When teams coordinate early with manufacturers and align foundations, utilities and long-lead systems around a pre-engineered building package, they often cut months from traditional timelines and reduce schedule risk from weather, trade stacking and material delays. 

WHY PEMBS ACCELERATE CONSTRUCTION

PEMBs use a systems approach that standardizes many elements that typically slow projects the most, including:

• Structural steel detailing
• Connection design
• Secondary framing
• Building envelope interfaces

Manufacturers design and engineer frames, purlins, girts, cladding and bracing as an integrated package. Components arrive on site ready for assembly, so contractors don’t have to field-fit them. That approach eliminates a large portion of requests for information, rework and sequencing conflicts that often appear when separate teams handle structural, envelope and miscellaneous steel scopes.

The model also aligns with the realities of modern construction labor. Crews assemble prefabricated frames and panel systems with repeatable, well-documented erection procedures, which help contractors ramp up new team members quickly while maintaining productivity. Because pre-engineered metal buildings rely on bolted connections instead of extensive field welding, teams reduce specialized labor needs and compress critical erection durations.

STREAMLINED DESIGN AND ENGINEERNG

Coordinated Structural Design Up Front

Pre-engineered metal building projects shift design effort from the field into the front end of the job, where it produces the greatest schedule benefit. During the design phase, the building manufacturer and design team coordinate structural loads, bracing locations, deflection criteria and interface points with slabs, mezzanines, mechanical, electrical and plumbing systems, and architectural features. When the team resolves these issues before fabrication, the contractor avoids costly detailing changes and field modifications that can stall erection.

Property and business owners increasingly treat PEMBs as mainstream solutions for low-rise nonresidential work, so guidance and requirements exist to support predictable delivery. For example, state-level pre-engineered metal building guidelines in the public sector require complete sealed documents, clear load tables and explicit code compliance criteria, which provide a solid framework for permitting and plan review. The clarity reduces back-and-forth during approvals and keeps design milestones aligned with construction and start dates.

Standardization That Protects the Schedule

PEMB systems benefit from repeatable details that manufacturers have refined across many projects and climates. Standardized frame geometries, panel profiles and connection details streamline engineering checks and shop drawing production, which shortens the path from schematic design to released-for-fabrication documents. In practice, that means contractors receive issued drawings earlier and can lock in procurement and erection plans with more confidence.

Because PEMB suppliers build to established specifications and quality programs, contractors also gain schedule protection on the back end of the project. Consistent tolerances and predictable connection behavior reduce time spent resolving misalignments, flange conflicts or panel fit issues during erection. This results in fewer unscheduled downtime days and a smoother critical path for follow-on trades such as interior build-out, process equipment installation and site improvements.

OFFSITE FABRICATION AND LOGISTICS ADVANTAGES

Pre-engineered metal building components come from controlled factory environments instead of jobsites, which removes weather from much of the structural schedule. Fabricators cut, drill and weld members indoors with automated equipment and quality inspections, so the contractor receives ready-to-assemble bundles instead of raw shapes. This off-site manufacturing model reduces fabrication variability and allows parallel progress, since the building goes into production while sitework and the foundations are in the works.

Logistics planning becomes more straightforward. Manufacturers ship frames, secondary members and panels in sequenced loads that match erection order, which minimizes double-handling and laydown congestion on tight sites. With fewer SKUs and a higher degree of prefabrication, contractors spend less time chasing missing pieces or improvising substitutions that can trigger change orders and schedule slips.

FASTER, MORE PREDICTABLE ERECTION IN THE FIELD

Erection speed remains one of the most visible advantages of pre-engineered metal buildings for contractors under schedule pressure. Because primary frames, roof structures and wall systems arrive as coordinated packages, crews can move quickly from first columns to a dried-in shell.

Weather sensitivity decreases once the building reaches that milestone, so the project team removes a major external risk from the schedule.

Repeatable erection sequences also support more accurate planning. Critical path schedules for PEMB projects often show compressed durations for structural steel compared to conventional methods, especially on low-rise commercial, industrial, athletic and agricultural buildings.

Less in-field layout, fewer complex connections and minimized welding enable smaller crews to maintain high productivity, which proves especially valuable in regions where specialty labor remains tight.

LABOR, SAFETY AND SITE COORDINATION BENEFITS

PEMB projects often require fewer total onsite labor hours than comparable conventional builds. The fewer the hours, the shorter the overall calendar time and the reduced exposure to site risks. Prepunched members and factory-fitted components limit cutting and drilling at height, while bolted assemblies reduce hot work. Those characteristics support safer workflows and more predictable productivity rates, which help contractors hold critical milestones even when conditions change.

Simplified scopes also ease coordination with other trades. Clear building geometry, known frame lines and predictable roof and wall assemblies give MEP and specialty contractors a solid foundation for routing and support planning.

When teams model penetrations, support points and hanging loads against pre-engineered metal building design early, they avoid many of the clashes that typically require late-stage rework.

APPLICATIONS WHERE SCHEDULE GAINS STAND OUT

Contractors see the strongest schedule impact from PEMBs on projects where simple structural grids and large clear spans take priority. Distribution centers, light manufacturing, storage facilities, athletic complexes and agricultural buildings often fit this profile and can move from foundation to occupancy significantly faster with pre-engineered systems than with traditional framing.

In sectors that depend on fast deployment, such as logistics, cold storage or year-round training facilities, compressed schedules translate directly into earlier revenue or operational readiness.

Specialized facilities, including metal equestrian buildings, also benefit from the repeatable, open-span structures that pre-engineered metal buildings deliver. Designers can integrate a steel shell, so contractors still meet sector-specific requirements while maintaining aggressive timelines.

BRINGING SCHEDULE CERTAINTY TO THE CRITICAL PATH

As owners push for shorter delivery windows and more predictable openings, contractors face increasing pressure to control variables that traditionally sit outside their direct influence. Pre-engineered metal buildings address that challenge by packaging key structural and envelope decisions into a coordinated, engineered system that moves much of the risk away from the jobsite and into controlled design and fabrication environments.

When project teams engage PEMB suppliers early, align permitting and foundations with the manufacturing schedule and plan erection logistics around sequenced deliveries, they create a clearer critical path and more reliable completion dates for commercial and industrial projects.

SEE ALSO: EVOLUTIONARY THEORY: PREFABRICATION’S TRANSFORMATION OF THE INDUSTRY

The post How Pre-Engineered Metal Buildings Can Help Contractors Shorten Project Timelines first appeared on Construction Executive.

But beyond recognizing exceptional work, the data behind these projects may also offer a roadmap for delivering better outcomes across the broader construction industry.

Can the performance metrics from award-winning projects help owners, designers and contractors make decisions that lead to safer jobsites, stronger budget performance and more predictable schedules? According to ABC’s growing EIC data set, the answer appears to be yes.

Over the past several years, ABC has enhanced and automated the EIC application process, enabling the organization to capture and analyze detailed project-performance data across hundreds of projects nationwide. The findings reveal several clear trends among top-performing projects: value-based procurement dominated over low bid selection; preconstruction services consistently improved schedule reliability; and contractors investing in technology and early collaboration often delivered stronger safety and budget outcomes.

The 2025 EIC portfolio—recognized at ABC Convention 2026 in Salt Lake City—provides one of the clearest pictures yet of what project excellence looks like in practice.

The portfolio includes 341 national-level projects totaling $15.09 billion in construction value, representing 38 million work hours, 48 million square feet of construction and 3.6 million acres of developed land. The projects span every major market sector, including data centers, healthcare, multifamily, petrochemical, institutional, renewable energy and aviation.

Collectively, the projects achieved a total recordable incident rate of 0.68—70% below the 2025 industry average TRIR of 2.3. Ninety-eight percent finished within the final contract budget despite collectively overcoming 2,647 days of delays. Across the portfolio, contractors deployed a wide range of technologies, including robotics, telematics, drones, virtual reality and artificial intelligence.

The data also challenges several longstanding assumptions about high-performing construction projects. While many EIC projects exceed $100 million in value, nearly 200 are valued below $20 million, suggesting the practices driving excellence are not limited by project size. The portfolio also demonstrates that merit shop contractors are successfully delivering large-scale, technically complex projects while achieving industry-leading safety performance.

Taken together, the portfolio significantly outperformed broader industry benchmarks in safety, budget reliability and schedule management—raising an important question: What were these projects doing differently?

The data points to several leading indicators that consistently show up in award-winning construction.

THE VALUE OF EARLY ENGAGEMENT

Project success begins with procurement strategy and the services purchased during project development.

All procurement methods were represented across both general and specialty contracting. However, 60% of projects were procured primarily on value- or qualification-based selection, while 40% were procured primarily on price. Of the price-based projects, half were awarded through select bidding processes involving prequalified contractors.

While much of the broader construction market still relies heavily on price-driven procurement, EIC projects skewed strongly toward qualification- and value-based selection (encompassing both the “value-based” and “solely negotiated” designations in the preceding and above infographics).

Every market sector selected contractors primarily on qualification at least 50% of the time. The high-tech/data center sector and renewable energy sector relied most heavily on qualification-based procurement, at 74% and 75%, respectively.

“Owners are increasingly seeing that selecting a construction partner based on best value, not just low price, leads to savings overall,” says Buddy Henley, president of Gaithersburg, Maryland-based Henley Construction. “Having a trusted partner engaged during design allows risks to be identified earlier and problems to be solved before they become costly. That early collaboration improves cost certainty, supports smoother schedules and significantly reduces surprises in the field.”

Government projects relied most heavily on open hard bid or price-based procurement, using that method 27% of the time. By contrast, the high-tech/data center market procured just 15% of projects through open hard bid.

Among general contractors, 74% were selected primarily on a qualification basis. Nearly one-quarter of those projects were solely negotiated, and those projects represented the highest average contract value at approximately $101 million.

“The most successful projects are the ones that bring the design team and construction manager together at the very beginning. Early collaboration improves constructability, clarifies scopes for the trades, and reduces gaps that create risk,” Henley says. “That early alignment leads to better budget predictability and stronger trade relationships, which directly supports safer and more successful projects.

When owners focus on value-based procurement instead of low bid alone, the outcomes are consistently stronger. Choosing teams based on experience, collaboration and the value they bring creates real partnership across the project. We see better cost control, higher-quality results and safer jobsites when the right team is selected from the start.”

Lorri Grayson, partner and founder of Rehoboth, Delaware-based GGA Construction, echoes Henley’s sentiments. “Early involvement creates an atmosphere of strong collaboration among project stakeholders. It enables the project team to define the scope of work, identify long lead items and, most importantly, control costs from the earliest stages,” she says.

“It also helps develop a bid strategy that responds to current market conditions. For example, early involvement on our current project, The Continental, located at the University of Delaware, saved the owner over $5 million on a $90-million project,” Grayson says. “Early coordination allowed us to identify critical procurement needs and minimize budget risks, resulting in a more efficient and cost-effective process.”

That emphasis on early collaboration and value-driven procurement was reflected throughout the EIC portfolio data. Just 18% of general contractor projects were procured through open hard bid, and those projects represented the lowest average contract value at approximately $15 million.

The owner perspective also supports early contractor involvement.

“Successful projects are built on strong partnerships rooted in trust, transparency and psychological safety—where titles are set aside and teams feel comfortable speaking openly to solve problems together,” says Spencer Moore, vice president and chief facilities officer for globally renowned cancer center UT MD Anderson. “Early collaboration creates that foundation, allowing teams to address challenges with humility and ownership before moving toward solutions.”

That same emphasis on qualifications, collaboration and long-term value also appeared in how specialty contractors were selected across the EIC portfolio. Specialty contractors were procured primarily on qualification 46% of the time, while 31% were selected through select bid and 24% through open hard bid. Contract value did not appear to significantly influence procurement methodology for specialty trades.

One of the more surprising findings in the data was that procurement strategy did not necessarily dictate contract structure. Regardless of how projects were awarded—whether through qualification-based selection, negotiated work or open bid—top-performing projects utilized virtually every form of contracting across the portfolio.

One notable distinction emerged between general and specialty contractors: Lump-sum contracting overwhelmingly dominated among specialty contractors regardless of procurement method.

THE PRECON ADVANTAGE

Across all market sectors, preconstruction services were provided on 74% of projects—well above what many contractors would consider typical across the broader marketplace. General contractors delivered preconstruction services on 73% of projects, while specialty contractors did so on 75%.

“Early involvement allows specialty contractors to contribute practical, experience-based insight before key decisions are locked in. When we’re engaged during preconstruction, we can identify coordination challenges early, help refine scope and sequencing, and offer practical yet innovative solutions to tough problems–reducing rework,” says Matt Terry, president of Dallas-based mechanical contractor TDIndustries. “That upfront collaboration directly improves schedule reliability, cost certainty and overall project performance.”

Steve Grauer, executive vice president for Hensel Phelps, agrees. “In my experience, the best outcomes to project success on complex projects are rooted in project teams that exemplify a high level of trust, practice transparency, have accountability, truly collaborate, and have a high level of executive commitment and engagement in the project and where there is open communication by all the stakeholders,” he says. “These traits are best embedded when project teams have some type of early engagement, giving them an opportunity to work collaboratively to resolve early challenges and work to build personal relationships prior to the start of construction.”

Notably, no preconstruction services were provided on 51% of projects procured through open hard bid.

While preconstruction services were utilized across all procurement methods and contract structures, the combination of open hard bid procurement and lump-sum contracting most frequently resulted in projects without preconstruction involvement.

Twenty-six percent of all EIC projects did not utilize preconstruction services, and 75% of those projects followed the open hard bid/lump-sum model.

FROM PLANNING TO PERFORMANCE

At a time when the construction industry continues to battle cost escalation, labor shortages and schedule disruption, EIC projects significantly outperformed broader industry benchmarks in safety, budget reliability and schedule management. The EIC portfolio overcame more than seven years of cumulative delays, delivering 98% of projects within budget and achieving a TRIR of 0.68.

The next question? Whether procurement methods, contract structures or preconstruction services contributed to those outcomes.

When comparing planned project duration to actual construction duration—including delay recovery—projects utilizing preconstruction services demonstrated stronger performance.

Projects with preconstruction services showed slightly better schedule outcomes overall. Fifty-two percent achieved shorter actual durations compared to projects without preconstruction services.

More importantly, projects with contractor involvement during preconstruction overcame more delay days and exhibited lower schedule variation.

Projects without preconstruction services experienced a 14% variance between planned and actual construction duration, including delays.

The same trend appeared across contract structures. Lump-sum contracts—which included preconstruction services on only 47% of projects—experienced an 11% variance between planned and actual duration. Construction manager-at-risk projects, where preconstruction services were included on 96% of projects, experienced only a 1% variance.

The trend became even more pronounced among general contractors. Design-build and CMAR delivery methods significantly reduced schedule duration variance compared to lump-sum and time-and-materials contracts. This aligns with the fact that design-build and CMAR projects incorporated preconstruction services on 90% and 96% of projects, respectively.

“The biggest gains we see come under the construction-manager-at-risk approach. Early cost validation during design helps identify savings without sacrificing quality,” explains Henley. “Clarifying scopes and resolving issues early reduces financial risk and improves safety across all trade partners.”

Among specialty contractors, preconstruction services also reduced schedule variation regardless of procurement method or contract type. Projects without preconstruction services experienced a 25% schedule variance. When specialty contractors participated in preconstruction, that variance was reduced by at least half.

Although 98% of EIC projects finished within the customer’s final approved budget, variation still existed between original and final contract values through approved change orders.

Projects utilizing CMAR and design-build delivery methods experienced lower budget variation than lump-sum and time-and-materials contracts, suggesting fewer scope changes and change orders over the course of construction.

No significant correlation emerged between procurement method, contract type and safety performance, with one exception: time-and-materials projects recorded an exceptionally low TRIR of 0.04.

Time-and-materials contracting was most common in industrial, infrastructure and renewable energy markets.

CONSTRUCTION TECHNOLOGY

Technology adoption continues to expand across the construction industry.

• The four most commonly used technologies during the past three years remained consistent:
• Project-management platforms
• Safety workflow technologies
• Drones
• Jobsite security technologies

TECHNOLOGY MOVES TO THE CENTER

Just three years ago, artificial intelligence was virtually absent from EIC projects. Today, 18% of projects report using AI technologies.

Importantly, no major technology category has declined in usage over the past three years, suggesting contractors continue to realize measurable return on investment.

Technology deployment also spanned all contract types and project sizes.

Construction technologies were utilized across projects of every size category. Data indicates that technology deployment frequency remains consistent regardless of project dollar value.

“During the past three years, we have experienced unprecedented growth which we attribute to two key factors,” says Rob Griffith, chief operating officer of Gaylor Electric. “First, we are collaborating with our customers earlier in the precon process. The second—related—factor is our commitment to utilizing innovations that increase efficiency and safety for our workforce and the speed at which we deliver reliable outcomes on projects.”

Projects utilizing safety technologies consistently reported lower TRIR rates than projects without those technologies.

The trend suggests that investments in safety-focused technology are contributing to improved jobsite performance.

“Technologies like BIM, VDC, field-management platforms and real-time reporting help teams communicate more effectively and make informed decisions faster,” Terry says. “Our longstanding investments in these tools give our teams a distinct advantage when delivering high-quality results. This amounts to better productivity, safer jobsites and more predictable outcomes for owners.”

WHAT THE INDUSTRY CAN LEARN

Companies qualifying for EIC awards should take pride in their performance. The data confirms that ABC’s EIC-awarded projects significantly outperform industry averages across safety, budget and schedule metrics.

• The analysis also reinforces several broader conclusions:
• Preconstruction services deliver measurable value
• Technology adoption is accelerating and becoming a key differentiator
• Safety leadership remains foundational to project excellence
• High-performing contractors consistently deliver quality projects regardless of procurement method or contract structure

The data also provides insights worth sharing broadly across the industry. Regardless of project size, market sector or delivery method, the conditions for excellence can be created through intentional planning, collaboration, innovation and leadership.

SEE ALSO: ABC UNVEILS AWARD-WINNING CONSTRUCTION PROJECTS, NATIONAL CONTRACTOR OF THE YEAR, SAFETY AND DIVERSITY EXCELLENCE IN THE INDUSTRY

The post Inside Construction’s Highest-Performing Projects first appeared on Construction Executive.

Spending was down on a monthly basis in 9 of the 16 nonresidential subcategories. Both public and private nonresidential spending were down 0.2% in March.

“Nonresidential construction spending contracted yet again in March,” said ABC Chief Economist Anirban Basu. “While a large portion of the ongoing decline is due to steadily falling manufacturing-related construction activity, weakness is becoming more widespread. Both public and private sector activity fell in March, and the latter is now down more than 2% on a year-over-year basis. With the exception of the ongoing boom in data center construction (+34.3% year over year), there are few sources of momentum. Despite this ongoing weakness, however, contractors remain optimistic about the outlook, according to ABC’s Construction Confidence Index.”

SEE ALSO: CONSTRUCTION HIRING STILL EXCEPTIONALLY SLOW IN MARCH

The post Nonresidential Construction Spending Down Again in March first appeared on Construction Executive.

Strategic fabrication identifies the work that can be repeated from project to project. By standardizing those portions of production, contractors reduce waste and variation without limiting the craftsmanship required for custom systems. This balance allows teams to optimize labor, maintain quality and meet schedule targets while still supporting architecturally unique designs.

Understanding Strategic Prefabrication

Strategic fabrication centers on making smart operational choices about where standardization adds value. The goal is not uniformity across the entire project. Instead, it focuses on the sections of work that benefit from consistency, predictable sequencing and material efficiency. When those elements are handled in a controlled shop environment, field crews can focus on high-skill installation tasks that require experience and judgment.

This matters because construction sites are unpredictable. Weather shifts, other trades overlap, materials arrive at irregular intervals and jobsite congestion affects the pace of work. These unpredictable conditions create what many refer to as a “wicked” environment. By contrast, fabrication shops operate in a “kind” environment. They are climate-controlled, ergonomically arranged and designed to remove obstacles that slow down field production. Mechanical aids reduce physical strain, workers stay safer and teams can repeat the same high-quality results every time.

A strong fabrication operation is built on three essential components: workflow design and facility layout, labor and skills optimization, and digital integration.

Workflow Design and Facility Layout

Efficient workflows are the backbone of a successful shop. Production sequences must be designed with intent. Material flows need to be direct and predictable. Workstations should be arranged so that crews can move from one task to the next without bottlenecks or unnecessary backtracking. When a layout reduces motion and congestion, productivity rises while fatigue and risk of injury decline.

Thoughtfully designed workstations also allow teams to focus on precision. Proper lighting, clear work surfaces and logical material staging help eliminate errors and rework. These are advantages that are difficult to achieve consistently on active jobsites.

Labor and Skills Optimization

Mechanized tools improve consistency and broaden who can participate in shop work. Instead of relying on brute strength to lift and position materials, crews use cranes, lifts, adjustable tables and other mechanical devices that allow workers of all sizes and backgrounds to succeed. This reduces physical strain, supports workforce longevity and opens the door for people who may not have previously considered a trade career.

Women, in particular, have become highly effective fab-shop welders. Their precision, focus and attention to detail translate exceptionally well to welding, brazing and assembly tasks that reward consistency over strength. When paired with standardized shop workflows, these traits help drive high-quality output.

Digital Integration

Digital tracking software ties the entire operation together. Platforms that monitor material, labor hours and progress help teams make informed decisions with real-time information. They allow project managers to anticipate bottlenecks, track the pace of production and maintain accurate installation forecasts.

One of the most important financial advantages is the ability to bill for partial completion of assemblies before they reach the jobsite. Contractors operating on tight credit lines gain a more predictable cash-flow model because progress can be verified through digital records.

“By leveraging real-time, model-based data on assembly progress and labor completion, specialty contractors can confidently substantiate billing well ahead of physical installation,” says David Wenger, senior solutions engineer at Stratus. “Because this progress is visually represented within the model, it creates a level of transparency that strengthens alignment and trust between VDC, the shop, the field and, ultimately, the general contractor and owner.”

Digital integration turns the fabrication shop into a data-driven production center rather than a collection.

Addressing the Skilled-Labor Shortage

The industrywide labor shortage is intensifying, and strategic fabrication offers a practical response. By replacing physically demanding field work with controlled, mechanized shop tasks, a larger portion of the workforce becomes capable of contributing. Workers who may not feel comfortable performing heavy overhead installation can excel in a stable, structured environment that prioritizes accuracy over strength.

This does not eliminate the need for skilled craft professionals. Instead, it allows those experienced workers to dedicate more time to complex tasks, systems coordination and installation details that require their expertise. Routine components can be produced by broader segments of the workforce, supported by digital instructions and mechanical aids.

“Transitioning tasks into a controlled fabrication shop allows our industry to engage people who may not take on demanding field work, while the introduction of new technologies makes these roles even more appealing to younger talent,” says Wenger. “It’s a practical way to grow the workforce and mitigate industrywide labor shortages at the same time.”

The result is a more sustainable labor strategy that improves retention and expands recruiting pipelines.

Overcoming Labor and Workflow Challenges

Many MEP contractors face the same scenario: a mid-sized team responsible for supplying and installing mechanical piping for a multistory commercial building. When performed entirely on site, this task is labor-intensive and vulnerable to delays. Crews must lift heavy pipe into position, work around other trades and adjust to weather and shifting schedules. Fatigue affects judgment and accuracy, and timelines often stretch beyond the planned duration.

Through strategic fabrication, much of that work shifts indoors. Digital tools track the material, labor and completion status of each assembly. Components are built with precise measurements under consistent conditions. Mechanical lifts and ergonomic tables reduce physical strain, allowing crews to work longer with fewer interruptions.

Because much of the work occurs simultaneously across several stations, output increases even with a smaller workforce. Contractors can invoice earlier through digital progress tracking, easing cash-flow pressure on businesses that rely on credit to cover project expenses.

This shift leads to four key results:

• Higher output: Multiple assemblies can be produced at once without the constraints of jobsite scheduling.
• Improved safety: Mechanical aids reduce the risk of injuries tied to heavy lifting and repetitive strain.
• A broader workforce: Tasks become accessible to more workers, creating opportunities for underrepresented groups.
• Stronger cash flow: Early billing based on verified progress stabilizes finances and reduces reliance on short-term credit.

“Structured workflows and digital tracking continue to reduce errors, accelerate assembly and give contractors real-time insight into material and labor costs, which is essential for managing cash flow and maintaining schedule,” says Wenger. “Over time, this tracking builds a valuable historical dataset that strengthens the ability to forecast future requirements and improve long-term planning.”

Future-Proofing Fabrication Operations

Contractors who adopt strategic fabrication position their businesses for long-term stability. A well-run shop allows companies to bid more confidently, deliver with greater predictability and avoid the costly setbacks tied to field delays. Standardization increases output while maintaining quality. Digital platforms provide insight into productivity, labor usage and scheduling risks, helping leaders plan more effectively.

These practices provide several advantages:

• Consistent quality supported by repeatable workflows
• Predictable schedules with fewer disruptions
• More efficient labor usage that focuses skilled workers on value-added tasks
• Data-driven forecasting for materials, manpower and production timelines
• Smoother collaboration between VDC, shop teams and field crews

Digital tools also play an essential role in financial stability. Progress verification allows contractors to invoice portions of work earlier, reduce credit dependence and maintain healthier cash flow. Transparency created by digital records helps avoid disputes with general contractors and owners while reinforcing trust.

By combining these operational, labor and digital elements, fabrication shops can reach manufacturing-level performance. The result is a more capable workforce, more controlled projects and more stable margins, even under challenging market conditions.

Strategic fabrication is not simply relocating tasks indoors. It is the intentional design of a production system that uses repeatability, mechanical assistance and digital visibility to improve efficiency, quality and financial performance. When contractors design workflows around what can be repeated, use equipment that reduces strain and adopt platforms that track progress in real time, they create a more productive and resilient operation.

This approach also expands the workforce pool, helps address the skilled-labor shortage and reduces exposure to unpredictable field conditions. Contractors who adopt these principles can deliver work with greater consistency, support their teams with safer and more predictable environments, and maintain the financial stability needed to grow.

By combining controlled shop operations with strategic planning and digital integration, MEP contractors can build fabrication shops that operate like high-performance manufacturing facilities. The result is higher quality, fewer delays and a more satisfied workforce ready to meet the demands of today’s projects.

SEE ALSO: PRE-FABULOUS: COST AND ENVIRONMENTAL SAVINGS WITH PREFABRICATION

The post Fabrication Shops Should Be Operating Like High-Performance Manufacturers first appeared on Construction Executive.

The results are published in the 2025 State of MEP Annual Report, and while the full findings span fabrication trends, automation adoption, software maturity, metrics and KPIs, and workforce dynamics, three themes stand out clearly:

The Bigs Are Getting Bigger, and the Gap Is Widening 

This is the trend that should make every mid-market contractor pay attention. As mega projects such as data centers, semiconductor fabs, healthcare campuses and energy plants make up an increasing share of the construction pipeline, the large multi-trade MEP firms capable of taking on this work are disproportionately benefiting. 

The data backs it up. The survey found that contractors above $250M in revenue reported a median revenue increase of +14.5%, ten percentage points above the overall industry median of +4.5%. Firms with 500+ employees also showed +14.5% headcount growth, while smaller firms held flat. And it’s not just revenue—larger companies had larger fabrication footprints, higher prefabrication rates and more mature digital workflows than their smaller counterparts. 

What’s creating this gap? Scale, certainly. But it’s more than that. The large firms have invested in planning systems, BIM infrastructure and fabrication capacity that let them take on complex, multi-system scopes. 

They’ve built the preconstruction, fabrication and field execution muscles that mega projects demand. And, increasingly, owners are consolidating MEP scopes under fewer, more capable contractors by rewarding the firms that can self-perform across trades with connected workflows from design through installation. 

For contractors in the $50–250M range, the takeaway isn’t to panic, it’s to recognize that the competitive bar is moving. The firms pulling ahead aren’t winning because they’re bigger. They’re winning because they operate like connected enterprises, not collections of disconnected departments. That’s a gap any contractor can close with the right strategy. 

Prefabrication Has Become a Growth Strategy, Not Just a Production Tactic 

For years, prefabrication has been talked about as a way to save time on the jobsite. And that’s true, but the 2025 data tells a bigger story. Prefab is increasingly being used as a strategic hedge against the two biggest risks in the industry: material cost volatility and labor scarcity. 

Start with materials. The survey found that the median material cost increase over the past year was +8%—outpacing labor inflation, which came in at +2.5% at the median.

For the first time, uncertainty in material pricing has overtaken shortages as the industry’s primary cost risk, driven by tariffs, freight variability and supply inconsistencies. Prefabrication helps contractors control that variability by enabling earlier, more predictable procurement tied directly to digital models, a tightly controlled waste environment, optimized use of automating tooling and coordinated production schedules. 

Then there’s labor. Over 50% of respondents reported that labor availability worsened in 2025 compared to 2024, with the South and Midwest hit hardest. With hiring increasingly difficult, contractors are turning to prefabrication to increase output without proportional increases in headcount. Moving work from the field to a controlled shop environment with automated equipment means fewer workers can produce more, with higher quality and less rework. 

And here’s the performance kicker: Firms with over 60% prefabrication rates reported a +14.5% median revenue increase, compared to +4.5% for the industry overall. The industry’s median prefab rate sits at around 30%, but ranges widely—from 9.5% in electrical to 29.5% in piping and 19.5% in sheet metal. The variation reflects trade-specific constraints, but also a massive opportunity.

When contractors planning to expand prefab were asked what would enable that growth, the top answers weren’t about equipment, they were about adding dedicated prefab planners, standardizing design components and strengthening cross-team collaboration. 

In other words, prefab growth is a people-and-process problem, not a capital expenditure problem. The contractors who get that distinction are the ones scaling fastest. 

MEP Contractors Need Manufacturing Metrics—Not Just Financial Ones 

MEP contractors have increasingly adopted a production system methodology—a connected workflow that runs from BIM to fabrication to logistics to field installation. When it works well, it looks a lot more like manufacturing than traditional construction. But here’s the problem: The metrics most firms use to run their businesses haven’t kept up with that evolution. 

The survey found that 75% of contractors track project profitability and 89% track project profit versus estimate. Financial measurement is strong. But when you look at the operational metrics that actually drive those financial outcomes, the numbers drop off a cliff. Less than 30% of firms track VDC productivity or material logistics cycle time. Only 21% track on-time material and fabrication delivery rates on all projects. Material flow from shop to field—the logistics handoff that determines whether field crews are productive or waiting—is the least instrumented workflow in the entire industry. Most contractors know how a project ended financially, but can’t tell you why. They can’t see the cycle times, throughput rates, delivery accuracy or utilization data that would explain the variance between a good project and a bad one, or which systems and processes make money vs. lose money (eg. When is it better to use welded joints vs. grooved joints on a piping system). It’s like running a factory and only measuring revenue without tracking defect rates, production speed or on-time delivery.

The firms that are getting this right—the ones investing in operational KPIs—report better forecasting, improved billing cadence, higher schedule predictability and stronger margin control. As one respondent put it, integrating their VDC model with their estimate and ERP gave them a daily measure of gain and loss that was nearly impossible to track just a few years ago. 

Heading into 2026, 68% of respondents said they plan to increase investment in tracking shop and operational metrics. The contractors who will lead the next five years are the ones who stop managing by financial rearview mirror and start operating with real-time production data—from the BIM model through the shop floor to the installed product in the field. 

The Bottom Line 

The MEP industry is at an inflection point. The firms pulling ahead aren’t just bigger or better funded, they’re more connected. They treat fabrication as a coordination hub, not a production silo. They use prefabrication as a strategic lever, not just a time-saving tactic. And they’re building the data infrastructure to measure and optimize their operations the way manufacturers have for decades. This is called data-driven contracting—the idea that when you connect every workflow from design through installation and give contractors real-time visibility into what’s actually happening across their operations, you don’t just improve efficiency, but fundamentally change how decisions get made, how risks get managed and how profitability gets built.

The data from 144 industry leaders confirms the direction. The question for every MEP contractor now is: How fast are you willing to move? 

SEE ALSO:

Jake Olsen is the CEO of Stratus (www.stratus.build), a connected fabrication platform built for MEP contractors. The full 2025 State of MEP Annual Report is available at stratus.build. 

The post New Survey Reveals Three Trends Reshaping MEP Contracting first appeared on Construction Executive.

Much of that space is already committed. Roughly 92% of the development pipeline has been pre-leased, largely by hyperscale technology companies racing to support AI-driven workloads and cloud services.

The rapid expansion is also reshaping where facilities are built. About two-thirds of new construction is occurring in emerging markets such as Texas, Tennessee, Wisconsin and Ohio, where developers can secure land, power and permitting more easily than in traditional hubs. Texas alone is projected to rival Northern Virginia as one of the world’s largest data center markets.

Despite strong demand, developers face growing constraints, particularly around power availability, grid capacity and long equipment lead times—factors increasingly shaping where and how quickly new data centers can be built.

SEE ALSO: DATA CENTERS, INTEREST RATES AND MORE PRIMED TO EXACERBATE LABOR SHORTAGE

The post Data Center Surge: Pre-Developed Space Already 90% Leased first appeared on Construction Executive.

Succession planning—often overlooked as a time-sensitive matter—is no different. An owner’s preparations for leaving the company in the hands of family members, existing employees or a potential buyer should begin as early as a decade in advance.

“The best time to start succession planning was yesterday,” says Jay Montalbano, managing partner at CPA firm Hannis T. Bourgeois in Baton Rouge. “Many business owners don’t have a conception of how long it’s going to take them to sell their business. In reality, successful transitions can take five to 10 years.”

Financial management and succession planning are deeply intertwined. Effective financial management ensures the business is stable and valuable before, during and after a leadership transition. Montalbano, who has helped develop numerous succession plans, says the process is often multifaceted and complex. Waiting until an owner nears retirement age can have costly consequences.

“Waiting too late can limit your options and kill your leverage,” he says. “The earlier you think about it, the better the results when you decide to sell the company or transfer ownership.”

Many of the steps involved are simply good business practice. Keeping accurate and clear financial records is the foundation of any sound succession plan, and it can also improve a contractor’s long-term profitability. Conversely, poor recordkeeping increases risk and decreases company value.

A consistent track record of reviewed and audited financial statements “says a lot to a prospective buyer when your succession plan is to sell the company,” Montalbano says, while unaudited books can make the numbers less reliable.

“If you’re trying to sell to an outside entity, having five to 10 years of audited history is going to make that transaction go a lot smoother.”

Kenneth Hedlund, managing director at CBIZ in Indianapolis, says that’s why his first order of business when advising contractors is to clean up their financials. About 80% of Hedlund’s workload involves internal successions, employee stock ownership plans, mergers and acquisitions.

“Regardless of the type of succession, businesses should focus on the same things —strong balance sheet, steady cash flow, consistency and profitability,” Hedlund says. “A well-capitalized company always has a lot more flexibility and options.”

As Hedlund puts it, a contractor needs to demonstrate “quality of earnings” to a potential buyer, meaning the earnings are consistent, predictable, understandable and profitable. Any spikes should be thoroughly explained.

“You’re selling profitability and debt-free cash flow to a buyer, so your financial statements can’t be messy.”

Contractors should also prove they can manage projects effectively and complete them at margin or better. “Having a tight system internally around the work-in-process schedule is probably 80% of the challenge,” he says. “They need to show robust systems around budgeting, job costing and cash-flow monitoring.”

That can be difficult. Project margins are often based on estimates, and a completed job rarely hits the target due to cost variations, labor fluctuations and material price changes.

Complicating matters, there is often a communication disconnect between field managers and the financial side of the business. That can lead to inaccurate reporting.

“There must be a strong link between your CFO or controller and the project folks, focusing on communication and a process for reviewing projects, estimated costs and updating percentage of completion,” Hedlund says. “They must work together for a contractor to properly state their balance sheet, whether it’s receivables, work in progress, overbillings or underbillings. Your financial people need to establish that link.”

A CPA can also examine a contractor’s books to identify ways to improve profitability and value. Hedlund says he “scrubs” financials, pinpointing items that can be adjusted or removed. Personal expenses run through the company, for example, can significantly affect reported profit margins.

“That can distort their true profit,” he says, “and in turn yield a lower valuation.”

Owner compensation can often be added back to earnings since the owner will no longer be involved post-sale. Unusual one-time events that are not ongoing may also be adjusted. “It could ultimately result in hundreds of thousands of dollars in additional value for the company,” Hedlund says.

There are pitfalls to avoid. When selling a company, efficient tax management—or a lack of it—can make or break a deal.

Larry May, a partner at Carr, Riggs & Ingram LLC in Ridgeland, Mississippi, says minimizing the tax burden is the goal of both buyer and seller—and they are often at odds.

“My team and I do tax projections for anyone wanting to sell,” May says. “What’s in the best interest of the seller is to sell stock so they can get capital gains rates on as much of the money as possible. But the buyer wants to buy the assets so they can mark them up to fair value and start depreciation over. For both sides, it’s all about minimizing the tax burden.”

A buyer will typically resist a stock purchase because it can create exposure to litigation arising from the seller’s past projects. “If they buy the stock, that litigation is not going to stop with the old owners,” he says.

More commonly, buyers purchase the assets of the company while retaining the name—or a variation of it—to reduce litigation risk.

“It’s not what you sell a business for, it’s what you keep,” Montalbano says. “Getting a value on a business is important. That gets you 50% there, but the other 50% is how you structure it. You can ask for $10 million for your company, but if you’re keeping only $2 million, you haven’t done a good job.”

Corporate structure—whether S corp., C corp. or partnership—can also have significant tax implications.

“It’s important that you have a CPA involved, because there are all kinds of unique state and local impacts that aren’t always considered,” May says.

SIDESTEPPING THE RISK

A CPA-led team can also help address and mitigate risks before and after succession, including potential loss of key customers, bonding support or senior project managers.

Often, the success of a closely held business is tightly tied to its owner. That can complicate succession if employees or customers leave once ownership changes.

“The founder is so key and integral to the business that it’s hard for them to sell,” Hedlund says. “Without them, employees will start leaving, customers will leave.”

That makes early planning critical. Owners can begin grooming team members years before the transition. Deferred compensation or retention plans may help reduce the risk of losing key managers. “Many owners will depart the company, but not before they have good and reliable managers in field operations and someone who can take the helm,” he says.

Recognizing the importance of a smooth transition, ISC Constructors, a large family-owned industrial contractor in Baton Rouge, began laying the groundwork for succession several years ago.

The first phase was implemented about five years ago when co-founder Jerry Rispone stepped down as president and Donnie David assumed the role. It marked the first time in company history that neither Jerry nor Eddie Rispone, the original founders, led the company.

Another transition occurred January 1, 2026, when David shifted to ISC’s executive board and Thad Rispone, Eddie Rispone’s son, became president. The change included multiple departmental promotions, new hires and transfers.

Brett Nolinske, who became CFO at the beginning of the year, says that although the succession was largely internal, there were still financial considerations. The company closely monitored general and administrative costs throughout the process to avoid “sticker shock” as employees moved into new roles and additional hires were made.

They were also mindful of the risk of losing business during leadership changes. “We had new folks in new positions taking on more responsibilities,” Nolinske says. “That meant there was more job risk because everyone was being elevated to new roles, and we didn’t have that weathered eye on the job that we might have had for 25 years.”

ISC took a measured approach, mentoring new leaders for months before transitions became official.

“It boiled down to identifying those leaders, mentoring them and bringing them along ahead of time so the right relationships had already been established,” Nolinske says. “The previous CFO did a great job mentoring me, but it didn’t happen by accident.”

Some risks are less obvious, particularly when a sale is involved. Bill Cerney, a surety bond specialist at Gibson Insurance in South Bend, Indiana, says active surety bonds can create complications that are often overlooked. Most contractors provide personal indemnity for bonds and remain liable for project completion even after a sale.

“It’s important for the seller to be aware of that,” Cerney says. “Look at your surety agreements. They’ll likely say that any change in ownership requires notice to the surety or it might trigger a default position. When that happens, they’ll seek to ensure there’s adequate capital for the work to get completed.”

Communication is essential to avoid unintended consequences. “To prevent that, you’ve got to assemble the right set of business advisers so they can do their job and help you avoid them,” Cerney says.

A VARIED SUCCESSION LANDSCAPE

Succession plans vary widely, making it critical for contractors to surround themselves with qualified CPAs, attorneys and consultants. Some companies even hire third-party CFOs to help manage the process.

“There is certainly value in having a CFO or some type of internal CPA involved in the books, because there’s only so much information an external CPA can access,” Hedlund says.

“Construction is a high-risk business,” he adds. “Any contractor can have one bad contract that could devastate their equity and working capital, so you want to manage that risk with good internal processes that link financial management to your operations.”

Dave and Lorri Grayson, co-founders of 20-year-old commercial and institutional contractor GGA Construction in Middletown, Delaware, understood the importance of outside expertise when expanding into southern Delaware three years ago. Rather than pursue a full acquisition, they merged with Broadpoint Construction and brought owner John Schneider into the company as a partner, along with his eight-person team. The assets were transferred without assuming unnecessary risk and liability.

We felt this was the best approach,” Lorri Grayson says. “But we knew we wanted our own name and brand. We also wanted him and his people.”

A third-party CPA and temporary CFO helped navigate the process, including merging two accounting systems so both offices could share resources. “It took about three years to work out our processes and merge the two companies into one,” she says.

Now, the Graysons are planning the eventual transfer of their ownership to their sons. They’ve encouraged their sons to develop new clients rather than rely solely on existing relationships. “Our goal is to be completely out of the business in four to five years,” Lorri Grayson says. “We’re not there yet, but we’ve gone through the hard stuff.”

“When we finally pull away 100%, do I think they’ll struggle? Sure, in some respects,” she says. “That’s the challenge of any succession plan. How do you get them to continue on when you leave?”

SEE ALSO: WHY STRUCTURED KNOWLEDGE TRANSFER IS CRUCIAL FOR SUCCESSION PLANNING

The post ‘Start Yesterday’: Time Sensitive Succession Planning in Construction first appeared on Construction Executive.

Often described as “America’s industrial thrift store,” repurposedMATERIALS works with contractors, manufacturers, utilities, government agencies and agricultural operations to divert usable materials away from landfills and into new, productive applications. Rather than breaking materials down through recycling, the company specializes in repurposing—keeping items intact and functional so they can be reused with minimal processing.

“For us, the goal isn’t perfection—it’s practicality,” says company owner Damon Carson. “If something is still strong, still safe and still useful, then throwing it away doesn’t make sense. We exist to connect that material with someone who can actually use it.”

SEE ALSO: ADAPTIVE REUSE PROJECTS ABOUNDED IN 2025

A Practical Approach to Construction Waste

Construction waste is often a byproduct of timing, specification changes or liability constraints—not material failure. repurposedMATERIALS focuses on capturing that overlooked value. With warehouse locations across the United States, the company accepts everything from surplus building materials and industrial components to highly specialized items that no longer fit their original purpose.

This approach allows builders and project managers to solve two problems at once: reducing disposal costs while gaining access to affordable materials. In many cases, materials available through repurposedMATERIALS can cost a fraction of new inventory, while still meeting the functional needs of the project.

The company’s impact becomes especially clear when looking at real-world case studies that demonstrate how creative reuse can solve unexpected challenges.

Case Study #1: Bulletproof Glass Finds a New Home in a Zoo

One of repurposedMATERIALS’ most striking examples involves a semi-truckload of unused level-8 ballistic glass panels. Originally manufactured for installation at the state capital complex in Sacramento, California, the two-inch-thick panels—measuring 42 inches by 10 feet—were rejected after being produced to the wrong specification.

For many suppliers, this kind of mistake would result in scrapping the glass entirely. Instead, repurposedMATERIALS accepted the material, recognizing that its strength and quality were still exceptional.

The glass would find its home in an unexpected place. A zoo in Texas, preparing for construction of a new lion exhibit scheduled to begin in 2026, needed large, durable viewing panels capable of safely separating animals from visitors. repurposedMATERIALS re-homed 24 of the ballistic glass panels to the zoo.

Although the glass was technically over-engineered for the application, the zoo gained a far more affordable solution than purchasing new specialty panels—and the material avoided the landfill entirely.

“That glass didn’t fail,” Carson explains. “It just didn’t fit one project. But for the zoo, it was a perfect match. That’s what repurposing is all about—finding the right second life.”

Case Study #2: “Expired” Natural Gas Pipe Solves an Agricultural Challenge

In another example, a major natural gas utility company in Illinois faced a familiar regulatory issue. Polyethylene natural gas pipe must be installed and buried within three years of its manufacture date to meet safety and liability requirements. Once that window closes, the pipe becomes unusable for gas service—even if it is brand new and structurally sound.

Rather than discarding the material, the utility sent the “expired” pipe to repurposedMATERIALS. The company then matched it with a Minnesota hog farmer facing a different problem altogether.

The farmer needed a cost-effective way to transport manure from his hog barns to his cornfield irrigation system, where it would be sprayed as fertilizer. He buried 2,800 feet of the expired four-inch polyethylene pipe to move the manure efficiently across his property.

For the farmer, the manufacturing date was irrelevant. He needed pipe that was strong, reliable and affordable—and the reclaimed gas pipe met those needs perfectly.

“Regulations can turn perfectly good materials into waste overnight,” Carson says. “But outside of that original use case, those materials can still be incredibly valuable. In this case, one problem became another person’s solution.”

Case Study #3: Retired Military Parachutes Become a Monastery Workshop

Not all repurposing solutions come from construction or utilities. Sometimes they come from the Department of Defense.

The U.S. military routinely retires massive cargo parachutes used to deliver tanks, Jeeps, ammunition and food supplies to battlefields. These are not standard parachutes—they range from 35 to 100 feet in diameter and are built to withstand extreme forces. Once retired, they are typically destroyed or discarded.

repurposedMATERIALS stepped in to redirect these parachutes toward a completely different mission.

When Brother Joseph and the Carmelite monks in Wyoming needed a warm, workable space to help build their monastery, they chose creativity over conventional construction. Using eight repurposed military parachutes sewn together and reinforced with one-inch blended webbing tied to concrete-filled drums, the monks engineered a temporary workshop enclosure.

Once a portable propane heater was turned on, the parachutes expanded like a hot air balloon, creating a surprisingly effective and insulated workspace. Within three hours, the structure transformed brutal Wyoming winter conditions into a usable environment where the monks could continue their work.

“That project is a perfect example of thinking differently,” Carson says. “Those parachutes were designed to save lives in combat. Now they’re supporting a peaceful, productive purpose. That’s the beauty of reuse.”

Smart Solutions for a Changing Industry

Builders face increasing pressure to reduce waste, lower embodied carbon and control costs. By reusing materials as-is, contractors avoid the environmental impact of manufacturing new products while also cutting transportation and disposal costs. The result is a more efficient material lifecycle—one that aligns sustainability with common-sense economics.

“Construction doesn’t need more buzzwords,” Carson says. “It needs options that work in the real world. Repurposing gives people a smarter way forward without sacrificing quality or performance.”

SEE ALSO: WHAT’S OLD IS NEW: ADAPTIVE REUSE ACROSS AMERICA

The post Old Military Parachutes Repurposed in Wyoming Monastery Project first appeared on Construction Executive.

In 2023, Chad Theriot explored industrial and infrastructure applications of modular construction, addressing risks like offsite fabrication and integration complexities in his article, “The Rise of Modular Construction—Impacts for Consideration.” Since that time, modular construction has continued to experience significant advancements and has been increasingly adopted by contractors across a broad spectrum of industrial and commercial projects. As modular construction continues to reshape the industrial landscape, contractors and owners alike must be mindful of the legal implications associated with its use, specifically as it relates to liability and risk allocation, regulatory compliance, quality control and upstream factors such as transportation and intellectual property concerns.

Industrial Applications: High Stakes and Evolving Risks

Standard forms from ConsensusDocs and the American Institute of Architects, while foundational, could be enhanced with provisions tailored for industrial modular projects. Unique challenges often arise in these projects, such as offsite inspections, final assembly complexities, industrial cleaning standards, supply-chain disruptions and hybrid goods-services transactions. Innovations in modular construction, such as the use of 3D printing in controlled manufacturing environments, boost efficiency and can cut waste by up to 90%, but introduce intellectual property concerns—a risk less common in residential builds. Consequently, the use of modular construction methods in industrial projects carries elevated stakes and potential higher-dollar disputes compared to residential applications.

For example, the utilization of megastructure modules during the construction of Dallas Fort Worth Airport’s Terminal C highlights how modular methods enabled scalability but required meticulous risk allocation considerations to address logistical complexities. Similarly, the $1.4 billion expansion at Hartsfield-Jackson Atlanta International Airport blends modular and traditional stick-built methods, showcasing modular’s growing prevalence in high-profile infrastructure while also demonstrating the need for both offsite and onsite inspections in addition to coordination across multiple trades to confirm the proper integration of the modular and stick-built methods. These examples illustrate modular’s transformative potential in industrial settings, yet underscore the need for contracts that address its distinct complexities.

Trends, Challenges and Future Events 

As modular construction gains traction, the industry must ensure contracts address its unique risks, from offsite fabrication to logistical complexities. Engineering News Record’s 2025 reporting, including a new International Code Council modular standard, reflects modular’s expanding role in industrial and commercial projects. The Modular Building Institute also highlights growth in multifamily and commercial sectors, fueled by automation and sustainable materials, aligning with both residential and industrial goals. 

Yet, challenges like supply-chain volatility and labor shortages persist across the industry, as noted in the Association of General Contractor’s 2025 Outlook, with industrial projects facing additional hurdles in federal compliance. Upcoming events, such as the 2026 World of Modular (April 20–23, 2026; Las Vegas, Nevada) and Advancing Prefabrication 2026 (February 2–5, 2026; Dallas, Texas), will bring interested stakeholders to explore AI integration, global standards and cross-sector solutions to address these shared challenges.

Advancing Contracts to Meet Modular’s Industrial Challenges

The AIA’s April 2025 Volumetric Modular Construction documents, including A181-2025 Standard Form and A281-2025 General Conditions, mark significant progress by bringing some clarity to offsite responsibilities, warranties and integration risks, offering valuable support for industrial projects. Additionally, ConsensusDocs’ 753 and 253 forms continue to provide a strong foundation for prefabricated projects. However, opportunities remain to further tailor and customize contractual provisions for industrial modular complexities such as multijurisdictional compliance and logistical liabilities. For instance, ENR’s Jan. 16, 2025 article discussing the transportation of a 2,800-ton modular furnace illustrates the need for precise contract terms to manage transportation risks. 

Recent regulatory and legal developments further underscore these gaps. The U.S. Department of Housing and Urban Development delayed its updated Manufactured Home Construction and Safety Standards to Sep. 15, 2025, which created uncertainty for modular projects that intersected with manufactured housing regulations, particularly in defining compliance for off-site components used in industrial settings. More specifically, as explained by WoodWorks in its “Expert Tips” articles addressing some of the issues associated with offsite inspections, many states allow for the use of third-party inspection agencies such as ICC NTA to conduct offsite inspections; however, this can vary greatly depending on the jurisdiction in which the project is located. Similarly, the 2025 case Turan v. Union Modular Homes LLC in New York highlighted disputes over payment and defect responsibilities in modular installations, emphasizing the need for clear contractual terms to address liability allocation and quality control across jurisdictions.

These developments reinforce the importance of customized clauses—covering transport damage, jurisdictional compliance and defect warranties—to align standard agreements with modular’s unique demands in industrial contexts. Some of the relevant contractual provisions contractors and owners should consider when utilizing modular construction include, but are not limited to:

• Inspections (offsite and onsite): Specify who is responsible for inspections at the fabrication facility and how inspection results are documented.
• Transport and Logistics: Address liability for damage during transit and, if applicable, storage, including insurance requirements and risk allocation.
• Integration and Assembly: Define standards and requirements for final assembly, industrial cleaning, and commissioning to ensure quality and compliance.
• Intellectual Property: Clarify ownership of modular designs, 3D-printed components and proprietary manufacturing processes.
• Jurisdictional Compliance: Ensure contracts address varying state and federal regulations, especially for projects spanning multiple jurisdictions.
• Warranties: Set clear terms for liability, quality control and warranty periods, including procedures for addressing defects discovered post-installation.

While the rise of modular construction in residential and industrial construction projects has certainly been a boon to contractors and owners alike, it is important to recognize that this rise is not without risk. Professionals should leverage the advances in AIA’s VMC documents and ConsensusDocs’ forms as a starting point, supplementing them with customized clauses to address gaps in areas such as off-site logistics, multijurisdictional compliance, and defect liabilities. By proactively adapting contracts and project management practices, contractors can harness modular’s benefits while minimizing risks in today’s complex industrial landscape.

SEE ALSO: MODULAR CONSTRUCTION CONTINUES TO GAIN MAINSTREAM ATTENTION

The post Modular Construction’s Big Boom: New Risks Outpacing Standard Contracts in Industrial Projects first appeared on Construction Executive.

Driven by an increase in hybrid work, an ongoing housing shortage and a heightened focus on environmental concerns, these unique projects not only help revitalize communities but support sustainability, reduce waste and help contractors grow their business. 

REUSE PROJECTS AND RESEARCH

High-profile adaptive reuse projects include the award winning Asher Adams Hotel, formerly the historic Union Pacific Railroad Depot in Salt Lake City; The High Line, originally an elevated railroad track turned public park in New York City; and Ghiradelli Square, the iconic San Francisco-based chocolate factory turned shopping, dining and entertainment complex. These transformations showcase the power of adaptive reuse to revitalize local neighborhoods and communities while reducing the environmental impact and restoring the architectural heritage of abandoned structures.

Given the nuances associated with adaptive reuse projects, contractors gain an unprecedented opportunity to grow their business, learn new technical skills, navigate complex project management issues and hone problem-solving proficiencies, while expanding the opportunity to apply creativity and innovation to project design. Offering laborers the hands-on opportunity to work on adaptive reuse projects gives contractors a competitive edge and can help attract highly motivated and energetic individuals to increase their talent bench and showcase expertise in tackling these unique projects. 

Furthermore, the measurable gains achieved through these projects are proven and significant. Industry research cites adaptive reuse projects can be completed up to 30% faster and are typically 15–30% less expensive than new construction due to savings on demolition, new materials and labor. By executing these revitalization-type projects, contractors also demonstrate a commitment to sustainability, helping to attract like-minded industry partners and much-needed talent resources, all while contributing to the greater good. The Carbon Avoided: Retrofit Estimator tool was purpose-built to quantify carbon savings and, in a 2024 study on reusing a historic building, found an 82% reduction in global warming potential compared to building new. The environmental impact of adaptive reuse is significant and can make a meaningful difference in local communities around the world. 

CHALLENGES AHEAD

While the benefits are clear, adaptive reuse isn’t without its challenges. Unlike new builds, adaptive reuse projects can present unforeseen hurdles like structural issues, building codes that are difficult to meet, contaminants like asbestos, complicated design modifications to existing layouts and more.

To help contractors navigate adaptive reuse projects, there are innovative tools available designed to help overcome these challenges, ensure efficiencies and maximize onsite labor. A few of these solutions include:

• Innovative Cable Solutions: One of the key advantages of adaptive reuse projects is that much of the existing infrastructure–such as doorways–is already present. This means that contractors don’t have to spend time building these out. However, it does mean that contractors need to find efficient ways to move cable through the existing structure efficiently. Most cable reels won’t fit through standard doorways, so contractors tend to waste time tearing down and then rebuilding the frames. Fortunately, there are cable solutions that can fit through most standard doorways, which saves time on these kinds of projects.

• Lighting Carts: Every broken light bulb or fixture takes money out of a contractor’s pocket. Lighting carts allow workers to easily and securely transport these materials across the jobsite. Additionally, these carts save time by eliminating the need for electricians to manually carry fixtures around the site.

• Mobile Storage Solutions: With space often at a premium, these job trailers provide a single, secure place to store all the necessary materials, which helps save on labor and streamline inventory management.

• Kitting and Prefabrication: One of the main advantages of adaptive reuse projects is they generally have a faster turnaround time than new builds. Kitting and prefabricated solutions can help speed up installation time even further by delivering components to the jobsite ready to install. Labor-intensive tasks, such as sorting and basic assembly, are performed off site, meaning specialized labor can spend more time on critical tasks.

As metro areas get more creative in how they utilize their existing buildings and spaces, the number of adaptive reuse projects will only continue to grow. For contractors, the measurable benefits cannot be ignored and while challenges exist, those that overlook the opportunity to tackle these projects are leaving money on the table and effectively handing business to their competitors. By relying on innovative tools, strategic partners and doubling down on a commitment to helping improve their local communities, contractors are well positioned to confidently add adaptive reuse to their project portfolio.    

SEE ALSO: PLAN OF STEEL: RALEIGH’S NEWEST ADAPTIVE-REUSE PROJECT

The post Adaptive Reuse Projects Abounded in 2025 first appeared on Construction Executive.