Not everyone is on board with prefabrication … yet

Listen to this article

Contractors are always looking for ways to save time and money. Prefabrication sometimes can do just that. It’s not a new building method, but one that has gained attention as the construction industry has struggled to find enough skilled workers.

According to the 2017 Fails Management Institute survey, 77 percent of respondents in the construction industry nationally think today’s prefabrication environment is significantly different than just four years ago. Further, respondents say the amount of project work using prefabricated materials almost tripled between 2010 and 2016.

The ongoing skilled labor shortage is a big driver of this trend, according to industry stakeholders.

“Right now everyone is fighting for skilled labor, and a lot of site-build contractors are having a hard time finding that labor,” said Paetra Orueta, executive vice president with Blazer Industries, an Aumsville-based manufacturer of prefabricated building components. “Either they turn down work or pay top dollar. So it’s really hard because it’s moving the pricing right up, and people are desperate so they will pay it.”

Many others agree.

“Architects have been wanting prefab to take off for a long time,” said Dave Otte, a principal at Portland firm Holst Architecture, which is the lead designer on a modular affordable housing project in Portland’s Kenton neighborhood. “I think we’re just now getting to a tipping point in Portland where schedule and labor are such driving pieces that prefab starts to make economic sense.”

Construction schedules are lengthening, Otte added, and fewer skilled workers are available now than before the Great Recession. New ways of saving time and money are being sought.

“We’re growing so fast as a city, he added, “Modular is more typical in California and Washington, and Oregon is the next place it’ll be a more everyday construction typology.”

Other figures in the 2017 FMI survey, however, suggest prefabrication isn’t refined. For instance, 46 percent of respondents said prefabrication is not effective for them, while another 40 percent indicated the concept needs improvement. Just 14 percent of contractors, meanwhile, expressed satisfaction with prefabrication.

Overall, the survey points to four main trends surrounding prefabrication. One, today’s prefabrication environment is very different than in 2013; two, most contractors struggle to make prefabrication effective; three, contractors want to double their labor investment in prefabrication over the next five years; and four, in today’s environment, project schedules are considered a critical benefit of prefabrication.

“Modular has a lot of benefits, but it also has a lot of constraints,” said architect Brian Cavanaugh, a principal at Architecture Building Culture, the Portland firm responsible for designing the modular Jarrett Street Lofts on North Interstate Avenue. “Everything has to be really dialed in.”

Projects can require both state and local governmental approval, he said. Teams need to understand how those can dovetail so that time and cost savings can be achieved.

“When you look at it from a raw cost per square foot, modular is more expensive than stick framing,” he said. “But again, that’s not the whole cost picture. If you can realize the time advantages, it could be 30 percent less on the schedule, depending on the project.”

Prefabrication has another significant benefit, according to Hoffman Construction vice president Dan Drinkward.

“We find that in addition to the labor benefits, it improves quality and it decreases the amount of waste material and allows us to make the construction site more like a manufacturing plant,” he said. “It’s like an assembly site instead of a construction site, and that’s ultimately our goal.”

These days, Hoffman Construction rarely moves forward with a project without at least a small amount of prefabrication, Drinkward said.

“It’s part of our standard process in preconstruction to see the ways we can use prefabricated building components,” he said.

Drinkward expects modular construction, now used most frequently for residential projects, to gain use in commercial projects as well.

“I don’t think there are any downsides to it,” he said. “I will say it’s not always cost-effective, and you have to do a careful analysis; it doesn’t make sense every time.”

Prefabrication makes the most sense for projects with many repeating elements or a large number of mechanical installations, Drinkward said.

“Apartments, hotels, student housing – (for) those type of projects, a complete module might make sense,” he said. “We’ve looked at those projects, and they’re limited in terms of size of the project, and also they’re not necessarily efficient in terms of materials. We have not found one to make it work on, but I would love to do one of those; they’re very interesting to me.”

Developer Derrick Aragon said his firm, Northwest Ventures Group, has carried out eight projects in the Portland area using modular construction. This includes a pair of assisted living facilities in Milwaukie and Vancouver, Washington, as well as 13 Dekum in Northeast Portland. The three-story, 28-unit apartment building was built in 2016, with installation of modular pods taking just two days.

Northwest Ventures Group, whether acting as developer or contractor, has grown comfortable using modular components in its projects, Aragon said.

“Once we figured out what we were doing, it presented this opportunity to take advantage of the speed and the cost,” he said. “It’s also a lot faster to build and it takes that risk off the table at some level. You have more control over the end product; that’s something that’s appealing from a surface level. From my side of the table it’s about how I can pick the exact product I want; that’s why I like it.”

Costs of modular projects vary, Aragon said. Some pencil out as cheaper than site-built and some don’t.

“It all depends what your finished product is, your market and what kind of product you’re bringing to the market,” he said. “Modular can provide equal to and also less than stick-frame or site-built construction.”

Another area of prefabrication is covered by Portland firm GRIT Building Solutions. It was founded just two years ago and utilizes interior panels manufactured with plumbing, electric, data or other types of systems already set. These are shipped to the job site and installed far more quickly than building them in place.

“The GC does the shell and core and we come in with walls that have power, data networks, and then we bring the finishes on site later,” said Angela Glatz, a project executive with GRIT Building Solutions. “It’s similar to conventional construction in that we’re putting in the rough framing, and it has the power and data, but we leave the finishes off until all the other trades are done.”

GRIT Building Solutions contracts with DIRTT Environmental Solutions, a Canadian manufacturer, to supply prefabricated panels for each job.

“I think part of it is just people’s needs,” Glatz said. “There’s less skilled labor to do the work. People are more willing to think outside the box to say, ‘How can we get these jobs done?’”

Construction is one of the slowest industries to bring in new technologies, she added, but firms like hers are trying to break new ground in that regard.

“We’re using (BIM) to design and price, but it’s also feeding the CNC machines and robots and factories,” she said. “It’s creating a more seamless process, and maybe there’s a good ol’ boy mentality, but now the need is so much greater maybe people will be willing to try something new.”