The environmental industry is relatively young. Most of the regulations that govern the work of environmental service providers were established in the 1970s. In those early years, most of the large project work was oil spill response and the attendant remediation that followed. Early industry leaders describe those early years as the “wild west” without rigid frameworks for project delivery. Time and materials contracts were much more popular and used to address risk on cleanup projects that dealt with varying quantities. There were few parameters and little precedence to cover this relatively new market.
Fast forward nearly 50 years and the remediation industry has matured, fractionalized, and coalesced around specific niche markets such as geotechnical, water treatment, dredging, abatement and demolition, industrial maintenance, and emergency response. The days of low-risk, T&M engagements for larger remediation projects have largely gone the way of the dinosaur.
Over the past 20 years, as the industry continued to learn from past projects and added much more structure around project execution models, the traditional “design-bid-build” delivery model gained popularity. This model draws a line between engineering the remedy and regulatory interface and the actual remedial work to be performed. Included in this model is the competitive procurement process which is designed to ensure the lowest possible price. Because engineers are in control of the project in the early stages, staff engineers are often tasked with the burden of developing the project budget by way of developing the cost estimate. This is a bit like asking your plumber to predict the price of your large landscaping project. Budget busts get amplified once the project hits the field. Setting the budget for larger remediation projects and programs is typically best done by those who actually do that type of work often or, at a minimum, heavily informed by field staff as it requires experience and a careful eye on every detail.
Further complicating matters, the remediation industry is unique in that target media (contaminated soil, groundwater, and debris) are often located in places that are difficult to measure. Most of the contaminants environmental contractors address are underground, within groundwater, in a tank or vessel, located in a riverbed, or sandwiched between building materials. This is not vertical construction work and it’s common for quantity estimates to vary from original estimates to final punch lists.
A lack of accurate estimates of variable quantity items is expensive as waste disposal costs, in-situ reagents, or replacement materials usually account for a high (>50%) percentage of the overall cost of a remedial project. Underestimations of variable quantity items have been a financial thorn in the side of the remediation market for decades. Both owners and contractors have developed mechanisms to deal with that risk that do not always favor our customers.
It is therefore beneficial to leverage the experience of a contractor and perform remediation projects in a Design-Build (DB) fashion to catch and correct scope creep and financial busts before they happen. What does a highly functioning DB team need? In essence, the collective team, between the contractor and engineer, must have the following attributes:
- Experience: The team must have sufficient, direct experience to spot problems and be creative about how to solve them before the field teams hit the job site.
- Trust: The team must have faith in the financial and methodology portions of the job. This generally comes from a commitment to transparency and collaboration.
- Flexibility: The team must be able to adapt to changes quickly and must have accountability between both entities.
The primary benefits of Design-Build Projects include:
- Schedule: Shorter procurement, more resources are dedicated to the pricing and planning elements.
- Owner engagement: Streamlined. There is one contract and “one throat to choke” on DB projects as the delivery team shares the risk.
- Collaboration: The project benefits from early contractor buy-in and QC which results in less surprises as problems are caught early
- Liability: no finger-pointing, price certainty, “ The buck stops here”
The Design Institute of America reported that design-build is anticipated to represent up to 44% of construction spending by 2021. We hope so because, at Terra Nova, we have decades of experience in Design-Build remediation. We like to operate as a “toolbox” for the engineering industry where we serve as a trusted member of the design team and collaboratively execute remedial field services. Most of our most complicated remediation work is performed in a design-build fashion, with Terra Nova adding significant value to the planning, costs, and constructability review phases. Our remediation business model is predicated upon maintaining very close relationships with our engineering clients and operating as an extension of their field services group. We have a long and proven history of geotechnical and remedial services to top-tier clientele in the energy, oil and gas, transportation, and manufacturing industries.
As the President and CEO of Terra Nova, Bill Hunter is responsible for the overall quality, strategy, employee development, and trajectory of the company. Bill is a 20+ year veteran of the environmental services industry and has led national teams providing remediation, industrial and response services to a wide variety of industries in the United States. Bill’s executive tenure includes managing cross-functional teams under private equity, public and family-owned settings since 2006. Bill’s primary daily tasks are to support the management teams and lead by example.
Contact Bill Hunter @ email@example.com