Modular Data Center is not a guarantee of less cost, time, waste

Some Modular Data Center vendors would lead you to believe that a modular design is a guarantee to lower cost, less time to build, and reduces waste.

Modular uses Prefab construction ideas.  An article written by Postgreen Home's President Chad Ludeman provides some details on what is possible in home construction using Prefab.  The perspective given is prefab used in a modern home.  

Some nuggets that will get you thinking.

Prefab manufacturers and resellers will tell you that prefab is cheaper because of the time and labor savings, but let’s list the key factors that actually make prefab more expensive than site built:

  • Manufacturing Facility Overhead – Prefab manufacturers work in buildings with support staff above and beyond those actually building the houses. They also have facility costs such as equipment, utilities and maintenance … Site built homes, built by most residential builders, don’t have any of these.
  • Manufacturing Company Profit – These manufacturers are making at least as much profit as the average general contractor and often more.  The majority of cost savings resulting from the prefab manufacturing process stays in the pockets of the manufacturer.
  • Delivery, Setting, and Crane Fees - These can easily run $10K per house (cranes aren’t cheap) and can be significantly more if the distance from manufacturer to site is large.  Most manufacturers also dictate who the labor crew will be, and often they won’t be the best value available.
  • Architect or Reseller Fees – In some cases the fees charged by the architect providing the prefab can run as high as $30,000 or more.  Even in cases where no additional site customization or design work is needed, a substantial fee will still be added by the architect or reseller.
Less Waste. Since prefab is built in a factory they claim to create much less waste by setting aside their scrap and reusing it in other projects.  What they do not often advertise is that their structures use 20% – 30% more raw materials than stick-built homes in order to withstand transportation.  That’s no small figure in my book, especially considering that even if there is waste on-site with stick-built homes you can now easily hire a waste removal company that will recycle 90%+ of your construction waste.
I recently walked through a delivered prefab with the owner and he offered me pallets of free OSB because he had so much extra and had no idea what he was going to do with it.  I’m sure every prefab company is not this sloppy, but it is another indication of waste in an industry claiming extreme efficiency.
I have some friends who are not believers in containers and they say they can stick build a data center cheaper than containers.  How?  They have ideas like this.
Quality Stock Plans
The first place to start when trying to streamline and cut costs from any building project is with high-quality building plans from qualified architects.  If every detail down to the last sheet of drywall and bucket of paint is nailed down and proven out in each set of plans, it becomes much easier for a GC to provide the best price from his crew and any subcontractors that are hired for the job.  This can not be undervalued, since any uncertainty on the part of those bidding on the project will instantly up the quotes.  This is where prefab gets most of the efficiency gains in their process, by building exactly the same home over and over.  They know exactly how much material and how much labor goes into each home plan in their library of options.

 If you don't agree with this author you can rebuttals here.

To Conclude . . . Finally

There are many amazing things being done in prefab, and if it weren’t for my self-imposed ban on mentioning specific companies and architects, I could name a bunch that I personally admire.  However, there are also a large number of misconceptions about the benefits of prefab that need to be discussed, and this post is simply trying to get that discussion started.  Are there points of dispute here?  Certainly. Am I perfectly correct in everything I have said?  Probably not. So, go to the comments and tell me what you think.

Editor Update 9/18/08: Tedd Benson of Bensonwood Homes has a lengthy, articulate response to this article, and Lloyd Alter of Treehugger mentioned a few points to consider as well.  Allyson Wendt of Building Green also added her thoughts on the future possibilities of affordable, green prefab.

One of the posts by Tedd Benson gives you more to think about.

On the other hand, I do understand why costs might be higher. One of the big reasons is that the contractors hired to put the package together often have no motivation to be efficient, and furthermore, have a very convenient excuse if things take longer and cost more: it’s not their fault; they are the solution, the prefab package is the problem. In addition, the subcontractors who bid on the portions of work not accomplished with the prefabrication tend to charge 15-25% more for the same reason. It’s very often not whether the work will be more or less difficult, but just the fact that it’s different. It’s the out-of-my-comfort-zone tax, and it’s one of the hidden costs of any alternative form of construction. Too often, there’s simply an up-charge for having to think.

This last point wakes you up to what a tract home is like.  Actually, there are some data centers that have been built like tract homes too.

My biggest problem with site construction is that it often results in “devalue” engineering. Frequently, the people on the site think they know more than engineers and they reduce the framing schedule, reduce the fastening patterns, don’t install all the clips and tie-downs and otherwise save themselves effort and time by reducing the structural quality of the building. My start in the building industry was with tract home construction in suburban developments. Before I knew anything, the shortcuts and the flimsy buildings were appalling to me. We sometimes forget that the standard of building in America isn’t the custom homes built by the good builders, or the good prefabrication efforts by responsible companies. That vast majority of homes are tract homes built by low-skilled, unqualified labor.