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Special Delivery

Master Builder: an ancient designation steeped in respect and mythos, it stirs images of structures so beautifully crafted they have stood for centuries, millennia even. The master builder, in times past, may have been associated with a project’s owner. He was the architect, the engineer, the contractor. One ring to rule them all. And for a very long time, this worked.

“Why wouldn’t it?” laughs Dave Kievet, chief operating officer for Boldt Construction, a member of multiple AGC chapters. In business since 1889, Boldt is headquartered in Appleton, Wisconsin. “The master builder controlled everything, so coordination was really easy.”

In more recent centuries, of course, the progressive fragmentation of these fields forced a change in process. Delivery methods developed, evolved, shifted, but one song has remained the same.

“Owners today don’t want to see anything different than they did decades ago; they want to see their projects delivered faster, at a lower cost and with a higher degree of quality.”

Meanwhile, those aforementioned fragments, and even further fragmented specialties — plumbing, electrical, mechanical, lighting — have an interest in maximizing their profits.

“And maximizing individual profit,” Kievet notes, “does not always result in the most efficient overall project.”

But forward-thinking organizations have, over time, honed the systems by which projects travel from concept to construction to the benefit of all parties involved.

PAST IMPERFECT

“Confrontation,” says Kievet, “is not fun. Not even if you’re good at it.”

But for a long time, it’s been an industry standard: design-bid-build.

“You get the drawings, you bid the project, you win it and you build it. And these projects can be very profitable.” But, he notes, very adversarial.

“Everyone is happy the day you win the bid, but then the change orders come, and it’s confrontational. It’s not fun. Somebody wins and somebody loses. It just isn’t a great way to feel good about what you do.”

Even in cases where something is amiss on the design, says Kievet, bottom line is what’s important. Contractors simply understood they’d have to deal with it on the back end.

“I have to bid exactly what they’ve given me or I run the risk of not getting the project.”

Says McKinstry’s Brian Antonsen: “It was a very selfishly based, self-preservation method of delivery.” One that was the common method when he entered the industry in the ‘90s.

“It was simple,” says the vice president of mechanical construction, “the firm with the lowest price would get the job and then spend time trying to figure out how to make up the bid problems.”

And, he notes, it was not generally the path to the best value or product for owners.

“Since I’ve been [at McKinstry — he began his tenure here in 2003] we’ve been a value-focused delivery entity, but we did mostly private sector work, because the people we were working with saw our ability to deliver things when we were permitted to think in unconventional ways, or begin work earlier in the project, or be the engineer of record and the constructor….”

Fast-forward about a decade and he has seen a positive shift in whose work they can do.

“The public sector has largely changed the method of procurement styles, it is more focused on value versus the cheapest price on bid day.”

TRUTHS AND LIABILITIES

Implementing Lean construction, says Kievet, was where the scales began to tip in the U.S.

“It’s not rocket science in itself, but the Last Planner System focuses on one thing that I think we really lack in the construction industry and that’s reliability.” Focusing on peoples’ commitments to get the job done, he says, “uses a little bit of peer pressure, shines a light on everyone.”

It’s illumination that Kievet says increases the odds of finishing on time and on budget. It was an eye-opener.

“All projects are collaborative in nature — one trade can’t start until the other finishes — and if one of them is late, it snowballs. The Last Planner System really works on managing these commitments and it was a breakthrough in understanding how projects should actually happen.”

Initially, Boldt’s goals were to find ways to work harder or faster. Their exposure to the Lean construction methodology changed the tack.

“Now, we work smarter,” says Randy Haak, Boldt’s general counsel, who was at the forefront of the company’s trademarked version of integrated project delivery: ILPD (the L stands for Lean).

“It’s a combination of integrating the team together early on in the process, as well as incorporating Lean methods of project delivery that follow the concepts of Lean manufacturing, analyzing and eliminating waste, always looking for ways to improve the process.”

On projects like these, the contractor and engineer or architect are brought in simultaneously.

“And instead of separate contracts, there’s one that the owner, architect and contractor all sign. We’re all bound together in one agreement, which by its very nature brings about the kind of collaboration that we want it to be. Because we’re all tied together, we have a common interest in the success of the project based on a single document.”

Key consultants — for the design team and trade partners — sign joining agreements in which they also agree to be bound by the provisions of the three-party agreement.

“It creates a collaborative team right from the beginning,” Haak explains, eliminating the naturally defensive, turf-protective environment traditional agreements foster. Integrated project delivery sets a maximum cost; it’s not guaranteed, but the parties don’t believe it will cost more.

“If it does, the whole team — design and construction — are all going to put their profit at risk, all the money into the pool and if the project exceeds the maximum price we’re going to take it out pro rata, based on how much they put in.”

Team preservation is the new self-preservation. Risk is shared, but, so too, is the reward. Savings affords team members an opportunity to earn more money.

“Now, instead of a team that’s fighting over who’s responsible for a problem, they’re working together to find ways to fix it.”

What happens when it doesn’t work?

“To my knowledge,” says attorney Haak, “there isn’t a project in the country where it hasn’t.”

IF YOU DESIGN-BUILD IT…

John Mura’s mouth wrote a check that his employer had to cash.

Before he came onboard as the CEO of the East Valley Water District six years ago, the utility’s plans to build a new headquarters had become a boondoggle.

“They went through the traditional design/bid/build process that was, honestly, probably not managed properly internally, and the result was a bid that came in over $30 million — and this was 15 years ago.”

They couldn’t afford it. It was an embarrassment.

“And it wasn’t something that gave our community a lot of confidence in the agency,” he says earnestly. “I mean, if we couldn’t build a headquarters, how could we continue to maintain a billion dollars in infrastructure?”

His mission, once hired? Deliver that project, “come hell or high water.”

Mura and his team wanted to go beyond simple office space, to build something that could be a community resource. Demo gardens on California drought-tolerant plants. A personal-use facility that could be booked for political and civic events, weddings, celebrations of life, quinceaneras.

“We wanted to set out to really positively impact the community, not just from a public-service standpoint, but from a trust-and giving-back standpoint.”

And so, when a newspaper reporter who covered all their meetings expressed a bit of cynicism, Mura stepped up with a mouthful.

“I told him, in public, that I was going to deliver the project for half the amount my predecessor ended up with, and it was going to be 10 times better. I kinda stuck my foot in my mouth. I was really bound by that $17.5 million. I needed to deliver it,” he says, laughing. “For my own ego, actually.”

Design-bid-build, says Mura, creates a situation where owners spend a ton of money on the front end.

It was in a previous position at the City of Chino Hills, where on a landscaping project, Mura created contracts for long-term partnerships, hiring not the lowest bidder, but the firm who could meet their performance objectives.

“When I started hearing about design/build, I saw a lot of similarities in the relationship building, in that mutual trust, in that mutual risk and reward.”

Contractor Balfour Beatty, a member of multiple AGC chapters, was brought in to help the vision of a 35,000-sq-ft campus move from concept to reality in the city of Highland.

“As East Valley Water District’s designbuild partner… [we] collaborated to create a space where customers would feel welcome while also creating an atmosphere that would encourage citizen involvement, conservation and stewardship,” says Crandall Bates, vice president of Balfour Beatty’s US Civils Western Region.

They delivered it 71 days ahead of schedule and, to the delight of Mura’s community, board, staff (and ego) for $17.5 million.

“We had a fantastic experience doing design/build on the headquarters,” says Mura. “I am certainly a true believer, and so is our entire community at this point.”

Even companies like Balfour Beatty, which Crandall says still typically delivers projects via design-bid-build and design-build has seen an uptick in alternative-delivery projects in the past decade, in particular with projects over $200 million.

“Owners are turning to alternative delivery methods to explore financing options, expedite project schedules and lower risk.”

McKinstry’s Antonsen, echoing Mura, notes that the shift from the adversarial nature of more traditional methods keeps the celebration going long past the moment you know you’ve won a job.

“You’re working twice as hard, because you’re now celebrated for coming up with brave and innovative ideas, you’re in a collaborative session where everybody is trying to achieve the same purpose: delivering a great facility at the best price point, best value, on the schedule the client needs. There’s a lot of wins in that collaborative delivery — and therefore the champagne keeps flowing.”