Should modular factories vertically integrate assembly? Do general contractors and developers want turnkey delivery? These two questions come up in almost every conversation I have about offsite construction, and they are really the same question. Who owns the seam between the factory and the finished building?
The factory's scope ends when the module or panel is loaded on the truck. The customer's experience ends when the building is occupied. In between is transport, the set, the connections across the marriage lines, MEP crossovers, weather tightness and the finishes at every seam. Every one of those site connections is a risk, and that stretch is where offsite projects most often get into trouble, and where the arguments about whose fault it is begin. By the way, the factory is also the least represented party on site, so it takes much of the blame.
The case for factories owning modular set and assembly
When the factory owns the set and button up, it controls quality across the handoff. Field problems feed directly back into the plant. There is one point of accountability for the schedule. And crews that set the same product every week get very good at it.
It is the same reason races are won and lost on pit road. The fastest car on the track means nothing if the handoff to the crew falls apart.
Labor makes the argument stronger. In January, Associated Builders and Contractors estimated the industry needs to attract roughly 349,000 net new workers in 2026 on top of normal hiring. Experienced set crews are a small slice of an already tight market. A factory that develops its own trained crews is building capacity that is hard to find anywhere else.
The case against
Field work is a different business. Different labor, different insurance, different licensing in every state, local relationships, local inspectors and a very different risk profile on the balance sheet. A factory that tries to do everything can spread its management thin and lose focus on DFMA and the plant. And in many markets, the general contractor is the factory's customer. Moving into assembly can feel to them like competition.
Do general contractors and developers want turnkey modular construction?
It depends on who you ask, and both answers are reasonable. Many developers want a single accountable party for delivering the building. Many general contractors want to keep control of the site, the schedule, and their trade relationships, and see the factory as a supplier, not a partner on the site. The mistake is assuming. Ask your customers what they want to own, what they want you to own and what they are worried about. Better yet, develop a clear, detailed scope matrix and include it with every modular proposal.
Developers who ask for turnkey are usually quoting Highlander: "There can be only one." One party, one contract, one single throat to choke.
There is plenty of middle ground. A factory can own the set and the seams while the GC owns site work and finishes. A factory can train and certify installers who work for the GC. Whatever the split, put it in a scope matrix that names every task and who owns it, before the first module ships. Remember, the GC does not know the manufacturer's business, so the manufacturer needs to close that gap by starting the discussion with exactly what is included in the proposal price.
Should every factory own assembly? No. Should every factory own the outcome? Yes.
Vertical integration is not the goal. Accountability is. Integrate as far as you need to be accountable, and be clear about what that means.