Top Projects

Think Big

Think big.

That's what California's general contractors say they need to do when building projects valued at $50 million or more.

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In our annual ranking of the state's largest projects, we asked general contractors to submit projects valued at $50 million or more that broke ground in 2006. Contractors responded by sending us their parking garages, hospitals and transportation projects; we then ranked them by dollar amount and then broke down top projects by category, such as education and healthcare.

And while these projects may seem big, they are often not complex. Instead, working on $50 million-plus projects simply means thinking larger: More material, longer construction schedule, more risk.

Otherwise, large projects face some of the same obstacles that contractors face when working on smaller projects.

It can be difficult to findsubcontractors to work on both small and large projects, says Bob Martz, regional vice president in the Southwest division of PCL Construction Services Inc. in Glendale.

"The subcontractor market is so busy," Martz adds. "It's tough to get subcontractors."

PCL often finds it will use the same subcontractors over and over for large projects, in part because those subcontractors have the financial wherewithal to handle such construction, says Martz.

Other smaller subcontractors may not simply have the financial ability, he adds.

Eric Lamb, executive vice president with Redwood City-based DPR Construction Inc., agrees that it is more difficult to find subcontractors to work on larger projects.

Another problem is material availability, Lamb adds.

"Materials, such as steel have longer lead times that can stretch out schedules beyond previous durations," says Lamb. "Fabricated steel lead times are as much as 35 weeks right now on larger projects."

When building large projects in California, general contractors agree that building hospitals and healthcare facilities is one of the most difficult challenges.

DPR Construction has two healthcare projects on California Construction's list. Buildinghealthcare takes time and care to do right, says Lamb.

"Large scale healthcare projects are very complex and take a long time to get designed and permitted in California," Lamb adds. "They tend to be the most difficult of the projects we undertake and require a very specialized team with experience in acute care work."

PCL Construction Services will work on virtually any type of project except healthcare, says Martz.

"The rules and regulations that have been put into place make it difficult to build [hospitals] on time," Martz adds. "We believe such projects should be built on time."

Because healthcare construction can lead to major claims and/or lawsuits, PCL will probably not enter that field anytime soon in California, he says.

"Until the rules change and it's more of a collaborative approach, we will probably stay away," Martz adds.

There are a number of risks involved with building larger projects. One of the main risks is that if a contractor does not deliver a project on time, a number of people are affected, says Mario Wijtman, vice president with XL Construction of Milpitas.

"There is a lot riding on the timely completion of manufacturing facilities," says Wijtman. "The client has created its business plan based on being able to have a validated facility by a set date. They begin hiring campaigns and marketing campaigns accordingly."

Both Lamb and Martz say taking on larger projects means investing more money and time.

"We need to be very disciplined in our processes and meeting commitments to do well on larger projects," says Lamb.
Building larger projects can also result in both negatives and positives for a contractor, says Martz.

"When we built Staples Center, that definitely opened up the eyes of a lot of owners in California," says Martz. "On the negative side, a lot of owners said PCL only does big, big projects. You don't want to be known as a contractor who only does big jobs."

When predicting future trends for larger projects, the contractors say they see the field diverging into different paths.
Lamb with DPR says the way buildings get built will change.

"One trend is to have more technology utilized on larger projects, such as 3D modeling and web-based project management tools," he says.
XL construction believes there will be more work available for biotech projects, says Wijtman.

"As the biotech industry continues to mature there will be higher demand for pilot and manufacturing facilities," he says.

Future trends may not necessarily be predicated on advanced technology, but instead on meeting simple demand, says Martz. And as California continues to grow, the state will need to build large projects simply to produce basic infrastructure, he adds.

Road projects, education and water and wastewater facilities will be needed, he says, and adds that the passage of a series of bonds in November means that money will be available for these things.

"You need more and more transportation projects. You need more freeways," says Martz. "You have a lot more kids. You need schools."

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