Target-value delivery in construction

Does your construction company work with a business banker?  Today, we share insights from a business banker who explains why you should. But first: Check out how this fleet of beavers built a much-needed dam before humans could.

Here's a peek at what's in today's issue:
//   How government efficiency impacts infrastructure projects
//   Why you should adopt target-value delivery
//   What recent executive orders mean for crew safety

'It’s a business banker’s job to be proactive'

Creating a sustainable business requires help from professionals outside the industry. One expert you might have overlooked: a business banker. We asked Lisa Long Jackson, CCIM, senior vice president and commercial lender at Pinnacle Financial Partners, how to get the most out of a business banking relationship. 

What are a few ways a business banker can help? 

Construction companies should meet with your business banker at least once per year. They can be your advocate and help you keep up with current trends. Fraud protection tools are important right now. If you’re writing checks and paying via auto debit or ACH, you should contact your banker and ask about fraud protection services. Finally, construction companies need insurance and bonding and many banks have insurance partners.

What’s one thing construction business owners should understand better?

Set up a line of credit before you need it. Yes, you will be paying an annual fee, but you’re prepared if someone doesn’t pay you in a timely manner. Credit lines should only be used for the short term, 12 months or less, for things like financing needs, and not for equipment or major purchases that may take longer than 12 months to pay back.

What else should construction businesses know about working with a business banker?

It’s a business banker’s job to be proactive in knowing the clients in our portfolios. That means we need complete tax returns to evaluate any loan request and interim financial statements, profit and loss and balance sheets dated within 90 days of the request.

Can business bankers help smaller construction companies too?

If your business is new or generates less than $1 million in gross revenue, you should still ask to meet with a business banker. In most financial institutions, they can introduce you to a colleague that they know and trust if your company isn’t ready for a full-time business banker. If you can’t find a business banker willing to talk with you, you may want to look for a different financial institution.

>> Who we're following:  WomenTalkConstruction on YouTube. This channel includes insightful interviews and short how-to and explainer videos on trending topics. 

>> What we're listening to: "How to Strengthen Client Connections Using Data and Soft Skills." In the latest episode of the AEC Marketing for Principals podcast, Scott Steiding, chief growth officer of Bennett & Pless, shares advice for building your book of business.

>> What we're reading: The 2025 National Construction Estimator (Craftsman, 2025). The latest edition has all the information you need for better estimating, including crew needs, material costs and total hours.

>> What's happening soon: Facades+ (Mar. 12), Washington, D.C. The event features the latest developments in building enclosure design and technology.

>> Just for fun: Math makes things beautiful. This article from The Big Think explains how mathematical patterns influence what we find aesthetically pleasing. 

Contractor Confusion: 'Efficiency' efforts sow uncertainty

 The Biden Administration's efforts to boost national transportation and energy infrastructure appear to be in the new administration’s crosshairs, according to Engineering News-Record deputy editor Richard Korman.

“Construction firms serving infrastructure needs of the U.S. government and its population, some for many decades, now face shrinking work prospects—or none if projects and agency owners are terminated,” writes Korman. In addition to the billions in construction and other relief funds affected by the U.S. Agency for International Development’s abrupt closure, the new administration has announced plans that could impact contractors working for other agencies.

• The Department of Transportation’s rail, highway, aviation and maritime projects funded by the Infrastructure Investment and Jobs Act are “of greatest concern," Korman says.
• The Department of Education is on the chopping block—and so too, presumably, are the construction grants it extends to 1,100 public school districts on or near military sites, Native American lands, federal housing and other U.S. property.
• Public works finance projects, including the California High-Speed Rail project and New York’s vehicle congestion pricing, are also being targeted.

And more may be on the way. Grist developed a helpful tool to track changes in projects included in the Inflation Reduction Act and the bipartisan infrastructure law.

Why it matters: In the current environment, governmental decisions that impact construction arise quickly and often with little warning. “Now is not too soon to prepare,” Korman cautions, noting that U.S. contracting officers can pause project work at any time for 90 days and end contracts for convenience or cause. “Companies [are] urged to review legal terms and protections, inform subs of stopped work and document added costs or cost-mitigation actions.” (ENR)

>>  Apartment Abundance: Investors keep building

>>  Data Dump: Construction Backlog Indicator up to 8.4 months  

>>  Shop Shortage: Retail vacancy hits historic low

>>  Sticker Shock: Construction costs on the rise

Preconstruction Planning: Is it time to adopt TVD?

“In today’s construction landscape, decisions made early in the project lifecycle create the largest cost savings and value gains,” writes Nathan Menken for FMI. With most projects exceeding budgets, blowing timelines and requiring reworks, a new approach is needed. Target value delivery (TVD) addresses those challenges with collaboration, transparency and predictable outcomes. Apply TVD to mitigate these challenges:

• Misaligned expectations: By engaging owners, designers and contractors early to establish clear goals and a shared vision.
• Rework and inefficiencies: Through structured and proactive planning that minimizes redesigns, cuts costs and creates efficient workflows.
• Siloed collaboration: By encouraging teamwork and building trust across all project teams.

Why it matters: “The construction industry is at a crossroads. As expectations rise, preconstruction teams must adapt to stay competitive. Firms that fail to innovate lose out to teams that deliver predictable, value-driven results,” Menken says. (FMI)

Site Safety: New heat rules in jeopardy

Research shows that construction workers experience heat stress more than any other industry, except agriculture. The sector also has a consistently high fatality rate from heat stress. Yet there is no mandatory federal standard for workplace heat stress hazards. These facts prompted OSHA to propose a new standard requiring employers to create heat injury and illness prevention plans. Despite the data, approval and adoption of the guidance has been stalled—and may ultimately be prevented—by a recent executive order instituting a regulatory freeze on all proposed and pending rules.

Why it matters: Heat-related threats to construction workers’ health and safety are growing. The average temperature in the U.S. is rising annually (2024 was the hottest year recorded in the National Oceanic and Atmospheric Administration’s 130-year measurement history) and the heatwave season now lasts a month-and-a-half longer than it did in the 1960s. (Insurance Journal)

• Show me the money! (Mar. 13) Take Columbia University's Construction Finance Management online course to learn about cost control, cash-flow tracking and risk reduction.
• Get ESA certified Learn to conduct a Phase I Environmental Site Assessment (ESA) in this online, on-demand course from The Swamp School.
• Reduce your fraud risk The Association of Certified Fraud Examiners offers a fully online class that reviews the industry’s most prevalent fraud schemes and shows you how to uncover and avoid them.

Thanks for reading today's edition! You can reach the newsletter team at thelevel@mynewsletter.co. We enjoy hearing from you.

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The Level is written by Margot Lester and edited by Katie Parsons.