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Collaborate on Energy Today!

I'm cross posting this article from the Collaborative Construction Blog because I think some of the subscribers to the Fort Thomas Collaborative Blog might be interested in learning more about how collaborative agreements, Building Information Models (BIM) and lean construction techniques are combined to achieve Integrated Project Delivery. Though this article describes how these tools work on major energy projects, the concepts described in the article apply with equal force to the construction of schools and other local infrastructure. The article follows.

How to Save Time and Money While Reducing Risks On Major Commercial Energy Projects!

James L. Salmon, Esq.
President, Collaborative Construction Resources, LLC
July 24, 2008

Every power plant project is unique, with physical and organizational factors differing from project to project. Given the uniqueness and complexity of such projects, they would benefit tremendously from the use of a truly Integrated Project Delivery (IPD) model that utilized collaborative or integrated agreements, Building Information Models (BIM) or Virtual Construction Design (VCD) and lean construction techniques. The first step in successfully deploying these innovative new tools is to utilize a collaborative team selection process. Few in the construction industry however understand these new tools, and fewer still understand how to utilize these exciting new processes in effective combinations. Collaborative Construction Resources, (CCR) LLC provides collaborative consulting services geared towards helping all the major stakeholders on complex construction projects utilize collaborative agreements, BIM / VDC and lean construction techniques to achieve true IPD. CCR educates all stakeholders regarding the importance of establishing a collaborative culture of trust that will permeate the project. Armed with knowledge of these unique tools and a better understanding of the culture necessary to achieve true IPD, stakeholders will be poised for success. Stakeholders involved in major energy projects, such as coal gasification facilities, power plants and the like, should learn more about IPD before their next project.

Front end cooperation between the owner and other Collaborative Team members leads to the creation of an accurate Target Cost Estimates (TCE) for the project, including target completion schedules, quality and scope of work, and accurate equipment lists. The unique collaborative relationships that underpin true IPD reduce economic tension that exists within traditional construction contracts. Too often owners in the traditional environment specify a Taj Mahal, while the contractor, driven by competition, is compelled to bid on Strip-Mall. In a true IPD setting the Owner realizes a Taj Mahal is too pricey, but is pleased to learn the company that bid a Strip-Mall can build a nice Mall of America for the right price. Effective and early collaborative consulting can help all the stakeholders meet or exceed all project goals, and even address long term operational considerations.

An experienced collaborative consultant can help the stakeholders maintain a spirit of cooperation and trust throughout the project. A good working relationship founded on collaborative sharing and nurtured in a high-trust low-blame environment ensures that the inevitable conflicts and challenges that arise are addressed via timely and proactive decisions. The adversarial culture that plagues the construction industry is virtually eliminated when true IPD is utilized effectively, resulting in increased productivity, efficiency, quality and cost savings. When all the stakeholders are brought to the collaborative table in advance the design professionals are able to use BIM and VCD tools to address the needs and suggestions of the constructor, the equipment supplier and the owner. Subsequent changes to the TCE will appear in real time on the computer screens as they appear. Early engineering and construction cost-saving contributions include value engineering, constructability reviews and life cycle analysis that benefit the project as a whole. Changes that occur during the project's execution are easily assimilated into the project by a Collaborative Team, minimizing the impact of changes on the cost and schedule.

The Collaborative Team’s ability to quickly recognize conflict, and prevent it from escalating into a major dispute, is a core benefit of the collaborative relationship. Issues are dealt with as they arise and they can be passed on to the Collaborative Team for resolution if they introduce additional cost or potential schedule impacts to the project. The nationally available collaborative agreements all contain "waiver" provisions and a laddered alternative dispute resolution mechanism that culminates in binding arbitration before a third-party neutral mediator the team members select in advance. This laddered resolution procedure virtually guarantees the project will not devolve into conflict.

The collaborative or integrated contracts provide the team with a monetary goal for successful project completion. A successful IPD project will utilize an incentive program that requires the Collaborative Team to "share the gain and the pain" by paying minor loses out of a shared pool and then distributing the remaining funds as bonus money as an integral part of the project payment terms. There are also non-monetary metrics that must be taken into account on projects. Quality, safety, safety, energy efficiency, long-term performance objectives, permitting and community standards are all non-monetary metrics to be considered.

Tracking these metrics throughout the project is a very important to the success of not only the current project, but future projects as well. Accurate performance data will enable the Collaborative Team to improve their performance on subsequent projects, and build confidence among others in the industry in the process. One important mechanism utilized in many collaborative agreements to track financial metrics is the open-book contracting approach where pre-agreed overhead allowances and appropriate profit margins are approved for each member of the Collaborative Team, eliminating progress payments and retainage typical under traditional contracts. This process reinforces the spirit of trust and collaborative cooperation that are the hallmarks of true IPD.

Use of true IPD offers power industry owners, contractors and lenders a proven, cost-effective and practical solution to fix the recurring financial problems that rear their heads on projects completed using traditional contracts. As the next generation of coal fired power plants come on-line, industry stakeholders are seeking "effective" low cost solutions to classic problems. To find those solutions those stakeholders must work together on a Collaborative Team to have success.

James L. Salmon is the President and founder of Collaborative Construction Resources, LLC. CCR is currently leading as strong Collaborative Team in pursuit of funding from the State of Kentucky for a Collaborative Coal Resource Program that would bring the powerful tools described in this article to bear on planning, designing, constructing, operating and maintaining Coal Based Energy Production Facilities around the country. James can be reached via the contact information below. Call James today if you are interested in forming or joining a Collaborative Team!

Email: James.Salmon@CollaborativeCR.com
Phone: 859-802-1118
Skype: JameswithCCR
Web: CollaborativeConstruction.com
Blog: CollaborativeConstruction.BlogSpot.com

Trip to Frankfort

On Friday of this week I am going to meet with the State Architect in charge of school facilities, Mark Ryles, and Larry Stinson who is now number two at KDE to discuss how the use of collaborative agreements, BIM and lean construction techniques might benefit Kentucky schools in general and Fort Thomas schools in particular. If anyone has any suggestions, comments or issues you want me to raise please let me know!

Community Connections!

Collaborative Construction Resources, LLC's and its Affiliates Collaborative Construction Resources, LLC CCR provides consulting to construction industry stakeholders interested in delivering collaborative / integrated construction services efficiently and productively. CCR helps such stakeholders utilize Collaborative Agreements, BIM and Lean Construction methods to achieve Collaborative / Integrated Project Delivery. Visit the Collaborative Construction Blog. Construction Owner Resources, LLC COR helps construction owners and their professional advisers adapt to the revolutionary changes sweeping the US Construction Industry. Read COR's White Paper Here. Onuma, Inc. Onuma, Inc. is the home of the now world famous BIMStorms and their underlying web-based software program, the cutting-edge Onuma Planning System. Design Atlantic, Ltd Finith Jernigan, author of the wildly popular "BIG BIM little bim" which serves as a layman's guide to the BIM revolution, is the principle at Design Atlantic, which has provided valuable services to Onuma, Inc. in the context of several BIMStorms.

Community Connection Resources Initial Announcement! Community Connection Resources is the community service arm of Collaborative Construction Resources, LLC (CCR) which donates space in its email newsletter to worthy causes. Below you will find information about community events scheduled throughout the summer at the Highlands United Methodist Church (HUMC) located at 314 N. Fort Thomas Avenue. These events are co-hosted by other Churches in Fort Thomas, including the First Baptist Church, First Presbyterian Church, and Highland Hills Baptist Church. Join members of these congregations and other community members for family fun and fellowship this summer! Who: Gospel Blue Grass Singers When: Wednesday, June 11 2008, 7:00 p.m. Where: HUMC Plaza, 314 North Fort Thomas Avenue The Gospelway Bluegrass Singers is a traditional bluegrass group that has been performing together for over 20 years. Each member of the group is an accomplished musician and lead vocalist—a unique feature amongst bluegrass bands. Join us in welcoming these talented musicians to Fort Thomas! What: Open Micah Night When: Wednesday, June 25 2008, 7:00 p.m. Where: HUMC Plaza, 314 North Fort Thomas Avenue Are you a comedian of any age? Have a special talent? Come join us for Open Micah Night, a night of family friendly comedy. Reserve your spot on the stage by contacting Jeff Millard at jjmillard@fuse.net and join us at the church with The Big Red Doors! Who: John C. Knight Family When: Thusday, July 3 2008, 7:00 p.m. Where: HUMC Plaza, 314 North Fort Thomas Avenue John Christopher Knight and family live self-sufficiently without electricity, farm organically with horses and train Border Collies in rural Kentucky. Having never pursued a music career, John's incredible story began while camping at a Border collie event and he was overheard playing. John and his family have appeared on CNN and the Today Show and around the country. Their show is wholesome and humorous. Who: River City Drum Corp When: Wednesday, July 23 2008, 7:00 p.m. Where: HUMC Plaza, 314 North Fort Thomas Avenue River City Drum Corps is one of Kentucky’s premiere youth organizations. Founded in 1990 by Ed "Nardie" White, the River City Drum Corps is a non-traditional arts and education concept which molds traditional African drumming, percussive music training, performance and cultural education into one focus. If you are a Fort Thomas resident please forward this announcement to friend and family and ask them to join you on the plaza. If you are not, take the short drive to Fort Thomas for these exciting events. We hope to see you there! Warmest Regards, James L. Salmon President, Collaborative Construction Resources, LLC

Upcoming Community Events

In an effort to increase traffic here and further stimulate discussion I am going to start posting information about community events that might be of interest to readers of this blog. My plan is to focus on events and activities specific to Fort Thomas, and not to try to cover too much ground in this regard. If anyone has a particular event you would like to see highlighted here please let me know.

Politicians Discuss Possible Lawsuit Against the Commonwealth

Below is a link to an interesting article in which Pat Crowley interviews a number of politicians regarding the possibility of school districts like Fort Thomas suing the Commonwealth over the inequitable funding provided by the Commonwealth. I will try to expand on the litigation option a bit in a separate post.

Is litigation an option?

Posting Comments

If you want to post comments it looks like you will have to register with one of the services mentioned in the drop down box, unless you have a google gmail account, in which case it appears you will be able to comment after entering your gmail account login information. If anyone has any questions feel free to contact me.

Welcome Fort Thomas!

Thanks for visiting the Fort Thomas Collaborative Blog. Please spread the word about this exciting new tool to your family and friends. Here, we will engage in the exciting task of leveraging our combined talents and resources for the benefit of the entire community.

In an effort to stimulate conversation and kick start this blog I suggest we first turn our attention to one of the most difficult problems we face, and that is funding for our schools. Many of you are keenly aware that the Fort Thomas Independent School District (FTISD) does more with less than just about any school district in the Commonwealth. Kentucky's statutory school funding mechanism, SEEK, interacts with other state statutes related to property taxes in a way that severely limits the FTISD's budget. That problem has been compounded by the Commonwealth's failure to fund education at adequate levels. These budget constraints limit the FTISD's ability to fund day-to-day operations and the district's ability to fund improvements to capital facilities.

Facilities, of course, represent another staggering challenge. Highlands High School is being renovated, but an additional $25 to $37 million is needed to complete the job, while Woodfill and Johnson are in dire need of replacement, at a combined cost of $30 to $40 million, depending on the size of the schools we build. Moyer, which is the most modern of our three elementary schools, needs substantial work as well that could cost another $5 to $10 million. Accordingly, we need between $60 and $87 million in capital improvements in our school district. Unfortunately, our current bonding capacity stands at a meager $10 million or so.

So where do we get the funding? Frankfort refuses to pay for the improvements we say we need, arguing we should "consolidate" two of the elementary schools to save money. The money saved from consolidation would be pittance, and would not address the issue of chronic underfunding. Even if we agreed to consolidate, Frankfort will not fund the building of facilities at market cost. Frankfort insists you can build a 600 student elementary school for a little over $10 million, while the reality is closer to $20 million.

The last two Local Planning Commissions struggled to balance our desire as a community to maintain our neighborhood schools against Frankfort's demands that we consolidate. The current plan calls for us to maintain our three elementary schools, a course of action sure to raise the ire of key players in Frankfort. The prior plan called for consolidation. Currently, the legislature has authorized the use of approximately $6.5 million to rebuild Woodfill, which is less than 1/2 what that will likely cost.

To summarize, our school district's operations budget is chronically underfunded and we need to invest between $60 and $87 million in capital improvements to modernize our school facilities. Your assignment as a concerned citizen is to begin brain storming solutions to this conundrum. Over the next several weeks I will post additional thoughts on this matter. For now, I invite each of you to subscribe to the blog and post your thoughts and comments in the comments section. If anyone is interested in writing a guest post please let me know. For now, stay tuned!