Choosing the most suitable contractor for any construction project requires research. Much like hiring a firm for smaller jobs, selecting the most appropriate builder for large-scale manufacturing facilities is a highly involved process, with questions that must be answered about budgeting, timelines, and more. And it all starts with an industrial general contractor.
General Contractors and Industrial General Contractors share many skill sets, yet there are important differences. Both manage day-to-day operations, liaise between clients and trades/subcontractors, and take care of project planning and scheduling, getting supplies and permits, and making sure on-site safety standards are met. This requires considerable training and outstanding communication skills, since many parties are involved.
On building sites for manufacturing, warehousing/logistics, and utilities like hydroelectric stations, the role of the industrial general contractor becomes incredibly demanding, mainly because of project scope and complexity.
Many General Contractors focus on residential or commercial construction, like retail and restaurants, with some limiting height to a certain number of floors. Industrial Contractors are much more specialized and need to be equipped with enough workers, machinery, and expertise to construct enormous manufacturing buildings. These projects, along with warehouses, fulfillment centres, oil and gas processing plants, and water treatment facilities, keep getting bigger and bigger.
Manufacturing buildings and fulfillment centers for retail giants like Amazon and Walmart now measure millions of square feet, not thousands. One of the largest to date is Tesla’s Gigafactory Nevada, which handles battery and motor manufacturing for the electric vehicle company. Currently at 5.3 million square feet, Tesla plans to expand to 10 million square feet and make the facility powered entirely by renewable energy.
Building massive manufacturing hubs for companies like Tesla, aviation juggernaut Boeing, auto maker Volkswagen, Amazon, Target, Michelin, Nike, John Deere, and other multinationals, demands extensive engineering knowledge, heavy machinery like overhead cranes to hoist structural steel elements into place, and extremely strict safety and regulatory protocols.
With manufacturing buildings constantly growing in size, clients like Tesla need to plan not just for the coming years but for decades into the future. As a result, major players like Walmart and Ikea are buying properties in Arizona and Dortmund, Germany, respectively, for e-commerce and distribution.
Like a homeowner hiring a GC for a kitchen or bathroom renovation, manufacturers looking to expand existing facilities or build new ones need to look at an industrial builder’s background, and this includes the company’s record for completing projects on time. This is critical, since manufacturers need to have their facilities outfitted with machinery like metal stampers and CNC machines, electrical systems, water and wastewater systems, HVAC, and more, so they don’t miss their production deadlines. Whereas homeowners can be forgiving if a project runs late, manufacturers lose a fortune every day their facility remains idle.
Although most large-scale locations are remote, many are connected to highways, railways, water access points, and even regional airports. Combined with smaller distribution centres in cities, retailers today can keep many more products in stock and deliver them faster than ever before.
Certainly, building huge manufacturing facilities is an expensive, complex endeavour requiring in-depth knowledge about permits and approvals, site grading, heavy materials like steel and concrete, electrical and heating, air conditioning and venting requirements, on-site safety, and more. Industrial buildings and steel structures demand construction managers experienced in all these areas.
From initial conversations to project completion, clients have a myriad of questions and concerns about their vision, which reputable firms will address. The first and most important is communication.
No matter how skilled the builder, if a customer feels a specialized industrial contractor doesn’t address the basics—such as returning phone calls on time—they may look elsewhere. Reputable industrial contractors are proactive; they don’t expect clients to keep pestering them for answers and they are upfront about the assignment and any potential obstacles that might arise to slow progress. If a contractor can’t provide a definitive start date, that is a problem.
All construction projects have elements in common, especially budgets and timelines. We’ve all heard stories about disgruntled home or business owners unhappy that a promised renovation went thousands of dollars over budget or was months overdue. For manufacturers who work on strict timelines, a promised building being delivered late isn’t an inconvenience—it’s a potential disaster. Budgets dictate all building projects. For multinational manufacturers, giving a ‘blank cheque’ to a builder is unheard of.
Instead, experienced industrial builders will discuss costs with clients and come back with detailed, line-by-line budgets to manage costs. Many firms today use construction management software like Procore to streamline the entire process. Construction budgets are broken down into many areas, including hard costs (the physical construction), soft costs (professional and administrative services), and contingency and profit, usually a percentage for unanticipated issues. Construction budgets encompass site work, labour (direct and subcontractors), materials and supplies, professional fees (such as paying architects and engineers), equipment (including rentals and maintenance), technology, insurance, permits, inspections, and more.
With increased tariffs on steel and aluminum, clients need to be prepared to pay 25 percent more for their manufacturing and heavy industrial buildings. Owing to an increase in the theft of tools and materials like lumber and high-value copper from construction sites (estimated to cost construction companies $1 billion USD annually), 24/7 security is a must, and another expense. Stolen building materials aren’t just an inconvenience; they cost thousands of dollars daily, rendering labourers unable to work.
Due diligence is crucial before hiring any firm for manufacturing projects. All reputable firms should have a portfolio of past work and clients willing to provide a referral. Satisfied customers will state if the job was completed on time, if there were any cost overruns, and other potential red flags. Most of all, what is the firm’s experience specific to project needs? If the building will be used for EV manufacturing, soup production, or as a fulfillment centre, how much experience does the builder have in these areas?
Before the first shovel hits the ground, it is also important to know the builder’s knowledge of permits. Are they aware of all building by-laws, which often vary from one municipality to another? Is the builder licensed and insured in all relevant areas, including liability in case someone is injured? Are subcontractors up-to-date with their own licensing and insurance?
Another essential topic of discussion is safety. What is the builder’s record for work-related Lost-Time Injuries (LTIs)? And considering the sheer size and complexity of building steel warehouses, which require huge cranes lifting steel I-beams, channels, and other construction materials, how many safety technicians are on site?
If these questions are answered to the client’s satisfaction, the next step is negotiating the deal. This includes the scope of work: deadline and budget. Once these areas are agreed upon, the builder and client will discuss payment terms and draft a legal contract.
For projects to be successful, clients and contractors need to come together and discuss their shared vision. Well-executed works completed to customer satisfaction are deliberate, the result of a collaborative approach. Successful industrial builders will view themselves as not just a service provider, but as a partner who is engaged and receptive, who anticipates issues, and who communicates with clients every step of the way.
