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abricated structural steel has been the m arket leader for


fram ing system s for non-residential building construction in
term s of both m arket share and cost for m ore than 50 years.
During the first tw o quarters of 2008 m ore than tw ice the am ount
of non-residential construction on a square footage basis has been
fram ed in structural steel than any other fram ing m aterial, includ-
ing concrete. W ith a 56% m arket share nationally structural steel
fram ing system s are the clear choice of project ow ners and design-
ers. W hy? Structural steel fram ing system s offer predictable value
for the building ow ner in term s of initial fram ing system costs, over-
all project costs and long-term benefits.
Initial framing system costs
Construction costs have escalated significantly over the past five
years w ith the square footage cost of non-residential buildings
increasing by a rate greater than the 19.4% increase of the
Consum er Price Index. The fram ing system of a building continues
to typically account for 10% to 12% of the building cost. During this
tim e the cost differential betw een structural steel and concrete
fram ing system s has rem ained relatively constant w ith a 5% savings
gained by selecting structural steel. For exam ple, w hen m easured
using national R.S. M eans data, the selection of a structural steel
fram ing system for a 20,000 square-foot eight-story office building
w ould save the ow ner an average of $200,000 com pared to a typi-
cal concrete system . This com parison of fram ing system s includes
directly related item s such as floor system s and fire protection.
The consistency of these results over the past several years
m ay surprise som e building project ow ners w ho continue to read
press reports of increasing steel prices. Steel prices have increased,
but the increase in steel prices im pacts all projects on a nearly
equal basis independent of the fram ing system selected. A recent
study concluded that for every $100 increase in the average cost of
ALL types of steel, the typical non-residential building project w ould
increase in cost by 3.5% . The study further distinguished betw een
structural steel fram ed projects and concrete fram ed projects w ith
the im pact of changing steel prices on structural steel fram ed proj-
ects being 3.8% and 3.3% on concrete fram ed projects. Based on
the findings of this study the overall contribution of changing steel
prices from late 2003 until early 2008 w ould be approxim ately 18% .
The study did not consider the im pact of the changing cost of other
m aterials, such as increasing concrete or lum ber prices, on the dif-
ferential. How ever, just as the price of steel has increased, cost
increases in other m aterials are a reality and the result is that today
steel fram ing continues to offer approxim ately a 5% cost savings
over other building m aterials.
W hat this study dem onstrates is that the vast m ajority of the
cost im pact of steel in a structure is N O T a function of the structur-
al steel fram e! Actually, in todays m arketplace m aterial costs rep-
resent 30 to 35 percent of the cost of fabricated and erected struc-
tural steel. At the current m ill price, a $100 change in m aterial price
w ould result in a 3.5% increase in the cost of the structural steel
package. The structural steel package is typically betw een 10% and
12% of the overall cost of a typical project. This m eans that a $100
change in the m ill price of structural steel w ill result in an increase
in the range of 0.4% in the overall cost of the project.
Rather, steel price increases have im pacted a w ide range of
building com ponents such as piping system s, ductw ork, m etal
studs, decking, facades, elevators, escalators, nails, w iring, electri-
cal com ponents, w indow fram es, sprinkler system s and, m ost cer-
tainly, reinforcing steel used in concrete construction. In fact, in the
typical building located in a low seism ic zone the w eight of the rein-
forcing steel in the concrete is roughly 50% of the w eight of the
equivalent structural steel fram e. In high seism ic zones the w eight
of the reinforcing steel m ay actually approach the equivalent
w eight of the structural steel.
Overall project costs and long-term benefits
The selection of a fram ing system should not be solely based on the
com parison of the relative costs of the fram ing system and directly
associated system s, but also on the benefits that w ill accrue from
the selected system . Those benefits that result in value im prove-
m ents m ay flow from quality considerations, secondary cost bene-
fits, schedule accelerations or reduced environm ental im pacts.
Structural steel is a quality product, fabricated in controlled,
quality certified facilities to precise tolerances that speeds erection
and allow s greater predictability and increasing productivity of
other trades. The structural steel industry em braces lean construc-
tion practices focused on the benefits of off-site fabrication.
Structural steel has a high strength-to-w eight ratio and is at full
strength w hen erected. The selection of a structural steel fram ing
S4 w w w .enr.construction.com /resources/special/ Septem ber 29,2008
SPECIAL ADVERTISING SECTION STEEL TAKES SHAPE
IDEAS2 photo:
Chris Cooper
Structural steel is readily available through Service Centers such as Triple-S Steel
Supply, San Antonio.
MARKETPLACECONDITIONS
Enhancing project value through structural steel
By John P. Cross, P.E.
ENR_Steel_section:Layout 1 9/22/08 10:49 AM Page 4
system can lessen the cost of foundations as a function of both the
reduced w eight of the structure and larger bay sizes. The equiva-
lent functional unit structural steel is about one-tenth that of other
m aterials so less m aterial needs to be transported to the site than
other building m aterials.
Structural steel fram ing enhances project payback by optim izing
usable floor space through sm aller colum ns and longer spans.
The fabrication and erection of structural steel w ill proceed
m ore rapidly than concrete fram ing system s shortening construc-
tion schedules, saving on general conditions and construction
interest w hile allow ing early occupancy and revenue generation.
Structural steel fabrication is BIM -enabled w ith actual cases of
fabrication and erection schedules being com pressed by 50% and
costs being reduced by 20% . The BIM m odels used in the fabricat-
ing process provide a virtual m odel base for identifying geom etric
interferences w ith other trades.
Structural steel fram es w ill provide decades of service, yet
allow for econom ical m odification or expansion not available w ith
other m aterials.
N ot only does the project benefit from the selection of struc-
tural steel, but the environm ent benefits as w ell. The recycled con-
tent of w ide flange structural steel averages 90% conserving pre-
cious natural resources including w ater. The em bodied energy and
carbon footprint are typically 10% to 20% low er for equivalent
structures fram ed in structural steel rather than in concrete. And
w hen the useful life of the building is reached, not only is the fram -
ing system fully recyclable (2007 recycling rate for structural steel
is 98% ), the cost of dem olition is significantly below that of com pet-
ing m aterials w ith a typical ratio of 10-3-0 for w ood-concrete-steel.
W hy? W ood and concrete m ust be transported and placed in land-
fills as opposed to structural steel being sold to steel m ills to be
used in the production of new steel.
Todays structural steel marketplace
Structural steel is readily available in todays construction
m arketplace through a netw ork of Steel Service Centers and
producers. The dom estic structural industry continues to
expand both production and fabrication capacity. The cost of
fabricated structural steel for building projects has increased
over the past several years as a function of increasing costs
of m ill products. But unlike the gyrations seen am ong com -
m odity based construction m aterials the trend for fabricated
products has been relatively sm ooth and predictable. The
Bureau of Labor Statistics (BLS) data indicates that the steel
fabrication industry has absorbed the variability in producer
pricing even as prices have increased.
The project ow ner or general contractor can exercise
significant control over how these m arket place variations
im pact their projects by clearly identifying w hether the risk of
m aterial price variations is held by the project ow ner, the fab-
ricator or the m aterial supplier.
The project ow ner can opt to hold the risk for m aterial price varia-
tions by em ploying an escalation clause in the contract for the fab-
ricated structural steel package. By assum ing this risk, the project
ow ner w ill gain the benefit of a low er base price for the steel pack-
age and the potential savings of a decrease in m aterial costs.
The project ow ner can require that the fabricator hold the risk
of increases in m aterial prices. The result w ill be that the fabricator
w ill price the cost of that assum ed risk into the base price of the
steel package. In addition, any decrease in m aterial cost w ill accrue
to the fabricator as com pensation for the risk that is being
assum ed. The project ow ner can low er the risk being assum ed by
the fabricator by authorizing acquisition of m aterial as soon as a bid
is accepted and com pensating the fabricator for m aterial storage.
A third m ethod of m anaging m aterial costs is for either the
project ow ner or fabricator to pass the risk back to the m aterial
supplier. M aterial suppliers, either m ills or service centers, current-
ly have program s in place to address price variability. In each case,
the key for the passing the risk back to the m aterial supplier is to
discuss the process early w ith the structural steel fabricator.
The single m ost im portant factor for m anaging not only the
cost of the structural steel package, but the overall value that can
be obtain from utilizing structural steel is the early involvem ent of
the structural steel fabricator. The structural steel fabricator is the
construction professional m ost acquainted w ith the value im plica-
tions of design decisions, m aterial availability, costing paradigm s
and process optim ization. Projects w here the fabricator is engaged
early recognize that structural steel is not a com m odity and bene-
fit directly from the fabricators expertise.
Todays design and construction m arketplace dem ands the w ise
selection of the project fram ing system and the proper m anagem ent
of the process of acquiring that system . Fabricated structural steel
system s provide both the m aterial and the industry expertise to bring
the greatest possible value to any building project. H
SPECIAL ADVERTISING SECTION STEEL TAKES SHAPE
IDEAS2 photo: DZSE
Structural steels high recycled content helped gain a LEED Platinum rating for
Chicagos Christy Webber Landscapes Greenworks office park.
John Cross is vice president of the American Institute of Steel Construction
in Chicago.
Septem ber 29,2008 w w w .enr.construction.com /resources/special/ S5
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