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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Meet Our Presenter(s):

Lisa Cooley, LEEP AP
Owner/Principal
Lisa Cooley Associates, LLC

Peter Cholakis
Chief Marketing Officer
4 Clicks Solutions, LLC

Born- and-bred construction

industry veteran
Expert in Job Order Contracting
and small projects solutions
Passionate about evolving delivery
methods

Career defining capital planning

and management solutions
Expert on facility lifecycle and Total
Cost of Ownership
Passionate about leveraging
technology to foster collaboration

Looking to the Past:

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

Designer
Builder
qualifications
based selection
Rex Miller, Commercial Real Estate Revolution

price
based selection

Adapted, HOK Architects

8

Supply Chain Barriers:

Builder 1

Builder 2

Builder 3

Owner

Builder 4

PROJECT

Builder
5

Subcontractors

Technology Barriers

10

Technology Barriers
Owner
AE

Contractor

Subs

11

Technology Barriers Speed vs. Flexibility

Owner

!!

AE

?
!!!!

?@#!*
?

Contractor

Subs

12

Technology Barriers
Flexibility
Cloud
Computing

Excel
Spreadsheets

Relational Database

Collaboration
13

Catalysts of Change

i
v
n

ro

nm

a
nt

l
o
c
E

m
o
n

ic
B

ig

a
at

u
sr

tiv

ch
e
T

l
o
n

e
gi

14

Environmental:
1. Recognition of buildings role in climate change
2. Challenge of meeting rising Energy Needs and paying for it
3. Government mandates

15

Altered
Economic
Landscape

Economic:
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

16

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

17

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

18

19

Disruptive Technologies:
BIM

Cloud Computing

A disruptive technology changes/overturns traditional business methods and practices.

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.

20

BIM The Simple Definition

BIM is the life-cycle management of the built environment supported by digital
technology.
(adapted from NIBS)

21

People

OWNERS

SUBCONTRACT
ORS

Information

BIM
&
Cloud
Computing

CONTRACT
ORS

AEs

Process

Cloud Computing

23

Convergence

y
erg
n
E
i ng s t s
s
i
R
Co
Carbon
Footprint

Flat World
Economy
Constrained
Capital Dollars
Refocus on
O&M

Altered
Economic
Landscape

t
en
m
y
plo
e
D
of
d
ee
Sp

New Project
Delivery
Methods to Meet
New Demands

ud
Clo

g
Bi

g
utin
p
Com

ta
a
D

BIM

Disruptive
Technology

Altered
Environmental
Landscape

Ener

Be

nch

gy M
o

ma

r k in

24

delin
g

Government
Mandates

Integrat

livery
e
D
t
c
e
j
o
ed Pr

er
d
r
O
Job

i ng
t
c
a
r
Cont

Ener
gy P
erfor
manc
e Co
ntrac
ts
Publ
ic

Priva
te

Partn
ers

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
25

Design-Build

Single Source Responsibility

Shifts risk of design errors from Owner to Contractor
Maximizing construction dollarsDesign-to-Budget
Faster Delivery
Can be commoditized as low bid, but can be innovative with performance-based
measures

From Scherer Construction, www.scherercfl.com

26

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 savings30-50%
Subjective evaluations every 90 days
feedback loop

27

Integrated Project Delivery

Est. Max Price

Actual Cost

Owner
Cost
Savings

Cost of the Work

Target Cost

Shared
Contingency

Alliance Contracts create shared Risk and Rewardshared contingency and

shared incentive pool. Liability Waivers mean no ability to sue.
Entire team on board before design startsrequires 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
$$$

Incentive
Pool

28

29

JOC

DBB

IPD

30

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

31

Shorter Project Timelines

32

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.

33

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.

Programming Estimate
Estimates from Each Design Stage
Final Detailed Cost Estimate
Initial Contractor Proposals
Technically Evaluated Proposals
Final Revised Contractor Proposals
Modifications & Changes Orders

34

Job Order Contracting

Case Study
JOC in place since 1999
Completing $2.5-$3m annually
Average project size about $20,000

Starbucks
$208,841
Coordination of university requirements with
concessionaire

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 antiterrorism research

35

Public Private Partnerships

Finds fullest expression as Design-Build-Own-Operate
Takes advantage of the same team innovations as DesignBuild and IPDcontract 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.

36

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

37

Process

38

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
39

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

40

41

Supporting Software Technology

Integration of Proven Construction Delivery Methods / Project
Management
Standardized Cost Data Architectures / Taxonomies (i.e.
TM 400,000 line items)
RSMeansTM
Comprehensive Document Management

Electronic Visualization / QTO

42

A Common Language
MasterFormat2010, Uniformat II Reference
Cost Databases (aka RSMeans)

COBIE, OMNICLASS

IFC

Metrics: FCI, SCI, Cost/GSF,

Cost/NSF, Utilization Rates, .

43

Facebook for the Built Environment 1

Project Collaboration

Real Time Collaboration via Web Meetings

Facebook for the Built Environment 2

Crystal Ball:
What does the future hold?

ce

construction
1.
2.

Christian and Pandaya, 1997. C

Prediction of Facilities.
NIBS 1998. Excellence in Facilit
Managment

49

Crystal Ball:
What does the future hold?
Increased worker productivity

Performance
Specs

Compensation
Structure

Healthcare outcomes

construction

Sophisticated
Data Analysis

Increased energy efficiency

Educational outcomes
50

Contact and Other Info

Lisa Cooley, LEED AP
Lisa Cooley Associates, LLC
www.lisacooleyassociates.com
505-239-3446
lisa@lisacooleyassociates.com

Peter Cholakis
4Clicks, LLC
www.4clicks.com
781-983-1128
pcholakis@4clicks.com

Presentation will be posted at www.lisacooleyassociates.com

Sources/Bibliography at: http://www.scoop.it/t/betterbuilding

51

Thank You!
For attending this
educational offering at
IFMAs World Workplace.

Be sure to evaluate the session at

the registration kiosk or online at
http://ceu.experient-inc.com/WWC121