The reason Public Sector Construction and FM Grade F for Cost Management is simple… the lack of owner leadership and competency. The net result has been a continuing decades old legacy of environmental and economic waste. The public sector could easily save 30%-40% of its budgets in this area with the basic implementation of robust, integrate planning, procurement, and project delivery methods.
Multiple studies by industry and the GAO note that over 80% of the failures in public sector facilities repair, renovation, and new builds are due to owner lack of effective leadership. Studies in the area date back to 1969, and yet there has been virtually no improvement.
More than half the time wasted during construction, the study teams have found, is attributable to poor management practices.
By common consensus and every available measure, the United States no longer gets its money’s worth in construction, the nation’s largest industry. Since the closing years of the Sixties, productivity in construction has been declining at a rate many industry leaders find appalling.
SUMMARY REPORT OF THE CONSTRUCTION INDUSTRYCOST EFFECTIVENESS PROJECT, 1983
Until owner leadership mandates strategic cooperation and associated core LEAN processes, including the use of locally researched detailed unit price cost data, public sector facilities management will remain in the dark ages.
For example, in 1969 many became concerned about the escalating costs of construction. By 1972, a Business Roundtable was created, and the Roundtable’s Construction Committee carries on the work which began in 1969.
The resulting Construction Industry Cost Effectiveness Project outlined the need for quality, efficiency, productivity, and cost-effectiveness in the industry, and steps for achievement. While the depth, breadth, and intensity which produced this report was noteworthy, forward progress remains unattainable and so, the abysmal record of public sector FM continues to this day,
Efficient management of buildings and other forms of physical infrastructure is critical to the economy and the environment as a whole and therefore to everybody. The build environment impacts costs, prices, international competitiveness, and our safety. Yet these vital resources remain poorly managed and repair, renovation, maintenance, and new build dollars are not being used effectively.
To claim that inefficiency is not due to owners, but the result of all participants such as architects, engineers, and builders, fails to recognize a simple truth…. owners are responsible for their buildings/physical infrastructure and pay the bills.
Shortcomings of Management 1The Heavy Costs Of Poor Safety Performance 2 The Perverse Effect Of Scheduled Overtime 3 Under trained Foremen And Demotivated Workers 4 Pinching Pennies On Training And Education 5 Cold Shoulder For Improved Technology 6 Modern Management Systems: A Little-Used Tool
SUMMARY REPORT OF THE CONSTRUCTION INDUSTRYCOST EFFECTIVENESS PROJECT, 1983
Path to Improvement
- Measure productivity
- Adopt and implement robust LEAN, integrated planning, procurement, and project delivery processes
- Assure cost visibility and transparency – Require locally researched detailed unit price cost data
- Mandatory initial and ongoing training for ALL participants on LEAN processes
- Embed processes into collaborative technology
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