about the presenters john robinson general manger/illinois; performance services, inc. david...
TRANSCRIPT
About the Presenters John Robinson
General Manger/Illinois; Performance Services, Inc.
David Binkley Director/Business Development; George Sollitt Construction Co.
Tim Thoman Owner/President; Performance Services, Inc.
Program Outline
Introductory Remarks - Bob Lanzerotti
Construction Delivery Alternatives – David Binkley
Guaranteed Energy Savings – John Robinson
Questions?
Construction Delivery Alternatives Traditional Architectural Design Phases
Percentage of Architect’s Professional FeeProgramming (5%) – Information gathering and definition of building issues
Schematic Design (10%) – Transform building issues into a graphic solution.Ideally, the Construction Manager becomes involved during this phase
Design Development (20%) – Refine the design solution
Construction Documents (40%) – Convert the design into technical drawings
Bidding (5%) – By General Contractor or subcontractors (under CM) per Illinois Procurement Code
Construction Administration (20%) – Confirm building in accordance with Construction Documents
General ContractorAlso referred to as; Design-Bid-Build or Lump Sum
Construction Manager (2 basic forms)CM as Advisor (CM/a) – also referred to as “Agency”CM as Constructor CM/c) – also referred to as “At-Risk”
with or without a Guaranteed Maximum Price
Construction Delivery Alternatives
No Contract
MEP/FP EngineerStructural Engineer
Civil Engineer
Interior DesignerCost/Scheduling ConsultantAcoustical ConsultantTheatrical ConsultantRoofing ConsultantFood-Service ConsultantLighting ConsultantSecurity ConsultantTechnology ConsultantA/V Consultant
HVACPlumbing
Fire-ProtectionElectrical
MasonRoofing
GlazingPavingExcavatorLandscapeFlooringPaintingDrywallCeilingRough CarpentryMillworkElevatorSpecialtiesEquipment
OWNER
CONTRACTOR
Construction Delivery AlternativesRelationships – General Contractor
ARCHITECT
PROS Roles clearly defined - traditional and straightforward Best suited for well defined, uncomplicated projects Competitive – perhaps lowest cost depending on Change Orders One contract to administer Single-source responsibility
CONS No Contractor input during design Contractor and subcontractor selection based solely on cost Slowest delivery method Contractor may attempt to enhance profit with Change Orders Potentially antagonistic relationship with the Owner and Architect
Construction Delivery AlternativesPros/Cons - General Contractor
Interior DesignerCost/Scheduling ConsultantAcoustical ConsultantTheatrical ConsultantRoofing ConsultantFood-Service ConsultantLighting ConsultantSecurity ConsultantTechnology ConsultantA/V Consultant
HVACPlumbing
Fire-ProtectionElectrical
MasonRoofing
GlazingPavingExcavatorLandscapeFlooringPaintingDrywallCeilingRough CarpentryMillworkElevatorSpecialtiesEquipment
CM ARCHITECTNo Contract
Construction Delivery AlternativesRelationships – Construction Manager as Advisor (CM/a)
MEP/FP EngineerStructural Engineer
Civil Engineer
OWNER
CM’s Professional Fee and General Conditions are negotiated; subcontractors are bid (per Illinois Procurement Code)
CM is an “agent” and “advisor” to the Owner
CM provides administrative and management services during pre-construction and construction phases
Owner holds and manages contracts with subcontractors
CM does not provide a Payment & Performance Bond; individual subcontractors provide this bond
Advisable for complex, fast or phased construction
Flexible for projects of ill-defined scope or that are subject to change
Construction Delivery AlternativesDescription – Construction Manager as Advisor (CM/a)
PROS CM selection based on QBS process - Owner can choose their CM CM is District’s advocate throughout the process CM input is available during the design phase
Cost / Schedule / Construction Logistics / Constructability Flexibility with regard to scope changes Allows for “Fast Track” construction
CONS Owner holds many contracts – Architect, CM and all subcontractors More paperwork due to multiple contracts held by District CM may lack leverage over subcontractors CM makes no promises relative to cost Architect’s authority during construction may not be clearly defined
Construction Delivery AlternativesPros/Cons – Construction Manager as Advisor (CM/a)
Traditional Schedule
Fast Track Schedule
Design
Bid
Build
Bid
Bid
Time SavingsBid
Build
Design
Construction Delivery AlternativesTime Saved using a Construction Manager
No Contract
MEP/FP EngineerStructural Engineer
Civil Engineer
Construction Delivery AlternativesRelationships – Construction Manager as Constructor (CM/c)
HVACPlumbing
Fire-ProtectionElectrical
MasonRoofing
GlazingPavingExcavatorLandscapeFlooringPaintingDrywallCeilingRough CarpentryMillworkElevatorSpecialtiesEquipment
ARCHITECT
Interior DesignerCost/Scheduling ConsultantAcoustical ConsultantTheatrical ConsultantRoofing ConsultantFood-Service ConsultantLighting ConsultantSecurity ConsultantTechnology ConsultantA/V Consultant
CM
OWNER
CM’s Professional Fee and General Conditions are negotiated; subcontractors are bid (per Illinois Procurement Code)
You can essentially chose your GC utilizing this method
CM serves as an “open book” GC
Guaranteed Maximum Price (GMP) Option
Cost-Plus Option (no promises relative to final cost)
CM assumes risk for construction
CM holds contracts with subcontractors
Construction Delivery AlternativesDescription – Construction Manager as Constructor (CM/c)
PROS CM selection based on qualifications - Owner can choose their CM Single-source of responsibility CM input is available during the design phase
Cost / Schedule / Construction Logistics / Constructability CM has “leverage” over subcontractors Allows for “Fast Track” construction
CONS CM’s allegiance may be divided between the Owner and profit, if under a
GMP Possible adversarial relationship with the Owner and Architect Architect’s authority during construction may not be clearly defined
Construction Delivery AlternativesPros/Cons – Construction Manager as Constructor (CM/c)
Definition and Characteristics GMP = Cost of Work + Contingency/Allowances + CM Fee/General
Conditions
GMP based on a specific set of design documents at a given time
GMP is subject to additions and deletions due to changes in scope of work. All costs above the GMP that are not approved by change order are absorbed by the CM.
Sharing or Return of Savings Unused contingency and/or allowances
Anything that causes the Cost of Work to be less than the figure used to establish the GMP
Construction Delivery AlternativesConstruction Manager as Constructor (CM/c)
Guaranteed Maximum Price
CONSTRUCTION DELIVERY METHODS
IASBO Annual ConferenceMay 16, 2012
Advantages to Guaranteed Energy Savings Contracts
• Sole accountability – no finger pointing• Integrated team• Guaranteed performance– Energy savings– Optimal learning environment– No “change orders”
• Lower costs– Lower soft costs– Lower overall construction costs
Plan-Spec Project Accountability
Lots of cooks in the kitchen – who is accountable?
Guaranteed Contract Project Accountability
One chef = full accountability
Contractual AccountabilityPlan & Spec Guaranteed Contract
Owner Owner
Architect Qualified ProviderConstruction Manager Contractors
Suppliers Sub-contractors
No direct accountability
Architect
Full accountability
Suppliers Sub-contractors
Integrated Team
Value of Team: Several brains are better than one
– collaborative synergy Contractors often know more
about what works best
Provider’s integrated team consists of architects, engineers, project managers and contractors working collaboratively together, shoulder-to-shoulder, to deliver the Best Value proposal. If this team doesn’t out-listen, out-think and out-work the other two teams, they lose the job. This collaboration and increase effort delivers better designs and more value.
Advantages to Guaranteed Contracts
• Sole accountability – no finger pointing• Integrated team• Guaranteed performance– Energy savings– Optimal learning environment– No “change orders”
• Lower costs– Lower soft costs
– Lower overall construction costs
Energy Savings Guarantee
• Monthly measurement– Utility bills– Equipment operating data
• Monthly collaboration with operators• Annual utility bill reconciliation• Goal: Energy Star certification• Hard guarantee
Learning Environment Guarantee
• Temperatures: +/- 2 degree F• Carbon Dioxide: < 1,000 PPM• Humidity: < 65% RH• Background noise: < 45 dB• Drafts: none• Illumination: 50 – 80 foot candles
No “Change Order” Guarantee• Owner can still add scope to project• Not a transfer of contingency accounts• Owner’s cost for errors and omissions are eliminated• Since PSI team pays for mistakes– Measure twice, cut once– Spend far more time investigating existing conditions– Persistent focus on processes that eliminate mistakes
No “Change Order” Guarantee
• No “value added” change orders• Very limited “unforeseen condition”
contingency costs– Only exceptions• Unknown below the ground issues• Unknown hazardous materials (i.e. asbestos)
• Examples
Advantages to Guaranteed Contracts
• Sole accountability – no finger pointing• Integrated team• Guaranteed performance– Energy savings– Optimal learning environment– No “change orders”
• Lower costs– Lower soft costs– Lower overall construction costs
Lower Soft Costs
• Architectural – engineering fees– Plan & Spec: 7 – 10%– Guaranteed Contract: 3 – 6%
• Contingency– Plan & Spec: 5 - 7%– Guaranteed Contract: 2%• 2% is for scope additions
Penn State StudyDesign-Build vs. Plan-Spec
Design Build delivered:• Quality: 10% Higher• Cost: 6% Lower• Speed: 33% Faster
Source: Project Delivery Institute, 1999
Integrated team approach is better!
Lower Soft Costs
U.S. Dept of Commerce Study Summary Results
“The use of the design-build delivery system tended to yield better performance outcomes for owner-submitted projects. These projects tended to have
better performance in cost, schedule, changes, rework and practice use. “
Source: U.S. Dept of Commerce Report. “Measuring the Impacts of the Delivery System on Project Performance – Design-Build and Design-Bid-Build,” Pg 49. November 2002
Lower Soft Costs
Other Contractor
Mechanical Contractor
Construction Manager
Architect
Suppliers
Insulator
Owner’s CostMultiple Layers of Compounded Markup
Owner’s CostFlat Markup
General Contractor
Control Contractor
Suppliers Subcontractor
Masonry
Plan-Spec Design-Build Cost Structure Comparison
Advantages to Guaranteed Contracts
• Sole accountability – no finger pointing• Integrated team• Guaranteed performance– Energy savings– Optimal learning environment– No “change orders”
• Lower costs– Lower soft costs– Lower overall construction costs