Why Are MEP Projects Late and Over Budget?

MEP (M&E) design and installation is a fundamental element of overall building design process as it directly impacts and influences the use and ongoing costs of the building. Sustainability and conservation issues are important additional factors influencing MEP (M&E) design and place further pressure on effective design while also operating in a profitable environment.

It is common knowledge that the margins involved in MEP (M&E) projects are precariously tight, however instead of managing risk to manage margins, the pressure (from General Contractors and Clients) to act quickly has meant that margins have been squeezed – to the point of loss in many cases. The industry has found it difficult to move from a “reactive site-based position” to a more balanced “pro-active” position that involves greater foresight and planning.

To understand why MEP (M&E) projects are continually over budget, one may find it easier to look first at a different industry entirely. So for example, one could look at anything ranging from manufacturing IT equipment to developing and launching a new software tool to motor vehicle manufacturing. In all of these examples there is a fundamental project cycle that is followed every time. This involves a series of stages which ensure that the output is understood and “tested” before something is built or put into a live environment. The testing, which is fundamental, includes comprehensive risk assessments at several stages and mitigating action to manage such risks.

Taking vehicle manufacturing as an example, at a very high level there are three key stages/elements involved. Firstly, there are individual components (or parts), secondly there is an initial assembly of parts (to make the vehicle) and thirdly there is a mass assembly process. Taking the components first, all components are designed and tested, in detail, in a virtual environment, usually with prototypes being developed for further testing before the finished component is ready. Turning to the “initial assembly of parts” that make up the vehicle. This is very detailed research and development process which utilises a process of virtually built and tested vehicles usually over a period of years. Only once testing is complete is a prototype started which is built, tested and re-built. The vehicle manufacturer will then move to mass manufacture in a production line environment. The production line itself is subject to extensive efficiency and accuracy improvement measures – on a constant and evolving basis. However, once the production line activity begins then there are NO SURPRISES in most cases and every element that is introduced to the line for a vehicle that is already tested is a) known, b) tested and c) works/fits.

In short, vehicle manufacturing utilises extensive planning, virtual testing, actual product/component testing and constant quality control during component manufacture and during the assembly process. There are no surprises or reactive responses during the production line phase of the projects and this is why profitability is in the hands of the manufacturer (and the market of course!).

Now, compare this with MEP (M&E) projects. Firstly, assuming that the engineering components (whether these are pipework, electrical or ductwork elements) are all tested and proven, the challenge for the engineer or sub-contractor is in the assembly of parts and then the installation process on a mass/large scale. As we know, most buildings (excluding new homes or similar repetitive designs) are unique so whilst the engineer is using components that are tested and is usually aware of how those components will work together, he/she will not usually be aware of all of the other factors that inhibit the ‘assembly’ and ‘arrangement’ of MEP (M&E) services. The challenge for MEP (M&E) projects therefore is not concerned with component testing and knowing how the components fit together but rather with site based component assembly, arrangement and installation.

To appreciate the challenge facing the MEP (M&E) industry one has to understand more about the building services design and detailing process. An MEP (M&E) design is completed by one party (the Consulting or Designing Engineer), this is usually a high level design and therefore cannot be easily tested at this stage as it has not taken into account several ‘other’ conditions such as, a) eventual procurement decisions that may lead to changes in sizes and specification of equipment and plant, b) position of other disciplines (e.g. any steel or structure), and; c) in some cases even other MEP (M&E) disciplines (so ductwork design may not have taken into account the plumbing design).

This high level design is then passed on to the next member of the supply chain (commonly referred to as the Building Services or MEP (M&E) Contractor/Trade) who is responsible for planning the site based assembly and installation. This ‘passing-on’ of a design obviously carries some risk but this process is commonly undertaken for MEP (M&E) projects due to contractual and financial reasons as well as technical expertise. As such, the Trade/Sub Contractor has responsibility for taking the design to a detailed level to allow the ‘other’ conditions to be assessed and risks to be mitigated. The Trade/Sub Contractor will detail the design to ensure that it is updated to include his/her preferred materials and plant, that it meets access requirements, it includes space or information for fixing and bracketing and be also to sure that it can be physically installed in the building. Once these elements are met and he/she is confident that the components in the design are not interfering with other disciplines (whether structural or other MEP (M&E) elements) then this first challenge for the Trade/Sub Contractor can be considered complete. This first stage is referred to as MEP Coordination (M&E Coordination) which is the term used to describe vertical and horizontal, interference free drawings.

The second challenge is to manage the installation (or assembly) work, this may involve a degree of pre-fabrication based on the design that has been detailed and the extent to which the building will allow pre-fabrication elements. Whether pre-fabrication is used or not the time and cost of the installation process is directly influenced by the accuracy of the drawings.

As well as using the detailed design for installation, the Trade/Sub Contractor will also use the detailed design output (usually a series of drawings) for creating a schedule or bill of quantities. This is a manual process that takes time and is subject to human error once again. However, it is vital to ensure that this is carried out correctly as it affects estimates and quotes – all of which affect the increasing accountability that MEP (M&E) Contractors/Trades are responsible for.

Traditionally, Trades/Sub Contractors created their detailed design (from which they also extract quantity information) using polyline software – a fairly primitive tool by today’s CAD (Computer Aided Design) standards, to create two dimensional, detailed, technical drawings. The key issues arising from use of polyline software tools are that, a) it takes a long time to produce the drawings – as they require a lot of overlaying and experienced insight, and; b) there is no easy or quick way of validating/testing the drawings – checking would require a manual review which is of course open to human error. Finally, due to the time taken to create and check the drawings, information such as bracketing, hanger locations and their sizes are typically omitted from the drawings – introducing further risk. Of course there are a series of other risks that are inherent in MEP (M&E) projects including the need to ensure the use of the latest set of constantly changing and re-issued design information from other disciplines.

As a result of these issues, MEP (M&E) projects are usually not designed in enough detail and certainly not tested to the degree that they should be. Compared with other industries such as IT development or vehicle manufacturing the acute lack of testing for the final stage (assembly at site level) has varying degrees of effects on the outcome of MEP (M&E) projects.

Working with the detailed design as it is means that any issues that do exist within the design (i.e. procurement or spatial clearance issues) will impact the Trade/Sub Contractor which will result in time delays and additional costs – both of which affect eventual profitability of the project. The reality is that in most cases contractors experience problems during the installation phase of projects which are caused by poor drawings standards and quality levels. Such problems result in spiraling costs and a complete lack of control in most cases. On site problems include:

  1. Clashes of MEP (M&E) services with other MEP (M&E) services as well as architectural and structural elements – the resultant delays and on-the-spot fixes result in labour and equipment costs that have a critical impact on budgets.
  2. Installers not being able to fully understand the drawings and therefore misinterpreting them – resulting in errors and then corrective work.
  3. Bracketing and hangar locations being compromised due to ineffective layout drawings – requiring site-based planning and installation.
  4. Lagging and insulation of services being affected – affecting MEP (M&E) service performance.
  5. Service access areas and access locations being affected due to poor planning – requiring site based resolution and dealing with subsequent knock on effects.

Trade/Sub Contractors are used to this of course and they manage this eventuality by ensuring that adequate site based resources and budgets are in place to manage ‘on-the-spot’ issues at site. Although the cost of additional, site-based, manpower and equipment far outweighs the cost that may have been incurred during the detailed design phase this has not deterred Trade/Sub Contractors from working in a reactive manner. In actual fact higher site based costs are actually helping to cover up the real issue of a poorly detailed design that has failed to identify and address issues during the detailed design (or ‘detailed coordination’) phase of the project. Had the design been detailed before moving to site, then site based costs and time could be controlled and profitability, and even overall project costs, for customers could improve considerably.

Collectively, the failure by Trades/Sub Contractors to create a detailed design with the best tools available; the apparent need to rush to site and start work (as a result of pressure from General Contractors and Clients); and the need to bridge overall project delays during installation stage (as a result of pressure from Project Managers) are all factors working against the Trade/Sub Contractor. One would argue that the only element that the Trade/Sub Contractor can directly control is the “detailed design”. If this is ignored to the extent that is currently the case, then MEP (M&E) project profitability will remain challenging at best.

So as can be seen, compared to manufacturing or IT industries where a thorough and detailed design process exists, MEP (M&E) projects are ill-tested therefore there is a higher propensity for them to fail. By accepting the risk of a poorly designed project the Trade/Sub Contractor is compromising not just profit but also his reputation and future success.

Next: Look out for our next article ‘The Key to Making MEP (M&E) Projects Profitable” which will be released in the coming weeks.


In writing this article we recognise that there are many reasons affecting profitability and performance including

a) choice of, and training of personnel,

b) choice of suppliers and partners

c) weak design execution,

d) unrealistic time frames for completion;

e) failing to detail the design and test appropriately.

This article is concerned with e) failing to detail the design and test appropriately. Our next article will feature more information about how to succeed in MEP (M&E) projects – including the approach now being taken and also how the industry has responded with lean methods and processes.

MEP (M&E) is short for Mechanical, Electrical and Plumbing which are the three main trades and components of building services. MEP is the term used commonly in the US and India while the term M&E is commonly used in the UK, Australia and Canada. In the Middle East the term is commonly referred to as Electro Mechanical Services.

Delays in MEP projects, and hence the propensity to go over budget, continue to plague the construction industry for additional reasons.

  • Collaboration is very important and should be implemented from the early stages, as early as the pre-concept stage. Everyone involved, whether architects, structural and building services engineers, installers and fitting teams should be on the same page. If teams do not collaborate and understand the challenges each faces then the potential for project schedule overruns will continue to increase.

  • Punctual execution of MEP projects can be subject to abnormal weather, funding, changes in regulations, labour shortages, material shortages or changing site conditions, changing orders, unreasonable project scope, inadequate early planning and the absence of risk management systems.

  • The contractor can further contribute to delays due to lack of updated systems. When systems are updated, sometimes it’s not enough to upgrade a mechanical element. Perhaps ducting or pipework may also need to be adjusted, causing more delays.

  • Projects can be victim to unrealistic, unachievable schedules. In general, equipment and overheads involved are expensive, manpower required is extensive, and as a consequence, expenses build up. This is why construction schedules are vital.

  1. Schedules guide the planning and sequencing of the project.
  2. Schedules protect liabilities arising from the costs of delays.

Contractor obligations should ideally include detailed scheduling, which can be reviewed and assessed regularly.

  • An owner’s lack of construction experience can adversely affect his/her ability to understand the constraints of an MEP contractor. In such cases, the contractor must be able to persuade the owner to be flexible on deadlines or agree to delay-related costs. One way to deal with this is for MEP contractors to ensure that on-site staff are well trained and well versed about the delays and the causes of the delays.

  • The concept designs provided by the client could be substandard and contain many errors because it does not take into account specific site or process requirements. However, once it is validated by the contractor, the client attempts to blame all concept design shortcomings on the contractor, and while the two argue, work is delayed.

  • Contracts contain a date when the contractor is to take possession of the site to conduct site investigation and determine enabling works. After this, construction commences. Many times, access is delayed to the contractor and this leads to delay in the commencement of construction.

What can be done to minimise some of these delay triggers and the resulting tendency to go over budget?

1. Coordinated Process:

MEP design needs to strictly adhere to the design construction sequence. Coordination of the process during design and construction phases will facilitate earlier contractor participation. This will lead to faster completion of projects and minimise the re-work required, saving costs.

2. Extensive Use of BIM:

Already, many firms are witnessing a movement from 2D CAD to BIM technology. BIM and Revit 3D modelling are expected to be more widely applied on all MEP systems. Engineering teams can collaborate effectively, using this technology, to construct, design and solve design integration issues.

3. Modular Construction for MEP Systems:

Modular construction and DfMA (Design for Manufacture and Assembly) has generally been seen in structural-based systems and prefabrication. With advancements in BIM technology, there are more opportunities of manufacturing an increasing number of components off-site. Doing so would help save expenses spent on detailed MEP site work and installation phases, helping with quicker turnaround times.

If implemented in concert, the above steps will see a reduction in both delays and costs. Ultimately, innovation in attitudes, software and processes is needed to seek fresh solutions and improve efficiency.

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