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PROJECT DELIVERY METHODS OF THE FUTURE Lisa Cooley, LEED AP Lisa Cooley Associates, LLC Peter Cholakis 4Clicks Solutions, LLC In the long history of humankind,

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Presentation on theme: "PROJECT DELIVERY METHODS OF THE FUTURE Lisa Cooley, LEED AP Lisa Cooley Associates, LLC Peter Cholakis 4Clicks Solutions, LLC In the long history of humankind,"— Presentation transcript:

1 PROJECT DELIVERY METHODS OF THE FUTURE Lisa Cooley, LEED AP Lisa Cooley Associates, LLC Peter Cholakis 4Clicks Solutions, LLC In the long history of humankind, those who learned to collaborate and improvise most effectively have prevailed. – Charles Darwin

2 MANAGING CEUs AND CFM ® MAINTENANCE POINTS You are eligible to receive Continuing Education Units and Certified Facility Manager ® maintenance points for attending sessions at IFMA's World Workplace. To receive 20 CFM maintenance points: Record your attendance on your CFM Recertification Worksheet. At recertification time, submit your completed CFM Recertification Worksheet. To receive CEUs: Pay the US$12 processing fee when you register for the conference. Visit the CEU Kiosks at registration or log on to http://ceu.experient- and pass a five-question assessment developed by the speaker. CEUs can only be earned upon successful completion of the assessment. Your transcript will be emailed to you.http://ceu.experient- Individuals seeking CEUs or LUs from other organizations must contact those organizations for instructions on self-reporting credit hours.

3 Evaluate Sessions Take Assessments & Log CEUs (no more CEU codes) Visit the registration kiosks or go online at

4 Meet Our Presenter(s): Lisa Cooley, LEEP AP Owner/Principal Lisa Cooley Associates, LLC Born- and-bred construction industry veteran Expert in Job Order Contracting and small projects solutions Passionate about evolving delivery methods Peter Cholakis Chief Marketing Officer 4 Clicks Solutions, LLC Career defining capital planning and management solutions Expert on facility lifecycle and Total Cost of Ownership Passionate about leveraging technology to foster collaboration



7 Looking to the Past:

8 Owner Designer Builder 72% of projects over budget 70% of projects over schedule 5% of project costs spent in bidding Rex Miller, Commercial Real Estate Revolution price based selection qualifications based selection knowledge gap Fracturing of the Industry and its Results: Adapted, HOK Architects

9 Owner Sub Builder 3 Subcontractors Supply Chain Barriers: Builder 1 Builder 5 Builder 2Builder 4 PROJECT

10 Technology Barriers

11 Owner AE Contractor Subs

12 Technology Barriers– Speed vs. Flexibility Owner AE Contractor Subs ? ? ? ? !! !!!! ?@#!*

13 13 Excel Spreadsheets Relational Database Cloud Computing Flexibility Collaboration Technology Barriers

14 14 Catalysts of Change

15 15 Environmental: 1. Recognition of building’s role in climate change 2. Challenge of meeting rising Energy Needs and paying for it 3. Government mandates Altered Environmental Landscape

16 16 Economic: 1. Fallout from of a building boom followed by recession 2. Reduced capital expenditures at a time when monumental change to the built environment is needed 3. World economy becoming “flat” Altered Economic Landscape

17 17 Resulting in a fundamental cultural shift? Driven by Millennial sensibilities and values The built environment is transforming to meet efficiency needs There is a need for responsive project delivery methods to facilitate these changes

18 18 Big Data: BIM and sophisticated energy modeling for new construction Ability to collect building performance metrics for existing buildings Challenge: 1.How to process it for decisionmaking and 2.How to leverage team expertise to effect productive change Need for delivery methods to quickly respond to urgency created by transparent data

19 19

20 20 = Disruptive technology is a term coined by Harvard Business School professor Clayton M. Christensen to describe a new technology that unexpectedly displaces an established technology. Disruptive Technologies: BIM Cloud Computing A disruptive technology changes/overturns traditional business methods and practices.

21 21 BIM is the life-cycle management of the built environment supported by digital technology. (adapted from NIBS) BIM – The “Simple Definition”

22 PeopleProcessInformation BIM & Cloud Computing OWNERSAE’s CONTRACTORS SUB- CONTRACTORS

23 Cloud Computing 23

24 24 Cloud Computing Speed of Deployment Transparency Big Data Convergence Flat World Economy Constrained Capital Dollars Refocus on O&M Carbon Footprint Government Mandates Rising Energy Costs New Project Delivery Methods to Meet New Demands Energy Modeling Benchmarking Altered Environmental Landscape Altered Economic Landscape Disruptive Technology BIM

25 25 Key Characteristics of Emergent Project Delivery Methods Qualifications Based or Best Value Selection Some form of pricing transparency Early and ongoing information-sharing among project stakeholders Appropriate distribution of risk Some form of financial incentive to drive performance Integrated Project Delivery Energy Performance Contracts Job Order Contracting Public Private Partnerships

26 26 Design-Build Single Source Responsibility Shifts risk of design errors from Owner to Contractor Maximizing construction dollars—Design-to-Budget Faster Delivery Can be commoditized as low bid, but can be innovative with performance- based measures From Scherer Construction,

27 27 Design-Build Case Study Awarded September 11, 2001 Schedule, budget and scope completely changed from original bid Completed 14 months ahead of schedule and $100 million under budget Performance-based, flexible contract allowed for innovation Incentives: Award fee allowed profit margins up to 10% if project goals were met Cost incentive allowed design/builder to share percentage of cost savings—30-50% Subjective evaluations every 90 days— feedback loop

28 28 Integrated Project Delivery Est. Max Price Actual Cost Shared Contingency Cost of the Work Incentive Pool Owner Cost Savings Savings $$$ Target Cost Alliance Contracts create shared Risk and Reward—shared contingency and shared incentive pool. Liability Waivers mean no ability to sue. Entire team on board before design starts—requires Qualifications Based Selection and Full Pricing Transparency Deep involvement of key subcontractors and suppliers in design process Goal is to reduce duplication of design efforts--shop drawings serve design development Utilization of BIM and other forward-thinking technologies to enable collaboration among team members

29 29


31 31 Job Order Contracting  “IPD Lite” for Existing Buildings  Consolidates procurement to shorten Project Timelines and reduce procurement costs  Transparency of pricing and procurement compliance through Unit Price Book  Long Term Facility Relationship increases productivity and enables reiterative process improvements  Quality and performance incentivized through IDIQ form of contract with minimal guarantee and clear maximum volume

32 Shorter Project Timelines 32

33 33 Fast and timely delivery of projects. Consolidation of procurement creates lower overhead cost and procurement cost Contractor and owner efficiencies in prosecution of the work. Development of a partner relationship based on work performance. Virtual elimination of legal disputes, claims and change orders. Standard pricing and specification utilizing a published unit price book (UPB), resulting in efficient and effective estimating, design, and fixed price construction. Advantages of JOC for Owners

34 How OWNERS Use JOC & Technology Programming Estimate Estimates from Each Design Stage Final Detailed Cost Estimate Initial Contractor Proposals Technically Evaluated Proposals Final Revised Contractor Proposals Modifications & Changes Orders  Track & Manage each project from inception to completion.  Manage a single project, your entire contract, or multiple contracts.  All project milestones, thru warranty period.  Display status of each project.  Maintain a complete cost history  Record all estimates associated with a project.  Review value of all projects awarded on a specific contract, or to a specific contractor.  Reports show pre-negotiation strategies and post-negotiation summaries. 34

35 35 Job Order Contracting Case Study JOC in place since 1999 Completing $2.5-$3m annually Average project size about $20,000 Examples of JOC projects: Office and classroom renovations Laboratory renovations Installation of varies mechanical equipment and associated work Road and parking lot improvements Interior finish-out projects for commercial spaces ADA modifications Mold and bird remediation Waterproofing projects Sports courts and recreational facilities Food service renovations Signage installation Sidewalks Starbucks $208,841 Coordination of university requirements with concessionaire Bio Safety Level 3 Laboratory $443,650 Rapid deployment of grant funds for anti- terrorism research

36 36 Public Private Partnerships Finds fullest expression as Design-Build-Own-Operate Takes advantage of the same team innovations as Design- Build and IPD—contract includes design and construction. Added benefit of private financing for upfront cost. Funding through toll concessions or availability payments. Some may be during the course of design/construction After completion, typically receive a regular (e.g. annual) payment – similar to a lease payment Added component of ongoing operation/maintenance. Allows owners to incentivize ongoing building performance Size of ongoing payments is contingent on the performance of the asset Drives performance and lifecycle decisions. Ultimate accountability for building systems. Originally focused on transportation. Now expanding into “social infrastructure” projects.

37 37 PPP Case Study Long Beach Courthouse Development Cost: $490M Lease-back period: 35 years Lease payments will be reduced if the private sector underperforms Performance Based Contract: Lease payments will be reduced if the private sector underperforms Extensive list of property management requirements Exact formulas for decreasing lease payments if requirements are not met Innovative Approach: Integrated design approach includes operations staff in design and construction decisions

38 Process 38

39 39 Energy Performance Contracts Usually includes financing— paid off with energy savings Payment based on anticipated energy savings, or contingent on actual savings Well-established in public sector, challenges in private sector Variation: Energy Services Agreement. New business models to address challenges: Managed Utility Service Agreements, Property Assessed Clean Energy (PACE), On-bill financing Drivers: benchmarking laws creating transparency in building energy costs for tenants and buyers, C-Suite lens into facility costs

40 40 ESPC Case Study State of Pennsylvania Department of General Services Guaranteed Energy Savings Act Strategic program approach Integrated approach with PPAs Small projects element Standardized contracts

41 41

42 Supporting Software Technology Integration of Proven Construction Delivery Methods / Project Management Standardized Cost Data Architectures / Taxonomies (i.e. RSMeans TM – 400,000 line items) Comprehensive Document Management Electronic Visualization / QTO 42

43 A Common Language MasterFormat2010, Uniformat II – Reference Cost Databases (aka RSMeans) COBIE, OMNICLASS IFC Metrics: FCI, SCI, Cost/GSF, Cost/NSF, Utilization Rates, …. 43

44 “Facebook” for the Built Environment 1

45 Project Collaboration

46 Real Time Collaboration via Web Meetings

47 “Facebook” for the Built Environment 2


49 49 Convergence Energy modeling for new construction Crystal Ball: What does the future hold? 1.Christian and Pandaya, 1997. Cost Prediction of Facilities. 2.NIBS 1998. Excellence in Facility Managment

50 50 Energy modeling for new construction Crystal Ball: What does the future hold? Increased energy efficiency Educational outcomes Healthcare outcomes Increased worker productivity Performance Specs Sophisticated Data Analysis Compensation Structure

51 51 Contact and Other Info Lisa Cooley, LEED AP Lisa Cooley Associates, LLC 505-239-3446 Peter Cholakis 4Clicks, LLC 781-983-1128 Presentation will be posted at Sources/Bibliography at:

52 For attending this educational offering at IFMA’s World Workplace. Be sure to evaluate the session at the registration kiosk or online at Thank You!

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