How To Overcome Procurement Challenges In Healthcare Construction

The healthcare construction supply chain has yet to fully recover from the disruption of the pandemic and we continue to see historically long delays for key products and equipment. For example, the 12- to 16-week lead time on electrical switchgear has swelled to 50 weeks, while the cost of these components has increased up to 50 percent over the past three years.

Against this backdrop, there’s more planning, forecasting, and creativity required than ever before. Construction managers, working in collaboration with clients and other project partners, must modify their strategies to complete the procurement process as efficiently and economically as possible.

Engage early with healthcare clients

Procurement for healthcare projects traditionally began at the end of the design process to navigate changing programming needs. Now, in this long-lead-time environment, early engagement between the design and construction teams has emerged as an essential strategy. In order for the construction manager to build out competitive and flexible pricing and provide comprehensive budgeting, ownership must commit to bringing teams on earlier than they are accustomed to.

As lead times vary for different materials and equipment, construction managers can better prioritize by tracking this information. Quality construction management staff will uncover product details during the bidding process, at industry conferences and through other means of networking. Internal databases allow teams to share knowledge internally of lead times, vendor “hiccups” and other developments throughout the industry. Curtain wall systems, switchgear, fuses, generators, bus ducts, and steel are all experiencing longer lead times, due in part to raw material and labor shortages. While we are beginning to see normalization for items including controllers, valves, and water pumps, more complex, custom-built equipment has yet to reach pre-pandemic levels.

Pre-purchase construction materials when possible

The pre-purchase approach is relatively simple but requires a modified procurement strategy from the ownership-design-construction team. First, the team reviews the conceptual design to identify project highlights or requirements, such as façade or key infrastructure elements. The construction manager will then solicit procurement information such as pricing, performance criteria, minimum information required to accurately purchase the equipment/material and specialized suppliers and contractors with relevant expertise. Finally, the construction manager will outline performance specifications, identify conceptual layouts of the finished product  and create bid packages, all while keeping track of the budget and anticipating fabrication timelines.

In a best-case scenario, the design of a healthcare project will be far enough along for the construction manager to identify specialized equipment needs and begin pre-purchasing. When there is insufficient design information, a design-assist partnership allows the vendor to work with the team to expedite the process.  This may include creation of fabrication drawings that account for existing conditions. As performance and operation requirements come in from the design team, products and services can be right-sized earlier in the process than a traditional “rip and read” approach.

Lendlease used the pre-purchase approach in our role as construction manager on a 200,000-square-foot outpatient complex in Manhattan. We identified items  during the schematic design phase—including curtain wall components, air handling units, air-source heat pumps and electrical switchgear and generators—with acceptable lead times, making them candidates for pre-purchasing. This ensured acquisition before we could no longer emplace them with the crane. We shared the specs, pricing, and schedule analysis with our client and began the pre-purchasing process, allowing the rest of the design to progress.

Pre-purchasing is also a powerful tool in combination with prefabricated elements, including machine room equipment skids, headwall systems, interior wall partitions and MEP risers. This process can offer speed, cleanliness, continuity of operations, and other benefits to healthcare construction projects.

Importance of construction managers on healthcare projects

By implementing these measures, the industry can creatively and effectively manage longer lead times. Early involvement from construction management professionals, using all the tools at their disposal to drive solutions, are key to streamlining this process.

Some of the most critical services healthcare construction managers provide are maintaining relationships with suppliers and vendors, as well as guiding and educating clients on fast-changing market conditions.

As we help clients embrace new thought processes and approaches, we’re able to successfully work together to overcome current procurement challenges and push projects across the finish line.

Brian Marman is project executive, New York construction, at Lendlease (New York), and can be reached at brian.marman@lendlease.com.