Owners and Contractors – Still Lagging in Construction Productivity and Technology Use

Construction  – A Track Record of Productivity Decline

Public and Private Sector Real Property Owners as well as their supporting Contractors and AEs continue to lag with respect to  construction software technology and training and the adoption of efficient collaborative construction delivery methods. These facts have made the construction singularly unproductive vs. other sectors for the past several decades.

Construction ProductivityConstruction Productivity - US Decline

Over 80% of construction contractors still use pen and paper (50%+) and/or spreadsheets (30%+) for critical tasks such as construction cost estimating and quantity takeoffs.  Only 35% use some type of task specific construction software!

More distressing, is the lack of awareness and usage of collaborative construction delivery methods such as Integrated Project Delivery – IPD (for new construction projects) and Job Order Contracting - JOC (for renovation, repair, maintenance projects ).

Time to Move Away FROM Antagonistic, Competitive Construction Delivery Methods TO Collaborative Teams

Traditional design-bid-build and low-bid are inefficient and antagonistic.  Owners, Contractors, and AEs are pit against one another from concept thru warranty.  The result is that between 70% and 90% of projects exceed the original planned cost and that the overrun commonly varies between 50% and 100% of budget.  Construction also suffers from 57% of effort on non-value added activities compared with 26% within manufacturing.  Causal factors such are largely related to ineffective coordination, basically the construction delivery method.   Value added - Construction vs. Manufacturing

Performance-based construction delivery methods with shared risk-reward, as well as well-defined roles, responsibilities, deliverables, and metrics from day one is the ONLY path to success.  These LEAN best management practices have been proven in the manufacturing sector, and a relative small percentage of Owners and Contractors in construction.  IPD, JOC, SABER and similar LEAN construction project delivery methods have been practiced for over two decades.

Move Away from Poor Use of Data Based Paper and Spreadsheets

Independently produced documents and spreadsheets produced by cost estimators, AEs, lead to major cost increased associated with  data capture and reuse, resolving multiple formats/terms/data structures, and errors, omissions, extra work, and claims inherent to the process.(2, 3)

Supporting technology and training has also been readily available.  More specifically, construction cost estimating and project management software solutions for JOC, SABER, IDIQ, etc. have existed for over a decade.  These solutions embed best management practices and workflow as well as robust construction cost databases.  They provide contract, project, and document management, as well as productivity and control features such as visual estimating / QTO, automated estimate comparison, and so much more!

Technology can help grow contractor business, while also enabling owners to get more projects completed on-time and on-budget.

So, why do so many Owners and Contractors stick with spreadsheets?

1. Failure to perform due diligence.  Simply researching the internet or talking with peers would be a step in the right direction.

2. Contractors (some) are not inclined to share information with Owners and/or work within a win-win environment of shared risk-reward.

3. Resistance to change.  “My way is the best way”.

4. You can’t manage what you don’t measure.  You can hide behind a spreadsheet. Using spreadsheets means there is virtually no accountability.  It’s extremely difficult to review larger or multiple trade estimates within a spread sheet, if not impossible.

5. “First cost” vs. “total cost” mentality.   Some see software as expensive vs. spreadsheets.  In reality, one mistake on one estimate will pay for multiple software licenses.   The cost of technology is insignificant vs. project costs.

In summary, whether you’re an Owner, Contractor, Subcontractor, AE, or Oversight Group,  failing to invest in the right software, information, business process, and training will be detrimental to your business and/or organizational mission.

Technology continues is exponential rate of change.  Cloud computing, a disruptive technology, is currently causing fundamental changes in how we work each and every day, yet many of us remain unaware.  \

Collaboration, transparency, metrics, and continuous improvement will be the norm.

Are you ready?

Related Articles/Additional Sources:

1. “Discussion on U.S. Construction Labor Productivity Trends, 1970-1998”, J. Constr. Engineering and Management, ASCE.127[5]: 427-429.)

2. “Labor-Productivity Declines in the Construction Industry: Cause and Remedies (Another Look), 2013, Teicholz, Paul, AECBytes

3. “Cost Analysis of Inadequate Interoperability in the U.S. Capital Facilities Industry”, 2004, NIST

4. “Long Term Impact of Equipment Technology on Labor Productivity in the U.S. Construction Industry at the Activity Level.” Journal of Construction Engineering and Management, 2004 130, no. 1:124-133,

All Renovation, Repair, Sustainability Construction projects should involve Job Order Contracting – JOC

Job order contracting (JOC) is a collaborative construction delivery method, and/or a form of integrated project delivery – IPD,   that enables organizations to get their numerous, commonly encountered construction projects done quickly, easily, and cost-effectively through multi-year contracts – IDIQ.

JOC reduces unnecessary levels of engineering, design, and contract procurement time along with construction project procurement costs by awarding long-term contracts for a wide variety of renovation, repair and construction projects.

With an emphasis on partnering and team work between Owners and Contractors, JOC provides the methodology to execute a wide variety of indefinite delivery, indefinite quantity – IDIQ fixed-price, multiple simultaneous orders for renovation, rehabilitation and repair work for  facility and infrastructure portfolios.

JOC provides multiple benefits vs. traditional design-bid-build and/or low bid, MACC, MATOC and other typically less efficient construction methods.

job order contracting software

Job Order Contracting / Integrated Project Delivery

Job Order Contracting / Integrated Project Delivery

JOC can deliver:

1. Shorter procurement and short overall project timelines.

2. Higher cost visibility and transparency.

3. Significantly reduced number of change orders

4. Higher overall quality.

5. Ability for Owners and Contractors to complete more projects on-time and on-budget.

6. Longer term performance-based relationships among Owners and Contractors.

7. Shared risk-reward

8. Ability of Owner Engineering, Contracting, and Programming to better work together

JOC contractors are selected on qualifications and performance at a best value or low price or low bid depending on local, state or federal statutes. JOC is about performance, reliability, dependability and quality.

At the same time, JOC is about results and working within budget and time constraints. The JOC contractor provides “on call” construction services from concept thru close-out.

JOC today has more than a 25-year record of implementation within the United States Department of Defense – DOD, and wide range of non-DOD Federal, County/State/Local, Educational, and Healthcare institutions. Currently, there are hundreds of successful contracts going by the JOC name or by its counterparts of delivery order contracting (DOC), task order contracting (TOC) and simplified acquisition of base engineering requirements (SABER).  Not only public sector but also private sector facility owners are expanding the use and implementation of the JOC construction delivery method.

JOC is used for a wide range of construction services:

  • Facility renovation and construction services delivering turnkey improvements while reducing time and cost.
  • Energy efficiency and management solutions providing high ROI and low risk.
  • Mission critical improvements.
  • Design – Build and Construction Management services to deliver projects on time, within budget, and without change orders.
  • Abatement and demolitions services to accelerate renovation projects.
  • Seamless integration with preferred architects, engineers, and client team of facility professionals.
  • State wide or nationwide delivery through responsive professionals in local offices
  • Delegated decision making authority.
  • Turnkey projects using a fast cycle time approach to cut time and cost from the front end of the project delivery process.
  • Combined value engineering and other best practices to ensure value delivered, price, and time are maximized on every project.

Technology and training are critically important to JOC, as they are to any best management practice and LEAN methodology.  Technology enables consistent, low cost deployment, monitoring, use of standardized and localized cost databases (for example the RSMeans Facilities Book which is used on approximately 80% of all JOC/SABER programs), contract/project/document management and continuous monitoring.  Training assures adequate owner capabilities (for example the ability to create an internal government estimate – IGE) and contractor knowledge of processes and responsibilities.

JOC is for any Owner and Contractor needs to improve productivity and efficiency with respect to facility renovation, repair, sustainability, and maintenance projects.  These project represent the largest capital outlay for many/most owners and the majority of construction work performed.

via http://www.4Clicks.com

Disruptive Technologies and the Construction / AEC Sector

Disruptive technologies change the normal course of how things are done.

Examples of disruptive technologies include PCs, Email, Cell Phones, Social Media/Networking.

What would you include in your top 10 or top 5 list?

AEC Disruptive Technology 2015

Cloud Computing, Mobile Internet, Genomics, and AI would certainly be on mine.

As  to the AEC sector?   Cloud computing, collaborative construction delivery, and 3D “printing” certainly are on my list, how about yours?

JOB ORDER CONTRACTING TRAINING

The Alliance For Construction Excellence  
Job Order Contracting (JOC) Training

 Thursday, April 30, 2015

8:00 a.m. – 4:45 p.m – Check in 7:30 a.m.
Location: To Be Confirmed Phoenix/Tempe, AZ 

So, what is Job Order Contracting (JOC)?
JOC is an efficient way of getting numerous, commonly encountered renovation, repair, remodeling and smaller construction projects done easily and quickly under a single contract. With an emphasis on a collaborative process embracing partnering and teamwork between owners and contractors, JOC provides the methodology to execute a wide variety of indefinite delivery, indefinite quantity, fixed price, multiple simultaneous orders for renovation, rehabilitation and repair work for large facilities and infrastructures.
JOC can be used for other types of projects as well, such as energy retrofit projects, renewable energy projects and could even be a method to implement performance contracting.

JOB ORDER CONTRACTING SOFTWARE AND TRAINING RSMEANS

Speakers to Include:

Wylie Bearup, PhD, PE, Alliance for Construction Excellence

Charlie Bowers, LEED AP, Centennial Contractors Enterprises

Jeffrey Kramer, PE, PWLF, CPM, CCM Alliance for Construction Excllence (ACE)
Registration Fee
ACE Members — *$330    l     Non-Members  — *$365
Register Online:
http://www.ace4aec.com/course/job-order-contracting-training-spring-2015

If you have not registered for meetings online, please click LOGIN button for information on creating your ACE website account.
If you have any questions, contact the ACE office at 480-965-4246.
 

*For information on group discounts, please contact Jacki Houchens at 480-965-9359.

Sessions & Topics

  • History of JOC & Why Used
  • Project Delivery Methods Comparison
  • The Individual Job Order
  • Overall JOC Program
  • Selecting the JOC Contractor (RFQ/RFP)
  • Legislation
  • Contracts
  • Estimating
  • Collaboration
  • Case Studies/Lessons Learned

Who Should Attend:

  • Public Owners
  • General Contractors
  • Architects
  • Consultants
  • Subcontractors
  • Vendors
  • Construction Managers
  • Superintendents
  • Attorneys
  • JOC Contractors

Stay Up to Date with ACE!

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Get the ACE app for your smart phone!

VIA WWW.4Clicks.com – Premier Cost Estimating and Project Management Software for JOC, SABER, IDIQ… featuring the best representation of RSMeans Cost Data, contract/project/document management, visual estimating, and more!

Best Construction Cost Estimating Software

Estimating Beyond Spreadsheets with RSMeans Cost Data

Sure, we all use spreadsheets every day.  What a great tool for transferring information and performing some analysis work!

However, if you do a lot of detailed RSMeans line item estimating for JOC, SABER, IDIQ, BOS, or similar work, you know there’s a need for greater productivity, collaboration, and transparency than what spreadsheets, online cost books, or generic cost estimating software can provide.

Job Order Contracting - Best Management Practices and Technology

Best management practices (Process), robust cost data, collaboration, and supporting technology are requirements for assuring maximized productivity, transparency, and continuous improvement.

PROCESS: It is the construction delivery method that sets the tone, establishes responsibilities, details deliverables, defines risk, and ultimately determines the success or failure of any renovation, repair, construction project. Traditional ‘ad-hoc’ methods, such as design-bid-build, pit owners, contractors, subs, and AEs against one another and have largely contributed to the decades long history of declining construction productivity.

COLLABORATION: Collaborative construction delivery methods such at integrated project delivery and job order contracting should be used for virtually every construction project.   These performance-based methods distribute risk and reward and promote long term, productive relationships.  They also foster, actually they require, information sharing.   Lastly, they provide information and metrics to enable continuous improvement in concert with other LEAN practices.

COST DATABASE:  A detailed unit price cost database including material, equipment, and labor, line item modifiers, and localization factors is equally important.  An example of such a database is the RSMeans Facilities Cost Book, which is use for the majority of current Job Order Contracts.   In fact, RSMeans Cost Data in general is considered to be the standard for North America.   It’s time to put aside CLINS without cost data, and leverage third party and owner experiences with the use detailed unit prices.  In short, “you can’t manage what you don’t measure”.  The use of detailed unit price books to validate lump sum “hard bid” values from contractors and subs provides must become standard practice.  With respect to RSMeans, is also important to have the best representation of RSMeans cost data available as well as tools and training/support.

SOFTWARE:  Software’s role is simple, to enable the cost effective deployment of best management practices, information access and reuse, and ongoing monitoring at both global and local levels.   Software must be “domain-specific”, in other words, just like the apps on your phone, software must be designed specifically for the task at hand.

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National JOB ORDER CONTRACTING Research Study – Milestone Schedule Released

National Job Order Contracting Research Study

Register to Participate or Receive Updates

Above is the latest schedule for the Arizona State University conducted National Job Order Contracting Research Study.  Owners, Contractors, and Oversight Groups currently practices JOC or SABER are encouraged to participate.

Anticipated research outcomes:

  1. Bests practices and case studies
  2. Speed, quality, satisfaction levels vs. tradition design-bid-build/low-bid
  3. Key requirements, components and characteristics for a JOC program
  4. Demonstrate the need for transparency and accountability in JOC
  5. Qualification process for owners/contractors in JOC
  6. Value of a formal, partnership-based business process

Additional Information about JOC / SABER

Job Order Contracting – Best Management Practices

Job order contracting (JOC) is a collaborative construction delivery method that provides significant advantages vs. the traditional design-bid-build process for the numerous renovation, repair, and maintenance projects facing facility owners.

JOC benefits Owners and Contractors alike in that it provide a means to expedite projects and assure better mutual understanding of work scope and costs. JOC is performance-based, it features a level of shared risk-reward and positive incentives to drive program and project success.

Technology and training are both critical to JOC.  As transparency, process, and a unit price book (UPB) are central to a JOC program’s success, JOCs should not be run out of spreadsheets or generic cost estimating programs.  JOC-specific tools and software provide core functionality, reduce deploy cost, and aid in consistent program deployment, monitoring, and self-improvement.   Training should be provided at all levels, ranging from an introduction (example: RSMeans Facilities Cost Book), Introductory and Advance Training with respect to the UPB and associated cost estimating and project management, and specialized training such as Architectural or Electrical Cost Estimating.

JOC should not be used to bypass Procurement/ Contracting.   In fact, Contracting/Procurement should be integrally involved in establishing the JOC program, implementation, managing and continuously improving the JOC.   Contracting/Procurement should work hand-in-had the Owner’s Engineering and Technical staff, Facility Managers, PMs, and their supporting construction Contractors.

Owners have a responsibility (a regulatory requirement in the Federal Sector per FAR) to conduct internal government estimates (IGEs) on individual JOC projects/task orders over a certain dollar value (typically $100,000 – $150,000).  Appropriate JOC technology can automatically compare Government to Contractor estimates and enable comment at the line item level.  Any Owner should, at minimum regularly audit their JOC project to assure consistent deployment and requisite compliance with establish business rules and relevant regulations.

The Unit Price Book (UPB) is a core component of any JOC program.   These should be unit price line items with both parent line item costs and line item modifiers and associated labor, material, and equipment costs.   At a minimum, the UPB costs should be updated annually during the JOC contract period (typically 3-5 years), and also update quarterly via a localized construction cost index (CCI). This practice will help to account for any major cost fluctuations due to material shortages, labor issues, or other potential impacts.

In situations where buildings are critical to an organization’s mission (government, education, healthcare, manufacturing, process sector, etc.), Owners, Contractors, and Subs must work together and assure adequate knowledge about the built environment, priorities, and resource allocation.  In these instances outsourcing is not recommend as Owners would no longer have the requisite information and ability to efficiently allocate resources and assure mission readiness.

Note:  JOC is also knows as SABER in the United States Air Force.  Both are forms of IDIQs.  The United State Air Force is one of the most skilled and progressive users of SABER/JOC, and its CE’s are well respected in both the public and private sectors.

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BIM US – Continues to Flounder – 4 Reason Why

1. Life-cycle management and total cost of ownership of the built environment are not understood, nor taught in schools or the professional sector the most part.

2. A BIM Ontology is non-existent.

3. Collaborative construction delivery methods are critical requirements to BIM and equally lack general awareness.

4. BIM remains 3d visualization centered.  Life-cycle management of the built environment supported by digital technology…aka BIM, can most certainly be implemented without 3d visualization.  In point of fact, 3d visualization is secondary to robust, collaborative business processes.

Built Environment Life-cycle Management