Unlock Public Sector Construction Productivity[1] with Proven Strategies: A White Paper
First, a few things to consider.
- Software is never going to be able to deliver a solution for your organization without addressing fundamental issues first. Take BIM for example. It has done virtually nothing to measurably impact the repair, renovation, maintenance, and construction of the built environment. It has neither reduced economic nor environmental waste. Software is only useful if it is based upon a robust strategy, supported by robust processes and workflows that maximize leverage of internal and external resources via collaboration and common mutually beneficial goals.
- Your most value asset is your people and your partners. Provide the leadership and tools needed to empower your staff and external partners to solve problems themselves and achieve best value outcomes.
- The risk of change is high, however, not pursuing fundamental change is potentially catastrophic.
Here’s opportunity to do something different.
Robust tools and processes have existing for decades that can assure quality repair, renovation, maintenance, and new builds are consistent delivered on-time and on-budget. Two of these solutions are Integrated Project Delivery (IPD) and Job Order Contracting (JOC). Many instances of their deployment, however have not achieved anticipated results. Both IPD and JOC are not the issue, but rather the implementing organization and/or service provider have been the cause of “failure”.
Let’s focus on JOC. Internal and independent audits have found that many Job Order Contracting deployments have unfortunately degraded into a simple means of speeding procurement and also carry excessive administration costs tied to a percentage of construction costs. Some have suffered from the excessive use of consultants, while others have failure to abide by fundamental procedures and implement appropriate safeguards against waste and even fraud.
LEAN Job Order Contracting is now available. As the name implied, this programmatic uses LEAN principles as a foundation. Furthermore, focus is placed upon empowering owners and their awarded JOC contractors to build and retain LEAN knowledge and capabilities and to be self sufficient. There are no “JOC administrative fees” based upon total JOC construction value, but rather simple software subscriptions and training costs.
LEAN Job Order Contracting includes the following elements:
• Comprehensive, verifiable, locally researched unit price cost data (no use of location or economic factors) with line-item modifiers, separate demolition line items, and and task descriptions written in plain English without the excessive use of acronyms or abbreviations.
• Local prevailing wage rates or Davis-Bacon as required
• Long-term Mutually Beneficial Relationships
• Powerful, Easy-to-Use, Collaborative Technology that simplifies the JOC Process
• World-class Training and Support for Owners, Design-Builders, Trades
• Fully Compliant
• KPIs Supporting Continuous Improvement
• Faster, Higher Quality, and Lower Cost Project Delivery
• Integrated Project Planning, Procurement, and Delivery
• Complete Workflow Management and Reporting, including Forms, Approvals, and Timing
• At a Glance Budget Visibility – Committed/In Process, Available, Expended
• Tracking of MBE/WBE/HUBZONE Goals
• Multi-level, Multi-format Training – On-site, Remote, and Self-paced Tutorials – Intro, Advanced, Refresher
• Common Source of Truth
• Full Document Management with check-in/check-out and version control), not simple file sharing/access
• Collaborative Proposal Reviews and Automated Estimate Comparison (fully auditable verification of all line items, pricing, and quantities)
If you can’t describe what you are doing as a process, you don’t know what you’re doing.
-W. Edwards Deming
Steps to consistent LEAN construction delivery success:
1. Assure your project planning, procurement, and delivery initiative will have a financial benefit.
2. Empower an internal champion to own the initiative.
3. Build a cross functional team with clear responsibilities to produce quality, efficient outcomes.
4. Align requirements to desired solution.
5. Provide adequate governance and continuously improve over time.
Most public sector organizations skip step #1 and rush to procurement and support their facilities management needs with software solutions with qualitative evaluations provided by marketers such as… “This is really innovative” …. Or “This will reduce risk” … instead of stating and assuring a clear, quantitative financial benefit, and thus they miss a massive opportunity.
While the procurement and build phase gets the most attention form public sector owners, a project’s success is determined before actual procurement. Preconstruction is where owners organizations can best identify opportunities to improve overall outcomes. Research has shown an average cost saving of 20% can be achieved by applying a consistent robust programmatic process throughout all phases, beginning with planning.
Clear, concise communication from the very beginning among participants, and building a strong foundation in the form of an initial and detailed scope of work (SOW), mitigates the potential for catastrophic project failures down the road. The time and energy invested in developing and deploying a strategic, organization-wide program-centric LEAN process unlocks opens the door to increasing the overall efficiency avoids issues during the build phase.
Putting preconstruction planning into action
Here is a proven process to optimize your preconstruction process and set all future repair, renovation, and new build projects up for success.
1. Audit your current process
Audit your current preconstruction process and perform a gap analysis identify areas of weakness. Whether you assume to an effective process in place and perhaps not everyone is using it effectively, or you know you don’t have a defined consistent, and well communicated process, it’s important to start from a known baseline. A complete view of your current preconstruction process as it exists is needed to set the stage for optimization and/or complete change.
2. Find the right collaboration tools
The only proven method of setting up any type of construction project up for success is to get all project participants and stakeholders on the same page, early on in the process. Furthermore, the only tools available to consistently accomplish goal are support the integration of planning, procurement, and project delivery teams.
A written Operations Manual and/or Execution Guide is also needed. This document, as part of the Contract, details all phases, requirements, roles and responsibilities, and workflows from initial planning through procurement, project delivery, close-out, and the warranty period.
All integrated planning, procurement, and project delivery frameworks share several core components. One of these is common data environment (CDE) in which information is clearly communicated in a standardized, easily understood and accessible manner. A CDE supports the creation of a verifiable detailed work scope (SOW). A component of a CDE specific to cost visibility is a locally researched detailed line-item unit price book (UPB). A UPB provides a powerful tool for an owner to validate contractor and subcontractor quotes as well as assure a common understanding of the detailed SOW. Lump sum quotes from general contractors and/or subs provide relatively little value with respect to technical or cost visibility.
3. Procurement
Once a single source of truth is available to all participants and stakeholders via the above, the traditional problems and inefficiencies cause by siloed data sets are virtually eliminated and the process can proceed to the procurement phase.
Integrated planning, procurement, and project delivery methods also have the benefit of establishing long-term relationships between owners and service providers as well as expediting quality project delivery. For LEAN JOC, a process can be procured and begun in weeks. The process simply requires the owner to set up a joint site visit to enable the owner and the contractor to share requirements and enable the creation of a detailed cost proposal.
4. Remove manual processes wherever possible
While “process is king”, technology does play a key role. The role of technology is to simplify processes and help to support consistent and lower cost deployment of processes. If the process is “right” and continuously monitored and improved upon, technology is simply an enabler, allowing internal and external teams to increase efficiency by automating tedious, manual processes. Furthermore, delays and errors caused by emails, spreadsheets, or file folders are minimized.
5. Build trust and strengthen relationships
Whether you’re an owner, general contractor, or subcontractor, positive long-term working relationships that are rooted in trust and communication are a necessary to increasing productivity. LEAN processes can support development and growth of these relationships.
80-90% of projects fail by being late, over budget, or otherwise complete to the dissatisfaction of one or more team members. Robust LEAN programmatic processes and tools can get that down to 10% or lower! With appropriate process deployment and management, loweing administration costs 75% and increased productivity 3X is a real possibility.
Contact us to discuss…
- A process to assure alignment of your internal and external teams and maximized productivity.
- How integrated platforms compare to traditional, siloed processes and the advantages you can expect to achieve.
- How to better connect teams from planning, to procurement and throughout project delivery.
- How an integrated platform exposes teams to critical information they can leverage for increased project success.
48% of rework is due to poor project data and miscommunication – 2018 Construction Disconnected, FMI)’
[1] We’ve had success with a wide range of federal, state, county and local government departments and agencies including universities, secondary schools, public works, joint bases, hospitals, and others. Our clients have reduced administration costs by 75% and improved achieved 3X productivity gains.
via Four BT, LLC – Integrated LEAN planning, procurement, and project delivery solutions for the public sector.