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Healthcare construction 2021

Insight into 2021 healthcare construction issues

We recently talked about healthcare construction, infrastructure, and education on the High Reliability Podcast.

We welcomed Jonathan Hunley to the air waves; he is System Director of Facilities Infrastructure for Bon Secours Mercy Health. Jonathan is responsible for the oversight and management of the Bon Secours Mercy Health Non-Threshold Infrastructure Program. He has oversight for 35 hospitals in 4 states, totaling more than 15m square feet.

With projects ongoing in multiple hospitals in multiple states, Jonathan provided his perspective into the front lines of healthcare construction and some of the challenges today’s market poses. We covered many areas, including lead times, budgets, labor, pricing, supply and commodities, and prefabrication.

Jonathan’s thoughts are below.

2021 healthcare construction impacts

1) Paint impacts. Companies that manufacture paint aren’t receiving their full orders of raw materials, creating downstream impacts in the availability of paint and paint buckets. There are several reasons for the shortage, including Covid, supply chain issues, and February winter storms in Texas.

2) TPO roof availability. Lead times are up to as many as 30 weeks. It will remain an issue for the year.

3) Chip issues. Chip plant manufacturing left the United States and moved overseas; then, Covid stopped South East Asian importing. Now, there is a shortage in the States (which is also impacting automobiles). Electrical gear, controls, and air handlers, among many, are affected, and schedules lengthened.

4) Supply and demand. Supply is down, demand is up, and costs are going through the roof. The typical environment would be 6 to 7% escalation for a multi-year project. Jonathan says now they are looking at 12 to 15%.

5) Steel. Big steel plants left the United States for overseas and repetitive Covid shutdowns last year shut down plants. Starting them back up is a process that doesn’t occur immediately.

Metal production has been impacted. Metal studs, steel bar joists, decking, and equipment such as generators, air handlers, and switchgear have seen lead times push out. For example, emergency power systems can be a 35 to 40-week lead, depending on the manufacturer. A year ago, it was 18 weeks.

6) Changing mindset. Jonathan and his teams look much further ahead than they have in the past, which has required changing established habits and thought processes. For example, gear not needed for more than a year is released early to ensure it is received on time and schedule. Of course, it’s an “inherent piece of risk” to release equipment before design completion; this risk has to be weighed in a manner not previously done.

Jonathan says that because the process will be at least 6 months longer, you need to quantify the impact in dollars and cents.

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