Owners – Make your Contractors Happy!

Owners, Contractors, and AEs Must Work Together

Poor productivity in the construction sector is a well known and persistent issue.  The solution to delivery renovation, repair, and new construction project on-time, on-budget, and to the satisfaction of all participants is remarkably simple.

Real property owners are ultimately responsible the construction sector’s low productivity.  It is owners that provide inaccurate and/or vague project requirements, create/support excessive numbers of change orders, fail to treat their service providers with respect, and lack the requisite ability to implement LEAN construction delivery methods.

 

Consider this:

Contractors are the construction experts. They simply need to be involved in the project early (from concept) thru hand-over/warranty period.   Contractors expertise must be leverage without excessive management and control, however, continuous support and monitoring must be present…”trust but measure”.

At the end of the day, both the Owner and the Contractor should have the same goals… completing a quality project on-time and on-budget.  Both should anticipate a reasonable profit, and a  potential long term relationship involving other projects.

Construction, like most other complex business relationships, is relationship-based. As such, all involved parties must be competent in their area(s) of expertise, have shared goals, and engage in full financial transparency.

job order contracting

Criteria for a Good, Mutually Beneficial Owner-Contract Relationship

  1. Open line of communication – Confidence is established through open, transparent communications.
  2. Collaboration – This must be both part of the culture of all parties as well as mandated in writing.
  3. LEAN Construction Delivery Methods – Job Order Contacting, JOC, Integrated Project Delivery, IPD ….   versus archaic, antagonistic, and unproductive design-bid-build, design-build, CM@R, etc.
  4.  Focus upon Outcomes – Metrics, key performance indicators, KPIs.
  5.  Leverage robust best management practices and business processes.
  6.  Share risk and reward.
  7.  Best value procurement versus lowest bidder.
  8.  On-demand service orientation.
  9.  Supporting technology – Technology is NOT the solution, but should support robust, proven LEAN processes.

  10. Involve all participants – technical/engineering, building users, procurement…

Efficient Construction Delivery – Life-cycle management of the build envrionment

Leveraging software to enable better decisions requires a robust, shared ontology, quantitative and qualitative metrics, sound processes/business practices, as well as transparency and collaboration.
Has anyone truly accomplished this in the AECOO community?
Certainly it has been don within certain areas such as cost estimating using common / well designed cost databases with integrated contract, project, and document management.

However across the full life-cycle of a structure?

Our industry, (AECOO – Architects, Engineers, Owners, Operators…), needs to focus upon the built environment from a life-cycle vs. first cost perspective.
This requires a fundamental change in thinking, business process and tools.

Parametrics are needed to enable what-if analysis while varying time, cost, materials, etc. For example, there is a reason, if not a mandate, for all large building portfolio owners to conduct ongoing  5-10-25-50 year planning while considering various capital reinvestment scenarios.

The convergence of processes, people, and technology is accelerating due to cloud computing (a disruptive technology). As process becoming transparent, change will become both more palatable and more frequent.

Traditional linear construction delivery methods such as design-bid-build are antiquated. “Newer” collaborative construction delivery such as IPD – integrated project delivery and JOC – job order contracting, and others will begin to mitigate waste, and improve stakeholder relationships.

2014 – Owners Need to Step It Up and Get Serious about BIM / BLM – Life-cycle Management of the Built Environment

It’s time for Owners to stop the marketing… Stop hyping their LEED  Silver or “Whatever” Buildings… and actually participate in life-cycle management of the built environment supported by digital technology.   This is the real BIM / BLM  (built-environment life-cycle management) and it’s critical to the financial, economic and mission goals of many/most organizations.

Improved decision making with respect to construction, repair, renovation, operations, and sustainability of the built environment, as well as associated efficient construction project delivery has several basic requirements.

1.   Recognition and consistent implementation of built-environment life-cycle management (BLM) “best practices” relative to business processes, workflows, requisite competencies, technologies, information management requirements, and associated metrics.

2.  Standardized robust terms, definitions, and inter-relationships for all associated built environment practice areas and/or competencies.

3.  A focus upon life-cycle costs vs. first costs in terms finance and environmental impact.

4.  Collaborative project delivery methods and practices such as Integrated Project Delivery (IPD), Job Order Contracting, (JOC), and Public Private Partnerships (PPP) vs. traditional ad-hoc and antagonistic methods such as design-bid-build (DBB) or interim methods such as design build (DB).

5.  Continuous monitoring and improvement.

Owners pay the bills are ultimately responsible for managing the built environment efficiently.  It’s beyond time that many/most Owners get started!

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BIM Guide for Owners – Building Information Management, Model, Modeling

Citation – Some excepts and content from: Computer Integrated Construction Research Program. (2013). “BIM Planning Guide for Facility Owners”. Version 2.0, June, The Pennsylvania State University, University Park, PA, USA.

The Architectural, Engineering, Construction, and Operations (AECO) Industry has a critical need for facility owners to understand and communicate their goals for implementing BIM throughout the life-cycle of a facility/built structure so that teams can produce the information during a project that will add value to the owner’s business operations.  

 

Building Information Management, Model and Modeling

BIM / BIM3

BIM is a term which represents three separate but linked functions:


Building Information Management: Is the ORGANIZATION & CONTROL of the business process by utilizing the information in the digital prototype to effect the sharing of information over the entire lifecycle of an asset. The benefits include centralized and visual communication, early exploration of options, sustainability, efficient design, integration of disciplines, site control, as built documentation, etc.–effectively developing an asset lifecycle process and model from conception to final retirement.

Building Information Model: Is the DIGITAL REPRESENTATION of physical and functional characteristics of a facility. As such it serves as a shared knowledge resource for information about a facility, forming a reliable basis for decisions during its life cycle from inception onwards.

Building Information Modeling: Is a BUSINESS PROCESS for generating and leveraging building data to design, construct and operate the building during its lifecycle. BIM allows all stakeholders to have access to the same information at the same time through interoperability between technology platforms.

From a BIM planning perspective there are multiple levels to be considered: 

• STRATEGIC PLANNING to assess existing organizational conditions; align BIM
goals and objectives with desired BIM Uses and maturity level; and develop a tran
sition plan for BIM implementation;
• IMPLEMENTATION PLANNING to develop the detailed implementation plan
within the operations of the organization; and
• PROCUREMENT PLANNING to identify key issues to consider when creating
BIM contract requirements.

In reality however, one could easily argue that it is the construction delivery method that dictates the overall success or failure of a project.  Furthermore, collaborative construction delivery methods (examples being IPD – Integrated Project Delivery for major new construction, and JOC – Job Order Contracting for repair, renovation, sustainability, and minor new construction) are probable requirements.  The construction delivery method impacts virtually all aspects of BIM PLANNING ELEMENTS.

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1. STRATEGY
Defines the BIM goals and objectives; assesses change readiness; and considers management and resource support.
2. BIM USES
Identifies the methods in which BIM will be implemented for generating, processing, communicating, executing, and managing information about the owner’s facilities.
3. PROCESS
Describes the means to accomplish the BIM Uses by documenting the current methods, designing new processes
leveraging BIM, and developing transition plans
4. INFORMATION
Documents the information needs of the organization, including the model element breakdown, level of development, and facility data.
5. INFRASTRUCTURE
Determines the technology infrastructure to support BIM including computer software, hardware, networks, and physical workspaces.
6. PERSONNEL
Establishes the roles, responsibilities, education, and training of the active participants in the BIM processes established.

As might be expected, CHANGE MANAGEMENT is central to successful BIM implementation.

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Another important consideration it the type and granularity of information required at this stage of your life-cycle management strategy.

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Another way to look at things is the “level of maturity” of your overall BIM process.  This concept incorporates consideration of construction delivery methods, granularity of content, and other factors into some form of rating mechanism.

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Another critical aspect is clear definition of terms!   BIM is an evolving discipline so it is critical to define every important term.  Below is  just a short list of terms that should be included in any BIM related project…with clear definitions.

• BIM Champion/Manager
• BIM Project Execution Plan
• BIM Use
• Design Model
• Fabrication Model
• Facility Data
• Federated Model
• Level of Development
• Project Team
• Record Model

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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

BIM for Owners = BIM for FM, Building Information Modeling for Facility Managment

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Ok, so we get that 3D visualization is a component of BIM.  Design concepts can be beautifully illustrated, and one can relatively easily make a change to the model and the output documents update. Clash detection and the ability to eliminate clashes prior to the construction work starting is also a big “plus” for BIM.  Now it is time to focus on the information in BIM.

It’s time to focus on the true value of BIM for Owners (as well as Contractors, Oversight Groups, the general Community, etc.), the efficient life-cycle management of the built environment.

There are major challenges to attaining BIM, the most significant being change management.  For example, the traditional culture of the AECOO sector (Architecture, Engineering, Construction, Operations, Owner) has been based upon adversarial, non-collaborative ways of conducting day to day business.  As a result, sharing information, consistency, and standardized efficient practices have been difficult at best.

Cloud computing, as well as major market drivers may force change.   That said, when information   becomes more widespread, what standards will it be authored to?  How are things and/or objects defined?  How and when will information be updated?  What specifics and/or parameters are required to define or redefined and object.  For example take a door –  physical configuration (accessibility, dimensions, weight, materials, manufacturer, year built/age), functional aspects(acoustic rating, fire rating, thermal transmittance, security, self-closing, condition, cost, replacement cost, life-cycle), maintenance requirements, warranties?

Also the above, and more, must be considered for the “I” in BIM, in order to fulfill the definition of BIM.

A shared digital representation of physical and functional
characteristics of any built object including buildings,
bridges, roads, process plants etc. forming a reliable basis
for decisions. – ISO

Building Information Modelling (BIM) is the process of generating and managing data about the building, during its life cycle. Typically BIM uses three-dimensional, real-time, dynamic building modelling software to increase productivity in the design and construction stages. – NBS

Building Information Modelling (BIM) is a new approach to being able to describe and display the information required for the design, construction and operation of constructed facilities. It is able to bring together the different threads of information used in construction into a single operating environment thus reducing, and often eliminating, the need for the many different types of paper document currently in use. To use BIM effectively however, and for the benefits of its use to be released, the quality of communication between the different participants in the construction process needs to be improved.
If the information needed is available when it is needed, and the quality of that information is appropriate, then the construction process can be improved. For this to happen, there must be a common understanding of building processes and of the information that is needed for and results from their execution. The Industry Foundation Classes (IFC) provides a comprehensive reference to the totality of information within the lifecycle of a constructed facility. It has been created as an integrated whole in response to the identification of business needs expressed by the international building construction community. It does not contain a comprehensive reference to individual processes within building construction.
The case for a comprehensive reference to processes in building construction is clear and compelling. By integrating information with the process, the value of such a reference is greatly enhanced and it becomes a key tool in really delivering the benefits of BIM.  – buildingSMART, NIBS

The future of BIM modeling is to expand the information model to include more of the life cycle phases (ie: real property commerce, maintenance and operations, environmental simulation, etc.), to standardize life cycle process definitions and associated exchanges of information, and to standardize information content so that meanings and granularity are clear and consistent. This expanded scope definition will make BIM useful to a wider community including, for example, real property managers, appraisers, brokers, mortgage bankers, facility assessors, facility managers, maintenance and operations engineers, safety and security personnel as incident responders, landscape architects, infrastructure engineers and operators, and others outside the business verticals associated with new building design and construction. – BIM Initiative – NIBS