1 2012 Annual Alpha Meeting Dr. Dean Kashiwagi, PhD, MBA Performance Based Studies Research Group...

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2012 Annual Alpha 2012 Annual Alpha MeetingMeeting

Dr. Dean KashiwagiDr. Dean Kashiwagi, , PhD, MBAPhD, MBA

Performance Based Studies Research GroupPerformance Based Studies Research Group

Del E. Webb School of Construction ProgramDel E. Webb School of Construction Program

School of Sustainable Engineering & the Built School of Sustainable Engineering & the Built EnvironmentEnvironment

Ira A. Fulton Schools of EngineeringIra A. Fulton Schools of Engineering

Arizona State UniversityArizona State University

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Inside of a building

Corroded deck

• Worldwide as a leader in Best-Value Systems– Conducting research since 1994

– 1000+ Projects

– $4.4 Billion Services & Construction

– 5% Increase in Vendor profit

– 98% On-time, On-Budget, Customer satisfaction

– PMI, NIGP, IFMA, IPMA

– Tests in Netherlands, Botswana/Africa

– ASU – investments of over $100M due to BV

– WSCA Contract Gives Access to all states

PBSRG’s Research Results(Performance Based Studies Research Group)

© 2011, Arizona State University, PBSRG

International Efforts

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Fulbright Scholarship-University of BotswanaPIPS tests

RMITTeaching IMTPBSRG platform

NetherlandsMost successful implementation of BVP outside of United StatesVisionaries: Scenter, Rikswaterstaat, NEVILargest test: $1B

BrunsfieldComplete Supply Chain implementation of best value PIPS

University of Alberta

United States-65 clientsWSCA, NASPO

CIB NetworkPBSRG NetworkPMForum Network

FinlandBVP is being proposed as a part of risk/project management

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Dutch Efforts

• Approx. 50 general presentations

• Approx 2000 attendees

• 2nd and 3rd reprint of Dutch book

• 4 papers published

• NEVI education and certification

NEVI

• Third largest procurement organization in the world

• Represents both public and private procurement groups

• Educate and certify PIPS practitioners

Rochester School District• University of Minnesota Contract

• City of Rochester

• Rochester School District

• Rochester School District Superintendent

• Rochester School Board

• Rochester School Teachers/Students

Eliminating the ConfusionPla

nnin

g /

Pro

gra

mm

ing

Desi

gner

Contr

act

ing

Vendors

/ M

anufa

cture

rs

Use

rs

Insp

ect

ors

Sim

plic

ity/D

om

inant

Info

rmati

on

Technical Details

30K Foot Level

W W W . P B S R G . C O M

Industry Structure (Reactive vs Proactive)Industry Structure (Reactive vs Proactive)

High

I. Price Based

II. Value Based

IV. Unstable Market

III. Negotiated-Bid

Specifications, standards and qualification based

Management, direction, and control

Decision making

Technical expertise on client’s side

Best Value (Performance and price measurements)

Quality control and quality assurance

Perceived Competition

Pe

rfo

rman

ce

Low

High

Owner selects vendor

Negotiates with vendor

Vendor performs

© 2011, Arizona State University, PBSRG


High

Low

Perf

orm

an

ce

Owners

“The lowest possible quality that I want”

High

Low

Perf

orm

an

ce

Vendors

“The highest possible value that you will get”

Minimum

Maximum

What is causing all the What is causing all the confusion?confusion?


Perf

orm

an

ce

High

Low

Ris

k

High

Low

Best Value vs. Low BidBest Value vs. Low Bid

Contractor 1Contractor 2Contractor 3Contractor 4

Contractor 1

Contractor 2

Contractor 3

Contractor 4Perf

orm

an

ce

High

Low

Ris

k

High

Low


Industry performance and Industry performance and capabilitycapability

Highly Trained

MediumTrained

Vendor XCustomers

OutsourcingOwner

PartneringOwner

PriceBased

MinimalExperience


ObjectivesObjectives

Get more business

Minimize risks for Neogard, client and contractor

Support Alpha contractors

Provide dominant documented performance

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Key itemsKey itemsBeing proactive and visionaryMinimizing transactions and risks during the projectCustomer satisfaction policy vs. Alpha program requirementsPre-planning

Pre-award meeting Risk Management Plan Weekly Risk Report

Create “win-win” DISD effortsNeogard Risk Management Program

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Current Alpha ContractorsCurrent Alpha Contractors


Best Value Alpha ProjectBest Value Alpha Project

Alpha Contractor

Alpha Contractor

Pre-

cons

truc

tion

R

isk

Mee

ting

Pre-

cons

truc

tion

R

isk

Mee

ting

Alp

ha C

ontr

acto

r N

otif

ied

of P

AA

lpha

Con

trac

tor

Not

ifie

d of

PA

Roof InspectionRoof Inspection

Warranty signedWarranty signed

Roof Inspection (Once every two years)


Follow up Call (Yearly)


Aw

arde

d Pr

ojec

tA

war

ded

Proj

ect

NTPBid

Close Out

Rep

eat

Pro

cess

Com

ple

te

DISDB

on

d P

M /

Pla

nn

ing

/

Pro

gra

mm

ing

Desig

ner

Con

tracti

ng

Gen

era

l C

on

tracto

rs

Alp

ha C

on

tracto

rU

sers

Insp

ecto

rs

Using Common Sense

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Bidding Award Start of Project End of Project

Inspection

Whatr is inWhat is outRisksRisk MitigationTrack deviations

Value determined by BUR/MB

Past Alpha Projects

• WRR creates accountability and tracks cost changes and delays

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CriteriaKansas Marine

Ft Rucker

Original Project Cost 1,184,515 885,400

Total Close-out Cost 1,209,000 885,400

Total % Over Budget 2% 0%

% over budget due to Owner 0% 0%

% over budget due to Contractor 0% 0%

% over budget due to Unforeseen 2% 0%

Total % Delayed 391% 119%

% delayed due to Owner 171% 119%

% delayed due to Contractor 0% 0%

% delayed due to Unforeseen 220% 0%


Pre-construction Risk MeetingPre-construction Risk Meeting Not the same as pre-construction meeting

Meet on project-site

Following should attend the meeting Alpha Contractor Owner representative Neogard representative Any other critical entity involved with the project

Identify all the risks and a plan to mitigate them for all parties, create a Risk Management Plan (RMP)

Create milestone schedule and track percentages (from detailed schedule)

Initiate Weekly Risk Report


Pre-construction Risk MeetingPre-construction Risk Meeting

Clearly identify “what is in” and “what is out”

Price what is specified

Any additional items that need to be added / deleted and was not included in the specifications, immediately issue a change order or ask for additional funds

Get approval from the client at the meeting

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Risk Management PlanRisk Management Plan

Identify major risks that the contractor does not control

Plan to manage and minimize the risk that they do not control

Living document in Weekly Risk Report


Why Risk Management Plan?Why Risk Management Plan?

Makes everything transparent

Brings accountability

Protects Alpha contractor

Eliminates false expectations by owner

No surprises during the project

Creates “win-win” situation

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Best Value Alpha ProjectBest Value Alpha Project

Alpha Contractor

Alpha Contractor

Pre-

cons

truc

tion

R

isk

Mee

ting

Pre-

cons

truc

tion

R

isk

Mee

ting

Alp

ha C

ontr

acto

r N

otif

ied

of P

AA

lpha

Con

trac

tor

Not

ifie

d of

PA

Roof InspectionRoof Inspection

Warranty signedWarranty signed





Aw

arde

d Pr

ojec

tA

war

ded

Proj

ect

NTPBid

Close Out

Rep

eat

Pro

cess

Com

ple

te


DeliverablesDeliverables

Detailed Technical Schedule




Interface with others who vendor DNC







RMP

RMP


Detailed Schedule, Interfaces with DNC parties, Detailed Schedule, Interfaces with DNC parties, RMP, PMRMP, PM




RMP

RMP Performance Measurements

Performance Measurements


Weekly Risk ReportWeekly Risk Report

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Risks are all issues that could affect budget, schedule or owner satisfaction

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Track Change Orders

Risk Management Plan

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All numbers calculated automatically, no need to update



Project Contact Information

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Customer Satisfaction PolicyCustomer Satisfaction Policy

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Alpha Contractor

Alpha Contractor

Follow-up call to client*

Follow-up call to client*

YesYes

Problem?(Leak, open

blisters)

Problem?(Leak, open

blisters)

Repair roof within 15 days of notice

Repair roof within 15 days of notice

Contact the Applicator

Contact the Applicator

Roof Installation

Roof Installation

NoNoNext Job

Next Job

*Client can change the satisfaction rating anytime putting the Alpha Contractor under the risk of elimination from the program


Customer Satisfaction vs. Alpha ProgramCustomer Satisfaction vs. Alpha Program

Customer SatisfactionAlpha Program

Roof inspections once every 2 years

Annually submit to Arizona State University (PBSRG) all SPF roofs installed over 5,000 SF

Attend educational presentation given by Arizona State University (PBSRG) (1/year)

98% of roofs do not currently leak

98% of customers satisfied

Maintain “Good Financial Standing” with Neogard

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Roof InstallRoof Install

Client Follow-up

Client Follow-up

Problem?Problem?

YesYesNoNo

Repeat

Pro

cess

Dissatisfied Client

Dissatisfied Client

Fix roof within 15 days

Fix roof within 15 days

Eliminate from program until roof

fixed / client satisfied

Eliminate from program until roof

fixed / client satisfied

98% of customers satisfied


Alpha Inspections - 2012Alpha Inspections - 2012 Cook Coatings – March 2012

Phoenix Coatings – March 2012

ProCo – May 2012

Tillotson – June 2012

Washington – July 2012

Longhorn – July 2012

Brazos Industries – July 2012

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Alpha Annual ListAlpha Annual ListPlease submit the annual roof list, if not already done, to

Dhaval Gajjar at [email protected] meeting the following criteria All newly installed SPF roofs over 5,000 SF Installed in 2011

Template for roof list will be sent

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mailto:[email protected]

DISD Efforts

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DISD Risk MinimizationDISD Risk Minimization

Inspect DISD roofs every yearDISD Weekly Risk Report sent every weekFix roofs that have over 1% blisters, leaking or

GT 1 SF of blisters within 15 daysMike Smith can notify PBSRG anytime for

dissatisfaction of not fixing the roofAn Alpha contractor can be removed from the

Alpha Program

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DISD WRR – Risky ProjectsDISD WRR – Risky Projects

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Sent to DISD h every week


2011 DISD Projects2011 DISD Projects

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No Job Name Contractor Job Area

1 Thomas Jefferson HS Alpha Contracting 145,850

2 Sunset High School Alpha Contracting 44,580

3 Stonewall Jackson Elementary School Alpha Contracting 22,242

4 Alamo Pool Alpha Contracting 13,030

5 Pleasant Grove Pool Alpha Contracting 13,030

6 Lakewood Elementary - Modular Building Alpha Contracting 5,688

7 Harry Stone Brazos Urethane 95,000

8 D.A. Hulcy MS Brazos Urethane 62,050

9 Whitney M. Young Jr. Elementary Brazos Urethane 59,000

10 JW Ray Brazos Urethane 54,500

11 David W Carter Brazos Urethane 38,000

12 James B. Bonham - BP 45ª Brazos Urethane 17,184

13 B.F. Darrell Male Academy Phoenix 1 55,600

14 Nancy Moseley Phoenix 1 22,300

15 Seagoville Alt.Edu.building Phoenix 1 2,000

No ContractorTotal Jobs

Total Job Area

1 Alpha Contractor 6 244,420

2 Brazos Urethane 6 325,734

3 Phoenix1 3 79,900


DISD WRR – Risky Project StatusDISD WRR – Risky Project Status

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Job ID Job Name Job AreaOriginal Install

DateEstimated Repair date

1 Hawthorne ES 45,200 7/30/2005 End of February, 2012

2 Spruce HS 85,000 8/26/2005 End of February, 2012

3 Houston ES 23,000 7/22/2005 Repair in-process, open blisters fixed

4 Peabody ES 32,600 8/1/2005 Have a renovation contract, will repair at same time

5 Hillcrest HS 108,000 6/10/2005 Repair in-process, open blisters fixed

6 Hall ES 68,000 7/26/2005 Have a renovation contract, will repair at same time

7 Seagoville HS 57,300 8/3/2005 End of February, 2012


DISD WRR - ContractorDISD WRR - Contractor

Contractor Total # of

roofsAverage job area

(SF) Total job area

(SF) Average age (Yr)

Total blisters (SF)

Total percent of roof area blistered

Total repairs (SF)

Total percent of roof area repaired

Alpha Contracting 48 41,165 1,975,918 5 2,124 0.11% 2,426 0.12%

Dallas Urethane 2 96,000 192,000 6 0 0.00% 0 0.00%

Longhorn Enterprises

3 36,167 108,500 6 51 0.05% 180 0.17%

Phoenix 1 25 35,369 884,215 11 1,126 0.12% 6,349 0.72%

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DISD WRR – Overall P-lineDISD WRR – Overall P-line

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No Criteria Unit 2011

1 Oldest job surveyed Years 25

2 Average age of jobs surveyed Years 7

3Age sum of all projects inspected (doesn't leak, total years combined)

Years 558

4 Average total repairs on each roof SF 110

5 % of total roof area repaired % 0.29%

6 Average blister area on roofs SF 52

7 % of total roof area currently blistered % 0.14%

8 Total existing blisters SF 4,117

9 Average job area (of jobs surveyed and inspected) SF 40,630

10 Total job area (of job surveyed and inspected) SF 3,209,733

11 Total number of jobs inspected # 79


Alpha Contractors – Blisters vs RepairsAlpha Contractors – Blisters vs Repairs

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No Alpha Contractors Total SF Inspected

Total SF Blisters % Blisters Total SF

Repairs % Repairs

1 Alpha Contracting 1,662,785 1,585 0.11% 2,155 0.13%

2 Brazos Industries 1,194,706 240 0.04% 0 0.00%

3 CAW 2,321,117 575 0.07% 0 0.00%

4 Cook Coatings 3,084,007 290 0.01% 930 0.03%

5 Dallas Urethane 2,010,212 73 0.01% 0 0.00%

6 IRC 4,395,540 368 0.04% 0 0.00%

7 Longhorn 449,758 196 0.04% 2,103 0.47%

8 Phoenix Coatings 1,272,080 47 0.01% 0 0.00%

9 Phoenix1 992,210 1,126 0.12% 6,349 0.72%

10 Pro Co. 281,931 233 0.07% 0 0.00%

11 Progressive Roofing 1,151,514 179 0.01% 0 0.00%

12 Tillotson 413,574 95 0.03% 0 0.00%

13 Washington 836,031 484 0.08% 0 0.00%

14 Wattle & Daub 993,953 30 0.00% 0 0.00%

Neogard Warranty Risk Management Program

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Neogard Warranty ProgramNeogard Warranty Program

QC & Measurement of:•System Performance•Contractor Performance•Follow up for issues•Maintain Customer Satisfaction

NeogardNeogard

OwnerOwner

PBSRGPBSRGWarrantyWarranty

Performance InformationProblems


Neogard effortsNeogard efforts Client satisfaction ratings for all projects (roofing, waterproofing, wall

coatings, flooring) Identify risky jobs (leaks, dissatisfied customer) Annual checks on all projects under warranty

Performance line all applicators Differentiates low-performing and high-performing vendors Identify risky applicators

Overall performance line Only manufacturer with documented performance Use for marketing Neogard products

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Overall Neogard P-lineOverall Neogard P-line

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Neogard MeasurementsNeogard Measurements

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Neogard Segment P-lines

Risky Applicators

Risky Projects


Example Applicator P-lineExample Applicator P-line

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W W W . P B S R G . C O M 66

Comments / QuestionsComments / Questions


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