BIM & Efficient Life-cycle Management of Facilities & Infrastructure

bim and efficient life-cycle facility management

Efficient life-cycle management of facilities and other physical infrastructure is impossible until real property owners are better educated and truly capable in their role as stewards of the built environment.

LEAN best management practices and associated collaborative construction delivery methods (Integrated project delivery – IPD, Job Order Contracting – JOC, etc.) are REQUIRED in order to deliver quality renovation, repair, sustainability, and new construction projects on-time and on-budget.

Most Owners do not have the educational background or professional experience needed to consistently deploy LEAN construction delivery methods and/or life-cycle management.

job order contracting

job order contacting - JOC

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

BIM Strategy, Collaboration, and Interoperablity… Getting it right from square one.

The construction industry (architecture, engineering, construction, operations/facility management, business product manufacturers, oversight and regulatory groups), like most other sectors, is in a state of rapid change.

Construction delivery methods are at the center of  this ongoing transformation as they dictate the structure, tone, and legal requirements of any project.  Thus, whether you are involved with construction, renovation, repair, and/or sustainability projects… Integrated Project Delivery – IPD, for new construction, Job Order Contracting – JOC, for minor new construction, renovation, repair, and sustainability and Public Private Partnerships – PPP, are examples of collaborative construction delivery methods that are rapidly replacing traditional and somewhat dysfunctional methods such as Design Bid Build (DBB).

While collaborative construction delivery methods have been in existence for decades and are well proven, they are only recently being more readily adopted.  The drivers for change include environmental, economic, and technology factors.  We are all aware of shrinking resources whether budgetary or non-renewal energy related, as well as associated environmental regulations relative to global warming, the latter of which will become increasingly stringent.     That said, disruptive technologies such as BIM (Building Information Modeling) and Cloud Computing are also a major causal factors  as well as enablers  relative the  business process change so desperately needed with the construction sector.
As collaborative construction delivery methods become more common, the need to share information transparently becomes paramount. Project teams need to adapt to early and ongoing information sharing among distributed team members and organizations.   In the case of JOC (also known as SABER in in the United State Air Force), technology has been available for over a decade to support virtually all aspects of   collaborative project execution from concept thru warranty period.  An example is 4Clicks Project Estimator combined with RSMeans Cost Data, and/or organizational specific unit price books.  With all parties leveraging the same data and following robust, collaborative processes from concept, thru site walk, construction, etc., the net result being  more jobs being done on-time and on-budge with fewer change orders and virtual elimination of the legal disputes, the latter be unfortunately common with traditional methods.

Job Order Contracting Process
Job Order Contracting Process

IPD vs. Traditional

How built environment stakeholders share information and work together will continue to evolve.  The methods in which we, as Owners, Contractors, AEs, etc. participate in this exchange within our domains will determine our ultimate success or failure.

As show in the following graphic, the project delivery methods, while a fundamental element, is just one “piece of the BIM pie”.

Multiple “activities” , business processes” , “competencies”, and “supporting technologies” are involved in BIM.

BIM is  “the life-cycle management of the built environment supported by digital technologies”.

BIM Framework
BIM Framework

A Snapshot of International BIM Status and Goals

Year Country Action Reference
2007 Finland Requires IFC BIM in its projects and intends to have integrated model-based operation in future Senate Properties
UK Standard: Collaborative production of architectural, engineering and construction information. Code of Practice. BS 1192:2007
2008 USA Mandatory BIM for government projects GSA; USACE
2010 Norway Requires IFC BIM for new buildings Statsbygg
3 BIM pilot projects running Norwegian Defence Estates Agency
Singapore Establish Centre for construction IT help key agencies and construction firms to kick start BIM Singapore BIM Roadmap 2012
UK Building Information Management – A Standard Framework and Guide to BS 1192 Joint publication of BS 1192:2007 and BSI/CPI
2011 Singapore Work with key agencies on pilot projects Singapore BIM Roadmap 2012
UK Creation of the implementation plan and team to deliver Government Construction Strategy (May)
Evaluate trial projects and recommend (ongoing)
Standard Due: Library Objects for Architecture, Engineering and Construction. Recommended 2D symbols of building elements for use in building information modelling. BS 8541-2
Standard Due: Library Objects for Architecture, Engineering and Construction: Identification and grouping BS 8541-1
Report/Strategy Paper for the Government Construction Client Group (March) BIM Industry Working Group
2012 Korea Public Procurement Service to fully adopt IFC-based open BIM
Singapore BIM as part of public sector building project procurement Singapore BIM Roadmap 2012
Work with key agencies to prepare consultants and contractors who undertake the public sector projects to be BIM ready
BIM Guide – published Singapore BIM Guide
Finland Common BIM Requirements – published buildingSMART Finland
UK Begin phased roll out ot all Government projects (Summer) Government Construction Strategy
Define and mandate expected standard (information set) for Government projects (April)
Identify trial projects in multiple departments to achieve delivery via 3D fully collaborative BIM (July)
COBie-UK-2012 BIM Task Group
Standard due: Library Objects for Architecture, Engineering and Construction: Shape and measurements BS 8541-3
Standard due: Library Objects for Architecture, Engineering and Construction: Attributes for specification and simulation BS 8541-4
Building Information Management Management – Information requirements for the capital delivery phase of construction projects PAS 1192-2:2012
Operational Asset Management – Processes and data for the commissioning, handover, operation and occupation stages BS 1192-3 (not yet published)
2013 Australia Develop and deliver a BIM awareness and promotion program for key government and broader industry participants (July 1) Implementation Strategy – National BIM Initiative Report
Develop and start delivery of BIM training packages to industry practitioners (July 1)
Enable progressive access to an Australian library of generic BIM objects and information for manufactured products that comply with Australian BIM standards (July 1)
Singapore Mandatory Architecture BIM e-Submissions for all new building projects . 20,000 m² Singapore BIM Roadmap 2012
2014 Australia Develop Australian BIM contracts (July 1) Implementation Strategy – National BIM Initative Report
Encourage the inclusion of BIM as a collaborative technology for both professional education and vocational training in the tertiary sector (July 1)
Develop industry protocols for information exchange to underpin BIM and collaborative practice (July 1)
Coordinate activity between relevant sectors of the Australian economy to enable integrated access to land, geospatial and building information (July 1)
Singapore Mandatory Engineering BIM e-Submissions for all new building projects . 20,000 m² Singapore BIM Roadmap 2012
2015 Australia Develop Australian technical codes and standards for BIM (July 1) Implementation Strategy – National BIM Initative Report
Align Australian BIM codes and standards with international equivalents (july 1)
Develop a model-based building regulatory compliance process demonstrator (July 1)
Develop and implementation plan for the transition of Australian regulatory codes and compliance mechanisms to model-based performance based systems (july 1)
Require BIM for Australian Government procurement for built environment projects (July 1)
Encourage State and Territory Governments and the private sector to require BIM for procurement for built environment projects (July 1)
Singapore Mandatory Architecture & Engineering BIM e-Submissions for all new building projects . 5,000 m² Singapore BIM Roadmap 2012
Target = Singapore Construction Industry to use BIM widely
2016 UK Deliver Level 2 BIM (Collaboration) – Introduce a progressive programme of mandated use of fully collaborative Building Information Modelling for Government projects. Level 2 = Managed 3D environment held in separate discipline “BIM(M)” tools with attached data; Commercial data managed by an ERP; Integration on the basis of proprietary interfaces or bespoke middleware could be regarded as “pBIM” (proprietary); the approach may utilise 4D programme data and 5D cost elements. UK Government Construction Strategy & BIM BIM Strategy Paper (2011)
 Source:  Susan Keenliside, 2013-email, via http://www.4Clicks.com
2020 Singapore Realise the vision of a highly integrated and technologically advanced construction sector that will be led by progressive firms and supported by a skilled and competent workforce. Singapore BIM Roadmap 2012

The Value of NBIMS = The Value of BIM?

The primary focus of the NBIMS-US™ is to provide open standards to transform the currently inefficient and ineffective  life-cycle management of the built environment…  Is this not the same value provided by BIM?

This transformation is accomplished through the creation and exchange of building information modeling (BIM) information and management processes.  Elements included include reference standards; outlining classifications of data and processes, data exchange formats, requirements for many different types of information exchanges and practice standards; which outline practices and workflows for data modeling, project execution, and robust feedback on success or failures so that assumptions are quickly improved. The metrics by which these open standards are to be evaluated include: total cost of ownership vs. first costs, impacts upon organizational mission, sustainability, life-safety, utilization, up-time, project timelines, fewer change orders, fewer legal disputes, ….

Goals, Objectives, and Benefits of NBIMS and BIM:

  1. Reduce the total cost of ownership of the built environment in concert with the mission of an organization and its relationship to the environment via timely, accurate, re-usable information and associated enhanced decision support capability.
  2. Enable collaboration and information sharing among all shareholders via established products, methods, and information formats.
  3. Front end information gathering, planning, and decision-making to have the greatest positive impact in the overall design, procurement, construction, operations, and decommissioning process, taking advantage of collaborative, integrated project delivery.
  4. Information development and sharing via consensus documents that select a common path forward when multiple divergent paths were once available
  5. Build a growing community of practice which allows progress to be made built upon previous levels of agreement
  6. Share information with software vendors as well as other product and service providers to build solutions that supports a consensus agreement of practitioners
  7. Identify specific reference standards that are used for BIM
  8. Documents “best practices” to potentially become standard practice for creating and managing information be re-used and re-purposed

Building Owner Perspective

  1. How can I better optimizing building performance to contribute to improving overall performance (e.g. financial, environmental, organizational, operational efficiencies) across the lifespan of my physical assets.
  2. Where can I find process documentation and contract language to cost-effectively develop and consistently deploy efficient construction delivery methods, enable high quality and quantity work at a reasonable cost.

Contractor Perspective

  1. An understanding of how to develop long lasting relationships with Owners, AEs, Subs and leverage BIM and associated optimized construction delivery
  2. How to perform more projects that provide a more predictable revenue stream and a reasonable profit margin.

A/E Perspective

  1. Participation in emerging efficient project delivery processes to better acheive design excellence, meeting project schedules and exceeding client service expectations.
  2. An understanding of how to develop long lasting relationships with Owners, Contractors, BPMs …and leverage BIM and associated optimized construction delivery
  3. How to perform more projects that provide a more predictable revenue stream and a reasonable profit margin.

Business Product Manufacturer (BPM) Perspective

1. How can I make my products available to designers and contractors so that they fit in with BIM project delivery processes

2. How should I format my products as BIM objects (e.g. level of graphical detail and business properties) so they are most useful by designers and contractors

3. I am interested in getting designers and contractors to specify and purchase my product

ALL:

1. How to use BIM for specific construction tasks (e.g. cost estimating, material procurement, digital fabrication, valuation of in-place construction, commissioning and handover, safety management)

2. How to mitigate risk.

3. How to organize my organization and project teams to take advantage of BIM processes and technologies.

4. How to participate in emerging efficient project delivery processes to focus on design excellence, meeting project schedules and exceeding client service expectations.

5. I am interested in optimizing staff resources, project profitability, maintaining relationships with my clients and finding the next job

Ballot Cover Letter Statement:

The National BIM Standard is a consensus document, where many ideas are brought together, presented to a variety of people representing different parts of the industry, discussed, debated, and ultimately subjected to the democratic process to determine which ideas rise to the stature of inclusion.

facility-life-cycle-technology-and-process-roadmap1-300x172BIMF - Building Information Management Framework

Related docu,ment – http://fire.nist.gov/bfrlpubs/build04/PDF/b04022.pdf – Cost Analysis of Inadequate Interoperability in the U.S. Capital Facilities Industry Michael P. Gallaher, Alan C. O’Connor, John L. Dettbarn, Jr., and Linda T. Gilday

TFM Article – BIM, Cloud Computing, IPD and JOC

Construction Disruption           Peter Cholakis

As they pass the emergent stage, BIM and cloud computing will continue to impact project delivery.
Emergent disruptive technologies and construction delivery methods are altering both the culture and day-to-day practices of the construction, renovation, repair, and sustainability of the built environment.
Meanwhile, a shifting economic and environmental landscape dictates significantly improved efficiencies relative to these facility related activities.  This is especially important to any organization dependent upon its facilities and infrastructure to support and maintain its core mission.
The disruptive digital technologies of building information modeling (BIM) and cloud computing, combined with emergent collaborative construction delivery methods are poised to alter the status quo, ushering in increased levels of collaboration and transparency.  A disruptive technology is one that alters the very fabric of a business process or way of life, displacing whatever previously stood in its place.  BIM and cloud computing fit the profile of disruptive technologies, individually, and when combined these stand to create a tidal wave of change.
BIM is the life cycle management of the built environment, supported by digital technology.  While a great deal of emphasis has been placed upon 3D visualization, this is just a component of BIM.  The shift from a “first cost mentality” to a life cycle cost or total cost of ownership is a huge change for many.Improving decision making practices and applying standardized terms, metrics, and cost data can also prove challenging.An understanding and integration of the associated knowledge domains important to life cycle management is required, resulting in what is now being referred to as “big data.”
Cloud computing is also a disruptive technology, and it’s one that impacts several areas.  The National Institute of Standards and Technology (NIST) definition of cloud computing is as follows, “Cloud computing is a model for enabling ubiquitous, convenient, on demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, services) that can be rapidly provisioned and released with minimal management effort or service provider interaction.  The cloud model is composed of five essential characteristics, three service models, and four deployment models.”
It is perhaps helpful to define cloud computing in terms of its benefits.  Cloud computing enables far greater levels of collaboration, transparency, and information access previously unavailable by traditional client/server, database, or even prior generation web applications.  Multiple users can work on the same data set with anyone, anywhere, anytime, in multicurrency, multilanguage environments.  All changes can be tracked to “who did what” within seconds (potentially the best form of security available), and information is never deleted.
The disruptive technologies of BIM and cloud computing will accelerate the adoption of emergent construction delivery methods and foster new frameworks.  Design-bid-build, the traditional construction delivery method for decades, is inherently flawed.  As a lowest bid deployment it immediately sets up adversarial relationships for involved parties.  Owners prepare a solicitation for construction projects based on their understanding of them1, with or without third-party A/E assistance, and in most cases they go out in search of the lowest bidder.  Then without a thorough understanding of the owner’s facility, bidders base their responses on the owner’s solicitation, plans, and specifications.  Owners typically allow a period of time for bidders’ questions and clarifications; but the quality of this interchange is at best questionable if based solely on a written scope, plans and specifications, and/or a meeting with suppliers.
Design-build, arguably a step in right direction, falls short of bringing all stakeholders together.  More responsibility of design and construction is shifted to the contractor and/or A/E.  However, the dual level participation structure doesn’t assure the interests of all parties are equally addressed.  Furthermore, the design-build process is typically reserved for major new construction projects versus the numerous sustainability, repair, renovation projects, and minor new construction projects typically encountered by facility managers (FMers).
Because BIM brings together previously disparate information into a framework that enables decision support, using the technology requires a collaborative construction delivery method.  The integration of the domain knowledge and robust processes required to allow fms, A/Es, and other stakeholders to achieve heightened levels of information sharing and collaboration is enabled by methods that include Integrated Project Delivery (IPD) and Job Order Contracting (JOC).
Key characteristics of these emergent construction delivery methods include: choices based on best value; some form of pricing transparency; early and ongoing information sharing among project stakeholders; appropriate distribution of risk; and some form of financial incentive to drive performance.
Both IPD and JOC allow, if not require, owner cost estimators and project managers to “partner” with contractors, subcontractors, and A/Es to conceptualize, create, cost, prioritize, start, and report upon projects—in the very early phases of construction.
IPD, JOC, and Simplified Acquisition of Base Civil Engineering Requirements (SABER)—the U.S. Air Force term for applying JOC practices—are practiced simultaneously by a growing number of organizations and supported by digital technologies.  These construction delivery processes are embedded within software to allow for rapid, costeffective, and consistent deployment as well as the associated level of collaboration and transparency.
BIM and cloud computing are disruptive technologies that will accelerate the adoption of emergent construction delivery methods such as IPD and JOC.Construction delivery methods set the tone and level of interaction among project participants and can be viewed as the management process framework.When supported by BIM and cloud computing, the life cycle management of the built environment, and the associated management of big data, can be expected to become commonplace for many construction projects.

Cholakis is chief marketing officer for 4Clicks Solutions, LLC (www.4clicks.com), a Colorado Springs, CO provider of cost estimating and project management software.  With expertise in facilities life cycle costs and total cost of ownership in various market segments, he is involved in numerous industry associa- tions and committees including the American Society of Safety Engineers, Association for the Advancement of Cost Engineering, Society of American Military Engi- neers, BIM Library Committee-National Institute for Building Sciences (NIBS), and National Building Information Model Standard Project Committee.

 

 

http://epubs.democratprinting.com/article/Professional_Development%3A_Construction_Disruption/1338940/149812/article.html

 

 

 

BIM, Value Management, Life-cycle Cost Management

Source:  International Journal of Facility Management, Vol 4, No 1 (2013), via http://www.4Clickscom – Premier cost estimating and efficient project delivery software for JOC, SABER, IDIQ, SATOC, MATOC, MACC POCA, BOA, BOA… including exclusively enhanced 400,000+ RSMeans line item cost database, contract/project/document management, and visual estimating/QTO.

BIM is the life-cycle management of the built environment supported by digital technology.  Unfortunately, too much emphasis has been placed upon 3-D visualization and other technology components vs. the process of life-cycle management.

Facility / Infrastructure Life Cycle Cost:   Costs associated with designing, acquiring, constructing, adapting, maintaining, repairing, and operating a built structure.

While Value Management is used as term in this paper, it is arguably interchangeable with Capital Planning and Management (CPMS).  The latter is a process involving the construction and management of physical and functional conditions of a built structure over time.

 

A CRITICAL REVIEW OF VALUE MANAGEMENT AND WHOLE LIFE COSTING ON CONSTRUCTION PROJECTS

Abdul Lateef A, Olanrewaju
Department of Civil Engineering, Universiti Teknologi PETRONAS,
Bandar Seri Iskandar 31750 Tronoh, Perak Darul Ridzuan

Correspondence: abdullateef.olanrewaju@ymail.com

ABSTRACT

It is the aim of this paper, to present the complexity of the body of knowledge capturing the range of conflicting assumptions and understanding on the theories and practices of value management (VM) and life cycle-cost (LCC). Life cycle cost in facility construction projects is a management tool that is used to analyze the cost of constructed facilities in terms of cost of acquiring the facility and as well as maintaining and operating the facility. It makes a lot of sense to consider the capital costs of projects with their associated operation and maintenance costs. This is so that the project that is procured would economically viable through its entire life span. The recent increase in demand for sustainable or green buildings is further making the consideration of life cycle cost an issue.

However, life cycle of the project alone is not sufficient as source of creating value to the clients and end users. Consequently, the need for value management emerges. Based on extensive literature review this paper has shown that the life cycle costing techniques is a tool in the value management methodology an basic finding from the connection is that both VM and LCC can be embedded into the wider context of FM.

Keywords: life cycle cost; value management; reflexivity in research, facility management, best value; construction projects

I. INTRODUCTION

In this paper, our aim is to represent the complexity of the body of literature capturing the range of conflicting assumptions and understandings about the theories and practice of VM and LCC. Before proceeding however, it is important to acknowledge what although we attempt to offer a balanced portrait of opposing views, our opinions and biases will come through whether we want them to or not. Although we are more comfortable with usual impersonal academic writing style, we believe it will help readers to differentiate what we believe from what other believe if we are honest and explicit about where we stand on some of these issues under investigations. We do this here and again wherever we view it is necessary. This kind of discussion of the preference and opinions of an author is reflexivity paradigm, and it is particularly important in value management issues, in which so many divergent assumptions are often left unsaid or asserted as truth. While some could argue that some issues are better left unsaid, it is not at any one interest to continue to pretend as everything is right and thus failed to present our side of the case. At least, this could serve as impetus to some writers and commentators.

Published literature revealed a wide range of opinion which tends to polarize either towards life cycle costing or value management. In other words, there are misconceptions and misunderstandings as to which of the two techniques is more involving, proactive and can ultimately create and sustain best value for construction projects. However, the purpose of life cycle costing is to maximize the total cost of ownership of the projects over the project’s life span (Morton and Jaggar, 1995 and Arditi and Messiha, 1996). It is also defined as the total cash flow of the project from the conceptual stage to the disposal stage (Bennett, 2003). Life cycle analysis takes into account the capital costs of the project as well as costs of operation and maintenance. The fundamental issue in the LCC is the determination of the operation and maintenance costs of all possible alternatives which are then discounted to present worth of money (Pasquire and Swaffield, 2006) for analysis.

However, while selecting alternative proposals or elements, the criteria of selections are more than just the issues of total costs. Many criteria, in addition to the cost criterion must be analyzed and adequately considered if maximum value is to be delivered to the client (Ahuja and Walsh, 1983). VM takes into accounts all the criteria that the client / user desire in their project. Value management involves the identification of the required functions and the selection of alternative that maximize the achievement of the functions and performance at the lowest possible total cost (Best and De-Valennce, 2003). The value management approach reduces the risk of project failure, lower cost, shorten projects schedules, improve quality, functions, performance and ensure high reliability and safety. While, life cycle costing is useful when a “project” has been “selected or defined”, value management is introduced much earlier. Value management is introduced when a decision has not been made yet either to build or not. At this stage, the “project” is still soft; the client’s solution to the client’s problem might not even be constructed facilities. For instance, if a client wants higher return for investment, value management is introduced to determine the kind of project that will provide to the client the expected return on investment (Kelly and Male, 2001). Perhaps the project in this case may be for the client to invest in agricultural activities. So from the beginning, the clients and other stakeholders are explicitly aware of the kind of project in which to invest.

This paper used literature review to achieve its aim. The remainder of the paper is organized as follows. It commences in II “epistemology of reflexivity, in this section, overview of reflexivity are presented. This section is preceded with the section on the “introduction”. Section III; dwell on the “principle of life cycle costing”. The section III reviews literature on the technique of life cycle costing. The purposes and methodology of the technique were provided and discussed. In section IV, the principle and methodology of value management were discussed. In this section, explicit references on the two important phases in the value management methodology where life cycle analysis is mainly used were outlined. Analytical comparisons of the two techniques are then presented in section V as discussion. However, before detail information on comparing the two techniques is provided, linkages between facilities management, value management and life cycle cost are provided. A basic finding from the connection is that both VM and LCC can be embedded into the wider context of FM. The paper is concluded in section VI by bringing together major themes of the paper in: “conclusion and observations”.

II. EPISTEMOLOGY OF REFLEXIVITY IN RESEARCH

Research could involve quantitative or qualitative data or both. The degree of influence the researcher has on a research depends on the type of data being collected. For instance data collected through interviews are more prone to bias as compared to survey questionnaire instrumentation. Being reflexive involves being conscious on how the researcher’s personal values, opinions, views, actions will not creep into the data collection, analysis, results and interpretations. For instance, bias could also creep into research because of how the researchers analyze and interpret previous related works-i.e. through literature review. However, bias could creep into research knowingly or unknowingly. According to Dainty, there is a “traditional of reflexivity in qualitative enquiry where researcher openly questioned the effectiveness of their research methods on the robustness of their results and debate the influence and effect that their enquiry has had on the phenomena that they have sought to observe” (Dainty, 2008). Cohen, et al., (2006) also outlined that reflection occur at every stage of action research. In that regards, in actual practice, biasness is difficult to eliminate in all type of research. However, being aware of it and the ability to control or minimize it is the most important element in research. In order to minimize biases, researchers should apply to themselves the same decisive criteria they set for other people works to pass through (Cohen, et al., 2006). However, we are consciously aware of the effects of the reflexivity on this study. In other words, we recognized the influence our sentiment, perceptions, values, feelings, thoughts and understandings may have on this study. For these reasons, we have made all possible efforts to be on the fence– yet to be decisive and analytical. In other words, as far as this issue is concerned, we have not taken a neutral position but a middle course position.

III. LIFE CYCLE COST TECHNIQUE IN CONSTRUCTION PROJECT

While information on the exact time, on the origin of LCC and the time it was first applied to the construction projects is not available, but it can be safely concluded that it preceded the VM techniques. Life cycle costing is also being referred to as whole life cost or cost-in-use. However, life cycle cost is preferred here as it is the most familiar time term even among the practitioners. Regardless of the nomenclature, the main purpose is to consider future costs in the determination of true cost of projects. In other words, LCC is a technique that is used to relate the initial cost with future based costs like running, operation, maintenance, replacement, alteration costs (Ahuja and Walsh, 1983; Morton and Jaggar, 1995; Bennett, 2003 and Kiyoyuki, et al., 2005). Elsewhere, it is defined as the total cost of project measured over a period of financial interest of the clients (Flanagan and Jewell, 2005). LCC enables a practical economic comparison of the alternatives, in terms of both the present and future costs. This is to allow in the final evaluation, to find out how much additional capital expenditure is warranted today in order to achieve future benefit over the entire life of the project. It is therefore the relationship of initial cost and other future based cost. Certainly, there is a need to relate capital cost with operation and maintenance costs in order to procure buildings that present value for money invested to the clients. This requirement is becoming more of a necessity with the increase in drive and subsequent demand for sustainable or green buildings. Since the 1960s, studies have shown there are the needs to balance capital costs against the subsequent maintenance costs of the buildings (Seeley, 1996).

Decision regarding the life cost of a project has to be ascertained right from the project’s conceptual stage as to whether to reduce the initial cost at the detriment of the maintenance and running costs. This depends on the client’s value system on the projects; however, effective balance must be strike to ensure meaningful selection. In addition to the initial construction costs which are foreseeable cost, other unforeseeable cost that should be considered are the operation cost, cost of energy usage, maintenance cost, disposal cost / salvage cost. Today clients are wiser, as they seem to prefer investing little more today for tomorrow savings. Clients are becoming knowledgeable about construction projects, as to what the future might likely portray regarding collateral costs. Issues of LCC are more important to the owner-occupier than to the developer who only builds to let or sell the construction projects on completion or over a certain period of time. In this case, end-users are left to bear the maintenance costs. The modern procurement system (i.e. design, building and operate) is possibly a good channel to consider building life cycle. In fact, the LCC is a tool that is often used by the management team to procure value for money invested

IV. VALUE MANAGEMENT IN CONSTRUCTION PROJECT

Various terms – value engineering, value control, value analysis and value engineering- have been used to describe the principle of value engineering. However, in this paper all the terms are synonymous. The most common are value management and value engineering, though. The two terms are used interchangeably in this paper. VM was developed due to shortage of materials and components that faced the manufacturing industry in the North America during the WW11. VM is both problem solving and problem seeking processes. As a problem seeking system, it identified problems that might arise in future and develop or identified solution to the problem. Value management is a proactive, problems solving management system that maximizes the functional value of a project by managing its development from concept stage to operation stage of a projects through multidisciplinary value team (Kelly and Male, 2001). It make client value system explicitly clear at the project’s conceptual stage. It seeks to obtain the best functional balance between cost, quality, reliability, safety and aesthetic. The approach could be introduced at any stage in the projects’ life cycle, but it is more beneficial if it is introduced from the pre-construction phase of the projects; before any design is committed (Ahuja and Walsh, 1983).

The tools and techniques of VM push stakeholders to provide answers to questions that might not ordinarily be considered if other approaches were used (Olanrewaju and Khairuddin, 2006). Value engineering identifies items of unnecessary costs in a project and develops alternative ways of achieving the same functions at the lowest possible cost, without impairing on the quality, aesthetic, image, safety and functional performances of the building and at the same time improves the project schedules. VM programs commonly take the form of arranging a workshop in which the client, contractors, suppliers, manufacturers, specialists and other stakeholders involved take part and put forward suggestions for discussions and investigations (Harry, 2000). This will make the consultants and designers understand what a client will accept as the benchmark to measure the outcome of their investment (Leung, Chu and Lu, 2003).

Consequently, the client will be provided with projects they can occupy, operate, maintain, at their preferred location, on schedule without compromising the require quality, function, aesthetic and images with acceptable comfort. If the client value system is not made explicit, consultants and designers merely focus on requirements that were not intended by a client. Thus, opportunity for maximizing concept, design, construction and maintenance might not be possible. However, the VM workshop or session is different from the normal project meeting as the objectives of each are distinct.

Value management is defined as an organized set of procedures and processes that are introduced, purposely to enhance the function of a designs, services, facilities or systems at the lowest possible total cost of effective ownership, taken cognizance of the client’s value system for quality, reliability, durability, conformance, durability, aesthetic, time, and cost (Olanrewaju and Khairuddin, 2007). The methodology is about being creative, innovative, and susceptible to changes, consensus, enhancing the use of resources, analytical, togetherness and good communication (Stevens, 1997). Value engineering program is commonly carried out in the systematic stages of; feasibility, concept design, design development, construction and operations and occupancy phase of the projects (Table 1). The work activities are strategically carried out in the job plan. The job plan is the frame works that guide the systematic maneuvering of ideas to ensure that alternatives are not unnecessarily omitted (Ahuja and Walsh, 1983).

Table 1.Value Management’s Job Plan

alt

The value management job plan is an organized framework that guides the processes of analyzing the project, products, services or components under study, to enable the development of numbers of viable economical and functional alternatives that meet clients’ requirements. The strict adherence to the framework ensures maximum benefits and offer greater chances for flexibility. It also ensures that no step or phase is over-sighted or omitted. The value management process can be broken down into various phases. Regardless of the number of phases in the process, the major activities still holds. In many cases, the phases are however broken down into five major phases. However, in this paper, it is broken onto nine major phases for easy understanding. Life cost of project of an item or element is mainly considered during two of the value management phases, namely, the evaluation phase and the development phase. Therefore, the next two sections will discuss in-depth the two main phase.

IV.1 The evaluation phase

This is the fifth phase in the value management methodologies. The evaluation phase is some time call the investigation phase. The evaluation phase is very important phase of the value management process. It is a strategic planning stage of the process (Stevens, 1997). The phase should be considered with the spirit of creative thinking that is associated with the analytical phase. The refined and modified results of the analytical phase are considered in detailed in evaluation phase, on one to one basis judging among themselves. Primarily, the basic activities of this phase is elimination, pruning, modifying and combining ideas in order to reduce the large quantity of ideas collected from the analytical stage to meaningful and workable ones. Generally, alternatives are evaluated in terms of its total cost, availability, technology, its merits, its constraints, ease of construction, effect on schedules of works, safety, ease of procurement, coordination (Bennett, 2003). The evaluation should not just be based on what similar design had cost before or currently cost, but the comparison should include physical appearance, similar properties, and methods of designs, technology and maintainability (Ahuj and Walsh, 1983).

In the course of pruning ideas, some ideas might appear to have potentials but perhaps due to the prevalent technological advancement, they might not be considered. Those ideas should be put aside for later discussions with interested manufacturers or vendors for productions or purchase (Dell’Isola, 1982) where possible. Overall, the project must be looked at from different dimensions. In order to avoid fall-out during the evaluating process, a benchmark should be set against which to establish and measure whether idea should be rejected, pruned, modified or combined. However, it is important to invite some if not all members of the designing team in order to listen to their opinion regarding the evaluated alternatives, particularly, those that were selected. This is important in case they might have considered inculcating some of the analyzed alternatives earlier on. And, if they had, a request should be made as to why they did not consider using these alternatives. Their ground of rejection might be important to the study team (Kelly and Male, 2001) in search for better alternatives.

IV.II: The development phase

Based on the outcome of the evaluation phase, some or the entire item will require further development so that best value proposal can be made more explicit. In other words, the purpose of this phase is to enable further development of the alternative proposals. The major activity that is performed in the development phase includes the preparation of alternative design and cost so that a justification can be made on the viability and feasibility of the new proposals (Dell’Isola, 1982; Ahuja & Walsh, 1983 and Ashworth, and Hogg, 2002). Further benchmarking is to be considered here aside the one in the preceding phase such as; if the idea will work and meet the client’s requirements considering the prevalent advancement of technology. In addition, the interests of the clients who will approve the recommendations require systematic consideration to avoid unnecessary objections. All the relevant information regarding the development of a project must be documented, as this will later be presented to the clients as evidence. The associated risk inherent in the alternative proposals are determined, documented and solutions proffer in advance (James, 1994).

V. DISCUSSION

This section discusses the crossing point between value management and life cycle cost. But before proceeding, a brief discussion on how the two strategies relate with facility management is provided. The question can be asked, whether LCC or VM fit with facility management? Facilities include all fixed properties of an organization such as buildings, plants and equipments. Assets entail both fixed and non-fixed properties of an organisation. Facilities contribute significantly to the enhancement in productivities, profit-abilities and service quality of an organization. Facility management (FM) involves the management of all the services that support core business of an organization (Amaratunga, et al., 2000). FM focuses on meeting organization’s performance in terms of relationship between operational facilities and business outcome. Although, both VM or/ LCC are applicable to all classes of facilities (management), the focus of the classes of the facilities that this paper is concerned with are the constructed facilities and the building projects in particular. Building in this context involve the building’s fabrics, structure and engineering services. The value of a building is determined in relation to its current ability to provide user functional requirements, the current market value and the building condition and performance rating in comparison to that of a new building (Kyle, 2001). The roles are consistent with functions of professional including value managers, asset managers, facility managers and the real estate managers.

One of the major functions of facility management is to ensure that building projects receive adequate maintenance in order to continue to function efficiently and effectively to support the organisation’s corporate objectives. Maintenance process is a fundamental stage in the building life cycle. Maintenance has to be initiated if the building is still functionally sound and cost-efficient to do so against procuring new building or embarking on activities including refurbishment, conversion and alteration. In order to ensure high building performance, maintenance must be considered from the initiation of the buildings. From the foregoing, the opening question is pertinent, because LCC is a technique that is used by the facility management organisation or team to procure value for money invested (Flanagan and Jewell, 2005). In other words, LCC enables facility managers to make informed decisions on how much to invest today for future economic benefits. While the needs for space requirements in an organisation can be triggered by organisation’s asset / facility management unit, the strategic nature of VM allows it to be explicitly clear whether the proposed facility is require and what nature and form it should takes. Generally, the primary functions of the facility managers concern the coordination of the needs of properties users, equipments and plants and operational activities taken place within the space (IREM, 2006). This role is different from that of the value managers. The feedback from the post occupancy evaluation, which forms part of the FM directive, can also serve as feedback to the VM workshop in order to provide best values to the stakeholders. In general, VM can be integrated into the largest context of FM (Green and Moss, 1998) as FM provides a wider platform for decision making throughout the building life cycle. Therefore, FM focuses on space planning. Thus, the combination of VM and FM would produce good outputs. Having provided connections between facility management, life cycle costing and value management, in the remaining paragraphs the discussion emphasises LCC and VM.

Issues relating to LCC of facility have received wider acceptance, because what appears to be cheaper might in actual fact be expensive taking into account future-based costs. Therefore, when selecting a design solution capable of achieving the client value system, alternative that has the lowest cost, will in most cases be the first to be selected, if other performance criteria are satisfied. However, criteria like aesthetic (inspiring and harmonious), images (reputable and progressive), fitness for purpose, sustainability, buildablity, maintainability, technology, quality, safety, convenience, comfort, reliability must be included if best value is to be achieved. Construction clients are becoming more demanding, complex, sophisticated and in fact wiser compare to how they use to be in the past. Today’s clients want to see and in fact have projects that will perform the required functions; that costs less, be sustainable, completed within shortest possible time and also meet other basic requirements (Fong, 1999). Whereas, life cycle costing concentrate on the cost criteria (capital, operation and maintenance cost though), value management takes account all of the criteria within the client value system. Indeed, today clients are taking into account various set of complex algorithm that defined value to them (Halil, and Celik, 1999). The benefits and satisfactions they are getting from other industries like the automobile, aircraft industries are all fascinating experience. These are also making them to be more aggressive with the construction industry. The LCC techniques might be capable of providing best price, but best price does not in any way connote best value.

LCC is introduced after it has been decided that the best alternative proposals that will meet the client’s corporate objective is construction project, whereas VM examine the client’s business case to establish what type of “projects” a client required. Project in this stage is not necessarily a construction projects, but any alternatives that would provide the best return for the client’s investment in terms of money, time and other criteria of their value system.

VM precedes other strategies in that it is introduced before the design even commences (Kelly and Male, 2001; (Qipping, and Liu, 2004 and Shen, 2004). It is also unique in that it makes explicitly the client value system and goes ahead to determine weather the projects is desirable, viable and feasible before any commitment is made to whether to build or not. In that regards, it entail getting it right from the concept. It is only when the correct problem is identified that the correct solution can be developed. Regardless of the sophistication of the instrument used, if the client’s needs and wants are not known, it is either the projects is abandoned, completed but unoccupied or very expensive to operate and maintain. While LCC is tactical; VM is both strategic and systemic. While the LCC could be described as a strategy that provides answer to the question “how do we do it efficiently”, VM ask and provide answer to the question “why do we do it-why do we need the projects”. This is achieved using the functional analytical procedure of the VM. VM is certainly not a replacement alternative to the previous cost saving approach but it is certainly a viable alternative for achieving client value system (Ahuja and Walsh, 1983).

In the value management of construction projects, techniques like the supply chain, risk management, procurement, system engineering, concurrent engineering, safety management and partnering are applied during the development stage of the VM workshop; when developing alternative proposals, elements, components, equipments, items, materials and construction methods that provide value for money to the client. Therefore, these techniques are tools in the kits of the value management process. Apart from the LCC technique, VM makes used of other tools and techniques including, functional analysis, decision matrix, criteria scoring, brainstorming and functional cost model, SWOT analysis, supply chain analysis, risk analysis and checklists. To underscore the holistic and uniqueness of value management, various writers including Male, et al., (1998) and Fong (2004) have found that value management is more involving and unique than many methods / systems including total quality management, supply chain management, risk management, time management, cost management and lean construction.

VI: CONCLUSION AND OBSERVATIONS

The study has been able to investigate the relationship between value management and life cycle costing through literature review. This is done by bringing the theory behind each of the concept into context through literature survey. The paper has revisited the debate on VM and LCC which began sometime ago perhaps unnoticed. While the exact time cannot be traced the debate probably began on the arrival of the VM into the construction scene around 1960. This paper should be regarded as reflective contributions of the authors to the debate about the two concepts and tools. Life cycle costing technique is specific to particular stages and it is useful when it has been established that a “project” will satisfied the client requirements. The techniques and tools used in VM are not new per se, however the methodologies, consistent, systematic and holistic ways they are applied in VM is prominent. While value management has reached certain level of popularity and maturity, the LCC is yet to gain similar recognition even in the construction.

In conclusion, hopefully, we have been able to provide intermediate interpretations of the two concepts because we do not intend to provide extreme viewpoints. This paper does not claim that total cost of building is not important, but what it claimed is that, the value of projects does not ends with the consideration of the cost alone. Many “soft or qualitative” issues in actual fact are more important to the “hard or engineering” issues in majority or all of the cases. Perhaps, we should also add that considerations of the quality and completion time of project are also engineering or hard issues. Our aim is to provide a broad overview over a significant, yet complex issue and the emphasis has been to demonstrate the connection between the two concepts. Since we are aware of the bias that might creep into research like, attempts were made consciously to bring them to the barest level even though it is very difficult to eliminate it altogether. The conclusions of this paper are based on literature review In future primary data through survey or case studies will be collected from those that are consider to have adequate knowledge on the two techniques to see how our opinions differ from that of others’. On a final note, VM is about getting the initial concept right from the word “go”!

REFERENCES

Ahuja H, N, and Walsh M, A. (1983), Construction Management and Engineering: Successful Methods in Cost Engineering. Canada: John Wiley & Son Inc.,

Amaratunga, D., Baldry, D. and Sarshar, M (2000). Assessment of facilities management performance – what next? Facilities, Vol. 18. Number 1 / 2 pp.66-75

Arditi, D. A and Messiha, H. M. (1996), Life Cycle Costing in Municipal Construction Projects. Journal of Infrastructure System, Vol. 2 No. 1, March 1996, pp.5-14 (doi 10.1061/ (ASCE) 1076 – 0342 (1996)2; 2:1(5)

Ashworth, A. and Hogg, K. (2002), Willis’s practice & procedure for the quantity surveyor. 11th Edition. Oxford: Blackwell Science

Benntte, F. C. (2003), The management of construction: a project life cycle approach, Butterworth – Heinemann, Oxford

Best, R., and de Valence, G., (eds) (2002), Design and Construction: Building in value, Butterworth – Heinemann, Woburn.

Booty, F. (Editor) (2006), Facilities management, 3rd Edition, Oxford: Butterworth- Heinemann

Cohen, L., Manion, L. and Morrison, K. (2006), Research methods in Education. 5th Edition. Oxon: RoutledgeFalmer

Dainty, A. (2008), Methodological pluralism in construction management research, In: Knight, A and Ruddock, L (editors) (2008) Advanced Research Methods the Built Environment. UK: Wiley-Blackwell

Pasquire, C. and Swaffield, L. (2004), Life-cycle / whole-life costing. In Kelly, J., Morledge R. and Wilkinson, S (editors) (2004) Best Value in construction. Oxford: Blackwell Publishing

Dell’ Isola, A. (1982), Value Engineering in the Construction Industry. 3rd Edition, Van Nostsrand and Reinhold Company Inc., New York

Dell”Isola A. J. (1997), Value engineering: practical application for design, construction, maintenance and operation, R. S Means Company, In: Shen, Q and Liu, G (2004) Applications of value management in the construction industry in China, Journal of Engineering, Construction and Architecture Management, Vol. 11 No. 12004 pp9-19 ISSN 0969-9988

Duncan, C. (2002), New Aspect of Quantity Surveying Practice: A Text for All Construction Professionals, Elsevier Butterworth – Heinemann, UK

Flanagan, R. and Jewell, C. (2005), Whole life appraisal for construction. Oxford: Blackwell Publishing Limited

Fong, P. S. (1999). Organization knowledge and responses of public sector clients towards value management: responses of public clients. The International Journal Of Public Sector Management, Vol. No. 5 1999 pp445 – 454

Halil, S. N., & Celik, T. (1999), Value of a Product: A Definition, International Journal of Value – Based Management, 12; pp181 – 191

IREM (Institute of Real Estate Management, 2006), Principles of real estate management. 15th Edition. Chicago: Institute of Real Estate Management

James O. J. (1994), Preconstruction Estimating: Budget through Bid. USA: McGraw – Hill Inc.

Kelly, S. R. and Male, S. P. (2001), Value management in design and construction: the economic management of project. 1st Edition. E and FN Spon. London:

Khairuddin, A. (2002), Construction Procurement in Malaysia: Processes and Systems: Constraints and Strategies. Research Centre, International Islamic University Malaysia, Kuala Lumpur

Kiyoyuki, K., Sugisaki, K., and Kobayashi, K. (2005), Statistical deterioration prediction considering the non uniformity of the visual inspection interval, In Proceedings of the International seminal on asset management. Jointly organized by Kulliyyah of Architecture and Environmental Design and Kyoto University Japan. Held on 24th – 25th, 2005 in Kuala Lumpur, Malaysia

Kyle, B. R. (2001). Toward effective decision making for building management. In Proceedings of APWA International Public Works Congress, Philadelphia, Sep. 2001 NRCC/CPWA/ IPWEA Seminar Series “Innovation in Urban Infrastructure. Available at www.nrc.ca/irc/uir/apwa pp52- 69

Leung, M. Y., Chu, H. Y. and Lu, X. (2003), Participation in value management. Report for RICS Education Trust Founded Project

Male, S., Kelly, S., Fernie, S., Gronqvist, M., & Bowles, G. (1998), The Value Management Benchmarks: A Good Practice Framework for the Clients and Practitioners. London: Thomas Telford Publishing,

Morton, R. and Jaggar D. (1995), Design and the economics of building, London: E and FN Spon.

Qipping, S., and Liu, G., (2004), Application of Value Management in the Construction Industry in China. Journal Engineering, Construction and Architectural Management. Vol. 11 No. 1 Pp9-99. ISSN 0969 – 9988

Olanrewaju, A. A., and Khairuddin, A. (2006), Value Management: New Direction for the Nigerian Quantity Surveyors. P102 – 109, Proceedings of Quantity Surveying National Convention, Organized in conjunction with the International Construction Week. 4 – 5 September 2006. ISBN: 983 – 41749 -2 -6, Held at University Science Malaysia (USM)

Olanrewaju, A. A., and Khairuddin, A. (2007), Determining whether Value Management is practiced in the Nigerian Construction Industry, In: Proceeding of Quantity Surveying International Convention (QSIC). Jointly organized by Visit Malaysia 2—7; International Islamic University Malaysia; Board of Quantity Surveyors Malaysia; Institution of Surveyors Malaysia; JKR and CIDB. Held on 4-5th September 2007, Kuala Lumpur.

Seeley, I. H. (1996), Building Economics: Appraisal and control of building design and efficiency. 4th Edition. New York: Palgrave

Shen, Q. (2004), Application of Value Management in the construction industry in China. Journal of Engineering Construction and Architectural Management 11(1): pp. 9-19

Stevens, D. (1997), Strategic thinking: success secrets of big business projects. Australia: McGraw-Hill Companies

Green, S. D. and G.W. Moss, (1998), Value management and post-occupancy evaluation: closing the loop, Facilities, Vol. 16 Iss: 1/2, pp.34 – 39

Zavadskas, E. K and Vilutiene, T. (2006), A multiple evaluation of multi-family apartment block’s maintenance contractors: I Model for maintenance contractor evaluation and the determination of its selection criteria. Building and Environment 41 (2006), p621 -632

Creative Commons License
This work is licensed under a Creative Commons Attribution 3.0 License.