c t s g r o u pconstruction technology services

PLANNING AN EFFECTIVE STUDY TIME ALLOCATION OF VE PHASES

STUART SOKOLOFF, P.E. PRESIDENT CONSTRUCTION ENGINEERING TECHNOLOGY SERVICES P.C. (CTS GROUP)

●N.Y. CITY: (212) 239-0135 ●BOCA RATON, FL: (561)465-2889

THE NEXT GENERATION

c t s g r o u pconstruction technology servicesSTUART SOKOLOFF, P.E.

VE • 20 YEARS IN VE • APPROXIMATELY 150 STUDIES • OVER 35 CVS’ • VP OF CONSTRUCTION (PREVIOUS)

CONSTRUCTABILITY • CONSTRUCTION DESIGNS US LARGEST CONTRACTORS

LIABILITY • 500 CASE LITIGATIONS

DBIA • VE TASK FORCE

c t s g r o u pconstruction technology servicesPRESENTATION OUTLINE

• VALUE MANAGEMENT • GOALS • TEAM FORMATION • PHASES CONSTRUCTABILITY RISK • COST • LIABILITY

c t s g r o u pconstruction technology servicesVM Goals

Goal VM Design-Build

Reduces Owner Risk Craft Project Constructability Partnering Quality Reduce Schedule Alternatives

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WHY IS VE PERFORMED?

c t s g r o u pconstruction technology servicesForming the VM Team

Facilitator Technical Experts Owner Representatives A/E Representatives Facility Operators

c t s g r o u pconstruction technology servicesBRIDGE VE TEAM

c t s g r o u pconstruction technology servicesQUALITY STUDY PARAMETERS

• TEAM >:

• CVS: Efficiency/Time Allocation Professional/ PE or RA

• Owner: Duration

Expertise

Participation: Owner/Eng. Size

c t s g r o u pconstruction technology services“Think Out of the Box”

• Six Phases of VM: 1. Information 2. Function Analysis 3. Creative 4. Analysis/Evaluation 5. Development 6. Presentation

c t s g r o u pconstruction technology services“Think Out of the Box”

• The Real Six Phases of VM: 1. Information 2. Function Analysis 3. Risk 4. Creative 5. Analysis/Evaluation 6. Constructability 7. Development 8. Presentation 9. Implementation

c t s g r o u pconstruction technology servicesMOST IMPORTANT PHASE

Usually Relatively Obvious (For Physical Projects)

●Bridge ●Building ●Tunnel ●Station ●Waste Water Treatment Plant

• DEVELOPMENT

“THE IDEA NOT IMPLEMENTED HAS NO

VALUE”

• Functions?:

c t s g r o u pconstruction technology servicesIDEA SELECTION

VOTING “SURGEONS & SHOEMAKERS”

c t s g r o u pconstruction technology servicesHOW ARE BENEFITS DIMINISHED

IDEAS:

Not Offered

Not (Adequately) Developed

Offered: Not Correct/Beneficial

V = F (P) CO$T

V = CO$T

1 F(P)

FUNCTION = PERFORMANCE

Not Risked

c t s g r o u pconstruction technology services

VM Study Implementation (Timing) Options

Stage Design Status

Standard (DBB)

Design-Build

Scoping 0-5% Design Completion

Design Preparation 20-30% Post DB Selection* 30% NA

Comparison with Procurement Type

*After Design-Builder Selection — Prior to NTP (Notice to Proceed)

c t s g r o u pconstruction technology servicesTIME ALLOCATION

• PRE-STUDY: 8 -16 HRS • DURATION: 5 DAYS • FUNCTION ANALYSIS: 1 HOUR • TEAM SIZE: 8-10 (TOTAL INCLUSIVE) • DESIGNER PRESENTATION: 1 HOUR • RISK ASSESSMENT • NO DRAFT REPORT HANDOUT • CVS TIGHT TIME CONTROL

“TALK LESS DEVELOP MORE”

EFFICIENT USE OF TIME

c t s g r o u pconstruction technology servicesConstructability

• One aspect of VM and Design-Build • What is Constructability? How to : design: construct

– feasible – better – best

c t s g r o u pconstruction technology servicesWHAT IS RISK?

“The chance of a negative event”

GOAL: IDENTIFY AND MITIGATE

c t s g r o u pconstruction technology servicesFORMAL RISK

c t s g r o u pconstruction technology servicesINFORMAL RISK

c t s g r o u pconstruction technology servicesRISK: ACCORDING TO WHO?

PERSPECTIVES • OWNER • PUBLIC • DESIGNER • BUILDER • DESIGN-BUILDER

c t s g r o u pconstruction technology servicesRISKS

• ERRORS/ OMISSIONS (DESIGNER)

• APPROACH (DESIGNER/OWNER)

• DELAY/SCHEDULE (CONTRACTOR)

• CHANGED CONDITIONS (OWNER)

c t s g r o u pconstruction technology services

INFORMAL DESIGN RISK MITIGATION

MITIGATION

RISK ITEM PROBABILITY X SEVERITY = RATING

c t s g r o u pconstruction technology services

FORMAL DESIGN RISK MITIGATION

PROBABILITY MODEL (MONTE CARLO, ETC)

SINGLE OR GROUPING (AVG. P)

a) RANGE/LIKELIHOOD % CHANCE b) ESTIMATE IMPACT RANGE/LIMITS

c) COMPUTER STIMULATIONS REVENUE SCHEDULE COST

IMPACT

P

c t s g r o u pconstruction technology servicesUNION LABOR

c t s g r o u pconstruction technology servicesEstimating Project Costs

• Problematic

• Material Construction

• Means/Methods by Builder

• Each Project is Unique

• VM “Savings”

c t s g r o u pconstruction technology servicesWHAT DOES A PROJECT COST?

The cost of a project is the lowest price submitted by a

responsive bidder

c t s g r o u pconstruction technology services

“LEGAL LIABILITY”

c t s g r o u pconstruction technology services

RESPONSE TO A POOR VALUE IDEA (COST OR TECHNICAL)

• Not My Decision

• Not My Fault

• Was Your Choice

“SO WHO SAID YOU SHOULD IMPLEMENT OUR RECOMMENDATIONS ANYWAY?”

c t s g r o u pconstruction technology services

IS THE CVS AND STUDY TEAM RESPONSIBLE FOR A POOR

VALUE IDEA?

YES! (unless you are careful)

c t s g r o u pconstruction technology services

ACTUAL CASE LEGAL ACTION vs. VE ENTITY

VE Recommended Project Implementation

Project Not Financially Sound (Project Discontinued)

≈ > $40 Million Action Owner vs. Prime Engineer vs. CVS vs. Each Team Member

c t s g r o u pconstruction technology servicesCOMPLAINT

Counts: • Negligent Misrepresentation

• Malpractice

• Breach of Contract

• Unjust Enrichment

c t s g r o u pconstruction technology servicesAVOID LIABILITY

“Recommendation” “Verify” “Confirm” “Validate” “Assure”

DON’T VOLUNTEER FOR LIABLITY

• Inaccurate Costing

• Poor Value:Poor Performance Mitigation Of

V = Performance CO$T

c t s g r o u pconstruction technology servicesSUGGESTIONS

1. Allow Sufficient Time For Experts To Be Experts

2. Do Not Offer Costs/Use Given Project Costs

3. Do Not Offer “Recommendations” Offer “Ideas”

4. Disclaimer In Response To RFP/and in Report

5. Carry Insurance

c t s g r o u pconstruction technology servicesDISCLAIMER

“The costs used are those provided by the Engineer.

Where the VE team has offered alternate costs, they

are provided for information only reflective of the

extremely short duration of the VE study and should

be evaluated by the Owner and its Engineer. VE Ideas

are provided to the Owner/Engineer for their

evaluation and implementation is exclusively at their

discretion.”

c t s g r o u pconstruction technology services

c t s g r o u pconstruction technology servicesThings Do Change

10 20 30 40 50 60

c t s g r o u pconstruction technology services“NEXT GENERATION”

YOU ARE CHANGE!

• LOOSEN UP

• “TALK LESS: DEVELOP MORE”