Permanent Modular Construction (“PMC”), or off-site construction, is the process of prefabricating construction components in sections (or modules) off-site, most often at a large warehouse or factory, and then transporting those components to the site for a contractor to install.¹

Globally, the PMC market is projected to grow from $75.89 billion in 2021 to $114.78 billion in 2028 at a compound annual growth rate of 6.1%.²

Generally, PMC projects allow contractors to concurrently perform activities that would normally be performed consecutively. ³ For example, in traditional building construction, contractors must wait until the foundation of a site is finished to begin constructing the vertical structures. However, with PMC, owners hire manufacturers to prefabricate vertical structures (e.g., prefabricated hotel room) and/or multi-trade utility racks off-site while the on-site contractor completes foundation work.⁴ Contractors can then deliver and install the prefabricated units once the on-site predecessor activities are complete.

Additionally, projects utilizing PMC can potentially mitigate construction site impacts such as permitting and weather delays since contractors perform a majority of prefabrication work offsite and in a controlled environment, which could allow for greater schedule duration predictability.⁵

Finally, PMC can be beneficial for projects in locations with limited space for staging and moving materials (e.g., urban developments) as it can reduce the need to stack or store a majority of the bulk construction materials.⁶

Other potential considerations for PMC projects include the following:

• Does the project have uniform/standardized design elements? For example, structures with repeated design elements such as apartment buildings or hotels can be better suited for PMC compared to projects with more unique/non-repetitive design elements.⁷
• Do the prefabricated units’ size and weight exceed local or regional transportation standards? Often, oversized and overweight loads increase shipping rates⁸ and require an extra level of planning and management to acquire appropriate permits,⁹ adding transportation costs compared to on-site fabrication with materials that are delivered separately. Additionally, shipping the prefabricated modules requires extra design considerations, and applicable costs, to account for the dynamic loads associated with transportation.¹⁰
• What is the likelihood of design changes? On-site field design changes on prefabricated modules can potentially be a larger cost and time impact as compared to traditional on-site construction.¹¹ Contractors may not be able to make alterations to prefabricated modules in the field, and the modules may need to be shipped off-site to complete required design change alterations.

The professionals at Breakwater are experienced in the analysis of construction claims stemming from PMC projects.

1: “What is Modular Construction?” Modular Building Institute, https://www.modular.org/what-is-modular-construction/.
2: Module Construction Market, https://www.fortunebusinessinsights.com/industry-reports/modular-construction-market-101662.
3: “Modular Construction for Chemical Mass Transfer Systems,” Koch Modular Process Systems, https://kochmodular.com/modular-process-systems/.
4: “Prefabrication: Benefits & Drivers For Successful Implementation,” https://www.mortenson.com/-/media/project/mortenson/site/files/services/prefab/mortenson-prefab-study.pdf.
5: “Modular Construction for Chemical Mass Transfer Systems,” Koch Modular Process Systems,  https://kochmodular.com/modular-process-systems/.
6: The Advantage and Challenges of Modular Construction, https://www.realprojectives.com/the-advantages-and-challenges-of-modular-construction/.
7: The Advantage and Challenges of Modular Construction, https://www.realprojectives.com/the-advantages-and-challenges-of-modular-construction/.
8: “Oversize Freight Shipping,” https://www.freightrun.com/services/oversize-load.
9: “Oversized Load Regulations by State,” https://osagespecial.com/2021/01/oversize-load-regulations-by-state/.
10: “Off-Site And Modular Construction Explained,” Ryan E. Smith, 2016, https://wbdg.org/resources/site-and-modular-construction-explained.
11: “Off-Site And Modular Construction Explained,” Ryan E. Smith, 2016, https://wbdg.org/resources/site-and-modular-construction-explained.