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By: Ted Garrison

Value Based Contracting. By: Ted Garrison. Why Value Based Contracting?. The construction industry is the only significant industry that hasn’t increased productivity during the last 50 years! Construction Industry Institute. The Research.

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By: Ted Garrison

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  1. Value Based Contracting By: Ted Garrison (C) 2013 - New Construction Strategies

  2. Why Value Based Contracting? The construction industry is the only significant industry that hasn’t increased productivity during the last 50 years! Construction Industry Institute (C) 2013 - New Construction Strategies

  3. The Research • 1995 USA Construction and Building Sub-committee Report • 1995 OASIG UK Study • 1997 KPMC Canada Study • 1999 Singapore Construction 21 Report • 2001 Australian Build and Construction Industries Supply Chain Project • 2002 Canadian Construction Research Board Report (C) 2013 - New Construction Strategies

  4. Edwards Deming “Price has no meaning without a measure of the quality being purchased.” (C) 2013 - New Construction Strategies

  5. What’s the Potential? Reduce design/ construction time by 50% Reduce operating expense by 50% Reduce total project cost by 30% (C) 2013 - New Construction Strategies

  6. What Is Value Based Contracting? It’s a process where people collaborate with people and groups outside of each others formal control and inspire each other to work toward common goals – despite differences in their convictions, cultural values, and operational norms. (C) 2013 - New Construction Strategies

  7. What Is Collaboration? Coordination Cooperation Capability Development Connection (C) 2013 - New Construction Strategies

  8. Avoid Subjective Decisions!Event - Project Initial conditions Final conditions Time • The more info we have before the event, the easier it is to predict the final outcome • The less info we have before the event, the harder it is to predict the final outcome • However, the lack of info will never change the final outcome • Probability occurs when people don’t understand • Must think proactively – not reactively (C) 2013 - New Construction Strategies

  9. How Do You Select Your Team? • It’s a balanced approach • Past Performance • Leadership • Risk Analysis (Reliability) • Value Assessment • Price • Subtitle • Introduction • bullet • point • list (C) 2013 - New Construction Strategies

  10. PIPS Filters Time Number of Competitive Firms Award Filter 1 Education & Past Performance Information Filter 2 Bid Proposal & Risk Assessment Plan Filter 3 Interview Filter 4 Prioritize Filter 5 Pre-Award Period Filter 6 Weekly Report Post-Rating (C) 2013 - New Construction Strategies

  11. Does It Work? 98% of PBSRG’s projects had high quality, finished on-time, on-budget with no contractor generated change orders! 98% (C) 2013 - New Construction Strategies

  12. Conclusion Buyers would be best served by developing a long-term relationship based on loyalty and trust with a single team of contractors working together to reduce costs and improve quality. (C) 2013 - New Construction Strategies

  13. What Are Your Thoughts or Questions? (C) 2013 - New Construction Strategies

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