Presentation is loading. Please wait.

Presentation is loading. Please wait.

1 Best Value Business Model Kenneth T. Sullivan PhD, MBA Performance Based Studies Research Group School of Sustainable Engineering and the Built Environment.

Similar presentations


Presentation on theme: "1 Best Value Business Model Kenneth T. Sullivan PhD, MBA Performance Based Studies Research Group School of Sustainable Engineering and the Built Environment."— Presentation transcript:

1 1 Best Value Business Model Kenneth T. Sullivan PhD, MBA Performance Based Studies Research Group School of Sustainable Engineering and the Built Environment Ira A. Fulton Schools of Engineering Arizona State University www.pbsrg.com

2 W W W. P B S R G. C O M 2 Who we are: PBSRG Overview Established in 1994 by Dr. Dean Kashiwagi and Dr. Bill Badger Research effort entails: Information Measurement Theory (IMT): measuring of current conditions to predict future outcomes Clients implementation of Best-Value Business Philosophy to improve the efficiency of their organizations and projects/services Organizational Transformation Models Performance Information Procurement System (PIPS) Contracting & Project management model (alignment/leadership instead of management/influence) - PIRMS Performance Information Environment (minimize access and flow of information) for accountability Risk management by using deductive logic, minimization of decision making

3 W W W. P B S R G. C O M Worldwide as a leader in Best-Value Systems Conducting research since 1994 168 Publications 800+ Projects $4.6 Billion Services & Construction 5% Increase in Vendor profit 98% On-time, On-Budget, Customer satisfaction PMI, NIGP, IFMA, IPMA Tests in Netherlands, Botswana/Africa, Malaysia ASU – investments of over $100M due to BV PBSRGs Research Results (Performance Based Studies Research Group)

4 W W W. P B S R G. C O M 4 Research Clients General Dynamics University of Minnesota General Services Administration (GSA) Heijmans, Netherlands Ministry of Transportation, Netherlands State of Alaska University of Alberta State of Oklahoma State of Idaho Idaho Transportation Department State of Oregon Neogard Tremco US Solar Arizona Parks and Recreation US Army Medical Command USAF Logistics Command University of New Mexico EVIT School District Arizona State University US Corps of Engineers Arizona Public Service (APS) Salt River Project (SRP) Rochester Public Utility Boise State University University of Idaho Idaho State University Lewis & Clark State College City of Phoenix, AZ City of Peoria, AZ City of Roseville, MN Olmstead County, MN Fann Environmental Brunsfield (Malaysia) Fulbright Program /University of Botswana, Africa US Embassy, Bank of Botswana RMIT, Melbourne Australia Aramark, Canon, Qwest, ISP, Chartwells, AP, Pearson Various Contractors and Consultants

5 W W W. P B S R G. C O M 5 Working Commission 117 & Journal International Efforts & Partners 5 years 15 tests for infrastructure Two major GCs Fulbright Scholar University of Botswana PIPS tests RMIT Teaching IMT PBSRG platform Tongji University Brunsfield Complete Supply Chain

6 W W W. P B S R G. C O M 6 What makes our research message unusual….. Simplistic Uses logic Efficiency: less decision making, less management, and better results (best value and high profits) It is more important for the vendor who does the work to know what to do than it is for client s representative to know what the vendor should do Measurement

7 W W W. P B S R G. C O M 7 Industry Structure High I. Price-Based/Traditional II. Value Based IV. Unstable Market III. Negotiated-Bid Specifications, standards and qualification based Management & Inspection Best Value (Performance and price measurements) Quality control Competition Performance Low Qualified vendors invited Owner selects vendor Negotiates with vendor Vendor performs Vendor minimizes risk Client minimizes risk

8 W W W. P B S R G. C O M 8 Vendor 1 Vendor 2 Vendor 3 Vendor 4 Performance High Low Risk High Low Performance High Low Risk High Low Impact of Minimums & Expectations Vendor 1 Vendor 2 Vendor 3 Vendor 4

9 W W W. P B S R G. C O M High Low Performance Owners The lowest possible quality that I want Vendors The highest possible value that you will get Minimum Perception Problems with Traditional Systems High Low Performance Maximum

10 W W W. P B S R G. C O M 10

11 W W W. P B S R G. C O M Initial conditions Final conditions Traditional Management Time Laws D2 D1M&C D3 D1: Client makes decisions on budget, time, and expectation D2: Client consultant/professional makes more decisions to make expectations true D3: Vendors attempt to use the lowest possible price to minimize the risk caused by the decision making of client & consultant/professional M&C: The client attempts to force vendor to make expectations happen

12 W W W. P B S R G. C O M Initial conditions Final conditions Project Management Model Time Laws M1 C1M2 C1: Client Expectations based decisions and various factors – may or may not be realistic M1: Measured vendor plan that more accurately describe the initial conditions replaces C1 – converts to a predictive contract M2: RMP/WRR measures deviation & performance to plan M3: Final performance measurement M3

13 W W W. P B S R G. C O M 13 Inefficiency vs Efficiency Micro-Management Performance dictated by technical information Specification is the requirement Inspection by client Client s professional is the expert and has control No performance measurements Increase flow of information Relationships (partnering, deals, give and take) used to solve issues Need more people (inefficient) No accountability Leadership Performance dictated by performance information Specification is only the intent Quality control by vendor Vendor has control Performance measurements Decrease flow of information High performance vendors used to minimize risk Need less people (efficient) Accountability Can you make the transition?

14 W W W. P B S R G. C O M 14 Performance-Based Functions I. Price-Based II. Performance-Based IV. Unstable Market III. Negotiated Competition Performance LowHigh Treat as a Commodity Volume Based No Accountability Finger Pointing Management & Inspection Minimum Standards Client minimizes risk Value & Performance Maximize Profit Vendor Accountability Minimized Management & Inspection Quality Control Vendor minimizes risk

15 W W W. P B S R G. C O M 15 Best Value Overview Complete business model for organizations & projects A best value selection and management tool (developed and tested over 16 years) It can be applied to any type of system, organization, structure, procurement, project, or need Best Value is not just a procurement method. It is a selection and management tool that can be applied in: Business Services (IT, dining, consultants, equipment, doc mgmt, insurance, etc.) Facility Services (maintenance, roofing, janitorial, landscaping, supplies, etc.) Design, bid, build (DBB), Design build (DB), Construction manager at risk (CMAR) A/E & Design, Job Order Contracting (JOC), Indefinite Delivery Indefinite Quantity BV is not a computer software package, but rather a combination of IMT principles that allows a client to optimize their environment

16 W W W. P B S R G. C O M What does the Best Value Model do? Makes things simple (measurement, dominant information) Minimizes the fuel of bureaucracy (decision making, non-dominant information, management, control, and direction) Creates transparency Allows organizations/vendors to be highly efficient and successful Proposes that to accurately identify what is and then to have a plan to efficiently meet the needs will minimize risk 16

17 W W W. P B S R G. C O M 17 Best Value System: PIPS & PIRMS Identification of Potential Best-Value Pre Planning and Risk Management Measurement of Deviation from the Expectation PHASE 1 PHASE 2 PHASE 3 17 PIPS PIRMS Performance Information Procurement System Performance Information Risk Management System

18 W W W. P B S R G. C O M 18 What is the model? Identify the expert with as little effort as possible, using measurement and differential Transfer risk and control to the expert through preplanning and risk minimization, focusing on risk that are not controlled Hire the expert Use alignment, planning, & measurement in place of management, control, and direction Create a performance information environment to drive accountability and change Proactive vs. Reactive Supply chain (us mentality) Logic vs. Experience Predictable vs. Chance

19 W W W. P B S R G. C O M What are we trying to accomplish from a procurement perspective? Scenario 1 Scenario 2 Question: If Purchasing wants to buy a green circle, in which scenario is hiring the right green circle easiest to justify?

20 W W W. P B S R G. C O M 20 Filter 1 Past Performance Information Filter 2 Current Capability Filter 4 Prioritization (Identify Best Value) Filter 5 Cost Reasonableness Filter 6 Pre- Planning & Risk Min Time Quality of Vendors Filter 3 Interview Key Personnel Award High Low BV Process Measurement of Risk & Performance During the Contract

21 W W W. P B S R G. C O M Evaluation Criteria Past Performance Information Scope Plan Technical Risk Plan Risk Assessment & Value Added Plan (RAVA) Transition Schedule Financials/Cost Interviews

22 W W W. P B S R G. C O M Assessment: based on actuals

23 W W W. P B S R G. C O M 23 Identifying the Potential Best-Value Best-Value is the lowest price Best-Value is within [10%] of next highest ranked firm Best-Value can be justified based on other factors Best-Value is within budget Yes No Yes Best Value Prioritization Best Value Prioritization Yes No Go with Alternate Proposal or Cancel Proceed to Pre-Award Yes No Yes No Proceed to highest ranked proposal within budget

24 W W W. P B S R G. C O M 24 Best Value System Identification of Potential Best-Value Pre Planning and Risk Management Measurement of Deviation from the Expectation PHASE 1 PHASE 2 PHASE 3

25 W W W. P B S R G. C O M Initial conditions Final conditions Project Management Model Time Laws M1 C1M2 C1: Client Expectations based decisions and various factors – may or may not be realistic M1: Measured vendor plan that more accurately describe the initial conditions replaces C1 – converts to a predictive contract M2: RMP/WRR measures deviation & performance to plan M3: Final performance measurement M3

26 W W W. P B S R G. C O M VB C Buyer Controls Vendor Through Contract Traditional Risk Model

27 W W W. P B S R G. C O M VB C Vendor Manages/Minimizes Risk With Contract - Contract is predictive Best Value Risk Model

28 W W W. P B S R G. C O M 28 Pre Award Period What is it / Why is it important Period of time allotted to potential best value vendor (aka the Expert) to: Think about and preplan the project Set a plan for its delivery / clarify that your proposal is accurate Identify the risks and issues that could cause the plan to deviate Identify what you dont know and when you will know it and how the plan could change based upon what you discover Set plans to minimize those risks from occurring Address all the concerns and risks of the client

29 W W W. P B S R G. C O M 29 Pre Award Period What is it / Why is it important Period of time allotted to potential best value vendor (aka the Expert) to: Know how they are being successful and adding value (measurement) What metrics you will use and how you will report them What is the current baseline condition we are comparing against Identify what you need from the client and have a plan for getting it Have completely aligned expectations between all parties so everyone knows what is going to transpire and what they are supposed to do

30 W W W. P B S R G. C O M 30 Filter 1 Past Performance Information Filter 2 Current Capability Filter 4 Prioritization (Identify Best Value) Filter 5 Cost Reasonableness Filter 6 Pre- Planning & Risk Min Time Quality of Vendors Filter 3 Interview Key Personnel Award High Low BV Process Measurement of Risk & Performance During the Contract Non-Detailed Detailed Non-Detailed

31 W W W. P B S R G. C O M 31 Pre Award Document (Risk Management Plan) 1.Scope & Project/Effort Plan Clear and Detailed Project Scope (what is and what is not included) – Set Baseline Expectation 2.Cost or Financial Model 3.Milestone schedule (linked to performance benchmarks) 4.Risk Minimization Plan Uncontrolled Risks List A list of Risks Proposer does not control with plans to minimize Identified Risks List A list of all previously identified risks (by other bidders, user, and client) with plans to minimize 5.Client Action Item List 6.Weekly Risk Report Set Up 7.Performance Metrics 8.Other: Agreed to Value Adding Options, Original RAVA Plan, Interview Minutes, etc…

32 W W W. P B S R G. C O M 32 Filter 1 Past Performance Information Filter 2 Current Capability Filter 4 Prioritization (Identify Best Value) Filter 5 Cost Reasonableness Filter 6 Pre- Planning & Risk Min Time Quality of Vendors Filter 3 Interview Key Personnel Award High Low Award Measurement of Risk & Performance During the Contract

33 W W W. P B S R G. C O M 33 Filter 1 Past Performance Information Filter 2 Current Capability Filter 4 Prioritization (Identify Best Value) Filter 5 Cost Reasonableness Filter 6 Pre- Planning & Risk Min Time Quality of Vendors Filter 3 Interview Key Personnel Award High Low Measurement Measurement of Risk & Performance During the Contract

34 W W W. P B S R G. C O M 34 Weekly Reporting System Excel Spreadsheet that tracks only unforeseen risks on a project Client will setup and send to vendor once Award/NTP issued Vendor must submit the report every week (Friday). The final project rating will be impacted by the accuracy and timely submittal of the WRS

35 W W W. P B S R G. C O M 35 Unforeseen Risks PERFORMANCE SUMMARY Vendor Performance Client Performance Individual Performance Project Performance RISK MANAGEMENT PLAN Risk Risk Minimization Schedule WEEKLY REPORT Risk Unforeseen Risks Management by Risk Minimization METRICS Time linked Financial Operational/Client Satisfac. Environmental

36 W W W. P B S R G. C O M Importance of Measurement Measurement is critical Measurement = accountability Accountability = improved performance, change Measurement allows definition of value (expertise) An expert is someone without risk Measurement is a mirror 36

37 W W W. P B S R G. C O M Potential Vision Educate on IMT and Best Value methodology, tool, etc. Transfer and educate a new tool for procurement Transfer and educate techniques for preplanning and contracting Create a measured environment Measure projects and vendors Measure the university, organizations, groups, people, etc. Measurement = accountability = higher performance Integrated into network of similar partners all trying to become better Become educators and leaders of your area 37

38 W W W. P B S R G. C O M How will you know when you have been successful Potential Goals Educated and certified Educating others Measured projects and services Risk Performance Comparison to baseline conditions Preplanning and risk management plans Creation of a leadership environment alignment Less client effort required Fewer lawyers needed Better vendors 38

39 W W W. P B S R G. C O M Stones vs Bricks 39

40 W W W. P B S R G. C O M Stones vs Bricks Best value is a leadership based model Leadership uses measurement and alignment of supply chain participants to optimize efficiency, minimize risk, and reduce costs Traditional approach Micro-management, direction, control, multiple layers of inspection Dependence upon the contract to ensure performance Best Value Approach Leadership, alignment, preplanning, and a supply chain perspective Uses of expertise, measurement, and accountability to optimize performance within the clients constraints 40

41 W W W. P B S R G. C O M Initial conditions Final conditions The Event Time Laws D2 D1M&C D3 D1: Client makes decisions on budget, time, and expectation D2: Client consultant/professional makes more decisions to make expectations true D3: Vendors attempt to use the lowest possible price to minimize the risk caused by the decision making of client & consultant/professional M&C: The client attempts to force vendor to make expectations happen

42 W W W. P B S R G. C O M 42 Perceive Process Apply Change Cycle of Learning 100% Information

43 W W W. P B S R G. C O M 43 Perceive Process Apply Change Processing Speeds All Individuals Process At Different Speeds 100% Information

44 W W W. P B S R G. C O M 44 Q: How much do we know about everything? 0% Information100% Information % Known This Much?

45 W W W. P B S R G. C O M 45 Proposal: We dont know very much 0% Information100% Information % of Information What we dont know What we know As for me, all I know is that I know nothing. - Socrates

46 W W W. P B S R G. C O M 46 Q: How do we solve what we dont know? (aka Risk) Do we use what we know to solve what we dont know? OR Do we use logic to solve what we dont know? 0% Information100% Information % of Information What we dont know What we know

47 W W W. P B S R G. C O M 47 A: Logic can be applied without knowledge/experience 0% Information100% Information % of Information What we dont know Logic

48 W W W. P B S R G. C O M 48 What is the model? Identify the expert with as little effort as possible, using measurement and differential Transfer risk and control to the expert through preplanning and risk minimization, focusing on risk that are not controlled Hire the expert Use alignment, planning, & measurement in place of management, control, and direction Create a performance information environment to drive accountability and change Proactive vs. Reactive Supply chain (us mentality) Logic vs. Experience Predictable vs. Chance

49 W W W. P B S R G. C O M Case Studies 49

50 W W W. P B S R G. C O M Overview of SHIP Test Objectives Establish contract with SHIP provider for college students in Idaho BSU Objectives: Maximize value (performance and cost) of SHIP Have an environment of risk minimization and performance measurement Minimize client effort in selection and management Minimize decision making Education of PIPS Measurement of differential BSU would like to create a consortium of universities/colleges in Idaho for a single SHIP contract 50

51 W W W. P B S R G. C O M Deliverables Major project deliverables include: 1.Set and Educate Project core team and 2.Set BSU Strategic Plan 3.Capture current level of performance and cost Plan providers Cost structure Program structure and details Identify differentials, gaps, and overlaps 4.Create RFP 5.Educate Vendors 6.Run Selection and Interviews 7.Run Pre-Planning and Risk Management 8.Award & Transition 9.Establish and maintain measurement system 51

52 W W W. P B S R G. C O M Stat e of Idah o Overview Create a statewide Student Health Insurance Plan (SHIP) consortium Create a statewide Student Health Insurance Plan (SHIP) consortium Boise State University (BSU) Boise State University (BSU) Idaho State University (ISU) Idaho State University (ISU) Lewis-Clark State College (LCSC) Lewis-Clark State College (LCSC) 3-Year Contract | $36 Million 3-Year Contract | $36 Million Measurements of Success Measurements of Success 1.Reduce internal University program administration costs 2.Maintain or increase Customer Satisfaction (University & Students) 3.Maintain or increase cost-effectiveness of program to students

53 W W W. P B S R G. C O M Stat e of Idah o What Should We Include In RFP? Request For Information (RFI) General request to vendors Ask vendors what information they need to see in the RFP to create and provide an accurate proposal Has no contractual implications, just providing information to the client RFIRFP

54 W W W. P B S R G. C O M Stat e of Idah o Selection Criteria & Weights Responding contractors were evaluated on: Responding contractors were evaluated on: Premiums (Student, Spouse, Dependents) (200 Points) Premiums (Student, Spouse, Dependents) (200 Points) Interviews (350 Points) Interviews (350 Points) Program Administrator Program Administrator Claims Administrator Claims Administrator Waiver Administrator Waiver Administrator Data Base Manager Data Base Manager Marketing Manager Marketing Manager Risk Assessment and Value Added (RAVA) plan (250 Points) Risk Assessment and Value Added (RAVA) plan (250 Points) Risk Assessment – ability to identify and minimize potential risk unique to this project Risk Assessment – ability to identify and minimize potential risk unique to this project Value Added Option – ability to add value to the project in terms of time, money or quality Value Added Option – ability to add value to the project in terms of time, money or quality Scope Plan (50 Points) Scope Plan (50 Points) Concise synopsis of the work that will be performed (major tasks, steps, or work packages). Concise synopsis of the work that will be performed (major tasks, steps, or work packages). Vendors impression of how they will achieve the objectives of the consortium Vendors impression of how they will achieve the objectives of the consortium Past Performance Information (150 Points) Past Performance Information (150 Points) Firm Firm Program Administrator Program Administrator

55 W W W. P B S R G. C O M Stat e of Idah o 55 Filter 1 Past Performance Information Filter 2 Proposal & RAVA Plan Filter 4 Prioritize (Identify Best Value) Filter 5 Pre-Award Phase (Pre-Plan) Filter 6 Weekly Report & Post-Rating Time Quality of Vendors Filter 3 Interview High Low Summary of Proposal Submittal Proposal Includes: 1)Cost/Financial Information 2)RAVA Plan (3) 3)Scope Plan (2) 4)PPI

56 W W W. P B S R G. C O M Stat e of Idah o Coverage/Plan Characteristics Consortium goal was to standardize coverage between all three University's (to maximum extent possible). However, deviations were made as necessary (BSU athletic coverage, ISU RX Coverage, Capitated Fee, etc) Consortium goal was to standardize coverage between all three University's (to maximum extent possible). However, deviations were made as necessary (BSU athletic coverage, ISU RX Coverage, Capitated Fee, etc) Consortium goal was to increase plan characteristics (to provide better coverage for students) Consortium goal was to increase plan characteristics (to provide better coverage for students)

57 W W W. P B S R G. C O M Stat e of Idah o SHIP Analysis

58 W W W. P B S R G. C O M Stat e of Idah o Analysis of Proposals

59 W W W. P B S R G. C O M Stat e of Idah o Overall Best-Value Results Best-Value Results: Best-Value Results: Student Premium has decreased by 2% (-$26) Student Premium has decreased by 2% (-$26) Spouse & Dependent Premium has decreased by 19% (-$519) Spouse & Dependent Premium has decreased by 19% (-$519) In general, Benefits/Coverage have been increased In general, Benefits/Coverage have been increased Previous Program:Previous Program: –Student Premiums increased $124/year (past 4 years) –Spouse & Dependent Premiums increased $126/year

60 W W W. P B S R G. C O M Case Study: ASU Food Services Contract $32 Million Dollars (Over 10 Years)

61 W W W. P B S R G. C O M After 1 Year: Monitoring Based on Measurements Increase sale of food by 14% Increased cash to ASU by 23% Minimized management cost by 80% Increased customer satisfaction by 37% Increased capital investment by 100%

62 W W W. P B S R G. C O M 2009 Performance Metrics

63 W W W. P B S R G. C O M Performance Metrics – Combined ASU FY 2010

64 W W W. P B S R G. C O M Overview of ASU Network The ASU Network consisted of: 64,000 Students and 12,000 Faculty 4 Different Campuses Estimated Cost: $11.1M Number of employees: 18 Full-time employees 8 Students 3 Contract technicians Main Technical Competencies: Core Infrastructure Design & Engineering Edge (Field) Technicians Project Management & Coordination Documentation Network Information/Operations Technology Solutions (network monitoring/measurement)

65 W W W. P B S R G. C O M Technology Options

66 W W W. P B S R G. C O M Final ASU IT Networking Contract ASU IT Networking previously performed in-house ASU IT Network Details 76,000 Students and Faculty 5 yr. Contract 4 Different Campuses ASU chose As-Is option ASU Maintenance Annual Cost Qwest Maintenance Annual Cost Total Annual Qwest Savings Total Qwest Annual Value Added and Savings $13,981,934$12,500,0001,481,9342,756,934

67 W W W. P B S R G. C O M Vendor Created Information Environment Old Operational StructureNew Operational Structure Complicated Management Structure Single Management Structure Seamless Organization No measurementFully measured No accountability Qwest responsible for entire operation Requires more labor26% less labor

68 W W W. P B S R G. C O M Dominant Information Dominant Performance Indicators Overall cost of network Top of the line networking Network Sustainability/Accessibility Customer Satisfaction Documentation of Deviations to financials

69 W W W. P B S R G. C O M 69 U of MN Objectives The UMN has a goal to be recognized as a top research institution in the world In 2005, CPPM partnered with the PBSRG (ASU) to implement the PIPS Best Value Process CPPMs Objectives of the Best-Value Program are to: Contract to high performers Respond faster to customer needs Increase performance (on time, on budget, high quality) Increase efficiency of procurement (spend taxpayers money more efficient) Create a fair and open process for all vendors

70 W W W. P B S R G. C O M 70 CPPM Strategic Plan First organization to establish and follow a Strategic Plan Ultimate Goal: CPPM take over entire program and is successful in implementing and sustaining the program. Year 1 – Pilot Testing Year 2 – Evaluation and Continued Testing Year 3 – Expansion Year 4 – Expansion Year 5 – Infusion & Transition Year 6 – Transition

71 W W W. P B S R G. C O M 71 CPPM Strategic Plan Year 1 Identify and educate core group Identify qualified vendors Implement best-value Analyze pilot projects Year 2 Continue testing best-value Evaluate core group and refine Expand test to different trades (General Construction) Educate more internal CPPM staff Implement a weekly project tracking system Refine list of qualified vendors Educate and debrief qualified vendors on initial project results Year 3 Allow other CPPM personnel to test Automated online Directors Report Monitor all CPPM projects (LB & BV) Expand testing (A/E Services) Identify performance of UMN PMs, Procurement, other critical areas, etc. Train CPPM on all BV components Year 4 CPPM acquire and perform all best-value functions (educate and train) PBSRG assist on areas of weakness CPPM handle analysis and tracking of all weekly reports Implement best-value on a larger scale Educate other UMN groups (Energy, Zones, Permitting, Codes, ect)

72 W W W. P B S R G. C O M 72 Transitional Plan

73 W W W. P B S R G. C O M 73 Award Analysis: Number of Best-Value Procurements: 161 Awarded Cost: $50.6M (11% below average cost) Average Number of Proposals: 4 Projects Where Best-Value was also Lowest Cost: 53% 85% of projects were awarded to vendor with highest / second highest RAVA Plan (7.3 vs 5.9) Performance Information: Contractor Impacts: 0% Change Orders / 4% Delay Vendor post project rating: 9.6 Average Contractor Increase in Profit: 5% Current Construction Results

74 W W W. P B S R G. C O M 74 PM 1PM 2PM 3PM 4 Procurement Officer 1Procurement Officer 2 Director Contractor 1 Contractor 2 Contractor 3 Contractor 4 Contractor 3 Contractor 6 Contractor 1 Contractor 8 Contractor 9 Contractor 7 Contractor 2 Contractor 4 Contractor 8 Contractor 9 Contractor 2 Program Report Director 1Director 2 PM 1PM 2PM 3PM 4 Vice President

75 W W W. P B S R G. C O M 75 Report – Overall Program

76 W W W. P B S R G. C O M 76 Report - Directors

77 W W W. P B S R G. C O M 77 Report - End Users

78 W W W. P B S R G. C O M 78 Report – Internal PMs

79 W W W. P B S R G. C O M 79 Report - Contractors

80 W W W. P B S R G. C O M 80 Report – Yearly Analysis

81 W W W. P B S R G. C O M 81 Report – Top 10 Riskiest Projects

82 W W W. P B S R G. C O M 82 Report – Analysis of Risks

83 W W W. P B S R G. C O M Research from Contractor Delays Contractor Risks% Delivery of Materials Delayed28% Installation errors26% Incorrect material ordered or delivered11% Alteration of installation needed9% Manufacture didn't have sufficient materials9% Misunderstanding of Construction Documents6% Door Frames incorrect size4% Soil compaction2% 83 52% of risks due to errors in materials delivered

84 W W W. P B S R G. C O M 84 Targeted Business Group (Minority & Disadvantaged) Out of 63 qualified contractors, 18 are TGB (29%) Out of 161 PIPS Projects, 26 were awarded to TGB Contractors (16%) Awards were based on best-value, which shows that there are high performing TGB vendors in the MN community

85 W W W. P B S R G. C O M Best Value Vendor Characteristics Preplans and Minimizes Risk on Each Initiative Has a plan and knows the risks to the plan Is transparent Communicates clearly Asks good questions, knows what they dont know Measures Performance and drives accountability Uses Dominant Information to Differentiate themselves/show value added Educates the Client and helps the client be a better client Educates themselves and has a continually enhanced vision Holds themselves and the client accountable Their plan is aligned so that when they win, the client automatically wins 85

86 W W W. P B S R G. C O M Best Value Client Characteristics Ensures their needs and concerns are known by the vendor Ensures the vendor has a plan that addresses each need/concern/risk Is a facilitator to the vendors development of the plan(s) Enforces the best value structure Weekly risk reporting is being done Each risk is given a client satisfaction rating Measurements by vendor are being done Do not be pulled into making decisions you do not need to make Educates themselves and the vendor Avoids reversion Transfers risk and control Holds the vendor and themselves accountable Ensures the plan is aligned so they win and the vendor wins 86

87 W W W. P B S R G. C O M 87 Master of Science Degree Program: Facilities Asset and Project Management Masters program: Available on-line and in-person (site visits) Based on IMT, Leadership, and Best Value Completely integrated with your job/organization Thesis becomes documentation of best value implementation at your organization 30 Credits – Only 7 Classes and a Thesis Classes in IMT, Best Value, and PIRMS Classes in Leadership and FM, and PM (value based) Classes in Research Methods and Data Analysis

88 W W W. P B S R G. C O M 88 Comments / Questions W W W. P B S R G. C O M

89 89


Download ppt "1 Best Value Business Model Kenneth T. Sullivan PhD, MBA Performance Based Studies Research Group School of Sustainable Engineering and the Built Environment."

Similar presentations


Ads by Google