CII: An Introduction CMAA Owners’ Forum May 2, 2010 Atlanta, Georgia

1. CII: An IntroductionCMAA Owners’ ForumMay 2, 2010Atlanta, Georgia Manuel A. Garcia, P.E. Associate Director Construction Industry Institute

2. Today’s Agenda • Introduce CII • CII-CMAA Alliance • Present High Owner Relevance CII Practices • Zero Accidents • Partnering • Team Building • Alignment • Front End Planning • Planning For Start Up • Project Delivery & Contract Strategies

3. What is CII? • A consortium of leading owners, contractors & suppliers, and academia working to improve the constructed project and the capital investment process. • A research unit of the Cockrell School of Engineering at The University of Texas at Austin

4. CII History • Established as a recommendation from The Business Roundtable CICE Project to address: • construction research • fragmentation of the industry • Founded in 1983 by 28 companies;Now 108 members • First to bring research to the engineering-construction world • First industry-government-academic research collaboration for the constructed project

5. Mission Purpose To measurably improve the delivery of capital facilities. • Enhance business effectiveness and sustainability of the capital facility life cycle • Expand the global competitive advantage of its members through: • active involvement & participation • effective use of CII research findings, including CII Best Practices.

6. Owner Members Abbott Air Liquide Air Products and Chemicals Alcoa Ameren American Transmission Co. Anheuser-Busch InBev Aramco Services Company Archer Daniels Midland Barrick Gold BP America Bristol-Myers Squibb Cargill Chevron CITGO Petroleum Codelco-Chile ConocoPhillips Constellation Energy DFW International Airport Dow Chemical DuPont Eastman Chemical Eli Lilly ExxonMobil GlaxoSmithKline Hovensa International Paper Kaiser Permanente Marathon Oil NASA Naval Facilities Engineering Command NOVA Chemicals Occidental Petroleum Ontario Power Generation Petrobras Praxair Procter & Gamble Progress Energy Saudi Basic Industries Corp (SABIC) Sasol Technology Shell Global Solutions US Smithsonian Institution Southern Company Sunoco Tennessee Valley Authority Trans Canada Corp. U.S. Architect of the Capitol U.S. Army Corps of Engineers U.S. Dept. of Commerce/NIST/Building & Fire Research Lab U.S. Dept. of Energy U.S. Dept. of Health & Human Services U.S. Dept. of State U.S. General Services Administration

7. Contractor Members Aker Solutions Alstom Power AMEC Atkins Faithful + Gould AZCO Baker Concrete Construction Barton Malow Bateman Engineering Bechtel Group Bentley Systems BIS Frucon Industrial Svcs. Black & Veatch Bowen Engineering Burns & McDonnell CB&I CCC Group CDI Engineering Solutions CH2M HILL CSA Group Day & Zimmerman dck worldwide Dresser-Rand Company Emerson Process Mgt. e Project Management Fluor Foster Wheeler USA Grinaker-LTA/E+PC Gross Mechanical GS E & C Hargrove and Associates Hilti Jacobs JMJ Associates KBR Lauren E & Constructors M. A. Mortenson McDermott International Mustang Omniware Oracle USA Parsons Pathfinder Pegasus Global Holdings R. J. Mycka S&B E and C The Shaw Group Siemens Energy SNC-Lavalin Technip URS Corporation Victaulic Company Walbridge The Weitz Company Wanzek Construction WorleyParsons Zachry Zurich

8. CII Chairmen, 2005–2010

9. CII Organization Board of Advisors Strategic Planning Committee Executive Committee Knowledge Management Knowledge Assessment Knowledge Creation Knowledge Dissemination Special Functions Implementation Strategy Committee Professional Development Committee Knowledge Management Committee Benchmarking & Metrics Committee Research Committee Academic Committee Breakthrough Strategy Committee Branding Implementation Committee Conference Committee Finance Committee Membership Committee Nominating Committee Research Teams Industry-Sector Benchmarking Product Review Board

10. University of Alabama Arizona State University Auburn University Bucknell University Carnegie Mellon University University of Cincinnati Clemson University University of Colorado-Boulder Colorado State University University of California-Berkeley East Carolina University University of Florida Georgia Institute of Technology University of Houston University of Illinois Iowa State University University of Kansas University of Kentucky Lehigh University University of Maryland University of Michigan Mississippi State University Universities involved 1983-2009 University of New Mexico North Carolina State University North Dakota State University Oklahoma State University Oregon State University The Pennsylvania State University University of Pittsburgh Purdue University Polytechnic University San Diego State University San Jose State University Stanford University State University of New York-Albany Vanderbilt University Virginia Polytechnic Institute and State University Texas A&M University The University of Texas at Austin (CII headquarters & founding university) University of Washington University of Waterloo University of Wisconsin-Madison Worcester Polytechnic Institute

11. Industry Leaders Support the CII Mission

12. CII Knowledge Processes Knowledge Creation Research to define best practices, breakthroughs, & industry norms. Management, organization, and assessment of the 500-plus CII documents and publications. Knowledge Management Dissemination through publications, implementation guides, educational materials, workshops, and conferences. Knowledge Assessment Knowledge Dissemination Assessment of the impact of CII practices through benchmarking.

13. construction-institute.org

14. CII Practices (CII Best Practice Candidates) Project Planning Phase Attract and Maintain Skilled Workers Automated Identification Construction Input Assessment Effective Use of Global Engineering Workforce Environmental Remediation Management Equitable Risk Allocation International Project Risk Assessment Leader Selection Modularization/Preassembly Organizational Work Structure Project Delivery and Contract Strategies Project Security Project Teams Technology Implementation Value Management Work Process Simulation • Design/ Construction/ Startup Phases • Craft Productivity Practices • Design for Maintainability • Design for Safety • Engineering Productivity Measurement • Piping Design • Project Life • Cost & Schedule Control • Employee Incentives • Fully Int. & Auto. Project Processes (FIAPP) • Information Integration • Management of Education & Training • Managing Workers’ Compensation • Project Health Assessment • Small Projects Execution

15. CII Best Practices Project Planning Phase Alignment Partnering Front End Planning Team Building Design Phase Constructability Materials Management Construction/Startup Phase Planning for Startup Zero Accidents Techniques Project Life Cycle Benchmarking & Metrics Change Management Disputes Prevention Implementation of CII Research Lessons Learned Quality Management

16. Use of Best Practices Begins with Strong Implementation Culture Ends with Improved Performance

17. CII Grouping of 10 Practices/ Best Practices VBP Survey Start of Section 4.3

18. The Owner’s experience…

19. Impact of Best Practice Use on Schedule Performance- Owners High Use = 9.7 % Schedule Improvement VBP Survey Figure 14

20. Impact of Best Practice Use on Cost Performance- Owners High Use = 10.9 % Cost Improvement VBP Survey Figure 13

21. Impact of Planning Best Practice Use on Cost Performance- Owners High Use = 7.5 % Cost Improvement • Front End Planning • Alignment for FEP • Planning for Startup VBP Survey Figure 15

22. Owners… • If you are not implementing these CII Best Practices: • Front End Planning • Alignment for Front End Planning • Partnering • Change Management • Planning for Startup Your projects are costing you 20% more than they should

23. The Contractor’s Experience…

24. Impact of Execution Best Practice Use on Cost Performance- Contractors High Use = 12.2 % Cost Improvement • Constructability • Project Risk Assessment • Change Management VBP Survey Figure 16

25. Leadership at the Top to “Bottom Line” Impact Company Culture Practice Implementation Performance Result$!

26. TRIR Rate

27. DART Rate

28. Project Distribution by Location VBP Survey Figure 3

29. Project Distribution by Nature VBP Survey Figure 4

30. Project Distribution by Industry Sector VBP Survey Figure 5

31. Project Distribution by Cost Category VBP Survey Figure 6

32. Project Distribution by Project Delivery System VBP Survey Figure 7

33. 0.4 0.3 0.2 Better 0.1 Performance 0 -0.1 -0.2 4th Quartile 3rd Quartile 2nd Quartile 1st Quartile Low High Practice Use Value of Best PracticesTheoretical Relationship

34. CII Resources • Research Products • CII Research Summaries • CII Implementation Resources • CII Research Reports • CII Productions • Professional Development Continuum • CII Store • Education Modules • CII Online Education • CII Courses • Registered Education Providers • Executive Leadership Program • CII Events • Annual Conference • Performance Improvement Workshops • Benchmarking Seminars/ Workshops • Web Seminars • Communities of Practice • CII Mentoring • Implementation Champion Program • Experienced ISC members • CII Staff Implementation Tool Box

35. Professional Development Continuum • Development of project management professionals • Online education path outlining CII educational resources • Targeted to competencies in: • Leadership & Human Relations • Project Organization & Management • Continuous Improvement • Front End Planning & Risk Management • Project Implementation & Controls • Design, Procurement & Materials Management • Construction Practices and Contracts • Safety, Health, Environment & Security

37. CII Education Modules • CII research formatted as instructor-led courses • Developed by industry experts and adult learning instructional designers 18 different topics Taught right from the book –or – Customized by your own trainers to specific company needs and applications

38. CII Education Modules • Everything an instructor needs … • PowerPoint Slides • Lecture Notes • Exercises • Case Studies

39. Accessible on the Internet 24/7 CII Online Education • Based on CII Best Practices • Fully interactive web-based learning • Professional Development Hours (PDH) credits

40. Construction Industry InstituteContinuing Education Courses are sessions built from a series of half and full-day courses presenting CII Researchfindings in an interactive classroom environment Participants may register for an individual course, multiple individual courses, or entire one-week session Each Individual Course covers a specific area ofCII Research Continuing Education Courses

41. Develop your next generation of industry leaders • Two-week, intensive, in-residence program at UT’s Executive Conference Center • Construction Industry Focus • Now in its fifth year This is where you want to send your top talent. January 9-21, 2011 ATT Executive Education Center The University of Texas at Austin

42. Changes for 2011A better value in a difficult economy • Two-week course – reduced from three weeks • 33% reduction in time required away from office • $19,900 registration fee – reduced from $23,900 • 17% reduction in registration fee • Retains 87% of podium hours • 13% reduction in podium hours • reduction based on participant feedback

43. CII Executive Leadership Program Alumni

44. Fill these spots with your rising stars! CII Class of 2011

45. What Is the ROI? • Enhanced executive leadership capabilities • Strategic business skills • Collaborative relationships • between owners and contractors • with peers across the industry • Benchmarking on best practices • Executive level networking opportunities

46. Past Participant Companies Abbott Aker Kværner Alstom Power Aramco Services BE&K Baker Concrete Construction Bateman Engineering Bowen Engineering Burns & McDonnell CB&I CCC Group CDI CH2M HILL CSA Group DuPont Eli Lilly Emerson Process Management Flint Energy Services Fluor Foster Wheeler General Services Administration Hatch Hill International Intel International Paper Jacobs Midwest Steel NOVA Chemicals Ontario Power Generation Rohm and Haas S&B Engineers & Constructors Saudi Aramco The Shaw Group Smithsonian Institution Southern Company Tampa Electric TXI U.S. Army Corps of Engineers Walbridge WorleyParsons

47. January 9-21, 2011 ATT Executive Education Center The University of Texas at Austin

48. 2010 CII Annual ConferenceAugust 3-5, 2010 Over 500 Top Industry Attendees Presentations on: New CII research CII product implementation case studies New CII Initiatives Professional Development Implementation Benchmarking Other Notable Speakers Grand Cypress ResortOrlando, Florida

49. Performance Improvement Workshop Fall Focused on: CII Product Implementation Best Practices New Practices Case Studies Networking Houston, Texas November 8-10, 2010

50. Benchmarking Conferences & Workshops Essential for implementation of reliable benchmarking process. Updates improvements in the online system Explains new metrics & interactive reports Delivers annual training needed to stay in tune with improvements Ensures greatest benefit from this valuable CII resource. Contact Frances DeCoux at (512) 232-3000 or f.decoux@mail.utexas.edu June 2-3, 2010Abbott Park (Chicago), ILHosted by Abbott