Hey folks, Phil Zito here and welcome back. Today, we're going to be talking about how to line out subcontractors. So, up to this point we've talked about performing a sales to operations handoff, we have talked about performing takeoffs and re-estimates, and we've talked about creating submittals and project documents.
So, at this point in a building automation project, I would assume that you would have approved submittals, so everything would be ready to go and it's time to line out our subcontractors. In this post, we're going to discuss how to do that. We're going to talk about what specifically lining out a subcontractor means, the different methods of doing it, the different expectations you can place on subcontractors, how you can develop subcontractors so you have your go to subcontractors, and much, much more.
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Alright, so what does it mean to line out subcontractors? Well, I never really could figure out what the term line out means. If I go to Google and I search “line out subcontractor” or “what does it mean to line out a subcontractor?” I type that in, and I get nothing right? So, I'll give you my interpretation of what lining out a subcontractor means from my experience.
Lining out a subcontractor
Basically, when you are having a subcontractor who is working on your projects, and typically we're talking about electrical, low voltage or extra low voltage subcontractors. What you're lining them out on is you're taking your MEP set, your mechanical, electrical, plumbing set, of construction documents, and you're taking your approved submittals, and you are figuring out how everything is going to be installed. Now you may say to yourself, “But why do we have to do this? Didn't they quote the job? Didn’t they look at it? Didn't they go through a scoping process like we did?”
You know what? Some of your subcontractors, probably did. I'm willing to bet though, most of your subcontractors looked at the basic floor plan of the project, figured out its square footage, and then they figured out, based on the equipment schedule, how many pieces of equipment exist, and based on those two pieces of information, they were able to come up with an estimate for their labor, but they did not come up with a scope.
So, just like your sales-to-operations handoff, you need to have an operations-to-subcontractor handoff. The level of which you do this, the effort you put into this, directly correlates to the success of your projects. Outside of the sales-to-operations handoff, there is nothing else like lining out your subcontractors, in regards to having an impact on the success of your project.
I mean, I'll be honest, this sounds bad, but you can get away with skipping point-to-point, you can get away with functional tests skipping, if you have really good subcontractors and really good submittal processes. What you can't get away from is lining out your subs because if you don't, and you give them zero direction, you're going to get a zero-direction project result.
So how do we do this? How do we line them out? Well, we take our MEP set and we take our submittal set. The first thing we need to do is review where our panel locations are going to go, so, they can get ahead of the curve with the main electrical folks, with the drywalling folks and they can get anything that needs to be stubbed out, anything that needs to be pre-installed before drywall, anything that needs to be pre-installed prior to them laying foundation or floor slabs. We need to get ahead of that.
So, we're going to look at floorplans, figure out our locations for our panels, figure out our locations for our stub-ups, figure out how we're going to be routing our wire in the plenum. You should do this alongside your subcontractors. I know this is time consuming, and I know it's a pain in the butt. Honestly, it's time you probably don't have budgeted in the project. If you do this now, if you take the time to get ahead of it, you're not only going to get a better installed product, but you are also going to avoid substantial delays due to not having things in the right location.
Take the time to figure out okay, we're coming out of the floor here, we're punching through the floor there, we need to have our stub-ups on these walls, we need to have these different things in different areas, we need to have conduit here, we don't need to have conduit there, and avoiding having to core through floors, having to like cut holes in drywall and then re-drywall, it just can get really ugly. So, we're going to figure out our panel locations, stub-ups, cores, all that stuff. Then, once we've done that, we are going to go through our submittal documents and we're going to make sure that our subcontractors understand the electrical details associated with submittals.
I spent some time on this in the previous post, where I said, “Hey, you should have electrical details that correspond to your panel layouts and your controller terminations so that your subs know how to actually terminate things.” What I personally like to do when I line out my subs, is I like to do my electrical details, take them, and go through them with the subcontractor. The nice thing is there's not so many new things. If we really think about it, we have about a little less than two dozen things we can wire up. You have flow meters, relays, sensors, actuators, etc, but at the end of the day, there's only so many ways to wire those up.
So, if you spend time, you bring the subcontractor, to the job site or maybe to your warehouse, and this is only if you haven't worked with the sub before, but you spend about four hours going through and addressing, “This is how we want our relays terminated, this is how we want our actuators terminated, this is how we want our flow meters terminated, etc.” You just spend that little bit of time, especially if it's things like 4 to 20 milliamp with externally source power, things that are going to potentially throw them off or make the subcontractor make mistakes, these are the areas that you need to focus in on and you solve these by working with them.
Now, as I'll talk about a little bit later in the post, you can get more strategic and you can have subcontractor training. You can actually qualify subcontractors to bid on your projects by having them go through a pre-training that is required in order for them to work on your projects. Up to this point, all we've done is we've lined out our subs, we've gotten them familiar with our controls diagrams, and we've run through at a high level with what we're going to do.
Next thing we want to do when we line out our subcontractors is, we want to agree on material delivery and material retention. Oftentimes, as soon as the material shows up on the site, you can bill for the material, even if it's not installed. That's a quick way to make margin because you can defer paying your distributor while you are living off of the margin and cash from the project, especially if you have a paid when paid plus 30 contract. You will pay the sub when you get paid or you'll pay the distributor when you get paid, plus 30 days, so that gives you some time to cash flow.
So, what you can do with that material is you say “Subcontractor, we're going to ship the material in pallets by unit,” like for example, “Air handler 1, that's going to show up on a pallet, air handler 2, that's going to show up on a pallet.” By doing this, you're making it easy for them to not lose the materials and you're making it easy for them to install. They’ll know, All this stuff goes with unit 1, and I know how to install this on unit 1 because I've done the installation process with the building automation contractor prior to receiving this material.”
The next thing is, you want to get very clear on where materials are going to be stored on site, how they are being stored on site, and how are we going to have material management processes. Who signs for the material and who validates that they got the material? Material loss is a very real issue on construction projects, and it happens way more often than people like to admit. We need to have processes in place to avoid this.
You have lined out your subcontractor, you've run through the mechanical plans, you've run through the submittal set, you've run through the details on how to install individual devices, and you've figured out your material management. That's tactical related to a specific project. Now let's back up and be a little more strategic.
What we did, back when I had an operations team, in Dallas, Texas is, we brought in the subcontractors who were executing our projects, the electrical subs, and we put them through a one-day training. They went in and were trained on:
How do we install our resistive?
What are our standards for installation?
What are our standard trees and j-hooks?
How far do should we have j-hooks in between on runs?
How are we going to handle Cat five?
How are we going to handle various wire types?
What color wires do we use?
How do we terminate in our panels?
We got very prescriptive, and we put together a training plan. This is actually something I've been considering doing as a course, creating a Building Automation Installation Basics for Subcontractors course. Let me know if that's a course you would find interest in. Feel free to just comment below, message us on LinkedIn, or just hit me up directly.
But this is something we did, and it was really effective. It really helped vet the subcontractors, the ones who knew how to do the installs. We really made sure that they knew what they were doing. We made sure that they were prepared, and then, when they wanted to go bid, they had to have been through this training. I think if I remember correctly, we did the training twice a year in the spring and fall and that really helped. That helped substantially reduce our cost per point, that reduced our subcontracted cost, because these people knew what was expected of us, they could more accurately bid their labor because they understood, and they also got free training out of it.
So, I mean, I'm not going to pretend that they weren't using the skills that they learned from our training at other companies’ projects, I'm certain that they took what they learned from us and used it with other companies, but you know what, they used it with us as well and that made our installations better. It made things easier for us. At the end of the day, that's really important, because a lot of you are short on technical talent, you don't have the technical labor you need in order to execute all your tasks, and one of the ways you can really mitigate that is by making sure your subcontractors are able to properly install.
Subcontractors -> Point-to-point checkout
Now, let's talk about the elephant in the room. People ask me, “Where do I think the industry is going? Where could it go?” One area I think it could go is, subcontractors doing point-to-point checkout. So, this is really easy if you do self-install, if you do self-execution of installation, but a lot of big companies do not do self-execution of installation. The risk associated with that, and just the cost, benefit, and pay off, it's just really not there to be honest.
So, a lot of folks use subcontractors, but what if they were able to use subcontractors not just to do install, but also to do point-to-point check out potentially to do functional test? I don't see subcontractors doing functional tests because of the mechanical knowledge requirements, but point-to-point check out, I could totally see that happening. That's just to check the box, “Does it meet this or does it not?” Then, you could have a technician that comes in after and resolves all the deficiencies.
This would just be another level of training. You would just have to get them the tools, enable the electrical subs to log into the controllers, and enable them to be able to do basic point-to-point checkout.
- When I command this on, does it turn on?
- When I command it off, does it turn off?
- Does the temperature change? Is it accurate based on my meter versus what the temperature says?
These are all things that you can have these subcontractors do, and it's really where I think the future of subcontracted work is. I think that is a very important value add for electrical subs to do and simply add that capability to their skill set. That's something that they don't have to necessarily know how to do by themselves, they can be taught that. So, I don't expect people on the electrical subside to be randomly figuring it out on jobsite, as that is definitely something where you have to be trained. I do think it would behoove you to consider training your subcontractors to do point-to-point checkout.
So, to recap, up to this point, we've discussed:
- Lining out our subcontractors, the importance of lining them out, and how we approach that; electrical details and reviewing, and also doing some mockups of installation with them in your warehouse.
- With your electrical subs, how to manage materials, how to manage delivery, and retainage of materials, as well as Chain of Custody when it comes to materials; how that impacts billing, and your ability to generate profit from the project.
- Setting up a semiannual training program for your subcontractors to get them up to speed.
- Using subcontractors to do point-to-point checkout.
A lot of stuff for you to approach with your operations team. Maybe in a team meeting, discuss this, think through your processes. How can you improve them? Do you have a checklist for these items? If you don't, I encourage you to create that checklist. We’ve already gone and created that for you in our BAS Installation & Configuration course.
So that being said, thanks so much for being here. In next post, we're going to discuss how to schedule out labor and common tasks. That might be a one-part post, but honestly, that might be a two-part post. Part of me feels like it's going to be a pretty quick post. The other part of me feels like it's going to be a pretty long post. Keep an eye out for it!
Thanks so much for being here. I hope you enjoyed the post and I look forward to your comments and engagement on social media. Thanks a ton. Take care.