Dive Brief:
- DTE Energy broke ground Tuesday on its $1 billion Blue Water Energy Center natural gas-fueled power plant in East China Township, Michigan. General contractor Kiewit Engineering has started the subcontractor prequalification process with local companies, according to a DTE announcement.
- Kiewit is expected to spend at least $200 million on Michigan-based subcontractors, workers and material suppliers. The project could create 500 construction jobs for Michigan residents and 35 full-time positions upon the plant's scheduled opening in 2022. Construction should begin in the spring of next year.
- When the Blue Water plant is operational, it is expected to aid DTE in its goal of an 80% reduction in carbon emissions while keeping rates affordable, according to CEO Gerry Anderson. The company said the facility will provide low-emission electrical power to approximately 850,000 customers as part of its plan to double its renewable energy capacity and invest $1.7 billion within Michigan.
Dive Insight:
The subcontractor prequalification process can be a tedious one for a general contractor, especially when encouraged — or required — to limit its selection to the local market. Companies that do work nationwide often have preferred, familiar subcontractors that also offer their services across the country but cannot use them for entire scopes of work like they normally would.
One of the things Kiewit is likely looking for in potential subcontractor partners is experience with natural gas-fueled power plants. A successful history with the type of project at hand is going to be one of the top requirements of any general contractor or construction manager when vetting subcontractors. Other requirements will likely include the ability to adequately staff and finance the project. That might even include the capacity to provide payment and performance bonds if the owner requires them. Good references are important as well to help weed out those companies with any past performance or management problems that aren't obvious from a look at the standard paperwork.
Technology is helping this selection process along, however. Earlier this month, preconstruction platform BuildingConnected announced its purchase of TradeTapp, a subcontractor risk analysis solution. TradeTapp provides general contractors with recommendations based on subcontractor qualification data to help eliminate problems that result from selecting the wrong company, which can end up wasting millions of dollars a year.
