< Previous10 Helping owners achieve the most productive use of every capital dollar. include all resources through a project lifecycle –engineering, procurement, and construction. In the construction space, this would include the uncertainty of the availability of craft professionals. There is right now a finite number of craft resources to complete an unprecedented number of new capital projects.” One of the solutions to having enough skilled workers on hand will eventually come down to dollars and cents – at least in the short-term – and, because of this, the construction industry will need to ensure they are offering competitive pay rates. “It’s a craftsperson’s market and right now they can basically pick and choose where they want to go to work,” says Hulet. “If companies choose to pay less than what’s competitive, they might get some people, but they won’t get the magnitude of people they need and they won’t be top-notch talent. But money is just part of the equation and isn’t the solution in of itself – it’s more like using a Band-Aid to stop the bleeding. Going forward, owners and contractors will have to come together to find a more permanent solution that’s a win-win for everyone.” Complexity really comes down to the number of factors that need to be considered on a project and how they all might relate to one another. The more factors and interconnections there are, the more complex the project becomes. “Everyone is doing what they can to manage what we’re up against, but the complexity in the construction process is also being magnified by the volatility and uncertainly that we’re seeing, especially now that there really aren’t enough resources here in the U.S. to effectively complete the projects we’re being asked to build,” says Hulet. Construction projects have always been complex and have had many moving parts, but the current lack of construction resources and labor is causing many owners and contractors to completely retool the way they do business when it comes to things like project planning, design, and execution. “Contractors are increasingly being asked to look at more efficient and productive ways to meet both the cost and schedule goals of each project,” says Omichinski. “This is where areas of offsite fabrication, pre-assembly, and modularization are playing a bigger role in capital projects. But with an increase in said alternatives, the complexity in logistics also increases.” Ambiguity comes up in construction for a variety of reasons, such as during the rush to finalize contracts or from a lack of scope definition by owners during the proposal phase of a project. This results in additional risk being passed on to the contractors, as well as tighter and shorter project schedules based on very limited scope definitions. “For projects to be more successful, owners and contractors need to work closer together during the project planning stages so that the contractor – who is closer to the issues and challenges within the industry – is able to better provide real-time data and information on project resource shortages or supply chain issues,” says Omichinski. Hulet agrees, adding that owners and contractors will need to continue fostering a more collaborative effort to ensure they can truly tackle volatility, uncertainty, complexity, and ambiguity in construction. He recommends that owners become more open-minded and receptive to ensure that contractors are paid much quicker than the current norm (which can be 90 to 140-Day Net Payment Terms), as well as provide more reasonable gross margins with the understanding that – by doing so –everyone involved in the project wins. “It’s got to the point where many of the bigger construction owners are taking maintenance work at one and two percent gross margins while, back in the day on a typical maintenance contract, The owners know that things have to change – but change is tough, and it takes time. – Terry Hulet, Atlantic, Gulf & Pacific Company (AG&P) a construction owner could make a 10 to 15 percent gross margin. I’ve witnessed some of the larger construction owners taking contracts at no profit just to say they have the contract,” says Hulet. “If construction owners and owners do not work together to find a middle ground that will make the business relationship beneficial for both parties – the industry will continue to struggle, and we will not meet the needs of our industry in the days ahead.” Looking ahead The last few years has taught the construction industry that it’s not if VUCA will occur, it’s when. As such, it is imperative that construction’s current leadership prepares to meet the multiple challenges presented by volatility, uncertainty, complexity, and ambiguity head-on; and do so sooner than later. The good news is that this message has been heard, and players in the construction industry are beginning to understand that only by owners and contractors working together, will everyone be able to mitigate the impacts of operating in a VUCA world. Hulet recalls a CURT event in 2022 in Cincinnati, Ohio, where Pete Dumont, CEO of PrairieDog and Chief Innovation and Digitalization Officer for AG&P, shared a presentation with CURT members. “He spoke about smart contracts and ensuring contractors get paid much quicker than they currently do,” says Hulet. “When he was finished, I was surprised to see how many owners were waiting to speak with him in more detail about the smart contract concept. The owners know that things have to change – but change is tough, and it takes time. We need to figure out how we can all sit down and make projects a win win for both owners and contractors. Until that happens, VUCA will continue to be a challenge.” Fortunately, organizations like CURT exist as a resource to help the construction industry navigate the VUCA world, offering peer support and critical information that sheds light on the volatility, uncertainty, complexity, and ambiguity currently impacting the sector. “CURT has always been a communications hub for owners and contractors, not only sharing information to its members on project/contractor/ owner success, but also on the challenges our industry is facing and what owners and contractors can do and are doing about it,” says Omichinski. “CURT’s efforts help us prepare to adjust to disruption in our industry, whether that be a VUCA world or any other unforeseen event.” ‘‘It’s finally on the way, let’s get it right! FEATURE M ost of us heard something about the Bipartisan Infrastructure Law (BIL) when it was passed a year ago now, but the impact of this sprawling package of spending is not something that is easily summed up in a single news story. After the sound bites and initial news coverage faded, most Americans quickly turned their attention elsewhere. It’s hard to blame the public for not getting excited about a long- promised infrastructure overhaul given the countless false starts by politicians to address the problem. Many of the warning signs regarding the state of our infrastructure have not been obvious. When a catastrophic event happens – a building collapse, a failed bridge inspection, extreme weather events taking an undue toll on projects – it’s often too easy to write it off as an isolated incident. Given those challenges, the passage of the infrastructure package is truly remarkable. Funding in the Bipartisan Infrastructure Law is desperately needed thanks to a double whammy affecting our built environment: decades of funding neglect for maintenance and upkeep amplified by the dynamics of climate change. Against that backdrop, our aging transportation, water, energy, and communications networks are vulnerable like never before to forces including extreme heat and cold, precipitation changes, flooding, sea-level rise, powerful wind, saline intrusion, and other extreme events. The BIL commits a staggering $1 trillion to address these and other shortcomings and vulnerabilities. The scope of this funding package goes beyond what we traditionally think of as infrastructure and includes commitments to revamp and even revolutionize access to and markets for energy delivery, high-speed internet access, cyber security, clean and renewable energy, clean air and clean water, supply chains, and manufacturing. A $66 billion pledge to modernize and expand rail, including high-speed rail, is the largest in half a century. A $110 billion commitment to improving roads and bridges is the most significant investment since the Eisenhower administration. Add to that $89.9 billion to improve transit; $25 billion on airports and ports; and $240 billion to address infrastructure vulnerabilities from climate change, extreme weather, and cyber-attacks. Finally, the BIL includes a broad commitment to expand clean and renewable energy and clean water, including a 10-year extension of investment and production tax credits for renewable energy production and storage. With hundreds of projects already funded and underway across the United States, the stage is set for a wave of capital projects and development that could be transformative for the way we live and work, as well as our place in the global competitive economy. Given the enormous hurdles that were overcome to pass the funding package, you could argue that passage of the BIL means the hard work is over. But equally challenging will be putting the money to work on thousands of thousands of projects that will be administered at the local level while ensuring those projects are built to last. The ball is now in the hands of city councils, school districts, regional governments, and assorted boards and commissions. Before the shovels turn, a critical concern will be ensuring these projects are designed and constructed effectively. There’s $225 million in the package to improve construction standards and modernize building codes that will go a long way toward buildings that are more efficient and resilient. By Marc Gravely, Gravely Attorneys & Counselors Improvement Massive Infrastructure12 Helping owners achieve the most productive use of every capital dollar. Like infrastructure itself, building codes have suffered from inattention and are now outdated and focused on engineering, design, and construction techniques from the last century. A paradigm shift is required if we expect our built environment to be lasting and able to survive a range of uncertain futures. Buildings must also be efficient to reduce demands on energy and resources. Goals like these demand attention to details that building codes never anticipated until now. According to the National Institute of Building Sciences, adoption of hazard-resistant building codes saves communities $11 per every $1 invested through energy efficiencies and structural resilience. By 2040, these savings are projected to reach a cumulative total of $132 billion. A combination of little things and big things have a way of adding up, with savings and improvements realized though attention to proper insulation, efficient HVAC systems, green wastewater systems, solar panels, and other features. Modern building codes provide a baseline of minimum standards, but it is up to property owners and managers to ensure that these projects are built without design and construction defects. For example, a staggering 54 percent of school buildings across the U.S. have major systems in need of repair or replacement, including 36,000 school buildings with aging, inadequate, or defective HVAC systems. Those same deficiencies are found throughout the built environment. For new and existing structures alike, construction audits can identify these structural and design weaknesses before an extreme weather event is bearing down. The completion of a major project is no time for complacency. A third-party post-construction audit is critically important to identify any construction and design defects while the work is still fresh. One of the most common construction defects – and one that can be minimized with enhanced building codes and construction audits – is the faulty design or construction of a building’s envelope or barrier between a structure and the elements. A properly designed and functioning envelope is critical for proper drainage, air circulation, and energy consumption. Future-proofing our infrastructure requires embracing uncertainty as the new normal. Risks are evolving, sometimes in ways that are unpredictable and not well-understood. Across building sectors and project timelines, we must be open to new ways of thinking about infrastructure with a commitment to resilience. Otherwise, we shouldn’t be surprised when our built environment fails to withstand the hazards and demands of extreme weather and climate change. There’s so much to be excited about with this new commitment to improving our infrastructure. $1 trillion is a lot of money any way you look at it. But is it enough? Will it fix all our problems? Will it be administered properly? Will mistakes be made? If history is any judge, it would be foolish to expect perfection. But the scope of projects already underway or in the works is setting the stage for growth, innovation, and improvement to our built environment like we haven’t seen in generations. Marc Gravely is the founder of Gravely Attorneys & Counselors. He is also the author of the best-selling book, “Reframing America’s Infrastructure: A Ruins to Renaissance Playbook.”16 Helping owners achieve the most productive use of every capital dollar. FEATURE Making the case for asset-centric project management. F or the last year, the Kahua team has socialized an idea among the CURT community and with other construction owners that has resonated with every audience. The idea is simply that as we manage construction projects, we need to do so through the lens of an asset owner. As design and construction professionals, we have spent our careers thinking of the asset (facility, infrastructure, etc.) as a project, something temporary that we must push to get completed. We start with a budget and a schedule. A fixed amount of money and a fixed amount of time. The construction might take a few months or a few years, but it is a very limited amount of time. The useful life of the asset will be decades or longer. The cost may be millions or billions of dollars, but it will be a fraction of what the owner will spend operating and maintaining the asset over the long course of its useful life. During the temporary time of design and construction, we have historically created and collected an enormous amount of information about the asset we are building. Much of this information could be useful to the owner for the purpose of operating and maintaining the asset. But the sad truth is that most of it never gets reused. There is a better way. Kahua President and CURT Technology Committee member, Brian Moore, explains it like this: “As a student at Auburn University in the 1980s, I would – several times a year – drive back home to Chicago. I would buy a Rand-McNally atlas and a highlighter. The atlas would help me plan my route. What it didn’t do was tell me that since it was published, a new interstate had opened that could have saved me time and fuel. It did not tell me that the bridge was out near Nashville and that I would be stuck in traffic for hours and hours. It gave me static information because that was all that was available. Along came cell phones and easy-to-use apps, and today we have dynamic data, information that is crowd-sourced and always up to date. We now use Waze, and we get the latest info on the road, the traffic, even where the police are waiting to slow us down. It’s time we begin to use available design and construction data to better build and manage our valuable assets.” Since we began to go digital with project information, using various software programs, electronic messaging, computer aided design (CAD), then building information modeling (BIM), and so on, we’ve collected more and more valuable data along the way during a project. But one of the fundamental problems is that we make this data static when we turn it over at the end of a project. Databases and files become a series of PDFs and spreadsheets, stuck on some sort of media device, and for the most part forgotten. Even as poor as this process is, it is nonetheless expensive. A contractor will spend 0.3 percent of the project budget corralling and organizing data he or she has (or should have) already collected. That might seem like a small slice of the pie, but it all comes directly out of the profit margin; $3 million for every $1 billion in revenue is real money. It’s a much more expensive process for the owner. A study by FMI indicates that 95 percent of all data collected during design and construction goes unused after the project concludes. FIA Tech estimates that owners spend two to four percent of the cost of the project after the project, in an effort to compile data in a way that it becomes useful to the teams that will operate and maintain their assets for years to come. That’s $20 million to $40 million for that same $1 billion project. The concept of Asset Centric Project Management addresses and eliminates this project after the project. By specifying upfront what data is important, the owner tells the design and construction team what they must collect along the way. The process requires very little By Nicholas Johnson, Kahua, Inc. Asset Owner Looking Through the Lens of anThe Construction Users Roundtable 17 or no additional effort. We already gather this information. The only thing different is that we are provided a means and method for tagging assets and associating them to other important project documents and business processes. Consider the life of one particular asset, an air handling unit. It starts as a request, something specified on a drawing, and then included in a cost estimate and a submittal process. Then it becomes part of a purchase order. Then it is acquired and moves through the supply chain. It finds its way onto the job site. It is installed, in a certain place, by a certain installer, under specific conditions, and then inspected. Later, it will be commissioned by another party. Finally, the keys to the building are handed over to the owner. There is a warranty period, but otherwise, this is the end of the project. Let’s think about what information we have collected, and what documents we have affected in this story. Our air handling unit was part of: • Several drawings • Multiple models • An estimate • A submittal log • A purchase order • A shipping document • A contract • An installation form • Daily reports • An inspection report • A commissioning report • Possibly RFIs • Possibly change orders Among all these processes and documents, we can discover part numbers, locations, room numbers, zones, serial numbers, installation dates and conditions, which was the installing company, who was the actual installer, and more. Asset Centric Project Management requires that construction owners specify we collect certain pieces of this data in a certain way for a certain purpose. That purpose is to eliminate the “project after the project.” But it is also to inform the owners asset decisions going forward. The project is over, but our air handling unit will live in the owner’s collection of assets for decades. It will need to be maintained. It will have components that need to be repaired. It may get moved to a different place in the facility, or it may get moved to a different facility altogether. It may go through a recall and need to be replaced. And, at some point, years down the road, it will surely be retired and replaced. Along the way more data has been collected: maintenance records and logs, notices from the manufacturer, location data, and specific notes from technicians who have been maintaining, repairing, and upgrading the asset. Asset Centric Project Management tools create an asset data repository. This repository continues to inform the owner’s other tools and inform the owner’s decision making regarding his assets long after the project is over. Data flows from the project into operations, from specs into BIM, and then into CMMS, and then continually, back and forth, between the asset data repository and the tools used for mapping, for digital twinning, for maintenance and operation, and for future capital planning. These tools exist today, and owners are beginning to take advantage of the wealth of data that has – until now – been an unearthed goldmine. Jim Ellis, CURT President and retired VP of Global Construction at Microsoft, may have said it best in a recent CURT blog post: “Our industry continues to look for fusing and integrating advanced technologies across the asset lifecycle, from build to operate and maintain, to leverage optimum value for key stakeholders. I am delighted to see companies like Kahua, PrairieDog, and CIR Analytics get it and work toward advancing this for our industry. I can’t wait to see more.” More is here. The goldmine is now open. And the time has come for construction owners to begin mining. Nicholas Johnson is Chief Evangelist at Kahua, Inc. ner • Cost and time to collect info for handover process • Cost to pull together commissioning report for an asset • Inability to feed and maintain BIM, ESRI, and computer maintenance management systems (CMMS) • Improve future decisions about new facilities • Retain knowledge around an asset • Struggle with corporate memory leakThe Construction Users Roundtable 19 FEATURE Women are an untapped resource, if given safe and supported opportunities to thrive. I t is an undisputable fact that the construction industry needs women. In a July 8, 2021 story, CNN reported the Associated Builders and Contractors projects that a million new construction workers are needed this year into 2023 to keep up with demand. In addition, Jonathan Arnholz, writing for the National Center of Construction Education and Research, described women in construction as bringing a diversity of ideas and skills in problem solving that make construction companies stronger. As more women choose to give their time and talents to a career in construction, companies that wish to attract them must consider the messages their company culture send to women. At a typical construction recruitment presentation, a company representative will state that his company values women in construction, but will then play a slideshow or hand out a brochure that depicts only men in each phase of construction. If a woman is included, it often feels like she is only a token as she appears to be wandering aimlessly through the construction site holding a clipboard. Pronouns used in the material are usually “he” or “him.” Those portrayals of a typical company day speak volumes about the value of women to that company. Construction businesses that wish to recruit women in construction must produce recruitment materials that feature women actually working in construction and avoid personal pronouns or include “she” and “her” or the more inclusive “they” and “them.” If possible, women should be tasked with designing the phase of the company’s recruitment program geared toward other women. If needed, female consultants should be hired to advocate for the needs of women in construction, including fair and equal wages and benefits and a physically and psychologically safe working environment. A 2021 Business Insider study found that 44 percent of women hired in the construction industry leave permanently within their first year. A majority of those who left reported they felt a lack of respect or experienced harassment, which prevented them from feeling able to ask questions or clarify their job tasks. Companies that want to tap into the human resource of women in construction must prioritize training for women. Women can develop the skills they need to thrive in construction careers through apprenticeships, which provide paid on-the-job learning combined with post-secondary classroom instruction. In addition, companies must create a safe environment where questions can be asked and are respectfully answered. With only 13 percent of construction companies owned by women and only 16 percent of construction firms promoting women to C-level positions, women are significantly underrepresented in construction leadership. However, female leaders play a crucial role in eliminating the challenges other women face in construction. They are significant in obtaining benefits for women and creating an environment where By Karen Mitchell, CBT, CIS, CIT, NAWIC Women? Does Your Company Culture Support Scan this code to access a report outlining best practices for sanitation on the construction jobsite specifically for women. Next >