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A Panel Discussion: How Do Contractors and Owners Have to Change?
Recently at the 98th annual Canadian Construction Association conference, a panel of construction leaders discussed needed industry changes with respect to Owners and Contractors.
During the discussion, the panel shared insight into opportunities, both for improvement and the ability to add more value to construction projects including these 5 areas:
1) Pricing - When it comes to pricing, low-bids may not necessarily represent good value to the owner, nor do they benefit the other side. Contractors are also obliged to honour the price.
John Mckendrick, the executive vice president of project delivery for Infrastructure Ontario, spoke from an owner perspective and said he tries to have adequate budgets because "when a low bid comes through we have to go back to value engineering, I don't want that on my side, and I don't think you do either.”
James Paul, the president and CEO of Defense Construction Canada, added "we don't want the low bid, we want the right bid," and that low bids put the project under stress out of the gate, and doesn't benefit either side.
2) Documentation - Poor documentation leads to mistakes, more cost and added risk.
Grant Beck of Graham Construction pointed out that too often owners give complete responsibility to a third party project manager or consultant, and those third parties tend to shirk responsibility for poor documents or other mistakes.
Neil McFarlane, the executive director of Alberta Infrastructure, pointed to poor quality of documents as a key issue. Owners and contractors have to discuss the impacts of documents not being fully developed, McFarlane said, as it has the greatest impact on the overall life cycle cost of a project.
3) Procurement - Owners and contractors should be open to new procurement methods so that teams can add more value to the project.
James Paul, the president and CEO of Defense Construction Canada, said there are areas of improvement on both sides. Security is becoming more important, and effort is being made to get industrial security clearances as quickly as possible.
It's important to set aside traditional procurement approaches and tackle projects as a team, Paul said, but if it's successful it will address concerns on both sides.
4) Request For Proposals - Proposals cost money to prepare and should be set up to add value to the project.
Ian Boyd, the president and CEO of Bird Construction, said escalating costs occur at the prequalification stage, and that more and more work is being done at the Request For Proposals stage which, contrary to the impression of owners, is "anything but free."
At the RFP stage, Boyd said, innovation gets stifled, and it's difficult to add value. "We need to allow innovation to happen in these large design/builds," he said.
5) Building Information Management (BIM) - BIM can add value to the project, but it requires consistency from all contractors.
Mike Reinders, president of Maple Reinders Group, said "maybe it's a good thing that owners are forcing us to use BIM. Maybe contractors need a push to use this software, and have subcontractors on identical software."
Overall, the panel discussion provided valuable insights into how the process can be improved using the principles of Design-Build.
To learn more about how you can save time and money for your next construction project, contact our Design team today.
Article Source: http://journalofcommerce.com/Associations/News/2016/3/CCA-BLOG-How-do-contractors-and-owners-have-to-change-1014052W/
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