Today’s contracting firms build their market strategies around doing more with less, finding ways to provide better service by leveraging in-house capabilities. Seattle-based specialty contractor McKinstry has implemented those practices for years, honing its design-build, operations and maintenance (DBOM) capabilities and consolidating them under one roof to create an integrated delivery model. The goal for its clients is to maximize their energy savings and systems performance throughout the life cycle of a building.
The DBOM model seeks to alleviate a fragmented process that’s often inherent in the design, construction and operations of buildings, due in part to the lack of integration among disciplines.
“We're defragging,” says Ash Awad, McKinstry chief market officer, an 18-year veteran of the firm. Among other benefits, the DBOM model eliminates the loss of continuity and knowledge that can occur as projects transition from one siloed project team member to another, including designers, contractors and operators, adds Brian Antonsen, McKinstry’s director of mechanical construction for the Western Washington region.
That continuity extends from design to commissioning of facilities. “We don't have disparate groups, but rather engineers that follow a project from design to commissioning to assistance in solving problems related to operations and maintenance,” says Michael Frank, McKinstry’s director of engineering. “This affords our customers the continuity they deserve and enables our engineers to become well versed in our full cycle of services.”
This model isn’t new to the industry, or to McKinstry, which employs 2,000 workers across its 23 U.S. offices. The firm has functioned as a DBOM provider for nearly two decades, particularly in the Pacific Northwest, with operations and maintenance contracts accounting for 15% to 20% of its 2016 revenue of $620 million, says Awad. He anticipates that the firm’s operations and maintenance revenue will grow by 15% to 20% annually.
Ops Center Resources
Nevertheless, “there are few other specialty firms out there that offer full DBOM services,” says Brian Turmail, spokesman for Arlington, Va.-based Associated General Contractors of America. Among the potential reasons are the considerable sums that McKinstry has invested to bring its suite of services to fruition. Those include construction of high-tech remote operations centers on its Seattle and Spokane, Wash., campuses.
The centers incorporate proprietary software that allows for remote, real-time monitoring of clients’ systems and components to optimize operations and maintenance (O&M).
Based on O&M data logged into the center’s systems, teams with expertise in building systems—including controls, mechanical, electrical and plumbing systems—analyze and address issues via a call center that’s open 24/7 year-round. For projects in Washington and Oregon, McKinstry deploys fleets of vans to address issues on site. Its comprehensive array of services and technologies serve as “our ticket to entry,” says Frank.
As part of its integrated delivery services, McKinstry seeks to eliminate waste and redundancies from hospitals, data centers, R&D centers, schools and labs. Total cost of ownership (TCO) analyses evaluate the impact of potential designs, first on costs incurred during design and construction, then later on operations costs after a building is occupied. The goal is to minimize TCO over a building’s life cycle. “There’s too much waste in the operations and maintenance of buildings,” Awad says.
This belief guided design of highly efficient systems for Seattle-based Allen Institute, a 270,000-sq-ft, life-science research facility. McKinstry served as design-builder for the mechanical systems. Piping conducts the heat released by the facility’s data center to warm offices and labs, says Paul Wohnoutka, the Allen Institute’s senior director of operations. The strategy, coupled with chilled beams and radiant panel cooling for offices and labs, yielded efficiencies exceeding ASHRAE 90.1 by 24%, Wohnoutka says.
“What also impressed us about McKinstry is how smoothly it transitioned from phase to phase, from predesign through commissioning, rather than tossing plans over the fence from one group to the other,” he says.
Although McKinstry was not awarded an operations contract for the LEED Gold facility, the firm procured a service contract for its HVAC components, including chillers, boilers and rooftop mechanical systems. “We'll be having them [McKinstry] in shortly to address low-humidity levels in one of our spaces, Wohnoutka says. “Of particular benefit is our ability to tap into the expertise of engineers originally involved in the design of the facility.”
The firm’s ability to incorporate energy-efficient biomass, solar, bio-fuel, geothermal and waste-to-energy systems into projects has earned McKinstry a reputation as a sustainable design leader. The firm operates as an energy services company (ESCO), with a clientele that has led to expansion into several Western and Midwestern locations, from Texas, Montana and Arizona to Utah, Colorado, Minnesota and Illinois, Awad says.
McKinstry fulfills energy-saving performance contracts (ESPCs) that allow clients ranging from school districts to municipalities and health care organizations to achieve guaranteed energy savings. The arrangements stipulate that improvements will generate sufficient cost savings to pay for themselves over the term of the contract. Services include energy audits of existing lighting, HVAC, electrical, energy management and other systems to improve performance and achieve the required payback, Frank says.
For retrofits, McKinstry often acts as a prime contractor, subcontracting the HVAC work to local firms that may be preferred by clients, according to Awad. Depending on the project, McKinstry also can assist clients in procuring project financing, including bonds, rebates, grants and tax incentives. Commissioning, training and ongoing monitoring and verification round out the process. In some instances, the firm negotiates long-term operations or maintenance contracts with the client, Frank says.
Working as an ESCO, McKinstry is seeing significant growth in both the Midwest and Pacific Northwest, Awad says. In December, the U.S. Communities Government Purchasing Alliance awarded the firm a six-year contract to provide energy-saving services to participating public agencies, with the city of Portland, Ore., serving as lead public agency on the initiative. The contract gives McKinstry the option to renew for another five-year period.
In all, ESCO-related projects account for about 40% to 45% of McKinstry’s revenue. Awad expects energy-upgrade projects like those to expand by 10% to 15% per year, eventually prompting further geographic growth. “Although our geographic breadth currently extends from the West to Midwest, I anticipate we’ll establish a similar presence on the East Coast in coming years,” he says.
Meanwhile, McKinstry keeps busy with an array of projects, including work for a school district in Bothell, Wash., with 23 schools that serve 23,000 students. In Seattle, McKinstry is managing installation of a nearly 100-kW solar array atop West Hospital at Harborview Medical Center. Upon completion in April, the 312-panel array will be the largest of any hospital in Washington, says Justin Fallstrom, regional director, Oregon and Western Washington Energy for McKinstry. Harborview and McKinstry also have overseen lighting upgrades, fan replacements and heating and cooling upgrades. “Our goal was to first reduce energy consumption, then generate energy with systems such as solar,” Fallstrom says.
As a provider of DBOM services, McKinstry remains a unique firm. The good news, says Awad, “is that we’re beginning to see more interest in integrated delivery among industry members, with owners, architects, engineers and builders moving in that direction.” The result, he predicts, will be better buildings for everyone.