Second root problem #3: We don’t know how to sell (our) services
Design-bid-build and it's impact on the project and the BIM use.
I often encounter a tremendous know-how lack in purchasing strategies. So, the flip side of an industry not knowing how to sell is an industry not knowing how to buy.
I remember being on loan to a smaller architectural office to support the construction management team that won the contract for a school building. The atmosphere was ripe with conflicts. The architect against the client. The construction management put pressure on the architect to deliver the plans. And I was in the middle, trying to organize the planning so construction could move on. Now, I know that personal conflict is often a result of bad processes, but at this time, I took it personally.
But let's start at the beginning. It was a design-bid-build project. With design-bid-build, the client has two main starting points. The first one is to contract directly with an architect, and the architect will bring/recommend other planners as needed. The influence and communication between the client and architect are significant. Yet, many clients can't go this way because of their submission laws or guidelines. They need a competitive bid. Therefore, architectural competitions to find the best design are standard, especially for public clients. That was the case for the before-mentioned project - the architect did win a competition.
The disadvantages of these competitions for both parties in detail are:
The architect gives away for free that has a high value - the creative concept. In former times, the deal was that the architect would get the contract and the fees for the following planning phases by winning the competition. Now in a time when contracts are often split. Or more of these planning could be automated and done much quicker. The architect has a hard time selling these planning services. So, the overall sales value of the architect's/planner's work decreases.
The client gets to choose from many different designs but has little influence while these designs are being developed. Ultimately, when selecting the design, the client gets the architect by default. Doing a good concept is not a guarantee for good project execution. The architect from my before-mentioned project knew about that and hired an external project manager, an external support for cost management, an external construction management (us), and while I worked for him, even an external planning support for some details. All this was while trying to keep his high architectural standards and failing miserably to manage all these stakeholders with different interests than him. He was not happy, and nobody else was happy. This example is extreme, but I can see the same pattern in many projects. The missing management competency - the bad processes - are the root of many conflicts.
Once the architect is selected, the other planning partners, like structural- and HVAC- engineering, and fire safety, building physics, geology, etc., get on board. The design's detail level progresses; at some point, the project is ready to apply for a building permit and, later, bring the construction companies on board.
The construction company often has little time between winning the contract and starting on-site. In other words, too much time gets wasted in the early stages, and when the construction company needs to compensate for it. It's an application of Parkinson's law that a task will always fill the allowed time. Or even sharper:
Planning is like gas; it will fill the available space
When there is not enough time between the construction company’s signing and starting on site, success depends on the planner's level of competency. Not a pleasant situation to be in as a company. The construction companies’ financial success depends on outside parameters they can't properly influence. Therefore, all the "nasty" letters and the conflicts.
The underlying idea of design-bid-build is that the separation between design and building guarantees high quality and the best deal for the client. The planners are the brain, and the construction company only needs to execute - this idea was born in the Industrial Revolution with the division of labor. This division might still work in a factory setting (but I doubt it when looking at the lean management movement that is quite common in fabrication). But in a world where construction becomes more complex, and the construction company often knows best how to build something, this separation makes less and less sense.
The fee structure
Roughly 20% of the construction costs are for planning, and 80% is for construction. In governmental projects, it’s often close to 30%. The planning fee is either:
Calculated as a percentage of the construction cost. Therefore, the incentive to optimize and spend less on construction can be low.
Calculated based on the time spent. Thus decreasing the motivation to work more efficiently. Therefore, I'm not surprised that automation is not a big topic in the industry.
At the same time, the planners don't suffer directly from any mistake in the planning phase. It's the construction company suffering first. They need to prove that something was wrong and that they could not do their work correctly. At the same time, the client and the planners try to create contracts to make this prove as hard as possible - one of the big reasons for conflict between clients, planners, and construction companies.
Match this with the statistics showing that:
Often, planning accounts for 80% of the time, and actual construction accounts for only 20%.
On average, 10% of the construction costs are failure costs. That’s half of what the client spends on planning!
The margin of many construction companies is lower than 3%. A healthy company should have 10-20%. This probably explains the low investment in innovation.
The construction company usually loses money on site because of insufficient preparation upfront. The statistics show that 2/3 of the mistakes are caused by planning or construction management failures. Match this with the first bullet point.
40% of the total worldwide CO2 is due to construction.
60% of worldwide waste is due to construction. A material provider once told me their waste ratio was 30%, and they could easily decrease it to 8% with better planning. Yet, this is not part of their business model. A US Company specialist in BIM for production mentioned a project where they decreased waste to 2%.
We have huge industry issues that influence everybody's quality of life!
The advantage of Design-bid-build
Of course, there are advantages as well in design-bid-build. One of the main advantages is that once the architect is contracted, the client can easily influence the design. With a fixed price contract, even seemingly without cost. With an hourly-based contract, they only need to pay the (low) hourly rates of the planners. Used positively, this allows for much-needed iterative design development. On the negative side, it often prevents clients from thinking upfront about their requirements. Often, clients even try to push this requirement formulation on the planners. I remember a hospital project where the project lead always asked for more specific requirements the client could not provide. The situation escalated so much that she had to leave the project. Although she just did her job, looking at the effort from her team and seeing how it skyrocketed because of these necessary loops to clarify and discover the client's requirements. Again, this is one of the common and major points of conflict in building projects. And a case in point on how important it is to enable clients' decision-making.
Design-Bid-Build and BIM
I often hear from architects that they have the most work with BIM and the smallest benefit. This is even true when they look only at the planning stage. This only turns around when they see their job as a service to the construction site. So it all depends on the system and the borders you look at. But where is the incentive for the planner to optimize for constructability in design-bid-build (The exception are the planners who want to keep absolute control over aesthetics)?
And this is probably my most significant criticism of design-bid-build; it's a purchasing strategy that maximizes thinking in silos and increases friction in the team - especially when the client is not professional. On the other hand, if the client has the experience and can manage the development, it can be a powerful strategy with many upsides for the client. If this is not the case, I recommend other strategies over design-bid-build.
In the next chapter, we will explore design-build and it’s impact on BIM in more detail.