Monday, January 5, 2009

What to do when construction slows down

I read an article today that mentioned an interesting (If not a bit scary) statistic. According to the American Hospital Association, 56 percent of recently surveyed hospitals were reconsidering or postponing large construction projects. In the short-term that is bad for architects, contractors and equipment vendors. When the economy recovers, it means that there will be the need to re-confirm the planning assumptions used. What changed in terms of population, competition and technology?

The medical equipment list will need to be reviewed for the same reasons as the design of the space. Here are a few areas to focus your review:

1) Save money by not spending it. Re-examine opportunities to re-use existing items. If your new project was delayed, the Doc's likely kept on begging for that new ultrasound, laser, or OR tables. You might find that this year's annual budget was spent reducing the need for purchases on your new project.

2) Commit early for better pricing. As we all know, equipment vendors are focused on hitting their quarterly numbers. This slow down will have a very negative effect on them. When your project is back on the front burner, vendors will be looking to get revenues flowing again. If you have a high confidence level in your project completion date, you should be able to negotiate a better price if you commit in an earlier quarter than you would have otherwise. Ask for the deal. Any VP of Sales knows that locking out the competition is worth a few points. Even better, call your GPO and push them to organize a group buy for the big ticket items you need. As a side bonus, the contractor will love you because there won't be any last minute change orders. (Or at least fewer!).

3) Sit down with the architect. Go through the plans and get an understanding of what changed and why. Sometimes changes that meant little to the architect my offer an opportunity to alter the equipment list. For example, many clients will shell some spaces to allow for future expansion. You can easily eliminate the equipment from those rooms. But if you drop from ten LDR's to 4, can you still justify a dedicated ultrasound? Maybe they share with Imaging for another year.

Worried you won't be around when the project is re-started? Suggest new ways for your expertise to be used. In any downturn, the focus turns to cost-cutting. If you have enough experience to know what is broken in the system, do you have the expertise to fix it? Submit a proposal to improve the utilization of equipment, streamline the capital purchasing process, develop facility standards or move a paper process into an electronic process. If the facility is not spending capital dollars, the C-suite might be willing to spend operational dollars to effect cost-savings when the spigot opens again.

If you have other suggestions, or a comment on these first few suggestions, we'd like to hear from you.

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