Mountain Cascade, Inc.

Peter Foote

Construction Innovation Authority

Improving collaboration between owners, designers and contractors in design-build delivery. That is a broad subject and extends to areas I find are clearly defined and areas in which any given party can drift “beyond the lines." Of concern is that the majority of professionals working in a collaborative environment will often stray outside the lines without intent or malice.

Many things lead to this; however, the two I experience most frequently are

• Insufficient Identification of Roles and Expectations at the outset

• Lack of knowledge and understanding of specific collaborative delivery models

Over the history of alternative (collaborative) delivery models, specific definitions and characteristics have evolved. These often relate to a specific type of contract. Reaching from one delivery model to another, after entering into a contract that is specific as to type, carries multiple issues. 

An example would be choosing fixed-price design-build and attempting to alter the delivery course while expecting the cost to remain fixed.

Improved collaboration begins with clear expectations and a thorough understanding of which delivery model best suits the project and owner’s needs. Beyond this, the team has to genuinely trust each other. Historical stereotypical definitions have to be set aside to establish trust. Owners may privately regard contractors as greedy and avaricious. An inexperienced or poorly developed contractor project manager may see the owner as a piggy bank to be emptied. 

It has been largely my privilege to work with scrupulous management, regarding owners' management as intelligent and working toward a common good. To the avaricious PM, I would remind them that “This isn’t the last job”; instead, it is (or rightly should be) one in a stream of ongoing projects. With this is the fact that working for one owner is actually working for “every” owner. Because owners share information about contractors, the same as contractors and suppliers may share thoughts on which owners are reasonable to contract with. 

The area of construction I have worked in is referred to under the umbrella of “Heavy Civil." But within Heavy Civil are Roads, Bridges, Dams, Utilities and Airports. That is not meant to be an exhaustive list, but my word of caution is to beware the “expert at all facets” of heavy civil. Construction companies can have multiple divisions, but sharing talent between Roadways and Pipelines, as an example, is the recipe for lower results.

“Improved collaboration begins with clear expectations and a thorough understanding of which delivery model best suits the project and owner’s needs.”

A “heavy civil" contractor I worked for “briefly” considered my knowledge with water conveyance as perhaps "well above average." Yes, I had a very good understanding of the owners' needs and expectations, but too often I was being requested to “come visit with these people… they are really mad." The ‘mad’ description precipitates questions as to how far along they were on a specific project and where their difficulties were based. In other words, “What did you do to upset them?”

Owner operators of water infrastructure are very specific in their needs and experience. When a contractor begins a new project, their team needs to ‘see’ the project from beginning to commissioning. When they make rookie mistakes or reveal their experience to be lacking, they have two choices: one is to ask for help from the owner. In most cases a good system operator has numerous qualified people who, when treated fairly and HONESTLY, will help. The other choice a contractor may elect is to write change orders in an effort to have the project owner pay for their education. That was typically when I was asked to “come talk to these people." Reputation does not always come with truckloads of patience. I would typically start by educating the person from my company on how a well-planned and executed segment of work would have been approached. Then explaining to them that I didn’t have much in my toolbox beyond honesty and humility. Far more people will work with a person who is honest and recognizes their shortcomings and perhaps needs to learn.

The well-spoken and well-educated budget terrorist will blindly ask and expect the owner to pay for their mistakes.

Returning (finally) to the relationship between owners, engineers and contractors brings me back to trust. Progressive Design Build can open eyes. It is an open book and clears up a lot of preconceptions. One being that all contractors are rolling in money and lecherous. We open the books on a given project and most are shocked to learn our profit margins are somewhere very close to (or below) 10 percent. Many also don’t realize ‘who’ is cash flowing the project. 

If an owner allows me a mobilization of 50 to 75 percent, that sounds great. Until you realize we pay payroll weekly (with related taxes and benefits), we typically pay fuel costs biweekly. We will have to pay some vendors for submittals and the terms are not much over 30 days. This is when we bill the first month at the end of a four-week cycle and then the owner remits payment 30 days after that. We’ve already incurred 60 days of payments; then our billing is subject to retention. It’s very common for a project to be near ‘red ink’ for its duration until retention is paid. 

Owners have tablets full of their own concerns and past problems they are trying to armor against. Some upfront teaming is critical before jumping into the ‘marriage’ and expecting harmony.