Next Generation Cloud Construction Cost Estimating and Efficient Project Delivery Solution in Beta

4Clicks Solutions, LLC is currently beta testing Ceasel, a next generation cloud computing application to enable collaborative construction cost estimating and associated efficient project delivery.

Cloud computing is more than a catalyst for change, it is a DISRUPTIVE TECHNOLOGY, that will significantly enhance productivity within the Architecture, Engineering, Construction, and Facility Management sectors.

ceasel-logo

Different form legacy client/server applications or “web-enabled” systems that tend to automate existing ‘ad hoc’ and inefficient business process, Ceasel and other “built from the ground” true cloud computing applications enables embed business best practices and drive true collaboration among Owners, Contractors, Architects, Engineers.  The core focus ends up being upon  CHANGE MANAGEMENT and how to best leverage cloud computing, vs. the technology itself.

Here’s just a few benefit of Ceasel’s cloud computing …

1. Collaboration – True cloud computing (vs. cloud-washing or simply posting legacy applications to the cloud) lets users work concurrently on projects in real-time…virtually anyone, anywhere, anytime in multiple languages and currencies.

2. Data Integrity – Information is NEVER deleted. This is potentially the best form of security available. “Who” does “What” and “When” is always tracked and changes can be “rolled back” at any time by authorized administrators.

3. Data Protection – It is YOU, the user who determines how, when, and where to publish data. For example, you can maintain information in your private area, publish as read only to specified members within a private cloud…or publish to all members in a private cloud, or publish information to all members in public cloud and enable rights to use and modify data.

4. Visualization – DATA visualization and the associated development and implementation of collaborative construction delivery methods such as integrated project delivery – IPD, and job order contracting, JOC, enable shared information earlier in the project life-cycle and among more participants.  This enable errors to be found and corrected and/or changes to be accomplished earlier in the project timeline.  This results in few change orders, faster project timelines, and virtual elimination of legal disputes.  Cloud computing will accelerate data visualization and transparency among all stakeholders of physical infrastructure and promote multiple forms of performance-based processes.

5. Agility – Our work and natural environments are changing at an accelerated pace. Rapid deployment, monitoring, and the associated continuous modification of processes and policies are becoming increasingly important. Cloud computing deploys processes faster than any other method currently available. There is no longer a need to rely upon internal “IT” for deployment or applications specific changes, computing power, storage space, etc.

6. Mobility – It is neither cost effective, nor efficient, to have everyone working in offices or specified work settings. Resources need to be tapped from multiple locations enabling use of “the best of the best”. Cloud computing allows direct, transparent access to local resources while also communicating centralized processes and procedures.

7. Centralization of Information – While information can be scattered among several data centers, it also can be instantly consolidated to provide global management in support of an organization’s mission as well as associated, efficient local action.

8. Business Continuity – While Internet access is required (unless you host the “cloud” internally), would you rather store your information at your location and risk catastrophic failure, or at a location with multiple redundancies?

 

If you are interested in becoming a beta partner, please contact pcholakis@4Clicks.com

Managing JOCs ( Job Order Contracting) and IDIQs in spreasheets?

I regularly come across Owners (DOD and non-DOD) who run Job Order Contracts and other IDIQs in spreadsheets…or at least try to do so. I will come right out and say, it can’t be done efficiently, nor does the approach provide for an appropriate level of management/oversight. I’d love to hear your thoughts on the topic. Is it lack of education? Mismanagement? Other?

Certainly spreadsheets have many advantages over manual methods, however they fall way short of what a database application such as e4Clicks Project Estimator has to offer.

Is your spreadsheet difficult to use and maintain?
Do changes made in one spreadsheet force you to make changes in another?
Can you see all pertinent data on one screen or do you have to keep scrolling or open other tabs?
Can you easily update prices, quantities and other data elements in a single location?
Are estimates hard to find because they are buried in a confusing collection of folders and directories?
Does your spreadsheet automatically generate a series of reports and/or populate a government form?

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Minimizing Waste and Improving Construction Productivity

On average 25-30%+ of construction project costs are due to inefficient processes.  Construction delivery methods that better integrate people and technology such as Integrated Project Delivery (IPD) and Job Order Contracting (JOC)* have proven to help address the issue of poor productivity across the AECOO spectrum (architecture, engineering, construction, operations, owners).

Reducing waste through the use of collaborative construction delivery methods, robust information and data architectures, metrics, and supporting technology is not “rocket science” and we can all make positive impacts beginning today.  

Key characteristics of productive and collaborative construction delivery methods are as follows:

  1. Early involvement of project participants (architects, owners, building users, contractors, engineers, business product manufactures, oversight groups).
  2. Life-cycle cost vs. first-cost focus.
  3. Performance and value-based vs. low-bid.
  4. Robust ontology, standardized data architectures (examples: UNIFORMAT II, MASTERFORMAT2004/2012, RSMeans Cost Data, OMNICLASS).
  5. Robust collaborative construction delivery methods (IPD – Integrated project delivery, JOC – Job Order Contracting, PPP – Public Private Partnerships).
  6. Open, cloud computing, object-oriented supporting technology vs. archaic, monolithic technology.

 

 

Anecdotally, the main reason BIM has failed to date, and YES is has failed, is the lack of the application of a well defined systems and process approach that incorporates LEAN collaborative construction delivery.  BIM is NOT about design.   BIM is the life-cycle management of the built environment with a focus upon total cost of ownership throughout all “construction” phases.  BIM value is NOT 3D pretty pictures, but data visualization and associated decision support.  

It time to put aside our traditional AECOO culture of waste, poor planing, lack of transparency, distinct lack of responsibility on the part of Owners, etc., and make changes that will improve the current economic and environmental landscape.

 

*Job Order Contracting
Job Order Contracting (JOC) shares many of the features of IPD, but is focused on small- to medium sized renovation and remodel projects that make up the majority of a facility manager’s project portfolio. In many ways JOC is a delivery method ahead of its time, having been introduced in the US Army in the late 1980’s. It is a competitively procured, fixed unit price, indefinite quantity construction procurement and delivery method.
By integrating the design and construction of smaller projects, JOC can compress project timelines to better respond to the day-to-day needs for flexibility within a large facility. The design process is streamlined and involves design professionals at the level appropriate given the project scope; sometimes owner and contractor produce a solid statement of work and simplified design which is the most efficient approach.
Pricing transparency is provided in the form of a unit price book (UPB)—a construction cost database of detailed priced tasks, including construction, maintenance, repair, and renovation workitems and specifications. These tasks form the pricing basis for collaboratively-scoped projects, thus providing price certainty and meeting most procurement regulations. Since JOCs require a highly-performing contractor to provide these additional services, it is most typically procured through a Best Value or Qualifications Based process. Risk is fairly distributed, with the contractor taking on the performance risk of procuring subcontracts and materials within the pre-agreed unit prices, and the owner allowing for annual updates to the price book to reflect construction inflation.

JOC ProcessBLM2

 

 

IFMA WebCast – Efficient Project Delivery Methods for Repair, Renovation, Sustainability, Construction

IFMA Facilities Consultants

IFMA WebCast – Efficient Project Delivery Methods for Repair, Renovation, Sustainability, Construction

IFMA WebCast – Efficient Project Delivery Methods for Repair, Renovation, Sustainability, Construction

1.Importance and currently available collaborative project delivery methods
2.Description of key characteristics of a collaborative project delivery method
3.Roles of Owners, AE’s, Contractors
4.Importance of standardized information and process-centric technology

 

Download Presentation

Construction Cost Estimating Trends – 2014 and Beyond

Demand for higher productivity in the construction sector and environmental sustainability is reaching a critical level and causing significant changes in both construction cost estimating and the AEC industry as a whole.

Major Trends:

Shift to life-cycle cost visibility for new construction, renovation, repair, operations, and maintenance

Emphasis upon estimate and project sharing, collaboration, and reuse (vs. reinventing the wheel or recreating mistakes)

Use of smart object/component technologies to enable easier development and maintenance of cost models

Availability of international cost/performance data

Integration of estimating with business and procurement “best practices”/business process will be the norm (LEAN, IPD, JOC, BIM)

Advanced web centric cost data management, sharing, and data reuse

Required use of reference cost data across all sectors

Greater emphasis upon maintenance as a primary sustainability solution

Overall higher level of standardization (currently common in other business sectors)

Standard use of visual estimating tools (i.e. eTakeoff /BIM/QTO)

Estimating and estimators will become key components of collaborative value-driven construction “best-practices”/”business processes” such as IPD, JOC, LEAN, and BIM.

The ability to draw create, actively reuse, and share localized, national, and international life-cycle reference cost databases spanning construction, operations, and maintenance will drive transparency and add a needed level of cost control as well as ongoing decision support for architects, designer, owners, contractors, vendors, and oversight groups.

While innovators are currently deploying IPD and JOC solutions and taking advantage of the inherent costs savings, and improvement of quality and collaboration, these and synergistic processes will become the norm and complementary to BIM.

For example, today estimators using off-the-shelf technology (for example e4Clicks Project Estimating software – http://www.4clicks.com) can select standard or customized cost guides/cost databases, prepare, update, and share estimates and projects, track project status, and apply time saving visualization/calculation on screen take off technology (for example eTakeoff which is fully integrated with e4Clicks).

Estimators and all related professionals will participate earlier and throughout the life-cycle:

Estimators, owners, facilities managers, end users, contractors and vendors will be a part of the design, construction, renovation, repair, maintenance and operations processes, enabling a life-cycle perspective to be applied to all decisions.

Decision support systems will be outcome-driven with life cycle cost, performance, function, and reuse consideration appropriately weighted.

Collaboration, communication, documentation, and transparency will be the norm

Risk and reward are value-based balanced among all participants/constituencies

Quality and sustainability will be primary drivers

While many of the changes are inevitable, some estimators continue with ad-hoc methods; spreadsheets, subcontractor and vendor quotes, etc, resulting in an increased gap and range of estimates.

IPD – Integrated Project Delivery

JOC – JOB Order Contract

QTO – Quantity Takeoff
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Construction Productivity must be Owner driven – BIM, IPD, JOC

One thing is clear, the construction sector (architecture, engineering, contractors, owners, operators, users, suppliers) has been lagging virtually all other business sectors for decades with respect to productivity improvement.

I believe that the cause is largely cultural, however, any major improvement must be driven by Owners,and/or mandated by governmental regulation.

My reasoning is simple, Owners pay the bills.  Thus as long as Owners remain satisfied with the status quo and/or remain “uneducated” with respect to proven business “best practices” and lean management processes, as well as supporting technologies, economic and environmental waste will continue to be rampant.

Currently, my outlook is somewhat pessimistic.  If one looks at  capability and knowledge specific to life-cycle  facility management from an industry perspective, most has originated with the government sector, followed by higher education, state government, healthcare, process-based industries, etc. etc.    Basically, Owners whose mission is dependent upon their built environment tend to create and follow life-cycle management practices. These are Owners that can’t adopt a “churn and burn”, or “run to failure” approach to facility management.  These sectors can’t easily pack up and move if their facilities and physical infrastructure fail.

That said, even government owners, for the most part, have failed in any sort of department or agency-wide adoption of standardized best practices.  This is true even for  “simple” areas such as facility repair, maintenance, and renovation.  Only the Air Force appears to come close to having any true adoption of robust, proven, best-practices in this regard, as well as associated training, etc., most notably with their SABER construction delivery structure.

In order to effect measurable productivity improvement in the “construction” sector, , I have put together a core requirements “checklist”.

1. Robust Ontology – Cost effective information management and information reuse can only be accomplished with a detailed set of terms, definitions, metrics, etc.  This aspect is also critical to improved strategic and tactical decision support mechanisms.

2. An understanding of life-cycle management of the built environment from a collaborative, best-practices, process perspective as well as associated supporting technologies.  Forget the traditional strategy-design-construction-demolish approach.

3. Commitment to a total cost of ownership perspective including both economic and environmental costs vs. our classic “first-cost” mentality.

4. “Trust but measure” – Owners MUST conduct their own internal cost estimating and associated capital planning and compare these to contractor estimates, with each party using the same  data architecture (examples: RSMeans, masterformat, uniformat, omniclass).

5. Adoption of collaborative construction delivery methods such as Integrated Project Delivery, IPD, and Job Order Contracting, JOC, in lieu of antagonistic and inefficient design-bid-built, or even design-build.

6. STOP reinventing the wheel.  Nothing noted here is “rocket science”.  Many, if not most, processes, procedures, and technologies are readily available for anyone who does a bit of basic research!!!   Also, stop with the focus upon BIM from a 3D visualization perspective!  3D tools are great, and add value, however, INFORMATION and PROCESS drive success.

 

BLM2

The Best Unit Price Book for Job Order Contracting

One of the most difficult decisions in standing up a Job Order Contract is the owner’s decision about what type of Unit Price Book (UPB) is best for your JOC program.  UPB’s have traditionally come in two flavors:

  • Commercial off-the-shelf estimating guides like those produced by RSMeans (Facility Construction Cost Data is the one most often specified for JOC).
  • Customized books, which can have varying levels of custom cost data line items and varying approaches to localization.  For example, RSMeans also produces custom cost data sets  such as an international custom data set  for the US Army Corps of Engineers.  That said,  most owner’s needs are better met with standard price guides.
  • A number of factors should inform this choice, including:

    1. Geographic footprint of your program.
    2. Whether your organization or group of users has a single well-defined set of building standards and specifications.
    3. Program volume.
    4. Volatility of the construction market, especially commodity-based materials, and your desire to track these price variances.

    Localization Localization and customization are different things.  There is a bit of a “localization fallacy” in the JOC market.  Unit Price Books (UPBs) are described as being either “national” or “local,” but the lines are blurred when you look at how the books are actually produced.  RSMeans’ national pricing guides are produced to serve a broad market, so the published unit prices are a national average.  But in reality, RSMeans researches local material, labor and equipment inputs on a vast scale—935 distinct locations in the US and Canada—and through its proprietary algorithms produce City Cost Indexes (CCIs) to fine-tune each and every unit price for all 935 markets.  If you dig into the data produced by RSMeans’ methodology, it is impressive.  RSMeans produces not just one CCI for each location, but 18 of them, segmented by CSI division/subdivision and by material and installation.

    The importance of leveraging this granular level of CCI will be addressed in another post, but the point here is that the application of this highly detailed and precise CCI adjustment factors is in no way inferior to a “localized” UPB.  In both cases there are proprietary algorithms and raw cost research at work; it’s just a matter of how the outputs are presented.  The line blurs further when the data is loaded into a powerful software programs like e4Clicks Project Estimator and JOCWorks  which allow automatic application of the CCIs.  In addition, RSMeans has worked with a large northeastern state to produce a set of 14 pre-localized UPBs—one for each county—to support a JOC program.  This allows for the direct insertion of current prevailing wage rates and a direct print reference for contractors new to JOC and RSMeans, which this state valued.  But many owners find that the application of the appropriate CCI more cost-effectively meets their needs.

    Geographic Flexibility There are actually some distinct advantages in tapping into a national pricing guide like RSMeans. First and foremost, it is an objective third party, market leading source of information.  Also you can use a single data source to cover a large geographic area, which is particularly valuable for purchasing organizations, statewide, or other multi-site contracts.  RSMeans can cover multiple locations with a single data source through the application of our CCI data.  For instance, RSMeans covers 36 locations in the State of California, with wide swings in price deltas from the national average as evidenced in the CCI’s—from a low of 65.5 (65.5% of national average prices) for concrete products in San Bernadino, due to proximity to aggregate sources and batch plants, to 171.6 (71.6% more than the national average) for Division 21/22/23, driven by the nearly $100/hr. wage + fringe rate for plumbers in the city.

    In addition to simplifying administration of a Job Order Contract, use of a single flexible, location-adjusted data set allows for some powerful benchmarking of projects across a program, even when construction costs are variable by location.  A job order proposal or portfolio of projects can be easily repriced with a different CCI to compare typical costs from place to place, and aggregated projects can be analyzed for ongoing construction program insight.  The use of a single data set, and especially an industry standard one like RSMeans, also simplifies the UPB evaluation and coefficient bidding process for contractors.

    Customization Localization is the simple adjustment of an existing database for a particular geographic location.  True customization is the addition of distinct owner-specific line items that may be needed for a JOC program but are not included in the standard data set.  Common sense tells us that no UPB is entirely custom—they would be cost-prohibitive to produce if they were.  Rather, books can be customized by selecting the applicable line items from a vast database and then providing selective additional custom data.

    What is the value of customization?  It depends.  For an owner that has clear proprietary building materials or systems that need to be covered in a JOC, it can be valuable.  RSMeans worked with Los Angeles World Airports (LAWA), a very sophisticated owner with extensive standard specifications used in a particular geographic location, to accomplish a selective customization (in tandem with localization).  RSMeans integrated and mapped LAWA’s specs to our data, and also did custom cost data research on some unusual and proprietary items that are part of their building standards.  Another approach to flexibly dealing with proprietary or unusual items is to build in a contractual provision to allow for a material price over-ride, based on documented costs of proprietary material.  This allows for holding the labor and equipment costs constant, when owner-preferred material may not be covered by the UPB line items.  This is another functionality of  e4Clicks Project Estimator and JOCWorks.

    Updates Another advantage of tapping into a commercial cost data research effort like RSMeans’ is that the data is updated on a continuous basis, including annual publications and quarterly updates.  Only a national-local research effort with 40,000+ customers can provide this level of dynamic pricing for the  volatile construction market, where commodity prices, wage adjustments and market forces can push specific unit prices up or down in sometime unpredictable ways.  RSMeans updates 80,000 line items annually by researching material prices, current wage rates, and equipment rental rates for all 935 locations we cover.  That said, 4Clicks exclusively enhances this data to delivery well over 400,000 line items, complete with line item modifiers and full descriptions in plain english.

    Cost data difference-RSMeans-Line-Items

     

    Customized and localized books can be expensive to produce on this continuous basis, and while the financial investment might be warranted in a very large program, it can be cost-prohibitive in small- to moderate-sized ones.  As a result JOC pricing for customized/localized books is often updated by applying a single inflationary index (most typically the ENR CCI) annually to the contract coefficients.  The problem with this approach is that material and labor prices don’t rise and fall equally—they are subject to highly variable commodity price inputs and labor negotiations.  The failure of a UPB to accurately track these changes on a continuous basis is a risk factor for contractors, and can lead to higher coefficients to cover their risk margin.  No construction cost data source is updated as frequently as RSMeans, and that reduces risk and costs to owners and contractors alike.

     

    So when choosing the right UPB for your JOC program, cut through the black-and-white rhetoric of national vs. local, gain an understanding of how the data is developed and presented, evaluate your need for customization and updates, and then consider your options.  RSMeans provides both standard and custom cost data solutions, always with cost-effective program administration in mind.

    (Source: adapted from RSMeans/Lisa Cooley Blog 7/10/2014)

    http://www.4Clicks.com – e4Clicks Project Estimator is the premier cost estimating and project management software available featuring an exclusively enhanced 400,000+ RSMeans line item cost database and integrated contract/project/document management, visual estimating/QTO, and more.,

    The Best Unit Price Book for Your Job Order Contract Precision of Quarterly Updates vs. Inflationary Indexing