Creating a “best value chain”  for renovation, repair, and construction must be a common focus for all participants and stakeholders.

Current methods used to address the ongoing numerous repair, renovation, and minor new construction projects facing real property owners don’t work.   Far to many projects are over-budget, take far too long to procure let alone complete, and are simply not done right the first time.

Design-bid-build, and even “newer” methods (design-build, CM@R….) are relatively inefficient, antagonist, and prone to failure.   These “traditional” construction delivery methods fail to require collaboration and an atmosphere of mutual trust/respect, shared risk/reward, and financial transparency/visibility.

The construction delivery method determines the final outcome of any project or program more so than any other single element.  It is the construction delivery method that sets the overall tone and defines roles, responsibilities, workflows, metric, deliverables, and more.

LEAN construction delivery methods exist that have proven to consistently delivery 90%+ of construction projects on-time, on-budget, and to the satisfaction of all participants and stakeholders;

#1 Integrated Projects Delivery, for major new construction, and

#2 Job Order Contracting, for repair, renovation, sustainability, and minor new construction.

Let’s focus upon repair, renovation, and minor new construction as this is where real property portfolios are spending the bulk of their resources and having the most difficulty.

Job Order Contracting provides a solution, yet less than 5% of real property owners leverage the process and fewer to so to its full potential….despite being readily available for decades!   Lack of education and the need to fundamentally shift day to day business practices are the primary reasons why most are stuck in a mode of low productivity and waste.

Moving to higher productivity and significantly greater productivity and measurably improve outcomes requires a shift to BEST VALUE procurement,  and LEAN construction/ LEAN project delivery.

The requirements for LEAN construction and project delivery are listed outline as follows…

1. Required collaboration among all participants
2. Common data environment (including a detailed unit price book, UPB that his locally researched and organized via CSI Masterformat, and includes demolition line items, and line item modifiers.)
3. Financial transparency
4. Mutual trust/respect
5. Share risk/reward
6. Long-term relationships
7. Documented Operations Manual/Execution Guide
8. Fully defined workflows, roles, and responsibilities.
9. Key performance indicators (KPIs)
10. Required intials and ongoing training for all pariticpants
11. Continuous improvement
12. Supporting cloud-based technology

Technology isn’t the cause of the AECOO sector’s  rampant low productivity, it’s the endemic lack of collaboration and associate poor leadership on the part of real property owners.

30% “Wrench Time”/30% Rework: The efficiency rate in construction is notoriously low. During the last five decades, productivity in construction declines by 0.3% on average on a yearly basis. Only in the US, the labor productivity growth rate doesn’t exceed 0.1% (the lowest rate compared to other similar industries).   Rework  consumeS between 7% to 15% of the total budget in new construction.Source: McKinsey & Company