The corona pandemic started the disruption of the operation chains of construction sites and materials. More challenges were thrown at the construction sites with the war in Ukraine. The availability of materials has deteriorated rapidly. Energy and fuel prices have risen drastically. The costs of HVAC installations are skyrocketing. Cooperation and the efficiency of site operations become key in the implementation of projects.
The rise in prices surprised and makes contracting operations difficult
The wild rise in material prices has surprised construction industry operators, but the rise has hit contractors particularly hard. In the ongoing projects, models have not been agreed upon that could take unexpected cost increases into account in the prices. According to the general contract terms, it is possible to think about extending the contract period, but not automatically increasing the prices.
"In the future, we will have to think about the matter in the contract phase, because offering work involves great financial risks. When operations involve such significant risks, the contractor is forced to think about what he dares to offer," says special expert Juha-Ville Mäkinen from LVI-Tekniset Urakoitsijat LVI-TU ry.
There are no guilty parties, but someone always ends up paying the price
Mäkinen reminds that in the current situation it is important to keep a cool head and remember that the culprits cannot be identified from the chains. Compensation claims cannot be assigned to anyone. No entity can benefit from this, and has not taken the initiative.
"Despite that - and unfortunately - someone has to pay for these price increases as well. Currently it is a contractor. No wonder if the situation seems unreasonable," says Mäkinen.
Cooperation ensures the future of projects
To get over the acute phase, the cooperation of all actors involved in the chain and the will to find solutions are needed to avoid the accumulation of problems on the neck of one party. In practice, this means new negotiations in ongoing projects to check prices and possibly change some planned solutions.
"The customers and main implementers have been ready to deal with the issues, and everyone has understood the seriousness of the matter. Everyone understands that now is not an opportunity to make quick profits. The discussion already evaluates future projects and the cooperation during them," says Mäkinen.
Compensation by making the operation more efficient
You can also see opportunities in the situation. When the crisis pushes the players in the construction industry to discuss and find a common solution, then at the same time a discussion can be opened to solve the challenges identified earlier. For example, by reorganizing the logistics and planning of construction sites, according to recent studies by Aalto University, savings corresponding to the price increases seen now could be obtained.
"It's not a new issue, but now would be a good time to look for solutions to the problems that industry players themselves can influence," Mäkinen encourages.
"Just improving communication during the project and making the processes visible would produce significant savings in labor costs."
The sheet music is ready
In two separate studies, Aalto University investigated the role of building technology in construction processes and the allocation of personnel's working time. The research was conducted in 2020–2021 and the research reports were published in early 2022.
"I recommend getting to know these reports and especially the recommendations for measures presented in them. You can find ready-made sheet music there, and if we can get the groups to think about them together, then something good from this spring can be left behind," says Mäkinen.
Check out the Hukka HVAC and electrical works final report
Take a look at the final report - The role of building engineering systems in the construction project process
Pictures
A multi-phase residential real estate site
Juha-Ville Mäkinen
More information
LVI-Technical Contractors LVI-TU ry
Special expert Juha-Ville Mäkinen phone 045 899 9388, juha-ville.makinen@lvi-tu.fi
Communications manager Pipsa Hiltunen phone 0400 287 939, pipsa.hiltunen@lvi-tu.fi