LEAN Job Order Contracting – Optimize Facility Renovation, Repair, & Maintenance

LEAN Job Order Contracting – Optimize Facility Renovation, Repair, & Maintenance

Optimizing facility and infrastructure renovation, repair, and maintenance requires alignment of organizational strategy and vision both internally and with service providers.

2015 optimized facility renovation and repair

Internally, owners must be skilled at all aspects of managing the life-cycle of physical structures from concept through warranty, with particular emphasis upon LEAN, collaborative best management practices.

Improving operational efficiency and maximizing capital reinvestment can only be achieved if owners demonstrate leadership with respect to developing internal teams and trusted business partners such as architects, engineers, and contractors.

Job Order Contracting is a critical tool with respect to delivering more projects on-time and on-budget versus traditional design-bid-build.  High levels of quality and overall satisfaction can also be achieve via owner implemented and managed job order contracts.

Job Order Contracting is a LEAN construction delivery method that integrates mandatory collaboration of all stakeholders, shared risk/reward, common terms, definitions, and data architectures, transparent pricing via a unit price book – UPB,  global oversight and local implementation, on-demand services, and best value procurement.

Owners and contractors continuously evaluate current overall status, prioritized projects, performance versus budget, quality, and time,  and methods for improvement.

Unlike typical AEC culture, all parties are contribute equally and sacrifice short-term gains for better long-term performance.  Vision and intent of the partnership is shared and goals are clearly defined.  While there is a high degree of trust, all financial, project, and technical information is fully transparent and documented.  Parties are free to deliver in their area of expertise without excessive management and control.  While education and training is both ongoing and mandatory.     All of these factors are principles of LEAN construction management and best practice JOB ORDER CONTRACTING.  They all all involved parties to develop with and for each other with the result being better ways of doing things and mutual, longer term rewards.

 

standardized cost data

job order contracting

 

job order contract

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

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

What is BIM?

If you can’t see the whole picture… you can’t appreciate BIM.

elephant BIM

Hard to believe…perhaps to some… but many /most of us in the Architecture, Construction, Owners, Operations sector still don’t know how to define BIM.

Anna Winstanley and Nigel Fraser of Lean BIM Strategies Limited provided the most likely reason in a recent perspective…  if you can’t see the whole picture… you can’t appreciate BIM.

BIM Definition – Short – The life-cycle management of the built environment supported by digital technology.

BIM ToolsBIMF - Building Information Management Frameworkvia http://www.4Clicks.com –  Premier cost estimating and efficient project delivery software supporting JOC, SABER, IDIQ, SATOC, MATOC, MACC, POCA, BOA … and featuring integrated contract, project, document management, visual estimating/quanity take-off. QTO, and an exclusively enhanced 400,000 line itme RSMeans Cost database.

Moving from Design-Build, DB, to Integrated Project Delivery, IPD

Providing the opportunity for the kind of collaboration that the construction industry so badly needs….

Design-Build has a spectrum, ranging from almost as dysfunctional …. all the way to almost as collaborative as Integrated Project Delivery.

Shifting Design-Build toward IPD

This blog entry was co-authored by Oscia Wilson and Lisa Dal Gallo

We are big proponents of Design-Build because it places designers and builders in the same room, thus providing the opportunity for the kind of collaboration that the construction industry so badly needs.  Opportunity for collaboration, however, is not the same as a guarantee of collaboration.  Design-Build has a spectrum, ranging from almost as dysfunctional as Design-Bid-Build all the way to almost as collaborative as Integrated Project Delivery.

Design Build continuum

Figure 1: Depending on how the Design-Build structure is implemented, a project can be nearly identical to an IPD structure or very dysfunctional

On the left of this spectrum, you have those Design-Build projects that use bridging documents, lowest bidder selection, and a team that doesn’t work well together.  Although the builders are contractually combined with the architect of record, these projects are not collaborative, let alone integrated.

Owners, this is bad for you.  The biggest problem with this model is that when you have an architect prepare bridging documents, you’ve just made all the big decisions without the input of the building team.  Since 80% of the cost decisions are made during the first 20% of the design, you’ve just cheated yourself out of the biggest source of potential savings that come from collaboration between the contractors and the designers.

On top of that, now you’ve divided your design team into two groups: the architects who did the bridging documents, and the architects who finish the project.  This creates knowledge transfer loss, inefficiencies due to effort repetition, and prevents the second architect from holding a sense of ownership over the design.

In addition, if your selection is based solely on price, the Design-Build team will price exactly what is on the bridging documents; there is no incentive for the team to engage in target value design.  This situation could be improved by offering an incentive through savings participation, but that kind of aggressive innovation requires a high functioning team.  If the selection was based on lowest bid, the team may be too dysfunctional to achieve real gains because the lowest prices generally come from the least experienced and least savvy of the potential participants.  Often in these settings, cost savings are achieved at the expense of quality design, as general contractors under great pressure to achieve aggressive cost savings revert to treating architects and engineers as venders instead of partners.

For owners who want intimate involvement in the process, Design-Build based on low bidding offers another disadvantage.  In order for the Design-Build team to deliver for that low price you were so excited about, they have no choice but to ruthlessly cut you out of the process.  They are carrying so much risk that they can’t afford any of the potential interference, delay, or scope escalation that comes from involving a client in the back-room discussions.

If you have a team that works well together, you move farther to the right on the spectrum.

If you hire the design-build team based on good scoping documents instead of bridging documents, you move farther to the right on the spectrum.  (Partial bridging documents may be a good compromise for public owners whose process requires a bridging step.)

Starting somewhere in the middle of this spectrum, you start seeing successful projectsA successful, collaborative Design-Build project is light years ahead of Design-Bid-Build.

Some projects are pushing the envelope so far that their Design-Build projects look very similar to Integrated Project Delivery (IPD).  Lisa Dal Gallo, a partner at Hanson Bridgett is an expert in IPD and partially integrated projects, including how to modify a Design-Build structure to get very close to an IPD model.  She recently discussed this topic at both the San Diego and Sacramento chapters of the Design-Build Institute of America (DBIA). The discussion was mainly to assist public owners who have design-build capability to improve upon their delivery, but same principles apply to private owners who may not be in the position to engage in a fully integrated process through an IPD delivery method.

Several recent and current projects in California are operating on the far right side of this Design-Build collaboration spectrum, by crafting a custom version of Design-Build that uses IPD principles.  Here’s how they’re doing it:

  • Skipping the Bridging Documents. Instead of using bridging documents as the basis for bidding, owners are creating scoping criteria or partial bridging documents that provide performance and owner requirements, but allow the design team to collaborate on the design and present their own concept to achieve the owner’s goals. Under this type of scenario, the design-build teams would typically be prequalified and then no more than 3 teams would be solicited to participate in design competition.The team is usually selected based on best value.  After engagement, the owner and end users work with the team through the scoping phase and set the price.
  • Integrating the Design-Build entity internally
    • To assist in a change in behavior, the general contractor and major players like architect, engineers, MEP subs, and structural subs can pool a portion of their profit, proportionally, sharing in the gains or pains inflicted based on the project outcome.
    • Through downstream agreements, the major team players can also agree to waive certain liabilities against each other.
    • They enter into a BIM Agreement and share information freely, using BIM to facilitate target value design and a central server to allow full information transparency.
  • Partially integrating with the owner.  The owner can play an active role, participating in design and management meetings.

The extent to which the owner is integrated with the design/build team is a subtle—but crucial—point of differentiation between an extremely collaborative form of Design-Build (which I suggest we call “Integrated Design-Build”) and Integrated Project Delivery.

Here is the crux of the biscuit: Under an IPD model, the owner actually shares in the financial risks and rewards associated with meeting the budget and schedule[1].  Therefore, they are part of the team and get to fully participate in back-of-house discussions and see how the sausage is made.

Under Design-Build, even an Integrated version of Design-Build, the design-build entity is carrying all the financial risk for exceeding a Guaranteed Maximum Price (GMP) and/or schedule, so they deserve to collect all the potential reward if they can figure out how to bring it in faster and cheaper.  Since the owner’s risk for cost and schedule is substantially reduced when the project uses a GMP, the owner doesn’t really deserve a spot at the table once they’ve finished clearly communicating their design and performance criteria (which is what the scoping documents are for).

It can be an awkward thing trying to incorporate a client who wants to be involved, while making sure that client doesn’t request anything above and beyond what is strictly communicated in the scoping documents upon which the GMP is based.

So the key differences between this Integrated Design-Build and full Integrated Project Delivery are:

  • The contract model (a multi-party agreement between Owner, Architect and Contractor vs. an agreement between owner and usually the contractor)

  • The level of owner participation in the decision making process

  • The fee structure and certain waivers of liability (shared risk) between the owner and the other key project team members.

Delivery model diagrams

Figure 2: Traditional design-build is hierarchical in nature. An integrated design-build model is collaborative in nature (but only partially integrates with the owner). An IPD model is fully collaborative with the owner and may or may not include consultants and sub-contractors inside the circle of shared risk & reward, depending on the project.

The IPD contract form of agreement is aimed at changing behaviors, and its contractual structure exists to prompt, reward, and reinforce those behavior changes.  However, full scale IPD is not right for every owner or project; it is another tool in a team’s tool box.  The owner and its consultants and counsel should determine the best delivery method for the project and proceed accordingly.  The important thing to remember is that any delivery model can be adapted to be closer to the ideal collaborative model by making certain critical changes.  What is one thing you might change on your next project to prompt better collaboration?


[1] Under IPD, a Target Cost is set early (similar to a GMP).  If costs exceed that target, it comes out of the design & construction team’s profits.  But if costs go so high that the profit pool is exhausted, the owner picks up the rest of the costs.  If costs are lower than the target, the owner and the team split the savings.


Lisa Dal Gallo

Lisa Dal Gallo is a Partner at Hanson Bridgett, LLP, specializing in assisting clients in determining the best project delivery method to achieve the teams’ goals, developing creative deal structures that encourage use of collaborative and integrated delivery processes and drafting contracts in business English.  She is the founder of California Women in Design + Construction (“CWDC”), a member of the AIA Center for Integrated Practice and the AIA California Counsel IPD Steering Committee, and a LEED AP.  Lisa can be reached at 415-995-5188 or by email at ldalgallo@hansonbridgett.com.

 

 

 

Oscia Wilson headshotOscia Wilson, AIA, MBA is the founder of Boiled Architecture.  After working on complex healthcare facility projects, she became convinced that Integrated Project Delivery (IPD) was key to optimizing construction project delivery.  She founded Boiled Architecture to practice forms of Integrated and highly collaborative project delivery.  She serves on the AIA California Council’s committee on IPD.

via http://www.4Clicks.com – Premier cost estimating and efficient project delivery software ( JOC, SABER, IDIQ, MATOC, SATOC, MACC, POCA, BOA… featuring an exclusively enhanced 400,000 line RSMeans Cost database with line item modifiers and full descriptions and integrated visual estimating/QTO, contract/project/document management, and world class support and training!

Job Order Contracting – JOC – is a proven form of IPD which targets renovation, repair, sustainability, and minor new construction, while IPD targets major new construction.

IPD - Integrated Project Delivery and JOC - Job Order Contracting
IPD – Integrated Project Delivery and JOC – Job Order Contracting
JOC Process
JOC Process

BIM graphic #6

IWMS and EAM are buzzwords!

BIM is the life-cycle management of the built environment supported by digital technology…. EAM and IWMS are “buzzwords”.

 

To achieve efficient the life-cycle management involved a list of competencies, processes, technolgies…  please add to the list!

  1. Collaborative construction delivery methods
  2. Transparency
  3. Common glossary of terms
  4. Common information exchange formats
  5. Management  “buy in”
  6. A focus upon “life-cycle costs” and/or “total cost of ownership” vs. “first costs”
  7. Metrics, Benchmarks, standardized and detail cost information – “you can’t manage what you don’t measure”.

Achievement of efficient life-cycle management of the built environment requires a fundamental shift in how the AECOO (Architecture, Engineering, Construction, Operations, Owner) sector conduct business.  BIM and Cloud Computing are disruptive technologies that will assist in this “transformation”…which as already begun.. while economic and environmental market drivers will assure the transformation.

Adoption of collaborative construction delivery methods such as Integrated Project Delivery (IPD), and Job Order Contracting (JOC) … both decades old… has accelerated, and also are important BIMF - Building Information Management Framework

BIM Technology and Process Road Map
BIM Technology and Process Road Map

change agents.

Via:  www.4Clicks.com – Premier cost estimating and efficient project delivery solutions for JOC, SABER, IDIQ, SATOC, MATOC, MACC ….

 

The Metrics of BIM – The Manage the Built Environment

As the old saying goes…”you can’t manage what you don’t measure”.

 

 

Here’s the beginning of a list of information requirements spanning various domains/competencies, technologies, etc.,
While an important component, the 3D component of BIM has been a very unfortunate distraction.  It appears that many/most have “gone to the weeds” and/or are “recreating the wheel” vs. working on core foundational needs such as the consistent use of appropriate terminology and the establishment of robust, scalable and repeatable business practices, methodologies, standards, metrics and benchmarks for facilities and physical infrastructure management.

It is common terminology that enables effective communication and transparency among the various decision makers, building managers, operators and technicians involved with facilities and physical infrastructure investment and management.

Here are examples of metrics associated with the life-cycle management of the built environment:

Annualized Total Cost of Ownership (TCO) per building per gross area = Rate per square foot

Annualized TCO per building/Current replacement value = Percent of Current Replacement Value (CRV)

Annualized TCO per building/Net assignable square feet = Cost rate per net assignable square feet per building

Annualized TCO per building/Non-assignable square feet = Cost rate per non-assignable square feet per building

Annualized TCO per building/Building Interior square feet = Cost rate per interior square foot per building

Churn Rate

Utilization Rate

AI (Adaptation Index) or PI (Programmatic Index) = PR (Program Requirements) /
CRV (Current Replacement Value)

Uptime or Downtime – Defined in percent, as amount of time asset is suitable for the program(s) served.

Facility Operating Gross Square Foot (GSF) Index (SAM Performance Indicator: APPA 2003)

Custodial Costs per square foot

Grounds Keeping Costs per square foot

Energy Costs per square foot

Energy Usage

Utility Costs per square foot

Waste Removal Costs per square foot

Facility Operating Current Replacement Value (CRV) Index (SAM Performance Indicator: APPA 2003)

Planned/Preventive Maintenance Costs per square foot

Emergency Maintenance Costs as a percentage of Annual Operations Expenditures.

Unscheduled/Unplanned Maintenance Costs as a percentage of Annual Operations Expenditures.

Repair costs (man hours and materials) as a percentage of Annual Operations Expenditures

FCI (Facility Condition Index) = DM (Deferred Maintenance) + CR (Capital Renewal)
/ CRV (Current Replacement Value)

Recapitalization Rate, Reinvestment Rate

Deferred Maintenance Backlog

Facilities Deterioration Rate

FCI (Facility Condition Index) = DM (Deferred Maintenance) + CR (Capital Renewal) /
CRV (Current Replacement Value)

AI (Adaptive Index) or PI (Programmatic Index) = PR (Program Requirements) /
CRV (Current Replacement Value)

FQI (Facility Quality Index) or Quality Index or Index = FCI (Facility Condition Index)+ AI (Adaptive Index)

BIMF - Building Information Management FrameworkVia http://www.4Clicks.com – Premier cost estimating and efficient project delivery software for the built environment – , …