Unit Price Books & Other Things JOC

Unit Price Books – UPBs & Other Things JOC

A Job Order Contract requires the use of a unit price book, UPB, and an associated co-efficient.  Contractor bid one, or multiple co-efficients and then apply the co-efficient to the unit price line items when preparing an estimate for specific JOC project (task order).

In many cases, an area location factor may also be be applied to the estimate, in addition to the construction co-efficient.

Line items from the current UPB are called “priced”, or “prepriced” line items.  Any line item used in a JOC  estimate is called a non-prepriced, NPP line items.  JOC contracts typically limit the total value of NPP line times to be no more than 10% of the total cost of the project estimate.

2015 optimized facility renovation and repair

Historically, most Job Order Contracts have used the  Facilities Construction Cost Data publication from the RSMeans Company, LLC as the UPB.   This was likely because the RSMeans Company, LLC was recognized at an objective national resource for cost data. With the acquisition of the RSMeans Company, LLC by The Gordian Group, the types(s) of unit price books used, and their prevalence, may change.

Most job order contracts, at least in the public sector, require the use of “bare cost” line items, i.e. costs that do not include contractor overhead and profit.  Contractor overhead and profit and other costs are generally expected to be accounted for within the contractor’s JOC co-efficient.

standardized cost data

Any selection of a unit price book for a Job Order Contract should consider the following:

  1. Detailed descriptions for each line item in common industry terms, and with a minimum of abbreviations.
  2. Cost data research and provided by an independent and objective source.
  3. Ease of use
  4. Full search capability
  5. Annual updates
  6. Area cost location factors, with quarterly availability

 

 

LEAN Facility Renovation, Repair, & Construction

Collaboration Matrix

Owner focus upon a BEST VALUE approach to facility management is required in order to maximize productivity and minimize waster.   Prevalent “low bid” design-bid-build construction procurement and delivery and it’s associated narrow consideration of “first costs”, is extremely wasteful and typically results in poor quality, project delays, excessive numbers of change orders, and overall higher costs.  Even approaches such as design-build or CM@R don’t achieve maximized performance and satisfaction levels.

BEST VALUE construction project delivery methods include Integrated Project Delivery – IPD, and Job Order Contracting, JOC.  Both contractually require collaboration among project participants and deliver superior quality as well as on-time and on-budget performance.

Best practice IPD, JOC and related collaborative LEAN construction delivery methods share the following  characteristics.

  1. Early and ongoing participation of all project participants (owners, contractors, A/Es, subs, engineering, procurement, project managers, planners, oversight groups, users)
  2. Documented roles, responsibilities, deliverables, and metrics
  3. Shared risk/reward
  4. Continuous improvement
  5. Common terms, definitions, and standardized information formats (for example, UNIFORMAT, MASTERFORMAT, IFC…)
  6. Financial transparency (example – commerical unit price book, UPB – material, equipment, labor, productivity).

4bt processOpenJOC

The are multiple benefits to be gained by LEAN construction delivery participants.

  • Improved Customer Service and Responsiveness.
  • Shorter Procurement Times
  • Decreased Overall Project Delivery Times
  • Reduced Procurement Costs
  • Greater Financial Visibility
  • Longer term relationships
  • Shared Risk/Reward
  • Higher Quality
  • Greater Frequency of On-time Projects
  • Greater Frequency of On-budget Projects
  • More Funds Allocated to Construction versus Administration
  • Fewer Change Orders
  • Virtually Elimination of Legal Disputes
  • Greater Overall Satisfaction
  • Best Value

Managing JOCs ( Job Order Contracting) and IDIQs in spreasheets?

I regularly come across Owners (DOD and non-DOD) who run Job Order Contracts and other IDIQs in spreadsheets…or at least try to do so. I will come right out and say, it can’t be done efficiently, nor does the approach provide for an appropriate level of management/oversight. I’d love to hear your thoughts on the topic. Is it lack of education? Mismanagement? Other?

Certainly spreadsheets have many advantages over manual methods, however they fall way short of what a database application such as e4Clicks Project Estimator has to offer.

Is your spreadsheet difficult to use and maintain?
Do changes made in one spreadsheet force you to make changes in another?
Can you see all pertinent data on one screen or do you have to keep scrolling or open other tabs?
Can you easily update prices, quantities and other data elements in a single location?
Are estimates hard to find because they are buried in a confusing collection of folders and directories?
Does your spreadsheet automatically generate a series of reports and/or populate a government form?

http://www.4Clicks.com

What is BIM?

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

elephant BIM

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

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

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

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

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

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

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

Shifting Design-Build toward IPD

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

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

Design Build continuum

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

  • The level of owner participation in the decision making process

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

Delivery model diagrams

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

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


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


Lisa Dal Gallo

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

 

 

 

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

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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.

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

BIM graphic #6

5 Steps to a Successful Construction Cost Estimate

1.Collaboration – To paraphrase, “no successful cost estimator is an island”.  It is critical to understand the full scope of any project.   Collaboration spans discussions with Owners, Contractors, Subs/Trade, site visits, sharing estimates and jointly reviewing/refining and negotiating estimates, and more!

2. Transparency – Despite what you may hear, there is no “secret sauce” involved in cost estimating, and no “black magic” either.  It’s all about experience and the application of robust business process and appropriate use/re-use of available cost data, including so called “reference cost data” such as RSMeans.  All stakeholders must be able to understand the cost estimate thus transparency is a requirement.

3. Technology – Collaboration, transparency, accuracy, productivity and other factors are directly impacted by technology.  Using the appropriate tools for the job is just as important for cost estimating as it is for a  construction project.  The exclusive use of spreadsheets for multiple concurrent projects and/or larger projects is typically unproductive and error prone.  Don’t fall into the “spreadsheets can do anything” trap.  That said, there is no cost estimating software application that can do everything (residential, commercial, government, …) well.  So look for ‘best of breed’ applications that are built for your needs!

4. Information – Extensive  detailed line time cost databases, such as those from RSMeans, as well as historical costs and other third party sources are extremely important relative to productivity and accuracy.  They enable information re-use, data validation, and more.   That said, proper attention must be paid to the data architecture (how information is categorized, updated, and stored).

5. Localization – Every construction job, while sharing many similarities, is different.  Each cost estimate must be localized for physical site conditions, physical location, as well as local labor and material availability.

4. Granularity – A big word, I know… but understanding the inter-relationships and variability associated with material, equipment, and labor for each activity or task is critical.   Are you using union, open shop, Davis-Bacon…  what is the source of your information, what sample size are you using,  what could affect productivity, ….
5.  Parallel Approach – Top down or bottom up?  The answer is both!   Clearly one must understand the overall value associated with a certain project.  That said, detailed line items with associated labor, materials, and equipment, and an associated bill of materials (BOM) are requirements for transparency and to mitigate errors and omissions.

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The Metrics of BIM – The Manage the Built Environment

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

 

 

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

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

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

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

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

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

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

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

Churn Rate

Utilization Rate

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

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

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

Custodial Costs per square foot

Grounds Keeping Costs per square foot

Energy Costs per square foot

Energy Usage

Utility Costs per square foot

Waste Removal Costs per square foot

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

Planned/Preventive Maintenance Costs per square foot

Emergency Maintenance Costs as a percentage of Annual Operations Expenditures.

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

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

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

Recapitalization Rate, Reinvestment Rate

Deferred Maintenance Backlog

Facilities Deterioration Rate

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

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

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

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