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PROJECT DELIVERY METHODS OF THE FUTURE

PROJECT DELIVERY METHODS OF THE FUTURE. Lisa Cooley, LEED AP Lisa Cooley Associates, LLC Peter Cholakis 4Clicks Solutions, LLC. In the long history of humankind, those who learned to collaborate and improvise most effectively have prevailed. – Charles Darwin .

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PROJECT DELIVERY METHODS OF THE FUTURE

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  1. PROJECT DELIVERY METHODS OF THE FUTURE Lisa Cooley, LEED AP Lisa Cooley Associates, LLC Peter Cholakis 4Clicks Solutions, LLC In the long history of humankind, those who learned to collaborate and improvise most effectively have prevailed. – Charles Darwin

  2. MANAGING CEUs AND CFM® MAINTENANCE POINTS You are eligible to receive Continuing Education Units and Certified Facility Manager® maintenance points for attending sessions at IFMA's World Workplace. To receive 20 CFM maintenance points: Record your attendance on your CFM Recertification Worksheet. At recertification time, submit your completed CFM Recertification Worksheet. To receive CEUs: Pay the US$12 processing fee when you register for the conference. Visit the CEU Kiosks at registration or log on to http://ceu.experient-inc.com/WWC121 and pass a five-question assessment developed by the speaker. CEUs can only be earned upon successful completion of the assessment. Your transcript will be emailed to you. Individuals seeking CEUs or LUs from other organizations must contact those organizations for instructions on self-reporting credit hours.

  3. Evaluate Sessions Take Assessments & Log CEUs (no more CEU codes) Visit the registration kiosks or go online at http://ceu.experient-inc.com/WWC121

  4. Meet Our Presenter(s): • Lisa Cooley, LEEP AP • Owner/Principal • Lisa Cooley Associates, LLC • Born- and-bred construction industry veteran • Expert in Job Order Contracting and small projects solutions • Passionate about evolving delivery methods • Peter Cholakis • Chief Marketing Officer • 4 Clicks Solutions, LLC • Career defining capital planning and management solutions • Expert on facility lifecycle and Total Cost of Ownership • Passionate about leveraging technology to foster collaboration

  5. Looking to the Past:

  6. Fracturing of the Industry and its Results: 72% of projects over budget 70% of projects over schedule 5% of project costs spent in bidding Owner knowledge gap price based selection qualifications based selection Designer Builder Adapted, HOK Architects Rex Miller, Commercial Real Estate Revolution

  7. Supply Chain Barriers: PROJECT Owner Subcontractors Builder 5 Builder 3 Builder 1 Builder 2 Builder 4 Sub

  8. Technology Barriers

  9. Technology Barriers Owner AE Contractor Subs

  10. Technology Barriers– Speed vs. Flexibility ? Owner ? !!!! !! AE ?@#!* ? ? Contractor Subs

  11. Technology Barriers Flexibility Cloud Computing Excel Spreadsheets Relational Database Collaboration

  12. Disruptive Technologies Catalysts of Change Big data Economic Environmental

  13. Environmental: Altered Environmental Landscape 1. Recognition of building’s role in climate change 2. Challenge of meeting rising Energy Needs and paying for it 3. Government mandates

  14. Economic: Altered Economic Landscape 1. Fallout from of a building boom followed by recession 2. Reduced capital expenditures at a time when monumental change to the built environment is needed 3. World economy becoming “flat”

  15. Resulting in a fundamental cultural shift? Driven by Millennial sensibilities and values The built environment is transforming to meet efficiency needs There is a need for responsive project delivery methods to facilitate these changes

  16. Big Data: BIM and sophisticated energy modeling for new construction Ability to collect building performance metrics for existing buildings Challenge: How to process it for decisionmaking and How to leverage team expertise to effect productive change Need for delivery methods to quickly respond to urgency created by transparent data

  17. Disruptive technology is a term coined by Harvard Business School professor Clayton M. Christensen to describe a new technology that unexpectedly displaces an established technology. Disruptive Technologies: BIM Cloud Computing = A disruptive technology changes/overturns traditional business methods and practices.

  18. BIM – The “Simple Definition” BIM is the life-cycle management of the built environment supported by digital technology. (adapted from NIBS)

  19. Cloud Computing

  20. Transparency Convergence Rising Energy Costs Speed of Deployment Altered Environmental Landscape Altered Economic Landscape Big Data Carbon Footprint Government Mandates Flat World Economy Constrained Capital Dollars Refocus on O&M New Project Delivery Methods to Meet New Demands Energy Modeling Cloud Computing BIM Benchmarking Disruptive Technology

  21. Integrated Project Delivery Energy Performance Contracts Job Order Contracting Public Private Partnerships Key Characteristics of Emergent Project Delivery Methods • Qualifications Based or Best Value Selection • Some form of pricing transparency • Early and ongoing information-sharing among project stakeholders • Appropriate distribution of risk • Some form of financial incentive to drive performance

  22. Design-Build • Single Source Responsibility • Shifts risk of design errors from Owner to Contractor • Maximizing construction dollars—Design-to-Budget • Faster Delivery • Can be commoditized as low bid, but can be innovative with performance-based measures From Scherer Construction, www.scherercfl.com

  23. Design-Build Case Study • Awarded September 11, 2001 • Schedule, budget and scope completely changed from original bid • Completed 14 months ahead of schedule and $100 million under budget • Performance-based, flexible contract allowed for innovation • Incentives: • Award fee allowed profit margins up to 10% if project goals were met • Cost incentive allowed design/builder to share percentage of cost savings—30-50% • Subjective evaluations every 90 days—feedback loop

  24. Integrated Project Delivery • Alliance Contracts create shared Risk and Reward—shared contingency and shared incentive pool. Liability Waivers mean no ability to sue. • Entire team on board before design starts—requires Qualifications Based Selection and Full Pricing Transparency • Deep involvement of key subcontractors and suppliers in design process • Goal is to reduce duplication of design efforts--shop drawings serve design development • Utilization of BIM and other forward-thinking technologies to enable collaboration among team members Savings $$$ Est. Max Price Target Cost Shared Contingency Actual Cost Owner Cost Savings Incentive Pool Cost of the Work

  25. JOC DBB IPD

  26. Job Order Contracting • “IPD Lite” for Existing Buildings • Consolidates procurement to shorten Project Timelines and reduce procurement costs • Transparency of pricing and procurement compliance through Unit Price Book • Long Term Facility Relationship increases productivity and enables reiterative process improvements • Quality and performance incentivized through IDIQ form of contract with minimal guarantee and clear maximum volume

  27. Shorter Project Timelines

  28. Advantages of JOC for Owners • Fast and timely delivery of projects. • Consolidation of procurement creates lower overhead cost and procurement cost • Contractor and owner efficiencies in prosecution of the work. Development of a partner relationship based on work performance. • Virtual elimination of legal disputes, claims and change orders. • Standard pricing and specification utilizing a published unit price book (UPB), resulting in efficient and effective estimating, design, and fixed price construction.

  29. How OWNERS Use JOC & Technology • Track & Manage each project from inception to completion. • Manage a single project, your entire contract, or multiple contracts. • All project milestones, thru warranty period. • Display status of each project. • Maintain a complete cost history • Record all estimates associated with a project. • Review value of all projects awarded on a specific contract, or to a specific contractor. • Reports show pre-negotiation strategies and post-negotiation summaries.

  30. Job Order Contracting Case Study Starbucks $208,841 Coordination of university requirements with concessionaire • JOC in place since 1999 • Completing $2.5-$3m annually • Average project size about $20,000 • Examples of JOC projects: • Office and classroom renovations • Laboratory renovations • Installation of varies mechanical equipment and associated work • Road and parking lot improvements • Interior finish-out projects for commercial spaces • ADA modifications • Mold and bird remediation • Waterproofing projects • Sports courts and recreational facilities • Food service renovations • Signage installation • Sidewalks Bio Safety Level 3 Laboratory $443,650 Rapid deployment of grant funds for anti-terrorism research

  31. Public Private Partnerships • Finds fullest expression as Design-Build-Own-Operate • Takes advantage of the same team innovations as Design-Build and IPD—contract includes design and construction. • Added benefit of private financing for upfront cost. Funding through toll concessions or availability payments. • Some may be during the course of design/construction • After completion, typically receive a regular (e.g. annual) payment – similar to a lease payment • Added component of ongoing operation/maintenance. • Allows owners to incentivize ongoing building performance • Size of ongoing payments is contingent on the performance of the asset • Drives performance and lifecycle decisions. Ultimate accountability for building systems. • Originally focused on transportation. Now expanding into “social infrastructure” projects.

  32. PPP Case Study • Long Beach Courthouse • Development Cost: $490M • Lease-back period: 35 years • Performance Based Contract: Lease payments will be reduced if the private sector underperforms • Extensive list of property management requirements • Exact formulas for decreasing lease payments if requirements are not met • Innovative Approach: Integrated design approach includes operations staff in design and construction decisions

  33. Process

  34. Energy Performance Contracts • Usually includes financing—paid off with energy savings • Payment based on anticipated energy savings, or contingent on actual savings • Well-established in public sector, challenges in private sector • Variation: Energy Services Agreement. New business models to address challenges: Managed Utility Service Agreements, Property Assessed Clean Energy (PACE), On-bill financing • Drivers: benchmarking laws creating transparency in building energy costs for tenants and buyers, C-Suite lens into facility costs

  35. ESPC Case Study • State of Pennsylvania Department of General Services • Guaranteed Energy Savings Act • Strategic program approach • Integrated approach with PPAs • Small projects element • Standardized contracts

  36. Supporting Software Technology

  37. A Common Language

  38. “Facebook” for the Built Environment 1

  39. Project Collaboration

  40. Real Time Collaboration via Web Meetings

  41. “Facebook” for the Built Environment 2

  42. Crystal Ball: What does the future hold? Convergence Energy modeling for new construction • Christian and Pandaya, 1997. Cost Prediction of Facilities. • NIBS 1998. Excellence in Facility Managment

  43. Crystal Ball: What does the future hold? Increased worker productivity Healthcare outcomes Energy modeling for new construction Increased energy efficiency Educational outcomes

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