The Joy of Not Traveling

I spent a large part of my working life as a road warrior, attending to business all over the world.  I can relate to virtually every situation in the movie “Up in the Air”.  I made the decision a few years ago to stop.  While I would not trade the experience that I had and the opportunities that it provided me for anything, I don’t miss it.  There are perks that keep on giving, like permanent gold status on a few airlines and a few unused accumulated points that have not been used up for hotels, flights and cars.  I am also able to immediately fall asleep on an airplane, often before it leaves the ground.  I am a proficient user of Skype and WeChat.

I recently had the opportunity to visit with another ex-road warrior.  We shared stories of waking up at odd hours in hotel rooms wondering what city you where in; of planes missed or nearly missed; of hard to get used to foreign customs; and having to explain to folks that it is less exotic than it sounds when your trip consists of airport to taxi to hotel to meeting back to taxi to airport and then out – it doesn’t really matter what city or country that you are in.  My personal favorite observation is the number and variety of complicated alarm clocks in hotel rooms and their ability to be off by 12 hours or some other random number of minutes, even though there was no apparent way to re-set them – thank goodness for smart phones in recent years.

There is a lot to be said for coming home to the same place every night, being able to plan on attending a local event, and being available for family when needed.  I no longer must fly out on a holiday to attend a meeting in a country that does not recognize that holiday or try and create a special occasion while the family is living in a hotel room.  I no longer wake up or get sleepy at random times while consistently in the same time zone.

I occasionally speak to groups about working globally and often get the chance to mentor others about overseas or heavy travel opportunities.  The ability to live in other cultures is the best way to see the world and to become a part of the global community.  Working remotely greatly increases your chances for greater responsibility and to hone your skills.  However, it is far more stressful on both you and your family than you might imagine.  I almost always say – take the chance but know the risks.

Using Artificial Intelligence in Risk Management

One of the challenges that the construction industry has is a lack of coordinated data sharing.  Some agencies have started to collect large amounts of data, but it tends to be project specific, not particularly accessible and not organized in a way that it can be easily analyzed to develop usable information. 

Data mining could be particularly valuable for risk management and improving the quality of design and planning contracts.  If an agency had multiple years of change order data from its construction contracts it may be possible through data mining to extract information as to the types and severity of changes.  This information could be studied to identify reoccurring problem areas.  For example, if it was determined that large and consistent geotechnical related change orders occurred, it might point toward changing the design and planning process to require more geotechnical investigation. 

This same data mining could help categorize changes so that the severity and probability of various types of changes could be better understood, allow for better contingency forecasting, and promote better planning for how to handle individual changes.  For example, knowing that weather related changes occur on a certain percentage of a certain type of project and have a certain average impact would provide a better foundation for predicting the impact of these changes on individual projects and encourage more effective contract language and decision making for dealing with these impacts.

If such data is available, and before analysis starts, it needs to be reviewed to see if individual change descriptions accurately explain the reason for the change (for example, is there a bias against stating that there was a “design error” or the owner “changed criteria”) and whether the data is sufficiently detailed to extract usable keywords and phrases.  This exercise would also help contract administrators better coordinate with management to identify key data that should be tracked in the future and promote consistent change order language.

Better RFPs, Better Proposals

Owners often misunderstand how much effort goes into preparing a focused and informative proposal and, regrettably, professional service providers often don’t bother to go to the effort to prepare one because it is not always apparent that it makes a difference in the selection.  It is certainly no fun to slog your way through voluminous boilerplate that begins to look the same between each proposal.  It is also no fun to spend the time and incur the expense of preparing a comprehensive and detailed proposal if it seems that it will not be read.  

As the number of project opportunities starts to pick up with the renewed emphasis on rebuilding and expanding our infrastructure, proposers can become selective on what they seriously pursue, and owners will want to do everything possible to get the best teams working on their projects.

So, what can an owner do to improve this process? 

1) Decide what is important and tell the proposers what you want to know

This means spending the time to honestly evaluate how you will make your decision and to clearly describe the keys to making that decision.  Is it valuable to have each proposer discuss in depth their approach to every aspect of the project delivery process?  Do you value innovation?  How do you value company experience versus individual staff experience?  If what is important to you can be addressed in 20 pages instead of 120 pages, why not encourage brevity?

If an owner takes the time to explain what they want, it is incumbent upon proposers to respond accordingly. 

2) Provide all available information

Proposers spend a lot of time trying to locate and obtain all available information related to a project.  While it may be impressive that a company has the resources to dig up difficult to locate background information, it does not mean that they are the best team to do the work.

Providing all available studies and plans and conducting a thorough and informational pre-bid meeting shows that you as a client are serious and helps all proposers work from an even playing field. 

3) Shortlisting

The shortlisting process allows an owner the opportunity to tell individual proposers that they have a limited chance of being selected due to not addressing what is important, a lack of experience, or a lack of capability. 

While shortlisting might increase the amount of time and effort needed to make a selection, it will certainly increase the number of highly qualified bidders who might pursue your project and it allows you to focus on more detailed discussions ensuring better alignment between you and the successful proposer.

4) Pricing

Providing a price for professional services at proposal submission, at interview time, or in advance of a discussion of the exact scope and expectations is rarely a valuable exercise for either owner or proposer and detracts from the time that can be spent preparing a responsive proposal.  Also, for most public works projects, using price as a part of the selection for professional services is inconsistent with regulations.

While an owner may want to have some idea of the cost of what they are buying, depending on the assumptions made by each proposer, the pricing might vary significantly for what is seemingly the same work.  Wait until there is alignment on the scope of work before asking for pricing.

The Future of Construction

I take my role as a grandpa seriously and spend time visiting my granddaughter (and daughter and son-in-law).  I have been able to combine my hobby of tinkering with my visits by making improvements and building a fancy fort and swing set in their recently purchased home.  I am pleased that my two-year-old granddaughter takes her role as tinkerers assistant very seriously and shadows me as I work on various tasks around the house.  Not only does she love to play with the tools but she will watch closely what her parents or I am doing and can be seen copying the efforts with spare tools in her fort.  She has no lack of electronic toys and limited access to television, but she has a real interest in putting things together with spare materials or with Legos.  As we bemoan the lack of skilled craftspeople in the construction industry it is heartening to see that building can compete with all the other distractions that children currently have.  I look forward to bringing my granddaughter the miniature workbench that my father built for me and that my daughter played with through her childhood.  I don’t know what direction my granddaughter’s development will take but I know that she will continue to have a knowledge of the role of craftsmanship in the world that we live in and how it has a direct impact on how we live.

We need to focus on how to interest not just Millennials, but Gen Z and Gen Alpha children in the construction and engineering industry.  These are the future engineers and managers that will continue to bring 21st century tools and ideas to our industry and that will provide the ingenuity to take our infrastructure to unimagined levels of dependability and ease of use.  Equally important, we need to recognize the need to train and mentor in both directions, so that new members of the industry get the benefit of the experience of seasoned professionals and to help seasoned professionals close the technology gap that is evident in our industry.

Robust Risk Management Can Lower Costs

The intent of risk management is to identify potential issues before they occur; track these issues throughout planning, design, construction and operations; develop ways to accommodate these issues that best allocates risk; and monitor the issues as your project progresses to see if they develop and whether the plan to deal with them is appropriate.  A robust program of risk management helps to properly price and schedule a project and helps reduce those surprises that prevent a project from progressing as planned.  Tips for effective use of your risk management program include:

·        Start early.  Every assumption made during planning and design results in a potential risk.  Keep track from the beginning of the planning stage so that they are not forgotten or overlooked.  Go back regularly to check if the approach to handling each risk is appropriate and the potential impacts and probability of occurrence still make sense.

·        Be fair.  If you made the decision as an owner to limit your budget for design or research (geotechnical exploration for example), don’t be shocked if there are change requests due to differing site conditions.  Expect to set an appropriate probability of occurrence and contingency for unforeseen conditions and be prepared to deal with them in a timely manner.

·        Share your risk register.  Keeping information of where there may be problems from your contractor may not be the best way to protect yourself.  Consider whether it is better for everyone to know and discuss issues in advance or to find out the issue in the field when crews are mobilized, and delay costs are substantial.

·        Recognize that all risks can have an impact on project progress.  Advances in schedule management promote having several work areas available – dependent upon the effective flow of resources and equipment and the ability to work unimpeded – with less focus on a single critical path.  Knowing where potential problems might be helps to identify where to shift resources when there are delays and lower potential impact costs.

·        Appreciate that information collection has improved spectacularly in the past years and contractors are able to accurately measure productivity.   Calculating and claiming for a loss of productivity (the “measured mile” approach) is much more credible.  Anticipating and planning will reduce the impact when change occurs.

·        Not all change is negative.  Tracking of potential positive issues is just as important as tracking potential negative ones.  The ability to capitalize on a positive change that has been identified and monitored is just as important as avoiding problems.

Why Contractors Do What They Do

What is the impact of some common contract terms:

·        Claim notification must be submitted within ?? days of an occurrence or the claim is void

·        All costs must be submitted within ?? days or they will not be considered.

·        The amount negotiated is full and final settlement for that change

·        No total cost claims are allowed

Each of these requirements is perfectly sensible, you need to be notified in a timely manner, costs should be collected expeditiously, and once negotiated, the costs of changes should be final.  Unfortunately, many changes are not so clear-cut as to have definite start and completion dates (do you make a claim for changed conditions after the first hard driving pile of 500, the 10th, ???).  A series of changes may have a different cumulative impact than the sum of the individual changes and some changes result in incremental increases in the cost of the work (for example, a high-water table impacting the rate at which material can be excavated).   If you work in area where strict notice regulations apply, as a contractor, you may have little choice but to claim quickly and claim often in order to protect your right to recovery.  Even if substantial compliance with contractual notice is accepted in your area, why take the chance?

What constitutes notice is sometimes an issue as well.  Is formal written notice of a potential claim required, are site meeting minutes sufficient, is the change so obvious that notice is a given?

A contractor has every right to be compensated for changed conditions and, as an owner, you should want your contractors to be paid for the work that they have done and to be recognized as a partner, not a combatant, in delivery of your projects.  Ignoring contract requirements is not a solution for either party, but appreciate that your contactor may be playing by the rules that you established and react accordingly.