Construction Cost Estimating Software vs. Spreadsheets – State of the Nation 2012

While accurate, timely, and transparent cost estimating is critical to the success of any renovation, repair, sustainability, or new construction project, most construction cost estimators (over 55%) continue to rely primarily upon manual methods, hard copy documents, or electronic spreadsheets such as Microsoft Excel.

Lack of robust business processes, management practices, proper education and training, and some degree of technophobia endemic to our AECOO industry (Architecture, Engineering, Construction, Operations, Owner) may well be responsible for this “state of the nation”.   Negative impacts of ‘ad hoc’ methods and the failure to adopt robust construction delivery methods and associated supporting software include:  loss of business revenue and lower profit margins, poor productivity, spreadsheet and formula errors, lost information, and poor business decisions.

Construction estimating involves the estimating of material, labor, equipment, overhead/profit and contingencies. Spreadsheets, most commonly Microsoft Excel, are used by more estimators for this purpose (over 40%) than any method, although as many as ten (10) percent or more of construction cost estimators may still rely exclusively upon hand written estimates.  While spreadsheets are relatively easy to master and provide a means to create and report a construction cost estimate and or cost models, their benefit comes largely from their ability to partially relieve estimators of mundane calculations.  Accuracy, however, is not necessarily improved and productivity is not maximized.   For example, data entry remains tedious and prone to error, formula error are common, and collaboration and information sharing are limited. (Christofferson, Jay. “Estimating with Microsoft Excel”, Brigham Young University. Nickols, Robert Duane. “Construction Estimating Using Excel” Lexington Technical Institute, University of Kentucky. Caulkins, Jonathan P., et al. “Do Spreadsheet Errors Lead to Bad Decisions” Carnegie Mellon University)

Sophisticated, Cost estimating and Efficient Project Delivery Software systems are now available, and have been proven over the past decade.  Growing numbers of cost estimators now have the need to work with multiple projects, multiple estimates, and multiple contracts (IDIQ, JOC, SABER…) simultaneously and securely.   These newer Cost estimating and Efficient Project Delivery Software systems, such as 4Clicks Project Estimator, provide these benefits, and more.    A ‘short list’ of additional capabilities includes the ability to work with multiple cost books/guides/UPBs, track project status, automatically compare estimates, easily copy/paste, clone, and reuse estimates, integrated sophisticated visual estimating and quantity take-off (QTO) tools, including pattern search, automatically link specifications to estimates ….
Owners, Contractors, and AEs are moving to advanced cost estimating and management systems, and many oversight groups such are beginning to require their use.

The level of collaboration, transparency, and information re-use enabled by Cost Estimating and Efficient Project Delivery Software drives 15-25%+ reductions in procurement cycles, six to ten times faster estimating, reduce overall project times, as a significant reduction in change orders and the virtual elimination of contract related legal disputes.

White Paper – Cost Estimating Evolution 

The Marginalization of BIM

1. All stakeholders – Owners, Contractors, A/E’s, Facility Users, Oversight Groups, ant the Community benefit from IPD (integrated project delivery) and “IPD-lite” which is JOC (Job Order Contracting).  The latter is a form of IPD for renovation, repair, sustainability, and minor new construction.

2. Existing and emerging technology and business processes such a BIM and cloud computing will enable and drive higher collaboration and productivity within the Architecture, Engineering, Contraction, Owner, and Operations sector.

3. Culture change is the current barrier to change, not technology or proven processes or lack of efficient delivery methods.  Collaboration, despite noteworthy examples to the contrary, is largely foreign to our industry.  Design-bid-build and low bid practices have created adversarial relationships in many/most cases.  Even “newer” processes such as design-build are lacking vs. IPD and JOC.

4. Contracts should reflect, support and embed the goals of the associated project delivery method, however, the project delivery method set the tone and determines the success/failure of most projects in concert with the professionalism of the team.

5.  The altered global economic and environment landscape, combined with collaborative cloud computing (the “Facebook for Life-cycle BIM”) will drive continued growth of IPD and JOC.

6.  LEAN and continuous improvement are indeed philosophies.  IPD, JOC, and BIM are methodologies, embedded within supporting technology to affect LEAN within the AECOO sector.  BIM, without LEAN, IPD, and JOC is indeed marginalized.

 

The BIM Framework - BIMF

A Step Closer to BIM? NIBS and AIA Working toward Centralized Building Information Resource

Let’s face it,  the virtually singularly low rate of productivity of the AECOO (architecture, engineering, construction, operations, owner) sector for the past several decades is due to our CULTURE.

As a group, we are kings of the “not invented here” syndrome… or the “my way is the better way” syndrome.  Also, the “let’s keep the Owner in the dark” or the “let’s not work together”, and the “bid low and make it up in change orders” , or “let’s accept the lowest bid and hope for the best” approaches to ruin.

As I’ve previously noted, the altered world economic and environmental landscapes will force CULTURAL change in our industry.  Architects, Engineers, and Contractors new motto will be “our best customer is a smart customer”.  Why?  It’s simple, collaboration and improved “cradle to cradle” facility life-cycle management approaches will be required for survival.  Furthermore, cloud computing and proven collaborative construction delivery methods such as Integrated Project Delivery (IPD) and “IPD-lite”, also known as Job Order Contracting, the latter for facility repair, renovation, sustainability and minor new construction, will converge to enable knowledge sharing among all facility stakeholders.

The signing of an agreement between The American Institute of Architects and the
National Institute of Building Sciences to Work Together on Promoting Building Industry Research and Knowledge
is just one indication of the our “changing AECOO landscape”.  It demonstrates the two organizations’ mutual interest in the design, construction, operations and maintenance of high-performance buildings and the desire… no better yet the recognized NEED TO COLLABORATE on issues surrounding these topics.

A primary initial goal of the “partnership” is the joint development of an on-line portal for building industry research and knowledge.   It’s amazing how many in our industry are not even aware of NIBS or Smart Building Alliance.  The march toward BIM, and recognizing its true potential as “efficient building life-cycle management support by technology and standardized processes, taxonomy, etc.” vs. “pretty 3D pictures” will know hopefully gain traction and momentum.

Building Information Management Framework - BIMF

via http://www.4Clicks.com – premier software for cost estimating and efficient project delivery – JOC, SABER, IPD, SATOC, MATOC, IDIQ, POCA, MACC, BOA ….

Beyond Green – High Performance Buildings, BIM, and Life-cycle Facility Management

Let’s face it, LEED is a great marketing tool, but NOT the solution.  “Kudos” to LEED for building awareness  and  addressing the need to focus upon sustainability of the built environment!

That said,  high performance buildings should not cost significantly more that “typical construction”.  The paperwork and methods involved in LEED add superfluous costs and will not necessarily yield optimal results.   I have entered far too many LEED certified  buildings with massive glass multi-story areas and other clearly “non-sustainable” items.  There should be little to no cost premium for a sustainable building.   Even now, studies show that a 2% premium is all that is required.   I would further argue that no premium is really need should basic standards be a requirement and market efficiencies take hold.  Also, over the life-cycle of a building, a sustainable, high-performance building will win on ROI every time as only 10%-20% of life-cycle cost go into construction, vs. operations, maintenance, etc.

Efficient ongoing life-cycle management of facilities is the key to sustainability.   It is probable that many, if not most LEED buildings constructed are no longer meeting their design goals.  Why?  They are simply not being monitored maintained on a proactive life-cycle basis.  Why not?   The culture of our industry and awareness of the true meaning of BIM need dramatic if/not disruptive change and  improvement.

BIM is the life-cycle management of the built environment supported by technology… not pretty 3D pictures that don’t link to value knowledge domains.   Further, collaboration is the key to BIM, and collaboration is dictated by AEC delivery methods.  Traditional delivery methods such as design-bid-build (DBB) and even attempts at improving it such as design-build (DB) and construction manager at risk (CMAR) are flawed as they inevitably pit some of the key parties involved against one another.

Integrated project delivery (IPD) and job order contracting (JOC), the latter “IPD-lite” specifically for renovation, repair, sustainability, and minor construction projects, are critical to BIM and to altering the inefficient and adversarial processes that dominant our industry today.

BIMF - A Framework for BIM

Collaboration, Transparency, Accuracy, Process, and supporting Technology – The Keys to Improved Productivity for Building Construction, Renovation, Repair, and Sustainability

Interoperability is a common “buzzword” used whenever you here a discussion about improving productivity with the AECOO (Architecture, Engineering, Construction, Owners, Operations) industry sector.  Unfortunately, it is a term associated with primarily with technology, and its usage implies that interoperability from a technology perspective is a major, if not THE major stumbling block to construction sector productivity improvement.  This “assumption” would be blatantly false.  Drastic culture and process are the requirements for mitigating waste within the AECOO sector.

The primary issue that dictates the tone and efficiency of any facility construction, renovation, repair, or sustainability project is process related… and is “the construction project delivery method”.  Assuming capable parties in each “knowledge domain” the delivery method must provide for, support, and monitor collaboration, transparency, and accuracy.   Common taxonomies, cost data bases, etc. play a role, as does supporting technology that embeds and distributes consistent processes.   While its true that cloud computing is an enabler, with its role to support the cost effective integration of various knowledge domains and technology silos; the underlies processes linked to a collaborative project delivery method focused upon life-cycle management is the critical aspect.

Integrated project delivery (IPD) and job order contracting (JOC) – the latter also referred to as IPD-lite as it target renovation, repair, and sustainability vs. new construction – are current examples of proven efficient construction approaches that dramatically alter the “status quo”.

Common taxonomy plays a key role and is also generally overlooked.   For example, cost estimators, even today, primarily rely upon spreadsheets and customized cost databases vs. integrating powerful software packages and standardized cost databases (ie RSMeans).   “Doing it my way” and exclusively using spreadsheets prohibits efficient information reuse, is prone to data and formula errors, and create largely unsupportable databases.   How can multiple cost estimators share information on a project, or communicate with Owners, Contractors, AE’s, Subs, etc… if they aren’t speaking the same language?  They can’t… and they don’t.  And this is just one example of many…across multiple knowledge domains whether it be capital planning and management, maintenance and repair management, building automation systems, procurement, bidding, project delivery, …..

(Figure Source – White Paper on IDDS “Integrated Design and Delivery Solutions”, CIB Publication 328.)

The AECOO sector can’t even begin a discussion about achieving higher levels of interoperability, exchanging BIM models and data, etc., until it shifts its focus exclusively to culture and process change.  We don’t even have a common understanding of BIM, let alone sharing BIM models.  Even today, many view BIM as 3D visualization, vs. life-cycle building management supported by technology!  We need to recognize that design-bid-build (DBB) and even design-build (DB) and the associated “accepted” practices of change orders and lawsuits are contrary to the basic tenants of productivity, collaboration, transparency, and accuracy.

Certainly it is true that our industry is fragmented and relatively slow at adoption of new technology, however, this is due to our culture, and our lack of efficient processes.

via http://www.4Clicks.com – premier software for cost estimating and efficient project delivery – JOC, SABER, IPD, SATOC, MATOC, MACC, POCA, BOA, IDIQ

Green-Washing and Cloud-Washing – Terms you must know relative to BIM – Not to mention BIM-Washing

BIM is the life-cycle management of facilities supported by digital technology – NIBS.   That said, BIM is critical to sustainability/green as is collaboration and cloud computing.

As BIM, Green/Sustainability, and Cloud Computing are considered “new” and not necessarily  “mainstream”.. and all three are “hot topics”, it’s not surprising that some organizations are engaging in BIM-washing, Green-washing, and Cloud Computing-washing.

These issues are extremely important, thus worthy of discourse.

GREEN WASHING

Here’s an informal poll relative to Green-washing.   The question, asked on Linked-In was “Labels + Certificates = Sustainability. Yes. No. Or?”   The question and responses bring to mind “LEED”… a great marketing tool perhaps, but it’s value remains uncertain, especially when considering long-term/life-cycle aspects.  Also what due labels really mean… who polices product labels?  Is bamboo really green if you consider it is transported halfway around the world.  Is mercury-based lighting sustainable?  Oh and yes…. the Prius and other vehicles have the nasty little batter disposal problem to deals with…

GreenWashing

CLOUD COMPUTING WASHING

Cloud computing is NOT taking legacy applications and moving them to the cloud via a virtual server.  Cloud computing consists of three tier technology.

Cloud Layers

Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS) and Software-as-a-Service (SaaS).

Cloud computing is viewed as a means to break down traditional data and process stovepipes.  Cloud computing encompasses four different deployment models, and in these preliminary stages of cloud development, organizations are free to determine which model best serves their needs.  The four models, as defined by the National Institute of Standards and Technology (“NIST”), include: (1) private clouds, for the use of a single agency; (2) community clouds, shared by multiple agencies; (3) public clouds, largely for the public’s use and benefit; and (4) hybrid clouds, facilitating the sharing of data and utilities across two or more unique clouds of any type.


(Peter Mell and Tim Grance, Nat’l Inst. of Standards and Tech., The NIST Definition of Cloud Computing – 2009)

Cloud computing will enable collaborative, secure, and transparent applications and the rapid deployment of robust business process.. both so sorely needed in the AECOO sector (architecture, engineering, construction, owner, operator).

Major Shifts in Information Technology

 

BIM WASHING

Ok folks.  I’ve said it before, and I will say it again.  3D visualization is NOT BIM !!!   The integration all aspects and processes of facility life-cycle management is BIM.   Will all this occur in Revt, Archcad, or some IWMS system… absolutely NOT!    Cloud computing, however, integrated with existng knowledge-domains such as CPMS, Construction Project Delivery (IPD, JOC), CMMS, CAFM, GIS, BAS, ….   now that’s BIM!

BIM Strategy and Framework

A Comparison of Construction Cost Estimating Tools – Spreadsheets, Cost Calculators (RSMeans CostWorks), and Cost Estimating/Project Management Software (e4Clicks Project Estimator)

INTRODUCTION

Accurate, timely, and transparent cost estimating is critical to the success of any renovation, repair, sustainability, or new construction project. While most construction cost estimators continue to rely primarily upon hardcopy documents and electronic spreadsheets such as Microsoft Excel, many are beginning to leverage electronic cost books and associated “calculator” software tools. Both of these approaches have merit and are well suited for certain types of users.

Growing numbers of cost estimators, however, have the need to work with multiple projects and multiple estimates simultaneously, securely share information on active projects, localized cost information, as well as easily locate and reuse historical data.
These Owners, Contractors, and AEs are moving to advanced cost estimating and management systems. They are discovering that significantly higher productivity can be gained (50%+). Furthermore, the collaborative aspects of these advanced cost estimating and project management software systems are aligned with integrated project delivery methods and construction sector movement toward Building Information Modelling (BIM).

This paper addresses each of these primary approaches to construction cost estimating and discusses their application. For clarity, products are referenced within each category as follows: (1) Spreadsheets – Microsoft Excel, (2) Electronic Cost Books/Calculator – RSMeans CostWorks, and (3) Cost Estimating and Project Management Software – e4Clicks Project Estimator.

bp 2011 9 22 comparison-cost-estimating-tools

CONCLUSION

Over the past forty plus years, there have been many initiatives to improve cost estimating to facilitate the delivery of construction projects on time and on budget. Owners, contractors, and AEs now have multiple methods to select from based upon their needs.

Spreadsheets were a major improvement in the 1980s, followed by formal processes for collecting and harnessing historical information to more accurately project and control costs.

Over the past decade, a powerful new capability has been added, collaborative cost estimating and project management software. The evolution of transparent and collaborative cost estimating and project management software mitigates the time wasting, unproductive aspects of creating estimates one at a time from scratch. Additional benefits include the reduction of data input and formulae errors, as well as costly ‘errors of omission’, common with ‘ad hoc’ spreadsheet-centric approaches.

What’s next…?

The application of cloud computing to cost estimating and project delivery and management software and the subsequent integration with Building Information Modelling.  The ability to produce accurate cost estimates and control costs throughout a buildings life-cycle will be greatly enhanced. Another breed of cost estimating and project management software, Adaptive Project Delivery (APD) will also evolve.  But all this is for another story.

Integrated Project Delivery / IPD, Job Order Contracting / JOC , Simplified Acquisition Base Engineering Requirements. / SABER.. Central to Achieiving Sustainability and High Performance Buildings

IPD, SABER and JOC for High Performance Buildings

1. Buildings account for almost 40 percent of primary energy use in the United States, 12 percent of total water use, and 60 percent of all non-industrial waste. Indoor environmental quality of buildings affects the health, safety, and productivity of the people who occupy them.

2. The U.S. federal government has the opportunity, and the responsibility, to significantly improve the performance of its buildings and to lead the way for other large organizations to do the same. The Federal government owns or leases 429,000 buildings worldwide, containing 3.34 billion square feet of space.

3. JOC and SABER programs can play a very important role retrofitting existing buildings to achieve higher performance levels, while IPD provides more efficient project delivery for major new construction.

IPD, JOC, and SABER are  efficient construction delivery methods capable of delivering significantly  higher productivity and greater transparency vs. traditional “design-bid-build”, or even “design-build”.  More projects can be accomplished on-time and on-budget with Job Order Contracting, Simplified Acquisition of Base Engineering Requirements, and IPD… it’s that simple.

Efficient project delivery is a requisite component to achieiving sustainability goals and BIM.

via www.4Clicks.com – Premier cost estmating and project management software for IPD, JOC, SABER, SATOC, MATOC, MACC, POC, BOA…featuring collaboration, transparency, and an enhanced 400,000 line item RSMeans cost database.

BIM for FM – Definition

By the NIBS definition, and I paraphrase…   BIM is life-cycle facility management supported by digital technology.

BIM is not Revit, ArchiCAD, et al, though they are useful 3D visualization tools and potentially central data storage areas/portals for  summary FM information.   Though I personally doubt the latter will evolve well, if at all, within these platforms.

Collaborative business process models (including integrated project delivery), shared common data architectures(MasterFormat, Uniformat, Omniclass, COBIE,…), integrated knowledge domains (CMMS, CPMS, CAFM, BAS, BIS, …) etc, and truly “disruptive” technologies such as cloud architectures/frameworks will accelerate true BIM deployment and ongoing efficient usage.

The payback on BIM, per its NIBS definition has been proven multiple times and in various manners.  Basically BIM is “pro-active” information-based facility life-cycle management, supported by technology and collaborative, open processes.

True value of BIM, “Infomation”  comes with integration of CPMS, CMMS, CAFM … knowledge domains, enhanced project delivery systems( IPD, JOC – Job Order Contracting), portals, ….etc. etc. etc.

Thoughts?

BIM Framework - BIMF

 

via www.4clicks.com,  premier software for cost estmating and efficient project delivery – JOC, SABER, SATOC, MATOC, MACC, POCA, BOA, …..

BIM – The New Standard of Care for AEC / AECOM . (Architecture, Engineering, ConstruBuilction, Operations, and Maintenance of the built environment)

Much has been said about BIM, and many misunderstand its core definition and purpose.

BIM is the process of  efficent  life-cycle management of  facilties and associated infrastructure, supported by digital technologies.

BIM is not IWMS, CPMS, CMMS, CAFM, BAS, GIS ….. , but the integration of these and other core knowledge domains within a collaborative enviroment… with Owners, Contractors, AEs, facility/infrastructure users, service providers, and oversight groups… sharing information via open, comment defintions, taxonomies, benchmarks, practices and standards.

Technology now allows for the relatively simple task of integrating multiple technologies and knowlege domains and enabling accurate, secure, and rapid access to detailed informations and decision support systems.  However, the REAL ISSUE is that the AEC / AECOM sector must change its “ad hoc” and traditionally unproductive ways of doing business.

The below BIM Framework, BIMF is a represetation of how the process side of BIM can be applied, with appropropriate customization, for any organization.   Expanded details of each component is readily available.    Also, it is important to become familiar with the following, if you are not current tracking these key initiatives/technologies/processes:  Cloud technology, COBIE, IFD, IFC, OMNICLASS, UNIFORMAT, MASTERFORMAT, STEP, reference cost books / guides, JOC / Job Order Contracting, IPD / Integrated Project Delivery, FCI / Facility Condition Index , SCI / System Condition Index …….,

BIM Framework - BIMF

Total Cost of Ownership Framework

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