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
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 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
Looking to the Past:
 Fracturing of the Industry and its Results:

72% of projects over budget

70% of projects over schedule Owner

5% of project costs spent in bidding

knowledge
gap

Designer
Builder

qualifications based price

selection based selection

Rex Miller, Commercial Real Estate Revolution Adapted, HOK Architects

Supply Chain Barriers: Owner PROJECT

Builder 1 Builder 2 Builder 3 Builder 4 Builder

5

Subcontractors
Technology Barriers
Technology Barriers

Owner

AE

Contractor

Subs
Technology Barriers– Speed vs. Flexibility

Owner ? ?
!! !!!!

AE ?@#!*
?

Contractor ?

Subs
 Technology Barriers
Flexibility

Cloud
Computing
Excel
Spreadsheets

Relational Database

Collaboration
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 Catalysts of Change
e s
o gi
o l
h n
c
Te
e
l p tiv
a ic u
e nt m at
a
i sr
o d D
nm o n ig
v iro E c B
E n

14
Environmental: Altered
Environmental
Landscape
1. Recognition of building’s role in climate change
2. Challenge of meeting rising Energy Needs and paying for it
3. Government mandates

15
 Altered
Economic
Economic:
Landscape

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”

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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

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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

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19
 Disruptive Technologies:
BIM Cloud Computing

=
A disruptive technology changes/overturns traditional business methods and practices.

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.

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 BIM – The “Simple Definition”

BIM is the life-cycle management of the built environment supported by digital

technology.
(adapted from NIBS)

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 People

OWNERS

BIM
SUB- &
CONTRACT AE’s
ORS Cloud
Computing

CONTRACT
ORS
Information Process
Cloud Computing

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 Convergence
y
nerg
E
i s ing sts
R Co
Carbon
Footprint

Government
Flat World
Altered Altered Mandates
Economy Economic Environmental
Landscape New Project Landscape
Constrained
Capital Dollars Delivery
Refocus on
Methods to Meet
O&M t New Demands En e r
men gy M
y od e l i
eplo ng
D g
d of putin Be
ee Com nch
Sp ud BIM ma
Clo rk ing
ata Disruptive
y D Technology
arenc ig
nsp B
Tra

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 livery Ener
o j ect De g y Per
Integrat ed Pr form
ance
Cont
racts
ract in g
er Cont
Pu b l
Jo b Ord ic Pr
ivate
Partn
ers

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
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 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, www.scherercfl.com

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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

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Integrated Project Delivery
• 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
Savings
$$$
Est. Max Price

Contingency
Shared
Target Cost

Actual Cost
Cost of the Work

Owner Incentive
Cost Pool
Savings

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29
 JOC DBB
IPD

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 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

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Shorter Project Timelines

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Advantages of JOC for Owners
• 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.

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 How OWNERS Use JOC & Technology

 Track & Manage each project from Programming Estimate

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

Modifications & Changes Orders

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Job Order Contracting
Case Study Starbucks
$208,841
Coordination of university requirements with
concessionaire
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
Bio Safety Level 3 Laboratory
work $443,650
• Road and parking lot improvements Rapid deployment of grant funds for anti-
terrorism research
• 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

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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.

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PPP Case Study
Long Beach Courthouse
Development Cost: $490M
Lease-back period: 35 years
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

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Process

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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

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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

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41
Supporting Software Technology

Integration of Proven Construction Delivery Methods / Project

Management

Standardized Cost Data Architectures / Taxonomies (i.e.

RSMeansTM – 400,000 line items)

Comprehensive Document Management

Electronic Visualization / QTO

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 A Common Language
MasterFormat2010, Uniformat II – Reference
Cost Databases (aka RSMeans)

COBIE, OMNICLASS

IFC

Metrics: FCI, SCI, Cost/GSF,

Cost/NSF, Utilization Rates, ….

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“Facebook” for the Built Environment 1
Project Collaboration
Real Time Collaboration via Web Meetings
“Facebook” for the Built Environment 2
 Crystal Ball:
What does the future hold?

ce

construction

1. Christian and Pandaya, 1997. C

Prediction of Facilities.
2. NIBS 1998. Excellence in Facilit
Managment

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 Crystal Ball:
What does the future hold?

Increased worker productivity

Performance Compensation
Specs Structure
Healthcare outcomes

construction Sophisticated
Data Analysis

Increased energy efficiency

Educational outcomes
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 Contact and Other Info

Lisa Cooley, LEED AP Peter Cholakis

Lisa Cooley Associates, LLC 4Clicks, LLC
www.lisacooleyassociates.com www.4clicks.com
505-239-3446 781-983-1128
lisa@lisacooleyassociates.com pcholakis@4clicks.com

Presentation will be posted at www.lisacooleyassociates.com

Sources/Bibliography at: http://www.scoop.it/t/betterbuilding

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 Thank You!
For attending this
educational offering at
IFMA’s World Workplace.

Be sure to evaluate the session at

the registration kiosk or online at
http://ceu.experient-inc.com/WWC121