Who Will Pay for Project Delivery Process Innovation?

11/27/2006

The Construction Users Roundtable counts among its membership many of the biggest consumers of construction services in the U.S. These owners have fostered some of the biggest changes in the construction mindset in recent years.

Take safety as an example. Keeping workers safe used to be something to strive for among contractors. Now, thanks to pressure from owners, zero workplace incidents is a mindset. Large owners have much to be proud about for the change in attitudes in the industry about protecting workers.

Now, these top owners are turning their attention to the construction process itself. They see the development of tools that combine design, communications and database capabilities and are quick to grasp their potential not just in tweaking design, but in changing the entire construction process to make it more efficient.

To that end, Cincinnati-based CURT has created a strategy group called 3xPT consisting of owners, contractors and architects to examine the practical aspects of implementing a project or program delivery process that brings in contractors and designers early and facilitates communication between them.

There is merit to this idea. It is what construction managers and program managers have been arguing for years. Technologies such as 3D and 4D CAD and building information modeling simply facilitate the practical aspects of the process.

But there is much for 3xPT to consider before owners can expect their construction service providers to jump into a new project delivery process. Roles and responsibilities of the parties must be defined. Contract language must be developed. From a practical standpoint, risks and liability must be established and the question of who will pay for this brave new world must be answered.

Owners often complain about how seemingly conservative and hidebound the construction industry is. This is true in part. But owners themselves are part of the problem. They demand innovation, but refuse to be the first to try something new. And if they do take the plunge, they make sure that much, if not all, of the risk is shifted to others.

Owners also want contractors and designers to invest fortunes in new techniques and technology, then dismiss requests for help. "That's just your overhead, and it's not my problem," too many say.

In an industry like construction, with its razor thin margins, construction firms cannot be expected to bear the costs and risks of new processes alone. So we wish only to caution owners: If you demand a brave new world, you had better be willing to show the courage of your convictions by bearing some of the risk and helping pay for it. The rewards will follow.