ABC: The Keys to Success from a Contractor

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ABC The Keys to Success from a Contractors
Perspective

• William G. Duguay
• J.D. Abrams, L.P.

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Here is the Mandate we share

• "Change the way we build highways. We need to
  build them faster, have them last longer, have
  them be safer and at a lesser cost. Be BOLD and
  AUDACIOUS in your thinking."
• Michael P. JacksonFormer Deputy Secretary for DOT

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• But, lots of us are Old School
• How do we make what worked forever, work in a
  changing market

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Different Components

• Accelerated Project Delivery or Financing
• Accelerated Bridge Construction
• Catastrophic Event
• Embedded in a larger project
• Incremental use of ABC techniques

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Provide the Contractor an opportunity to have a
competitive edge

• This can be through
• Means and methods
• Available equipment
• Time of year current workload
• Existing technology or availability of major
  supplies in the market place

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Efficiency defined by

• Simplicity of design and specifications
• Cost/benefit in line with expectations
• Aesthetics are appropriate for the location use
• Longevity life cycle costs are met

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Share or Define Risk

• Contractors perceived level of risk translates to
  dollars on bid day
• May prevent interest in the project
• Limit what's incidental, and what cant be
  defined by specification or plans

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To be effective, it needs to be

• Achievable with acceptable risk
• Predictable in a variety of applications
• Satisfy the majority of, or at least the most
  important goals

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Whats to like about Prefab/Precast
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Lower risk from

• Uncertainty
• Labor availability or quality
• Access or site constraints
• Weather

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• Bulk of Man-hours spent in a controlled low risk
  environment, or subcontracted out for fixed
  pricing
• Prefab can provide additional owner benefit if
  the GC is also the producer

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Repeatability

• Multiple repetition's drives all contractors cost
  reporting
• With multiple repetitions, cost can be improved
  upon over time
• The fewer new operations that start on a project,
  the more time there is to spend refining on-going
  operations

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Specifications

• Pre-cast specs are rarely ambiguous in their
  intent and are rarely contested
• Erection or assembly of sub-components is
  typically well defined
• Details tend to be clear cut and simple

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Clean simple details

• Tend to
• Drive down costs
• Be built to higher standards
• Reduce inventories speed replacements
• Reduce overheads distributed costs

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Priority projects can be profitable

• Fast track projects can and should use
  incentive/damages clauses
• Revenue can be turned quicker for the GC, and the
  facility put into operation sooner for the Owner
• Assets may be better utilized across a company
  (assets that work tend to make money)
• Be careful the plans and specs arent geared
  towards the GC spending an equivalent bonus
  amount to get it

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Successful really boils down to

• Developing an idea that meets your needs
• Selling it for a price that, well, meets your
  needs
• Getting it built in a time frame that meets your
  needs
• Walking away from it at completion not wanting to
  change a thing because the project met your needs

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What Contractors dont usually like
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Undue Risk or Schedule demands

• Fast track needs to be reserved for when it is
  needed
• Specs that unduly favor one party are ones that
  typically are faulty and are used to cover less
  than satisfactory plans and detailing

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Project Goals not effectively communicated

• Can be Scope
• Can be details, phasing requirements, schedule
  demands
• If it is a new design that could be used for mass
  use or production pending successful testing, it
  needs to be communicated.

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Perceived

• Contractors perception is reality on bid day.
• Cost will be driven by the contractors perception
  of
• Undefined items of work, or method of payment
• Restrictive specifications
• Poorly crafted bid documents

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Sole Sourcing

• Sole sourcing may be necessary due to approved
  lists from an agency, but they limit competitive
  advantages
• If they are a necessity, develop ways for the GC
  to maintain an edge
• Make sure the sole source will be able to meet
  the demands of the project prior to specification

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One of a kind designs

• Limits re-use of
• Technology
• Equipment, forms, yards
• Cost history
• Personnel

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Differing perspectives on the same thing

• (understanding both sides)

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Speed

• Owners
• Limit down time of asset

• Contractors
• Prefab minimizes hindrances to speed
• Weather impacts
• Labor availability
• Equipment troubles
• Material issues
• Site access issues

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Quality

• Owners
• Insure TQM

• Contractors
• Items built in a controlled environment are
  conductive to better QA/QC programs

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Traffic Disruptions

• Owners
• Seek to minimize traffic interruptions
• Limit road user costs
• Limit detours
• Limit public scrutiny
• Limit impacts to essential services

• Contractors
• Traffic closures are one of the most dangerous
  field operations
• Typically limit hours of work
• Frequently push work onto less productive shifts
• Have high costs of cancellation

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Cost

• Owners
• Include
• Management/Procurement
• Design
• Construction
• Construction overheads
• Life cycle
• Intangibles
• Aesthetics
• Historical
• Research

• Contractors
• We are a business, and in the business of being
  profitable, by constructing for owners.
• Include
• Manpower
• Equipment
• Home office expenses
• Materials (permanent consumable)
• Taxes
• Investments
• Insurances
• Cash flow
• Profitability

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Thoughts on Accelerated Project Delivery

• Agreeing before, is easier than surprises after
• Level playing fields invite participation
• Copy other successful programs and adapt them to
  local conditions and regulations
• Those made part of the solution beforehand,
  usually aren't part of the problem later

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Dont let this statement define your organization
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You Speak Engineer, I Speak Contractor

• Poor communication and collaboration is
  pervasive and impacts each phase of the
  construction process as well as everyone involved
  in the process when all of the responses were
  tabulated, we noted one overarching theme that
  stood at the top of the owner concerns,
  communication
• 2003 FMI/CMAA Fourth Annual Survey of Owners

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Solution

• Specify the different roles for participants
• Assign responsibilities authority to team
  participants
• Define turn around times for information transfer
• Ensure all participants are equal stake holders
• Make sure your way of doing business matches the
  business you will be doing
• Follow through with your objectives by critical
  evaluation
• Understand what drives cost and minimize cost
  triggers

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Partner from Concept to Completion

• Dont let it be a catch phrase, but rather your
  primary tool to ensure the projects success.
  Properly used, it will bring all the benefits of
  ABC to your project.

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Once you have settled on an idea, embrace what
drives the Price Schedule process

• Repeatability
• Durability
• Reliability
• Adaptability
• Survivability of the idea
• Profitability

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Questions?