these nine areas, critical gaps between the perspectives of contractors and owners emerge. A few top examples include:

  • More than half (56%) of owners are confident that they know what makes their projects attractive to contractors to bid, but only 16% of contractors agree.
  • Nearly all owners (92%) believe that they frequently form and sustain long-term partnerships with contractors, but only 35% of contractors find that to be true.
  • Over half of owners (52%) believe that they are frequently keeping abreast of the changing permit requirements, but few contractors agree (21%).
  • Most owners (76%) report that they frequently communicate their future construction plans to contractors, but only 19% of contractors find that this occurs on a frequent basis. The most common reason that owners offer for not sharing information is uncertainty about program changes, but most contractors think owners are more concerned about confidentiality.

Despite their differing perspectives, though, both owners and contractors value the importance of stronger communication early in the project. More than 70 per cent of owners and contractors agree that making time for program-level scope/schedule coordination early in a multi-site program improves scope clarity, quality, schedule and budget.

“Dodge has done several studies on traditional construction projects that demonstrate that early coordination and collaboration across the project team, including the owner, improves project outcomes,” says Steve Jones, senior director of industry insights research at Dodge Data & Analytics, “but the benefits of that approach are magnified by the unique challenges of doing a large program of work.”

The study provides a basis not for correcting either side, but for supporting efforts for clearer communication based on understanding the differing perspectives voiced by each.

“The importance of clear and open communication early in a program cannot be over emphasized,” Kuhn said. “Taking the time to truly understand the goals of the other side is essential to creating better outcomes and minimizing unmet expectations. It is only through frank and open dialog that both owners and contractors can truly appreciate the goals and challenges faced by each other.”

A complimentary version of the Challenges and Opportunities in Multi-Site Construction SmartMarket Insight is available at:http://www2.sevansolutions.com/2019-04-16_Dodge_Challenges_Opportunities_Multi-Site_LP_2019_Dodge_Study.htm

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