Overview in May 2021

Happily the national economic picture may be brightening. As the nation haltingly works its way out of the 100 year pandemic and the related economic crisis, the “Sustainable Business Building Group” has continued its work.

This Link gives some more detail: https://www.wilkinsonadvisors.com/building-in-box-update-bib/

6 product examples have been assembled from the BiB (Building in a Box) kit of parts. These examples range from 3200-2700 gsf and meet the standards of being:

• High performance (energy usage)
• Sustainable (low carbon footprint)
• Healthy (productive and safe)
• Affordable (first cost and operations)

More will follow at this site and its blog. Inquiries are welcome from like-minded businesses and advocacy groups, (george@wilkinsonadvisors.com)

The United States is a market society. As such, markets exert both resistance to change and sponsor change. Building in a Box  (BiB) is a “disruptive” concept and is a product, not a project in the traditional sense.

First, what are the characteristics of the BiB product?

• A small commercial building (branch office or warehouse or industrial space)

• Prototypes assembled from a “kit of parts” for the customers needs

            • A high performance enclosure system for very low cost of hvac operations

            • A friendly site design for the enjoyment of employees and visitors

            • Advanced indoor climate for employee and visitor wellness

            • Favorable first cost plus cost of operations (energy)

            • Short and predictable design and construction schedule in all seasons

            • Reliable single contract source for the entire transaction

            • Financing incentives in connection with the cost of acquisition

            • Dependable quality resulting from high degree of off-site completion

In connection with a BiB investment, here are some market-related drivers

1. Brand enhancement
2. Meaningful impact on the climate change crisis
3. Favorable first cost plus operating expenses
4. Enhanced indoor environment for wellness and productivit

Brand enhancement

             Attract more business from like-minded customers

             Signal advocacy for issues of the day

Meaningful impact on the climate change crisis

            Build with low carbon footprint materials (“embodied carbon”)

            Lock up CO2 (use mass timber when appropriate)

            Burn less fossil fuel for heating, cooling, and ventilation

            Choose renewable sources when available 

            Trade Renewable Energy Credits (“RECs”) or Excess Carbon Certificates

Reduced operating expenses

            Pay lower income taxes (federal and state incentive programs)

            Reduce monthly energy bills

            Learn best operating practices (includes on-boarding support)

Enhanced indoor environment for wellness and productivity

            Provide COVID hardening

            Apply Lighting design  and ventilation for improved productivity

            Reduce group medical insurance policy costs by design

Speed to Market

            Experience short and reliable start to finish product delivery (e.g. 3-6 months)

            Expect product delivery in ALL seasons (including winter)

            Include filtering in the short delivery schedule to open faster

(BiB is the work product of a local professional collaborative in Minneapolis, St Paul, Minnesota.

For more information, contact george@wilkinsonadvisors.com or respond at www.wilkinsonadvisors.com)

3. Ethics and the “Shop Drawing” anecdote (an editorial, 041421)

(disclaimer: this document is solely the opinion of George Wilkinson and Wilkinson Building Adviors, and does not represent that of any of its clients or employees)

Ethics: “Moral principles that govern a person’s behavior or the conducting of an activity”

Morals: “Standards of behavior or beliefs concerning what is acceptable”

Professional: “A person competent in a particular activity”

Overview and Summary

This is the third in a three part series addressing best practices and ethics in the AEC business community (“Architecture/Engineering/Construction”)

The premise of this essay is that the traditional organization of design and construction in the US is deeply flawed and as such creates ethical dilemmas for professionals. Insomuch as this author’s professional practice is devoted to working along the entire line of action (from early design to construction completion), an anecdote will be used to illustrate a common ethical issue: the effective and productive use of shop drawings

This essay draws heavily on the 1) McKinsey Global Institute’s publication entitled “Reinventing construction;  a route to higher productivity” (February 2017), 2) McKinsey and Company’s “Agile delivery of capital projects” published a part of the “Voices on infrastructure; The project of the future” (September 2020), and “Project Fitness Guidelines” published at www.WilkinsonAdvisors.com.

The industry as context

McKinsey et al argues that the industry is a poster child of misaligned contract incentives and obligations that leads to persistent low productivity relative to national and international baselines.

 • Contracts often define and reinforce functional silos

• Balky contract frameworks are resistant to effective management by Owners (the ones who pay the bills

• The industry is digitally illiterate 

• Project team contracts often mis-allocate risk and incentives

Within the traditional project apparatus lies a work flow called “submittals”, commonly known as “shop drawings.” Shop drawings in the ideal sense are the record documents intended to inform the field operations at a detail level. Shop drawings lie on the opposite end of the spectrum from conceptual design drawings. 

The Architect’s dilemma and liability

Architect’s can afford to practice only to the extent that they can afford and purchase professional liability insurance. Error and omissions (“E and O”) insurance is a part of the insurance package. Architect’s face powerful incentives to avoid claims against their E and O, the life blood of their practice.

The span of managerial control for an Architect to hold contracts for and manage a range of supporting disciplines is contractually tenuous at best. 

Basic problem solving methodology defines this issue well (e.g Dittmar, School of Architcture, University of Minnesota circa 1972). Moving from concepts to details is hard work. 5 concepts beget 5000 details from architecture/engineering point of view. On the face of it, it is impossible for a single knowledge/skill professional to know it all. From an operations perspective: production architectural practice is the quintessential “horizontal” job description; knowing enough about many technical areas to knit together a “whole” project is a daunting task. 

Now comes shop drawings (the anecdotal lesson)

In the traditional form, contracts require that Architects and their subconsultants  (often a pyramid configuration with Architects at the contract apex) “approve” shop drawings and pass on  the detailed documents as instructions to the Contractor. This approving of instructions to the Contractor has been the source of endless contract disputes in the case where the Architect and Contractor’ agreements are held by the Owner and administered by its representative. In response to this impasse, lawyers for architects have crafted shop drawing approval stamps employing tortured language to shield their clients (architects) from liability. (An interesting corollary question is” “Who then bears the liability?”)

In other words the contract structures themselves assure “siloed” behavior that ultimately is a disservice to the entity paying bills, aka the “Owner.” In all fairness the role the architect assumes is flawed and unmanageable  leading costly disconnects. Law text books are full of examples and many lawyers are well paid to join the conversation.

(As detailed aside, the standard of practice at Wilkinson Building Advisors is that the role of architect approval of shop drawings is to assure dimensional consistency while respecting the technical roles of various participating specialties; more on this in other posts. Take a look at a more detailed example in the appendix to this essay)

Paradigm shifts required

My post entitled “Sound and Ethical Business Practices for Integrated Services (revised April 2021)  describes business history that led to the emergence of new business forms in the last century. The role of the architect as Master Builder began to morph into other business forms. This came to pass despite the resistance by the AIA (the architects professional society). So-called design-build project formats became common. These changes  addressed many of obstacles cited in the McKinsey essays including:

            • alignment of incentives by contract

            • creation of cross functional teams in place of silos

            • streamlining of managerial actions

            • replacing linear and gated processes with resilience matrix

Not surprisingly, this paradigm shift helped solve fundamental shop drawing processes. With the Contactor and designers aligning concepts and their related details, many destructive and artificially gated processes were eliminated. Passing instructions downstream was simply eliminated by definition.

Horizontals become a best practice

In this writer’s opinion the evolution of the AEC industry’s (Architecture/Engineering/Construction) contract standards of practice have moved past the design/bid/build to design/build paradigm and on to new types of organizations. Management lingo calls the solution a “horizontal organization” that is essentially flat and built around cross-functional teams. (This writer uses the term “vertical organization” to mean that all essential skills and knowledge are in a single operational entity without regard to formal reporting structure.)

Note that McKinsey argues for cross functional teams as part of needed paradigm shift. Lest the reader believe that “cross-functional teams” is a new idea, I cite the “studio system” applied by architectural firms last century as an example. In that case, all needed design disciplines were located in the same space.. a studio. A shoulder-to-shoulder work effort sometimes resulted. Architects learned engineering-speak and engineers also loved design (as well as analysis). Note however that despite the application of this progressive concept, builders were seldom in the room.

The COVID era has put a new an interesting spin on what is a  “horizontal organization”; how does a multi-functional team Zoom? What efficiencies are gained and when is the social loss a net negative on creativity and productivity? This writer suspects that that COVID will reduce the amount of space owned and rented and the amount of drive time to the “office.” “Virtuality” is now in play.

The potential for virtual work flows now changes business structures. Just as music recording and storage technologies upended the music industry and word processing and file distribution changed the print publication industry, project platforms will change the AEC industry. Margins are too thin to waste money on rent and gasoline.

Epilog

The anecdotal example of shop drawing management is an example of the stubborn Gordian knot into which the AEC industry has twisted itself. Liability management and insurance was the stuff of paralysis. The result was reduced value for all participants: Owners and service providers alike. Contract struggles arose and persist.

New business forms are emerging that hold the promis e of increased productivity. 

Note that this author has posted a series of related advocacy articles. In particular, see the downloadable “Project Fitness” worksheet posted at www.wilkinsonadvisors.com. Here are some additional notable and related posts on George Wilkinson’s Linked in space.

            • “Fix your Project”

            • “Essay to Owners: Get it Right Before Spending Money”

Appendix A Example and details about shop drawings

A good example of design and shop drawing details is that of mechanical equipment in a plenum. (Plenum means the space above the finished ceiling and below the structure of the floor above.)

Best practice for the architect is to provide layered space for services, e.g. lights, communication cabling, hvac ductwork etc. With these definitions in mind the job of the architect when reviewing hvac submissions (shop drawings) is to provide basic “interference” checks; e.g. sis the ductwork layout dimensionally consistent with the layer plan? The architect’s job is NOT to review the overall size of the ductwork to meet indoor temperature requirements.

2. How professional leadership is bedrock in the planning and construction industry

(disclaimer: this document is solely the opinion of George Wilkinson and Wilkinson Building Advisors and does not represent that of any of its clients or employees)

Introduction

This is the second in a three part series addressing best practices and ethics in the AEC business community (“Architecture/Engineering/Construction”)

Taken in the broadest sense, construction in the US is a multi- trillion/year industry. Yet in the commercial building sector, how buyers and sellers contract is deeply flawed and the issues are structural and persistent. These flawed processes, often encroach on the boundaries of ethical business behavior. Setting the issue of outright corruption aside, what are some the key characteristics  of this situation:

1. Sellers of services and outcomes often do not know the cost basis for a transaction during the early stages.
2. Buyers of services and outcomes nearly never know what cost basis to expect, particularly during the early stages when budgets are estimated (i.e. historical facts are absent).
3. Reporting of costs and sales prices during and after transaction ∂oes not follow widely accepted business practices.
4. In many cases, the buyers of services lack direct and applicable business experience; in all fairness this can be attributed to infrequent engagement with the market.
5. The market is a cacophony of noise (to the buyer’s ear) as various participants compete to become the center of the project operational wheel.
6. The professional resources in the construction marketplace are deeply siloed.

Design and problem solving methodologies vary widely, and the risks are opaque to buyers.

• Creativity is often overrated; sometimes proven solutions can carry the day.
• Design (when needed) is often non-linear; “what if” cycles often are needed to discover an appropriate and effective solution.
• No service provider silo has earned the right to be the master builder, the defacto “center of the wheel.”

Indeed, this is a tangled web. It leads to common complaints about the design and construction industry: i) it unexpectedly cost too much, ii) the schedule was longer than estimated, and 3) the “product outcome” was a surprise.

Let’s examine this riddle

This author lays blame and potential for constructive change at the feet of the buyers. Afterall, the entity that holds the money has overwhelming influence. Among the issues listed above, here’s what can the buyers do.

• Look for the horizontal function
• Recognize the temporary organization
• Insist on verticals
• Recognize that facts are facts
• Insist on normalized costs
• Embrace the “looks like” discovery process
• Keep the egos at bay
• Measure, measure, cut; avoid early time compressions
• Don’t lose mission in the details

Look for the horizontal function

Knitting together functions across silos is a core managerial requirement. Architects used to claim being the Master Builder.. a huge and nearly impossible task across the current complexities. During the sales cycle, builders, brokers, and design professionals often compete for the buyers attention and commitment.  Buyer beware! There is no substitute for demonstrated competency, not just by the firm seeking the business but the actual professionals proposing to do the work.

As service providers (architects, design-builders, et al) and Owners seek to make good business deals, each should vet the other in connection with emerging marketplace imperatives:

• Innovative team communication systems are not optional: eMail is fast becoming dysfunctional, awash is annoying distractions

• Place-based operations need to be scrutinized; old model office environments can be burdensome rather that productive

• The design services “DPE multiplier” needs to be evaluated; layers of partner compensation and build-in overhead can drive shocking numbers, e.g. $160/hr billing rate for an unlicensed intern ($40 in the check after deductions); productive business models are driving down the DPE)

Insist on horizontals

Horizontal organizations in the planning, design, and construction industry (“the industry” for purposes of this essay) are in the forefront on the solution to the tyranny of silos. These organizations make it their mission and value proposition to knit together the pieces into the whole. Further, off-loading unfamiliar duties to horizontals allows the buyer to run their business during the project period.

It is this writer’s opinion that risk management forces in the marketplace have segmented otherwise obviously unified functions. For example, it is virtually impossible to forecast costs and check business plan feasibility without  an interwining of design and construction skills and knowledge. Construction operations insurance and design liability insurance drive designers and builders into their own well-defended corners. 

Recognize the temporary organization 

Most businesses engage the planning, design, and construction industry infrequently. Thus, by definition, the “project” organization is temporary. Executive care must be taken to engage and facilitate the right cast; some will be active only during the project period, some will be from the outside. Operational responsibility that will be ongoing after the project period must be considered; vetting qualifications (in addition to aspirations) must be carefully accomplished.

For most organizations, this is no small matter. Skill sets and knowledge basis are fundamentally different during the project period as compared to operations that follow.

But after the project period is completed and the investments are made, operations must carry forward successfully. 

Recognize that facts are facts

Examination of actual cost histories is a bedrock standard of practice when budgeting. Buyers must navigate the mine-field of sales price vs cost. Guessing often carries a large margin of error (>30%). Further, cost histories when used as budgeting guides must classify costs is useful ways. The schedule of values documents used in common AIA contract forms can be misleading and often not helpful to either the architect-of-record or the buyers (aka the “Owner”).

This essay advocates a relationship with a fully vetted horizontal: direct experience in similar work including actual cost records; use non-disclosure agreements (NDA)  as needed to protect proprietary information.

Insist on normalized costs

The industry commonly uses the Masterformat classification system for contracting. This is the de-facto standard for contracting within the industry (i.e. a general contractor doing a deal with a subcontractor) BUT, the Uniformat classification is system is the best system for classification of costs when planning and budgeting . Thus, Masterformat histories are not maximally useful useless classified as Uniformat. Recently buyers are commonly making the distinction as a best practice.

Unfortunately, deception (or misunderstanding) can buried in the numbers. For example, cost centers and terms such as general conditions, general requirements, qualified costs, owner contingencies vs contractor contingencies, basic services vs addition services, and not-to-exceed cost basis just to name a few. The professional services, project team has a duty to be transparent

Embrace the “looks like” discovery process

As the old saying goes: “beauty is in the eye of the beholder” and that is usually true in the world of building design. In fact, the right look (aka “beauty”) is one of the reasons a buyer hires an architect or interior designer. To the extent the buyer wants to influence “the look”, talk is cheap, imprecise, and usually ineffective. One tried and true approach is to identify (and often visit) examples that embody the look. It’s worth noting that hiring a designer that has a demonstrated history of producing “the look” is a role for the executive buyer.

Keep the egos at bay

For some business leaders, guiding a project is an exciting process; sometimes it is a nearly a personal endeavor; Identity and judgement become inextricably intertwined. Advice to the executive buyer: if you are spending someone else’s money, leave the choices to the carefully selected design professionals and the building committee. 

Don’t lose the mission in the tactical details

As concepts expand rapidly into details, the lead buyer is well-advised to establish measurable outcomes and stick to them. “You can’t manage it if you can’t measure it.”

Measure, measure, cut; avoid early time compressions

The old carpenter’s saying is instructive: (paraphrase) measure twice (be sure) and then cut (you can’t go back). This applies to the project planning process. Sometimes finding the right question is elusive; design is often not a straight line process. Later stages of project execution can be well guided by detailed schedules. However, on the front end, take the time as needed.

Epilog: What to do to avoid failure and risk poor decisions

All of the above recommendations address the human decision-making;  excellence in professional management is the common theme. When these checkpoints are successfully navigated, the temptations for short-cuts and poor business relationships are reduced and eliminated.

Citations

Also see:

 • the “Project Fitness Guidelines” can be downloaded from www.wilkinsonadvisors.com. This checklist  is a guide for executive decision-makers.

• “Reinventing construction: a route to higher productivity”, McKinsey Global Instititue, February 2017

1. Sound and ethical business practices for integrated services (revised 041421)

(disclaimer: this document is solely the opinion of George Wilkinson and Wilkinson Building Advisors and does not represent that of any of its clients or employees)

Introduction

This is the first in a three part series addressing best practices and ethics in the AEC business community (“Architecture/Engineering/Construction”)

In the middle of the last century, various practitioners began to assemble teams of designers and builders under single contracts and the label “design-builders” was coined and applied to these business arrangements. This was a watershed idea provoked substantial protest in special organizations such as the AIA. It was not until the last decade or so of the last century that the AIA recognized the role of design-builders. Since then what started as a revolution has become ordinary. In fact, the language is even changing still, for example “integrated project delivery.”

Amid all of these changes and in this writer’s opinion, there are several themes: i) value arises when design and construction are closely intertwined in the earliest planning stages of a project, and ii) integrated delivery requires effective interaction between a wide variety of professional disciplines.

Accordingly, a great deal can be written about design-build and integrated product delivery. This short document intends to focus on i) bringing subcontractors to the table early in the planning process and how to do so fairly and ethically, and ii) engaging mechanical electrical and plumbing contractors early in the project design processes 

Language and words

First, some language needs to be adopted. I’ll use these terms: program, schematic design, design development, and construction documentation. Common definitions of these terms are generally consistent throughout the industry.

Further, I’m going to use the terms cost planning and estimating, preliminary project description and outline specification, and preliminary plans versus final plans (e.g. construction documents).

• Cost planning: preliminary estimates prepared before scope of work is well-defined

• Cost estimating: counting and measuring quantities and applying unit costs to known scope of work

•  preliminary project description: a narrative generally following the Uniformat classification of systems and subsystems

• outline specification: an outline of descriptive project information following the master format classification

• preliminary plans: descriptive images usually at a schematic or design development level 

• final plans: documents suitable for bidding, buying, and constructing

The special and important role of MEP systems

MEP systems are large part of project costs for freestanding buildings and major remodeling projects. It is not uncommon that MEP systems can comprise 35-40project hard costs. Further, performance outcomes from these systems are a large part of the basis for long-term owner satisfaction. (e.g. “indoor climate”).

Due to the critical importance of these systems, this writer asserts there is a strong case for involving mechanical electrical contractors with relevant design-build experience early in the process whether contracts ultimately will be determined by competitive selection or by negotiation. How then can planning be undertaken with the assistance of subcontractors before enough is known to enter into contractual agreements?

Given the complexity of this question, it is not uncommon for business conflicts to arise. What steps in can be taken and what business processes can be adopted to fairly serve all parties to the process?

There are some clues as to good practice throughout the industry .I suggest a three-step process:

            a. Subcontractor “auditions”

            b. A planning stage agreement (the first part of a two-part agreement)

            c. A construction subcontract (the second part of a two-part agreement)

Subcontractor “auditions”

Provided that Contractor has a reputation for fair dealing, most subcontractors are willing to trade some intellectual property for the opportunity to become known and perhaps win the opportunity to be selected for the  project. In pure negotiation and business terms, common sense is a guide: each party trades something to get something. The rules of the road for fair dealing include these: • the criteria for subcontractor selection need to be specific and well communicated

• the timeline for planning and subcontractor selection need to be explicit and respected

 • Contractor must avoid “shopping” good ideas among candidates

•  subcontractor participants should be assured they will get their “fair share” of project opportunities in return for participation

The audition step is a good time for contractor learn about the potential and expertise of subcontractor. Their work product and methodology tell a lot about expertise. Subcontractors who are accustom to auditioning in the early stages and  often have work product that signals their experience and depth. 

Well-qualified subcontractors naturally cite applicable experience and lessons learned during the early planning stages. This builds credibility. In general, “talk is cheap” and the way in which a subcontractor attempts to engage planning speaks volumes.

For example, subcontractors skilled in so-called “preconstruction services” often have their own forms and proprietary means of presenting their work product. For example, a letter entitled “opinion the probable cost” suggests that they have a practiced business process.

Planning stage agreements (part 1 of 2)

Provided that the audition stage was satisfactory and that the candidate subcontractor has demonstrated expertise, the part one agreement may be appropriate. Such an agreement has these characteristics:

• part one is defined to be the first of two parts

• the agreement provides for certain services to be performed and under what circumstances the agreement will move to part 2

• the agreement defines work product in process. For example a Preliminary Project Description (PPD) prepared by Contractor for the intended units of work can be designated as the target for which a cost plan or (aka prelimibary estimate) is to be prepared 

• the part one agreement should provide a schedule for the greater project and a schedule for the prospective work by the subcontractor

• importantly, from an ethical perspective, the agreement should be clear with respect to how subcontractor is “rewarded” for its work and also be clear that the part one agreement is an exclusive right (or not).

The construction subcontract (part 2 of 2)

By the time a process moves to part 2, the project in most cases has moved well into the design development stage and financial planning is in the form of cost estimating (as compared to cost planning). By the conclusion of design development,  subcontractor will often have invested significant resources both in time and money and have a reasonable expectation of performing the construction work. Accordingly, the part two agreement needs to be clear with respect to under what circumstances the agreement can be terminated by Contractor.

From contractor’s perspective, by the time part two is in process, it should be evident that subcontractor is qualified to do the work and has demonstrated substantial capacity to assist in planning. However, there is criteria to which subcontractor can be held in order to win the work. In particular, the cost planning framework set up in part one should be progressing logically and consistently to detailed estimates. If indeed scope has been progressing consistently then it’s a red flag if cost estimates suddenly depart from the cost plan. 

Contracts can provide for an “open-book” cost management process disciplined by a not-to-exceed price and can include the requirement that the not-to-exceed price is converted to a lump sum. Properly done, such a conversion can be a benefit to all members of the team including the client Owner. Assigning authority to responsibility brings attention and efficiency.

By the time part two of two is executed, there should be no surprises about the allocation of risk and reward. Overreaching with punitive terms can break the business process at the last moment. The audition, part one, and then the part two process is an incremental one during which trust and understanding are built. By the time the parties arrive at part two, there should be little doubt about good faith dealing and the ability to work together going forward.

The client Owner

The tasks that design-builder undertakes with their client owner has many layers. With respect to the process of bringing subcontractors into the early stages of design and construction, Contractor has various and sometimes competing duties and obligations. In particular the project is not an end in itself and it serves a greater business purpose. With that purpose often comes business protocols and requirements, the most common of which is to understand the process as design…bid…build. In fact it is very common for client owners to believe (and even insist) that the only way to get a competitive look at the marketplace is to use the above-mentioned design…bid… build process. Unfortunately, the harsh lessons of history are often the best teacher as to how the so-called traditional process can lead to unintended consequences, such as substantial budget overages after a great deal of design resources and money have been expended.

On the other hand, client owners led by seasoned executives sometimes understand that “Best value” may not be lowest cost nor most likely to be discovered by traditional design.. Bid.. Build process. 

These altogether common conditions in the marketplace make it incumbent on Contractor to arrange a process with the client Owner well in advance of inviting subcontractors to audition and to begin to devote resources to the project. It is indeed an unenviable business position for Contractor to be caught between it’s client owner’s requirements and it’s prospective subcontractor’s expectation.

The design professionals and subcontractors

As narrated in the first section of this paper, the advent of integrated services as a path to value is a relatively recent event. During the 50 years which ended at the turn-of-the-century (2000), all participants in project teams had been affected by standards of practice which sought to deeply intertwine design and construction services. Owners, design professionals, and builders were affected.

Various professional organizations have sought to define a “design-assist” standard of practice in which builders and design professionals collaborate during the early project stages to assure high-value cost-efficient outcomes. The prospect of these collaborations have raised many questions such as:

            • Who is the designer of record?

            • Where lies the design liability?

            • How do professional standards of practice apply?

In respect to all of these questions, a large body of case law has defined liability and related insurance matters. In general professional liability is tightly bound to whom-ever is overseeing the design work. Certifications cannot be bought and sold; “responsible charge” is a fundamental obligation on design professionals. Thus contracts must be very clear as to where responsible charge lies..

These legal requirements notwithstanding, and somewhat ironically, the duty of responsible charge is often (in the opinion of this writer) best discharged by close collaboration with builder resources to ensure that project can be soundly constructed to industry standards.

In these collaborations, style counts. It is not unusual that the design professionals share the head of the table and thus they share the gavel. In that case, the tone of the workgroup is set by their leadership. 

(more to be added here)

Some conclusions

The design-builder, has a wide range of duties both upstream (to it’s client Owner) and downstream to subcontractors. There is statistical evidence that liability claims are reduced when there is a tight fit between design and construction. The ideas discussed in this paper describe one dimension of that fit: the essential relationship between MEP subcontractors and contractor during the early stages of the project planning.

COVID era epilog:  Horizontals become a best practice

In this writer’s opinion the evolution of the AEC industry’s (Architecture/Engineering/Construction) contract standards of practice have moved past the design/bid/build to design/build paradigm and on to new types of organizations. Management lingo calls the solution a “horizontal organization” that is essentially flat and built around cross-functional teams. (This writer uses the term “vertical organization” to mean that all essential skills and knowledge are in a single operational entity without regard to formal reporting structure.)

Note that McKinsey argues for cross functional teams as part of needed paradigm shift. Lest the reader believe that “cross-functional teams” is a new idea, I cite the “studio system” applied by architectural firms last century as an example. In that case, all needed design disciplines were located in the same space.. a studio. A shoulder-to-shoulder work effort sometimes resulted. Architects learned engineering-speak and engineers also loved design (as well as analysis). Note however that despite the application of this progressive concept, builders were seldom in the room.

The COVID era has put a new an interesting spin on what is a  “horizontal organization”; how does a multi-functional team Zoom? What efficiencies are gained and when is the social loss a net negative on creativity and productivity? This writer suspects that that COVID will reduce the amount of space owned and rented and the amount of drive time to the office. “Virtuality” is now in play.

The potential for virtual work flows now changes business structures. Just as music recording and storage technologies upended the music industry and word processing and file distribution changed the print publication industry, project platforms will change the AEC industry. Margins are too thin to waste money on rent and gasoline.

(george@wilkinsonadvisors.com)

The Building in a Box (BiB) product is an ongoing design work at Wilkinson Building Advisors and the affiliated Sustainable Business Building Group.

The BiB product line plans to provide sustainable and energy effective solutions for such business use types as:

1. Commercial offices 
2. Retail 
3. Light industrial

This product line will offer low first cost and operating expense solutions. Features include:

1. High degree of off-site completion using structural integrated exterior panels and mass timber superstructure assemblies
2. A kit of parts shipped to the construction site for superstructure and enclosure assembly
3. Rapid and reliable on-site construction schedules
4. Use of materials and assemblies that are environmentally sustainable including emerging mass timber products
5. Point of use power generation and optional storage systems
6. Advanced indoor climate systems designed workplace safety, productivity and economy of operations

The BiB design and construction team will provide end to end services from early planning to the delivery of a complete and operable building and site. On-board training services will be available to assure that building operations achieve the high degree of energy efficiency built into the design.

As a footnote and for for the reader interested in bigger picture of how to improve productivity in the design and construction industry, here is some suggested reading by the McKinsey Global Institute:

Re-inventing Construction..

BiB engages SIP and CLT systems

The Sustainable Business Building group continues to envision a range of products that engage the structural integrated panels (“SIP”) and cross-laminated timber (“CLT”)

The sustainable commercial office is in the advanced stages of design.

Visible City and MSP real estate studies

Visible City is an applied GIS (Geographic Information Systems) developer and practitioner group.(https://www.visible.city) The Visible City’s team expertise extends across many aspects of planning for the man-built environment including insights into placement of real estate investments.

This post demonstrates several examples. (Visible City is currently collaborating with Wilkinson Building Advisors and the affiliated Sustainable Business Building Group’s Building in a Box initiative). Here are some work product examples.

Historical Access to Transit

“The attached image illustrates locations of individual properties built 50 or more years ago, located within proximity of major existing or planned transit stations in the Minneapolis/St. Paul metro area. In several of these areas, the transit infrastructure is not yet in service, but the market is moving to account for its future impact. Those parties that incorporate more data into their decision making about operations and investments, stand to extend their competitive advantage.” -Jon Commers http://www.visible.city

Accessibility studies

“Americans increasingly use transportation beyond the single-occupancy vehicle. Transit usage, shared car services, and micro-mobility options like scooters, are moving a growing share of passengers through the nation’s metro areas. Spatial analysis and interpretation can help decision makers understand these patterns in order to reconsider what locations most strongly match their needs of today with contemporary consumer behavior. “

“(Re: suburban car access) The attached image illustrates the area of accessibility for given locations that an organization might compare – existing or prospective sites, or competitor’s locations. The colored “travel-shed” represents the overall area from which a customer could reach the given location within a short period of time. Our approach is not only to establish the travel-shed, but to compare its characteristics – its community profile, its context in terms of building activity, transportation patterns, density of competition, and other metrics customized to a client’s needs and strategy.”-Jon Commers (Visible City’s Managing Principal)http://www.visible.city

Kristel Wilkinson (property management consultant), in collaboration with Wilkinson Building Advisors and it affiliated members in the practicing community has developed a preliminary program for “hardening” commercial buildings against transmitting viral infections. This program includes a range of simple low cost operational practices such as restricting toilet room access and populations as well as various hvac modifications for air quality and ventilation improvements.

Each building is different and one size does not fit all. For a no obligation assessment contact george@wilkinsonadvisors.com.

The guiding light for Wilkinson Building Advisors is to “Plan thoughtfully and act purposefully.” A pillar of the consulting practice is to help everyone “win” when the project needs fixing. Thus the title of this post: “Fix your project.”

Unfortunately, the need for “fixing” usually arrives after a design and construction project is in the advanced stages, i.e. construction is well underway. By then the “one-time manager” is feeling as though events are getting out of hand. The usual suspects are:

• The financial operations threaten  to break the budget
• The schedule is slipping and the needed opening dates seem unlikely

Wilkinson Building Advisors (“WBA”) is familiar with these types of situations and takes pride in finding solutions that avoid costly disputes in which there are no winners but the lawyers.

In connection with these sorts of matters, WBA does not seek lengthy engagements. Rather, working at the pressure points, the earlier the better, has proven to be the best path to getting the project back on track.

Check in with WBA and arrange for a quick opinion or referral to another expert.

Common sense….

In commercial life, it is a common best practice to have a business plan before spending a lot of money. This concept applies to planning, designing, and building (and paying for it). Why then is it so common to hear: “it cost more”, “the schedule was really late”, “I was disappointed in the design but it was too late to change”. Here is a perspective

A roadmap to best practice

Contracts are an agreement about how risk is allocated in the deal; risk is priced into the deal.

Each party to the contract negotiates for, and eventually agrees to the price of performance

The specter of risk sits on the shoulder of the contracting parties. When risk is substantially speculative, as compared to known, then contract negotiations and subsequence performance are distorted.

Many  processes in the AEC+dev industry are “poster children” to the proposition of contract and performance distorted by mis-allocated risk. Cost ignorance is high among the usual suspects.

Case and point is the classic design-bid-build delivery system. This process proposes that the contract sum for construction will be established after 70% of the design fees are expended and then only after considerable time and effort have been invested by those that pay the bill, otherwise known as the Owner. When the bids don’t conform to the budget, then the re-design process kicks in. In most cases the Owner pays that bill too: more time and money.

(Though a topic of another essay, there’s a popular myth in play here: the low competitive bid is the cost. This idea is examined in the text: “Design-Build” (Beard, Loulakis, and Beard”))

Consider these numbers with respect to risk allocation:

1. 70-75% of development period costs are “hard” costs; construction costs
2. A faulty sum of the parts estimate can miss the mark by 20%
3. Thus the speculative error is perhaps 15% of development period total cost
4. (5% or less is considered an acceptable tolerance in many circle)

With this much uncertainty in the deal, who carries the risk ?…. negotiations ensue. Is it the designer, or the builder, or the Owner? 

This writer’s premise is that cost analysis can only be based on market-derived facts and that these facts must be applied during the front-end work of project. These analysis resources can be brought to bear in a variety of ways and this topic is the subject of a series of essays also on the George Wilkinson articles on LinkedIn.

            • “Teaming, not the “Race to the Bottom”

            • “Essay to “Owners”: don’t waste your money, get started well”

            • “The New Owner (Representative)”

            • “ Ethics in design-build planning”

Examine your projects “fitness.” Go to Wilkinson Building Advisors and download the Project Fitness Guidelines.