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University of Chicago Medical Center

    The 1.2-million-SF, 12-story University of Chicago Medical Centerís New Hospital Pavilion will increase the hospital's current clinical capacity by more than one-third. The structural system consisted of concrete shearwalls, with steel beams and columns with a total of approximately 13,500 tons of structural steel.

University of Chicago Medical Center expansion projectWhen notified by the Construction Manager that the budget for steel construction would have to be increased from $52,000,000.00 to $56,000,000.00 after an earlier increase from the original budget of $45,000,000.00, the Owner decided to bring in The Steel Construction Group (SCG) to help develop a procurement plan which would rely heavily on the use of off-shore procurement to control costs.

Total Steel Savings - $15,000,000

After their initial analysis revealed that the structural steel framing system did not have sufficient complexity to allow full savings from the reduced labor cost of using off-shore fabricators, SCG recommended that a new approach to steel procurement using U.S. domestic fabricators but a more "hands-on" pre-approval and bidding procedure would lead to enough savings to warrant reducing the budget for structural steel to $44,000,000.00.

With some reservations being expressed by the Construction Manager, the Owner accepted the recommendations made by SCG with the stipulation that off-shore pricing should still be developed and compared with domestic pricing. The final Procurement Plan developed and implemented by SCG called for a steel budget of $44,000,000.00 and the award of steel contract to domestic contractors if the domestic pricing at bid time was within budget and no more than $3,000,000.00 higher than pricing received from off-shore sources.

Upon receipt of steel bids an award was made to the lowest, qualified domestic bidder at approximately $41,000,000.00 which reflected a savings to the project of approximately $15,000,000.00. The lowest off-shore pricing received totaled $39,000,000.00 making the domestic pricing within the $3,000,000.00 window previously established.

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