Next Generation Cloud Construction Cost Estimating and Efficient Project Delivery Solution in Beta

4Clicks Solutions, LLC is currently beta testing Ceasel, a next generation cloud computing application to enable collaborative construction cost estimating and associated efficient project delivery.

Cloud computing is more than a catalyst for change, it is a DISRUPTIVE TECHNOLOGY, that will significantly enhance productivity within the Architecture, Engineering, Construction, and Facility Management sectors.

ceasel-logo

Different form legacy client/server applications or “web-enabled” systems that tend to automate existing ‘ad hoc’ and inefficient business process, Ceasel and other “built from the ground” true cloud computing applications enables embed business best practices and drive true collaboration among Owners, Contractors, Architects, Engineers.  The core focus ends up being upon  CHANGE MANAGEMENT and how to best leverage cloud computing, vs. the technology itself.

Here’s just a few benefit of Ceasel’s cloud computing …

1. Collaboration – True cloud computing (vs. cloud-washing or simply posting legacy applications to the cloud) lets users work concurrently on projects in real-time…virtually anyone, anywhere, anytime in multiple languages and currencies.

2. Data Integrity – Information is NEVER deleted. This is potentially the best form of security available. “Who” does “What” and “When” is always tracked and changes can be “rolled back” at any time by authorized administrators.

3. Data Protection – It is YOU, the user who determines how, when, and where to publish data. For example, you can maintain information in your private area, publish as read only to specified members within a private cloud…or publish to all members in a private cloud, or publish information to all members in public cloud and enable rights to use and modify data.

4. Visualization – DATA visualization and the associated development and implementation of collaborative construction delivery methods such as integrated project delivery – IPD, and job order contracting, JOC, enable shared information earlier in the project life-cycle and among more participants.  This enable errors to be found and corrected and/or changes to be accomplished earlier in the project timeline.  This results in few change orders, faster project timelines, and virtual elimination of legal disputes.  Cloud computing will accelerate data visualization and transparency among all stakeholders of physical infrastructure and promote multiple forms of performance-based processes.

5. Agility – Our work and natural environments are changing at an accelerated pace. Rapid deployment, monitoring, and the associated continuous modification of processes and policies are becoming increasingly important. Cloud computing deploys processes faster than any other method currently available. There is no longer a need to rely upon internal “IT” for deployment or applications specific changes, computing power, storage space, etc.

6. Mobility – It is neither cost effective, nor efficient, to have everyone working in offices or specified work settings. Resources need to be tapped from multiple locations enabling use of “the best of the best”. Cloud computing allows direct, transparent access to local resources while also communicating centralized processes and procedures.

7. Centralization of Information – While information can be scattered among several data centers, it also can be instantly consolidated to provide global management in support of an organization’s mission as well as associated, efficient local action.

8. Business Continuity – While Internet access is required (unless you host the “cloud” internally), would you rather store your information at your location and risk catastrophic failure, or at a location with multiple redundancies?

 

If you are interested in becoming a beta partner, please contact pcholakis@4Clicks.com

Construction Productivity must be Owner driven – BIM, IPD, JOC

One thing is clear, the construction sector (architecture, engineering, contractors, owners, operators, users, suppliers) has been lagging virtually all other business sectors for decades with respect to productivity improvement.

I believe that the cause is largely cultural, however, any major improvement must be driven by Owners,and/or mandated by governmental regulation.

My reasoning is simple, Owners pay the bills.  Thus as long as Owners remain satisfied with the status quo and/or remain “uneducated” with respect to proven business “best practices” and lean management processes, as well as supporting technologies, economic and environmental waste will continue to be rampant.

Currently, my outlook is somewhat pessimistic.  If one looks at  capability and knowledge specific to life-cycle  facility management from an industry perspective, most has originated with the government sector, followed by higher education, state government, healthcare, process-based industries, etc. etc.    Basically, Owners whose mission is dependent upon their built environment tend to create and follow life-cycle management practices. These are Owners that can’t adopt a “churn and burn”, or “run to failure” approach to facility management.  These sectors can’t easily pack up and move if their facilities and physical infrastructure fail.

That said, even government owners, for the most part, have failed in any sort of department or agency-wide adoption of standardized best practices.  This is true even for  “simple” areas such as facility repair, maintenance, and renovation.  Only the Air Force appears to come close to having any true adoption of robust, proven, best-practices in this regard, as well as associated training, etc., most notably with their SABER construction delivery structure.

In order to effect measurable productivity improvement in the “construction” sector, , I have put together a core requirements “checklist”.

1. Robust Ontology – Cost effective information management and information reuse can only be accomplished with a detailed set of terms, definitions, metrics, etc.  This aspect is also critical to improved strategic and tactical decision support mechanisms.

2. An understanding of life-cycle management of the built environment from a collaborative, best-practices, process perspective as well as associated supporting technologies.  Forget the traditional strategy-design-construction-demolish approach.

3. Commitment to a total cost of ownership perspective including both economic and environmental costs vs. our classic “first-cost” mentality.

4. “Trust but measure” – Owners MUST conduct their own internal cost estimating and associated capital planning and compare these to contractor estimates, with each party using the same  data architecture (examples: RSMeans, masterformat, uniformat, omniclass).

5. Adoption of collaborative construction delivery methods such as Integrated Project Delivery, IPD, and Job Order Contracting, JOC, in lieu of antagonistic and inefficient design-bid-built, or even design-build.

6. STOP reinventing the wheel.  Nothing noted here is “rocket science”.  Many, if not most, processes, procedures, and technologies are readily available for anyone who does a bit of basic research!!!   Also, stop with the focus upon BIM from a 3D visualization perspective!  3D tools are great, and add value, however, INFORMATION and PROCESS drive success.

 

BLM2

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

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

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

Shifting Design-Build toward IPD

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

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

Design Build continuum

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

  • The level of owner participation in the decision making process

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

Delivery model diagrams

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

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


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


Lisa Dal Gallo

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

 

 

 

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

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

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

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

BIM graphic #6

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.

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

NIBS – Building Innovation 2013 Conference

I am writing this from Washington, D.C. while participating in the NIBS Building Innovation 2013 Conference.   The buildingSMART alliance conference is part of this gathering under the title “Integrating BIM: Moving the Industry Forward.”

BIM education and practice requires focus upon process and associated return-on-investment.   Robust communication and adoption of standard and/or “best practice” construction planning and delivery methods specific to efficient life-cycle management of the built environment are sorely needed.

It is amazing that Integrated Project Delivery – IPD, and “IPD-lite”… the latter being Job Order Contracting and SABER which are forms of IPD specifically for renovation, repair, sustainability and minor new construction…  are not being brought to the forefront as critical aspects of BIM.    It is the construction planning and project delivery method that sets the tone of any project and ultimately dictate relationships and associated successes or failures.

Collaboration, transparency, and performance-based win-win relationships are necessary components of a BIM-based philosophy.  Yet, these and other critical aspects; including  defensible, accurate, and transparent cost estimating and standardized construction cost data architectures, are neither in  forefront of current thinking nor receiving an adequate allocation of resources.

 

Far too much emphasis continues to be place on the 3d visualization component aspect of BIM, IFC format pros and cons, and other “technology” areas.

 

Technology is NOT what is holding back BIM, it is the apparent lack of understanding of … and associated failure to adopt … facility life-cycle management processes… combined and what can only be described as a pervasive “not invented here” attitude.

Many of of our peers are reinventing the wheel over and over again at tremendous cost to all stakeholders…Owners, AEs, Contractors, Subs, Oversight Groups, Building Users, Building Product Manufacturers, …not to mention our Economy and our Environment, vs. sharing information and working toward common goals.

BIM Evolution

In the long history of humankind, those who learned to collaborate and improvise most effectively have prevailed.
– Charles Darwin

BIM, the life-cycle management of the built environment supported by digital technology, requires a fundamental change in how the construction (Architects, Contractors, Engineers) and facility management (Owners, Service Providers, Building Product Manufactures, Oversight Groups, Building Users) sectors operate on a day-to-day basis.  

BIM, combined and  Cloud Computing are game changers.  They are disruptive technologies with integral business processes/practices that demand collaboration, transparency, and accurate/current information displayed via common terminology.

The traditional ad-hoc and adversarial business practices commonly associated with Construction and Facility Management are changing as we speak.    Design-bid-build and even Design-Build will rapidly go by the wayside in favor of the far more efficient processes of Integrated Project Delivery – IPD, and Job Order Contracting – JOC, and similar collaborative programs.  (JOC is a form of integrated project delivery specifically targeting facility renovation, repair, sustainability, and minor new construction).

There is no escaping the change.   Standardized data architectures (Ominclass, COBie, Uniformat, Masterformat) and cost databases (i.e. RSMeans), accesses an localized via cloud computing are even now beginning to be available.   While historically, the construction and facility management sectors have lagged their counterparts (automotive, aerospace, medical, …)  relative to technology and LEAN business practices, environmental and economic market drivers and government mandates are closing the gap.

The construction and life-cycle management of the built environment requires the integration off several knowledge domains, business “best-practices”, and technologies as portrayed below.   The efficient use of this BIG DATA is enabled by the BIM, Cloud Computing, and Integrated Project Delivery methods.

Image

The greatest challenges to these positive changes are  the CULTURE of the Construction and the Facility Management Sectors.  Also, an embedded first-cost vs. life-cycle or total cost of ownership perspective.  An the unfortunate marketing spotlight upon the technology of 3D visualization vs. BIM.   Emphasis MUST be place upon the methods of how we work on a daily basis…locally and globally  − strategic planning, capitial reinvestment planning, designing collaborating, procuring, constructing, managing and operating.  All of these business processes have different impacts upon the “facility” infrastructure and  construction supply chain, building Owners, Stakeholders, etc., yet communication terms, definitions, must be transparent and consistently applied in order to gain  greater efficiencies.

Some facility life-cycle management are already in place for the federal government facility portfolio and its only a matter of time before these are expanded and extended into all other sectors.

BIM, not 3D visualization, but true BIM or Big BIM,  and Cloud Computing will connect information from every discipline together.  It will not necessarily be a single combined model.  In fact the latter has significant drawbacks.    Each knowledge domain has independent areas of expertise and requisite process that would be diluted and marginalized if managed within one model.   That said, appropriate “roll-up” information will be available to a higher level model.   (The issue of capability and productivity marginalization can be proven by looking a ERP and IWMS systems.  Integration of best-in-class technology and business practices is always support to systems that attempt to do everything, yet do not single thing well.)

Fundamental Changes to Project Delivery for Repair, Renovation, Sustainability, and New Construction Projects MUST include:

  • Qualifications Based or Best Value Selection
  • Some form of pricing transparency and standardization
  • Early and ongoing information-sharing among project stakeholders
  • Appropriate distribution of risk
  • Some form of financial incentive to drive performance / performance-based relationships

BIM Strategy and Change Management II

BIM (Building Information Modeling) is the life-cycle management of the built environment supported by digital technologies.  As such it is a process of collaboration, continuous improvement, transparency, and integration.   3D distractions aside,  achieving optimal return-on-investment (ROI) on BIM requires focus upon change management, first and foremost.  Ad-hoc business practices, traditional construction delivery methods, and legacy software must be cast aside.

BIM is managing information to improve understanding. BIM is not CAD. BIM is not 3D. BIM is not application oriented. BIM maximizes the creation of value. Up, down, and across the built environment value network. In the traditional process, you lose information as you move from phase to phase. You make decisions when information becomes available, not necessarily at the optimal time.  BIM is not a single building model or a single database. Vendors may tell you that everything has to be in a single model to be BIM. It is not true. They would be more accurate describing BIM as a series of interconnected models and databases. These models can take many forms while maintaining relationships and allowing information to be extracted and shared. The single model or single database description is one of the major confusions about BIM.(http://4sitesystems.com/iofthestorm/books/makers-of-the-environment/book-3/curriculum-built-world/categories/introductionbim-integration/)

The principles of BIM:

  • Life-cycle management: Process-centric , longer term planning  and technologies that consider total cost of ownership, support decision making with current, accurate information,  and link disparate knowledge domains and technologies.
  • Collaborative Delivery Processes:  Integrated Project Delivery (IPD) procurement and construction delivery processes that consider and combine the knowledge and capabilities of all stake holders – Owners, AEs, Contractors, Business Product Manufacturers, Oversight Groups, Service Providers, and the Community.  (i.e.  IPD, Job Order Contracting/JOC)
  • Standards and Guidelines:  Common glossary of terms, metrics, and benchmarks that enable efficient, accurate communication on an “apples to applies” basis.
  • Collaborative, Open Technologies and Tools:   Cloud-based systems architectures that enable rapid, scalable development, unlimited scalability on demand, security, real-time collaboration, and an full audit trail.

(Johnson et al. 2002) – There is an interrelationship between business goals, work processes, and the adoption of information technology. That is, changes in business goals generally require revising work processes which can be enhanced further by the introduction of information technology. But we also recognized that innovations in information technology creates possibilities for new work processes that can, in turn, alter business goals  In order to understand how information technology influences architectural practice it is important to understand all three of these interrelated elements.
Business Goals…   Work processes  ….   Information  technology
require/create               require/create                    require/create

(Via http://www.4Clicks.com – Premier cost estimating and efficient construction project delivery – JOC, SABER, IDIQ, SATOC, MATOC, MACC, BOCA, BOA.  Exclusively enhanced 400,000 RSMeans Cost Database with full descriptions and modifiers.)

Sustainability –  “to create and maintain conditions, under which humans and nature can exist in productive harmony, that permit fulfilling the social, economic, and other requirements of present and future generations.”  – US Executive Order 13423

Ceasel – Patents Pending

BIM Framework