Who Should Own the Contingency?

A good contingency plan requires continuous thought and planning, whether you are going on vacation to Mexico, climbing Mt. Everest, or tackling a capital improvement project--things go wrong. As a father of three, and a business owner, I find myself commonly swerving through what could go wrong next and how to circumvent potential obstacles and recover from bumps in the road. I am not being pessimistic; I am being a survivalist. When it comes to navigating a project budget, proper management of the contingency is an area that can influence a successful project outcome. Who manages it? Who carries it? And, how do you make sure it doesn’t get inflated to the point of stopping your project? While there are many discussions on the subject of contingency we could hash over, this blog addresses why an owner and general contractor would want to have a portion of the

Myth #1 Busted – We Have Long-standing Relationships With All Clients

Last year I was honored to be selected to serve on a panel of owner’s representatives at the 2016 AIA Symposium. While the discussions that ensued were informative and thought provoking, it was the dialogue that occurred off stage that stuck with me most. I was repeatedly approached by inquiring architects who wanted to know “Why don’t Owner’s Representatives issue better RFPs and guide their clients through a more refined selection process?” While I am not the owner’s representative industry spokesman, I defended myself (and our colleagues) by explaining that owner’s representatives are not always the culprit of these poorly crafted RFPs. Upon returning from the conference, I was curious, what percentage of RFPs do we help owners generate? While it is true that owner’s representatives sometimes have a long-standing relationship with certain clients, we aren’t always involved in the procurement of architects, or even general contractors for

Breaking Into a New Market

I was recently asked by a smaller-sized architecture firm how to win work for a project type with which they had no prior experience. Many of us have faced this quandary. It can be frustrating; but, with tenacity and smart business decisions it can be done. We went on to discuss some options. 1.  Hire for it. At one point, we had no school experience and wanted to break into the market. When we had an opportunity to add staff we didn’t hire our best friend, we looked for a resume that fit our strategic plan. The project manager brought along a deep rolodex (okay, CMS) and the market has been open ever since. 2.  Devise a creative teaming approach that provides a unique strategy or solution; it will almost always garner attention, if not win you a top contender spot. 3.  Start shaking hands.  Although it's not

Feedback Etiquette

The cursed proposal, and the hopefully-to-follow, nerve-inducing interview, are both part of what the A/E/C industry endures to win work. The process costs teams thousands of dollars in staff resources, printing costs, even on small projects. It is a serious decision and investment to submit. When working with owners during the procurement process, we advise them to respect the efforts put forth by the submitting firms, particularly those who weren’t awarded the work. We communicate that they prepare detailed feedback to those who inquire. Typically, not all firms will place the call. In our experience, general contractors are more comfortable (1 in 3) than architects (1 in 5) reaching out to us or the Owner. We provide the following list of dos and don’ts for our clients to consider: Do 1. Collect relevant documents including notes from the process and the actual proposals during or immediately after the

Here’s Your Fee

In speaking with a Principal of an established architectural firm that recently entered the Front Range market, I came to find out he and his colleagues were perplexed by firms’ common practice of sometimes using professional fees as a differentiator when submitting on projects. “What’s the deal with professional architectural fees in this market?“ he asked. Not sure where he was going, I replied, “How do you mean?” He went on to explain that his firm, established in other geographic markets, is not accustomed to deviations in fees between firms. It appears that in the Front Range market, fees carry weight in owners’ hiring decisions and teams are willing to set their fees to differentiate themselves. While our market has a common industry fee (by project type) and although the standard fee has never been corroborated, it is known by all. My new colleague was clearly frustrated as

Liar, Liar

So, the dilemma unfolded, a crossroads of sorts. What to do? I am sure that most A/E/C professionals have been faced with a situation where they had to decide between telling a client what they would like to hear versus the painful truth. We received a RFP calling for a combined design and construction schedule of six months. Upon analyzing the project details, it was clear that an eleven-month schedule was required. This left us with the option of proposing a schedule and fee that matched the client’s delusions, or present the reality. Do we tell the truth and risk losing the project? Do we tell the client what they want to hear? Should we lie? The answer was obvious - present the truth. As an owner’s representative, it is counterintuitive to mislead the owner. We are, after all, supposed to watch out for their best interests. We secured

Why Colorado in Primed for Public Private Partnerships

Originally published in the Dec. 2015 issue of Building Dialogue. There has been a lot of discussion about Public-Private Partnerships (P3s) recently in Colorado, and for good reason. Colorado leaders have positioned the state to be a leader in this delivery model and is on its way to proving that that this approach can be a viable choice for vertical buildings (social infrastructure), in addition to transportation projects.  P3s have been proven to be highly successful in Canada, Australia and Europe and it is only a matter of time before we see this project approach become more prevalent in the U.S. The most notable Colorado P3 project is the construction of additional lanes along U.S. 36. In order to allow for this project to move forward, the state passed legislation that cleared the way for funding to be applied, which is a barrier many other states can’t overcome.

Anniversary Musings

Wember has been providing Owner's Representative services for over twelve years, and although it’s been a roller coaster, that’s ok. I like roller coasters.  I thought I would share some thoughts as I reflect: Don’t send the email.  In 2006 we were in a position to take on a program of three buildings for a new client, we were very excited.  When the RFP came out the program changed from $20 million to $120 million and we knew we would not be able to compete or service the projects.  In a rage I wrote a scathing email to my future client, luckily I deleted it and wished her the best on the project and gave a simple explanation on why we would not be able to submit.  Three months later my contact called me telling me that we were awarded the projects and would be part of the

The Hesitancy of Contingency

Recently, we were trying to close the gap between our project budget and progress estimate, looking for options, the owner honed in on the contingency as an easy way to cover the delta, offering up, “Let’s reduce the contingency from 5% to 1%. We will be on budget and move forward.” Although this was by far the easiest solution to get us on budget, I encouraged him to explore other options. When he asked me to explain why he needs a contingency fund, I responded “Do you like your job? Contingency allows you to keep it.” We remained at 5%.  The fact is, contingency is, if nothing else, an insurance policy. Contingency is usually a hot topic, regardless the team member’s title. Design teams want to be assured that the owner has a contingency fund in place. The reality is, no drawings are perfect and unforeseen conditions need

The ABCs of PPPs

Serving as Owner Representative to numerous municipalities, we are participating in PPP discussions like never before. So much in fact, that I recently attended the National Public Private Partnership conference in Boston to learn the ABCs of PPPs and discover the benefits this innovative business model as to offer. While Public Private Partnerships (PPP) have been around for over 20 years, they have been less prevalent in the United States, compared to the trendsetters of Canada and Australia. That said, there is a surging interest in the PPP model, particularly with infrastructure projects such as water, roads and bridges (think US 36 tollway). Institutions looking for stable financial investments are attracted to water facilities, toll roads and parking garages. They offer a safe bet for a return on investment as they are necessary for a successful communities. Social infrastructure projects, such as schools and libraries, have similar potential,

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