Sustainable Facilities Management Practices

Sustainable Facilities Management Practices

Sustainable Facilities Management Practices involve a clear set of objectives, methods, and processes aimed at maximizing performance of the built environment with respect to economic and environmental resources in concert with meeting organizational mission needs.

Concurrent planning, design, construction, and operation throughout the lifecycle of a built structure across disparate multidiscipline teams operating in a transparent and collaborative manner, in concert with real property owner leadership, commitment, and accountability are core requirements.

Robust strategies and support tools have also been developed for the implementation of sustainable facilities management and are continuing to evolve.

The majority of repair, renovation, maintenance, and new construction projects fail to be delivered on time or within with a satisfactory standard, or on budget despite the adoption various new technologies and tools such as BIM, CMMS, IWMS, CAFM, ERP, LPS, 5S, 5Whys, Gemba, etc.    The reason rests in the absence of an effective philosophy and supporting framework to manage and leverage working relationships and information shared between owners, architects, engineers, builders, building users, and facilities management.   

Core elements of sustainable facilities management

  1. Owner  leadership capacity, commitment, and accountability
  2. Team unity, commitment, and focus based upon the establishment of clear, mutually beneficial goals
  3. Significant investment in intitial and ongoing training for all participants and stakeholders
  4. Common, shared information environment
  5. Objective, current, verifiable, and granular construction task data shared throughout the project lifecycle
  6. Programmatic framework consistently applied to all projects
  7. Quantitative performance indicators
  8. Regular third-party audits

Coordination between organizations and crews can only be accomplish via early and ongoing information sharing among all participants and stakeholders.
Cost reduction/increased productivity results from learning that occurs within a shared information environment and the associated reduction of  errors throughout the project duration and associated rework.

Primary failure points for repair, renovation, maintenance, or new construction projects include;

  • Poor owner leadership
  • Selection of wasteful project procurement and project delivery methods.
  • Lack of objective local market granular line item labor, material, and equipment costs information and/or failure to share information this and all relevant information with all project partcipants.

Sustainable Facilities Management PracticesSustainable Facilities Management Practices

 

via 4BT.us

 

Linking Program Management and Project Management

Linking Program Management and Project Management – A Proven Construction Productivity Solution

Linking Program Management and Project Management  and enhancing  this relationship aligns single projects to a robust programmatic approach to significantsly improve overall outcomes for owners, architects, engineers, and builders.

Linking Program Management and Project Management

 

TRANSPARENCY-COLLABORATION-ROBUST PROCESS

Imagine that the the person who owns the facility and the one designing, engineering, repair, renovating, maintaing, or building it  had the same information.

Imagine a long term, mutually beneficial relationship among all parties that is aligned to the mutually beneficial interests of all parties.

 

Programs vs. Projects – Addressing Construction Productivity

What’s the difference between a project and a program?

A project is temporary, with a beginning and an end, while a program is a framework that supports projects.

In the construction industry, every repair, renovation, maintenance, or new build project may have its unique characteristics, but they should all observe the same fundamental programmatic approach in order to achieve maximum beneficial value for all participants and stakeholders.

Unfortunately, the root cause of low productivity and high levels of financial and environmental waste associated with the creation and sustainment of the built environment is the failure of owners, architects, engineers, and builders to adopt a robust programmatic framework. By adopting a programmatic approach, we can address these issues and ensure that every project is completed efficiently and sustainably.

Let’s work together to improve construction productivity and create a more sustainable built environment for all.

Linking Program Management and Project Management

CONSTRUCTION COST MANAGEMENT Linking Program Management and Project Management

Linking Program Management and Project Management
Managing all projects in a coordinated way ensures…
#1. Alignment of all participant and stakeholder goals.
#2. Full technical and cost visibility and transparency.
#3. 90%+ of all projects delivered on-time, on-budget, and per specification.

4bt.us – Current, local market granular cost data and integrated project delivery solutions.

 

Facilities Leaders NOT Facilities Managers

Facilities Leaders NOT Facilities Managers

Attaining a sustainable built environment requires Facilities Leaders NOT Facilities Managers.

#1. Managers focus upon goals; leaders grow their people and perfect their systems.
Repair, renovation, maintenance, and new build project fail due to poor systems and rarely due to the people doing the work.
Leaders leverage systems-thinking and are process-oriented. Focus is on the daily habits, routines, cultures, and actions that lead to success. They understand that people and robust systems dictate outcomes.
Managers tend to focus upon individual details without paying as much attention to the processes, systems, and strategies needed to consistently achieve optimal outcomes.

#2. Leaders focus upon importance, managers are reactionary.
Managers are stuck on on tasks that appear urgent but are not important.
Leaders expended resources that enable them to concentrate on tasks that are important and build towards long-term success.

Facilities Leaders NOT Facilities Managers
#3. Leaders see road maps to success, managers see paperwork.
Time, objective, current actionable information is critical to any project. Without it, production, flow, and knowing what will happen and when is impossible.
Managers complain about documentation, especially allocating the time and resources to develop a detailed, well communicated Scope of Work including local market granular material, equipment, and labor requirements. Leaders understand the need to quantify what planned and what is being built.

#4. Leaders set and enforce standards; managers work without them.
Leaders set clear methods and means for how things should be done and deploy processes to ensure everyone is on board.
Leaders are accountable are all internal and external supporting teams.

#5. Leaders listen and learn, manages enable the ‘status quo’.
Unhealthy relationships are due to difficult people, but rather misunderstanding of our differences, our inability to easily change.
Leaders make a serious effort to see things from someone else’s point of view. They respect their differences and adjust their approach accordingly.

#6. Managers focus on dates, while leaders focus all aspects of production.
Who does what by when, is irrelevant if the details of how things get done are not fully considered. Leaders fully appreciate how work happens, the “flow” of production activities, and implement the right systems to deal with variances.
Facilities Leaders NOT Facilities Managers Facilities Leaders NOT Facilities Managers
#7. Leaders plans carefully and execute quickly. Managers speed through the planning process.
Rushing through the planning phase is the fastest way to errors, cost overruns, and rework. Managers tend to minimize planning are forced to engage in inefficient reactive tasks.

#8. Leaders listen to and value those doing the work. Managers do the opposite.
Amateurs undervalue trade partners. While leaders know that the value of developing strong relationships with skilled trade partners, managers tend to abuse them. Leaders provide support, express appreciation, and learn from those actually doing the work.

#9. Managers focus upon command & control, while leaders gain trust and alignment through communication.
Building the vision of a shared, mutually beneficial outcome drives creativity, passion, and commitment. It is the compelling direction and vision that connects everyone’s work to a larger purpose.
Managers tend to focus on maximizing the performance of individual’s, resulting in unanticipated conflicts with mission goals and other team players.

#10. Leaders focus upon people, while managers focus upon skills.
While technical skills certainly matter, communication, problem-solving, collaborative leadership, and critical thinking cannot be overlooked.

via 4bt.us

ISO - FM & Data Management

ISO – FM & Data Management

“ISO 55000/1 are standards that define a management system for asset management. The focus of these standards is not the asset (in this case the data asset). Instead, its focus is on managing the value generated by and through the asset (to include data and data as an asset). This is an important nuance because it means the ISO 55000 standard series will not tell you how to manage data, it will only cover how data interfaces with asset management and thereby generates value for the organization.

ISO 55001 (2014) currently contains paragraphs that touch on the management of data in terms its support of asset management objectives – that is the management objectives for assets that are needed to achieve organizational objectives. They are: 7.5. – Information Requirements, and 7.6. – Documented Information. Furthermore, the word “data” is mentioned only twice in the body of the standard and not in context of requirements for its explicit management. I agree this is unsatisfactory and undervalues the importance of data as an asset and its role in asset management. Currently, ISO 55000/1 does not do a good job on how intangible (non-physical) assets are covered. Thankfully, this is not where this story ends.

The ISO Technical Committee (TC 251) that manages the ISO 55000 series is seeking to remedy this through updates and new standards planned to be released this year. These includes:

Update: ISO 55000 – Overview, Principles, and Terminology: introduces “data” as a technical term and integrates use of data in benefits of asset management.

Update: ISO 55001 – Asset Management System Requirements: Expands a subclause to cover Data and Information and adds another on Knowledge in clause 7. – Support. Also, it adds substantial new content on decision making and frameworks that will elevate recognition and prominence of data in support of asset management.

New: ISO 55012 – Guidance on People Involvement and Competence:  Introduces and details the human-side of asset management knowledge and application that, given ISO 55000/1 expanded scope, is inclusive of data/information/knowledge management and their roles supporting achievement of asset management.

New: ISO 55013 – Guidance on the Management of Data Assets: Provides a detailed overview on data’s role in asset management and the management of data as an asset. Primary clauses herein are titled: Managing Asset Data, Delivering Value from Asset Data, Identifying Data Assets, Managing Data Assets, and Governance. This includes about 12 pages of content that will develop and reinforce the role data has in asset management and supporting value generating activities.”

(Source:  Jack Dempsey – Linked In Feed 20240228)

Efficiently Manage Dynamic Projects

How to Efficiently Manage Dynamic Projects – The Solution to FM and Construction Waste

Learning how to effciently manage dynamic project is the first step toward solving FM and construction waste.

Focus must shift from constantly seeking technology as a solution to the root cause of the AECOO sector’s problem.  The root cause is a bad process, the solution is the application of systems thinking and the adoption of robust frameworks that focus upon People, then Process, then Information, and finally enabling Technology.

 

Image Source: Leyla Acaroglu (https://medium.com/disruptive-design/tools-for-systems-thinkers-the-6-fundamental-concepts-of-systems-thinking-379cdac3dc6a)
Image Source: Leyla Acaroglu (https://medium.com/disruptive-design/tools-for-systems-thinkers-the-6-fundamental-concepts-of-systems-thinking-379cdac3dc6a)

The lack of system thinking across the FM and construction sector is a primary cause of rampant economic and environmental waste. Until system thinking is understood and adopted on a widespread basis, there is little likelihood of measurable improvement.

What is system thinking? – Simple, it’s the process of considering the whole and how the all the associated parts, people, actions, resources interrelate, and discovering ways of improvement.

Why does it matter? – The application of system thinking to facilities management (FM) and the AECOO sector, and associated tools and support processes, can consistently ensure the delivery of quality, sustainable outcomes, on time and on budget. (AECOO = Architecture, Engineering, Construction, Owners, Operators)

What are the barriers? – System thinking requires a fundamental change in mindset for current AECOO players. While the following may sound like “common sense”, the philosophies and concepts are rarely practiced. Care of People. – Innovation and improvement require that traditional adversaries find common ground. We all know that traditional planning, procurement, and project delivery practices are adversarial, and broken, yet we fail to address this basic issue. Owners must lead a change in mindset and provide a consistently safe, welcoming, and collaborative environment. Everyone involved also must enable those doing the work, those with hands-on knowledge, to contribute to solutions in innovative ways.

Examples of FM and construction philosophies, concepts, and tools that leverage system thinking? Lifecycle total cost of ownership (TCO) asset management, Alliance Contracting, Integrated Project Delivery (IPD), and LEAN Job Order Contracting all embody system thinking. While the degree to which these and other practices maximize the benefits of system thinking varies widely based upon actual implementation, significant, measurable benefit can be realized if ALL the following criteria are met. Total cost savings of 30%-40%, on time, on budget quality delivery, and satisfaction of all involved participants and stakeholders are just a few of benefits.

  1. Real property owner leadership, accountability, and commitment
  2. Multi-party, long term agreement with an integral operation manual and/or execution guide that clearly communicates roles, responsibilities, deliverables, processes, workflows, quantitative performance metrics, and shared risks/rewards.
  3. Integrated internal and external planning, procurement, and project delivery teams that communicate and collaborate on an early and ongoing basis.
  4. A common data environment (CDE) inclusive of 1. A common written set of terms and definitions using industry standards without confusing acronyms or abbreviations, and 2. a granular, line time construction task listing that is both locally researched, current, and organized using a standard data architecture (examples: expanded CSI Masterformat, expanded Uniformat).
  5. Mandatory initial and ongoing training for all participants.
System Thinking for FM and Construction
The System Thinking Journey from Mindset to Tools & Processes

There are other elements involved and customizations per organization to be considered, however, these represent core fundamental requirements.

Reach out to learn more….

Everything is ready… are you?

 

FEDRAMP is Hindering Facilities Management

FEDRAMP is Hindering Facilities Management in the Federal Sector

We have all been dealing with FEDRAMP for years along with associated misinformation, ambiguity, and missteps.

 

FEDRAMP is Hindering Facilities Management in the Federal Sector due to its failure to keep pace with current technology and methods.

 

FEDRAMP is Hindering Facilities Management in the Federal Sector due to its failure to keep pace with current technology and methods.

 

As a result, there is a misunderstanding as to how and if these requirements provide benefit. The fact is that FEDRAMP can and has harmed efficient federal sector stewardship of the built environment.

We are happy to hop on a call to assist you from an informational standpoint.

The following factual information is provided to assist Federal Departments and Agencies in making, or revising, policy specifically with respect to effectively and securely using commercial SaaS solutions to improve the efficiency of facilities and physical infrastructure operations, repair, renovation, maintenance, and new build activities, sustainment, and sustainability.

#1FEDRAMP was initially establish to provide a standardized method for ensuring digital information security for federal government agencies. It was based upon NIST standards and other information available at the time. Since that time, it has failed to keep pace with evolving technologies and methods.

#2 There a total of 459 companies in the world who have achieved FedRAMP certification. As you can imagine, the Government contracts with a lot more than that for SaaS solutions (https://marketplace.fedramp.gov/products). When looking over those companies who are certified, most of them are very very large companies and companies who are “hosting focused” versus “application focused”. As a result the “application focused” solutions tend to be traditional, outdated, and relatively expensive and do not maximize potential value to a government using agency.

#3 It is now recognized that the FEDRAMP process, while well intended, has several major issues.  It is now understood that requiring FEDRAMP certification in not in the best interests of federal government agencies and departments for many, if not most applications. Please review the following which clearly support this fact.

Here is a draft memo from OMB regarding FEDRAMP revisions, that: https://www.cio.gov/assets/files/resources/FedRAMP-updated-draft-guidance-2023.pdf . This memo clearly notes that SaaS product like those provided by Four BT, LLC and hundreds of other innovative solutions per #3 below are NOT subject to FEDRAMP requirements. )

“Examples of excluded cloud-based services that do not host an information system operated by an agency or contractor of an agency or another organization on behalf of an agency include:

#1. Ancillary services whose compromise would pose a negligible risk to Federal information or information systems, such as systems that make external measurements or read information from other publicly available services.

#2. Publicly available social media or communications platforms governed under Federal agency social media policies, in which Federal employees or support contractors may or may not enter Federal information.

#3. Publicly available services that provide commercially available information.”

“FedRAMP acts as a barrier to entry to firms offering their cloud services to the government.

FEDRAMP has created barriers for businesses offering cloud services to the government and have slowed agencies’ access to technology that increases their operational efficiency and reduces costs.

These issues have created artificial barriers to businesses offering their services to the federal government, thereby slowing agencies’ access to cloud services that increase their ability to serve the public while cutting costs.

The wide-ranging benefits of cloud computing make it clear that it is in the interest of the government to remove any unnecessary barriers to its adoption.”

This above quotes clearly support the issues associated with FEDRAMP(source: of above – https://itif.org/ )

Because Federal agencies require the ability to use more commercial SaaS products and services to meet their enterprise and public-facing needs, the FedRAMP program must continue to change and evolve. (Source: (Federal Secure Cloud Advisory Committee (FSCAC) Feedback to the GSA Administrator on the 2023 Draft Office of Management and Budget(OMB) Memo, “Modernizing the Federal Risk Authorization Management Program (FedRAMP)”)

#54BT’s Job Order Contracting and cost estimating systems using locally researched current and objective granular repair, renovation, maintenance, and new build cost and construction cost data are hosted in a FedRAMP certified data center and therefore inherit the controls from them.

There are few if any additional requirements that should be requested.

ALL Federal Departments and Agencies MUST update their SaaS use policies and change from needlessly requiring FEDRAMP approval. Not doing so, negatively impacts the efficiency of these organizations, in contradiction to FAR regulations and their fiduciary responsibility to taxpayers. Furthermore, exclusively requiring FEDRAMP certification for all SaaS applications favors large businesses, again, a violation of existing statutes.

#6It important that commercial SaaS providers, and the associated infrastructure used to deploy SaaS products, meet appropriated compliance requirements for specified levels of security as developed by NIST.

For example, Four BT LLC products are fully compliant in this regard.

Four BT, LLC (4BT) SaaS products are hosted on Microsoft AZURE and Amazon AWS.  Our products are hosted on Microsoft AZURE, and Amazon AWS in the United States, both hosting infrastructures are FEDRAMP compliant.

As a result of Microsoft AZURE hosting for example, and its FEDRAMP compliance, 4BT SaaS software inherits compliance. In addition, Four BT, LLC is company is DFARS, NIST 800-171 and CMMC Level 2 compliant and operates using the Microsoft GCC High. [Note: Microsoft 365 Government Community Cloud High is a cloud platform developed by Microsoft for cleared personnel and organizations that support the Department of Defense (DoD).]

 

REAL Barrier to Improved Facilities Lifecycle Management

The REAL Barrier to Improved Facilities Lifecycle Management

The REAL Barrier to Improved Facilities Lifecycle Management lies in the four cohorts of the status quo.

The four cohorts of the status quo

#1 The first group cares about the policy. They benefit from it. They’ve organized themselves around it. (It makes no sense to argue with the first group.)

#2 The second group cares about stability. They have limited bandwidth, and they’re not particularly interested in reconsidering everything, all the time.

#3 The third group doesn’t care that much.

#4 And the fourth group is harmed by the policy, either directly or indirectly.

Change happens slowly because the first three groups have power, inertia and communications on their side.

Change happens when the fourth group can create the conditions for the third group to care, and then these two groups move the urgency up the agenda.

Robust solutions have existed for decades to enable the consistent delivery of quality repair, renovation, maintenance, and new build solutions on time and on budget.

Relationships that lead to mutual benefit and can be easily formed by groups who traditionally operate as competitors fighting head-to- head in the construction industry. This traditional fragmentation is a major obstacle to industry development.

The pervasive ‘status quo’ noted above is enabled by the lack of capable, accountable real property owner leadership and is the primary barrier to productivity improvement.

Via 4bt.us

FM 2023

and Renovation Outcomes, Improving Facilities Project Outcomes

Improving Facilities Project Outcomes

Improving Facilities Project Outcomes, whether,  repair, renovation, maintenance, or new build, isn’t difficult.

It does, however, require relationships that lead to long-term mutual benefit are formed by internal and external teams who might otherwise be competitors fighting head-to- head, the later causing the traditional fragmentation and major obstacles to efficient project delivery.

Focus upon PEOPLE, PROCESS, INFORMATION, and TECHNOLOGY, and in that order, is the starting point.

A failure in the management process is the cause of most cost overruns, time delays, poor quality, or poor levels of satisfaction. The process of project participant education and selection, both internal and external is the first mandatory step towards measurably improving outcomes.

Managing risk involves the creation of internal and external teams and robust processes.

Developing and adherence to a relationship-based context is a primary step. This involves initial and ongoing training of all participants and stakeholders relative to;
1. attitudes and behaviors,
2. roles, roles, responsibilities, deliverables,
3. detailed scope of work development, inclusive of objective, line items construction tasks and associated local market labor, material, and equipment costs,
4. leveraging the experience of those doing the work initial project definition and problem solving,
5. benefit of long-term focus upon mutually beneficial outcomes.

 

Developing cross-team relationships (procurement, design-builders, facilities management….), both internal and external to the organization is the only proven pathway towards improving facilities project outcomes.

 

 

via Four BT, LLC (4BT) www.4bt.us

 

Construction Cost Factors

Construction Cost Factors – What you should know

While construction cost factors are used for estimating project costs, there are several challenges and potential problems associated with their use. Here are some common issues:

  1. Regional Variations: Construction cost factors rely on regional averages. Local variations in labor costs, material prices, equipment availability, and regulatory requirements can greatly affect the estimate. If your project is in an area with significantly different market conditions, estimates may be poor.
  2. Project Size and Scale: Cost factors may not scale linearly with the size or scale of a project. Large or complex projects may have different economies of scale, and cost factors may not accurately reflect these variations.
  3. Limited Detail: Cost factors are often broad and generalized, providing average values for various  construction aspects or categories. This lack of detail can be a limitation for most projects that generally require a more detailed breakdown of costs.
  4. Inflation and Economic Changes: Economic factors, such as inflation rates, can impact construction costs over time. Cost factors may not account for these changes, leading to significant discrepancies between estimated and actual costs.
  5. Technology and Innovation: Advancements in construction technology and methodologies may not be reflected in traditional cost factors. Innovative approaches or new materials might not be accurately represented, leading to potential underestimation or overestimation of costs.
  6. Lack of Project-Specific Information: Cost factors are based on average conditions, and they may not take into account the specific conditions of a project site. Site-specific challenges, such as environmental conditions or logistical constraints, may not be adequately considered.
  7. Over-Reliance on Averages: Averaging costs across various projects do not capture outliers.  Relying solely on averages without considering the range of potential costs can lead to significant errors.

To mitigate these issues, it’s advisable limit the use of construction cost factors and rely upon detailed local data, expert judgment, and a thorough understanding of specific project requirements.

Learn more about locally reserached construction cost data…

RSMeans versus locally researched cost data

ChatGPT Answers – RSMeans versus locally researched cost data

The preference for locally researched construction cost data over RSMeans national average cost data depends on the specific context and project requirements. Both options have their advantages and limitations.

Advantages of Locally Researched Construction Cost Data:

  1. Accuracy for Specific Region: Locally researched data is likely to be more accurate for a specific region or locality, as it takes into account the unique factors that influence construction costs in that area. This can include local labor rates, material prices, and regulatory requirements.
  2. Customization for Project Characteristics: Local data allows for a more precise estimation of costs based on the unique characteristics of a project, such as site conditions, climate, and availability of resources.
  3. Up-to-Date Information: Local data may be more current and reflective of the latest market conditions, as it can be updated more frequently than national averages.
  4. Understanding Local Market Dynamics: Local researchers may have a better understanding of the dynamics of the local construction market, enabling them to provide more insightful and relevant cost data.

Advantages of RSMeans National Average Cost Data:

  1. Broad Applicability: RSMeans national average cost data provides a broad overview that can be useful for preliminary cost estimates or projects that do not require a high level of detail. It can be a convenient starting point for cost planning.
  2. Consistency Across Projects: RSMeans data provides a standardized approach, allowing for consistency across different projects and locations. This can be beneficial for organizations working on projects in various regions.
  3. Historical Data Trends: RSMeans data may include historical trends and benchmarks, providing a long-term perspective on cost changes over time.
  4. Accessible and Widely Recognized: RSMeans is a well-known and widely used cost data source, making it easily accessible for many professionals in the construction industry.

In conclusion, the choice between locally researched construction cost data and RSMeans national average cost data depends on the project’s specific requirements, the level of detail needed, and the desired accuracy for the particular region. A combination of both approaches, using local data for detailed estimates and RSMeans for broad benchmarks, may also be a viable strategy in certain situations.

Learn more about objective, locally researched construction cost data.

 

2024 Job Order Contracting 

2024 Job Order Contracting

2024 Job Order Contracting

Job Order Contracting  (JOC) can be extremely efficient and provide full cost visibility for reducing deferred maintenance, renovations,  repairs, and even new construction.   That said, most JOC Programs are not designed, implemented, and managed properly.

Job Order Contracting was created several decades ago as a means to help get projects started quickly.  It was simply a way to speed procurement.   Since that time JOC has evolved into an integrated project delivery (IPD) method that not only accelerates procurement, but also shorten project delivery times and reduces costs up to 30%-40%.

 

Core Requirement for 2024 Job Order Contracting

  1. Current, objective, and granular locally researched construction cost data.
  2. Internal management of the JOC Program without excessive reliance upon a “JOC Consultant”.
  3. Senior management leadership, commitment, and support.
  4. Collaborative focus upon long term mutually beneficial outcomes for all participants and stakeholders.
  5. Mandatory initial and ongoing training for all participants.
  6. Regular independent third-party audits.

 

Current, objective, and granular locally researched construction cost data –  All project/workover detailed scopes of work, and contractor proposals/estimates are created using individual detailed unit price construction task line items using local labor, material, and equipment costs.   The use of national average cost data, location factoring, area cost factors, etc. are not appropriate and have shown to introduced significant errors in cost estimating.

The cost visibility provided by a locally researched cost database provides unprecedented cost visibility and reduced the typical inefficiencies, complexities, and errors introduced by traditional  construction procurement and project delivery methods. Learn more.

Internal management of the JOC Program without excessive reliance upon a “JOC Consultant”–  As noted, when properly developed and managed, JOC is a form of integrated project delivery resulting in owners and construction services providers becoming long-term partners, resulting in higher quality and improved overall outcomes from cost and experience perspectives.   This is simply not possible if the real property owner is not directly involved in ALL ASPECTS of JOC Program development, management, and continuous improvement.   Excessive use of consultants in general has also been shown to introduce the potential for fraud and other forms of mismanagement.

Senior management leadership, commitment, and support – JOC Programs require change management as they involve developing a collaborative philosophy among all internal and external constituencies.  Successful implementation is not possible without real property owner leadership, capability, and commitment.  With the latter, JOC Programs simply become a means to speed procurement and do not solve the industry-wide problem of excessive financial and environmental waste impacting the construction and facilities management sectors.

Collaborative focus upon long term mutually beneficial outcomes for all participants and stakeholders – Simply put, JOC Programs are a win-win situation for all participants.  Projects are completed on-time and on-budgets in a quality manners and for a reasonable cost.

Mandatory initial and ongoing training for all participants –  As JOC significantly differs from traditional construction procurement and project delivery methodologies initial and ongoing training is needed.  Management and operating behaviors need to be changed and technical skills improved.  Information sharing is difficult for many organizations and individuals and involve establishing trust.  From a technical perspective, owners and service providers must be capable of line-item construction cost estimating.  Learn more.

Regular independent third-party audits –  As will any partnering process, and independent review of processes and procedures is a critical element to ensure best management practices are being maintained and areas of potential improvement are noted.  Learn more.

Job Order Contracting is a great construction method for public organizations to utilize to get construction projects done quickly, within budget, and efficiently with full cost visibility and transparency.

via Four BT, LLC –  Local market objective, verifiable, granular construction cost data and associated efficient construction project delivery tools and services.

 

2024 Commercial Construction Cost Trends

2024 Commercial Construction Cost Trends

2024 Commercial Construction Cost Trends continue downward.

Non-residential construction costs declined again for the third month in a row.  Although costs remain 1.6% higher than one year ago, the downward trend is expected to continue.

2024 commerical construction cost trends

 

via Four BT, LLC – Objective, local market granular cost data to enable cost visibility and cost managment  for repair, renovation, maintenance, and new construction.

Agile Facilities Management, deferred maintenance

Agile Facilities Management – Deferred Maintenance – Public Sector – Federal, State, County, Local

Agile facilities management is required in order to address  growing deferred maintenance across all public sectors.  The constant cry that more dollars would solve the major deferred maintenance issues facing all public sector department and agencies is false.

Agile Facilities Management

In reality the efficacy of spending precious dollars on facilities repair and maintenance is often overlooked, and the process of sustaining physical infrastructure has little true oversight.

 

Learning how to pivot to agile facilities deferred maintenance management can be a game changer.

Rampant economic and financial waste has been the facilities management status quo for decades.    This is especially true in the public government sector…. Federal, County, State, and Local.

Sustainable management of buildings and other forms of physical infrastructure is critical in today’s world of shrinking resources.

Strategic planning, leverage of existing robust lifecycle facilities management processes, and owner responsibility and stewardship of public trust are mandatory and should be enforceable legislative requirements.

 

Traditional facilities capital planning and management strategic planning is a static process where the results rapidly become irrelevant, ignored and outdated within a short time.

The  process also fails to engage all important constituencies thus is not effective at developing robust lifecycle asset management methods.

It’s time for a new approach: agile facilities planning.

Agile facilities planning is a collaborative, iterative process that helps a senior leadership, facilities management teams, building users as well as services providers including builders, designers, and operators, align on priorities, develop accountability and then have a framework to make good decisions while making consistent progress.

The agile strategic planning process focuses on the most important things and organization must do to achieve results required for all physical infrastructure.

A robust programmatic approach, reliant upon systems-thinking can therefore be applied to all projects and workorders whether they are repair, renovation, maintenance, or new builds.

For leadership,  agile facilities management requires change management, supported by following core components and actions.

  1. Proper legislated mandates requiring robust physical asset management processes and accountability
  2. Enabled cost visibility and cost management including the requirement to use granular local market costs to validate contractor repair, renovation, new builds and all forms of maintenance
  3. Removal of “politics” and improper use of and/or reliance upon technology (For example:  Using CMMS without objective cost data for financial visibility, reliance upon BIM as a asset lifecycle total cost of asset management system,  requirement to use a government developed/sponsor technology for condition assessment/sustainment.)  and requiring ALL government agents to pass accounting audits (Note: The DoD has not passed a financial audit for decades.)

The excuse needing more money for deferred maintenance is just that, an excuse.  Wasteful spending and poor capital planning and management is the root cause.  More money will not solve the fundamental problems generated by poor leadership.

 

Unfortunately there will be no significant improvement is sustainability and waste reduction until owner leadership, commitment, and accountability are mandated.

 

Leadership and agile facilities management inspires people to focus upon creative problem resolution and continuous improvement.

A focus upon PEOPLE is paramount.  People  need to have a clear understanding of the priorities.  They need to be provided the ability to quickly evaluate situations, problems, and/or opportunities and determine what is worthwhile of their time and aligned with where the organization is headed.   This is needed not only on strategic level, but on a day to day level.

The mindset of internal and external teams must be continuously focused on the purpose of producing meaningful initiatives and productive outcomes in concert with organizational needs.

 

Benefits of agile strategic facilities planning

  • Optimization of workload distribution across the organization and with external partners (service/product providers)
  • Integration of all activities and projects, large and small toward achievement of major priority initiatives
  • Supports a pattern of continuity and a culture of accountability
  • Builds a foundation of communication
  • Contributes to a better understanding of the mission, vision and long-term success of the organization
  • Enables better decision-making

Senior and facilities management leadership and supporting external services providers must be prepared to collaborate and adapt to situational circumstances in order to optimize resources.   Implementation of an agile facilities management framework  leads to measurable, clear results amid the inevitability of changing circumstances.

Organizations that adopt strategic facilities management will be best equipped to thrive in the future.   Participants and stakeholders benefit from a strategy that recognizes the need for nimble, flexible, fact-based decision-making.

 

Non Residential / Commerical Construction Stats 2023

Non Residential / Commercial Construction Stats 2023

Non Residential / Commerical Construction Stats 2023

 

Via 4bt.us –  Objective, verifiable, local market construction cost data and integrated project delivery solutions.

 

Job Order Contracting Quick Facts

Job Order Contracting Quick Facts

Access hundreds of  Job Order Contracting Quick Facts to see how your organization can…

 

  • Improve contractor availability and relationships
  • Improve cost visibility and cost management
  • Achieve faster delivery times
  • Ensure a higher level of service and support from senior professionals

Attain all the above with the lowest JOC Program administration fee that doesn’t require a percentage of your construction volume!

 

Job Order Contracting Quick Facts

 

Access Job Order Contracting Quick Facts,  or reach out to learn more.

 

Critical Component of Integrated Project Delivery

Integrated Project Delivery Critical Component

An Integrated Project Delivery critical component is objective, verifiable, granular local market cost data as part of a detailed scope of work (SOW), fully communicated with and agreed to by all participants and stakeholders.

While IPD has been marketed as an improvement to traditional construction delivery methods (Sutter Health, etc.) and clearly demonstrated obvious benefit, the process has not been maximized.   IPD has not fully considered the need for…

#1 Objective, verifiable, current local market granular construction task data, inclusived of current labor, material, equipment and productivity components.  (IPD project outcomes have typically been compared using benchmarks against similar projects.   This does not provide a verfiable methodology for determining an objective project completion costs considering all relevant construction tasks, methods, material, etc.

#2 Integration of internal and external Planning, Procurement, and Project Delivery Teams.  (A systems-thinking based framework, applied to the integration of disparate teams and goals would enable greater focus upon mutually beneficial outcomes.)

#3 Application of a IPD framework for ALL construction, repair, renovation, maintnenance projects.  (A standardized framework for IPD can be applied to any size project, and not relegated exclusively to large new builds.)   The application of collaborative early and ongoing information sharing need within a common date environment via establish methods and workflows is fundamentally the same regardless of project size.

 

FM 2023

construction cost estimating facts

Area Cost Factors

STOP using ACFs – The inherent flaws of Area Cost Factors

STOP using ACFs – The inherent flaws of Area Cost Factors

There are multiple false assumptions associated with Military Construction Budgeting and Area Cost Factors. As a result, more than 40 years after the introduction of area cost factors (ACFs), the Department of Defense (and the Federal Government in general) is no closer to its goals of having construction cost estimates match actual construction costs, or properly adjusting for regional (location based) and/or time-based cost variances.

Area Cost Factors

Definition of Area Factor – A multiplicative value used to reflect relative geographical cost differentials. They are used in the development of military construction program projects and/or alternative basing studies.

The use of area cost factors (ACFs) for capital planning and budgeting repair, renovation (sustainment) and new construction factors remains a flawed approach. It’s been over 40 years since ACFs and the computerized use of ACFs have been introduced, and the initial concept and their use remains a significant barrier to construction and sustainment cost visibility and transparency.

ACFs are not a defensible method for adjusting for location-based and time-based variances in construction costs.

There is overwhelming statistical significance and audit reporting that the cost estimates used to for physical infrastructure decision-making are highly and systematically misleading. The result is continuous cost escalation of billions of dollars.

ACFs, and other forms of location factors, cost indices have been evaluated by several independent groups and through actual practices and proven not to be capable of providing a workable budget and/or reasonable estimate for future construction projects.

The use of Regional and Local area cost factors (ACFs) use a single factor to adjust ­all costs in an estimate which discounts the different impacts that local and regional markets have on labor, material, and equipment, as well as productivity. The errors in estimation caused by randomized use of adjustment factors result in a corresponding cumulative impact on the overall error of estimates.

Area Cost Factor assumptions erroneously posit that productivity is constant for all locations. In fact, many data publishers make the disclaimer that “productivity is not considered” in their location factors.

Area cost factors are simply incapable of accurately representing local market factors and costs.  Variances in labor, material, equipment, productivity, and means and methods cannot be accounted for by simply using a cost factor Indeed, “broad cost factors for categories including facility type, and location are only accurate within -25+% to +40%” at best and 2x-3x at worst.

The net effect of using ACFs is lack of confidence among both the user base, and those responsible for obtaining and approving sustainment and new construction funding. Significant government overpayments on both large capital projects and the numerous on-going repair, renovation, and maintenance projects continues unabated.

Military leadership would be far better served to use objective, verifiable, and current locally researched construction cost data for all of its planning, procurement, and project delivery activities.

Furthermore, adoption of best value LEAN construction planning, procurement, and project delivery would not only provide higher cost visibility and transparency, but also assure the consistent delivery of quality of sustainment and new construction projects on-time and on-budget.

To date, military leadership must be graded poorly relative to its requirement to analyze, review and maintain all types of physical infrastructure cost estimates and associated planning, procurement, and project delivery.

DOD and congressional decision-makers simply do not have reliable estimates to inform their decisions regarding appropriations and the oversight of projects.

 

Learn more…

 

 

References

1981, NBSIR 81-2250 Estimating Area Cost Factors for Military Construction Projects: A Computerized Approach

1985, Cost overruns in public projects.

1990, Military Planning and Design Funding Requirements, Report AROIRI

2016, Investigation in Construction Cost Estimation Using Monte Carlo Simulation AFIT Scholar J.D Bucholtz

2016, Indefinite Delivery/Indefinite Quantity project selection framework using stochastic techniques

2018, Correlation between cost growth and procurement methods on USACE construction projects

2018, Action Needed to Increase the Reliability of Construction Cost Estimates, Defense Infrastructure, GAO-18-101

Why LEAN Construction Matters

Beware of Using Assemblies for Job Order Contracting

Some suppliers of Job Order Contracting software and cost data use “Assemblies” within what is supposed to be a unit price book (UPB).

A fundamental element is Job Order Contracting (JOC) is line item estimating which involves breaking down the cost of  construction into discrete, granular tasks, each item representing a specific material, labor, and equipment components.  An example of a line item would be “0611162814000100 Framing- Walls- Studs- 8 ft High Wall- 2 in X 4 in”  This is in contrast to estimating based on assemblies, where pre-established sets of materials and labor units are used for common tasks, for example a “Structural or nonstructural interior partition wall Studs- 8 ft High Wall- 2 in X 4 in”  .  The latter includes studs, wiring, wallboard, etc.

Here are some key points to consider when using line item estimating for job order contracting:

  1. Detailed Breakdown: Line item estimating requires a detailed breakdown of all the elements involved in a project. Each aspect, such as materials, labor, equipment, and overhead, should be itemized separately.
  2. Unit Costs: Assign a unit cost to each line item. This could be the cost per unit of measurement (e.g., cost per square foot, linear foot, or unit) for materials, labor hours, or other resources.
  3. Accurate Quantities: Ensure that the quantities associated with each line item are accurate. This requires a thorough understanding of the project scope and specifications.
  4. Adjustments for Site Conditions: Consider any site-specific conditions that may affect costs and make appropriate adjustments. Factors such as site access, soil conditions, and local regulations can impact the cost of construction activities.
  5. Labor Rates: Include current, local market labor rates for different types of work involved in the project. These rates may vary depending on the skill level and type of labor required.
  6. Material Costs: Specify the cost of  materials for each line item based on current pricing for the local market.
  7. Overhead and Profit: Factor in overhead costs and profit margins using the establish/accepted coefficient. These are essential for covering indirect costs associated with the project and ensuring a reasonable profit for the contractor.
  8. Documentation: Clearly document each line item, including descriptions, quantities, unit costs, and any assumptions or considerations that went into the estimation using detailed notes.
  9. Regular Updates: Regularly update the line item estimates contained within the unit price book/constructon task catalong.  Market conditions can fluctuate frequently.  (Note: 4BT recommend quarterly updating.)

Line item estimating provides a detailed and transparent breakdown of costs, making it easier to track expenses and communicate with stakeholders.  It is a fundamental element and requirement for Job Order Contracting. It allows for a more granular understanding of the project costs compared to estimating based on assemblies.

 

construction cost estimating

 

 

Four BT, LLC – Efficient, integrated construction planning, procurement, and project delivery solutions.

 

Sustainable Public Sector Facilities Management

Sustainable Public Sector Facilities Management

Sustainable public sector facilities management is long overdue.

 

Rampant economic and environmental waste remains the norm regarding lifecycle management of public sector physical infrastructure.  The pervasive lack of integration of Planning, Procurement, and Project Delivery teams with robust, standardized processes continues to prevent public sector facilites portfolio owners from efficient execution of repair, renovation, maintenance, or new build projects required to both support their organizational mission and meet and do so meeting the fiduciary responsibility to the public at large.

 

Solutions to this major issue are readily available, however, will require significant change from the ‘status quo’ and the associated adoption of ”systems thinking”.   Neither appear likely to occur without some form of government mandate and significant improvement in formal and professional education with respect to lifecycle physical asset total cost of ownership management.

What is “systems thinking”?  It’s simply a to look at an activity/process as a grouping/interaction,  and investigate factors and interactions that could contribute associated outcomes.   A holistic view of facilities repair, renovation, maintenance, and new construction therefore involve consideration all factors and interactions impact the outcomes in terms of cost, quality, time, sustainability, community, and overall satisfaction of all participants and stakeholders.

 

Why systems thinking?

Historically, most people have viewed the AECOO sector (architecture, engineering, construction, owners, operator/operations) as highly complex and involving relatively uncontrollable disparate domains of knowledge and disjointed, unshared objectives and goals.

The reality is that, relative to other industries and activities, construction and FM are not complex.   Furthermore, it is relatively straightforward to enable formerly disparate entities to collaborate to consistently. achieve mutually beneficial outcomes.  All the methods, processes, tools, and technologies are readily available to support efficient, sustainable lifecycle management of the built environment.

“All” that is required, is …

• Compentent owner leadership, commitment, and accountablity.

• The application and continuous improvement of systems thinking based frameworks/process.

• A common, shared technical and cost data environment.

• Adoption of systems thinking and a fundamental change from current planning, procurement, and project delivery practices.

FM 2023

Learn more… or add to the discussion…

Sustainable Facilities Management
Sustainable Facilities Management
FM 2023

FM 2024 and Beyond!

FM 2024 and Beyond

FM 2024 and Beyond

1) Owner Leadership, Commitment, & Accountability

2) Integrated Planning, Procurement, and Project Teams, Processes, and Workflows

3) Standards and Guidance – Shared Objective, Granular, Local Market Construction Task & Cost Data, Expanded Masterformat, Expanded UNIFORMAT

4) Frameworks and Contracts Focused Upon Mutually Beneficial Outcomes for ALL Participants and Stakeholders

5) Manditory Initial and ONGOING Education and Training

6) Quantitative Performance Metrics and Continuous Improvement

 

Learn more @ 4bt.us, Inculsive, Open, Reliable, Veriable, Practice-oriented Tools for efficient repair, renovation, maintenance, and new construction activities.

 

FM 2024 and Beyond

FM 2024 and Beyond

socially adept FACILITIES MANAGEMENT

Skilled, flexible, responsive and socially adept FACILITIES MANAGEMENT

Skilled, flexible, responsive and socially adept FACILITIES MANAGEMENT is a learned adaptive skill.

It is CRITICAL that FM professionals and real property owners display leadership, commitment, and accountability with respect to sustainable lifecycle management of the built environment.

 

All the tools, processes, and support services are readily available.

socially adept FACILITIES MANAGEMENT

socially adept FACILITIES MANAGEMENT

socially adept FACILITIES MANAGEMENT

Creating Credible Construction Estimates

12 Step Program for Creating Credible Construction Estimates

The below 12 Step Program for Creating a Credible Construction Estimate is a valuable tool for any real propery owner or services provider.

#1 Define estimate’s purpose

■ Who will use the estimate and how.

■ Required level of detail, and overall scope.

#2 Develop estimating plan

■ Responsible individuals for estimating approach, estimate development (IGE), reviews, and scheduling as well as final scope of work development and approval

#3 Define program characteristics

■ Data and technology requirements (tools, manpower, training, support, data maintenance, deployment)

#4 Determine estimating structure

■ Define/select a work breakdown structure (WBS) and or a common data architecture (i.e. expanded CSI MasterFormat, expanded UNIFORMAT)

■ Identify potential validation methods/techniques, including a cost estimating checklist

#5  Identify assumptions

■ Clearly define what the estimate includes and excludes

■ Identify global and program-specific assumptions, such as the estimate’s base year, including time-phasing and life cycle

■ Identify program schedule information by phase and program acquisition strategy

■ Identify any schedule or budget constraints, inflation assumptions, and travel costs

■ Specify equipment the government is to furnish as well as the use of existing facilities or new modification or development

■ Identify prime contractor and major subcontractors

■ Determine technology refresh cycles, technology assumptions, and new technology to be developed

■ Describe effects of new ways of doing business

Creating Credible Construction Estimates

#6 Obtain data

■ Create a cost data collection and maintenance plan with emphasis on collecting current and relevant technical, programmatic, cost, and risk data

■ Investigate possible data sources and ensure local market, current, and granular costs are used.

■ Collect data and normalize them for cost accounting, inflation, learning, and quantity adjustments

■ Do not exclusively use historical data and economic factoring

■ Do not use ‘national average cost data’ and location factoring

■ Analyze the data for cost drivers, trends, and outliers and compare results against rules of thumb and standard factors derived from historical data

■ Interview data sources and document all pertinent information, including an assessment of data reliability and accuracy

■ Maintain and Store data for future estimates

#7 When appropriate compare vendor estimate to an independent owner generated cost estimate

■ Develop the cost model, estimating each WBS element, using the best methodology from the data collected,a and including all estimating assumptions

■ Express costs in constant year dollars

■ Time-phase the results by spreading costs in the years they are expected to occur, based on the program schedule

■ Sum the WBS elements to develop the overall point estimate

■ Validate the estimate by looking for errors like double counting and omitted costs

■ Compare estimate against the independent cost estimate and examine where and why there are differences;

■ Perform cross-checks on cost drivers to see if results are similar

■ Update estimate as more data become available or as changes occur and compare results against previous estimates

#8 Conduct sensitivity analysis

■ Test the sensitivity of cost elements to changes in estimating input values and key assumptions

■ Identify effects on the overall estimate of changing the program schedule or quantities;

■ Determine which assumptions are key cost drivers and which cost elements are affected most by changes

#9 Conduct risk and uncertainty analysis

■ Determine and discuss with technical experts the level of cost, schedule, and technical risk associated with each WBS element

■ Analyze each risk for its severity and probability

■ Develop minimum, most likely, and maximum ranges for each risk element

■ Determine type of risk distributions and reason for their use

■ Ensure that risks are correlated

■ Do not rely upon statistical analysis methods (e.g., Monte Carlo simulation) to develop a confidence interval around the point estimate.

■ Do not rely upon historical data

■ Identify the confidence level of the estimate

■ Identify the amount of contingency funding

■ Recommend that the project or program office develop a risk management plan to track and mitigate risks

#10 Document the estimate

Credible Construction Estimates

■ Document all steps used to develop the estimate so that a cost analyst unfamiliar with the program can recreate it quickly and produce the same result;

■ Document the purpose of the estimate, the team that prepared it, and who approved the estimate and on what date

■ Describe the program, its schedule, and the technical baseline used to create the estimate

■ Present the program’s time-phased life-cycle cost

■ Discuss all ground rules and assumptions

■ Include auditable and traceable data sources for each cost element and document for all data sources how the data were normalized

■ Describe in detail the estimating methodology and rationale used to derive each WBS element’s cost (prefer more detail over less)]

■ Describe the results of the risk, uncertainty, and sensitivity analyses and whether any contingency funds were identified ]

■ Document how the estimate compares to the funding profile

■ Track how this estimate compares to any previous estimates and actual costs

#11 Present estimate to management for approval

■ Develop a briefing that presents the documented life-cycle cost estimate

■ Include an explanation of the technical and programmatic baseline and any uncertainties

■ Compare the estimate to an independent cost estimate (IGE) and explain any differences

■ Compare the estimate (life-cycle cost estimate (LCCE)) or independent cost estimate to the budget with enough detail to easily defend it by showing how it is accurate, complete, and high in quality

■ Make the content clear and complete so that those who are unfamiliar with it can easily comprehend the competence that underlies the estimate results

■ Act on and document feedback from leadership

■ Request acceptance of the estimate

#12 Update the estimate to reflect actual costs and changes

■ Update the estimate to reflect changes in technical or program assumptions or keep it current as the program passes through new phases or milestones

■ Report progress on meeting cost and schedule estimates

■ Perform a post mortem and document lessons learned for elements whose actual costs or schedules differ from the estimate

■ Document all changes to the program and how they affect the cost estimate

(Adapted from Sources: GAO, DHS, DOD, DOE, NASA, SCEA, and industry)

 

 

Effective Public Sector Construction Project Management

Effective Public Sector Construction Project Management

Effective public sector construction project management requires an understanding of the requisite role of owners as stakeholders.

For decades attention has failed to focus on the need for continuous, competent, and accountable leadership and the effects upon finances, reputations, relationships, communities, and overall organizational missions.

Improvement in risk avoidance and fostering owner and team stakeholder satisfaction, trust, and mutual long-term benefit for all parties are prerequisites for sustainable lifecycle management of the built environment.

Proactive lifecycle management of planning, procurement, and project delivery internal and external teams, process, information, and enabling technologies would significantly reduce the level of traditional financial losses and legal conflicts and improve overall community and environmental impacts.

 

Effective Public Sector Construction Project Management
Steps Towards Effective Public Sector Construction Project Management

 

Strong and accountable real property owners governance in the only proven pathway towards  social and environmental responsibility and measurable reduction of traditionally negative effects and achievement of sustainable project outcomes.   Policymakers, practitioners, professional associations and academia should focus up factors that are associated with the project failure, especially awareness and education among stakeholders of proven integrated, collaborative, and transparent planning, procurement, and project delivery frameworks.

 

Sustainable Effective Public Sector Construction Project Management
Sustainable Facilities Management

construction cost estimating facts

 

 

“A project is a temporary endeavor undertaken to create a unique product or service.   Physical Infrastructure Project Management impacts environmental,  financial,  organizational, and community sustainability.  Continuing value deterioration is unsustainable”

 

 

  • Proactive, robust, and integrated construction planning, procurement, and project delivery
  • Mandatory and ongoing training, monitoring, and continuous improvement – Established risk management procedures, quantitative KPIs.
  • Effective Project Governance from owners -To guarantee that projects are closely watched and managed, consistent implementation of robut efficient project governance frameworks and processes is essential.
  • Transparent Communication: Throughout the project lifecycle, organizations must promote a culture of open and transparent communication with stakeholders, inclused of a shared, objective, and current database of granular construction tasks and costs.
  • Stakeholder Engagement –  Reslience against project failures requires a framework and environment that supports mutually beneficial outcomes for all project participants and stakeholders.
  • Resource Allocation –  A shared, common understanding of labor, material, equipment, time, productivity, and cost requirement is necessary to achieve a fair balance between initiatives  risk
    management.
  • Community and Environment Responsibility: Organizations must demonstrate an uncompromising dedication to environmental sustainability and safety, and limiting the negative
    effects on communities and ecosystems as a result.

 

 

Construction Project Failures

Root Cause of Construction Project Failures

Recognition of the root cause of construction project failures is the first step towards improvement.

Basically, a lack of  understanding of  work scope and the associated detailed work activities, processes, and resources are required as well as  how these activities impact participants and stakeholders cause repair, renovation, maintenance, or new build projects to be late, over budget, or otherwise completed poorly.

How can things go as planned if there is no plan?

Creating a detailed scoped of work (SOW) and properly communicating is to all involves parties  is critical to achieving consistent best value outcomes, and is generally a failure point for the majorit of projects.

The owner project manager is responsible for the creation of a detailed SOW.    The owner works with internal and external teams to create and validate the SOW.  The SOW drives project time, cost, quality and associated project objectives, goals, and final results.   The SOW, in concert with the owner PM’s ability to lead diverse teams from concept through completion, ultimately determines overall project “success”.

An unclear scope directly leads to confusion among project participants, scope creep, and change orders.  Associated robust processes are needed for scope creation and overall project planning, procurement, and project delivery.    Without both a detailed SOW and a robust process,  efficient project management is impossible.

Construction Project Failures

 

Construction Project Failures

 

Why LEAN Construction Matters

AECOO Engagement, Alignment, and Sharing of Objective, Current, Veriable Information = Efficient Construction Delivery Strategy

AECOO Engagement, Alignment, and Sharing of Objective, Current, Veriable Information are fundamental requirements for the consistent delivery of quality repair, renovation, maintenance, and new build projects.

 

AECOO Engagement, Alignment, and Sharing of Objective, Current, Veriable Information

AECOO Engagement, Alignment, and Sharing of Objective, Current, Veriable Information are fundamental to efficient project delivery.

 

AECOO Engagement, Alignment, and Sharing of Objective, Current, Veriable Information

masterformat

 

 

 

 

Why LEAN Construction Matters

Sustainability and Efficient Facilities Lifecycle Management

Sustainability and Efficient Facilities Lifecycle Management go hand in hand.

While most of us are aware of the rampant economic and environmental waste associated with the repair, renovation, maintenance, and new construction of buildings and other physical infrastructure, few understand that solutions are readily available or have the will and commitment to deploy them.

Public sector facilities management is particularly wasteful due to the pervasive lack of capable, committed, and accountable leadership.

Most public sector organizations lack a holistic view and/or understanding of integrated planning, procurement, and project delivery.   They simply do not appreciate the fundamental requirement to apply apply collaborative principles to construction processes and activities.

Until there is significant improvement in professional and formal education, the barriers to the successful implementation of efficient repair, renovation, maintenance, and new construction will not be overcome.

Best value repair, renovation, maintenance, and new construction frameworks are readily available and include the following elements.

#1 Real property owner leadership via direct involvement, capacity, commitment, and accountability.

Sustainability and Efficient Facilities Lifecycle Management
#2 Robust, integrated planning, procurement, and project delivery framework, processes, and workflows, with and associated multi-party contract and operations manual/execution guide.

Sustainable Facilities Management
Sustainable Facilities Management

#3 Common data environment inclusive of shared, local market, objective granular construction task data.

validate contractor quotes
#4 Mandatory initial and ongoing training for all participants.

#5 Quantitative metrics and regular third-party independent audits.

#6 Enabling collaborative tech that embeds robust process and workflows.

Despite massive investments in physical infrastructure,  it will be impossible meet decarbonisation
requirements or conserve vital natural resources.   The current average waste invovle in facilities management “construction” ranges between 40% and 60%.

There is no shortage of solutions available to drive significant improvement in managment of the built environment.  The challenge remains adoption and proliferation.

 

 

Why LEAN Construction Matters

Objective, reliable, and veriable Construction Cost Estimates

Objective, reliable, and veriable Construction Cost Estimates are critical to best value outcomes for all repair, renovation, maintenance, and new build activities.

The estimating process begins with a comprehensive understanding of your project’s scope of work.  A knowledgeable and well-trained estimating team is a key component along with a robust  processes, procedures, a objective and granular local market construction task data.

#1 Pre-Estimate Stage

Reviewing Requirements 

Owner creates and initial Scope of Work.

#2 Joint Job Site Visit:

Owners and design-builders should always conduct a joint visit to the site to review existing/verify conditions.

#3 Building a Detailed Estimate

The best approach to completing is to create a detailed line item estimate via a quantity take-off and associating granular labor, material, equipment, and productivigy data for each line.   This will provide you with a clear technical and cost view of the project.

#4 Uniform and Consistent Quantities and Costs

A quantity take-off is a continuous list of items and measurements and leverage appropriate technology to enable information sharing, updating, and resue.  Quantities must leverage consistent, industry standard units of measure.   Costs must be current, objective, and locally reserached.   Both quanitites and costs should be presented in terms of a granular construction task.  Each construction task should be unique and identifed by using a standard data architecture (i.e. expanded CSI Masterformat).

#5 Understand Your Products, Material, and Labor Costs/Pricing

Factors that impact local market costs:

  • Availability and demand for a product.
  • Availability and demand for labor
  • Availabiity and demand for equipment
  • Delivery factors  (location, security…)
  • Local market labor costs per trade (workers compensation, hourly rate, other “fringes”)

Reliable Construction Cost Estimates

#5 Productivity

Calculation of individual or crew times to complete a task in hours should be represented in terms of a standard eight (8) hour day, and represent average local productivity factors.  Normal hour work productivity and cost can vary from non-normal work hours.

#6  Subcontractor Quotes

It is best practice to also require subcontractors to provide detailed line-item quotes.  Lump sum quotes, even if provided by multiple constractors, should never be considers sufficient. It is important to provide the same level of percision and same evaluation steps used for owner and constractor estimating.

#7 Addtional Cost Considerations

Mobilization

  • Jobsite storage containers, required utilities, portable waste units
  • Safety costs
  • Dumpster
  • Clean-up
  • Other miscellaneous items, etc
  • Fees (permits/insurance)

via 4BT.US – Objective, local market granular construction task data and robust construction planning, procurement, and project delivery frameworks.

Why LEAN Construction Matters

OpenBUILD(TM) Integrated Project Construction Delivery Solution

The OpenBUILD(TM) Framework is a  standardized approach to construction data collection that collates data on all public sector projects across all locations in a common format.

Data is shared among both public and private sector audiences to leverage the latest methods and tools supporting optimal project planning, costing, procurement, delivery, and management. 

integrated Project Construction Delivery Solution

Learn more…. and request and informational session:

Why LEAN Construction Matters

DoD FAILS Financial AUDIT – AGAIN

For over 30 years, the Department of Defense (DOD) has spent billions of dollars each year to acquire and modernize financial management, logistics, and other business systems.

“DOD is the largest federal agency, and the only one that has never achieved a “clean” audit opinion—which is when financial statements are presented fairly and are consistent with accounting principles. The challenge that DOD faces in modernizing its business and financial IT systems is a big hurdle to making its financial statements auditable.”

DOD’s financial management and business systems modernization have been on our (GAO) High Risk List since 1995.

This is just another example of poor leadership and failure to implement robust processes.

 

 

The lack of effective planning and oversight of itsbusiness and financial management systems are
critical challenges…  (GAO-23-106817 2023)

View Report https://4bt.us/wp-content/uploads/2023/09/DOD-Financial-Management-Improving-Systems-Planning-gao-23-106817.pdf

 

DOD Financial Management:Improving Systems Planning and Oversight Could Improve Auditability

GAO-23-106817 Published: Sep 12, 2023. Publicly Released: Sep 12, 2023.
Why LEAN Construction Matters

Alliance Contracting Key Aspects

Below is a summary of Alliance Contracting Key Aspects

The fundamentals of alliance contracting are not new.   While alliance contracting is typically a term applied in the  Australia and the UK to a model applied to large complex projects, its core aspects have been in place for both Integrated Project Delivery (IPD) for major projects, and LEAN, Open Job Order Contracting for years, if not decades.

Alliance Contracting / Alliance Partnering in Construction, when properly designed, implemented, and managed, drives innovation, collaboration, and best value outcomes for all parties.

While most real property owners, designers, and builders, are aware of the issues associated with Traditional Planning, Engineering, Procurement and Construction strategies such as Design-Bid-Build, Design-Build, CM@R, etc. few have  operational and holistic knowledge of IPD, Open Job Order Contracting  frameworks that integrate internal and external  planning, procurement, and project delivery methods and teams.

The following are requisite components of a best value approach to all forms of Alliance Contracting.

  1. Owner leadership, commitment, capacity, and accountability
  2. Integration of planning, procurement, and project delivery teams
  3. Alignment of interests for all participants and stakeholders
  4. Granular construction task data that is current, locally researched, presented in a standard data architecture, and replete with labor, material, and equipment data and productivity information  (Note:  A major flaw and problem with traditional construction delivery methods is the lack of transparency and visibility by the owner into project cost, as planned, detailed contractor costs are not reported to the owner, and in many cases these costs are not fully auditable for comparison and cost management purposes.)
  5. Mandatory intitial and ongoing training for all
  6. Quantitative metrices
  7. Consistent programmatic process and workflow applied to all projects/workorders.
  8. Regular and independent third-party audits
Alliance Contracting
Alliance Contracting / Alliance Partnering in Construction

When properly designed, implemented, and managed, alliance contracting drives innovation and collaboration among all  on an early and ongoing basis.   The knowledge of those doing the work is appreciated and participants are enabled to make decisions that support common goals.    Fully transparent technical and cost information and targets ensures commercial alignment, while also mitigating contractual disputes, cost overages, time delays, and quality issues.

Focus is upon People, Process, Information, and enabling Technology.   The granular local market cost book and enabling technology provide all parties with real-time access to detailed project scope, schedule, status, and issues, providing a “single source of truth.”

Alliance partnering is perhaps a better term than “alliance contracting” as all aspects of repair, renovation, maintenance, or new construction lifecycles are considered, planning, procurement, and project delivery.  Owners and design/builders  develop, define, and deliver  projects jointly, applying both robust processes and innovation broadly to reduce project costs and improve performance.

Benefits of Alliance Partnering / Alliance Contracting

#1 90%+ of ALL projects (repair, renovation, maintenance, new builds) completed on time, on budget, and in a quality manner per the mutually agreed upon detailed Scope of Work (SOW).

#2 Full cost and technical visibility and transparency for all participants and stakeholders.

#3 Development of long term, mutually beneficial relationships.

#4 Full compliance with regulations/statues and a full audit trail.

#5 Significant reduction in environmental and financial waste.

#6 Continuous knowledge building and improvement for all participants.

Learn more about how Owners and Design/Builders can learn to engage in an open culture and behaviors that support the achievement of mutually beneficial outcomes.

Note:  Owners MUST be an active participant and be deeply involved in managing in projects.  The excessive reliance upon “consultants” will severely limit the knowledge and cost saving benefits provided by alliance partnering.    Owners must embed staff into the alliance team across all professional domains (construction, engineering, quality, safety, environment, commercial, and project services) and be involved in day-to- day decision-making, while also avoiding micro-management or excessive command and control.  It is equally important to enable independence and autonomy to drive efficient processes and decision making to deliver “best for project” outcomes.

Why LEAN Construction Matters

Defining a CREDIBLE Construction Cost Estimate

Defining a credible cost estimate is an important step towards improving construction outcomes.

The vast majority of “construction failures”, delays, cost overages, etc., are due to an inadequately defined Scope of Work and an associated lack cost visibility.

A credible cost estimate is one that has been derived using local market granular information.

 

CONSTRUCTION COST ESTIMATING via Unit costs / Bill of quantities 

A unit cost is assigned to each of the facility components or construction tasks as represented by the bill of quantities. The total cost is the summation of the products of the quantities multiplied by the corresponding unit costs. The unit cost method is straightforward and can be greatly aided by purchasing available a current locally researched granular construction cost database.  (Note: Individually developing and maintaining a local market line item cost database can be costly and time consuming for many owners and service providers.)

construction cost estimating
SAMPLE GRANULAR CONSTRUCTION TASK COST DATABASE

The initial step is to break down or disaggregate a project into a number of discreate tasks (demolition, repair, renovation, maintenance, new construction).

Collectively, these tasks represent all requirements listed in the project’s detailed Scope of Work (SOW) as mutually agree upon by the real property owner and the design-builder.

Once these tasks are defined and quantities representing these tasks are selected, a unit cost is assigned to each and then the total cost is determined by summing the costs incurred in each task.   Each unit cost task also must include individual labor, material, equipment, and crew/productivity data sets in order to ensure a high degree of confidence.

The level of detail in decomposing a “construction activity” into individual granular tasks and the validity of the core local market condition dataset jointly determine the level of credibility for the overall cost estimate total.

 

Learn more here…  

or ask a question.

JOC Program Productivity Improvement

JOC Program PRODUCTIVITY IMPROVEMENT – It’s all about empowerment and accountability

JOC Program productivity improvemen

JOC Program productivity improvement is supported by the following factors:

#1  Organizational development & leadership

#2  Common data environment (CDE)

#3  Monitoring and continuous improvement

#4 Compliance

#5  Enabling Technology

(more…)

CONSTRUCTION PROJECT FAILURE FACTORS

CONSTRUCTION PROJECT FAILURE FACTORS

Contruction failure factors are have been fully documented.  Recognizing these causal factors and implementing available solutions can substantially reduce the number of failed projects, and more efficiently achieve other project objectives.

The real area of befuddlement is why real property owners have not changed the decades old legacy of rampant economic and environmental waste plaguing the AECCO sector (AECOO – Architecture, Engineering, Construction, Owner, Operator).

Primary construction project failure factors:

#1 Lack of competent project leadership and associated project management and decision-making skills

#2 Poor project scope definition

#3 Failure to leverage robust and integrated frameworks that enable collaboration among planning, procurement, and project delivery teams and align members with the expectations of all stakeholders.

#4 Failure to leverage granular construction-based line of granular tasks and associated labor, material, equipment, and productivity information

 

Inconsistency in planning and scope management, poor communication, and failure to address stakeholder engagement can be rectified.   Competent and accountable real property leadership can commit to engaging in change management and leverage robust alliance/relationship-centric frameworks to ensure stakeholder requirements and expectations are met in the most efficient manner possible.

via 4BT.US

CONSTRUCTION PROJECT FAILURE FACTORS

References:

Atkinson, R. (1999). Project Management: Cost, Time, and Quality, Two Best Guesses and a
Phenomenon, Its Time to Accept Other Success Criteria. International Journal of Project
Management

Belout, A., & Gauvreau, C. (2004). Factors Influencing Project Success: The Impact of Human
Resource Management. International Journal of Project Management

Chitkara, K. K. (1998). Construction project management. Tata McGraw-Hill Education.

Cooke-Davies, T. (2002). The “Real” Success Factors on Projects. International Journal of
Project Management

Flyvbjerg, B., Holm, M. K. S., & Buhl, S. L. (2003). Underestimating Costs in Public Works
Projects: Error or Lie? Journal of the American Planning Association

Kerzner, H. (2017). Project management: a systems approach to planning, scheduling, and
controlling. John Wiley & Sons

Ling, F. Y. Y., & Bui, T. T. D. (2010). Factors affecting construction project outcomes: a case
study of Vietnam. Journal of Professional Issues in Engineering Education and
Practice

Mir, F. A., & Pinnington, A. H. (2014). Exploring the Value of Project Management: Linking
Project Management Performance and Project Success. International Journal of Project
Management

Project Management Institute (PMI). (2017). A Guide to the Project Management Body of
Knowledge (PMBOK® Guide) – Sixth Edition. PMI Publications

 

Why LEAN Construction Matters

Sustainability and Facilities Management in the Public Sector

Sustainability and Facilities Management in the Public Sector are critical issues from both environmental and economic perspectives.

Due to increasing concern about sustainability and productivity issues, there is a demand for public sector real property owners to significant boost productivity and overall stewardship of the built environment.

Sustainability and Facilities Management

 

Any significant improvement, however, will require LEADERSHIP, COMMITMENT, CAPACITY, and ACCOUNTABILITY.   More specifically, pervasive inefficient processes common the the Federal, State, County, and Governmenet sectors require fundamental change.   Unfortunately, market context can reduce interest in innovative, yet proven solutions.

The integration and collaboration between all internal (0wner) and external (service provider) project parties, starting from the early phases of the building process is lacking and a fundametnal requirement for improving the ‘status quo’.    Traditional planning, procurement, and project delivery methods and associate legal frameworks are not conducive to improving productivity and support fragmented, wasteful activities.

The current environment of autonomous units focusing on their own interests and incentives simply generates  conflict and disputes and 80%+ of all projects being late, overbudget, or poorly completed, rather than collaboration and coordination which has proven to consistently deliver positive outcomes for all project participants.

 

Integrated planning, procurement, and project delivery models include but are not limited to Integrated Project Delivery (IPD),  Project Alliancing (PA), and LEAN Job Order Contracting, all of which  enable collaborative partnerships and work mechanisms based on trust, robust processes, and a common, shared data environment.

These methods support project stakeholders in working according to a risk-and-reward sharing principle and boost performance-based process management.   All project resource requirements, labor, material, equipment granular costs, productivity, and scheudle are available to all signatory parties.

 

  • Alliance/Relationship based Construction Planning, Procurement, and Project Delivery
  • Multi-party arrangement
  • Integration operational goals of project participants/stakeholders
  • Shared responsibility for planning, procurement, and project delivery
  • Joint organization and management structure comprised of personnel from the services partner organization(s) and the owner.
  • Joint decision-making and resource management
  • Rewards are based on the overall project implementation and not on individual performance

 

IPD is ” project delivery approach that integrates people, systems, business structures and practices into a process that collaboratively harnesses the talents and insights of all participants to optimize project results, increase value to the owner, reduce waste and maximize efficiency through all phases of design, fabrication and construction. (AIA, 2007)

Mandatory Requirements

#1 Owner leadership, capacity, commitment, and accountabilty to collaborative methodology

#2 Congruence with local conditions (current local market granular construction task and cost data)

#3 Collaborative decision-making

#4 Continous, transparent monitoring with respect to accountability, performance, and reliability

#5 Mutually beneficial outcome targets and performace-based and shared risk/reward

#6 Experienced Local Partners

#7 Integrated Design

#8 Early Partner Invovlement

#9 Mandatory Initial and Ongoing Training

#10 Use of robust framework for ALL Projects

 

Organizational Key Components1. Strategy, which determines the direction of the organization;
2. Structure, which determines the location of decision-making power;
3. Processes, which establish the flow of information and information
technologies;
4. Rewards, which influence the motivation of people to perform and address
organizational goals;
5. People, which influence and define employees’ mindsets and skills.”   (2016, Galbraith)

References:

American Institute of Architecture, (2007). Integrated Project Delivery: A Guide, AIA National and AIA California Council, Sacramento, CA.

American Institute of Architecture and Associated General Contractors of America, California, (2010). Integrated Project Delivery: Case Studies, AIA National and AIA California Council, Sacramento, CA.

Cheng, R., Allison, M., Sturts-Dossick, C., Monson, C., Staub-French, S., and Poirier, E., (2016). “Motivation and Means: How and Why IPD and Lean Lead to Success.” Lean Construction Institute

Galbraith, J. R., (2016). The Star Model™.

Arditi, D., Nayak, S., and Damci A., (2017). “Effect of organizational culture on delay in construction,” International Journal of Project Management

Ballard G., Dilsworth B., Do D., Low W., Mobley J., Phillips P., Reed D., Sargent Z., Tillmann P., and Wood N., (2015). “How to Make Shared Risk & Reward Sustainable, ” Proc. 23rd Ann. Conf. of the Int’l. Group for Lean Construction, Perth, Australia

Miller, J., Garvin, M., Ibbs, C., and Mahoney, S., (2000). “Toward a New Paradigm: Simultaneous Use of Multiple Project Delivery Methods,” Journal of Management in Engineering

Zaghloul, R., and Hartman, F., (2003). “Construction contracts: the cost of mistrust,” International Journal of Project Management

Why LEAN Construction Matters

Facilities Management and Entropy

Facilities Management and Entropy –  Left unchecked disorder increases over time.  Energy disperses, and systems dissolve into chaos.

 

Entropy, Facilities Mangement, and the AECOO sector have more in common than they should.  

 

It’s well beyond time to stop running with the pack.  Where has that gotten us?

construction cost management

 

Certifications, traditional formal education, and professional training related to facilities life-cycle management and AECOO practices and practices have done little to address “Understanding and dealing with the concept of value.”

Virtually every other industrial sector has a grasp of the concept of value. Companies compete on a daily basis on offering varying value propositions.

 

The lack of a consistent understanding of value creates fundamentals barriers to effective communication and teamwork resulting in high levels of financial and environmental waste.

#1 Value-centric outcomes must be established and understood at a granular level by ALL participants and stakeholders early on and throughout the “construction life-cycle”.

 Value = ‘the most cost-effective way to reliably accomplish a function that will meet the user’s needs, desires, and expectation’. (Dell’Isola, 1997)

#2 Real propert owners must provide leadership, commitment, and a accountability for value definition and the overall planning, procurement, and project delivery process, with the support and collaboration of associated services providers.

#3 Deliverables must be defined at a granular “construction task level” using current, objective, and verifable information. Cost and techincal aspects must be fully transparent to all participants and stakeholders.

The lack of understanding of value in construction has resulted in the pervasive misperception of project Scope of Work  and indistinct roles, responsibilities, and required outpcomes acros disparate value-related disciplines.

via 4bt.us – Value creation throughout the whole life cycle of construction, repair, renovation, and maintenance.

Collaborative, multi-skilled team environment supported by owner leaership and accountability.  Process requires innovation and the involvement of stakeholders in the
development and execution of value propositions.

#construction #value #productivity #cost #management #costdata

Image preview

Organizational facilities management excellence is essential to realising value through managing risk and opportunity to achieve the desired balance of benefits, costs, risk and performance.

 
Why LEAN Construction Matters

Best Value JOB ORDER CONTRACTING

Characteristics of Best Value JOB ORDER CONTRACTING…

  1. Real proper owner capability, leadership, commitment, and accountability
  2. Integrated internal and external planning, procurement, and project delivery teams within a standardized programmatic process
  3. Clear set of objectives and workflows for the all aspects of the programmatic process – (Written Operations Manual/Execution Guides part of the multi-party agreement)
  4. Common data environment, inclusive of objective, current, granular local market construction task and cost data
  5. Initial and ongoing training for all participants
  6. Quantitative metrics
  7. Regular independent third-party audits

Sustainable Facilities Management
Sustainable Facilities Management
Preconstruction Prerequisties

Preconstruction Prerequisites

Here a listing of preconstruction prerequisites.

Preconstruction determines what will be built and how it will be procured and delivered.   A robust preconstruction process mitigates risk, virually eliminates change orders, ensures regulatory compliance, provide cost transparency, reduces project delivery times, and overall construction costs by 30%-40%+ vs. traditional methods.

#1.  Collaborative planning, procurement, and project teams that are integrated on an early and ongoing basis via a robust project delivery method.

#2.  Real property owner commitment, capabilty, and accountability.

#3  Initial and ongoing training for all participants.

#4 Quantitative metrics.

#5 Regular third-party independent audits.

#6 Objective, granular, locally researched construction task and cost data.

 

credible constructoin estimate

Credible Construction Estimate Core Elements

A credible construction cost estimate is required prior to engaging in procurement.   The follow elements are common to a credible construction cost estimate.

Credible Cost Estimate Core Elements

#1 Objectivity – The information used and those invovled in the creation of the construction cost estimate must be objective.  Primary data sources should be used whenever possible.  Secondary data sources, such as contractor and subcontractor quotes are secondary data sources and should not be exclusively relied upon.

#2 Timeliness – All cost data must be current.  The reliance on outdated information (more the three month old) can introduce significant error.  The use of economic factors (i.e. ENR economic index, etc.) applied to a outdated cost estimate will  introduce significant error.

3# Local Market – All cost data must be based upon local market conditions.  Locally researched labor, material, equipment, and productivity data is essential in the devlopement of a credible construction cost estimate.   The use of national average cost data with or without area location factoring (City Cost Index, CCI, Area Cost Factor, ACF…) will introduce significant error.

Credible Construction Estimate

 

To meet their responsibilities as stakeholders of the built environment ( facilities and other built structures ), public sector owners need to have the ability create credible construction cost estimate for ALL repair, renovation, maintenance (FSRM), and new build projects.

Education, key performance indicators, common terms and definitions, collaborative  construction delivery methods, and current, objective, local market granular cost data as well as  supporting technology can to be leveraged to enable significant cost savings via signifincant improvements in cost visibility, cost management, and productivity.

Federal, State, County, and Local Government, as well as Education, Healthcare and Transportation Departments and Agencies have a responsibility to create cost visibility and cost transparency and drive improved construction productivity.  However, multiple studies/reports note that available and proven best management practices have not been implemented on a widespread basis.

For example, GAO and other studies/reports consistently report that errors and lack of due diligence with respect to original construction cost estimates are primary reasons for negative cost and schedule  impacts, and overall poor project performance and outcomes.   T

The following figure, for example, was produced in 1972.

credible construction estimate

“Despite the fact that these basic characteristics have been published and known for decades, we find that many agencies still lack the ability to develop cost estimates that can satisfy them”. – GAO, 2009

The associated processes for developing a credible construction cost estimate are equally well documented.

credible constructoin estimate

From a more detailed perspective, the following steps have been published as a path toward a quality cost estimate.

  1. Define estimate’s purpose ■ Determine estimate’s purpose, required level of detail, and overall scope; ■ Determine who will receive the estimate
  2. Develop estimating plan ■ Determine the cost estimating team and develop its master schedule; ■ Determine who will do the independent cost estimate; ■ Outline the cost estimating approach; ■ Develop the estimate timeline
  3. Define program characteristics ■ In a technical baseline description document, identify the program’s purpose and its system and performance characteristics and all system configurations; ■ Any technology implications; ■ Its program acquisition schedule and acquisition strategy; ■ Its relationship to other existing systems, including predecessor or similar legacy systems; ■ Support (manpower, training, etc.) and security needs and risk items; ■ System quantities for development, test, and production; ■ Deployment and maintenance plans
  4. Determine estimating structure ■ Define a work breakdown structure (WBS) and describe each element in a WBS dictionary (a major automated information system may have only a cost element structure); ■ Choose the best estimating method for each WBS element; ■ Identify potential cross-checks for likely cost and schedule drivers; ■ Develop a cost estimating checklist
  5. Identify ground rules and assumptions ■ Clearly define what the estimate includes and excludes; ■ Identify global and program-specific assumptions, such as the estimate’s base year, including time-phasing and life cycle; ■ Identify program schedule information by phase and program acquisition strategy; ■ Identify any schedule or budget constraints, inflation assumptions, and travel costs; ■ Specify equipment the government is to furnish as well as the use of existing facilities or new modification or development; ■ Identify prime contractor and major subcontractors; ■ Determine technology refresh cycles, technology assumptions, and new technology to be developed; ■ Define commonality with legacy systems and assumed heritage savings; ■ Describe effects of new ways of doing business
  6. Obtain data ■ Create a data collection plan with emphasis on collecting current and relevant technical, programmatic, cost, and risk data; ■ Investigate possible data sources; ■ Collect data and normalize them for cost accounting, inflation, learning, and quantity adjustments; ■ Analyze the data for cost drivers, trends, and outliers and compare results against rules of thumb and standard factors derived from historical data; ■ Interview data sources and document all pertinent information, including an assessment of data reliability and accuracy; ■ Store data for future estimates/
  7. Develop point estimate and compare it to an independent cost estimate ■ Develop the cost model, estimating each WBS element, using the best methodology from the data collected,a and including all estimating assumptions; ■ Express costs in constant year dollars; ■ Time-phase the results by spreading costs in the years they are expected to occur, based on the program schedule; ■ Sum the WBS elements to develop the overall point estimate; ■ Validate the estimate by looking for errors like double counting and omitted costs; ■ Compare estimate against the independent cost estimate and examine where and why there are differences; ■ Perform cross-checks on cost drivers to see if results are similar; ■ Update the model as more data become available or as changes occur and compare results against previous estimates
  8. Conduct sensitivity analysis ■ Test the sensitivity of cost elements to changes in estimating input values and key assumptions; ■ Identify effects on the overall estimate of changing the program schedule or quantities; ■ Determine which assumptions are key cost drivers and which cost elements are affected most by changes
  9. Conduct risk and uncertainty analysis ■ Determine and discuss with technical experts the level of cost, schedule, and technical risk associated with each WBS element; ■ Analyze each risk for its severity and probability; ■ Develop minimum, most likely, and maximum ranges for each risk element; ■ Determine type of risk distributions and reason for their use; ■ Ensure that risks are correlated; ■ Use an acceptable statistical analysis method (e.g., Monte Carlo simulation) to develop a confidence interval around the point estimate; ■ Identify the confidence level of the point estimate; ■ Identify the amount of contingency funding and add this to the point estimate to determine the risk-adjusted cost estimate; ■ Recommend that the project or program office develop a risk management plan to track and mitigate risks 14 GAO-09-3SP Chapter 1 11 Step Description Associated task Chapter
  10. Document the estimate ■ Document all steps used to develop the estimate so that a cost analyst unfamiliar with the program can recreate it quickly and produce the same result; ■ Document the purpose of the estimate, the team that prepared it, and who approved the estimate and on what date; ■ Describe the program, its schedule, and the technical baseline used to create the estimate; ■ Present the program’s time-phased life-cycle cost; ■ Discuss all ground rules and assumptions; ■ Include auditable and traceable data sources for each cost element and document for all data sources how the data were normalized; ■ Describe in detail the estimating methodology and rationale used to derive each WBS element’s cost (prefer more detail over less); ■ Describe the results of the risk, uncertainty, and sensitivity analyses and whether any contingency funds were identified; ■ Document how the estimate compares to the funding profile; ■ Track how this estimate compares to any previous estimates
  11. Present estimate to management for approval ■ Develop a briefing that presents the documented life-cycle cost estimate; ■ Include an explanation of the technical and programmatic baseline and any uncertainties; ■ Compare the estimate to an independent cost estimate (ICE) and explain any differences; ■ Compare the estimate (life-cycle cost estimate (LCCE)) or independent cost estimate to the budget with enough detail to easily defend it by showing how it is accurate, complete, and high in quality; ■ Focus in a logical manner on the largest cost elements and cost drivers; ■ Make the content clear and complete so that those who are unfamiliar with it can easily comprehend the competence that underlies the estimate results; ■ Make backup slides available for more probing questions; ■ Act on and document feedback from management; ■ Request acceptance of the estimate
  12. Update the estimate to reflect actual costs and changes ■ Update the estimate to reflect changes in technical or program assumptions or keep it current as the program passes through new phases or milestones; ■ Replace estimates with EVM EAC and independent estimate at completion (EAC) from the integrated EVM system; ■ Report progress on meeting cost and schedule estimates; ■ Perform a post mortem and document lessons learned for elements whose actual costs or schedules differ from the est imate; ■ Document all changes to the program and how they affect the cost estimate – Source: GAO, DHS, DOD, DOE, NASA, SCEA, and industry.

Without accurate, timely, consistent, and actionable information, improved decision-marking and the associated reduction of rampant construction waste is impossible.

All public sector entities would benefit by using locally researched standardized cost data to generate line item cost estimates for construction projects.  This practice would not only provide requisite transparency, but also improve early, ongoing, and higher quality project work scope.  Sharing actionable, transparent information with all construction project participants and stakeholders early on, and throughout the construction and operations life-cycle of a built structure, would measurably mitigate change orders, legal disputes, and waste.

Typical construction project stake holders include: Owners (management, engineering, contracting/procurement, building users), Contractors, Subcontractors, and Designers/Architects.

Standardized Cost Data

“Many standard project construction breakdown structures have been created over the years for use in construction management. The most common, in existence since the 1960s, are the CSI (Construction Specifications Institute) format in North America and the SMM7 (Standard Method of Measurement) format in Great Britain.11 They originated as breakdowns for commercial building construction but have evolved to include other forms of construction.
CSI introduced an expanded version, the MasterFormat™, in 2004 that includes 50 divisions of work covering civil site and infrastructure work as well as process equipment—a significant increase from the previous 16 divisions covering building construction that had been in use for years. This expansion reflects the growing complexity of the construction industry, as well as the need to incorporate facility life cycle.  and maintenance information into the building knowledge base. Another level of standardized numbers was added to the publication. One goal was to eventually facilitate building information modeling to contain project specifications. The MasterFormat™ standard serves as the organizational structure for construction industry publications such as the Sweets catalog, with a wide range of building products; MasterSpec and other popular master guide specification applications, and RS Means and other cost information applications.
MasterFormat helps architects, engineers, owners, contractors, and manufacturers classify the typical use of various products to achieve technical solutions on the job site, known as “work results.” Work results are permanent or temporary aspects of construction projects achieved in the production stage or by subsequent alteration, maintenance, or demolition processes, through the application of a particular skill or trade to construction resources.
The OmniClass™ Construction Classification System, a new North American classification system, is useful for many additional applications, from organizing library materials, product literature, and project information to providing a classification structure for electronic databases. It incorporates other systems in use as the basis of many of its tables, including MasterFormat for work results and UniFormat™ for elements.
OmniClass follows the international framework set out in International Organization for Standardization
(ISO) Technical Report 14177—Classification of Information in the Construction Industry,  This document has been established as a standard in ISO 12006-2: Organization of Information about Construction Works—Part 2: Framework for Classification of Information.

It is also worth noting that CSI is involved in developing a corresponding system for terminology based on a related ISO standard, ISO 12006-3: Organization of Information about Construction Works—Part 3: Framework for Object-Oriented Information. The system known as the International Framework for Dictionaries (IFD) Library is a standard for terminology libraries or ontologies. It is part of the international standards for building information modeling being developed and promoted by buildingSMART International (bSI). CSI sees the IFD Library being used in conjunction with OmniClass to establish a controlled vocabulary for the North American building industry, thereby improving interoperability. Both OmniClass and the IFD Library are included in the development work of the buildingSmart alliance (the North American chapter of bSI) and its National Building Information Modeling Standard (NBIMS).

OmniClass consists of 15 tables, each representing a different facet of construction information. Each table can be used independently to classify a particular type of information, or entries on it can be combined with entries on other tables to classify more complex subjects. The tables are not numbered sequentially and there are gaps in the progression. The first is table 11, Construction Entities by Function, and the last
of the 15 is table 49, Properties.  The OmniClass structures start to approach the DOD WBS template model at the system level regarding construction classifications. In its table 21 under “Utilities and Infrastructure” is included breakdowns for roadways, railways, airports, space travel, utilities, and water-related construction. This is not unlike a concept in aircraft systems, electronic systems, missile systems, and ship systems from the DOD Mil Handbook template. OmniClass table 22 is based almost entirely on the CSI MasterFormat tables, although it is noted in OmniClass that “some content of MasterFormat 2004 Edition is not included in table 22.” None of the current construction breakdowns, including CSI, fully cover the complete civil infrastructure project life cycle, including development, engineering, construction, operations, maintenance, and risk mitigation. The current CSI MasterFormat 2004 edition comes closest to covering all the scope of work found in the construction of building facilities and site work. It falls short in addressing the unique requirements of program managers, estimators, schedulers, and cost engineers and in identifying all phases of work included in major infrastructure work such as Build Own and Transfer programs. These structures, MasterFormat, and OmniClass are not program work breakdown structures, although some subsections have the appearance of a WBS. However, at all levels the elements in the structures are candidates for WBS element descriptors, including work packages, and they meet the common definitions of WBS elements, being all nouns or nouns and adjectives. The MasterFormat tables include the equivalent of a WBS dictionary for the lowest levels. Many listings available in MasterFormat would enable an organization to pick and choose to provide ready-to-go WBS elements for virtually any work on any construction project, including related equipment and furnishings. It must be noted, however, that the summary headings are not truly WBS elements, since the breakdown or listings under the headings are further listings of categories within a heading and do not meet the WBS 100 percent rule. Figure 43 illustrates the relationship of the CSI MasterFormat structure to a WBS based on the CSI structure. (A true WBS would be based on the actual product structure.) The summary CSI elements are listed as the 34 divisions. Each division contains one or more sections that would be selected from the complete MasterFormat set to relate to the specific needs of the project. Also, although not shown, the specific physical breakdown of the building needs to be overlaid. For example, it would be normal for the individual floors to be identified and the appropriate work packages for each floor selected from the appropriate MasterFormat sections. Note, also, that there is no further breakdown of the project management element as would be the case in a true WBS. ”  –  GAO Report, 2009

GAO Report 2009 - WBS

via www.4bt.us – Data, tools, and services to support efficient planning, procrement, and delivery of physical infrastructure.

 

Why LEAN Construction Matters

Creating a detailed line item construction cost estimate

What’s involved in creating detailed line item construction cost estimate?

At the most detailed level; each granular construction task is usually related to and performed by a crew. The contruction cost engineer/estimator develops or selects a task description defining the type of effort or item to be constructed.

detailed line item construction cost estimate

Task descriptions are as complete and accurate as possible to lend credibility to the cost estimate and aid in later review and analysis.  Unit prices and quantities include individual LOCAL MARKET labor, material, and equipment information and cost breakdowns as well as crew and productivity information.

 

4bt.us

 

Why LEAN Construction Matters

Controlling Construction Costs, Rocket Science, and Time Travel

Controlling construction costs is not rocket science, nor does it involve time travel.

Any real property owner can control construction costs for facilities repair, renovation, maintenance, and new build projects.   Consistently delivering quality projects on time and on budget simply requires leadership, accountability, and commitment.

Controlling Construction Cost
Controlling Construction Costs is not rocket science

1. Adopt a Program vs. a Project Approach

Sure, every “construction” project is different, however, there are no worm holes or warp speeds involved.  EVERY project can broken done into discrete elements called line item construction tasks.  Using these granular elements and sharing the associated descriptions,  labor, material, and equipement details in a standardized format (CSI MasterFormat) with all project participants within a robust collaborative process is the path to significant cost savings and the mitigation of change orders, disputes, and waste.   Integrated Project Delivery (IPD) for major new construction and LEAN Job Order Contracting for repair, renovation, maintenance, and less design intensive new construction are proven programmatic processes that can save 30%-40%+ versus design-bid-build (DBB), CM@R, design-bulder (DB) and other more traditional forms.   Both IPD and JOC have been proven for decades and are well evolved.

2. Validate Contractor and Subcontractor Quotes

Obtaining comparative bids on all subcontracted work will not provide sufficient cost visibility.  Cost management can only be achieved through the process of owners created independent line item estimates.  The latter can be achieved throught the use of reading available objective third party cost database.  It is critical however that the cost databases be locally researched.  The use on national average cost data and location factoring will not provide adequate cost visibility.

 

3. Improve by building, retaining, and sharing Knowledge and conducting regular independent review Audits

The expectation and requirement is that all work must be auditable.  This can only occur with the associated used of robust process and standardized information.  All construction task and costs sent to the owner or design-builder can therefore  be reviewed, audited, and validated for contract compliance and compliance with fiduciary responsibilites.  Owner and design-builds therefore develop and maintain consistently formated documentation as an expectation from the outset of project conceptualization through plannig, procurement, and project delivery and beyond.

Why LEAN Construction Matters

Relationship-based Job Order Contracting

Relationship-based Job Order Contracting – Enabling commitment based upon a  mutual set of  expectations and an understanding of  acceptable behaviors of  each partner and shared, objective, and actionable information.

 

Move from a single transaction/project mentality where both sides attempt to gain maximum financial advantage to a program mentality, where teams work towards mutually beneficial long-term outcomes.

    • Innovative, market tested solution
    • Cost effective
    • Leverages experience of design-builders
    • Empowerment and collaborative individualism
    • Direct Owner/Design-Builder communication and collaboration – Owner PM & Design/Builder PM
    • Comprehensive detailed scope of work
    • construction proceeding prior to completion of the design documentation;
    • Reduced confrontation between owners and design/builders
    • Early and ongoing involvement of all stakehholders
    • Performance-based reward systems
    • Fewer change orders
    • Full accountability
    • Defined roles, responsibilities, workflow, and documentation.
    • Mechanism for sharing risks and benefits
    • Higher levels of service
    • Focus upon training and development
    • Lowest JOC Program adminstration cost

Benefits

  • Fewer contract variations
  • Organisational learning and team learning via sharing the diversity of independent collaborative individuals with unique skills
  • Reduced exposure to litigation due to enhanced communications, workflows, and defined issue resolution strategies
  • Lower risk of cost overruns  because of siginficantly enhanced cost visibility
  • Lower risk of time delays due to improve Scope of Work granularity
  • Higher quality
  • Lower administration costs
  • Compliant
  • Non- adversarial attitudes

Relationship-based Job Order Contracting

 

Partnership is the benchmark for other Owner-Design/Builder relationships

Cooperation + commitment to achieve shared goals

 Trust, cooperation, commitment, and accountability

Relationship-based Job Order Contracting
Relationship-based Job Order Contracting

Written roles and responsibilities for the paticipant across all organisation

Measurable quantitiative objectives relating  to each requirements

Mutually beneficial outcomes

Defined process to orient new team members and enable continuous improvement

Focus upon commitment and trust

Regular formal partnering meetings and subcontractor meetings

Daily information meetings

Monitoring against mutually agreed goals

Periodic workshops  focused on unresolved  issues and problems

 

Design/Builder Requirements

 

(1)    Demonstrated ability  to help define and complete the full detailed scope of works

(2)    Demonstrated ability to minimize project capital and operating costs without sacrificing quality.

(3)   Demonstrated ability to achieve outstanding quality results.

(4)    Demonstrated ability to provide the necessary resources for the project and meet the project program requirements.

(5)    Demonstrated ability to add value and bring innovation to the project.

(6)    Demonstrated ability to achieve outstanding safety performance.

(7)    Demonstrated ability to achieve outstanding workplace relations.

 

Learn more about…

  • Defining project goals;
  • Identifying resources required to provide the partnering infrastructure;
  • Knowing how to evaluate potential project partners; and
  • Understanding relative benefits of different types of relationship arrangements.

via Four BT, LLC – Proven construction management solutions that drive continuous improvement based on trust, cooperation, commitment, actionable information, and robust processes. www.4bt.us

 

  1. Long-term  focus on accomplishing the strategic goals of involved  parties
  2. Multi-project agreement: long-term relationships without guaranteed workload
  3. Common measurement  system for the projects and the relationship
  4. Improved  processes and reduced duplication
  5. Relationship-specific measures tied to team incentives
  6. Shared authority
  7. Openness, honesty, and increased risk sharing
Public Sector Construction Procurement

Public Sector Construction Procurement is BROKEN.

Public Sector Construction Procurement is BROKEN.

Why?

Each and every day the procurement of facilities repair, renovation, maintenance, and new construction services occurs without any current, objective, verifiable cost information.   This activity is in direct violation of the fiducicary responsibility of public sector organizations.

How?

Most public sector organizations do not use local market, verifiable, and granluar cost data to establish a construction cost estimate.  Instead, reliance upon contractor quote, historical costs, and/or national average cost data and locationg factoring is the norm.

Solution?

#1 First, public sector organzations must itegrated Planning, Procurement, and Project Delivery Teams and leverage robust, proven frameworks that focus upon best value outcomes.

#2 Current, granular local market cost data organized using expanded CSI MasterFormat.

#3 Widespread adoption of collaborative construction delivery methods.

 

Public Sector Construction Procurement
Public Sector Construction Procurement is BROKEN

Learn more…

Why LEAN Construction Matters

Construction Cost Data Integrity

Construction Cost Data Integrity is one of the most overlooked items in preparing a detailed Scope of Work.

Construction Cost Data Integrity Requirements

 

#1 Objectivity

#2 Current, Local Market Information

#3 High Granularity

#4 Standardized Terms, Definitions, and Data Architecture

 

#1 Objectivity

Cost data must be professionally researched with source including, but not limited to,  local, regional, and national materials suppliers as appropriate, prevailing wage rates for all associated trades,  local contractors/subs, equipment rental services, local market productivity, relevant, third-party databases.

#2 Current, Local Market Information

All construction cost data should be researched per the associated cite.  (Note: The use of national average cost data, location factors, economic factors, area cost factors, or historical data do not provide adequate cost visibility.)

#3 High Granularity 

Line item discrete construction tasks represent the only methods from which quanities can be applied to then create an cost estimate ready for procurement analysis.

#4 Standardized Terms, Definitions, and Data Architecture

All cost data should be include industry standard terms and definitions written in plain English, without the excessive use of abbreviations or acronyms.  Line item tasks should also have an associated expanded and unique CSI MasterFormat coding.   A standardized data architecture vastly improves the efficiency of information use, sharing, reuse, expansion/customization, and updating.

 

The exclusive source of granualar, current, local market construction cost data and also preventive maintenace task and cost for associated frequencies/checklist, in excess of 90,000 line items and updated using over 1.2 million data elements is Four BT, LLC.  www.4bt.us

 

Construction Cost Data Integrity
Construction Cost Data Integrity
objective local market standardized cost data

Objective local market standardized cost data

Objective, verificable, and actionable Construction Cost Data is now available for any location throughout the United States.

The ability to for owners and design-builders to share objective local market standardized cost data is critical to cost visibility and cost control.   When provided on a granular level, this shared information can also enhance the detail of the Scope of Work and mitigate change orders and rework, saving 30%+ of overall construction costs.

Objective local market standardized cost data
Objective local market standardized cost data

 

Local Market Granular Cost Data

4BT OpenCost(TM) Local Market Granular Cost Data an RSmeans Alternative?

We source and maintain current, LOCAL MARKET GRANULAR COST DATA that is superior to the traditional use  of “national average cost data” and location factoring.

Significantly improve cost visibility and cost management for ALL your facilities repair, renovation, maintenance, and new build projects.

#1 Over 85,000 line items available.   Granular line items for repair, renovation, maintenance, and new builds organized by expanded CSI MasterFormat. Also preventive maintenance cost data with costs and checks for every PM frequency, organized by TriServices expanded UNIFORMAT.

#2 Over 1.2 Million datapoints updated quarterly.

#3 Proven and in use by multiple public sector deparments and agencies.

#4 Supported by secure cloud technology and information management practices (NIST, CMMC LvL 3 compliant) enabling Program, Project, Proposal, Estimate, Workorder, Document, and Issues/Task Mangement, and more.

 

Local Market Granular Cost Data
Significantly improve construction cost visibility and cost management

 

Supporting Reference Information:

Independently reported issues with Location Factors

  • “Location factors are used during preliminary project evaluations. They are not intended to be used when preparing appropriation-quality estimates. They often are applied to conceptual estimates for identifying “go/no-go” projects at an early stage.”

(Peitlock, B.A., ccc, Developing Location Factors Using a Factoring Method, International Cost Engineering Council, ICEC International Cost   Management Journal (ICMJ), 1998.)

  • Location factors are primarily used in class 4 and 5 estimates and are not intended to be used for higher quality estimates, such as class 3, 2, or 1. The RSMeans city cost index (CCI) and the Department of Defense area cost factor (ACF) index are two primary examples of location factor publications.

(Martinez, A., Validation of methods for adjusting construction cost estimates by project location , University of New Mexico UNM   Digital Repository, 2010)

  • “Despite its potential weaknesses, estimation by adjustment factors is a very common approach for all types of construction. A very common approach for performing quick-order-of-magnitude estimates is based on using Location Cost Adjustment Factors (LCAFs). The accuracy of cost estimates in the early phases varies within an expected range that spans from -100% to +200% ” “Using the results of this study, various commercial entities (e.g., RS Means) could enhance their online tools by uploading publicly available socio-economic variables and allowing users to perform geostatistical analysis. As a result, a cost engineer could input the location of a project and obtain the most accurate location adjustment factor through a mix of interpolation and geostatistical prediction techniques.”

  (Migliaccio, G., Empirical Assessment of Spatial Prediction Methods for Location Cost Adjustment Factors, J Constr Eng Manag. 2013)

  • “Problems within the methodology, unfortunately, will continue to arise as standardized estimation tools (CCI) simply cannot account for the unique characteristics of individual states. Unfortunately, the accuracy of program-wide CCIs occasionally led to swings of ±20 percent after projects had gone through the bidding process. Additionally, no direct application of market or economic conditions existed in this conventional CCI process, which was theorized by FHWA to potentially be a significant influence on resulting project estimate accuracy. ”

(University of Colorado Denver College of Engineering and Applied Science Department of Civil Engineering, Validation of Project-level   Construction Cost Index Estimation Methodology, 2017

  • In the United States, RSMeans and other published construction cost data are useful for estimating the overall cost of a project. However, these are typically nationally aggregated mean costs and intended to be used with a local multiplier. Prior studies have found that locally adjusted RSMeans costs vary from actual local material prices. For example, Estes (2016) found that for a slab-on-grade foundation assembly with 0.1 m (4 inches) thick slab, vapour barrier and welded wire fabric in Baton Rouge, Louisiana, United States, concrete was found to be underestimated by 18% and vapour barrier by as much as 67%. Additionally, assembly costs for 0.1 m (4 inches) thick concrete slab were found to differ significantly (p = 0.004, α = 0.05) when comparing locally sourced costs and adjusted RSMeans cost data (Estes, 2016). Published cost data also lack accuracy due to the type and manner of data collected and represented. For example, RSMeans data do not account for variations caused by local codes, productivity rates, climate conditions, labour quality and availability, or costs related to land prices and permit fees (Ontario Construction Secretariat, 2001). (Kodavatiganti Y, Rahim MA, Friedland CJ, Mostafiz RB, Taghinezhad A and Heil S (2023), Material quantities and estimated construction costs for new elevated IRC 2015-compliant single-family home foundations. Front. Built Environ. 9:1111563. doi: 10.3389/fbuil.2023.1111563

NOTE:  All Trademarks remain the property of their respective owners.

 

LOCAL MARKET GRANULAR COST DATA

 

Four BT, LLC – www.4bt.us – Exclusive supplier of current, LOCAL MARKET GRANULAR COST DATA and supporting cloud technology, as well as full support services for Program, Project, Proposal, Estimate, Workorder, Document, and Issues/Task Mangement, and more.

 

Why LEAN Construction Matters

Construction Cost Estimating, Location Factoring, and National Average Cost Data

Many in the public sector are unaware of the construction cost estimating issues caused by the use of national average cost data and location factoring.

Here’s short summary of those problems noted by independent third parties.

  • “Location factors are used during preliminary project evaluations. They are not intended to be used when preparing appropriation-quality estimates. They often are applied to conceptual estimates for identifying “go/no-go” projects at an early stage.”

(Peitlock, B.A., ccc, Developing Location Factors Using a Factoring Method, International Cost Engineering Council, ICEC International Cost    Management Journal (ICMJ), 1998.)

  • Location factors are primarily used in class 4 and 5 estimates and are not intended to be used for higher quality estimates, such as class 3, 2, or 1. The RSMeans city cost index (CCI) and the Department of Defense area cost factor (ACF) index are two primary examples of location factor publications.

(Martinez, A., Validation of methods for adjusting construction cost estimates by project location , University of New Mexico UNM               Digital Repository, 2010)

  • “Despite its potential weaknesses, estimation by adjustment factors is a very common approach for all types of construction. A very common approach for performing quick-order-of-magnitude estimates is based on using Location Cost Adjustment Factors (LCAFs). The accuracy of cost estimates in the early phases varies within an expected range that spans from -100% to +200% ” “Using the results of this study, various commercial entities (e.g., RS Means) could enhance their online tools by uploading publicly available socio-economic variables and allowing users to perform geostatistical analysis. As a result, a cost engineer could input the location of a project and obtain the most accurate location adjustment factor through a mix of interpolation and geostatistical prediction techniques.”

               (Migliaccio, G., Empirical Assessment of Spatial Prediction Methods for Location Cost Adjustment Factors, J Constr Eng Manag. 2013)

  • “Problems within the methodology, unfortunately, will continue to arise as standardized estimation tools (CCI) simply cannot account for the unique characteristics of individual states.  Unfortunately, the accuracy of program-wide CCIs occasionally led to swings of ±20 percent after projects had gone through the bidding process. Additionally, no direct application of market or economic conditions existed in this conventional CCI process, which was theorized by FHWA to potentially be a significant influence on resulting project estimate accuracy. ”

(University of Colorado Denver College of Engineering and Applied Science Department of Civil Engineering, Validation of Project-level           Construction Cost Index Estimation Methodology, 2017

  • In the United States, RSMeans and other published construction cost data are useful for estimating the overall cost of a project. However, these are typically nationally aggregated mean costs and intended to be used with a local multiplier. Prior studies have found that locally adjusted RSMeans costs vary from actual local material prices. For example, Estes (2016) found that for a slab-on-grade foundation assembly with 0.1 m (4 inches) thick slab, vapour barrier and welded wire fabric in Baton Rouge, Louisiana, United States, concrete was found to be underestimated by 18% and vapour barrier by as much as 67%. Additionally, assembly costs for 0.1 m (4 inches) thick concrete slab were found to differ significantly (p = 0.004, α = 0.05) when comparing locally sourced costs and adjusted RSMeans cost data (Estes, 2016). Published cost data also lack accuracy due to the type and manner of data collected and represented. For example, RSMeans data do not account for variations caused by local codes, productivity rates, climate conditions, labour quality and availability, or costs related to land prices and permit fees (Ontario Construction Secretariat, 2001).

(Kodavatiganti Y, Rahim MA, Friedland CJ, Mostafiz RB, Taghinezhad A and Heil S (2023), Material quantities and estimated construction costs for new elevated IRC 2015-compliant single-family home foundations. Front. Built Environ. 9:1111563. doi: 10.3389/fbuil.2023.1111563

 

construction cost data location factoring

Via Four BT, LLC – www.4bt.us – Exclusive resource for local market unit price repair, renovation, maintenance, preventive maintenance, and new construction cost data updated quarterly, without any location or economic factoring.

Why LEAN Construction Matters

MOST Construction Cost Data is Useless

MOST Construction Cost Data is Useless due to archaic research methods and cannot provide cost visibility or enable cost managment capability for local markets.

Robust Construction Cost Data Research

1. Comprehensive, granular, line item tasks including a description, and individual data components for labor, material, equipment, and productivity (crews).

2. Specific local market research with zero use of location factoring (city cost indexing) or economic factoring (economic indexes)

3. Organization using expaned CSI Masterformat.

4. No inclusion of builder/contractor overhead or profit.

5. Timely updates – Data must be update quaterly at minimum.

There is only one source of objective, verifiable, and current line item construction cost data that is update both locally researched and updated quaterly, Four BT, LLC (4BT).

 

4BT updates 1.2+ MILLION data points to exclusively create objective, verifiable, and robust detailed line item construction cost databases for local markets.

 

MOST Construction Cost Data is Useless

MOST Construction Cost Data is Useless

Improving facilities lifecycle total cost of ownership asset managment one client at a time.

Why LEAN Construction Matters

JOC Contractor Evaluation

JOC contractor evaluation is an ongoing process, begining with their response to a Job Order Contract Request for Propsals for design-builders and continuing throughout the life-cycle of the JOC Program.

Here is a considerations for JOC contractor evaluation.

•Responsiveness of the contractor in terms of requests for site visits, requests for proposals, participation ins proposal evaluation, mobilization, daily site management, completion of required forms, and handover of required information post construction.
• Ability to collaborative work with owner staff in the scope of work definition.
• Timely creation of detailed line item proposals using locally researched construction cost data in compliance with Job Order Contract requirements.
• Ability to create and maintain a safe and clean work environment.
• Timely project mobilization and start.
• Efficient and collaboration crew and subcontractor mangement in a manner that maximizes the expertise of those doing the work.
• Projects are complete in a quality manner, per specfications, on time and on budget, without change orders.
• Ability to create a long term, mutually beneficial relationships with owner and subscontractor staff as well as material suppliers and other stakeholders.
• Acceptable levels with respect to defined, JOC quantitative performance indicators.

JOC Contractor Evaluation

Learn more about the JOC Contractor Evaluation Process…

Cost effective facilities Facilities Sustainment

Cost effective FSRM Facilities Facilities Sustainment, Restoration, and Modernization

Cost effective facilities FSRM,  Facilities Sustainment, Restoration, and Modernization can now be accomplished with the integration of robust process and planning, procurement, and project delivery teams within a common data environment (CDE) inclusive of current, local market, granular line item construction task data.

To support the cost effective FSRM, processes and teams collaboration with a digital cloud environment which embeds appropriate robust process to ensure proper governance.

Cost Visibility

A major failing of traditional FSRM practices has been the lack of cost visibility and therefor cost management.  The use of historical cost data, area cost factors, national average cost data, city cost indesing, all fail to provide adequate cost visiblity.  As a result, FSRM cost estimates and the ability to validate constractor proposal have suffered.   Current, local market unit price cost data is now readily available.

Robust Collaborative Process

While Job Order Contracting(JOC) has proven an excellent tool for expediting FSRM activities, it has lacked adequate cost visibility and program oversight.  The use of generic cost estimating software or spreadsheets are not appropriate for JOC.  JOC requires multi-level management and a full audit trail inclusive of Program Management, Contract Management, Proposal and Estimate Management, UPB Management, Workflow and Forms Management, Workorder Management, Document Management, Issues/Task Management, Contractor Mangement, Subcontractor Managemant, Quantitative Metrics, Initial and Ongoing Training, etc.

Implemanation of robust FSRM processes can reduce overall cost by 30%-40% and redirect these cost savings to actual repair, renovation, and maintenance activities.

 

“DoD real property will be managed in the most economical manner….”

DOD DIRECTIVE 4165.06
REAL PROPERTY (2022)

Cost effective FSRM
Cost effective facilities FSRM – Facilities Sustainment, Restoration, and Modernization can now be accomplished with robust process and data.

Definitions of Sustainment, Restoration and Modernization  (FSRM)

Sustainment means the maintenance and repair activities necessary to keep an inventory of facilities
in good working order. It includes regularly scheduled adjustments and inspections, preventive maintenance tasks,
and emergency response and service calls for minor repairs. It also includes major repairs or replacement of
facility components (usually accomplished by contract) that are expected to occur periodically throughout the life
cycle of facilities. This work includes regular roof replacement, refinishing of wall surfaces, repairing and
replacement of heating and cooling systems, replacing tile and carpeting, and similar types of work. It does not
include environmental compliance costs, facility leases, or other tasks associated with facilities operations (such as
custodial services, grounds services, waste disposal, and the provision of central utilities).

Restoration means the restoration of real property to such a condition that it may be used for its
designated purpose. Restoration includes repair or replacement work to restore facilities damaged by inadequate
sustainment, excessive age, natural disaster, fire, accident, or other causes.

Modernization means the alteration or replacement of facilities solely to implement new or higher
standards, to accommodate new functions, or to replace building components that typically last more than 50 years
(such as the framework or foundation)

Facilities Lifecycle Management. Facilities Lifecycle management entails the Planning,
Programming, Design, Construction, Activation, Operation, Sustainment, Maintenance, and
Disposal of the built environment through Military Construction and O&M-funded SRM
activities.

 

 

Why LEAN Construction Matters

Developing an Efficient JOC Program Framework

Developing an efficient JOC Program Framework requires a commitment to collaborative and integrated Planning, Procurement, and Project Delivery teams.

Unfortunately most JOC Programs outside of the DoD sector, simply use JOC as a means to speed procurement with little attention paid to JOC administration costs and the issues with the excessive use of “JOC Consultants”.  Mutliple independent third-party audits have clearly demonstated the pitfalls of this approach, common to the County, State, Local Government, and Educational Sectors. 

 

JOC Program success is dependent upon direct collaboration between Owners and Design-Builders as well as Subcontractors.    Developing and maintaining such a collaborative
environment requires initial and ongoing training, an unbiased JOC Framework, as well as continuous team assessment and improvement.  True collaboration and owner leadership, capability, commitment, and accountability are requirement, not choices.

Little focus has been give to JOC Program and collaboration assessement by trade associations or research to date.

Below are the requisite traits of collaboration within an efficient JOC Program as well as key aspects with respect to associated planning, procurement, and management activities.  This information cna be used to improve the overall effectiveness of any JOC Program.

 

#1  Educate organizational leadership and potential team participants on Job Order Contracting, and the need for “culture change” with respect of all aspects of procurement, planning, and project delivery (Note:  Implementing a JOC Program without altering traditional behaviors and levels of accountability will not enable realization of any measurable improvement in repair, renovation, maintenance, or new construction outcomes, and may actually result in excessive costs and conflict generation.  Initial and ongoing training for ALL participants must be mandatory.)

#2  Conduct diligent market researched on available JOC cost data, software, and services.  (Note: JOC has been used for decades, however, many traditional JOC tools and approaches are outdated.)

#3  Develop a JOC Program Strategy, Objectives, and Quantitiative Performance Metrics

#4  Select a JOC Program Administrator who is a consensus leader with appropriate management and technical skills.

#5  Do not procure any JOC Solution based upon a percentage of JOC contruction volume.  This approach may appear to be less costly at initial stages, however, easily results in 10x higher JOC administration costs.  Millions can be lost to JOC adminstration costs that could have gone to actual construction and deferred maintenance reduction activities.

#6  Use current, local market, unit price line item cost data.   Do not use general cost data books or national average cost data and location factoring.   Also do no use assembely level cost data.  The use of the latter will result in a lack of verificable cost visibility and failure to support effective cost management.

#7  Leverage collaborative cloud purposed-built JOC technology.  The use of generic project management software or spreadsheets is note recommended due to the inability to support requisite JOC program management activities and audit requirements.

#8  Develop and maintain focus upon OUTCOMES mutually beneficial to all JOC Program participants.

efficient joc program

 

Efficient JOC Program

 

Learn more about , reducing documentation time and improving cost management and quality…

 

Why LEAN Construction Matters

JOC Program Workflow

Here’s an example of a JOC Program workflow.

 

Objective, current, and verifiable data and a robust collaborative workflow form the foundation of a successful JOC Program.   For example, cost analysis, a critical component of any JOC Program Workflow becomes  meaningless if the unit price book is not locally researched, or simply wrong.   A locally researched, current unit price book is a prerequisite to a good estimating outcome and associated review and approval process.

Objective, quantitative cost data that represent local market conditions cannot be found within national average cost data books, city cost indexes, or historical cost data.

JOC Program Workflow
JOC PROGRAM WORKFLOW

 

JOC Program Workflow

 

via 4BT.us – Best value JOC Program solutions.

 

JOC dashboard

 

UPB = Unit Price Book, i.e. 4BT JOC Unit Price Book
General Conditions = Indirect Costs
OHP =  overhead and profit
Coefficient = Adjusted UPB + general conditions/OHP %

Why LEAN Construction Matters

National Average Cost Data inaccurately estimates project costs

National Average Cost Data inaccurately estimates project costs and the use of location factoring or economic factoring are insufficient to rectify the issue.

The traditional use of national average cost database and location factors has resulted in significant lack of cost management across the public sector.

Facilities sustainment and repair as well as new construction costs have not been well represents of managed for decades across the Federal, State, and Local Government levels.

National Average Cost Data

Current, actionable, and verifiable local market detailed unit price costs are now available.

 

National Average Cost Data inaccurately estimates project costs and waste billions of dollars annually. Leverage local market cost data.

 

Why LEAN Construction Matters

Take CONTROL of your CONSTRUCTION COST ESTIMATING

The ONLY cost estimating solutions with CURRENT, LOCAL MARKET, LINE ITEM construction cost data!

$1500/Year.

 

Estimate FASTER and with CONFIDENCE!

 

 

DoD FSRM, Why LEAN Construction Matters

DoD FSRM, BUILDER SMS and the LEGACY of Wasteful Politics

Zero credible cost visibility and inability to enable cost management…   another instance of Government attempt to compete with the private sector and lack of capable and continuous accountable leadership.

DoD hasn’t achieved a clean audit since independent audits were initiated in 2017.

DoD FSRM BUILDER SMS and the LEGACY of Wasteful Politics
DoD FSRM, Builder SMS, Continued Examples of Lack of Governance, Accountability, and Leadership

We determined that the risk assessment and control environment components of federal internal control were significant to this objective, including the underlying principles that management should identify risks to achieving defined objectives, estimate their significance, and design responses to risks that are contained within the defined risk tolerances; as well as that management should assign responsibility to achieve the entity’s objectives, evaluate performance, and hold individuals accountable for their internal control responsibilities. Because we found the components’ facility condition data were unreliable due to missing and inaccurate entries, as noted above, we were unable to analyze the relationship between facility sustainment funding and facility condition.

We previously reported in 2018 on these unreliable data and made 15 SMS is a tool for asset life-cycle management that produces multi-year condition trends and investment requirements. There are specialized SMS modules, such as BUILDER (buildings), RAILER (rails), ROOFER (roofs), and PAVER (pavements). Modules are in development for utilities, fuels, water retention structures (e.g., dams and levees), and
shorefront assets. recommendations focused at improving the quality of data; however, as of September 2021, DOD had not yet implemented our recommendations.     (2022 GAO Report GAO-22-104481)

 

 

1975: Initial research began on airfield pavement management techniques
1977: PAVER is released
1983: Initial development of ROOFER
1984: Initial development of RAILER
1988: RAILER released
1989: ROOFER released
1990: Initial development of BUILDER
1995: ROOFER version 2.1 released
1996: Tri-Service Master Plan for all Engineering Management Systems (EMS)
modules (Air Force to fund PAVER enhancements, Army to fund RAILER
enhancements, and Navy to fund [future] BUILDER enhancements)
2000: BUILDER 2.0 released and first version commercially available
2003: NAVY funds development of BUILDER 3.0 (web-based with single instance for
entire component)
2005: Navy selects commercial tool for facility assessments in lieu of continuing with
BUILDER
2006: USMC begins pilot tests of BUILDER
2007: BUILDER 3.0 released (first enterprise ready web based SMS version)
2007: Army issues AR 420-1 specifying PAVER and RAILER as the data standard for
condition assessments of those specific infrastructures
2008: (November 25) OSD issues policy memo for linear segmentation of real property
[Deputy Under Secretary of Defense (Installations and Environment)
Memorandum: Revised Implementation Goals for Linear Segment Data Elements
of the Real Property Inventory Requirements (RPIR)]
2008: USMC begins full implementation of BUILDER at all USMC installations
2009: Navy abandons commercial tool and adopts BUILDER
2010: USAF performs first pilot tests of BUILDER for STRATCOM at 11 installations
2010: DLA approves use of BUILDER for facility condition assessments
A-2
2010: NIST completed inspections in Gaithersburg, MD to calculate facility backlog
and condition inspections
2011: Airforce implements BUILDER for about 60 million square feet
2011: NIST learns the BUILDER software, but doesn’t continue with additional work
2012: Army conducts BUILDER pilots (Fort Hood, Fort Carson, Letterkenny Army
Depot, and Sierra Army Depot)
2012: MEDCOM conducts BUILDER pilots to investigate adoption as Tri-Care
Management Activity (TMA) standard
2012: NIST expands pilot site contract to Gaithersburg, MD and Boulder, CO for 4
years
2012: National Academy of Sciences (NAS) releases Predicting Outcomes of
Investments in Maintenance and Repair of Federal Facilities recommending
Federal agencies adopt the BUILDER methodology
2012: NIST rotates campuses for the next 3 years to complete outstanding work
2013: STPI study identifies BUILDER as a promising tool to evaluate facility condition
for Federal laboratories1
2013: NNSA adopts BUILDER
2013: September 10 USD establishes SMS as the only DOD standardized facility
inspection and condition assessment tool [Deputy Under Secretary of Defense
(Installations and Environment) Memorandum: Standardizing Facility Condition
Assessment]
2013: ODNI adopts BUILDER and formed the BUILDER Board for implementation
2013: DHA conducts two pilots (Fort Bragg and Walter Reed)
2013: USDA completes first pilot (Beltsville, MD)
2014: VFA, Inc. v. U.S.; private interest sued the United States as a “bid protest to
challenge the decision of the Department of Defense (“DOD”) to standardize its
facility condition assessment needs through the Sustainment Management System
(“SMS”)”2
2014: NNSA implements BUILDER with two pilots (Lawrence Livermore National
Laboratory and Pantex Plant)
1 S. V. Howieson, V. Peña, S. S. Shipp, K. A. Koopman, J. A. Scott, and C. T. Clavin. A Study of Facilities
and Infrastructure Planning, Prioritization, and Assessment at Federal Security Laboratories (Revised), IDA
Paper P-4916 (Alexandria, VA: Institute for Defense Analyses, 2013),
https://www.ida.org/idamedia/Corporate/Files/Publications/STPIPubs/ida-p-4916.ashx.
2 United States Court of Federal Claims, “VFA, Inc. v. The United States: Bid Protest; DOD’s Sustainment
Management System; Subject Matter Jurisdiction; Standardization Decision; Distributed Solutions;
Definition of Procurement,” Filed October 21, 2014, https://ecf.cofc.uscourts.gov/cgibin/
show_public_doc?2014cv0173-62-0.
A-3
2014: USDA contracted with ALPHA Facility Solutions for two pilots (Grand Forks,
ND and Kearneysville, WV)
2015: NIST wrote new contract that continues to use VFA database, refresh database
every 3 years, and complete a more enhanced condition assessment in larger
businesses…..

 

(Source:  2017, Herrera, G. Stokes, C, Pena, V. Howieson, S. A Review of the BUILDER Application for Assessing Federal Laboratory Facilities)

DoD FSRM, BUILDER SMS and the LEGACY of Wasteful Politics continue unabated with no end in site. 

Robust solutions have existed and governemnt continues its legacy of environmental and financial waste.

 

 

“At most organizations, the bottleneck is at the top of the bottle.”– Peter Drucker.

“Eighty-five percent of the reasons for failure are deficiencies in the systems and process rather than the employee. The role of management is to change the process rather than badgering individuals to do better.”
— W. Edwards Deming

 

Lack of robust process is the #1 cause of financial and environmental waste with respect to lifecycle management of built structures (facilities and horizontal physical infrastructure).

Real property owner capacity, commitment, and accountability are fundamental requirements.

Why LEAN Construction Matters

Work Scope Visibility – Critical to Efficient Construction

Work scope visibility is critical to efficient construction outcomes.

A well defined and well communicated scope of work is a fundamental requirement in order to consistently acheive quality outcomes on time and on budget.

“A detailed, well communicated Scope of Work enables teams to have complete visibility of the requirements and the issues of the project on an early and ongoing basis.”

 

“You need fully transparent, objective information in order to create an accurate detailed Scope of Work response.   That’s traditionally been elusive in the construction design, and engineering sector because  information is completely fragmented and disparte professionals all think we have unique abilities and processand and full information sharing is taboo!  So sharing actionable, current data and then consistently describing it was virtually impossible.   A common data environment (CDE) inclusive of expanded MasterFormat organized detailed labor, material, equipment, and productivity information,  ensures everyone has access to apples to apples information.”

 

An objective, verifiable, and current local market unit price cost database is a critical tool in developing a detailed SOW.

 

work scope visibility

 

Process DRIVES construction outcomes

Process DRIVES construction outcomes. Simple.

Understanding that process drives construction outcomes is a critical learning for real property owners, designers, and builders.

The application of systems thinking to ALL projects via a robust PROCESS ensures consistently well planned, executable quality outcomes on time and on budget.

Focus upon initial planning and the development of detailed and well communicated Scope of Work and the associated invovlement of all stakeholders is Step #1. Continuing through latter prescribed phases provides the framework for productive and progressive construction.

 

• Budget, Time, and Requirements must be DETAILED prior to procurement.
• Outcome prediction (the plan) and outcome reality (the execution) must be managed with a robust collaborative proess.
• Planing, Procurement, and Project Delivery Teams must be integrated.
• Labor, Materials, Equipment, and Productivity must be detailed and based solely upon LOCAL MARKET CONDITIONS.

The primary failure point for over 90% of all projects is a poorly defined and poorly communicated scope of work, which in turn results from the lack of a robust process.

Alignment between the owner and the design/construction teams can only be accomplished via a collaborative approach that fully defines to work requirements, areas, and work packages.   This can ONLY occur using detailed line item granular work tasks that include local market labor, material, equipment, and productivity information.

The proper consideration of People, Process, Information, and Technology removes the age-old disconnect between owners and their service providers, as well as requirements and execution-levle packaging of scope of work.

The application of a robust, systems-level programatic process to ALL projects involved the integration of  multiple disparate and previously siloed disciplines.  The process is what enable all participantes to contemplates needs and constraints across the full context fo all disciplines to ensure productive execution as per the plan.

 

 

Process DRIVES construction outcomes
Sustainable Facilities Management

Process DRIVES construction outcomes

 

4bt.us

 

Process DRIVES construction outcomes by integrating previously disparate disciplines through the project lifecycle.

 

#construction #productive #progressive #planning #quality #cost #management #scope #work #collaborative #solution #costmanagement

 

Notes:

#1 The Owner organization must provide leadership, commitment, and accountability and establish project scope and associated high-level timelines and cost estimates for a project in sufficient detailed to enable design/builders to create a detailed line item estimate.  This is the sole pathway to maximization of mutually beneficial outcomes for all stakeholders.  All participants must have a shared common perspective of project deliverables.  In short, , the owner owns the scope and
requirements of the project.

#2 The use of veriable local market labor, material, equipment and productivity data at a granular level significantly improves the resource quantitifaction versus traditional methods.

#3 A centralized, current, and common data environment is a fundamental requirement.  Reliance upon spreadsheets, emails, or paper records will not support a robust programmatice process.  Realtime data driven decision-making at all levels and throughout all phases is supported by a common data environment.

#4  Pull Planning, i.e. Last Planner System, and other tools and philosophies are excellent for training and purpose-build usage, however, not integrated solutions.

Why LEAN Construction Matters

Systems thinking and Job Order Contracting

Systems thinking and Job Order Contracting can be integrated to achieved significant improvement is repair, renovation, maintenance, and new construction outcomes.

Reach out to learn…

What is Systems Thinking?

The Scope of Job Order Contracting with a Systems Thinking Structure

Asset Value Optization Strategies, Policies, Objectives

Implementation Requirements

Team Members Behaviors and Relationships

Quantification of Organization Outcomes

Maintaining Alignment, Sustainability, Leadership, and Governance

 

Systems thinking and Job Order Contracting
Systems thinking and Job Order Contracting
Why LEAN Construction Matters

Reinforce detail unit line-item construction cost estimating

Reinforce detail unit line-item construction cost estimating today with CURRENT LOCAL MARKET DATA.

 

Professional teams,  processes, collaboration, and standardized information drive higher productivity.   Cost visibility and transparency are critical to overall project success.

Accurate construction cost estimates based upon industry standards and produced in a timely manner can now be the norm with 4BT’s local market line-item construction cost databases.

Our verifiable cost data technology can be leveraged to equip estimators at any design stage – from concept through close out.

We can also help manage Programs,  Contracts, Proposals, Projects, Workorders, and Contractors within a single application, all using proven collaborative construction planning, procurement, and delivery methods.

Join the growing number of savvy Owners, Contractors, and AEs who engage in collaborative construction programs from planning, programming, design, construction, and close-out.

This common approach depends upon information sharing within a common data environment.

Unit Price Book – Actionable Construction Cost Data

 

 

#UnitCostEstimating

#TypesofEstimating

#estimating

#estimators

#estimatingtips

#constructionestimating

#constructioncostdata

Job Order Contract Enterprise Management System

4BT Job Order Contract Enterprise Management System

4BT Job Order Contract Enterprise Management System

 Program Management
o Ability to roll up program, project, and workorder schedule, resource and budget data
o Multi-year, multi-contractor, multi-UPB, project management
o Capture initial planning and detailed Scope of Work requirements
o Track variance from cost and schedule baselines across the JOC Program
 Projects & Workorders
o Manages and tracks all phases of the project and workorder lifecycle
o Schedule and budget estimation
o Current, local market cost data update quarterly (not simple national average cost data and location factoring)
o Workflow management complete with authorization forms
o Version control
 Resources
o Varying level of access privileges, driven by role
o Software as a Service – hosted by the AWS East/West
o DoD CMMC Level 2 compliant
o Software as a Service – hosted by the vendor
o Audit trail tracking
 Accessibility and Ease of Use
o Support for training and onboarding
o Ongoing training support after go live
o Follows industry best practices
o Ability to view labor, material, equipment, and productivity information
o Add/view/modify unit price line items
o Assign and Record  roles and assignments
o Track labor planned and actuals
 Reporting
o Detailed and summary reporting
o Ability to download ALL DATA in a standardized format

 

Job Order Contract Enterprise Management System
Job Order Contract Enterprise Management System

 

 

Job Order Contract Enterprise Management System

 

 

 

4bt.us  – Four BT, LLC was formed to address the major shortcoming of traditional “leading JOC consultants” and “national average cost data providers” by providing real property owners and awarded JOC contractors with several unique advantages you need for a successful JOC Program.

 

JOC Program Solution

JOC Program Solution

The Benefits the 4BT JOC Program Solution

With 4BT you can rest assured of a compliant, efficient, and low cost 4BT JOC Program Solution.

We started our company to specifically address the major shortcoming of traditional “leading JOC consultants” and “national average cost data providers”.   We  provide you, your organization, and your awarded JOC contractors with several advantages you need for a successful JOC Program, including;

  • Simplified Program Management: The is nothing complex about a JOC Program and planning, procurement, implementation, and ongoing management should be simplified into single sole source of truth, accountability and communication throughout its entire lifecycle.
  • Enhanced Collaboration:  Owner, contractors, and subcontractor teams should word directly together in a collaborative manner, without the excessive use of “JOC consultants”.  A core tenant, critical to attaining the major benefits of JOC, is direct owner involvement.   By having owner and contractor planning, procurement, and project delivery team members work together from the identification of a project need  to completion, we ensure all stakeholders are working toward the same goal and are on the same page.
  • Efficient, Best Management Practices-based JOC Process Implementation : Our collaborative integrated approach streamlines the process by eliminating traditional adversarial relationships within JOC Programs that are improperly structured or rely heavily upon JOC consultants.
  • Customized Solutions: 4BT’s in-house team cost engineers, program managers, and software developers work together to develop custom solutions that meet your unique operational needs, while ensuring the use of core JOC workflows.  We also LISTEN, and create new unit price line items per your need.
  • Cost Savings: Our integrated planning, procurement and project delivery solutions minimizes the number of change orders, reduces material waste, and avoid costly mistakes.  Furthermore, we do not require a percentage of JOC construction volume for the use of our products and services.  You simply subscribe to what you need and can save 10x of traditional “percentage fee-based” JOC solutions.  Furthermore, we provide local market cost data, versus national average cost data and location factoring.  This alone can provide 30%-40% greater cost visibility and associated cost savings.
  • Improved Quality Control: By maintaining all project and workorder information available in real time we ensure higher quality control, and consistency throughout all activities and address any issues that arise more efficiently.
  • Time Savings: 4BT ease-to-use, powerful and proven solution allows for faster project completion times.
  • Risk Mitigation: We work to identify and mitigate potential risks throughout JOC Program activities ensuring that your projects are completed on time, on budget,  without any significant issues, and in full compliance.
  • Flexibility: Our team knows it’s critical to be flexible and to respond to changes or unexpected issues that may arise.  We actually answer the phone and your emails!
  • Long-Term Relationship: 4BT believes in building long-term, mutually beneficial relationships with our clients.

JOC Best Management Practices

Set up an exploratory meeting….

Job Order Contracting Solution benefits

4BT Job Order Contracting Solution Benefits

There are clear 4BT Job Order Contracting Solution benefits when compared to traditional tools and methods.

Leveraging 4BT data, software, and services, you can integrate internal and external PLANNING, PROCUREMENT, and PROJECT DELIVERY processes and teams within a  robust, compliant, and efficient environment. 

Several advantages offered by the 4BT JOC Solution and methodolgy provide you with several advantages which result in significant overall project cost savings of 30%-40% overall and up to 10x with respect to JOC Program administrative costs.

  • Simplified JOC Program Management: Within the 4BT JOC Solution there is a single point of accountability and communication throughout the entire project.  There is no sole reliance upon emails or unorganized folders of outdated information.
  • Enhanced Collaboration: By having the ability to work live with contractors on proposal reviews, everyone is ensure of  working toward the same goal and are on the same page.
  • Efficient Workflows: We streamline the JOC workflow for you organization from initial requirements, to requests for contractor proposals, to joint site visits, to proposal review, to proposal acceptance and notice to proceed, and finally to workorder and project closeout.   All required forms and approvals, with associated documentation are digital and the correct version.  This improves the repair, renovation, maintenance, or new construction design-build process and eliminates traditional adversarial relationships, and well as mitigated change orders and project delays.
  • Cost Data Reliability: 4BT creates a local market JOC Unit Price Book (UPB) and can provide quarterly updates, and/or per your JOC Program requirements.   We do not use national average cost data and attempt to localize costs using city cost indexes, area cost factors, or economic factors, all of which have proven unreliable.
  • Customized Solutions: 4BT works with you to develop custom solutions that meet your unique operational needs, including the development of custom line items for the JOC unit price book.
  • Cost Savings: Our integrated planning and construction budgeting services help to minimize change orders, reduce material waste, and avoid costly mistakes, while our current, local market cost data, ensure cost visibility and provides superior cost management capability (Note: Independent studies have clearly demonstrated the lack of local market cost representation using national average cost databases, location factors and/or economic cost factors.)
  • Improved Quality Control: By keeping all Program, Contract, Project, Proposal, Estimate, Workorder, Issues/Tasks, UPBs, Documents/Forms, etc. in one place we maintain better quality control, ensure consistency throughout all Programs, Contracts, Projects and Workorders, and identify and address any issues that arise more efficiently.
  • Time Savings: 4BTs robust and streamlined streamlined processes and our superior customer service allow for faster project completion times.
  • Risk Mitigation: Our robust JOC process embeds JOC best management practices without deviation (For example, we do not allow Assemblies to be used for JOC is contrary to JOC methodology and impacts cost visibility and compliance.)   We can provide services to identify and mitigate potential risks throughout the life of the JOC Program ensuring that projects are completed on time, on budget, compliant, and without any significant issues.
  • Flexibility: Our full-service approach allows us to be more flexible in responding to changes or unexpected issues that may arise during throughout your JOC Program lifespan.  We are responsive, and we answer the phone and your emails!
  • Long-Term Relationships: 4BT believes in building long-term relationships with our clients, real property owners and design-builders, and our full-service to JOC approach allows us to continue support your needs well into the future.
  • Secure Cloud Technology: Amazon East/West cloud infrastructure and CMMC LvL 2 compliant for DoD use.
Job Order Contracting Solution benefits
Job Order Contracting Solution benefits

Join the rapidly growing number of public sector organization realizing the benefits of the 4BT Job Order Contracting Solution!

 

 

4bt.us

 

Traditional JOC Program

The Majority of traditional Job Order Contracts are FAILURES

 

The majority of traditional Job Order Contracts are  failures because Job Order Contracting is a whole body of knowledge that involves the assembly and creation of high performing teams that perform upfront and all aspects of project lifecycle work well.

Real property owners need to drive Job Order Contracting ever step of the way, every meeting, every conversation, every issue, and NOT rely upon “JOC Consultants”.

Most public sector real property owner use JOC to simply speed procurement and, as a result, end up with excessive JOC administration fees, waste, and even compliance issues. (see JOC Program audits – https://4bt.us/job-order-contract-audits/)

4BT (Four BT, LLC – www.4bt.us) offers total JOC Solutions that maximize quality, cost, and time benefits for all participants and stakeholders, add we do so at the lower JOC administration cost.

Reach out when you are ready to improve your JOC Program, or create a JOC Program.

 

#jobordercontracting #construction #project #work #quality #procurement #compliance #consultants #administration #property #jobordercontract #jocconsultant

 

 

 

Why LEAN Construction Matters

Robust Process Drives Efficient Construction Delivery

Robust process integrating multi-stakeholder engagement enables consistent delivery of quality repair, renovation, maintenance, and new build projects on time and on budge.

The effectiveness is dependent upon the successful implementation of core collaborative systems-thinking based principles.

#1 Process integrating Planning, Procurement, and Project Delivery Teams with established workflows.

#2 Long term mutually beneficial contracts between Owners and Service Providers (i.e. Design/Builders), inclusive of a Operations Manual/Execution Guide.

#3 Granular line item locally researched construction cost data organized using expanded CSI MasterFormat, and updated quarterly.

#4 Quantitative metrics supporting continuous improvement.

#5 Required initial and ongoing training for all participants.

#6 Owner leadership, direct involvement, capacity, commitment, and accountability

Robust Process Drives Efficient Construction Delivery
Robust Process Drives Efficient Construction Delivery

Realtime multi stakeholder engagement increases the effectiveness of collaboration and significantly improves outcomes for all forms of construction projects.

Why LEAN Construction Matters

Creating a Detailed Scope of Work – Efficient Construction Project Delivery

Creating a detailed scoped of work is critical to achieving consistent best value outcomes for all repair, renovation, maintenance, and new construction activities.

 

The assigned Owner project manager is responsible for the creation of a detailed SOW.  The SOW drives project time, cost, quality and associated project objectives, goals, and final results.   The SOW, in concert with the owner PM’s ability to lead a team to completion, ultimately determine overall project “success”.

An unclear scope directly leads to confusion among project participants, scope creep, and change orders.  Associated robust processes are needed for both scope creation and overall project planning, procurement, and project delivery.    Without both a detailed SOW and a robust process,  efficient project management is impossible.

 

Scope of Work Creation  – Address the most common failure point in construction.

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Alliance Construction Delivery Methods

Alliance Construction Delivery

Alliance construction delivery is process in which significant cost reduction, shorter project timelines, and high quality can be achieved  through sharing information, making joint decisions, and sharing benefits that otherwise could not be possible via traditional methods.

 

Learn more…

How to:

  • Achieve cost reductions
  • Enhance operational flexibility
  • Mitigate risk
  • Reduce project timelines
  • Ensure compliance

JOC Multi-stakeholder Collaboration

JOC Multi-stakeholder Collaboration

JOC multi-stakeholder collaboration is the next step in productivity improvement.

To date, most Job Order Contracts have been used to speed the procurement of repair, renovation, maintenance, and less design-intensive new construction projects.  While time reduction is certainly important, cost reduction, quality improvement, and improving owner/design-builder relationships are major additional benefits yet to be achieved on a widespread basis.

JOC Multi-stakeholder Collaboration and achievement of the noted benefits, required the following:

#1 Direct Owner Involvement –  Leadership, accountability, and commitment provided by the owner on a direct and day to day business, without excessive reliance on consultants.

#2 Current local market granular cost data – Unit price  (Note: use of assemblies is inappropriate for JOC) granular cost data that is locally researched and updated at least quarterly is needed in order to enable cost visibility and cost management.  (Note: The use of national average cost data, historical data, location factors, or economic factors do not provide cost visibility or cost transparency.)

#3 Robust JOC Framework – Multi-party agreement that clearly defines mutually beneficial outcomes and include an Operations Manual/Execution Guide as well as quantitative performance metrics.

 

JOC Multi-stakeholder Collaboration
JOC Multi-stakeholder Collaboration

JOC multi-stakeholder collaboration is the next step in productivity improvement, including cost reduction and faster project timelines.

 

www.4bt.us

 

Benefits of Market Cost Data to Create Estimates

Benefits of Local Market Cost Data to Create Estimates – 4BT

4 Benefits of Local Market Cost Data to Create Estimates

#1 DEFENSIBLE – Unlike the “industry leader”, 4BT does not create a national average cost database or use “city averages” or “location factors”.   We learned a long time ago, as have others, that this type of data typically does not represent current local market conditions.  In fact, cost discrepancies of 30%-40%+ are the norm.

4BT only creates and updates cost databased that are researched per location.  We also update our databased quarterly.

#2 DYNAMIC – We listen to the needs of our clients and constantly add new line-items.

#3 EASY TO USE – All line-item cost data is organized using expanded CSI MasterFormat.  This enables simplified data management and the ability to update estimates with various other databases as needed.

#4 SUPERIOR TECHNOLOGY –  We exclusively provide enterprise collaborative software to take full advantage of our construction cost data.  Our platform can manage multiple Programs, Contracts, Proposals, Estimates, Work Orders, Documents, Forms, Contractors/Subconstractors, Teams, Buildings, Graphics, Issues/Tasks, and even leverage BIM information.

 

construction cost estimating facts

Sustainable Facilities Management
Sustainable Facilities Management

 

 

JOC Program FAILURE POINTS

JOC Program FAILURE POINTS

JOC Program FAILURE POINTS

Eliminating JOC Program FAILURE POINTS is key to maximizing benefits for both owners and awarded JOC contractors.

Most JOC Programs are improperly implemented and therefore never achieve their many potential benefits.

List of JOC Program FAILURE POINTS
#1 Public sector OWNER is not fully engaged in the process. (Excessive reliance upon a “JOC consultant” to review projects and/or choosing the wrong JOC “partners”. Lack of management capability within the Owner Project Management Team/Core Group is fatal to JOC Programs. )
#2 Public sector OWNER not demonstrating the behaviors associate with JOC as an integrated project delivery method. (Owner using JOC to simply speed procurement. Owner “bid shopping” JOC project. Failure to link Owner and Design-Builder goals.)
#3 Failure to develop a clear, defined project scope.
#4 Failure to integrate planning, procurement, and project delivery teams and enable a more consistent approach to delivering high performance projects.
#5 Owner unwillingness to change or learn.
#6 Failure to require initial and ongoing training for ALL JOC Program participants.
#7 Lack of transparency.
#8 Failure to use CURRENT local market unit price cost data. (Note: National average cost data, location factoring, or economic factoring do not provide defensible representations of project costs.)

Sustainable Facilities Management
Best Value Job Order Contracting and Total Cost of Ownership Management

Learn more… www.4bt.us

#jobordercontract #jobordercontracting #solution #unitpricebook #JOCconsultant #construction #team #data #design #design #training #procurement #projectmanagement #change #project #planning #projects #management

Construction Cost Estimating is NOT and ART

Construction Cost Estimating is NOT an ART

While most writings imply that construction cost estimating is a combination of art and science, below are the reasons why Construction Cost Estimating is NOT and ART.

 

Construction Cost Estimating is NOT and ART and though the debate of art vs. science with continue, my vote is “highly technical profession”.

 

#1 Construction cost estimating is a profession.   Construction cost estimating takes decades of multi-discipline experience.  An understanding of diverse construction means and methods is required, and the potential impacts of multiple sources of variation must be considered.  The application of this knowledge is not so much an art, but a true professional learned discipline.   Just like a surgeon, practice, practice, and more practice, leveraging proven methods and techniques is the path to consistently positive outcomes.

#2 Robust Process is critical.  The application of a consistent robust process is mandatory elements to ensuring consistent, verifiable, defensible, and detailed construction cost estimates.   A detailed line item estimate inclusive of quantities and granular task descriptions inclusive of local market labor, material, equipment, and productivity data and costs is the only pathway to best possible estimation. (Process: A sequence or flow of Activities in an organization with the objective of carrying out work.)

#3 Knowledge of Teams and People.  Productivity is clearly linked to the people involved at all levels of a repair, renovation, maintenance, or new build activity.  A construction cost estimator can only create information with the assumption that the people involved have the appropriate levels of capacity and capability.

#4 There is no such thing as an accurate construction cost estimate.  A construction can be defensible, verifiable, and detailed, but never accurate.  Measuring accuracy required the ability to be validated/measure against a control.  There simply is no “control”.  Using actual construction costs clearly is inappropriate.  Using similar recently completely project also includes far too many variables.

 

While the debate of art vs. science or both, will continue.  My vote is a that it’s a profession and highly technical/experience based.  If one wishes to call “expert judgement” an art, then that’s one thing.  Expert judgement is certainly required to validate process and outputs.   As noted, I consider expert judgement a learned attribute.

We always need the expert judgement – the issue is sometimes to get hold of the experts at the right time. There are many benefits for the quality of the estimates if it is validated by an estimating expert – even if it is late in the life cycle.

 

Estimating as a process – The Estimating process is the combination of different techniques and solutions to drive a high quality result.  (Green, C. 2006)

 “Definition of estimating –  A quantitative assessment of the likely amount or outcome. Usually applied to project costs, resources, effort and duration and is usually preceded by a modifier (i.e., preliminary, conceptual, feasibility, order-of-magnitude, definitive). It should always include some indication of accuracy (e.g. ±x percent).(A Guide to the Project Management Body of Knowledge (PMBOK® Guide, p. 380)”

via 4bt.us

Actionable Construction Cost Data for Job Order Contracting Unit Price Book

construction cost data

 

 

 

 

Green, C. (2006)

Standardized Work Management

Standardized Work Management Drives FM Productivity

Standardized work management drives FM productivity by providing full technical and cost transparency to both owners and service providers.

Cost savings of 30%-40% are possible local market requirements are known and shared by owners, design-builders, and others in a collaborative manner with a focus upon mutually beneficial best value outcomes.

People, Purpose, Process, Information, and Technology

Establishing standardized granular work tasks and associated processes and workflows establishes a baseline for improvement.  Without a baseline productivity management is simply not possible.   Objective, granular works tasks come in the form of  locally researched unit price cost books (UPBs) that include a task description, unit of measure, and detailed labor, material, and equipment breakdowns in composition and cost.

1. Establish a baseline for improvement.
2. Create a means of realizing attainment of organizational goals at all levels,  from leadership to the front lines where those doing the work are enabled to contribute there expertise and problem solving skills.
3. Commit to and support a collaborative work environment among internal and external planning, procurement, and project delivery teams.
4. Enter long-term mutually beneficial performance-based projects that have integral operations manuals/execution guides and associated standardized workflows and quantitative metrics.
5. Require initial and ongoing training in support of continuous improvement.

Standardized Work Management Drives FM Productivity while standardized granular work tasks and associated processes and workflows establish a baseline for improvement.

Well-designed standardized work ins combination with robust systems-thinking based process supports both technical and social dimensions of the work equally, fostering a productive environment and accountability.

Standardized Work Management Drives FM Productivity
Sustainable Facilities Management

Standardized Work Management Drives FM Productivity

Standardized Work is Critical to Construction Outcomes

Why Standardized Work is Critical to Construction Outcomes

Standardized Work is Critical to Construction Outcomes

standardized work in construction

Standardized processes and workflows are critical to establishing collaborative work environments with full technical and cost transparency. Rather than limiting innovation, they enable those doing the work and associated contribution of their expertise.

People, Process, Information, & Technology

Integrated Planning, Procurement, and Project Delivery Teams

Integrating people and relationships with technical processes such as built environment repair, renovation, maintenance, or new construction is far from difficult.   It is quite simple.  It does, however, require real property owner leadership, capacity, commitment, and capability.

What is standardized work?   Specific to construction, it is the definition of a granular work task in terms of (1) definition (what does the task accomplish) (2) timing (Labor hours and composition required ,  (3) the associated type and number/amount of physical items required (materials and equipment), and (4) associated detailed costs.

The optimal method of categorizing and maintaining standardized construction work is via an objective and current locally researched line-item construction database.   These databases are readily available in electronic format and organized using standardized data formats such as expanded CSI MasterFormat and/or expanded UNIFORMAT.  Using a standardized data architecture is critical to enabling the efficient use and reuse, and continuous improvement of information internally and collaborating with external organizations/teams.

“Before an organization can reap the benefits of standardized work, a robust process framework must be defined and implemented, and work standards clarified.”

Without standardization, improvement is unlikely or “hit or miss” at best.

Important Note:  Standardization via a line-item database provides a common industry practice for a specific task/operation/routine that serves as the baseline of comparison for any individual doing the work.  It can be used to discern normal from abnormal in terms of time, materials, and practices.  With that baseline, a foundation  enabling management is established, making improvement possible. This doesn’t mean that a given operation is done the same way everywhere, but is a reference,  continuous improvement is always possible and should be enabled and recorded.

Standardized Work is Critical to Construction

 

via www.4bt.us – 4BT OpenCostTM Cost Data establishes a baseline of operation from which improvement is possible.

Integrate People with Process the 4BT Alliance &  Job Order Contracting Solutions

 

Additional Information

“Standardized work and kaizen are two sides of the same coin — if you try to have one without the other, you will encounter one of two types of serious problems.

Standardized work without kaizen:
• Employee motivation is killed, human creativity wasted
• Problems repeat, unidentified, unsolved, and unabated
• Employees don’t take the initiative, so improvement stops
• Operations — like economies, like companies, like cultures, like species — either progress or decline.

Kaizen without standardized work:
• Chaotic change, the saw-tooth effect of progress and regress
• Problems repeat, PDCA not followed, no root cause analysis
• Progress that is impossible to identify, improvement stops
• Kaizen, an expression of the scientific method, requires a baseline of comparison.  (Source: Standardized work and kaizen are two sides of the same coin — if you try to have one without the other, you will encounter one of two types of serious problems.
(Source: How Standardized Work Integrates People with Process, Lean Enterprise Institute, 2023)

Why LEAN Construction Matters

Leveraging JOC as a SYSTEM not simply a Procurement Tool

Leveraging JOC as a SYSTEM not simply a Procurement Tool provides significantly greater benefits while also reducing costs.

Many, if not most, current Job Order Contracting Programs simply use JOC to speed the procurement of repair, renovation, maintenance, or new construction activities.  This practice not only limits benefits possible from JOC  negatively impacts cost management capabilities, and even sets the stage for potential fraud.

#1 Job Order Contracting is a form of Integrated Project Delivery (IPD) and should integrate planning, procurement, and project delivery teams in an early and ongoing basis throughout project lifecycles.  Far too often, procurement uses the tool to simply push projects through faster and even outsource the management of the JOC Program.   Owner planning, procurement, and project teams should be involved in every JOC activities.

#2 Paying a percentage fee related to construction volume is very costly presents several conflict of interest.   For example, a “JOC consultant” is being paid a fee based upon a dollar value of a project that they are recommending for approval.

#3 JOC Program should be fully collaborative and financially transparent, and not pit Owners against Contractors.

 

Reduce Rework,  Optimize Jobsite Productivity, and Lower Costs with Systems thinking-based JOC.

Leveraging JOC as a SYSTEM not simply a Procurement Tool provides significantly greater benefits while also reducing costs.
Sustainable Facilities Management

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Alliance Contracting in Construction

Alliance Contracting in Construction

Alliance Contracting in Construction provides a real opportunity for the consistent delivery of quality repair, renovation, maintenance, and new build project on time and on budget.

Alliance Contracting in Construction
Sustainable Facilities Management

Alliance Contract/Contracting –  A specific means of project planning, procurement, and delivery wherein the owner/principal and service provider (design-builder) work collaboratively to deliver the defined, mutually beneficial outcomes of a project.  It a relationship characterized by risk/reward sharing and a no blame/no-disputes framework, and full financial transparency.  The term Alliance Contract is generally synonymous with “project alliance”, as well as forms of “integrated project delivery” and “job order contracting”.   Owner and service provider planning procurement, and project delivery teams work in a highly transparent and “collaborative” manner wherein commercial interests and actual project outcomes are in alignment.  Alliance contracting is a form of relationship or relational contracting.

To date, most (99%)  alliance contract implementations in the form of JOC and IPD are more JOC-like and IPD-like and fail to leverage all core fundamentals and associated benefits.

To gain full value from these powerful methods the following foundational elements are required:
1. Owner support, capacity, commitment, and accountability,
2. Integrated planning, procurement, and project delivery teams throughout contract life,
3. A mutually beneficial long-term contract with an integral operations manual/execution guide.
4. Current, local market, granular local market cost data (not national average data, cost factoring etc.)
5. Mandatory initial and ongoing training.
6. Quantitative performance indicators.
7. Enablement of those actually doing the work.)

Alliance Owner – Government department or agency
Competitive Best Value Procurement – Design-builders are selected based upon capability and performance as well as cost.
Early Design-Builder Involvement – Owner creates a Scope of Work for a particular need/activity and meets with contractor on-site and otherwise as needed to provide enough information to enable the design-builder to provide a detailed line item quote using a local market line item cost database.

www.4bt.us

#project #planning #design #construction #work #data #job #training #collaboration #procurement #database #like #IPD #alliancecontract #alliancecontracting #jobordercontact #jobordercontracting

 

Note:  Alliancing began in the construction industry in the 1980’s, with its roots in North Sea oil and gas projects. (Chew, S.  ALLIANCING IN DELIVERY OF MAJOR INFRASTRUCTURE PROJECTS AND OUTSOURCING SERVICES IN AUSTRALIA — AN OVERVIEW OF LEGAL ISSUES)

Note: Public sector outsourcing over that past several decades has resulted in governments  relying on the private sector to achieve outcomes previously conducted with ‘in-house’ capabilities.  This has resulted in  public sector diminished capacity and competency.  Federal, State, County, and Local Government  have  lost key skills in planning, designing, estimating, planning and implementing projects.  Management of these activities is a critical issue. (1998, Domberger,  S. The Contracting Organisation,  2008, Davies, J.Alliance Contracts and Public Sector
Governance

 

masterformat construction cost estimating

Job Order Contracting Solution that is cost effective

The ONLY Cost Effective Job Order Contracting Solution that maintains current local cost data

If you are looking a Job Order Contracting Solution that is cost effective and maintains current local cost data, you are in the right place.

Four BT, LLC saw the need for a cost effective, innovative, easy-to-use, yet more powerful JOC solution vs. “traditional”, “outdated” methods provided by “market leaders”.

If you want to stop wasting hundreds of thousand or even millions of dollars a year on JOC administration costs and poorly managed JOC Programs, simply reach out for a quick call.

The 4BT Knowledge-based JOC Solution:

  • Program Management
  • Contract Management
  • Proposal Management
  • Estimate Management
  • Work Order Management
  • Workflow, Approvals, and Forms Management
  • Full Document Management (now simply folders – full version control)
  • Document, Forms, etc. attached to work orders (no more searching for information)
  • Teams Management (Internal, Contractor, Subcontractor)
  • Building Management
  • BIM Integration
  • Secure (CMMC LvL 2), AWS East/West
  • Notes Capability (At all levels, Access your only, Internal only, or ALL)
  • Business Type Tracking
  • Budget and Project Status Tracking
  • Scalable
  • CSI MasterFormat
  • Triservices UNIFORMAT (for Preventive Maintenance)
  • And more….

Cost Effective Job Order Contracting Solution

 

Cost Effective Job Order Contracting Solution

Cost Effective Job Order Contracting Solution

Why LEAN Construction Matters

Construction: Integrating People and Robust Process with Standardized LOCAL MARKET Construction Task Data

Any organization can measurable improve repair, renovation, maintenance, and new build outcomes by integrating People and Robust Process with Standardized LOCAL MARKET Construction Task Data.

 

FACTS with knowing….

#1    Objective studies have shown that using national average cost data, location factors, historical data, area cost factor, or economic factors do NOT provide adequate visibility in local market costs.

#2    Granular line item estimating with full visibility into labor, material, equipment, and productivity details is the ONLY way to obtain reliable, objective,  and verifiable costs and proceed to procurement with a sufficient level of cost control.

#3    4BT is the exclusive source of local market line item construction cost data that is updated quarterly and organized using expanded CSI MasterFormat, while also providing local market preventive maintenance cost data and checklists for all frequencies organized using TriServices expanded UNIFORMAT.

#4    A poorly defined and poorly communicate Scope of Work is the #1 cause of “construction” project failure.

 

onstruction: Integrating People and Robust Process with Standardized LOCAL MARKET Construction Task Data

 

www.4bt.us

Alliance Construction Project Delivery

Alliance Construction Project Delivery – Driving Public Sector Stewardship of the Built Environment!

Alliance Construction Project Delivery is critical to public sector stewardship of the built environment.   Arguably, positive financial and environmental outcomes are impossible without it!

Alliance – A commercial arrangement involving close collaboration, sharing of risks and rewards, and framework that discourages disputes.

Current Situation
#1 Initial budgets for Repair, Renovation, Maintenance, and New Builds are almost always exceeded.
#2 Redesign, rework, and change orders are the norm vs. exception.
#3 Financial visibility and cost management are virtually non-existent.
#4 A robust, common process is NEVER employed.
#5 Scope of Work definition and understanding among all parties is a common failure point.
#6 Vendor selection process are flawed and favor economic and environmental waste.
Future, with Owner Leadership, Capacity, Commitment, and Accountability
#1 90%+ of ALL projects (repair, renovation, maintenance, and new builds) completed in a quality manner, on time, and on budget with full financial and technical transparency.
#2 Integrated and enabled internal and external planning, procurement, and project delivery teams working towards mutually beneficial, clearly defined outcomes.
#3 Granular scope of work with full labor, material, equipment, and productivity requirements defined in a common data architecture/format.4bt.us#project #maintenance #architecture #leadership #data #planning #future #management #procurement #procurement #work #quality #change #productivity #environmental #environmental #projects

Alliance Construction Project Delivery

 

 

Why LEAN Construction Matters

The SOLE SOURCE for Current, Objective, Verifiable, and Granular LOCAL MARKET CONSTRUCTION COST DATA

4BT (Four BT, LLC) is the sole source for current, objective, verifiable, and granular local market cost data that does not rely upon location or economic factoring of national average cost information.

Construction cost data is available for for Small Projects, Operations & Maintenance, and Major Renovations and Alterations, as well as Preventive Maintenance.

construction cost data
SOLE SOURCE for Current, Objective, Verifiable, and Granular LOCAL MARKET CONSTRUCTION COST DATA to measurably improve cost management.

uniformat

 

LOCALLY RESEARCHED Cost Data

LOCALLY RESEARCHED Cost Data – Up to Date Unit Price Construction Cost Data

LOCALLY RESEARCHED & Up to Date Unit Price Construction Cost Data available exclusively from 4BT (Four BT, LLC)!

  1. Line item cost data representing local market conditions.
  2. No use of location factors or economic factors – actual local market labor, material, and equipment costs.
  3. Cost data is collected and represented in a consistent way – expanded CSI MasterFormat, industry standard terms and defintions.
  4. Fully transparent technical and cost information.

 

WWW.4BT.US – The objective, verifiable source for local market granular construction cost data.

CSI Masterformat

 

 

 

Innovative LEAN Job Order Contracting

Innovative LEAN Job Order Contracting Knowledge-based System

Four BT, LLC (4BT) exclusively provides the Innovative LEAN Job Order Contracting Knowledge-based System.

  1. Systems-thinking based process and integrated technology
  2. Integration of internal and external planning, procurement, and project delivery teams
  3. Instant access to all current documents, drawings, forms, statuses
  4. Common goals, information, workflows
  5. Maximized leverage of the skills, knowledge, and problem solving of those actually doing the work
  6. Full cost and technical transparency – objective, current, granular labor, material, equipment, and productivity.
  7. Improved, long-term relationships among interdisciplinary team members
  8. Robust programmatic process applied to all work
innovative job order contracting
Sustainable Facilities Management

 

WWW.4BT.US

 

masterformat construction cost estimating

Construction Cost Estimating Facts

Construction Cost Estimating Facts

Construction Cost Estimating Facts

Construction Cost Estimating Facts
Construction Cost Estimating Facts

#1 There is no such thing as an “accurate cost estimate”.  Beware of any so called expert, estimating firm, or vendor using the term.

#2 Construction cost estimating is NOT an art.  Decades of professional experience in construction cost estimating, knowledge of actual construction process, means, and methods, and business environment acumen lead to  becoming a valued construction cost estimating professional.   There is no “secret sauce”, there are no “short cuts”, and technology in itself is not a solution.

3# Detailed knowledge of local market labor, material, equipment, and productivity information a granular level is required to produce a verifiable and defensible construction cost estimate that is actionable.  The use of building cost models, assemblies, national average cost data, historical costs, location or area cost factors, economic factors are will not provide equivalent, actionable cost information.

#4 Failure to make cost estimating part of a robust and integrated planning, procurement, and project delivery process, will inevitably result in cost and schedule overruns, change orders, and other forms of waste.  80% of all repair, renovation, maintenance, and new build activities lack financial and technical visibility in the form of a line item, detailed scope of work per above, and therefore result in one or more “failures”.   Poor management and poor process are the cause of 85%+ of all project failures, not the people actually doing the work.

Get a handle on sustainment, restoration, maintenance, and new build costs.

via 4bt.us Robust, objective, granular and defensible construction cost data and proven program management processes and enabling technology.

Why LEAN Construction Matters

Poor Construction Estimates – Root Cause

 

Poor Construction Estimates – Root Cause

The are two primary root causes of poor construction cost estimates:

  1. Lack of early and ongoing communication between all relevant parties.
  2. Failure to use granular, current, and well organized construction cost data specific to the local market.

via 4BT.us – Verifiable local market granular construction cost data and support program and estimate management technology.

poor construction estimates
The are two primary root causes of poor construction cost estimates, lack of collaboration and failure to leverage local market cost data.

 

FACILITIES PREVENTIVE MAINTENANCE COST CONTROl

RESTORE CONFIDENCE IN FACILITIES PREVENTIVE MAINTENANCE COST CONTROL & OUTCOMES

FACILITIES PREVENTIVE MAINTENANCE COST CONTROL and managing associated outcomes are critical aspects to lifecycle total cost of ownership asset management and associate FSRM (Facilities Sustainment, and Restoration and Modernization)

Locally Researched and Current Preventive Maintenance Cost Database – Exclusively available from 4BT!

  • Task Description and associated expanded TriServices UNIFORMAT organization
  • Unique PM check list for each task and for each frequency
  • Unique cost for each frequency and task
  • Labor and equipment cost detail

Just imagine, with a site inventory of facilities equipment you can now cost and procure all your preventive maintenance requirements with confidence!

FACILITIES PREVENTIVE MAINTENANCE COST CONTROL

uniformatFACILITIES PREVENTIVE MAINTENANCE COST CONTROL

2023 Collaborative Job Order Contracting

2023 Collaborative Job Order Contracting

2023 Collaborative Job Order Contracting is far superior to “traditional”  JOC Program approaches.

 

Looking to improve how your teams work together?

  • Streamline workflows
  • Reduce bottlenecks
  • Empowering teams

 

 

Multiple JOC Program audits confirm what most owners already know.  JOC Programs must be collaborative with all parties working in a compliant, fully transparent environment, and towards mutually beneficial well-defined goals.   In many instances, this has simply not been the case.

#1.  Owners must provide leadership and accountability and not excessively rely upon “JOC consultants”.

#2. Paying a “percentage of construction volume” for “JOC services” is costly and not in concert with the fiduciary responsibility of public sector owners.

#3. Building and retaining owner and contractor knowledge is critical and simply hasn’t been the norm.

 

JOC dashboard

Work with 4BT to develop and implement a Collaborative JOC Program that benefits all participants and stakeholders.

  1. Jointly work with us to conduct a JOC Program needs assessment, whether its your first, or you are transitioning from traditional methods.   This process includes the identification of participants and roles,  implementation schedule with key milestones, establish workflows, develop a locally researched detailed line item unit price book complete with task description, labor, material, equipment information, and associated line items for demolition and modifiers as appropriate (all organized using expanded Masteformat), creation of all required forms and documents to support the workflow and approval processes,  quantitative performance indicators.
  2. 4BT PEP JOC Knowledge-based Technology Platform
  3. Multi-level, multi-format training and support services2023 Collaborative Job Order Contracting 2023 Collaborative Job Order Contracting

Why LEAN Construction Matters

Objectively Validate Contractor and Subcontractor Quotes

Objectively VALIDATE Contractor and Subcontractor Construction Cost Estimates

Construction cost management capabilities are critical to the success of any repair, renovation, maintenance, or new build activity.  That said 80%+ of all projects are late or overbudget largely due to an inadequately detailed and poorly communicated Scope of Work (SOW) and associated cost estimate.

#1 Using a granular, current locally researched construction cost database enables validation of contractor and subcontractor estimates.

#2 Validating contractor estimates using a locally researched cost database can save 30%-40% of overall project costs.

#3 Sharing and estimate developed using a locally researched cost database with contractor improves SOW definition and significant reduces risk for all parties.

Simply applying quantities to line items that reflect local market conditions labor, material, equipment, and productivity is a proven path towards cost visibility and improved cost management.

Using a standard data architecture (expanded CSI MasterFormat) and industry standard terms and definitions is also critical to information sharing.

 

#construction #architecture #architecture #success #data #management #project #work #productivity #productivity #database #maintenance #costestimate #estimator #costdata

4bt.us – Objective local market construction cost data

BUILDER SMS - TOO LITTLE TOO LATE

BUILDER SMS – Too little to late?

“stepwise methodologies can be superior to the industry-leading continuous methodologies employed by BUILDER SMS in service-life prediction accuracy and decision-making versatility as ensembles.”

“the asset management industry must move away from just focusing on when a component will fail and consider the strategic points throughout a component’s life when targeted maintenance or repair may be beneficial”

– Improving Data-Driven Infrastructure Degradation Forecast Skill with Stepwise Asset Condition Prediction Models Kurt, 2022, R. Lamm, Justin D. Delorit, Michael N. Grussing, Steven J. Schuldt

 

preventive maintenance cost database

Why LEAN Construction Matters

Better estimates.

Better estimates.

  1. Verifiable. current local market labor, material, and equipment costs – updated quarterly.
  2. Detailed line item data organized with expanded CSI MasterFormat
  3. 2X+ faster than manual or spreadsheet estimating
  4. Complete audit trail
  5. Remove data sharing barriers – Copy, paste, share estimates securely
  6. Mitigate errors and omissions
  7. Export to spreadsheet or PDF
  8. Cloud, SQL technology

masterformat construction cost estimating

Construction Cost Management Capabilities

Construction Cost Management Capabilities 2023

Construction cost management capabilities are critical to the success of any repair, renovation, maintenance, or new build activity.   That said 80%+ of all projects are late or overbudget largely due to an inadequately detailed and poorly communicated Scope of Work (SOW) and associated cost estimate.

Questions every real property should ask before procuring a repair, renovation, maintenance, or new build service.

#1 Can I objectively validate the cost estimate?

#2 Is the cost estimate objective?

#3 Does the cost estimating include all granular construction tasks and quantities, including labor, material, equipment, and productivity representing current local market conditions.

#4 Is the cost estimate organized using a standard data architecture (i.e. expanded CSI MasterFormat) and industry standard terms and definitions understandable to all participants and stakeholders?

#5 Do all planning, procurement, and project delivery teams understand and agree with the construction cost estimate?

#6 Can I dynamically review, edit, and track the construction cost estimate as needed?  Are all changes logged as well as notes includes as to why changes were made?

#7 Can I track the performance of the cost estimate through the project lifecycle?

#8 Is my cost estimate part of a robust, integrated planning, procurement, and project delivery process?

 

Construction Cost Management Capabilities

 

If you can not answer “Yes” to all the above….  let’s talk.

 

masterformat construction cost estimating

www.4bt.us

Validity of a Construction Cost Estimate

Validity of a Construction Cost Estimate – Public Sector

The validity of a construction cost estimate is often overlooked, resulting in billions of dollars of waste every year.

 

A construction cost estimate must be independently validated.

 

Key Principles

There are key principles that should be adhered to when preparing a construction cost estimate.

Integrity:  Cost estimates must be calculated through an open and transparent process. Any uncertainties should be explained in an easily understood manner in laymen’s terms. Avoiding false precision and early optimism. The use of consultants to prepare estimates must be carefully structured and reviewed, to make sure that no conflicts of interest exist from a Government-Contractor relationship aspect. The contracting agency should have procedures that address conflict of interest issues in all solicitations.

Contents of a Cost Estimate: The cost estimate should be considered the equivalent of the total project purchase price. As such, it should include all costs and the value of any resources needed to complete the work.  The cost estimate should be detailed, i.e. line item, and presented in a clear, standardized manner.  Labor, material, and equipment costs, as well as productivity information should be provided and all based upon current local market conditions.  Lump sum quotes from contractors or subcontractors are unacceptable as they do not provide cost visibility or cost transparency and can not be independently verified.

Validity of a Construction Cost Estimate

Year-of-Expenditure Dollars: After the cost estimate is prepared, it should be expressed in year-of-expenditure dollars if there are multiple construction contracts.  Make certain that the selected year-of-expenditure reflects a realistic scenario, taking into account project planning and development durations, as well as construction.  Clearly specify how inflation is considered in the estimate and clearly state that the estimate is expressed in year-of-expenditure dollars.

Basis of a Cost Estimate: Estimates should be developed using the best information available.  At a MIMINUM, a current, local market line item cost database should be leveraged to validate contractor and contractor quotes as well a prepared an independent government estimate (IGE) as appropriate.   Professional expertise and judgement must be applied with leveraging any cost data source.  Historical data for similar project will rarely be of any practical use due do variations in local market labor, material, and equipment pricing as well as productivity.

Risk and Uncertainty: Costs should be determined for uncertainties within an estimate. All elements of the project must be reduced to a cost that can be accounted and budgeted at a line item level.  There should be a disciplined and comprehensive method of assessing and reassessing project risk and uncertainty. Costs that are unknown and costs associated with potential risks can be included in the form of a contingency amount.  Contingencies should be expressed in terms that can be easily presented to and understood by the public. The appearance of false precision must be avoided.

Project Delivery Phase Transitions: Estimates should be tracked throughout the life of the project and assumptions and estimate information must be well documented, including changes and what is and what is not in the estimate.  Appropriate notes should be added to line items to track changes throughout the planning, procurement, and project delivery phase.   The documentation should be in a form that can be understood, checked and verified.  A formal version control system must be incorporated and not a simple file based system with multiple documents.

Team of Professionals: A skilled, interdisciplinary team should produce estimates. Estimates should be developed using a clearly identified scope of work. Estimates should be based on consultation and not be developed in a vacuum. The estimating team should be composed of experienced personnel, with the requisite technical, managerial, leadership, and communication cost estimating skills. The team should also have a thorough understanding of the project’s scope, including the ability to determine and evaluate critical issues and risks. If resources are available, others experienced in estimating who have not been extensively exposed to the project should also provide input. This can bring a new independent analysis regarding items that may have a major impact on the cost estimate. Core competencies for cost estimating and a formalized training program to meet these competencies should be established. In addition, an estimating process manual should be in place.  An experienced person who is well trained in major project estimating should lead the process.

Validation of Estimates: A competent unbiased team should validate the cost estimates using a current, local market construct task cost database.  Periodic reviews of estimates are important for several reasons. First, conditions and underlying assumptions for original and subsequent estimates often change, thus estimates need to be refreshed to account for these changes.

Release of Estimates and Estimating Information: Careful consideration must be given to the context surrounding the release and potential use for the information provided in the estimates. While estimates may have been developed for a specific and unique purpose they may be subject to misuse by those who do not understand the applicable context. Cost estimates should not be released  until they have been thoroughly reviewed and found to be consistent with the project scope and are valid and complete indicators of project costs.

Validity of a Construction Cost Estimate

Construction Estimate. The total cost of physically constructing the project in the time required based on current costs for labor, materials, equipment, mobilization, bonds, and profit.  In preparing a cost estimate, a value analysis must be performed concurrently to establish the appropriate selection, means, and methods of each tasks to ensure the lowest possible life-cycle cost per the approved detailed scope of work.  Note:  Under no circumstanced should “price indexing” or “cost factoring” be used to adjust a construction cost estimate.  The use of economic factors, location factors, or area cost factors as a means to update the total cost of an estimate does not provide adequate cost visibility versus updating actual line items for labor, material, and equipment variation due to time.

 

The validity of a construction cost estimate is critical to any repair, reno, maintenance, or new build activity.

 

Construction Cost Estimate Checklist

  1. Estimate is escalated to year of expenditure dollars for each element of the project.
  2. Process includes risk-based assessments of unknown and all uncertain costs.
  3. Estimate is well documented
  4. Estimate has been independently validated.
  5. Estimate is consistent with project scope.
  6. Estimate includes all initial preliminary engineering costs and final design costs.
  7. Estimate includes all right-of-way and administrative costs.
  8. Estimate includes all third party (e.g. utility, railroad) costs.
  9. Estimate includes all construction costs.
  10. Estimate includes construction contingencies.
  11. Estimate includes construction administration.
  12. Estimate includes public outreach cost.
  13. Estimate includes a management reserve.
  14. For planning or conceptual estimates, consideration was given to expressing the estimate as a range.
  15. For projects under design, estimates include a design contingency at each stage of design.

 

 

 

Deliver QUALITY Facilities Projects ON TIME and ON BUDGET

How to Consistently Deliver QUALITY Facilities Projects ON TIME and ON BUDGET

 

Identify and engage champions and leaders.

Develop a written Execution Guide / Operations Manual that is integral to associated contracts.

Leverage a phased approach for all alliance partnerships and activities.  Accept that not all participants will implement change at the same rate and the both learning and improvement are continuous.

Mandate initial and ongoing training for all participants and stakeholders.

Leverage appropriate technology to build and retain knowledge.

Acknowledge and leverage the experience of those actually doing the work.

Deliver QUALITY Facilities Projects ON TIME and ON BUDGET

Deliver QUALITY Facilities Projects ON TIME and ON BUDGET

 

 

Job Order Contract Core Requirements Drive Efficiency

Job Order Contract Core Requirements Drive Efficiency

Job Order Contract CORE REQUIREMENTS drive efficiency.  They are critical to enabling optimal performance and achieving satisfaction for all participants and stakeholders.

Traditional JOC Programs have proved challenging and costly to many participants as they tend to be structured to favor owners and are costly.   Also, they fail to bring together the right people, owners, and design-builders, together in a collaborative environment.

Job Order Contract Core Requirements Drive Efficiency
Sustainable Facilities Management

 

The following 7 Job Order Contract Core Requirements Drive Efficiency

 

 

#1 Put People First: Center your JOC Program around integrating your Planning, Procurement, and Project Delivery Teams and enabling internal and external professionals to reach their full potential and perform their best sets up your organization for best value achievement.

#2. Apply Systems Thinking: Take the time to understand your internal requirements and those of our JOC contractors.

#3. Don’t pay Percentage Fees: Do not pay a percentage of JOC construction value for JOC tools or services. While the cost impact seems low at first, hundreds of thousands of dollars to millions are wasted.

#4. Do not rely heavily on a “JOC Consultant”: A core benefit of JOC is improving owner and contractor relationships and jointly building knowledge and capabilities. Encourage rapid learning, reuses of existing knowledge, and capture new knowledge to make it easier to use in the future to accelerate overall efficiency.

#5. Remember JOC is a TEAM Sport: Support a deliberate process to engage internal and external team members across the enterprise from initial ideas to delivery. This will ensure that you maximize value creation.

#6. Define Consistent Workflows: Organizing and managing the work concurrently and consistently maximizes available resources. Properly developed and implements workflows and tools reduce administrative burden as well as overall project delivery times and costs.

#7 Use current, verifiable, granular cost data for the JOC unit price book: Do not use national average cost data, even with location factors or economic indexing.  Factoring and indexing introduce significant cost errors and lessen both cost visibility and management capability.

www.4bt.us – Innovative Job Order Contracting Solutions to support owners and design-builders.

Why LEAN Construction Matters

Significantly IMPROVE your JOB ORDER CONTRACT

SIGNIFICANTLY IMPROVE your JOB ORDER CONTRACT

Significantly Improve Your Job Order Contract
Sustainable Facilities Management

#1 Put People First: Center your JOC Program around integrating your Planning, Procurement, and Project Delivery Teams and enabling internal and external professionals to reach their full potential and perform their best sets up your organization for best value achievement.
#2. Apply Systems Thinking: Take the time to understand your internal requirements and those of our JOC contractors.
#3. Do not pay a percentage of JOC construction value for JOC tools or services. While the cost impact seems low at first, hundreds of thousands of dollars to millions are wasted.
#4. Do not rely heavily on a “JOC Consultant”. A core benefit of JOC is improving owner and contractor relationships and jointly building knowledge and capabilities. Encourage rapid learning, reuses of existing knowledge, and capture new knowledge to make it easier to use in the future to accelerate overall efficiency.
#5. Remember JOC is a TEAM Sport: Support a deliberate process to engage internal and external team members across the enterprise from initial ideas to delivery. This will ensure that you maximize value creation.
#6. Define Consistent Workflows: Organizing and managing the work concurrently and consistently maximizes available resources. Properly developed and implements workflows and tools reduce administrative burden as well as overall project delivery times and costs.
#7 Use current, verifiable, granular cost data for the JOC unit price book. Do not use national average cost data, even with location factors.

 

 

www.4bt.us
#construction #job #work #team #learning #project #procurement #people #contractors #planning #building #future #joc #jobordercontracting #jobordercontracting

and Maintenance

Best Value Job Order Contracts – The Path to Sustainable Facilities Repair, Renovation, and Maintenance

Sustainable Facilities Repair, Renovation, and Maintenance is possible through the implementation of robust, innovative Job Order Contracts.

  • Create a strategic plan and use it as a guide
  • Find the gaps in current JOC performance
  • Improve value streams to meet the performance and adjust JOC Program accordingly
  • Create new metrics to support new ways of thinking and acting
  • Understand JOC administration costs
  • Manage operations on a performance basis
  • Improve and integrate Planning, Procurement, and Project Delivery Teams
  • Continuously improve

Critical Success Factors

  1.  Management must understand, embrace, and lead the organization
  2. Those doing the work must be empowered and enabled
  3. Improvements must be planned in detail with the cross functional Planning, Procurement, and Project Delivery Teams
  4. Successes must be translated to quantitative cost and time savings as well as improvement in quality and relatoinships
Construction Productivity Woes

Technology will NOT SOLVE Construction Productivity Woes.

Despite the hype of many vendors, Technology will NOT SOLVE Construction Productivity Woes.

Corporate parentage and culture do appear to be correlated with performance; the level of technology does not. – Krafcik, 1998.

Those doing the work do far more than complete repair, renovation, maintenance, of new construction tasks, they manage quality and develop creative solutions to ever-present variables.  Performance is much more related to management philosophy.  As noted by Deming, 85% of all failures are due to management and lack of process versus those doing the work!

The basic application of critical systems-thinking to physical infrastructure activities leads to the conclusion that integrated internal and external planning, procurement, and project delivery teams within a robust framework of processes and workflows built upon the principles of mutual trust and respect, a common shared, and transparent, information environment, and a focus upon outcomes all lead to the consistent delivery of quality, on time and on budget projects.

 

Learn more about tools, common, actionable data, and services that can enable organizations to…

  1. Shift to alliance planning, procurement, and project delivery collaborative frameworks
  2. Leverage current, local market granular construction task data to validate work scope, schedules, and cost
  3. Develop and maintain robust workflows for ALL projects
  4. Reduce project timelines and costs, and in improve quality
  5. Leverage technology as tool to deploy, improve upon, and monitor performance

Improve facilities sustainment

Sustainable Facilities Management
Sustainable Facilities Management

construction cost data

 

Technology will NOT SOLVE Construction Productivity Woes, despite the hype of software vendors, consultants, and media.

1998, Krafcik, The Triumph of the Lean Production System

Public Sector Facilities Management Solution

Efficient Public Sector Facilities Management Solution

Significantly improve public sector facilities repair, renovation, maintenance, and new build outcomes.

  1. Robust Process,
  2. Integrated Teams
  3. Defined Workflows
  4. Validate Cost Data

Robust tools and support services are now readily available to support all these foundational requirements.

 

1. Preconstruction
Preconstruction planning is critical to any project.  Is the project suitable for the construction delivery method?   Are funds available?  Is the right team available?

2. Procurement Workflows
A detailed scope of work and an associated detailed line-item estimate is required before any procurement evaluation and award.  From start to finish, bidding and procurement workflows are dependent upon robust process and current, granular local market labor, material, and equipment construction task data.  Joint site visits are also necessary prior to the contract award.  The proper use of data is a prerequisite to consistent positive outcomes.  Locally researched unit price cost data can be leveraged to detail labor type, time, and cost requirements, scheduling, and provide valid cost visibility.   Lump sum or poorly detailed contractor or subcontractor quotes, historical cost data, or national average cost data do not provide any ability for cost management to an owner.

3. Project Tracking
All phases, forms, approvals, dollars, and dates for a project must be monitored to enable management.    Optimizing construction processes, projects, and work orders isn’t difficult if appropriate teams, process, information, and technology are present.  Furthermore, leveraging valid information and quantitative KPIs (key performance indicators) supports knowledge building and continuous improvement.

Sample KPIs include:

• Labor productivity rates.
• Health and safety incident rates.
• Number of change orders.
• Project completion time (forecast vs. actual).
• Project cost (forecast vs. actual).

Sustainable Facilities Management
Public Sector Facilities Management Solution

Learn more:

Why LEAN Construction Matters

Public Sector Facilities Professionals – Reduce inefficiency, Streamline processes, Improve Quality, Manage Costs

Public Sector Facilities Professionals – Reduce inefficiency, Streamline processes, Improve quality, Manage costs

 

Cost Visibility

 

Collaborative Process

Sustainable Facilities Management
Sustainable Facilities Management

 

 

Why LEAN Construction Matters

Embrace the next generation of Construction and Sustainable Lifecycle Facilities Management!

Embrace the next generation of Construction and Sustainable Lifecycle Facilities Management!

Move all repair, renovation, maintenance, and new build projects forward with proactive, informed decisions.

 

Owners & Developers – Planners – Designers – Procurement Professionals – Builders

  • Collaborate with internal and external teams to detail Scope of Work and validate local market construction costs.
  • Know exactly how your request for proposals, projects, approvals, budgets, and work orders are progressing — from anywhere, anytime.
  • Empower those doing the work and leverage their expertise.
  • Mitigate risk and access a full audit trail.
  • Dashboard and detailed reporting, as well as instant access to ALL data via upload.
  • Manage IPD (integrated project delivery) and JOC (job order contracting) contracts and all activities.
  • Full document management and version control.
  • Exclusive locally researched granular line-item repair, renovation, maintenance, and new build cost data. (No national averaging or cost factoring)

Current, actionable information leads to better decision-making and best value outcomes.

 

Construction and Sustainable Lifecycle Facilities Management
Construction and Sustainable Lifecycle Facilities Management

 

Construction and Sustainable Lifecycle Facilities Management

Construction and Sustainable Lifecycle Facilities Management

Sustainable Facilities Management

Sustainable Job Order Contracting

Sustainable Job Order Contracting

What is Sustainable Job Order Contracting?

Simple.

A compliant, low cost, solution to consistently deliver quality repair, renovation, maintenance, and new build requirements on time and on budget with full financial transparency.

The ability to deploy sustainable JOC Programs requires appropriate and ongoing consideration of the following elements.  Owner leadership and commitment are critical and outsourcing JOC management is simply not compatible with best value outcomes for all participants.

  1. Purpose
  2. Scope
  3. Criteria
  4. Desired Outcomes
  5. Evaluation Criteria
  6. Rules
  7. Leverage Disparate Team Members and Viewpoints
  8. Provide Feedback and Recognition
  9. Monitor
  10. Adjust
  11. Validate
  12. Continuously Learn and Improve

 

 

sustainable job order contracting

 

A sustainable JOC Program considers and integrates People, Process, Information, and Technology.  All are interrelated with People and Process coming first, then a verifiable, current, and actionable shared common data environment (CDE), all supported by and embedded with Technology.

Sustainable Facilities Management
Sustainable Job Order Contracting

Sustainable Job Order Contracting drives best value JOC Program outcomes via the integration of People, Process, Information, and Technology.

Most traditional JOC Programs are NOT SUSTAINBLE due to high costs based upon a percentage of construction volume, lack of integrated of planning, procurement, and project delivery teams, and/or failure to use locally researched current granular cost data (no use of economic or location factoring).

construction cost data

 

Learn more?

Why LEAN Construction Matters

Sustainable Facilities Management – Repair, Renovation, Maintenance, and New Builds

Sustainable facilities management is the allocation of financial, environmental, and other organizational resources in the most efficient way possible.

Attainment of sustainable facilities management involves creating an environment for internal and external planning, procurement, and project delivery teams that fosters productivity, communication, collaboration, and innovation.

This requires building trust and respect among team members, a culture that promotes high performance, systems thinking, and a robust suite of processes, workflows, and tools.

People, Process, Information, and Technology are core development areas.  While they are all interrelated, People come first, then Process, and Information. Technology is last!  The role of Technology is to enable the consistent deployment and management of processes, workflows, and information to lower the cost of doing so.  Far too often Technology is viewed as a solution with the result typically being failure.

The quality of the outcome, defined by quantitative and qualitative metrics, is the measure of success.

 

Sustainable Facilities Management
Sustainable Facilities Management – People, Process, Information, and Technology

If you are ready to provide leadership, commitment, and support to enable sustainable facilities management, let’s talk.

 

 

www.4bt.us – Sustainable FM Solutions

  • Positive Culture
  • Sufficient Capability, Capacity and Skills
  • Equitable and Aligned Contractual Frameworks
  • Fully Transparent, Shared, Common Data Environment (CDE)

Positive Culture

Adopt collaborative methods that enable the contribution and knowledge of those doing the work as well as the growing and retention of knowledge throughout internal and external planning, procurement, and project delivery teams.

 

Commercial Frameworks

Long-term, mutually beneficial contracts that focus all players on outcomes and are supported by operations manuals/execution guides.

 

Capability, Capacity Skills

A coordinated revamp of formal and professional education/training to address all aspects of lifecycle total cost of ownership asset management.  Focus upon understanding capability and capacity gaps, developing a coordinated approach to addressing knowledge gaps.

 

Common Data Environment

Mandated use of common terms and definitions writing in plain English without the use of confusing abbreviations and acronyms, as well as the use of tools such as locally researched current granular construction task unit price book databases to better communicate and validate cost and scope of work requirements.

Why LEAN Construction Matters

Construction Productivity Solution – Provide support for dealing with the conflicting interests of multiple stakeholders

A robust Construction Productivity Solution must include the ability to provide support for dealing with the conflicting interests of multiple stakeholders is CRITICAL to consistent achievement of best value construction outcomes.
The 4BT OpenJOC(TM) Solution and 4BT OpenBUILD(TM) Solution enables owners and design-builders to work collaboratively towards well-defined mutually beneficial outcomes.

Systems Enablers for Sustainable Facilities Management, Repair, Renovation, and Maintenance are critical considerations for any real property portfolio owner. In fact, they dictate how efficiently or how poorly an organization manages facilities stewardship requirements.
4BT OpenJOC and OpenBUILD solutions provide the following systems enablers:

– Greater collaboration and early engagement between all participants and stakeholders, resulting in integrated internal and external planning, procurement, and project delivery teams.
– Establish a common data environment inclusive of shared, local market granular cost data organized using expanded CSI Masterformat.
– Robust programmatic process with defined phases, workflows, approval, forms, etc., supported by a long-term multi-party agreement and integral operation manual/execution guide.
– Quantitative metrics/performance indicators.
– Mandatory initial and ongoing training for practitioners and decision-makers to ensure the necessary knowledge to be able to implement organization-wide systems thinking.

Learn more…
Construction Productivity Solution

Why LEAN Construction Matters

Systems Enablers for Sustainable Facilities Management, Repair, Renovation, and Maintenance

Systems Enablers for Sustainable Facilities Management, Repair, Renovation, and Maintenance are critical considerations for any real property portfolio owner. In fact, they dictate how efficiently or how poorly an organization manages facilities stewardship requirements.

The AECOO sector (Architecture, Engineering, Contruction, Operators, Owners) must transition for a linear to a circular system for managing the built environment.  Traditional planning, procurement, and project delivery methods are disparate and largely ‘ad hoc’.  Focus is simply upon simply accomplishing tasks (correctly or incorrectly) and passing the outcome (good or bad) to the next person/entity in line.  Little thought is given to holisitic impacts on the players or the final outcome.  In short, it’s a game of “passing the buck”.  We are aware that these practices end with extraordinarily poor results for the AECOO sector.

Systems thinking leads to the following systems enablers.

  1. Greater collaboration and early engagement between all participants and stakeholders, resulting in integrated internal and external planning, procurement, and project delivery teams.
  2.  Establishing a common data environment inclusive of shared, local market granular cost data organized using expanded CSI Masterformat.
  3.  Robust programmatic process with defined phases, workflows, approval, forms, etc., supported by a long-term multi-party agreement and integral operation manual/execution guide.
  4. Quantitative metrics/performance indicators.
  5. Mandatory initial and ongoing training for practitioners and decision-makers to ensure the necessary knowledge to be able to implement organization-wide systems thinking.

A fundamental change in process and behaviors at all levels and all organizations associated with the built environment is required to acheive sustainable activities. All parties must rally behind the common goal to shift from our wasteful linear traditional methods economy towards regenerative lifecycle total cost of ownership asset management.  Many of the solutions required to deliver a sustainable methodology are available exist in today’s market and can be implemented immediately.

JOC Program Consultant
Systems Enablers for Sustainable Facilities Management
Improve facilities sustainment
Systems Enables for Sustainable Facilities Management