The Key to Successful Design and Construction

Transcription

1 The Key to Successful Design and Construction Lower Cost... Fewer Problems... Higher Value ICCCFO Spring Conference April 14, 2011

2 Sitton Construction Group Owner rep construction managers Primary focus: education Have helped save over $4 million in the last 3 years Doug Sitton, President, PE, LEED AP 30+ years in design and construction Primary focus on project management 500+ projects... $1 Billion+ Projects from $10,000 to $50 million

3 What if you could reduce the cost and the number of problems on your next construction project without any reduction in quantity or quality?

4 Agenda Projects That Fell Short The Common Cause Typical Shortcomings Project Complexity The Owner s Role Keys to Success Additional Tips

5 Projects That Fell Short What did the following projects all have in common that caused them to fall short of expectations?

6 Project #1 New High School $45 million new construction 20-month original schedule 12 months late 14% delay claims/change orders

7 Project #2 University Student Center $14 million addition/renovation 18-month original schedule 12 months late

8 Project #3 University Student Rec Center $13 million new construction 15-month original schedule 12 months late

9 Project #4 Church Addition Fellowship Hall, Classrooms and Offices $1.7 million addition 8-month original schedule 5 months late 18% delay claims/change orders

10 What Was The Common Cause? What did each of these projects have in common? A. Under-qualified contractor(s) B. Under-qualified architect/engineer C. Wrong delivery method D. Unusually complex E. Other

11 The Common Cause What did each of these projects have in common? Insufficient Owner resources expertise and availability to develop and manage a comprehensive plan for success The only consistent cause of project failure I have found in over 3 decades

12 Typical Project Shortcomings The Cost of Insufficient Resources

13 Selection Processes Reduced competition A team, B players Lack of similar experience Project type Delivery method Price only

14 Unclear Contracts Scope of services Accountability Risk allocation Compensation One-sided Contract sits on the shelf

15 Planning and Design Issues Unclear goals and objectives Unclear quality, budget or schedule Incomplete or inaccurate cost estimating Poor coordination with consultants Unforeseen conditions

16 Planning and Design Continued Poor communication Insufficient or unclear design options Slow decision making No contractor engagement

17 Bidding Process Low bid only No prequalification of bidders Unclear or inadequate bid clauses

18 Construction Conflicts Unclear or incomplete construction documents Change of staff from design Conflicts of interest

19 Construction Conflicts

20 General Challenges Problem solving/conflict avoidance Project delivery methods Differing expectations Asymmetric knowledge Conflicts of interest or competing incentives

21 The Cost of Complexity U. of I. Sues over Dorm's Big Cost Overrun Cost Overruns at Prairie State Energy SCHOOL BOARD TO MEET ON SCHOOL COST OVERRUNS MetroLink Files Damage Suit Against Four Companies Big Dig Cost Explodes To $22 Billion from Original $2.6 Billion

22 Project Complexity

23 Project Organizational Chart Thousands of exchanges of info in different languages Owner Funding sources Design firms Consultants Contractors Subcontractors Utilities Regulatory agencies Manufacturers/vendors Stakeholders

24 Design/Construction Complexity Organizations X People X Processes X Technical X External Forces

25 Technical Complexity Systems: Structural MEP/FP Interior finishes Security Data/telecommunications Furnishings and equipment Codes, soils, environmental, etc. Project delivery LEED Building information modeling (BIM)

26 The Owner s Role To provide the expertise necessary to develop and manage a comprehensive plan for success The Owner is responsible for the team of teams.

27 What an Owner Needs Expertise to: Improve all contracts Manage and improve everyone s performance Facilitate collaboration and teamwork Streamline and improve the delivery of planning, design and construction The availability of that expertise

28 Strong Owner Resources $60 million program delivered in 16 months and well under budget $5.4 million in renovations scope was increased while cost was decreased from $6.0 million

29 Keys to Success 10 Pieces to the Successful Project Puzzle

30 10 Pieces to the Project Puzzle 1. Identify Independent Expertise 2. Establish Goals and Objectives 3. Maximize Competition for Selection 4. Negotiate Effective Contracts 5. Place Right People in Right Roles 6. Plan Ahead 7. Establish Effective Processes 8. Set Performance Metrics 9. Apply Cost-Effective Technology 10. Lead and Manage Proactively

31 Solve It at the Beginning.

32 Solve It at the Beginning.

33 Minimizing the Time Invested Have the right level of expertise Invest the time early Avoid problems More time here

34 What if... Our project is small? We are only renovating? Our project is all new construction and pretty straight forward? We use our architect to manage our role or we hire a general contractor as our CM? We don t feel we can afford additional resources?

35 Who Wins When The Owner Has Sufficient Resources? Everyone! Two Options: Win-Win or Lose-Lose

36 Additional Tips for Success

37 Project Delivery Myths Design/Bid/Build Single Prime Design/Bid/Build Multiple Prime Performance Contracting Design/Build Owner Owner Performance Contractor Design Owner General Contractor Design GC C C C C C C C C C C C C C C C C C C C C C C C C C

38 Project Delivery Myths This method is: Best... Easiest... Fastest... Lowest cost Without change orders Integrated That method is... Construction manager as agent is a delivery method

39 Project Delivery Truths Every method: Has positives and negatives, has succeeded and failed Is complex, just in a different way Can be fast-tracked Should never be used as is Should be tailored to the specific client, project, and local/current market Customization and management matter most, not the method

40 The Checklist Manifesto Book by Atul Gawande How to Get Things Right Two main difficulties in complex environments: Fallibility of human memory and attention Skipping steps The solution: a checklist

41 The Checklist Manifesto

42 eproject Management

43 Armed with the most the most powerful weapon in anyone s business arsenal understanding you will have a fighting chance to get the building you want, when you want it, for the price you originally agreed upon. Broken Buildings, Busted Budgets by Barry LePatner

44 Thank You For more information contact Doug 618/ or dsitton@sittoncg.com