Tenant / Building User Relationship Management – FM Metric #1?
How well facility managers support their tenants and/or building uses with respect to their respective organizational missions is a critical performance metric for any real property owner.
Responsiveness, Quality, and Budgetary/Financial Performance represent key areas in which facility management professionals are judged.
The ability of real property owners, in their role as facility managers/stewards to collaborate with and understand the needs of building users as well as services providers such as architects, engineers, and construction contractors determines their effectiveness with respect to improved service delivery, mitigating risk, and overall life-cycle management of built structures.
The ability of an owner/facility manager to efficiently manage their numerous renovation, repair, and maintenance projects encountered on a daily basis, as well as strategically deal with capital renewal and deferred maintenance determines ultimate short and longer term success or failure.
Collaboration, transparency, mutual trust & respects, and shared goals are critical to the achievement of superior facility management outcomes. Understanding user/tenant requirements is step one, and sharing this information with all project participants from concept through ongoing life-cycle management is necessary in order to improve overall satisfaction as well as return on financial investment.
Use of LEAN collaborative construction delivery is the single most important element in improving overall outcomes. Whether adopting Job Order Contracting – JOC, for renovation, repair, and maintenance, or Integrated Project Delivery – IPD, for major new construction, the results of proper adoption and implementation with be a high number of quality projects delivered on-time and on-budget, to the satisfaction of all involved parties.
Most Owner (approximately 73%) either lack confidence, or are only somewhat confident of the satisfaction levels of their tenants/building users. When combined with the fact that the construction sector as a whole remains highly unproductive versus virtually every other industry, the need for cultural and operational change is clear.
Isn’t it time to move beyond ad-hoc business procedures and workflows, lack of standardized information, and limited financial transparency?
LEAN FM and Construction practices deliver…
A focus upon outcomes…
Early and ongoing collaboration…
Mutual respect & trust…
Common goal & objectives…
More projects on-time & on-budget…
Significant productivity gains…
Standardized data for information-based decision support…
Facilities operations involving multiple sites and building types/ages can be efficiently managed with the right mix of global oversight and local execution as well as consistent application of LEAN best management practices.
Visibility and communication at global and local levels is critical, including the ability to track the work order status and cost from concept thru warranty period.
Ad hoc, pen-and-paper based, systems must be replaced with appropriate technology that can provide a permanent record of core activities.
Procurement must be based upon BEST VALUE, and also used standardized terms, definitions and data sets, and rely upon the support of internal and external teams, as well be integrated with collaborative construction delivery methods such as Job Order Contracting, JOC.
Automated work order system and electronic cost estimating and project management capability provide visibility and control of facilities maintenance and repair processes.
True collaboration and longer term relationships with contractors and subcontractors, where both parties share common goals, risk/reward, and mutual respect is equally important.
Work orders should be request and managed locally with appropriate global oversight, including regular audits. “Trust but measure” is a core component of LEAN, as are continuous improvement, and key performance indicators, KPIs.
Robust LEAN construction delivery processes must be implemented consistently throughout the organization, while also taking into account local requirements and conditions.
Any effort or resource expended should be Outcome-based. The goals is to improve the ability to track progress and to accelerate the time-to-resolution of prioritized open work orders, in order to maximize limited resources.
Value-based selection of contractors and longer term relationships provide local knowledge of building and service requirements, on-demand quality service, and maximized efficiency. Operational efficiency is improved, while costs are reduced due to the reduction of change orders, improved quality, and a higher percentage of projects delivered on-time and on-budget.
Key performance indicators, KPI’s provide metrics that to hold both Owners and service providers more accountable with quantitative, current, and actionable information.
Owners and oversight groups must provide leadership and be capable of understanding the processes and value of collaborative construction delivery and associated life-cycle facility management methodology. Without this leadership, Owners don’t stand a chance of efficiently managing their real property portfolios.
Alternative LEAN construction delivery provides significantly higher visibility into overall maintenance and repair spending. Properly implement project delivery timelines can be reduced from years to months, or from months to weeks. Significant reductions in costs can also be achieved, in the range of 15% to 50%.
IFC, Cobie, Masterformat, Uniformat, Omniclass are standard data architectures critical to efficient construction delivery.
That said, common terms, definitions , and data architectures are just one of several components of collaborative LEAN construction delivery. Integrated Project Delivery, IPD and Job Order Contracting, JOC are proven collaborative construction delivery methods that deliver more projects on-time, on-budget, and to the satisfaction of all parties.
Until Owners require collaborative construction delivery and are capable of leading the shift toward built environment life-cycle management, all the technology in world will not make a difference.
The reason that BIM has stagnated in the U.S. and the U.K. is obvious…. culture change has yet to occur.
§102-74.10 – Executive agencies must manage, operate and maintain Government-owned and leased buildings in a manner that provides for quality space and services consistent with their operational needs and accomplishes overall Government objectives. The management, operation and maintenance of buildings and building systems must—
(a) Be cost effective and energy efficient;
(b) Be adequate to meet the agencies’ missions;
(c) Meet nationally recognized standards; and
(d) Be at an appropriate level to maintain and preserve the physical plant assets, consistent with available funding.
§102-74.35—Federal Executive Agencies must provide…
Building services such as custodial, solid waste management (including recycling), heating and cooling, landscaping and grounds maintenance, tenant alterations, minor repairs, building maintenance, integrated pest management, signage, parking, and snow removal, at appropriate levels to support Federal agency missions….
§102-74.115—What standard in providing asset services must Executive agencies follow?
Executive agencies must provide asset services that maintain continuity of Government operations, continue efficient building operations, extend the useful life of buildings and related building systems, and provide a quality workplace environment that enhances employee productivity.
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.
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 projects. A 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. 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.
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?
 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 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 email@example.com.
Oscia 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.
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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.
Facility management executives need to play a role in defining BIM. Having personally reached out to several leading FM professional organizations I am amazed at how little interest and/or awareness there is relative to BIM… not to mention other ‘disruptive technologies’ such as ‘cloud computing’.
Unfortunately this also appears to be the case for many large facility portfolio Owners.
As a direct result, the ‘life-cycle management of the built environment supported by digital technology’, BIM, which is so critically linked to major economic and environment factors, continues to falter.
True, BIM is in the ‘disillusionment’ phase of a typical technology adoption curve, however, the degree of resistance to ‘getting everyone on the same page’ (Owners, AEs, Contractors, Sub, Building Product Manufactures, Oversight Groups, Building Users), is almost overwhelming in the US…. vs. other Countries.
It’s beyond time for everyone to “visualize the possibilities and realities of what we can do quickly and what will take more time to really get right.”
The best “starting point” is to understand that the ‘ construction delivery method ‘ sets the tone and ultimately plays a key role in defining the success or failure of any renovation, repair, sustainability, or new construction project. The method must be collaborative, value-based, and have some form of risk/reward and/or performance basis. Integrated project delivery, IPD and Job Order Contracting, JOC and other “emerging” construction delivery methods have this characteristics.
Understanding facility life-cycle costs is a core component of any BIM strategy for Owners, AE’s, Contractors, Subs, Business Product Manufacturers, Oversight Groups, Building Users, … or any stakeholder.
There are many components of life-cycle costs:
First Costs – Planning, Selection, Acquisition, Construction
Maintenance, Repair – Routine, Preventive, Unscheduled (typically expenditures of $10,000 per job or less)
Capital Renewal (major system/subsystem cyclical replacement)
Renovation, Adaptation (altering, updating spaces based upon functional needs)
BIM is just now beginning to lay the foundation for new processes and supporting technologies to enable more efficient life-cycle management of the built environment. An important challenge is the establishment of common terms, definitions, metrics, and ‘best-practices’. Some off these will be new, however, many/most will likely be existing… the latter simply better shared, communicated, and consistently applied.