ABC: The Keys to Success from a Contractor’s Perspective

William G. DuguayJ.D. Abrams, L.P.

Here is the Mandate we share:

• "Change the way we build highways. We need to build them faster, have them last longer, have them be safer and at a lesser cost. Be BOLD and AUDACIOUS in your thinking."

• Michael P. JacksonFormer Deputy Secretary for DOT

• But, lots of us are Old School

• How do we make what worked forever, work in a changing market

Different Components

• Accelerated Project Delivery or Financing

• Accelerated Bridge Construction– Catastrophic Event– Embedded in a larger project– Incremental use of ABC techniques

Provide the Contractor an opportunity to have a competitive edge

• This can be through:– Means and methods

– Available equipment

– Time of year & current workload

– Existing technology or availability of major supplies in the market place

Efficiency defined by:

• Simplicity of design and specifications

• Cost/benefit in line with expectations

• Aesthetics are appropriate for the location & use

• Longevity & life cycle costs are met

Share or Define Risk

• Contractors perceived level of risk translates to dollars on bid day

• May prevent interest in the project

• Limit what's incidental, and what can’t be defined by specification or plans

To be effective, it needs to be:

• Achievable with acceptable risk

• Predictable in a variety of applications

• Satisfy the majority of, or at least the most important goals

What’s to like about Prefab/Precast

Lower risk from:

• Uncertainty

• Labor availability or quality

• Access or site constraints

• Weather

• Bulk of Man-hours spent in a controlled low risk environment, or subcontracted out for fixed pricing

• Prefab can provide additional owner benefit if the GC is also the producer

Repeatability

• Multiple repetition's drives all contractors cost reporting

• With multiple repetitions, cost can be improved upon over time

• The fewer new operations that start on a project, the more time there is to spend refining on-going operations

Specifications

• Pre-cast specs are rarely ambiguous in their intent and are rarely contested

• Erection or assembly of sub-components is typically well defined

• Details tend to be clear cut and simple

Clean simple details

• Tend to:– Drive down costs– Be built to higher standards– Reduce inventories & speed replacements– Reduce overheads & distributed costs

Priority projects can be profitable

• Fast track projects can and should use incentive/damages clauses

• Revenue can be turned quicker for the GC, and the facility put into operation sooner for the Owner

• Assets may be better utilized across a company (assets that work tend to make money)

• Be careful the plans and specs aren’t geared towards the GC spending an equivalent bonus amount to get it

Successful really boils down to:

• Developing an idea that meets your needs

• Selling it for a price that, well, meets your needs

• Getting it built in a time frame that meets your needs

• Walking away from it at completion not wanting to change a thing because the project met your needs

What Contractors don’t usually like

Undue Risk or Schedule demands

• Fast track needs to be reserved for when it is needed

• Specs that unduly favor one party are ones that typically are faulty and are used to cover less than satisfactory plans and detailing

Project Goals not effectively communicated

• Can be Scope

• Can be details, phasing requirements, schedule demands

• If it is a new design that could be used for mass use or production pending successful testing, it needs to be communicated.

“Perceived”

• Contractors perception is reality on bid day.

• Cost will be driven by the contractors perception of:

– Undefined items of work, or method of payment

– Restrictive specifications

– Poorly crafted bid documents

Sole Sourcing

• Sole sourcing may be necessary due to approved lists from an agency, but they limit competitive advantages

– If they are a necessity, develop ways for the GC to maintain an edge

– Make sure the sole source will be able to meet the demands of the project prior to specification

One of a kind designs

• Limits re-use of– Technology– Equipment, forms, yards– Cost history– Personnel

Differing perspectives on the same thing

(understanding both sides)

SpeedOwners

• Limit down time of asset

Contractors

• Prefab minimizes hindrances to speed– Weather impacts

– Labor availability

– Equipment troubles

– Material issues

– Site access issues

QualityOwners

• Insure TQM

Contractors

• Items built in a controlled environment are conductive to better QA/QC programs

Traffic DisruptionsOwners

• Seek to minimize traffic interruptions– Limit road user costs

– Limit detours

– Limit public scrutiny

– Limit impacts to essential services

Contractors

• Traffic closures are one of the most dangerous field operations

• Typically limit hours of work

• Frequently push work onto less productive shifts

• Have high costs of cancellation

Cost

Owners

Include:• Management/Procurement• Design• Construction• Construction overheads• Life cycle• Intangibles

– Aesthetics– Historical– Research

Contractors

• We are a business, and in the business of being profitable, by constructing for owners.

Include:– Manpower– Equipment– Home office expenses– Materials (permanent &

consumable)– Taxes– Investments– Insurances– Cash flow– Profitability

Thoughts on Accelerated Project Delivery

• Agreeing before, is easier than surprises after

• Level playing fields invite participation• Copy other successful programs and

adapt them to local conditions and regulations

• Those made part of the solution beforehand, usually aren't part of the problem later

Don’t let this statement define your organization

You Speak Engineer, I Speak Contractor

“Poor communication and collaboration is pervasive and impacts each phase of the construction process as well as everyone involved in the process… when all of the responses… were tabulated, we noted one overarching theme that stood at the top of the owner concerns, communication” 2003 FMI/CMAA Fourth Annual Survey of Owners

Solution:

• Specify the different roles for participants• Assign responsibilities & authority to team participants• Define turn around times for information transfer• Ensure all participants are equal stake holders• Make sure your way of doing business matches the

business you will be doing• Follow through with your objectives by critical evaluation• Understand what drives cost and minimize cost triggers

Partner from Concept to Completion

• Don’t let it be a catch phrase, but rather your primary tool to ensure the projects success. Properly used, it will bring all the benefits of ABC to your project.

Once you have settled on an idea, embrace what drives the

Price & Schedule process

Repeatability Durability Reliability

Adaptability Survivability of the idea

Profitability

Questions?