Modular Construction An Economics Overview of Completed Projects

Acknowledgments

Abelardo (Abe) Perez was assigned as the Project Controls Manager for industry leading life sciences companies with modular construction projects from 2003 to 2006 in Puerto Rico.

Common Module Types

Super Skid Process Architecture

Super Skid Modules

Large pre-constructed equipment with associated process, utility, infrastructure support prefabricated and predominately qualified. Super skids are interconnected to plant systems with the utilization of prefabricated spool pieces.

Process Modules

Large pre-constructed sequential modules equipped generally with large ballroom or ceiling/roof modules to encompass entire systems including large reactors, vessels, and tanks with associated process, utility, infrastructure support. Process modules are interconnected sequentially with full utilization of prefabricated spool pieces.

Architecture Modules

Large pre-constructed non process sequential modules utilized generally for support areas like corridors, offices, restrooms, mechanical and other support requirements. Architecture modules are interconnected sequentially with spool pieces for utilities and welded base plates.

Modular Construction Benefits

Schedule Health • Ability to complete onsite construction faster due to

simultaneous module fabrication, site works, and building foundations. This is an improvement to traditional stick built sequential construction.

• Improved labor productivity due to fabrication shop type environment for exceptional performance.

• Minimization of onsite risks due to labor market, construction delays, bidding process, poor productivity, and weather delays.

Modular Construction Concerns

• Module layout changes due to design changes are difficult and expensive due to limited module space. Late changes generally require extensive rework.

• Non traditional costs for module logistics, transportation, staging, and large crane requirements.

• Risks associated with module interconnections and spool pieces not properly aligned due to fabrication and transportation inefficiencies.

• Module fabrication late delivery • Shipments of incomplete modules requiring

unforeseen onsite completion.

Modular53%

Non ModularSupport Facilities

21% OwnerCosts10%Indirects

8%

Existing SiteInfrastructure

8%

0

10

20

30

40

50

60

% TIC

Puerto Rico Large Greenfield Biotech Project

(Engineering Qualification Prorated)

ModuleFab

56%

Super SkidVendors

10%

Modular Engineering

Costs14%

ModuleOffsite

Validation 1%

Owner ProcuredEquipment

19%

0

10

20

30

40

50

60

%

Puerto Rico Large Greenfield Biotech Project

Offsite Module Fabrication Costs

ModulePrep

Interconnects42%

Super SkidVendors

8%

ModuleValidation

Costs15%

ModuleAutomation

30%

Owner ModuleLogistics

2%

EngineeringSupport

3%

0

5

10

15

20

25

30

35

40

45

%

Puerto Rico Large Greenfield Biotech Project

Onsite Module Construction Costs

U.S. Module Fabricator Dry Products Facility CSI Cost Metrics

1. Steel • Module Steel (Tubular Frames) Fabricate and Erect $5,196 Ton • Metal Deck Installation $9.83 SF • Fireproofing (Intrumescent) $30.91 SF

2. Architectural • Roofing $31.78 SF • Gypsum Partitions $33.30 • Gypsum Ceilings $52.51 • RAP Wall (Clean Rooms) $39.11 • Flooring (Stone Hard) $11.08

3. HVAC • Duct (Galvanized), Accessories (Galvanized) $36.88 Lb • Insulation $3.57 SF

4. Fire Protection • Sprinkler System $9.02

5. Plumbing • Sanitary Drains $229.00 LF

6. Piping (Fabricate and Install) • Pipe, fittings, hangers, Spools (Purity/Non Purity) $355 LF

7. Electrical Instrumentation • Cable Tray $103 LF • Conduit (Composite) $59 • Power & Control Wire and Cable $1.76 LF

U.S. Module Fabricator Dry Products Facility Metrics

1. Module Fabrication Duration • 10 Months Total (84 Total Modules) • Module Average (Process/Non Process) 16 Weeks

2. Fabrication TIC Percentages • Engineering 2.3% • Direct Labor 30.3% • Contracted Labor - Data Not Available • Indirect Support 8.7% • CM 8.6%

3. Module Costs • Average Cost Per Module (Process/Non Process) $562,000 • Average Cost Per SF $1,124

4. Pipe Metrics • Non Purity Average Pipe Diameter 2.13” • Non Purity Pipe 29,000 LF - Welds per Module Data Not Available • Purity Average Pipe Diameter 1.59” • Purity Pipe 7,400 LF – Welds per Module Data Not Available

5. Automated Valves • Data Not Available

6. Fabrication Shop Validation • 3.4% performed (IQ)

7. Other • Surplus Material Generated - 5.6% of Bulk Materials • Total Cost Growth from Original Vendor Estimate 21.5%

U.S. Module Fabricator Biotech Facility CSI Cost Metrics

1. Steel • Module Steel (Tubular Frames) Fabricate and Erect $4,950 Ton • Metal Deck Installation $6.58 SF • Fireproofing (Intumescent) $29.84 SF

2. Architectural • Siding (Centria) $33.87 SF • Gypsum Partitions $12.70 (Five Wall Types) • Ceilings $73.87 • Flooring $5.33

3. HVAC • Duct (Galvanized), Accessories (Galvanized) $37.31 Lb • Insulation (Included above)

4. Fire Protection • Sprinkler System $9.11

5. Plumbing • Sanitary Drains $96.50

6. Piping (Fabricate and Install) • Pipe, fittings, hangers, Spools (Non Purity) $111.94 LF • Pipe, fittings, hangers, Spools (Purity - Subcontracted) $165.08 LF

7. Electrical Instrumentation • Security, Telephone, Sound & Paging System $2.45 GSF • Cable Tray $62.61 LF • Conduit (Composite) $25.96 • Power & Control Wire and Cable $1.43 LF

U.S. Module Fabricator Biotech Facility Metrics

1. Module Fabrication Duration • 16.6 Months Total • Module Average (Process/Non Process) 16 Weeks

2. Fabrication TIC Percentages • Engineering 5% • Direct Labor 30.2% • Contracted Labor 2.3% • Indirect Support 5.5% • CM 8.8%

3. Module Costs • Average Cost Per Module (Process/Non Process) $464,000 • Average Cost Per SF $1,200

4. Pipe Metrics • Average Pipe Diameter 2.39” • Non Purity Pipe 29,000 LF - 107 Welds per Module • Purity Pipe 24,000 LF – 35 Welds per Module

5. Automated Valves • 284 Installed • Less 1% Fabrication Shop Installed

6. Fabrication Shop Validation • 2% performed (IQ)

7. Other • Surplus Material Generated - 2.65% of Bulk Materials • Total Cost Growth from Original Vendor Estimate 6.1%

Comparison

1. Total Module Cost $1,165 SF • Module Fabrication Cost 1,150 Per SF • Logistics Cost Per Module $54,336 Each or $15.00 SF

Module Shipping / Transportation $26,776 Module Port to Site Transport & Site Offload $27,560

2. Traditional Building Construction

• Non Class 30% $383 SF TIC $115.00 • Class GMP 40% $630 SF TIC $189.00 • Class 10,000 20% $1,235 SF TIC $247.00 • Class 1,000 5% $2,500 SF TIC $125.00 • Class 100 5% $3,360 SF TIC $168.00 • Total Cost (Excludes Equipment) $844.00

3. $1,165 SF Modules versus $844.00 SF

4. Schedule

• Module Average (Process/Non Process) 10 Months Fabrication + 1 Month shipment + 2 Months Interconnects = 13 Months.

• Traditional Stick built Average 19 Months