The state of commissioning in 2012
Commissioning continues to expand to cover more systems, and energy-oriented existing building commissioning is still seen as the future. But a weak economic recovery and concerns about “commissioning lite” leave providers slightly more pessimistic than in 2011.
In the nationwide commissioning (Cx) market, how much difference does one year make? That depends—if you’re interested in who is providing the services, or what kinds of buildings are being commissioned, the answer is not all that much. If, however, the question is what systems are being commissioned or what the biggest challenges facing providers are, then we have some important updates.
For the second year, the nonprofit AABC Commissioning Group (ACG) conducted a survey of nearly 400 companies that provide commissioning services to learn about their biggest concerns and obstacles, what kind of work they are doing now, and what they expect to be doing in the coming year. With nearly 160 firms responding, we get a good snapshot of what’s changed, and what’s stayed the same, since last year. As with last year, all of the companies surveyed are professional, independent firms that are not engaged in contracting or manufacturing work.
In addition to data from ACG, Consulting-Specifying Engineer analyzes 2012 MEP Giants survey data, which requests information about Cx revenue. Table 1 shows the top 10 MEP Cx Giants, with three new firms on the list.
Commissioning revenue, delivery of services
Unsurprisingly, there is little change from 2011 in the split between companies for whom Cx is a primary versus a secondary business. Half report that commissioning comprises 20% or less of their business, while slightly less than a quarter say it is 85% or more.
When delivering commissioning services, the trifecta of an experienced and independent third-party provider, hired directly by the owner, and engaged during a project’s earliest stages, is one that is not as common as it should be—despite the fact that all three are generally within the control of a project owner.
While more than 40% of respondents indicate that they are hired as an independent third-party 85% to 100% of the time, this does not reflect any gain from the previous year.
As with last year, the news is better on who is hiring the Cx provider, with respondents reporting that 67% of the time they are retained directly by the owner or the architect. Respondents reported being subcontracted to either a general or installing contractor slightly more than a quarter of the time, a slight drop from the previous year.
There is also some small but encouraging movement on when the commissioning provider is hired during a project’s implementation. Respondents report that they are not hired until the construction phase 42% of the time (down from 46%). This means that they are slightly more frequently brought on during the design and predesign phases, when Cx has a greater chance of providing measurable benefits to the owner. You can’t blame providers for not turning cartwheels over this incremental improvement, however, and in fact the continued frustrations of being brought on board too late in the process bubbled up enough this year to land on the “top five challenges” list.
Commissioning increasingly encompasses a greater variety of systems on any given project, with the result being that Cx providers commonly partner with other firms to handle specialty work outside of their primary areas of expertise. That number jumped substantially in 2012, with 71% saying that they subcontract aspects of Cx work to others, up from just 55% last year—likely a reflection of the increasing frequency with which many systems are becoming more “mainstream” in terms of commissioning. The most common specialty areas cited continue to be building envelope and electrical Cx.
Cx and LEED
There is no question that the U.S. Green Building Council’s LEED rating system remains a significant driver of commissioning work by virtue of requiring “fundamental commissioning” as a prerequisite to obtaining a LEED-certified building and offering an optional credit for “enhanced commissioning.”
The prevalence of LEED projects is growing, according to survey respondents. About 58% of this year’s survey respondents reported that most (65% to 100%) of their firm’s recent Cx jobs involved LEED projects, a modest increase over last year.
More dramatic is the reported increase in the number of LEED projects pursuing the enhanced commissioning credit. This year, 40.2% of respondents said that 65% or more of their LEED projects were pursuing the credit, with fully half of those (20%) indicating that 85% to 100% of their firm’s associated LEED projects were doing so. Last year, those numbers were just 28% and 15%, respectively.
While many providers feel that LEED’s commissioning requirements should be more stringent, more projects opting to pursue the credit—and the additional commissioning activities and independence requirements that it entails—is a step in the right direction.
The next version of the LEED rating system, originally scheduled to be released in 2012, was postponed until 2013 based on comments from many stakeholders. For our survey (taken after the postponement), when asked whether they agreed with the proposed changes to the commissioning criteria, fully half of respondents said they weren’t sure, while the other half were evenly split between “yes” and “no.”
Building types, sectors, and Cx scope
Perhaps the most fundamental difference in delivering commissioning services on a project comes from whether it is new construction or an existing building. While 75% of respondents’ commissioning work is still coming from new construction, that was down from nearly 80% last year—suggesting that the long-predicted shift toward more existing building commissioning may have begun.
More evidence of the construction industry’s shift in focus toward existing buildings comes from Consulting-Specifying Engineer’s 2012 MEP Giants survey data. Asked what types of projects they are working on, engineering firms indicated an even split between new construction and retrofit/renovation design work (see Figure 2).
For commissioning providers, the mix of facility types remains largely unchanged, as commercial office buildings still form the backbone with roughly one quarter of the total, followed by higher education at 17%. The biggest change comes in healthcare facilities, which totaled nearly 15% this year, up from just 10% in 2011.
There was a moderate overall shift toward the private sector compared to last year, accounting for 39% of commissioning work compared with 33% last year. State government work showed the most significant decline, from 18% to 15%.
As noted last year, the “big three” of systems that are commissioned have long been HVAC, domestic hot water, and lighting/lighting controls. While those three continue to significantly lead the pack (see Figure 3), other systems are seeing dramatic increases.
Highlighting some notable changes: plumbing is now at 43% (up from 32% last year), electrical power controls jumped from 25% to 33% in one year, fire protection rose from 13% to nearly 20%, and building envelope now tops 15%, compared to just 9% in 2011. In fact, every system on the survey showed an increase over last year, with most outside the “big three” registering gains of more than 5 percentage points in the frequency with which they are commissioned. Clearly, the trend toward “whole building commissioning” is very strong.
Energy management services
The most significant addition to this year’s survey was a series of questions on energy-related services. Eight in 10 survey respondents indicated that their firms provide such services, separately from commissioning, and on average that they make up about one-sixth of their firm’s business.
We also asked which energy-related services these commissioning firms provide (see Figure 4). The most common responses were discrete elements of energy management—with 58% to 64% of respondents choosing energy audits, energy savings calculations, measurement and verification, and energy modeling. By comparison, less than 20% indicated “full service energy management.”
Another question was meant to address the conventional wisdom that building energy audits, while often performed, are also often shelved with no further action (something that ACG’s recently established energy management program is intended to address). Respondents who indicated that they do energy audits were asked how often their firm was then involved in implementing recommended energy conservation measures. The average response came in at just 21%.
Finally, it is interesting that survey respondents indicated that traditional “forensic” existing building commissioning is almost twice as easy (63% to 36%) to secure as an energy management project—this despite our data noting that existing building commissioning is still widely considered, in relative terms, difficult to obtain.
Challenges and looking ahead
Last year’s open-ended question about the greatest commissioning-related challenge that firms face proved to be both illuminating and validating in the sense that clear common themes emerged that many firms struggle with. The same was true this year, although the specific struggles changed somewhat. Once again, responses fell into five primary categories:
5. Finding qualified personnel. While a number of respondents reported difficulty in finding, hiring, training, or retaining qualified personnel, this issue received less emphasis than it did last year. Reflecting on why it is difficult to find and keep qualified employees, respondents noted the broad scope of skills required, as well as extended travel requirements.
4. Being engaged too late in construction projects. While commissioning best practices have long called for involvement as early in a project as possible, for a variety of reasons it is often an afterthought, with providers not engaged until the construction phase. This year, frustration on this issue propelled it onto the list as providers try to play catch-up while still delivering value to the owner.
3. Obtaining work. Among respondents to this year’s survey, there was a notable focus on increased difficulty in obtaining work. Commissioning providers generally attributed this to larger economic forces such as the sputtering recovery and the lack of a rebound in new construction, as well as a general decrease in federal and other public projects.
2. Scheduling and system readiness. Issues with maintaining project schedules were again a prominent challenge for many of the survey’s respondents. While working around inevitable delays is part of the job, it’s clear that compressed schedules and lack of coordination are putting significant pressure on providers’ ability to complete commissioning work in a timely fashion.
1. Competition, pricing, and condensed Cx scopes. Three different but interrelated issues—often noted as such by respondents—are combined here into the single biggest challenge. With more firms offering commissioning, there is downward pressure on fees, particularly from firms that are offering more limited services. With some building owners either unaware of, or indifferent to, the differences between comprehensive commissioning and “commissioning lite,” providers often find themselves forced to choose between doing a limited scope or not getting the job at all.
When asked to share their thoughts about possible upcoming trends in commissioning, the majority of respondents said they anticipated at least one of the following to occur: an increase in the number of existing building Cx projects; more demand for building envelope Cx; and (somewhat counterintuitively, given the trends) a drop in projects focused on LEED certification.
Finally, respondents provided their take on the expected growth, or contraction, of their commissioning business in 2013. While optimism still mostly reigns—64% say they anticipate more work—the percentage expecting a decrease doubled, from just 6% last year to 12%.
Ray Bert is executive director and Lexi Gray is communications director of the AABC Commissioning Group (ACG), a nonprofit association of certified commissioning providers headquartered in Washington, D.C.
Annual Salary Survey
After almost a decade of uncertainty, the confidence of plant floor managers is soaring. Even with a number of challenges and while implementing new technologies, there is a renewed sense of optimism among plant managers about their business and their future.
The respondents to the 2014 Plant Engineering Salary Survey come from throughout the U.S. and serve a variety of industries, but they are uniform in their optimism about manufacturing. This year’s survey found 79% consider manufacturing a secure career. That’s up from 75% in 2013 and significantly higher than the 63% figure when Plant Engineering first started asking that question a decade ago.