In 2005 I worked with a graduate student at Stanford CIFE named J.T. Taylor (now a professor of civil engineering at Columbia) on a study of early BIM adoption patterns. The project, published here and further examined in a journal article here, has affected my thinking about the building industry since, but not just because J.T. was able to put forward an interesting theory about how AEC firms wend their way down the BIM path (pretty prescient work for six years ago as BIM was just emerging). The research phase of the project required him to interview 65 designers and builders about their business processes, during which he observed that the AEC industry seemed to be “sub-optimized to the point of failure” as he once described it to me. Lacking objective measures or even specific, outcome-based delivery models, each part of the AEC delivery chain focuses on a single principle: lowest first cost.
The conclusion rings true. Clients choose designers based on lowest fees, then contractors based on lowest bids. Contractors select subs accordingly, and the chain continues until the project is completed. With this variable--lowest first cost--slavishly prioritized along each step in the process it is little wonder so many projects miss performance objectives, budgets and schedules.
Alternative project delivery methods like IPD (and supporting processes like BIM) purport to shift the focus to outcomes rather than lowest bids. But integrated approaches are oft criticized for having no mechanism to assure “Best Value” for the project, which to many clients continues to mean “lowest possible cost.” The UK Government recently published their “Construction Industry Strategy” for public projects in which this issue is called “competitive tension”—making sure that there’s enough competition in the system to avoid arbitrary price fixing and assure the best combination of performance and price.
The UK report asserts several strategies for accomplishing the ends of integrated delivery and therefore “best value” for public projects while maintaining competitive tension. A national database of project costs will create a baseline for comparison as new projects are defined. Public project managers on the client side will be measured by lifecycle value of projects, rather than slavish adherence to budgets, and will be trained accordingly. A pipeline of upcoming projects and their preliminary cost targets will be published giving AEC suppliers a “planning horizon” to anticipate potential work and plan integrated approaches accordingly. And by 2016 all UK public projects in excess of $7 million must be executed in BIM.
I have often gently chastised my colleagues in UK for having created much of the intellectual platform upon which the current movement for industry innovation is based (from Guerin to Egan up to Wolstenholme) but having little to show for the effort save the process that created Heathrow T5. Lots of theory in whitepapers, but little action. But the UK, not unlike our friends in Singapore, has suddenly taken a huge leap from theory into practice. The Government, responsible for 40% of construction spend (and therefore about 3% of GDP) has been forced by the economic crisis and climate change to attack this problem, and in doing so has introduced “competitive tension” across the AEC supply chain with the variety of techniques described above. Of course, they lead the argument with a promise to save themselves 20% along the way (some things never change). Lacking any other coalescing force in the building industry, Government will implement an innovation agenda meant to restructure the entire supply chain.
At least they understand the leverage points and the policy necessary to make the change. Where’s a similar conversation here in the US?