On the other hand, with low-bid jobs, a company known for doing a lot of rework may still get the project—if it's the lowest bidder.
Causes of Rework
Common causes of rework include faulty design, inadequate planning, inefficient processes, poor materials, faulty fabrication and too much work done hastily at the end of a project. The combination of more complex construction projects in recent years and fewer available skilled workers, especially where struggling subcontractors are concerned, has been a recipe for disaster—and rework—contractors say. Economic pressures contribute to rework as well.
"Staffs got cut to bare bones during the recession," says McLin. "People are busy again, but they're afraid to add staff, so they're stretched too thin. Profit margins are terrible, and companies were skating on thin ice to start with." Construction projects are on average being completed with a 3% to 4% pretax profit margin, according to Navigant.
The data show that rework often has more than one cause. A recent CII study called "A Guide to Construction Rework Reduction" reveals that the biggest contributor to rework, at 25.4%, is scheduling, followed by issues related to materials and equipment (19%), design and engineering (14.6%) and instruction/monitoring (14.5%). Cutting costs too much can also drive rework. To save money, for example, some architects and engineers use old designs or templates for new projects, and those designs may have problems that were fixed on a previous job but remain in the original design and are passed along to a new one.
While the construction industry has a history of turning a blind eye to how much rework occurs and how much it costs, more contractors realize the best way to cut that cost is to develop strategies to prevent it. Some contractors track rework costs, but nearly all of them keep those figures confidential.
"People are sensitive to tracking the cost of rework," says Mortenson's Hodge. "We encourage people to report it, and [we] don't look negatively on it."
Preventing rework generally comes down to focusing on quality, worker safety and common sense, according to CII findings. "It's just people," says Crew. "Rework has to do with common-sense stuff slipping through the cracks."
Contractors can rely more on new technologies, including BIM, to find and fix problems virtually throughout a project's life, so they don't have to be handled on-site. As such, BIM use has skyrocketed in recent years—from 17% of architects, engineers, contractors and owners employing it in 2007 to 71% in 2012—according to McGraw-Hill Construction research released in October (see related story in this issue). Some 74% of contractors now use BIM.
Construction is starting to look more like manufacturing. Mortenson is applying computer-automated virtual environment (CAVE) technology to the 225,000-sq-ft, $100-million ice hockey arena it is building for Pennsylvania State University in University Park, Pa. For the new Pegula Ice Arena, scheduled to finish in September, Mortenson built a room with a 1:1 aspect ratio and rear-projection screens, where rink staff and others can walk virtually around the space.
Contractors also have created low-tech solutions to rework. Some projects have turned to freezing a design before construction starts and creating a single point of authority—a "project czar"—to be the owner's project manager, which cuts down on rework due to indecisive owners. For example, the University of Arizona in Tucson, according to Navigant, used a project czar for its new student activities center. While the czar represented all of the project's 25 stakeholders, he was the only one authorizing change orders.
"The czar was a retired Air Force colonel, someone who was used to following procedures," says Zack. "He knew policies and procedures and why they existed."