Perini Building Company

Transcription

>> Thank you. Thank you. It's a pleasure to be here this afternoon. Have I spoken to any of you before? >> Just a couple of weeks ago, right? >> Yeah. >> Yeah. OK. Well, I won't tell that story again, OK? 'Cause you've heard it already. But it was mentioned that I'm on the High-Speed Rail Project. I just left there to come over here. A question that was asked me earlier is that project going to happen and I still have doubts and I've been on the project for over two and a half years now. Politics and construction, I will say do not mix. And attorneys and construction do not mix. So, that's what's happening with the High-Speed Rail Project right now. Too many attorneys and too many politicians but it's a great project. We were talking earlier about being able to live here in Fresno, commute to Los Angeles or San Francisco and be back for dinner in the evening. That would be a great, great opportunity to do business and to expand people's outlook from Fresno to Northern and Southern California. As the professor mentioned, I'm in a contrast design-bid-build with integrated project management or integrated project delivery because I believe firmly that design-bid-build is going to be a thing of the past. The high-speed rail is a design-build project. And most of you if you stay in the industry will get involved in design-build projects and CM at-risk projects, P3, public private partnerships, alliance contracting and so on and so forth. So, I don't know what you know, you definitely don't know what I know. So, it's going to be kind to be a meeting of the minds. Please raise your hand if you have a question or if I'm not clear or you have an example that you want to share with me. So, I assume everybody knows the three-legged stool of can--design team, owner's team and construction team. In the construction process, those are the three main players. And if this was an org chart, there would be all kinds of offshoots from each one of these legs. Construction team would have a bunch of subcontractors. The owner's team would have sub-consultants environmental documents, its own team members. And the design team, again, like the contractor would have a bunch of sub-consultants. This is the design build--design-bid-build process. So, I'm going to tell a story. Years ago, I built a school in Northern California here, that have an indoor swimming pool. I was a project manager. I worked for a general contractor. And had an indoor pool, shower room, locker room and in order to facilitate the showers, there was a 250 gallon water heater, A.O. Smith water heater. So, plumber made a submittal. Got it approved and ordered the water heater. I had my carpenters build the mechanical room, the house, this water heater. You know, a concrete slab, we studied it up, sheetrocked it inside and out. There was a vent for the fumes, combustion air vents, gas line, floor drain, door, everything. The plumbing contractor comes to me one day and says, "Ron, the water heater is at the plumbing supply house and it's a big, big sucker. It doesn't look like it's going to fit in the room." And I said, "Did you measure it?" He says, "Yeah. It's 36 inches wide." And if anybody knows what a door is 36 inches wide and then you've got to stop so that reduces it. And then if the door is open, you have the door itself to deal with. Push them to shove the water heater wouldn't fit through the door. I call the architect and I said, "Mr. Architect, how did you plan in your design to get this water heater in the room?" He said, "Well, it's your problem. You're the contractor. You missed sequence to work. You should have put the water heater and then built the room around it." I said, "Mr. Architecture, I've never done that before." And a 250-gallon water heater is about five times bigger than the water heater at your house. And you can get the water heater in and out at your house. I guarantee it. I said, "You know, I've been in this business for a while and I've never done that before." I said, "What happens if the water heater fails." He said, "Oh, this is such a high quality water heater that it'll outlast the building." I said, "Oh, come on. Come on, I don't believe it." So, I called the manufacturer and they said, "Yeah. It's of high quality and how you get it in and out is not our business but if you take it apart to get in and out of that room, your warranty will be void." So, here I am. I'm the project manager. I'm working for a construction company. And essentially, I'm going to have to tear a door out and rebuild the wall. And my boss is going to be ticked off because I'm spending money 'cause I missed sequence to work. Anybody got any comments about that? Anybody know anything about that? How would you do it? Who's wrong? Which one of these legs is responsible for not being able to get the water heater in the room? Was it me on the contractor esteem 'cause I missed sequence to work? Was it the designer 'cause he didn't make a door big enough or was it the owner because he needed a 250-gallon water heater for his many--in this case, kids projected the use of the room at one time? How do you resolve that? Who is responsible? So, in very generic--yes sir? >> I would think the design [inaudible]. >> OK. Why? >> Oh, because the design [Inaudible] verifies it didn't fit to the door. So, they could have [inaudible] see where they built the room and changed the plans [inaudible] water heater. >> Actually, that's a good thought. So, what you're saying is the contractor needs to verify everything that the designer puts on his plan. To some--well, I know. I'm not going to argue with you there to some degree. To some degree and we'll go through some slides here about the responsibility of the design team, the owner's team and the construction team. Very generic but these bullet points have been with me for 25 plus years and they're what, in my opinion is the foundation for claims and change orders if the individual entities do not adhere to these responsibilities. So, what's the owner's responsibility in the construction process design-bid-build using sound discretion and evaluating bids and qualifications? That's the important for contractors to know that it's a sound process preserving the bidding system, funding the work, owners need the money. Again, back to the High-Speed Rail Project, if you've read about the bond issues and people are trying to say that what's happening now. It doesn't really meet the requirements to the bond for 10 billion dollars and they're trying to stop the work. The owner needs to fund the work, providing surveys, again, high-speed rail, physical descriptions, securing easement. Last week, I was at a meeting, 205 pieces of property were on the critical path for the contractor to High-Speed Rail Project is acquired six. So, there's 199 pieces of property still outstanding. It's the owner's responsibility. Warranting the adequacy of the plans and specifications kind of goes to what we're talking about. Is the owner responsible for the plans and specifications? Suitability of furnish material, if the owner provides disclosing superior knowledge. There's a whole issue again at the High-Speed Rail Project about the environmental document and was all the information disseminated to the contractor as far as what they needed to do as for as mitigation and monitoring in the environmental process. Prompt action and clarifications provide final interpretation and cooperating, assuming ultimate responsibility for design professionals. I don't know if in any of your courses, you talked about the Spearing Doctrine. Is anybody ever talked about that that the owner--yes sir? [ Inaudible Response ] So, in the design-bid-build process, the owner ultimately is responsible for his design consultants, plans. That's why owners end up paying for change orders. They don't like it. They--but it's what happens. In fact, I've been in many discussions with owners saying the designer should pay for that. But Mr. Owner you warranteed, you guaranteed that your consultant, your agent design the project and if you want to sue your designer, that's fine. I'm not, is the contractor going to do that? That's up to you. Architect's responsibility, reduction and coordination of plans and specification, technical accuracy, specific design, another words to the design needs to be specific if it's--for example if a water pump suppose to raise water five feet, it needs to do that. You know, it needs to do that. The design needs to be specific. It needs to work. It needs to comply with the code. We all know about ADA requirements. That's the architecture's responsibility when he designs a project to make sure the door is wide enough. Lever handles, the halls ways. There's proper entrance into the building. The bathrooms meet ADA [phonetic] code requirements. That's the designer. Interpretation of the documents, submittal review, prompt and timely response, evaluation to the work, usually the architect goes out and looks at the work and says, "Yeah. This is what was intended." That's what was on the documents, diligent skill and good judgment of professional. Contractor, who did they inquire to ask questions? Reasonable review. Back to your comment, yeah, the contractor is required to reasonably review but as I used to argue when I was a contractor, you know, I've had 30 days, 60 days to review the plans. You've had a year or two years in the design and you expect me to find everything that you designed wrong. I'm not your plan reviewer. Plan and schedule the work. Supervise direct and install the work. Yeah. Adequate workmanship, correction of patent errors, errors that are patent, that are obvious. Not that are hidden, that are obvious, coordinate all parts of the work. Again, back to the water heater scenario, I was told by the architect, I missed coordinated it, missed sequenced it. Review, submit and coordinate shop drawings, of course, pay everybody, have adequate insurance that here are the safety standards and warranty and clear title when the project is done. So, going through any of those, back to the water heater scenario, did anything jump out at you? Back to the story about the water heater. Luckily, I lived about four, five blocks from the school project that I was building which was great. I can go home for lunch. And those of us that have been in construction for a while, that's a rarity that you get do a project so close to your house. So, I was really distraught about this water heater and the fact that I missed sequence to work. You know? I've been a contractor for a while. So, on a Saturday, I walked over to the school and the plumber was there doing some work on Saturday. And it just done, done me that it might be a code issue. And I asked the plumbing contractor if he had a copy of the uniform mechanical code and he did and instruct. And the code says that you have to be able to remove and have access to a water heater. So, back to this scenario when it said the architecture is responsible for code compliance, the architect and his design, when he didn't design a door big enough to remove that water heater. He violated the uniform mechanical code. So, he had to pay not only to take the door out but to replace that door with a wider door, a three foot six door which that one looks like. Same height because you could put that water heater on a dulling tippet back and get it in and then once it was in the room, there was enough ceiling height to jock it around. So, again, back to the owner being responsible for the designer, the owner ended up paying for a change order and he had a door he couldn't use because I give him the door. I didn't want it but took the door out and replaced it with a brand-new door. So, going to integrated project delivery, those issues that we just talk about as far as the water heater and in design-build, those issues are worked out amongst the team. So, and you don't have those issues. They should have already been done. And if you model the project, if there was a beam model, maybe you would have seen it there. Maybe you could have modeled the water heater in the room. You could definitely have a furniture fixture and equipment schedule. Everybody would have talked about it hopefully and maybe there wouldn't be an issue. So now, I'm going to move from design-bid-build to integrated project delivery. You've already probably read it. Integrated project delivery is a project delivery approach that integrates people systems, business structure practices into a process that collaboratively harnesses the talent and insights of all participants to reduce weight, optimize efficiency through all phases of design fabrication and construction. You see--you kind of see the difference. This is in the siloed approach. There's no three-legged stool here. Everybody collaborates. And the reason--when you look at this--can everybody see this? You see non-farm productive index. Construction, construction isn't very productive compared to other industries. We're always starting with the new project. Typically, it hasn't been built before. I mean facets of it have. I mean, I've been doing this for close to 40 years and yeah. I have a lot of knowledge and lot of experience but I start a project and there are facets that I've never seen before and never done before and there's always new technology. But I'll tell you one thing. I definitely check to make sure equipment fits in the room that it goes--that it's supposed to go to. I mean that was a lesson learned and as you get into this business and you keep doing projects, all these things get embedded. 30 percent of projects don't make schedule or budget. So, why do it? Design-bid-build, 92 percent of the projects, owner said, architects join or typically not sufficient for construction. 38 percent of carbon emissions in the US are from buildings, not cars. 37 percent of materials used in construction industry because it becomes waste. It's not planed well, trial and error. Owners are dissatisfied with the process because they spent a lot of money. A project that comes in with 10 present change orders considered a good project but if it's 100-million dollar project or a 200-million dollar project, 10 percent is a chunk of money. And if it's a school, that will buy a lot--that 10 percent will buy a lot of computers, furniture, programs. There's a little learning in repetitive failures. Again, I've learned a few things but I don't know at all. No focus on creation and delivery of value. Again, this is design-bid-build and default trust and integrity in the construction process. If you're a construction manager or an owner's rep or an architect, do you think the constructor is going to rip you off? Is that the general feeling? Change orders. Everybody talks about change orders like it's a four-letter word and it's a bad thing, and contractor are just out to get you. My opinion is if the plans were deficient, if the owner hasn't planned well, they've asked for it. They've ask to get change orders. Coordination and collaboration among team members. Back to the water heater scenario, did the mechanical engineer talk to the architect when the mechanical engineer specified this 250-gallon water heater and say, "Mr. Architect, I looked at this thing in online or in the switch catalogue or the--or at the plumbing supply house and it's three foot wide. You need to put in a door." They didn't coordinate. And one of the big issues is the architect designing to the owner's budget. Do they really know what it cost? And then bringing contractor subs and suppliers on board during the design phase typically doesn't happen. Typically doesn't happen. And who knows at the building? And a lot of times they're not consulted early on. Between 40 and 50 percent of all construction projects running behind schedule, the biggest cost and impact in construction today is inefficiencies. Built into the way projects run and manage, not the cost of materials or the cost of labor. A business structure design build is a business structure. P3, public private partnerships, CM at-risk, and the process is to collaborate and use talent in inside and participate in the design, in fabrication process. Integrated project encourages early contributions of knowledge and experience that's best for the project not for the individual silo, not for the contractor to make money on what's specified. The architect to get some design award and the owner to reap everybody off and get solely what they want out of the project. Again, back to preconceived notions, prejudgment, prejudice and I use that word in regard to preconceived notion. Does the architect just out to get in an award? Is the contractor just out for change orders? Or do you have mutual respect, the understanding that everybody has their own field of expertise and they have a lot to offer to the project. All members will benefit from integrated project delivery. I'm not going to get in to contract structure. In other words, the contracts between the integrated team members but there are ways to structure the contracts so that all members benefit in dollars, in reward, early goal definition. What's and again, in design-bid-build, the contractor typically bids on a project but he doesn't know what the goal of the project is. Is it schedule? Is it cost? Is it sustainability? I did a police facility years ago and while I was managing the design of that police facility, in the existing police facility, there was an officer who was killed in the lobby of that police facility and it was friendly fire. In other words, he was shot by another officer. And it happened because somebody came into the lobby of the police facility, a young man with a gun, pulled the gun on the clerk behind the counter. She hit a button. All these officers run to her assistance. One officer had already changed his clothes and he wasn't in uniform. Somebody [inaudible] gun, fires or shots or fired the officer that's not in uniform. Get shot and killed. So, I'm designing a new police facility. What do you think the emphasis of that new police facility was? Officer safety. Officer safety. So, there were bulletproof walls, the separation like this room here from the hallway was bullet-resistant. The glass was bullet-resistant. There was pass-through for packages. The public was separate and could not enter until they were called in or escorted in. So, that became the emphasis of my project. The police chief, the city manager, city council, nobody cared what it cost at that point. They didn't want to lose another person. The contractor again, he didn't know that when he did it but that was the emphasis to that project. Enhanced communication, focus on team performance, leads to communication between all participants that's open, straight, and honest. I was just to have conversation with the professor earlier about on the high-speed rail that I mentioned a year ago that there should be global calendar for the project. In other words, if somebody is having a design meeting on--we'll say PGNE or gas lines and somebody else is having a design meeting about Union Pacific and a crash barrier between high-speed rail and Union Pacific Trains. That should be on a global calendar. So, in your scope of work, if that meeting is of interest, you should know about it. At least know about it and if your schedule allows, you should be able to attend to enhance communication. Clearly define standards. I think that's self-explanatory. Standards for the project should be clearly defined, documented, appropriate technology, integrated project delivery, and BEM [phonetic], go together like a horse and carriage. I mean they just work. And if you're getting involved in BEM, get more involved in it. As a kid, I was a model builder. I think it's great to be able to model something before you build it. To understand how it goes together, to look at it from all sides and really understand it. That's the advantage of cutting-edge technology and BEM and integrated project delivery. High performance, sustainable design, high performance buildings, every building now has some lead certification. Every building now goes through a commissioning process, high performance. They need to function. They need to per-function its standards that were unheard of in 15 years ago. Again, back to the police facility, security officers' safety, you guys know what you have to go through at airports. Security is a big issue. So, promote early involvement of key participants. If I was building a project or designing a project or managing a project, managing a project right here at Fresno State, who should be the key participants? What's the last building that went up around here? The Library is fairly new. Let's talk about the library. Who should participate in that process? Library staff? How about somebody from the CM department? Maybe and maybe not. Anybody got any other ideas on who should participate on managing the design? I've got an architect on my team, I've got a contractor on my team but I need to know the program for that library. How big it should be, what you're going to put in it. Should I talk to the head librarian? Should I break it down a little bit and talk to just the librarian? These are questions that you need to ask and one thing I'll share this right now and walk out to this room with it. You need to include the maintenance staff. Almost from number one because they're going to leave with that building with that library. I mean I've worked on college campuses where people and the maintenance staff were there for 20 plus years. And they lived with the headaches of projects that were built and didn't function where they couldn't get to a shut-off valve or an air filter. Or the project just didn't work from a maintenance point of view or the carpet had to be torn up and just didn't wear well. You know, or the hardware on the door fell apart because what was specified didn't have longevity that was required. So, maintenance staff is important and there again, maybe it shouldn't be the maintenance superintendent. Maybe it should be one of the guys down lower. These are all things you work out, equitable balance have risk and reward in the--Again, those are contract issues between members of the team, and they pretty much follow the responsibilities. In other words, the architect is going to take on the risk of the design. The contractor will typically take on the risk if outgoes together and then those don't change but they may participate and share some of that risk. The compensation structure that's best for the project to open book, again that's different than design-bid-build where everybody shares the cost. There may even be a profit pool and if it increases, everybody shares. And if it decreases, everybody takes the loss. There's no winner. There's no loser, it's about the project. Clearly define responsibilities without chilling open communication or risk-taking, implement management and control structures built around team decision-making. Again, the difference in the IPD model is phenomenal, when everybody gets together upfront and talks about this staff and resolves the issues and really, you never know where the solution is going to come from. And like I said this morning, today, I was in three different design meetings in high-speed rail and everybody comes up with a solution one week and then it gets massaged and more input and it gets changed and it really is the best solution. What happened at the high-speed rail was there were five bidders on the High-Speed Rail Project for design-build teams and everybody could submit alternate technical comments. So, if they had a different way to do things than what was put out by the high-speed rail authority which was 30 percent plans. If they had a better idea, they submitted it and if the high-speed rail authority accepted it, they could bid that portion of work, knowing that it would be accepted if they won the project, but the winner of the project now, Tutor Perini, Zachry, Parsons gets to look at all those alternative design concepts and see if they can incorporate them into their design. So, in other words, the best mine in each of those design teams are now focused on one design-build team. And some of the concepts were worth it. Some of them weren't worth it. I mean one design concept is crossing the San Joaquin River just to move the bridge up the river a little bit. And if we can get that property 'cause it's a shorter distance, if anybody has ever lift up the river but the span is shorter, plus there's a PG&E gas line, plus there's a Kinder Morgan oil fuel line and inch is in diameter, so moving it away from all that stuff will enhance the project and save some money. So, in the traditional scenario, it says here design effort, starts out very slow, comes through a construction document and then here in the bid process, we're still designing and we're still designing when we go in the construction. But right here, somebody has already given this a cost. They bid it. This is the possibility, the change order is right here. CM at-risk, although the CM comes on early, he guarantees the process here, guaranteed maximum price. It's still being designed and then it goes in the construction design-build. The advantage of this CM at-risk design-build integrated design. One advantage is that the selection process is qualification based. Everybody know what that is? You've got to submit your qualification, it's not a hard bid project, usually you're allowed to submit the cost later in the process but you get pre-qualified you're selected on your qualifications, your ability, your experience because in this scenario, the traditional design-bid-build scenario, the one that makes the mistake can win. If the project is--we'll say the engineer's estimate is 10 million dollars, somebody makes a mistake and bids it at 9 million and they left out a million and they try to make it up in their deficient or they would get the project a low bid because it's the lowest number and people believe--there are people who believe that because it's the lowest number, it's the best value. And sometimes, it's a mistake. I mean when I worked on the contractor side, an elementary school was mirrored in the design plans. In other words, there was a building and it was duplicated again and then you go--went through and in the furniture, fixtures cabinets, if you looked at one sheet and didn't realize that those cabinets laid out for each room were actually duplicated in the other building, you'd be off by 50 percent 'cause there were two buildings. It mirrored each other, they faced each other, and if you didn't have that whole concept. And again, in the bid process, sometimes contractors only look at their scope of work like the cabinet guy. He looks at this cabinet sheet. He doesn't look at the other and realized there's two buildings here, you know? Or there wasn't a note and that actually happened on a project that I was the project managers and we took the bid, and we took the project and we were 50 percent short on the cabinet. And my boss said, ''Let's do it, we're going to do it''. I left and went to work for the City of Roseville before that project really even got into construction but it ended up bad. The contractor I worked for went out of business. The school was a year late in delivery. There were bunch of other issues related to that project. So, it turned out badly, the bonding company came in and took the project over and it started with cabinets and trying to cut everybody's bid to make up for that one mistake. So, construction manager at risk design-build integrated design, you get to select the contract. They're not on the low bid, not on the mistake but on their qualifications. So, you get into design-build right here based on some level of design, the contractor submits a number and starts designing. Like the High-Speed Rail Project, we gave them 30 percent design documents. They can change it if they have a better idea. And they do like I said move in the bridge across in the San Joaquin. Schematic design, these are the typical facets. Schematic design, design development, construction documents, this is less. It shortened at the end. You're making up time. Integrated project, everybody is on board here at the conception stage. Detail design, schematic design, design development, implementation which is essentially construction documents and the construction, it's almost flat-lined and it shorter yet, it's shorter yet, because you bring everybody together right in here, this ramps up. And as I say this right here, this is little money. Right here, this is big money. This is bricks and mortar, concrete, a mistake here cause you a lot of money, a mistake here especially if it's a BEM model. You know, you can change it, you can see where the conflicts are. Again, the participants rolls, what's most important on the project I hope to take away again is the maintenance staff, whatever the building is. They live it. They breathe it. They know what the issues are and what they have. They know what the issues are and what they want in the future or they'll learn if you give them the opportunity. Pre-qualify the members of the team based on experience, their past history, their financial status. One thing that happened in the downturn, I was working at a community college in Livermore Las Positas Community College, 250 million dollar bond program. A number of projects, but what happened when the market started to turn down, contractors got hungry and they were throwing a number at any in every project. They just wanted the cash flow. Again, the one that makes a mistake wins or the lower bidder and it was a tragedy. There were subcontractors who bid projects. In fact, I did a 50 million dollar theater project at Las Positas and the structural steel guy, the biggest sub-package, the structural steel went bankrupt. The contractor had to bring in another structural steel guy. They hired the foreman from the previous company because he had all the knowledge about how the stuff goes together but it was ugly in a lot of respect. So, what happened was we changed the delivery model. We went from design-bid-build to CM at-risk, to design-build, to pre-qualify. So, weren't taking a risk with contractors, so just throwing numbers and went in projects that they really couldn't do. Another common occurrence is sports fields. You want to pre-qualify landscapers. You don't want your household landscaper to build a sport field, a baseball field, even if it's little league field. You want somebody who understands what level is. I tore a hamstring by stepping in a hole one time playing out field in an adult league. So, you want to pre-qualify these folks and that's what pre-qualifying members of the team based on experience, financial were with of, their bonding capacity, their references. You just don't want somebody considering interest and seek involvement of select third parties, subcontractors. Again, their experience, identify organizational and business structures best suited, design-build, CM at-risk. Develop project agreements that define roles and accountability. Like I said, we won't--but this--those of you that have taken any business law know that, you know, you can distribute risk anyway you want but it's bets to really distribute it to the one that can bare it, whether it's the contractor with ways and means, the designer with design integrity involve all key stakeholders in the programming process back to those charts upfront. Upfront where the little money is involve if it was a campus project involve the dean, involve some instructors. And sometimes, it's really hard, I mean everybody has heard the term herding cats and sometimes it's like that. This professor has an opinion, the dean has an opinion. The maintenance guy has an opinion. And if you manage design, if you're--I'll say the integrator, the one that's taken all this stuff and really digesting it and coming out with an answer. And again, I've given you some examples, the police station example. The driver there with security, so when you take all these inputs, does it really hit that main goal for security, you know? This police facility, there was a jail, again officers' safety. You don't want a prisoner to take advantage of a jailer because of the design of the building. You don't want a jailer cornered, you know, you want the prisoner to be able or I should say the jailer to secure the prisoner to see the prisoner, all these things come to play. And you need the stakeholders to identify those. Again, key technology such as BEM, cost structure is developed earlier and in greater detail in conventional projects. Typically, there's a budget. Again, we'll say 10 million dollars for the project. The designer tries to design to the 10 million dollars, really doesn't know he puts this in and that in, in IPD, everything is taken apart. Scope, number one, you're going to have the three main players there. You're going to have mechanical, pluming electrical. And you're going to set a target budget based on the mechanical's experience, the electrical's experience, the plumber's experience on projects is similar size in scope. And you're going to set a target budget. You're going to know what the mechanical portion of that project is going to be. You're going to design to it. And if you don't, you're going to be able to work things within the budget but you're not going to find out and I'm sure you've heard of many projects. It goes out to bid and got--we had a 10 million dollar budget. In fact, that happened to me in the City of Tracy. Renovated an all theater in downtown Tracy and the project budget was 12 million and on bid day, it came in at 14 million. What happened? A lot of things happened, but the main thing is that the cost structure wasn't established and the designer kind of went outside by listening to so and so, add a little of this, add a little of that. So, in IPD, the cost structure is defined early. Everybody is on board, understands performance goals are developed again whether it's going to be lead, gold or silver. Again, what the security needs to be, how the building is going to function. Successful outcome matrix are developed and agreed upon, preliminary schedule is developed and its linked to the model. Sir? >> I have a question about the BEM model. Through your experience, one, there's a requirements of the use on BEM as a submittal and as executive tool between different [inaudible]. In the contract, how do you specify the ownership of [inaudible]? How do you share the risks [inaudible], you know, in that preexisting model? Is there any except on the--up to AIA, the U2O2 [phonetic] [inaudible]? Have you used any customized top of the contrast to address that? >> I have not. I have not. You know, the AIA is setting the ground work, and we're going to use BEM. We're using BEM on the high-speed rail but I haven't dug into it to really understand what the--'cause those again, they're contractual issues and--so, I can't answer that of the top of my head but a high-speed rail will own it when it's all said and done. That's as far as I can go on, on those kinds of issues with BEM. Design decisions are made on best to project basis. Again, what's best for the product and those goals are set at the outset, you know, again, you've heard about high-speed rail. It's supposed to go 220 miles an hour, you know, from San Francisco to LA. It's supposed to move a certain amount of people. Those are the goals best for the project. There's a definitive budget, there's a timeline. In the BEM model, the beam model will help facilitate that. One thing that I'm trying to see if I'm going to get to it, visualization of the model is tied to the cost model similar to a cost loaded schedule, a cost loaded BEM model, all the pieces fit together and you know what it's going to cost. You keep feeding it. Scope is fixed, price is fixed, the owner sign is off on it, what will--and again, this happens early on. Everybody understands what the process is, what the outcome is going to be. Leadership remains in the traditional roles of the participants. Again, back to risk, the architect takes his traditional role as far as risk and responsibility and leadership and the design, the engineers whether it's the mechanical, electrical, plumbing, the owner of the subs typically lead in their area of expertise. Then, the design development, it's unambiguous, fully defined, coordinated, validated, design--the integrated detail design phase period is longer and more intense in traditional design. Again, everything shifts upfront, all major building systems right down the furniture, fixtures and equipment. Again, in the BEM model, IPD and the BEM model are made for each other. Agreements are reached early, the tolerance between the trades enable--in other words, all the conflicts are resolved, everybody knows the space--I mean I'm sure you've talked about ceiling space. The BEM model shows you where sprinkler systems are and light fixtures and the speakers. And everybody knows the space that they can work in where is I've been on project design-bid-build projects. After the project was bid, everybody is standing around scratching their heads saying, "OK, where am I going to run this and where am I going to run that? And you mechanical contractor, you get to run your dock there and I'll run my sprinkler line here and the electrician is going to run his stuff there," and it takes time. Again, back to the inefficiencies I talked about earlier. You've already bid the project. You've already assign the cost to it. Now, you're trying to coordinate your work with three or four others subcontractors in a restricted space. And the BEM model allows for prefabrication which is less waste and again, I'm trying to anticipate slides here. Specifications are developed based on prescribed and agreed systems. In other words, the specifications are really already outlines. Everybody's talked about it, everybody has been involved. They know what the HVAC is, they know. With the 250-gallon water heater is and the size. It's already been agreed, specified, and it's part of the documents. The construction document phases, I showed you significantly shorter. The goal of IPD is to document how the design intent will be implemented not to change or develop it. It's already done where BEM is used, the shop drawing phase that typically occurs later in the process will be reduced and eliminated. Again, we'll just take the three major subs. They know what they're going to put in. They've already vetted it. They've already talked to the suppliers, there's not going to have to--the contractor is there. They know it will fit, they know it will work. There doesn't need to be this shop drawing, submittal phase. In other words, Mr. Designer, this is the 250-gallon water heater that I'm going to submit and use. That's already been decided. They know the manufacturer, the size and it just makes things prefabric--here, this is what I was--prefabrication of some systems could commence because the model is significantly fixed to allow prefabrication to begin, again using this ceiling scenario. Everybody knows what their tolerances are, what their spaces, dock work can be prefabricated at the shop, less costly, less waste, more controlled, cheaper. Rehearsal of construction is enabled through 4D and the cost through 5D. Again, back to the model scenario when I was a kid being able--I mean I'm older than I look, yeah, but I had a model of an eight-cylinder engine that I put together, it was made out of plastic. What a great learning tool, the pistons worked, you know, you wire the spark plugs, all that sort of thing to be able to do that in a building and rehearse the schedule and sequence of the work. Some of my friends at Turner Construction, if any of you have flown out of the Sacramento Airport. Turner Construction won that project because they put together a BEM model to show the airport authority that they could sequence the work and not disrupt airport operations. They showed how they were going to stage the project, they showed how they were going to sequence the project, and not impact airport operations and flights which is an important thing. That's how the airport makes its money. They didn't want to screw around with any shutdowns or disruptions, so Turner Construction was able to show a model on how they were going to do that. Specifications provide narrative documentation of the design intent were necessary like I said, it's upfront, implementation documents, visualize the project for participants who aren't involved in the development of the model. In other words, there may be some subs where the all the works hasn't been bought out but with the model, they'll understand it back to the theater scenario for example. You may bring in the ceiling subcontractor, but you have the space already modeled. You know the seats that are going to--but you can model the arrangement, ADA, maybe you really haven't decided the width 'cause that'll determine how many seats. Maybe that's still up for debate, the color definitely is, maybe you're going to have wood armrest but anyhow, you have the model and you can make sure all this stuff fits. Also hospitals, or again back to the police facility, be able to show people who didn't participate early on in the model how the model works, what their space is going to look like. People who don't--who can't look at a set of plans and really visualize it in 3D what that or what this, for example, classroom is going to look like? It's a great, great tool. Back to like I said, police facility, police officers typically don't read plans. Educators typically don't read plans. Library people typically don't read plan. So, to make sure that what functions for them in their work process is in the building that's going to be designed. The model is a great tool. Agency review, school buildings have to go to DSA. Hospitals go to go Ashpan [phonetic], smaller projects, city building department. What's happened recently is agency review in Britain is driving BEM. In other words, it's a requirement. If building departments, if DSA, if Ashpan required that all plans are submitted in BEM, those of you in this room or modelers or want to be modelers would be able to jump right on a job. And I think that this is going to happen where the agency is--and the agency review, the approvers are going to drive the use of BEM, it's going to be part of the project. And back to your question, those issues about who owns the model are definitely going to be worked out because agencies--approval agencies are going to want submittals. Performance-based code analysis, one in BEM, piece of cake. Integrated process require builders and trades be involved in preliminary and submittal review of the documents. In the model, all this stuff is easy compared to having a piece of paper and submittal. So, agency review is really going to drive in my opinion, the integrated project delivery and BEM. This is the future. And again, about buyouts, you'll be able to do it from the BEM model. Stuff that isn't--I mean whether it's whiteboards, carpet, stuff that typically is later on in the process will be able to be defined in the model and bid in the model. The quantities will be defined, early involvement guarantees contractor participation. The contactors that have agreed and typically signed the agreements early on using the three main MEP are pretty much guaranteed to participate in the project, which is a plus for the contractor. Of course, they may be required to have an open book and show the owner and the team, what things cost, their market, their profit and that's OK, this is America. We expect everybody to make a profit. We just don't want them to make a killing or we don't want them to make it of somebody else's back. So, if it's reasonable, everybody sits around the table, agrees and like I said, there can even be agreements about a specific profit pool that the mechanical, the electrical, the plumbing, the structural guy, everybody says, "I want to make this amount," goes into the pool and whether it goes up because they saved and it all goes in or whether it goes down because there was a mistake or there was an issue that didn't figured, everybody wins and losses together. Kind of like family, huh? A family budget. Contract administration, I'll just say that as a construction manager consultant, one of the things that I've typically sold working for where Parsons Brinckerhoff. Before that, I worked for Harrison Associates. Before that, I was the in-house project manager for the City of Roseville and I bought the services of value engineering, constructability reviews. Everybody know what a constructability review is? Looking at the set of plans and making sure that it's coordinated. Again, back to the water heater scenario that the mechanical that I did talked to the architect. One of the things I looked at right away in a constructability review is did the landscape architect talked to the electrical engineer? Because I found projects where they put an irrigation controller and has no electric going to it, because the landscaper said, "Well, I'm going to put that irrigation controller on the back of the trash enclosure," or some didn't place or in a mechanical room. And again, never coordinated or tells the electrical engineer, so the electrical engineer doesn't provide power to it. So, in the BEM model, constructability is already decided, gone through, the contractors been on board. He knows how he's going to build it. He knows if it's constructible. The values are already there. Everybody on the team has decided that this is the best value for the project and everybody has had input, it's within the budget. It works. The owner says, "Yeah, that's what I want. That's what I want." In that lab, in that college science building, I want those few modes to move, however, many cub feet of air out of there. Or, back to the police facility, I have enough air in my property and evidence storage room that when I bring in those bales of marijuana, it doesn't stink up my whole building 'cause I can excavate that air quickly--fewer RFIs, so, from a construction management perspective. Again, this is going to change the industry. Those services are going to be not needed. RFIs are going to be fewer. People won't be asking questions, those are already been--And the submittals, again the process, the administrative task of reviewing have gotten a submittal from the contractor, logging it in, evidence submittal log, taking that submittal and sending it to the architect. The architect log it in, tracking it, making sure it's returned and back and forth. Better understanding of the design intent and more prefabrication again, so less waste, more material is factory generated, less injuries. Again, thing are defined, spaces are already controlled. You can do it in a shop as opposed to doing it out in the field to more efficient. And the model ends up being the as-built condition. A schedule tide to the model to allow visualization of deviations from plans, sequence and duration, the contractor, the superintendent, the foreman can look at the model, plan and schedule the work. Try different scenarios. What if we do this? No, what if we do that? In the schedule and see if it works, especially, I made a comment to a team in my office who was going after a site development design for waste water treatment plan and I said, "You should model it." And what it was, there--in this waste water treatment plan, there were going to be about five different projects in upgrading this waste water treatment plan. In the RFP was to design essentially a contractor's yard that would facilitate all five projects. They were all going to go simultaneously but about three of them were going to go simultaneously. There was going to be at the peak, maybe 400 construction workers on site. They didn't model it, they didn't get the job. People have worked with me, but can you imagine how you could show in the model how you're going to manage 400 people entering and leaving the site everyday? How you're going to--where your lay down yard is going to be? Where are you going to store materials? Where that's going to be and sequence it for each one of these project based on the specific project. Would have been a winner? Would have been a winner? But they didn't do it but you can do it in the BEM model. Close out, anybody who's been involved in a project, closed out is the hardest part of the job. Getting all the warrantees, guarantees, getting the as-builts. Like I said the BEM model in and off itself will be the as-built condition 'cause it will be changed and tweaked as you go along. Compare actual to plan performance, you can go back and have lessons learned, so the next time hopefully you do it better. The BEM model integrated into the building operating system for the future being able to--for that next project. Again, working on a college campus, there is always submittals that's going to come along and if you have a model and you can see where--you built the library where the stubs for the water and the sewer and you're building another project next to it and you know what the invert is, you know where everything lays. It's just to an advantage expediting that future project as supposed to digging through number one files to find old plans. So, the BEM model will be great, great for that in the future. So that's it. Screen goes blank. No questions? I was completely clear, explained everything. Do you guys know what an integrated project delivery is about now? And really design-build is just one form of the integrated project delivery and you can take it to a greater extent, get more people involved, involved earlier, shift where the guaranteed maximum price is, shift risk, shift reward and again, the design-bid-build scenario is going to be a thing of the past because it's inefficient. So with that, no questions? Sir? [ Inaudible Response] >> Say that again? >> The library on campus [inaudible] new building, what I've heard about, the library is [inaudible]. And then on the projects [inaudible] that if [inaudible] decided that [inaudible] at all, so they refused to do that [inaudible] issues in the publics on a different interest groups of them [inaudible] in the system. But what do you think? In order to make the public agencies like [inaudible] the public [inaudible]. They [inaudible] make that at migration. What kind of, you know, different construction should be applied? What kind of [inaudible] should be there or after switching to more collaborative [inaudible]? >> Education--I mean I'll say, you know, that I've been doing this for a long time. One thing that I've said to my colleagues and a lot of people in this industry, this industry seems to be slow--I mean I showed you the chart as far as productivity seems to be old school. So, the people on the owner side and I'll just say in this scenario, the university trustees, they're thinking about projects 20 years back, you know, some of them probably still think again the best value is the low bid. In fact, the High-Speed Rail Project even though it's design-build, the best value selection was 70 percent price, 30 percent qualifications. So, you still have that price piece. And in my opinion, the winner lowball the project because 70 percent of the selection process was based on the price. I wrote a paper about best value for LA Unified School District that takes into account qualifications, price you sign an equation--I mean I think that's the best way. People just have to be educated that best value. I mean, we don't--I personally don't select my doctor, my dentist on low price. I don't. And if any of you in this room get ill with a major illness, you're going to look for the best. You're going to look for the best. I'll just tell you a close personal friend of mine, in fact, she was my best woman at my wedding and her profession was an attorney and I met her in law school and we've been friends for over 30 years. She retired and had a seizure. And the original diagnosis was a seizure, you know. Well, come to find out she ended up going to UC, San Francisco, ended up bringing a brain tumor, and that she got removed. But what I'm saying is she didn't take the first diagnosis. She didn't take the local physician. She went and found an expert at UC, San Francisco. And she didn't care what it cost. Of course, she had medical insurance but she had to spend some of her funds. So, I'm saying, people need to see the building process in almost the same light. I mean you build buildings. You folks who leave this program are going to build buildings and structures that last for 50, 60, 100 years. That's an investment, and it needs to be looked at with really some serious, serious eyes about what the future holds. And you talked about what, ACEC, yeah, but I don't if you've read the ACEC report on infrastructure. You guys leave this room, leave these classes and all you can do for the next 20, 30 years is repair the existing infrastructure, because it's old and it's deteriorating. And again, infrastructure to me is serious. It should be looked at as the example of IPD. It should be looked at long range. Best value, put in the best product in the ground because without infrastructure, the future is pretty grim--I mean we'd be a third world country without roads and high-speed internet, sewers and water pipes and we just--we don't have to go out and pump the water and bring it in, in a bucket. But, yeah, education and it's changing, you know, I don't know what the rules are as far as CM at-risk in the--I don't know if it's just Fresno State or I think you can use it in other colleges. I mean at Chico State, I think uses CM at-risk in their projects. They also use design-build. The community colleges like I said have invert on the community college. We use a wide variety depending on what the project was. We sat down and talked about it. We definitely wanted to pre-qualify the bidders. We wanted a pre-qualify pool of bidders whether it was CM at-risk, whether it was design-build and of course, a few hard bid projects, but still pre-qualification. Why hire a loser? Somebody who failed on another project or why hire a delivery method that you know is going to fail or bound to fail and people just need to over the long run become more trusting--let's put it that way, that you can deliver projects other than design-bid-build and I don't know what the issue was with the library and maybe somebody--maybe one of your students should write a paper on it. You know, I mean what went wrong there? What was the issue? Who was the contractor? Why--maybe they didn't understand, you know? I mean CM at-risk like design-build. If you don't define it early enough, what you really want and you leave it in the hands of a contractor then the contractor gets to decide, you know. If you don't decide on the weight of the carpet, the thickness, the durability, if you leave that out, that contractor and you just say, "Just carpet" or you say, "Just windows," and they're not double glazed or triple glazed or bullet-resistant, you know, or there was too much of a contingency. I'm going to say just of the top of my head that somebody on the university side didn't know what they were buying when they bought CM at-risk. And they did and they weren't involved in the process because some people think that this is like autopilot. If I pick this delivery method off the shelf, if I pick CM at-risk then I don't have to do anything. It's going to drive itself and I'm going to get the best project, that's not it. Owners need to be involved every step of the way. and again about--I showed you the slide about the administration portion as far as RFIs--yeah that's going to be less, there's not going to be constructability reviews or value engineering reviews. That owners or somebody representing the owner--sometimes that's me need to be involved to understand the process and understand what the owner needs. And in my resume because I built police facilities--yeah, I understand cause I built the golf course, because I built an aquatics complex, because I built, you know, a 50-million dollar theater, I understand. I can ask the question. Library, design one didn't build it, somebody else built it. I left that particular job and went on to something else but I'm just going to say somebody wasn't involved and didn't know what they were getting into. Probably let it go on autopilot. My opinion--anything else? Sir? [ Inaudible Question] Yes. [ Inaudible Question] No. And I don't know--well, I'll just say talking the contractors now. Nowadays, everybody has a preconstruction department whether it's Sant [assumed spelling], whether it's Turner, whether it's McCarthy, and they have a process and they sell that service. So, yeah, I wouldn't go get some old school guy who doesn't really understand what preconstruction services are all about. You know, finding the best, working to a target budget. Contractors typically have a pool of subcontractors. And they know the ones that they can work with. They know the ones who are going to perform. Again, back to pre-qualifying the contractor and you can even pre-qualify your subs, you know, you can write a pre-qualification where you say, "General contractor, you have to show me this, this and this. How many projects have you done? Who's going to be your superintendent? What's your past performance on project? And then I want to know who's your mechanical sub, who's you electrical sub, who's your plumbing sub and I want to see the same thing from them. Who's going to the mechanical subs project manager? And what he's experience?" You know, you can break in down and really its experience I found personally. I'll just tell you this story 'cause it just happened. I'm working on the High-Speed Rail Project. I'm working with a firm Harrison Associate that I used to work for. They are the CMs. I'm the program manager on the Program Management Team. So, I know some of these folks. In fact, the guy that I was working directly with worked for me 14 years ago and he left. Last Friday was his last day. He went to work for a local engineering firm and I'm crashed because we had a relationship, we had trust, integrity, we talked, we had communication because we worked together. That alone was his pre-qualifications. When I knew that I was going to be able to work with this guy. I was elated. And last Friday, he left, I didn't sleep well. That's one of reasons I'm here in Fresno today is because I'm trying to reestablish my connection with the team 'cause there's a new guy and he is only interim, but we just had this great relationship, you know, I mean we call each other. I know his wife, you know, we met at company parties when we worked together in the past. Again, we trust each other. We know that each other has each other's back. I'm not going to throw him under the bus. He's not going to throw me under the bus. It just--that's the kind of team you want, you know, and you see it on successful sports teams. You know, where people cover for each other, people look at for free each other that people perform for each because it's the good of the team that's important. Answer your question? So, yeah, you can break it down to wherever your comfort level is. And I'll just say again, when I was working for the City of Roseville or when I'd been the owner's representative, people bid projects that I put out on the screen because they knew they would be treated fairly, that I would make sure they got paid on time. I used to be a contractor. I know that you can't float a project for 90 days on you own money. I know that if you don't get paid, you're going to be cranky and grumpy and you're going to look for ways to get more money out of the project. So again, IPD and you saw it on the slide, it's just about integrity, it's about honesty, it's about trust, it's about all the things that I'll say the politicians don't believe it anymore, you know. It's about throwing somebody in the bus, it's about "I win you lose," I mean IPD is a model in my opinion for how you should live, you know? And how you should get things done and successful, if you go drive up the road and go to San Jose and deal with Google, that's how they get projects done. Everybody sits together. Nobody wins, nobody loses, it's for the good of the project, the good of the company. And hopefully again back to your question, educating owners or it's an evolutionary process. I mean we're talking about it at CMAA, talking about it at AGC, AEWA. Everybody wants to be able to deliver these projects better, quicker, faster, more economical especially now that things have slightly turned around. The opportunity to spend money and build this country, repair this country and make it move forward. Anything else? It's been a pleasure. Thank you. [ Applause ]