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Case Study: Addressing Escalation The Current, River North in Denver

Nov 16, 2021

U.S. Engineering

Current pricing escalation and supply chain issues present challenges for facility owners, design professionals and contractors. In this case study we offer solutions to those problems by examining our efforts on an office building project in Denver.

The Current, River North – 3615 Delgany

U.S. Engineering is providing design-build mechanical and plumbing services through design, preconstruction, and field execution for this 12-story Class A office building at 36th Street and Delgany in Denver’s growing RiNo district. ME Engineers serves as our design-build partner and engineer of record. Early onboarding of the USE/ME Engineers design-build team proved instrumental in achieving cost and schedule goals for The Current, River North project.

The 386,400-sq-ft tower features two levels of underground parking; ground-floor, full-service locker rooms; street-level retail space; and a 4,000-sq-ft main lobby. On levels 11 and 12, amenities include a 6,000-sq-ft great room, concierge services, a library, a digital media center, a water feature and a fireplace. The top levels of the tower offer large-format conference center seating for about 100 people. Exterior rooftop terraces at the 2nd and 12th floors provide tenants with outdoor views.

Early Procurement Strategies

Construction of The Current, River North started during the pandemic. As a design-build team, we understood that due to shipping delays, challenges with material and equipment availability and rising costs, the market was volatile. To address supply chain and long lead equipment challenges, we met with our design-build prime contractor on multiple occasions to communicate concerns of cost escalation and unpredictable supply. Meeting early allowed for a more aggressive procurement plan.

We purchased materials during design, well in advance of construction, based on our estimating bill of materials. The bill of materials was crosschecked with our coordinated Revit BIM 360 model and adjusted as necessary. Once purchased, most of the mechanical and plumbing materials pricing was set. Additionally, equipment and fixtures were negotiated in early bid packages and awarded within a few weeks of signing our contract to lock in pricing.

After issuing purchase orders, some manufacturers still notified our team of upcoming price increases that would take effect if we did not order the equipment within a few weeks. To avoid absorbing these additional costs, we ordered the equipment before the price increases and came up with a storage strategy.

Plan on Creativity

And we got creative with storage. From our manufacturing facility in Johnstown, Colorado, to vendor warehouses, and even to the underground garage at the jobsite, (once construction of this section of the project was completed), we found ways to store everything we bought in advance. This practice ensured that all materials and equipment that were needed for the project were within a one-hour drive radius of the site, alleviating any concerns regarding shipping delays due to lack of truck drivers. To date, we have not experienced any delivery delays or significant pricing increases on the project.

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