6 tips for starting a construction project in a new region
December 4, 2019
Construction companies working in unfamiliar areas can face a variety of challenges. What general contractors in engineering and construction need to know.
General contractors (GCs) taking engineering and construction projects to new areas of the U.S. face a variety of challenges they may not encounter on their home turf. But staying near home isn’t always feasible, especially when you consider that 10 states represent 60% of all tracked U.S. construction projects valued at $3.7 trillion, according to GlobalData.1
Jon Tate, Vice President of Construction – Risk Engineering at The Zurich Services Corporation, outlined several considerations for engineering and construction firms venturing into the great unknown:
Research the supply of skilled labor. The labor shortage continues to plague the construction industry. Companies working in a new area may face obstacles when competing with local businesses. Be sure to research the labor pool before you go, using available tools and reaching out to contacts in the region. If a local workforce is unavailable, you may need to consider finding workers to travel with you, or subbing out certain jobs you had initially planned to direct hire.
Be aware of regulatory requirements. State, county and city regulations can vary dramatically. It’s critical to comply with the local laws regarding licenses, permits and liens. Do your homework, and contact colleagues based in the region or those who have frequently worked there. Local chapters of relevant industry groups, such as the Associated General Contractors of America, can also be helpful.
Get the appropriate insurance solutions. GCs moving into new regions may be exposed to natural catastrophe perils they have never reckoned with and/or fail to understand. Your insurance providers and brokers can help identify the threats that could present risks on a job site, and help you determine the probable maximum loss associated with those particular perils. Ensure you have appropriate insurance coverage with appropriate limits, which would be specific to builders risk.
Want to learn more on this topic? We explore each of these considerations and a few more in greater depth to help GCs address the unique challenges they’ll face when venturing into a new region.