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AEC Stakeholders Weigh in on Productivity Barriers, Safety Best Practices and the Industry’s Image Problem

The value of teamwork is routinely preached from the football field to the battlefield to the boardroom. It’s no secret that a group of committed people—all working together toward the same goal—can achieve greatness.

But sometimes it’s hard to transfer that philosophy beyond a single organization to the other people and entities with which it works. In particular, construction projects don’t happen in a vacuum; they involve a pretty broad and diverse group of dedicated stakeholders.

The good news is many leading AEC firms are embracing teamwork—both internally and externally—in the context of sharing and executing clear project expectations. Truth be told, they want to collaborate more closely with one another, and earlier in the process. They crave an environment of transparency, trust and respect, where communication flows freely—and on a human level, not just via technology.

In the following Q&A, a construction project owner, architect, engineer, general contractor and subcontractor discuss their main barriers to productivity, their success placing team goals over individual needs, and their predominant contractual, safety and workforce issues.

Robert McCoole is senior vice president of the Facilities Resource Group for Ascension Health, the nation’s largest nonprofit health system and the world’s largest Catholic health system. Ascension has 131 hospitals and more than 30 senior  care facilities across 24 states and the District of Columbia.

David Hofmann
is a project director in the Washington, D.C., office of EYP Architecture & Engineering, which has expertise in design-build, integrated project delivery and BIM for the corporate, government, science, technology and higher education sectors. He has more than 16 years of experience leading and designing complex, high-performing and sustainable building projects.

Danny Celis is a mechanical engineer in the Tampa, Fla., office of VoltAir Consulting Engineers, which handles mechanical, electrical, plumbing and fire protection systems for public and private projects. He has more than a decade ofexperience,mostrecently focusing on designing HVAC systems.

Jon Pahl
has been with Nabholz Construction for 17 years and now serves as executive vice president of operations in the Olathe, Kan., office. As a national commercial general contractor and construction manager, the firm offers a full range of construction, industrial, civil, environmental and specialty services.

Greg Schniegenberg has been with Helix Electric for 15 years and now serves as a vice president and leader of the Oakland, Calif., office, as well as chairman of the board for the Northern California Chapter of Associated Builders and Contractors. Helix Electric specializes in complex design-build projects throughout the United States.

Q: What one or two things do you wish other project stakeholders knew that would help projects run smoother and be more profitable?

McCoole: Transparency and trust.

Hofmann: These days, the schedule seems to be relentlessly compressed. Everyone realizes the biggest way to gain efficiency is to progress the schedule. It can be driven by the owner or the contractor, and then everyone else has to play catch-up. I think it can be beneficial, but you have to have an integrated schedule, which would take everyone’s interests and goals into account. If you have an integrated discussion from the beginning, then you’re being realistic about all the tasks and goals. It’s a roadmap to the end goal.

Celis: As designers, we’re responsible for several different design aspects that sometimes conflict with another project stakeholder’s needs or wants. For example, if we’re working with contractors, one of their major issues is cost. If we’re talking to the owner, he may want to save costs at the expense of a building code. Or an architect may want all kinds of beautiful glass, but at the expense of HVAC loads. If you talk to the facility manager, he’s concerned about having the most efficient units possible, but that comes at a cost.

One thing that people should know is that we certainly strive to meet all these needs, but we’re all a team here, and sometimes we have to think of much more than what each person wants individually—the bigger picture we’re responsible for. Instead of zeroing in on one issue, think of it as more of a team collaboration, and recognize we can’t make everybody happy.

Pahl: Many project owners still can’t seem to shake the perception that construction is a commodity rather than a service. If they better understood the difference between a low-bid selection process and a selection process based on value and qualifications, they could enjoy the benefits of a true team.

The most successful project teams are composed of partners who all pursue the same outcomes: safety, quality, reliability and profitability.

In our operation locally, we earn most of our work based on qualifications rather than low dollar. It’s such a better way of buying construction. At the end of a project, every owner we talk to says this was such a better process. Many just don’t know they have that option available to them. They don’t understand there’s a better alternative out there.

Schniegenberg: If developers trusted the design-build process, especially for MEP, the industry would reap the benefits of having a streamlined approach to design, engineering and construction. Early procurement and commitment allows us to assign project managers, look at field resources, get the best pricing in materials and minimize our risk as it relates to the design. If we make an error, I own the risk.

Q: What are the main barriers to achieving productivity and profitability goals?

McCoole: Owners tend to believe they can’t share all project information openly, such as budget and time frames, because they can’t trust the contractors not to take advantage of them. Once contractors see they can’t rely on what a client says, it’s harder to take the next deadline or budget seriously. Having been a contractor for three decades and now an owner for almost one decade, I’ve come to believe the vast majority of contractors are more trustworthy than many owners understand.

Hofmann: Transparency, or lack thereof. People don’t always share expectations at the beginning of a project, especially their understanding of the budget. But the reality is, all that information comes out anyway. If the owner lays out resources and goals from the beginning, and if you have a more transparent discussion upfront, it saves everyone time, effort and money.

Celis: One of the major hang-ups we run into is that folks think meeting the energy code is solely the responsibility of the project’s mechanical engineer. Building codes have been changing and gotten more strict; the industry has been moving toward more of a collaborative effort. It’s not just about putting the most efficient HVAC system in. The owner, contractor and architect have to be a lot more involved, including the electrical engineer. We need to work together; for example, the team could add more insulation in the roof or walls or use LEDs instead of fluorescents to help meet the code.

Pahl: The most significant barrier to achieving any project goal is communication. Everybody is working at a frenzied pace with the market turning for the positive at the moment. We’re too reliant on technology sometimes and fail to pick up the phone and talk to each other to figure things out on a human level. When goals and expectations are clear from the very beginning, project teams can measure progress against their goals and ensure that milestones are met. And the best goals are mutually beneficial for all project stakeholders, not just an individual party.

Schniegenberg: The main hang-up is developers letting go of the competitive bidding process. A lot of old-fashioned boards of directors want to spend a year in design development and then go out to a competitive bidding process. By committing early, they feel like they’re missing an opportunity to save nickels, rather than looking at it as a way of saving thousands of dollars if it’s done differently from the beginning.

Q: When have you succeeded with innovative projects done early, under budget or that exceeded intended goals?

McCoole: In every successful project I’ve been involved in, all the stakeholders came together with one goal (a successful project) and were trusting and transparent. It’s that simple, but challenging to achieve.

Virginia Tech/EYPHofmann: On a big design-build project we did for a large government client, we met a very aggressive schedule and had added scope along the way to meet the owner’s needs. Design-build met those needs very well. We also have a multi-disciplinary classroom and laboratory building under construction at Virginia Tech with a construction manager at-risk project delivery. We had a set program from the university, but funding was cut by the legislature so we had to make some adjustments through a collaborative value engineering process. We didn’t have to cut the size of the building or its functionality, and we met the finish line with the budget we were given.

Celis: On a recent project, we had a very progressive owner who saw the need to bring in a construction manager right at the onset of the project. It was extremely helpful to work together with the construction manager in a semi design-build process to come up with a design that would be within the budget that the owner was allowed to use. It was a cost checker. It worked very well because we got the cost data feedback as were designing and looking at different building systems.

It worked so well that the building came in well under budget—saving money for the college. With the collaborative effort, we went above and beyond the energy code to meet LEED Gold criteria.

NabholzPahl: Several years ago, a local Kansas school district attempted to procure a very complicated high school addition/remodeling project using the traditional design-bid-build method. The lowest bid came in 20 percent over the $30 million budget. The school district rejected all bids and decided to advertise for a construction manager at-risk using an alternative delivery method allowed under state statutes (adopted in the mid-2000s). We responded to the advertisement and won the project in a competition that included qualifications, experience and fees. We got to work with the architect and owner immediately, developing sensible phasing plans and looking for cost reduction opportunities.

The project team ended up delivering the work on time and under budget without a single incident, and we sacrificed no program area to do so. We’re seeing more of this now across the state. It has become the primary procurement method for school districts.

Schniegenberg: In the Bay Area in particular, we’re starting to see prefabricated framing techniques. With one really fast and unique metal I-beam construction process, buildings can be done 30 percent to 40 percent faster. This requires subcontractors to build faster, so the general contractor has to be aware of the trials and tribulations of working that fast. On some of the bigger wood-framed projects, there’s a local company that builds 25 percent to 30 percent faster with prefabrication.

General contractors and subcontractors have to collaborate. If done correctly and the general contractor is part of the cooperative stakeholder process with the sub-trades, it will be successful. If they try to point fingers and micro-manage, it fails.

Q: With regard to safety, where has the industry made the biggest strides and where is there still room for improvement?

McCoole: With almost 900 fatalities in construction in 2014, we all have to acknowledge there is plenty of room for improvement. There have been strides in more construction companies taking safety seriously, but significant reductions in fatalities, accidents and near misses have not come fast enough. I worry most about how close so many incidents come to causing a fatality, but for luck. Recently, on a project with which I’m familiar, a tool fell from an upper floor of a structure under construction and hit a pedestrian in the wrist and ankle. Inches and good fortune kept that incident from being life-threatening or a fatality.

Hofmann: Schedule compression affects safety (e.g., adding double shifts), but you still have to take time to follow all the usual protocols. On some projects, designers doing site visits have to do the same training as any subcontractor would do. That doesn’t always happen, and it probably should. You get a sticker that goes on your hardhat; that’s the right way to do it.

Celis: As engineers, we’re onsite very little except to do inspections. Before, when the engineer would show up onsite, he’d check in at the trailer and walk the site. Now, a lot of construction managers require anybody onsite to go through a safety course. That is a great thing for everyone to do, especially if you’re just there for an inspection because you don’t know the site as well and don’t know all the possible safety hazards.

Sometimes we’re with recently graduated engineers who have never been on a site before; requiring them to go to a safety class is a welcome stride in the industry that should be applied on all projects. It really makes us more aware of the site conditions.

Pahl: My worry is that our industry is working at a feverish pace on margins that are still depressed. Unfortunately, safety can be sacrificed for productivity by stakeholders up and down all tiers of a project team. I don’t think we’ll ever achieve an acceptable level of safety until we all hold each other accountable to safe work practices.

At Nabholz, we have a ‘see it, say it, fix it’ philosophy. All team members, regardless of pay grade, have the authority to shut down an activity that isn’t being performed safely. Also, employees who witness someone shutting down an activity and then offering training on proper technique can submit that person to the ‘good catch’ program so they receive a pat on the back. At the end of the quarter, we’ll give a financial reward for the best catch.

In my opinion, lean initiatives have provided for the greatest improvement in safety. Lean practices hHelix Electricave us working smarter, eliminating redundancy, prefabricating in safer work environments and improving the ergonomics of any activity. We’re seeing a lot of subcontractors use prefabrication for components in the shop. BIM has a lot to do with that; they can download from the model, assemble in the shop and bring everything out to the field accurately.

Schniegenberg: What worries me is how many new people are coming into the industry improperly trained. On a Friday, a guy could be working at a sporting goods store, and on Monday he’s on the jobsite.

The biggest safety strides relate to technology. A lot of apps are being used onsite to check OSHA requirements, etc., and there’s web-based learning that allows me to send a number of guys through an OSHA course and print out certification that I can show the inspector on the jobsite.

Q: What risk management, contractual or insurance challenges are you encountering?

McCoole: We’re not seeing what I’d call balance around risk; it seems we’re perhaps in an unsettled period. Owner organizations, especially large ones, are focused on today’s risks, such as cyber coverage, and will look to contractors to carry it. That’s new to most contractors. In general, we find a large number of contractors do not carry liability limits sufficient to satisfy sophisticated owners. Owners, too, have a responsibility to be reasonable in their requirements and to understand where the market is for contractors.

Hofmann: Contractors are being more creative. For example, in developing a fixed price for a certain project, they might identify isolated unknowns and put a certain contingency on them as opposed to putting a 10 percent contingency on the whole project. It makes the pricing tighter and everything better for the owner. I’d like to see designers find a way to do that. There’s a lot of awareness of our liability, but it’s still pretty broad.

VoltAirCelis: One of the contractual challenges we encounter is being asked to provide services for things that we aren’t used to doing. We go back to CSI master specifications to delineate what designers are responsible for. For example, fire extinguishers come under the architectural specification. On one project, the architect didn’t want any part of designing the extinguisher cabinet, so we were asked to do it. We ended up taking it on after lots of research, but practicing outside our area of expertise is not something we like to do.

The owner may be short on funds and doesn’t want to hire a specialty firm. Internally, we can work with the owner, but we’ll hire a specialty firm to alleviate the liability for ourselves when it comes to specialized systems. We have to be careful with who takes on that liability.

Pahl: All stakeholders—construction firms included—could do a better job of understanding the risks truly at stake for other team members. An honest conversation about expectations in the beginning of a project could prevent misunderstandings and problems later on. The three-legged stool (owner, contractor and architect) may be a worn-out cliché, but if one is weaker than the other, it will collapse. If we all respect each other and communicate, then we’ll hold up under the weight of whatever stress we’re under.

Schniegenberg: A good contract identifies the proper allocation of risk to its sub-tiers. In boilerplates, general contractors are trying to put design risk to sub-tier contractors, and it becomes a legal argument because they don’t understand that’s not our risk. The problem is inappropriate allocation of risk to subcontractors in design environments. If a design is hard bid (already engineered), then subcontractors should not be borne with any design liability. If I’m a design-builder, that might make sense. But general contractors are trying to use one boilerplate contract for all different delivery methods.

Q: How can the industry take a more unified approach to fixing its image problem and addressing the workforce shortage? How have you had success attracting people to AEC careers?

McCoole: Contractors at all levels and sizes must come together. In addition, continued workforce shortages will drive costs higher, so owners that build frequently or continuously should see they, too, have a stake in the situation. But it’s deeper than just image; we have to attack the issues that create the less-than-desirable image, such as safety issues and unpredictable income levels. Accepting a more diverse workforce should be a significant part of the solution.

Hofmann: Now that the economy has picked up, it’s hard to find qualified designers. A lot of people left the profession during the recession. When I interview people, it’s all about the reputation of the company and the quality of the work. That’s what attracts them and makes them apply. The other thing that would help the industry’s overall image is to show the more collaborative approach of design-build and IPD. Pretty much every architecture school has a design-build studio now, versus only a couple 10 years ago.

Celis: One of the ways we’ve been successful is attending professional organization meetings, where college students show up. About six months ago, I met a young lady in college and I talked to her about what she wanted to do. I came back and talked to our company owner and said she was bright and we offered her an internship. During the internship, she saw the pride in our work, and eventually we hired her on full time. A lot of firms don’t send any representatives to career fairs, and that’s a missed opportunity to connect with students who are curious about our industry. Also, it’s neat to see engineers go out in the field to talk with students about what they’re working on. It puts more realism to the theories that they’re learning in school.

Pahl: The solution to our workforce shortage is likely to be a long, slow process. That’s bad news in the short term, but probably good for our industry in the long term. Much of the answer to our shortage is currently in high school and middle school. When we reach out to those kids and show them a career in the AEC world, we’re learning what’s important to them and trying to promote our industry’s ‘cool’ factor. Our new image needs to be one of advanced technology, competitive wages and safe work environments.

If we take these kids and invest skills training in them, pay them well and nurture career advancement, I think we’ll have loyal employees who will take our industry to places we never imagined. At the end of the day, it’s a people business. We let kids visit jobsites and sit beside us in the office. Over time, hopefully we can convince counselors that there are other opportunities besides a four-year construction degree.

Schniegenberg: We need to get into elementary schools early, around third or fourth grade, and talk about careers in construction. I also think we need an industry spokesperson and a marketing plan to get through to elementary and high school folks with trade workshops. When I ask a guy making $9 an hour at Target if he’d like to get into construction, he usually says he doesn’t know anything about it. But if I say he could make $19 an hour by Monday, he says ‘I’m in.’

Internally, Helix University provides education to our field workforce so apprentices and trainees can move into a journeyman role faster. We also have created a four-year ‘project engineer to project manager’ program for recent graduates. They have a mentor, and it’s almost like they get a Ph.D. in project management.

Q: Heading into 2016, what are your biggest concerns that could impact AEC businesses and projects?

McCoole: As a health care owner with several thousand craft professionals on our projects at any one time, their safety is a major concern. Inexperienced workers pose a significant risk, as do subcontracting firms that are not focused enough on safety.

As an owner with a significant annual spend in construction, we are obviously concerned about rising costs, which can be a product of an improving construction market. Waste of any kind—time, quality or cost—is our enemy. Any dollar wasted on one project can’t be spent addressing a real need on another project.

Hofmann: We’re focused on higher education, health care, sustainability and government work, where the U.S. drivers are very strong. There’s a lot of emphasis on science and tech and sustainability. And on the government side, there’s a lot of need for modernization. We have less exposure to international ups and downs; that could be tough for other design firms. That can be boom or bust.

Celis: The lack of workforce. We’re extremely busy, and we’re looking for more people. Even though we reach out, it’s tough to find qualified personnel to jump right in. Economically, we have a lot of work coming on the books right now.

As designers, we’re more immune to regulatory changes, but the health care-only designers had a lull and lost revenue because of the Affordable Care Act. We were fortunate enough to be diversified with health care, education, commercial and residential work.

Pahl: I think the current political climate of hostility is creating real economic uncertainty. Businesses don’t know who to trust or what to expect. And business owners in any market are hesitant to spend construction dollars in an unpredictable economy. Specifically, increasing government regulation and increasing taxation continue to be concerns that impact construction spending. Both issues could be resolved if national leaders would come together and focus on solutions. We simply lack civility in politics today, and it’s hurting the American economy.

Schniegenberg: The biggest concern is having enough qualified workers. For an electrician, the perfect certified craft professional takes seven to 10 years to develop. That guy is worth his weight in gold. In 2015, to get to that craft pro level, we’re talking 2025. That’s a long way away. The question is how do we attract and educate and maintain a unique generation of people who’ve said they don’t want to do hands-on work? 

Joanna Masterson is senior editor of Construction Executive. For more information, email masterson@abc.org, visit constructionexec.com or follow @Constructionmag.

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