10457 next practices in project delivery drives roadway
TRANSCRIPT
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“Next” Practices in Project Delivery Drives Roadway Success
Jake SmithwickAssistant Professor
University of North Carolina at Charlotte
Des MryglodDirector
Public Works & EngineeringLeduc County
Colin RoggeveenPrincipal
RPM Consulting Services
Just because something is written in a contract does not make it so
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Project Performance
• Only 2.5% of projects defined as successful (scope, cost, schedule, & business)– PricewaterhouseCoopers, 2009
• Only 30% of projects completed within 10% of planned cost & schedule – Construction Industry Institute Performance
Assessment Committee, 2015 edition
• 31% of projects cancelled before completed, 53%cost twice as much– Standish Group Chaos Report, 2010
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Vendor 1
Vendor 2
Vendor 3
Vendor 4
High
Low High
Low High
Low High
Low
Impact of Minimum Requirements
Vendor 1Vendor 2Vendor 3Vendor 4
It Is More Important For The Vendor To Know What To Do Than It Is For Client To Know What The Vendor Should Do
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The Process
3 Written SubmittalsBlind Evaluations: standard templates, no modifications, and no names.
Risk Assessment
= risks you don’t control
2 pages each, 6 pages in total
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Project Capability
Project Capability Template
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• Plan 1– We will use our 20 years of experience in working with mechanical
systems to minimize the risk of the heating and cooling system design.
• Plan 2– We have identified the design of the heat/cooling system as a risk. It has
not been used before in the area. Will ensure that the system performance and installation is verified in the pre-award period.
– We have bid using best rated mechanical contractor in the area (rated at 9.8 out of 10.0, next best rated 9.1)
– Mechanical contractor identified modifications to the design to improve output and sustainability of the system with the following impacts (mechanical system cost minimized by 15% - see VA#1)
– Mechanical system will be provided by one manufacturer, and will be commissioned by the manufacturer, contractor, and general contractor, who will take full responsibility of commissioning the system
Example of SolutionsRisk: Design of Heating/Cooling SystemType: Project Capability
• Plan 1– We will work with the user to minimize the impact of noise from
demolition.
• Plan 2– We have planned to demolition during off hours and weekends. This
will have a slight impact on our cost (less than 1%), but the impact to customer satisfaction justifies this.
– We will also install rubber sheets on the floors to diminish noise and vibrations.
– Both solutions can be performed within your budget. – Both solutions have been used on multiple previous projects w/ high
levels of customer satisfaction (9.4/10).
Example of SolutionsRisk: Noise from Demolition
Type: Project Capability
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Risk Assessment
Risk Assessment
= risks you don’t control
Risk Assessment TemplateTypical Risk Assessment Template
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Example of Solutions Risk: Loss of Radio Flagship in Major MarketType: Risk Assessment• Plan 1
– We will work very hard to maintain excellent affiliate relationships. If we lose a radio station (e.g. it changes its format) we will move quickly to replace the lost station. If we cannot quickly replace a flagship station, we can be very creative and could even consider purchasing all local inventory from a new flagship station.
• Plan 2– In the past 10 yrs, on over 50 accounts, 7 radio stations format changes
have occurred. The following solution is optimal.– We own and will maintain two radio contracts covering the area, where
signals can be switched if required. The flagship station will be the station with the stronger signal and greater coverage.
– If a station is lost we will have a equal replacement within 2 months. If within two months a replacement is not contracted we will purchase inventory from another station or discount the cost of an inventory purchase and add it to our payments to the client.
Example of Solutions
• Solution 1– By optimizing the building location, using a hybrid design and exploring
strong fundamental architectural design process with will provide an optimum solution. As design progresses, continuous verification of the budget will be utilized to ensure success
• Solution 2
• The owner can be assured that the budget is not a risk. Our world class team has connections to a wide range of high performing suppliers to ensure that you always get the best prices and ensure the budget is met.
Risk: Owner’s Budget (DB Residence Hall)Type: Risk Assessment
Generic Marketing InformationNOT a Plan
Will say whatever they think the client wants to hear in order to get the job
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• Solution 3– The Owner’s budget cannot accommodate the building program per the
requirements.
– We have identified multiple Value Added options that enable us to meet the budget and still deliver the required number of beds (in order to maximize owner revenue streams):
• Removal of underground parkade – $2,054,717 savings• Reduction in certain finishes (wall panels vs. dry wall) – $67,000
savings• Design efficiency opportunities: Adjust net-to-gross ratios in
targeted areas of building program (hallways, common spaces). Reduction in building footprint results in significant material savings – net savings $1,686,149
Example of SolutionsRisk: Owner’s Budget (DB Residence Hall)Type: Risk Assessment
• Plan 1– Coordination with [water company] is critical. We will
coordinate and plan with [water company] as soon as the award is made to make sure that we get water to the site to irrigate the fields.
• Plan 2– We will coordinate and schedule the water with [water
company]. However, based on past experience there is a high risk they will not meet the schedule (the water company does not meet schedule over 90% of the time).
– We will have temporary waterlines setup and ready to connect to the nearby fire hydrant to irrigate until [water company] is ready.
– We will also have water trucks on-site if there is problems with connecting the lines.
Example of Solutions Risk: Getting water to the site
Type: Risk Assessment
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Value Added
Value Added TemplateTypical Value Added Template
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Example: Value Added Items
• Reroofing this building will not stop all water leaks. The majority of the leaks are caused by cracks in the parapet walls, broken/missing glass, and poor caulking. For an additional $10K and 3 weeks in schedule we can replace and repair all of these items.
The Process
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Clarification / Preplanning Period
The Process
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Measured Environment• Must be simple and dominant
• Must be for the purposes of positive accountability
• Transparency and openness
• Measuring against a plan (or expectation created by the individual/team doing the work)
Project Background• Budget: $27M | 3.3KM
– Single largest project County has ever undertaken
• 4-lane Highway + Water Main– 300,000m3 Earthwork– 46,000T Asphalt– 91,000T Aggregate– 110,000m2 Subgrade
• Best value contractor:– $1M in proposed cost-saving initiatives– Awarded 30% below budget
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Location
Proactive Risk Management• Utility Relocation: We contacted local utility
companies 8 months ahead of the project start date and were assured of a May 4 start. Previous experience has 5+ weeks delay without pre-approval.
• Public Access on Highway 510: Construct full length temporary detour. Creates unimpeded access, giving more access for our work.
• Tree Clearing: Environment Canada mandates trees cannot be cleared if birds have nested after April 15. Potential schedule delays up through August 1 if trees not removed ahead of time.
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Value of “Thinking Ahead”Interview Comments
“I’ve visited the site numerous times. I personally prepared our proposal, and have reviewed all of the
details. We are having one subcontractor perform all of the major electrical, water, and other underground work.
This process has helped us coordinate our work to a much higher level.”
-Risk Plan Score: 7.0 / 10
VS...
“I reviewed our proposal in the past few days. I’ve spent a several hours reviewing it – I check all of our
estimators’ and business development staff work before submission. Our staff visited the site once.”
- Risk Plan Score: 3.4 / 10
Contract Management• Less time managing Contractor • More time required managing Utility Co.’s
• Team Environment– Shared Construction Site Office– Less time in meetings– Proactive vs Reactive
• Risk Management– Bi-weekly review and update of Risk Plan– New issues came with options & costs for solutions
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Final Results
Schedule
• Utility Companies 12 weeks behind schedule• 18 days certified weather delays
Substantial Completion Nov 5, 2015 (4 days behind schedule)
Final ResultsBudget
• Original Contract $14,755,894.21
• Approx $42k Contractor initiated change orders – 0.26%• $1.5M Work added to contract• $300k Design related changes• $465k Quantity overrun on Topsoil
• Final Contract $16,177,613.17
• Variance $1,421,718.96 (8.79%)
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Thoughts for owners• Simplifies the selection process
– saves staff review time– publically defendable / transparent– return for the taxpayers – Best Value
• Emphasis on project risk at the outset
• But… it requires a change in thinking– Apprehension of a new process from the client– Concern from the contractors “it’s not how we normally do
things”
• Changing the process from an adversarial process to a cooperative process
Award of Excellence
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Comments / Questions