Hey! Happy Friday! Matt here. Welcome to the Construction Curiosities newsletter. Especially to the New Subscribers. We had a 37% increase in subscribers since last week! Thank you! If you get value from this newsletter, please help us continue to grow and share with your friends, colleagues, social media networks, uncle’s dog, etc.
This weekly Newsletter will explore my Curiosities around the Construction Industry. It is meant for anyone and everyone that works in the industry, ancillary professions, or is simply Curious about Construction.
The real value in this newsletter however isn’t necessarily what I think and say, its the conversation by the group. I hope you will join the conversation on constructionyeti.substack.com !
This week we will look at:
- One Curiosity: National Rework Cost
- One Article: Japanese Plan to Solve Labor Shortage
- One Video: 7 Things You Didn’t Know
- One Quote: The 90/ 90 Rule
- One Meme: A Foot of Sun
Rework. The bane of every construction site, budget and schedule.
The Construction Industry Institute (CII) defines rework as “activities in the field that have to be done more than once in the field or activities which remove work previously installed as part of the project.” A simple definition for a complex problem. We have all seen it happen on every project. Time and time again. I’m pretty sure if Benjamin Franklin was in the construction industry his old quote would be “…in this world nothing can be said to be certain, except death, taxes and construction rework.”
I’m always curious and googling stuff (hence the genesis of this newsletter) and a while back I got to wondering how much money the U.S. Construction Industry spends on rework. Not surprisingly I’m not the only one wondering this. There’s actually quite a few studies dedicated to it.
A few studies have agreed that the average is about 5% of the project contract value for direct costs and about 9% of the total project cost when you factor is indirect costs (field overhead).
I would argue that there are costs that aren’t even being tracked that should calculate into this. Time and effort spent by the Architects, Engineer, Construction Managers, Owners, Inspectors, Vendors, etc to stop, think and talk about each one of the issues. In addition there is a belief that 38% of rework goes unreported. The guys in the field just fix it and move on.
But don’t think I’m trying to paint a picture that all rework is because of a contractor screw up. A 2012 study by Navigant Construction forum included this list of causes:
These studies aren’t all doom and gloom. They provide some ways that rework could be avoided. For instance, the Navigant Construction Forum study lists 7 remedies to decrease rework:
- Use of Building Information Modeling (“BIM”) and Virtual Design & Construction (“VDC”)
- Early and Continuous Stakeholder Involvement
- Design Freeze Prior to Start of Construction and Delegation of Authority
- Biddability Review
- Constructability Review
- Operability Review
- Change Order Review
I also have a deep dive into the US Army Corps of Engineers’ QC process planned in a future newsletter but here it is in a nutshell:
So back to my original curiosity that lead me down this rabbit hole. How much money does the U.S. Construction Industry spend on rework annually?
If we take the conservative estimate of 9%, multiply that by an average of $1.15 trillion annual construction spending in the U.S. and we get $103.5 billion dollars.
That’s the GDP of Puerto Rico. 🤯
Links to relevant studies if you need bed time reading material:
- THE IMPACT OF REWORK ON CONSTRUCTION & SOME PRACTICAL REMEDIES
- Measuring and Classifying Construction Field Rework: A Pilot Study
- Cost Management in Construction Projects: Rework and Its Effects
For tech-focused labor solutions, US contractors should look to Japan
“The Japanese government’s program, which focused on attracting a younger construction workforce via tech adoption, could provide a roadmap to fixing the American labor shortage, says one expert.”
Another heat wave is here. Y’all be careful out there and drink some water.
Thank you for reading! Head to the Substack post page to join the conversation.
Let me know in the comments or send me an email ([email protected]) what you liked, didn’t like, want to see more of in the future, or have suggestions! Look forward to hearing from you.
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