Industrial construction GMP schedule risk is a compression problem. A large warehouse can be built in ten or twelve months, which sounds like an advantage until something goes wrong and there is nowhere for it to go.
Why industrial schedules are so short
A distribution building is simple by construction standards. A slab, a structure, a shell, a roof, a sprinkler system, some offices and a lot of paving.
The trades are few, the repetition is high and the sequence is linear. There is no fit out to speak of, no unit count and no tenant coordination in most cases.
That simplicity produces very short programs relative to the floor area, and the market has come to expect them. A tenant signing a lease for a building of this type expects delivery in a timeframe a commercial or residential project could not approach.
The short duration is a genuine advantage. It reduces carrying cost, it reduces exposure to escalation, and it gets a rent commencement date closer.
It also means there is almost no float in the network. A twenty six month project absorbs a three week problem. A twelve month one does not, because every activity is nearly critical by construction.
That is the whole of the risk profile on this building type, and it shows up in three specific places.
Where industrial construction GMP schedule risk actually sits
Site work and earthwork. The first activity and the one most exposed to weather, soils and utilities. On a building with a large footprint the earthwork quantity is enormous, and a wet season or an unexpected soil condition consumes weeks before anything vertical starts.
The slab. Discussed separately, but from a schedule point of view it is a large pour on a critical path with curing time that cannot be shortened and a tolerance that has to be achieved first time.
Structural steel and joists. A long lead item on a building with no other long lead items, which makes the release date the single most important procurement date on the job.
Roof. Weather dependent, large area, and everything inside waits for it.
Fire protection. The sprinkler system in a high pile storage building is substantial, it depends on the commodity classification the tenant will store, and that classification is frequently unknown at pricing.
The last one is the most commonly underestimated, because it looks like a building system and behaves like a tenant requirement.
What compression does to a change
On a project with float, a change is absorbed. The activity slips, the float is consumed, and the end date holds.
On a compressed industrial schedule, every change is a delay, because there is no slack to consume. A change order for eleven days of work is eleven days on the completion date unless somebody accelerates.
That makes acceleration the default response rather than the exception, and acceleration is expensive in a way that change orders alone are not: overtime, additional crews, out of sequence work and the inefficiency that comes with all three.
It also changes the arithmetic of a design decision. On a long program a late design change costs the change. On a short one it costs the change plus whatever acceleration is needed to hold the date, and the second number is frequently the larger.
The practical consequence is that design completeness matters more on a fast job than on a slow one, which is the opposite of the intuition that a simple building needs less design.
How float disappears in general is covered in who owns float on a construction schedule.
A worked example
Illustrative figures. Not taken from any client project and not a quotation.
A 720,000 square foot distribution building with an eleven month program and a lease commencement date with rent attached.
Two events. Earthwork encounters unsuitable material over roughly a fifth of the footprint, requiring undercut and replacement: twelve days and $840,000, of which the material is $610,000 and the rest is equipment and time.
Separately, the tenant confirms a commodity classification requiring in rack sprinklers in two zones, which was not in the price. Design, fabrication and installation: nine days and $520,000.
Neither event has float to absorb it. Twenty one days of delay against a lease commencement produces an acceleration decision: additional crews on the roof and the sprinkler work, weekend work on paving, at a premium of roughly $240,000 to recover fourteen of the twenty one days.
Total $1.6 million, of which $240,000 exists only because the schedule had no room in it.
On a project with four weeks of float neither event would have moved the completion date and the acceleration line would not exist.
What buying float would cost
This is the calculation nobody runs and it is a short one.
Adding four weeks to an eleven month program costs four weeks of general conditions and four weeks of carrying cost, which on a project of this size is a knowable number and usually a modest one relative to the contract.
What it buys is the ability to absorb the two events above without an acceleration decision, plus a considerably calmer job.
Whether that trade is worth making depends on the rent commencement date and on how much of the schedule risk is genuinely outside anybody control. On a building with a large earthwork quantity and a tenant commodity classification still unconfirmed, it frequently is.
The reason it is rarely considered is that the schedule arrives as a given. It is set by a leasing commitment made before the construction contract, and by the time anybody prices the building the date is already in a lease.
Which is an argument for having the construction conversation before the leasing one, on a building type where the construction duration is short enough that people forget it has a lower bound.
There is a cheaper version of the same idea that does not touch the completion date at all. Float can be created inside the program rather than added to the end of it, by starting the long lead procurement earlier and by resequencing the site work so the earthwork sensitive activities happen before the wet season rather than through it.
Neither costs anything except attention in the first month, and on an eleven month job the first month is the only one where any of it is still adjustable.
What to do before you sign
- Ask how much total float the schedule contains, as a number, and where it sits.
- Establish the earthwork assumption: quantities, soil conditions, and what happens if material is unsuitable.
- Confirm a geotechnical report exists and that the earthwork was priced from it.
- Find the structural steel release date and check whether it has already passed.
- Confirm the commodity classification for fire protection, in writing, from the tenant.
- Price four weeks of additional program so the trade between float and duration is visible.
- Check the lease commencement date against the schedule with the float number in hand.
Item one is the question that is almost never asked on this building type, and the answer is frequently near zero. A schedule with no float is not necessarily wrong, but an owner who knows that is an owner who prices changes differently.
Item five is the single largest unpriced item on most industrial projects. Fire protection design follows the commodity classification, and a classification confirmed after the price is fixed is a redesign of a system that runs through the entire building.
The scope options for this reading sit in the review packages.
What we do
We measure the float in the schedule, test the earthwork and fire protection assumptions against the documents behind them, and state what a typical event costs on a program with no slack. The output includes the price of buying float, so the trade is a decision rather than an accident. We do not rebuild the schedule. The work is the schedule and procurement risk review. Where this risk sits changes with the building type, and the sectors page shows where it usually lands.
Questions people ask
Why is a short schedule a risk rather than a benefit?
It is both. The benefit is real: less carrying cost, less escalation exposure and an earlier rent commencement. The risk is that a compressed network has almost no float, so every change becomes a delay and acceleration becomes the default response rather than the exception.
What is the most commonly unpriced item on an industrial job?
Fire protection, driven by the commodity classification the tenant will store. It looks like a building system and behaves like a tenant requirement. A classification confirmed after the price is fixed is a redesign of a system running through the whole building.
Can float be bought?
Yes, by adding duration to the program at the cost of general conditions and carrying cost. Whether it is worth it depends on the rent commencement date and how much risk sits outside anybody control. The calculation is short and it is almost never run, because the date usually arrives fixed in a lease.
This is general information about construction contracts and is not legal advice.