A Contractor’s Challenge is to Manage the Unexpected in Tenant Improvements

What Contractors Worry About

From a contractor’s perspective, there’s already enough to worry about when everything is going right. In construction, the one thing you can be certain of is that there will always be something unexpected. This is particularly true in tenant construction when the work is in an older building. A lot of things can go wrong. And many of them are outside your control. That makes worrying about them just part of the process. This brings us to the Three S’s of what to worry about – Surprises that you might uncover in the course of a project, Supply chain issues that can impact product availability, price, and schedule, and the Safety of the workers who may be exposed to a variety of dangerous conditions.

1. Surprises

You pull up the old flooring only to find your first surprise – asbestos tile. Not a good day. The older the building, the more likely you will find these kinds of surprises behind walls, in ceilings, or under the floor. Switching out “Life” for “Renovation” Forst Gump might put it this way:

“Renovations are like a box of chocolates – you never know what you're gonna get."

Asbestos and lead paint are only one of the many headaches to be uncovered in working on a tenant improvement project. Structural issues, outdated electrical systems, code violations, and hidden water damage can throw a wrench into any project. The problem is that many of these stay hidden until after the demolition exposes them. This can add to additional expenses and delays in the construction process. Some you might be able to anticipate, while others can be completely unexpected. It’s just one more thing that could go wrong.

2. Supply

What a disappointment to find that the great feature light fixture specified has been discontinued, put on back order, or is delayed somewhere in the supply chain. The pandemic was a major hit to the supply chain which has been taking time to normalize. But significant challenges remain. Labor shortages, material availability, shipping logistics and costs, import tariffs and other factors are straining supply chain effectiveness. A 2022 study by CBRE illustrated the impact on key construction materials.

CBRE Supply Chain Disruption

This study was done in 2022, and there has been evidence of improvements since then. However, the supply chain remains fragile, and any number of things can cause disruption. The best line of defense is for the architect to check availability when preparing the specifications. If there are availability issues, that can then factor into more realistic pricing and scheduling. However, things can change quickly, so it’s always wise to be prepared if there are supply chain challenges.

3. Safety

The last thing any contractor wants is for someone to be injured on-site. Accidents happen. However, construction industry professionals have the highest injury rate of any profession. According to the Bureau of Labor Statistics, construction has experienced the most fatalities of any other industry. Construction accounts for 21% of all deaths among US workers. Falls (including slips and trips) are among the most frequent causes, followed by struck-by incidents, electrocution, and an assortment of other injuries. And injuries can last beyond the work. 56% of construction workers have hearing impairment by the time they reach retirement age. And, of course, there is the cost.

“$7.87 billion is the cost of workers’ compensation direct costs from the top five injury causes in construction.” Bureau of Labor Statistics

Of course, most construction companies have invested in worker safety programs. There’s nothing more important than the health and well-being of the construction team. Unfortunately, accidents will happen. Good training and on-site work practices can minimize the chances. This is the kind of thing you don’t want to go wrong.

Expect the Unexpected

There is only so much that you can plan for and anticipate. The trick is how you manage situations that you didn’t plan for. And overcome those things that go wrong. That’s where collaboration with the other stakeholders comes in. In most cases the owner, architect, and others understand to expect the unexpected and work together to reach a fair and reasonable solution. It’s just a fact of construction life.

Working together we can overcome the unexpected. That’s how we move forward and make progress regardless of the challenges.