Sixth Annual Owners Survey

Transcription

FMI/CMAA Sixth Annual S u r v e y o f O w n e r s
Survey of Owners
Table of Contents
Executive Summary ..............................................................................................................................................................1
Survey Participant Demographics ........................................................................................................................................4
Construction Delivery Methods ............................................................................................................................................6
Design and Designer Roles..................................................................................................................................................10
Project Leadership and the Role of Construction Manager ................................................................................................14
Collaboration and Project Control ......................................................................................................................................16
Commissioning ....................................................................................................................................................................17
Sustainable Building ............................................................................................................................................................18
Owners and the Future of the Industry................................................................................................................................19
Quotes from Survey Respondents ......................................................................................................................................20
Acknowledgements: Thanks again this year to Dennis Doran for his leadership role in organizing and publishing
the Sixth Annual Survey of Owners in conjunction with CMAA (Construction Management Association of America).
Thanks also to the leadership at CMAA for again sponsoring this research and a special thanks to Michael Kenig,
vice chairman of Holder Construction Company in Atlanta, for his contributions to this year’s questionnaire. This
year’s survey was conducted with the participation of the following associations that sent the survey form to their
membership: CMAA (the Construction Management Association of America), COAA (Construction Owners
Association of America), and CURT (Construction Users Roundtable).
Executive Summary
The FMI/CMAA Survey of Owners includes participants who are among the largest owners in the world. They command large capital
budgets, over $21 billion in construction projects, and nearly 70% of these owners are involved in over 20 projects per year. If the
industry is going to change, these owners, public and private companies, governmental entities, and other institutions will be the drivers of
that change. Remember as you read our report that the results and comments from this survey are what owners are saying and thinking
about their capital projects and construction-related topics raised here. It is also what they think about their own organizations’ effectiveness
for building projects.
We detect a change in the wind for the construction industry as we review the responses to this year’s survey. Many of the challenges that
we have seen come to the top of the list in past surveys of the owner community are at or near the top again this year. However, the results
in this year’s survey indicate that owners are making changes that are revolutionizing the construction process. This is not the sort of
revolution where suddenly everything will be built out of plastic; rather, it is a process revolution where roles and methods are changing
the way capital projects are delivered. Neither the construction industry nor owners are prone to sudden change, but there are pressures in
the economy that will accelerate the rate of change in the near term. A comment from a survey respondent highlights one of those economic
forces: “The costs of inefficiency are escalating at a greater rate than material and labor inflation.” While the cost of steel and cement are
making headlines, the less publicized failures in the management of construction projects can be disastrous. Listen carefully to the message
in this comment. We are not talking about just materials, methods, equipment, or contract documents. We are talking about how we work
to deliver successful capital projects and how we manage the costs of inefficiency.
The top concerns and issues found in the responses to this year’s FMI/CMAA Survey of Owners are very familiar to readers of our past
surveys. The list includes:
Trust and integrity in the construction process
Coordination/Collaboration among team members
Improved relationships between contractors, CM staff, designers, and final users
A/E consciousness of the cost to build their designs
Bringing contractors, subs, and suppliers on board during the design phase
Scope control/communicating a clear work scope
Providing drawings that are more complete to build the project
Owner responsibility for the process
Owner decision-making responsiveness
Attaining good project definition
All items on the list are important; however, the top item on the list, the need to build trust and integrity into both the relationships and the
construction process itself, is an overriding concern that can affect the costs of construction as well as the quality.
FMI/CMAA Sixth Annual Survey of Owners
1
For several years, we have noted that problems with communication
and collaboration have rated high on the list of concerns, and it is again top
ranked. Owners must take more responsibility for communication and
collaboration in the construction process or clearly designate a construction
manager to act as their agent or representative who will do that for the
owner. As an underlying theme for the overall survey results this year,
successful owners build a culture of ownership through the construction
process to align the stakeholders and achieve desired project outcomes
and program goals.
Trust and integrity are required ingredients for improving communications
and collaboration. Just as an owner expects more from the architect or
contractor than a design or a building, architects, contractors, and other
service providers want to work with owners that are open and clear about
their project outcomes and program goals. More owners are now taking
responsibility to improve the construction process by building more trust,
integrity, and ownership into the system. One of the areas affected by
this change is contract documents. When we asked about which contract
documents were used, we found that 37% used documents provided by the
AIA (American Institute of Architects), but most developed their own
documents either as modified standard documents or proprietary in-house
contracts. For the most part, owners are not interested in all the variations
of contract documents.
According to the results of this year’s survey, owners are also recognizing
that there are alternative construction delivery methods that will achieve
their goals. For instance, we found that 66% of respondents use the
design-bid-build delivery method most often (Exhibit 1), but only 23%
believe that that method offers the best value (Exhibit 2). Breaking that
response down by owner type shows that private/closely held and public
companies are most often using the delivery method that they feel offers
the best value. It makes sense that, over time, more owners will migrate
to the delivery method that offers the best value.
Although there was little change from last year when we asked respondents
how the time spent in different construction phases compared with their
plans, the change in the response indicated that projects are running behind
schedule even more often than last year. According to our survey, between
40% and 50% of all construction phases are running longer than planned,
and some of those run significantly longer than planned (Exhibit 8). We
did not ask about cost overruns this year, but when projects run longer
than planned in each phase of construction, it is likely that the project
will also run over budget. The leading causes of cost overruns in last
year’s report — for instance, incomplete drawings and the escalating cost
of materials — are no doubt conspiring to bust the budget this year, as well.
2
“Greater trust and teamwork is needed
to facilitate problem-solving instead of
finger-pointing.”
Comment from survey respondent
Exhibit 1
Which delivery method do you use most
frequently on the majority of your projects?
100%
Percentage of Total Respondents
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
All Respondents
CM-at-Risk
Private / Closely
Held
Public Companies
Design / Bid / Build
Quasi-Public
Municipal
Design / Build (with or without bridging)
State
Federal
Turnkey
Other
Exhibit 2
Which delivery method do you believe
offers the best value, whether you have
used that method or not?
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
All Respondents
CM-at-Risk
Private / Closely
Held
Public Companies
Quasi-Public
Municipal
Design / Build (with or without bridging)
State
Federal
Other
Turnkey
3
Survey Participant
Demographics
The largest group of respondents answering this year’s
survey was the municipal group. Along with state and
federal, political institutions represented over 60% of the
respondents, lending both breadth and depth to the types
of projects built by the owners in our results.
Exhibit 3
Which of the following best describes your
organization?
Quasi - Public
Municipal
Private /
Closely Held
8%
12%
27%
15%
Federal
17%
21%
Public Stock
Corporation
State
Most of the organizations answering our survey are
involved in a variety of projects that cross market sectors
and project types. Thus, the response by market sector
covers a wide spectrum of the built environment
(Exhibits 3-4).
4
Exhibit 4
Responses by market sector
(multiple answers per response allowed)
Education (28%)
Utilities (27%)
Public safety, administrative, and other (23%)
Private office and professional (23%)
Water supply/waste water facilities (20%)
Highways and streets (19%)
Industrial buildings (16%)
Telecommunications (12%)
Hospitals and nursing homes (10%)
Amusements and recreation (10%)
Hotels and motels
Courthouses, municipal/federal office buildings
Stores and other mercantile
Conservation and development (6%)
(9%)
(9%)
(8%)
Transportation (6%)
Other (6%)
Military facilities (5%)
Aerospace/aviation (5%)
High-tech research facilities
Home building/residential development
Churches/houses of worship
Emergency, health, information technology
Manufacturing (2%)
(4%)
(4%)
(2%)
(2%)
Automotive (2%)
Correctional facilities
(2%)
Respondents by title included CEOs, directors of facilities management,
program directors, vice presidents, and project executives. Sixty-eight
percent of the organizations represented are involved in over 20 projects
per year, and 45% spend more than $150 million per year on construction.
These companies and organizations represent what we call serial builders.
For serial builders, construction is not just an occasional event; there are
multiple projects in the works at all times.
With such varied representation of industry and organizational size, we
might expect the results to vary widely by sector or number of projects.
However, in most cases, the results, when broken out by different
categories, are highly consistent.The analysis presented in this report
represent the responses by all respondents unless the response by sector
or type of organization serves to illustrate key differences on a given
question or issue.
5
Construction Delivery
Methods
beginning of this report, for the private/closely held and public
sectors, design-bid-build was still the most frequently used
method at 42%, but CM-at-risk moved up to 28%. If the
differences between which methods actually used and the
We asked several new questions this year to focus on the use
methods perceived to have the best value indicate a
and effect of different project delivery methods. We asked
dissatisfaction level in delivery methods, then companies in
respondents to describe which methods they used, the
the private/closely held and public sectors have a higher
frequency of use, and their perception of the value achieved
degree of satisfaction as indicated by a smaller gap between
through each method. The choices for each question were the
use of a delivery method and preference for that method.
same, design-bid-build, design-build, CM-at-risk, turnkey,
and “other.”
One of the most important aspects of the survey results is the
changing attitudes concerning construction delivery methods.
With few exceptions, respondents used more than one delivery
Quasi-public and government organizations predominately use
method, but design-bid-build came up most frequently (37%)
the design-bid-build method, but clearly, many have tried other
when asked which methods they used followed by design-build
methods and most would consider either CM-at-risk or
at 27% of all responses (Exhibit 5). The results changed
design-build to be the best-value alternatives. Changing the
dramatically when we asked which method was used most
delivery methods used, in the case of these organizations, will
frequently, which is design-bid-build at 66% of all responses
often require changing laws and politics, but that is happening,
followed by CM-at-risk at only 19% (Exhibit 6). However,
too, because the public is best served when it gets the best
when asked which method delivers the best value, both
value for its tax dollars. Privately held and public companies
CM-at-risk (35%) and design-build (29%) rated higher than
continue to try a variety of delivery methods, as noted in the
design-bid-build (23%) (Exhibit 7).
“other” category of our results, including lease/buy back and
lease/lease back, but CM-at-risk will likely become the more
“Shared risk reduces cost.”
6
dominant delivery method for this group as long as the
experience is positive.
The variation in these responses is indicative of the number of
Respondents were asked if they would like assistance to gain the
organizations with restricted choices of delivery method whether
ability to use all project delivery options if they did not have it
by law, policy, or tradition. For instance, as noted in the
already, and 75% said “no.”
Exhibit 5
Which construction delivery methods do
you use?
40%
35%
30%
25%
20%
15%
10%
5%
0%
Design / Build
(with or without
bridging )
CM-at-Risk
(aka CMC, CM/GC,
GC/CM)
Turnkey
FMI/CMAASixth Annual Survey of Owners
Other
7
Exhibit 6
Which delivery methods do you use
most frequently on the majority of
your projects?
70%
60%
50%
40%
30%
20%
10%
0%
Design / Build
(with or without
bridging)
CM-at-Risk
(aka CMC, CM/GC,
GC/CM)
Turnkey
Other
Exhibit 7
Which delivery method do you believe
offers the best value, whether you
have used that method or not?
40%
35%
30%
25%
20%
15%
10%
5%
0%
8
Design / Build
(with or without
bridging)
CM-at-Risk
(aka CMC, CM/GC,
GC/CM)
Turnkey
Other
One of the areas that owners were asked about again this
year was their experience regarding time spent on recent
construction efforts for the different phases of a project.
The results were not significantly different from last year’s
results (Exhibit 8).
Exhibit 8
Indicate your experience regarding time
spent on your most recent projects for
each project phase. (All responses)
70%
60%
50%
40%
30%
20%
10%
0%
Shorter than planned
Design
As planned
Preparation of construction documents
Longer than planned
Programming
Significantly longer than planned
Construction activities
Commissioning
9
Design and Designer Roles
Where the designer may once have taken the leading role
in the construction process, now there are construction
managers, program managers, general contractors, and
consultants stepping in to assume that role. The changing
role of project leadership will affect designer fees and the
way designers work. Typically, negotiated lump-sum (46%)
was the predominant fee structure for respondents followed
by hourly rates with a “not-to-exceed” clause (Exhibit 9).
For public and private owner organizations, that ratio
changed to 37% for negotiated lump-sum and 37% for
hourly rates with a not-to-exceed clause.
“As A/E firms become more risk adverse,
their product becomes less relevant, i.e.,
an architect’s stamp on a submittal is virtually
meaningless. I see the architect’s role as a
producer of a product diminishing, but
increasing as a manager of multiple spec.”
Exhibit 9
With regard to the structure of your
designers fees, which of these approaches
are typical for your organization?
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Negotiated lump-sum
10
Hourly rates with a
“not-to-exceed”
Hourly rates
Percentage
Other
In the last few years of our owner survey, we have noted the increasing importance of using the pre-design phase to get the project off to
a good start and to avoid surprises in later phases. This year, we asked respondents who took advantage of a pre-design phase to tell us
what was working best. The top three answers included use of pre-design to get agreement on project scope in the design phase (27%), to
determine potential site problems (20%), and to reduce change orders in the construction phase (17%) (Exhibit 10).
Exhibit 10
If you consider pre-design important, what
has worked for your organization?
Regularly use pre-design to get agreement on scope in design phase
Regularly use pre-design to determine potential site problems
Regularly use pre-design planning to reduce
change orders in the construction phase
Regularly use pre-design to make decisions
that reduce cost overruns down the road
Regularly use pre-design to bring a team together of owners/users, A/Es,
and contractors in order to get the project started in the right direction
Do not regularly go through a formal pre-design process
Other
0%
5%
10%
15%
20%
25%
30%
Topping the list of improvements that owners would like to see in the design phase of the project is to have A/Es be more conscious of the
cost to build their designs (17% of all responses)(Exhibit 12). Key improvements noted for the design phase include (top six responses):
A/Es need to be more conscious of the cost to build their designs
17%
More coordination/collaboration among team members
11%
Need quality reviews from CMs
11%
There needs to be a thorough review of the technical design details
10%
Need to bring contractors, subs, and suppliers on board in the design phase
9%
Need to pay more attention to controlling scope
9%
Several of the items in the list tie directly to the owner’s needs to bring a team together early on in the project, define a clear leader for the
project, and get everyone on board with project goals with the idea of increasing ownership of the project. The design-bid-build delivery
system, for instance, makes this process more difficult, highlighting one of the key themes in this year’s survey — the look of project
delivery and changing project leadership. When we asked, “What changes or developments, if any, do you foresee in the relationship
between the different stakeholders in a given project?,” many of the responses were concerned with the role of the A/E and the
collaborative relationships between service providers (Exhibit 11).
11
Exhibit 11
Comments from survey respondents
“Digital collaborative project management tools and online documentation will enhance
communication and effectiveness, increase quality, and decrease project costs.”
“Earlier collaboration between the design team, owners, and the construction community
during the design phase.”
“Relationships change as the project progresses, projects that build and maintain trust do well,
those that do not become hard to manage and succeed.”
“Relationships need to improve between contractors, CM staff, designers and final users.
Introduction of formal commissioning will help.”
“Things seem to start cordially. As soon as a problem arises, relationships start to degrade.”
“Too many ‘stakeholders’ now who do not understand the entire process. Stakeholders have
evolved to encompass too many entities.”
“We are currently changing to a design/bid/build ‘proposal format’ that allows limited
negotiation in price and the selection of subcontractors.”
12
Exhibit 12
In the design phase, which procedures or
processes would you like to see improved?
A/Es need to be more conscious of the costs to build
their designs (i.e., materials, not over-designing, etc.)
More coordination/collaboration among team members
Need quality reviews from CMs
There needs to be a thorough review of the technical design details
Need to bring contractors, subs, and
suppliers on board in the design phase
Need to pay more attention to controlling scope
Need to provide more complete drawings
Must conduct a thorough site investigation to reduce
the number of changes due to differing conditions
A/Es need to better understand our needs
Owners need to take more responsibility
Need more detailed specifications before the project goes out to bid
None, we are happy with the process
Other
0%
2%
4%
6%
8%
10% 12% 14% 16% 18%
13
Project Leadership and the Role
of the Construction Manager
The project leadership role is changing as owners utilize a wider
When we broke out the responses for private owners who are not
range of project delivery methods. Project leadership is assumed
constrained by legislation (Private/Closely Held and Public Stock
in-house by 72% of all respondents with only 17% turning that role
Corporations) on the topic of choosing CMs and contractors, trust
over to outsourced construction managers or program managers.
and integrity in contractor choice moved to the top of the list, and
Owners that use construction or program managers more often retain
price moved to the bottom in the same relative ranking as given for
them as project administration/staff extensions, while only 32% retain
choosing construction managers. This difference in response between
a CM or PM as the project leader. Construction manager/program
owners who are free to chose any project delivery system versus
manager services are retained most often in the design phase of the
public agencies who typically are constrained by legislation, reflects
project (47%), but 40% of the time they are retained in the
private owner’s ability to choose project delivery methods. The
pre-design phase.
differences in ranking of the Private/Closely Held and Public Stock
Corporations in the selection of a construction manager are highly
Many of the issues expressed by owners when asked about the
consistent with the overall feedback provided. In addition,
changing relationships among stakeholders came up again when
Private/Closely Held and Public Stock Corporations also had better
they were asked about characteristics used to choose construction
results for the time taken in each phase of construction compared
managers and contractors, namely, trust and integrity, communication
to all respondents.
and collaboration, and the ability to control risk.
Trust/integrity was the most important characteristic for choosing a
construction manager, but ranked fourth behind the ability to deliver
projects on time, experience level with project type, and price when
respondents rated the same characteristics for choosing contractors.
Although many of the characteristics are ranked nearly the same for
both CMs and contractors, a comparison of the differences in ranking
reveals the different roles for CMs and contractors as perceived
by owners.
Cost control, owner representation, relationships, and leadership and
communication skills ranked appreciably higher as characteristics for
choosing construction managers, while price is the least important
characteristic for CM choice and nearly the highest ranked
characteristic for choosing a contractor. These rankings reflect the
dominant project delivery system, design-bid-build, where the main
concern for contractor choice is low price, delivered on time, and
within budget. Much of this focus on price is legislatively driven
by the public agencies that buy contractors services. The rankings
do not reflect owners’ concerns for better communications among
service providers or other value-added characteristics that a
contractor may offer.
14
Exhibit 13
1
2
3
4
5
6
7
8
9
(Public/Private)
Rank
Contractor
(Public/Private)
Rank
What characteristics do you use to choose the right
construction manager and contractor for your
project? (1=least important, 5=most important.)
Construction
Manager
(All Responses)
Rank
Contractor
(All Responses) Rank
Construction
Manager
A Trust/integrity
4.56
(1)
4.00
(4)
4.74
(1)
4.59
(1)
B Ability to deliver projects on time
C Ability to control costs
4.33
(2)
4.20
(1)
4.32
(2)
4.50
(2)
4.27
(3)
3.84
(6)
4.23
(5)
4.27
(5)
D Ability to represent our best interests at all times
E Experience level with the type of projects we build
F Communication skills
4.26
(4)
3.42
(10)
4.19
(6)
3.81
(9)
4.24
(5)
4.13
(3)
4.10
(7)
4.30
(3)
4.21
(6)
3.50
(9)
4.29
(3)
4.09
(7)
G Leadership skills
H Planning/scheduling capabilities
3.97
(7)
3.28
(11)
4.03
(8)
3.66
(11)
3.86
(8)
3.70
(8)
3.74
(10)
4.03
(8)
I
Relationships
3.82
(9)
3.06
(13)
4.23
(4)
3.63
(12)
J
CM certification
3.60
(10)
N/A
3.29
(11)
N/A
K Safety oversight
3.48
(11)
3.83
(7)
3.94
(9)
4.27
(4)
3.11
(12)
4.14
(2)
3.06
(12)
3.78
(10)
L
Price
M Bonding level
N/A
3.25
(12)
N/A
2.81
(13)
N Quality record
N/A
3.92
(5)
N/A
4.16
(6)
Note: Rankings from all respondents for characteristics used in the selection process for construction managers and contractors are
shown in the columns 2 through 5. Columns 6 through 9 compare the response for the Private/Closely Held and Public Stock
Corporations only in what they consider important in the selection of these service providers.
Despite the concerns for contractor choice, some markets around the country have had difficulty acquiring contractor services due to
labor shortages. Sixty-four percent of respondents said they had no difficulties acquiring contractor services, leaving 36% with some
challenges. Labor shortages are more often a topic of conversation as the market for construction services improves. This should
come as no surprise to those who have been following industry trends as many studies have noted that construction companies are
facing challenges attracting people at all levels. In the coming years, size and quality of management and labor force may be a unique
selling point for contractors. This trend may also be a major factor for contractors making greater use of technologies that save labor.
15
Collaboration and
Project Control
One of the areas increasingly affected by technology,
as well as the ability for the project team to
communicate more effectively, is project collaboration.
These are key concerns for project controls. When we
asked respondents to tell us if their project controls
were adequate, 65% said that they were. The 35% that
said no, project controls were not adequate, responded
that project management tools were the most important
area for improvement (52%) followed by job cost
projections at 34%. Sixty percent of respondents said
that they relied on the construction manager or
contractor to provide the software for tracking progress
and creating reports. Only 45% had their own project
collaboration system in house that they also required
the project team to use. Nonetheless, 82% said that
the owner should define the procedures for formal
communication between parties on the project.
While the subject of project collaboration and
communication often centers around choosing and
using the best project collaboration software, there are
other processes and practices that can have a great
impact on a project. When we asked owners to tell us
which practices they used to improve project
collaboration, three items topped the list with nearly
the same level of importance, they were: provide a
clear contact for decisions and approval (85%), openly
share project information (83%), and assemble the
project team early and meet frequently (80%). Each of
these areas can be enhanced with the use of a good
project collaboration tool that everyone on the team
Exhibit 14
can access (Exhibit 14).
Which of the following practices do you use to
improve project collaboration? (Top Responses)
90%
Percentage of Total
80%
70%
60%
50%
40%
30%
20%
10%
0%
16
Provide a clear contact
for decisions and
approvals
Openly share project
information
Assemble the project
team early and meet
frequently
Meet with service
providers to share
mission and goals for
project
Use a formal partnering
process on each project
Delegate communication and collaboration
responsibility to CM
Specify collaboration software
used by every company working
on the project
Another area being improved by technology but not yet in
wide use is 3D design. Building information modeling and
3D CAD design are currently used most often on large,
complex projects, but the technology has the potential to
Exhibit 15
Relative to the use of 3D design,
which one of these best describes your
organization?
enhance project collaboration and help to prevent change
We require it
on all of
our projects
orders due to interference fits. At this time, 46% of
respondents do not use this technology at all, while 40%
are using it selectively, and fewer than 5% require it on all
projects (Exhibit 15).
We request it on
most of our
projects
We do not use it
on any of our
projects
4%
10%
46%
40%
We only
use it on a few
of our projects
Commissioning
Commissioning is critical to projects requiring complex electrical,
telecommunication, and HVAC systems. One of the comments
we received when we asked about changes in relationships in the
construction process was that “The future use of commissioning
should have a positive influence on project delivery and cost.”
Regardless of who performs commissioning, it should be part
of the process from the early project stages with the idea of
beginning with the end in mind. Commissioning is a form of
quality assurance that serves in part to assure that all work is
performed according to design, contract, and code, but it should
also serve to assure that the building or project performs at peak
efficiency. That may mean power savings, or it may mean that
more expensive repairs don’t have to be made after the building is
occupied. Commissioning can positively affect life-cycle costs,
which in the long run reflects the true price of the project.
17
According to our survey, commissioning runs longer than planned 47% of
the time (Exhibit 8). One underlying cause for that problem may be that
26% of those surveyed do not have a formal commissioning requirement.
Most owners do have a formal commissioning requirement. Twenty-four
Exhibit 17
Relative to sustainable design and
construction, how would you describe
your organization?
percent assign that responsibility to a third party, while others use in-house
personnel, the contractor, a construction manager or program manager;
and 5% use their design team.
22%
Interested in being
sustainable, measured
using a system such
as LEED system, but
not certifying our
projects
Exhibit 16
Relative to a formal commissioning
process, which of these apply to your
organization?
We do not currently have a formal commissioning requirement
26 %
We require formal commissioning and hire a third-party to do it
24 %
We require formal commissioning and use in-house personnel
20 %
We require formal commissioning and have the contractor do it
14 %
We require formal commissioning and assign the responsibility
to the construction manager/program manager
11 %
We require formal commissioning and our design team does it
5%
Sustainable Building
In last year’s survey, we asked about the importance of green building
or LEED (Leadership in Energy and Environmental Design) when
planning projects and learned that 35% thought it was increasingly
important, while only 20% thought is was not important. This year, we
asked how respondents would describe their organization relative to
sustainable design and received a comparable response in that 23% said
they were not actively incorporating sustainable design into their
projects. The balance of respondents were interested in using
sustainable design in their projects, but only 25% were interested
in going the route of LEED certification for their buildings.
18
Not currently
actively
incorporating
sustainability into
our projects
23%
30%
Interested in being
sustainable, measured
using the LEED system,
and pursuing certification
25%
Interested in being
sustainable but not
measured using any
ratings system
Owners and the Future
In the introduction to this report, we noted that the results
of our survey indicated we were on the verge of
revolutionary change for the construction industry, and the
cost of inefficiency was one of the primary drivers of that
change. There are costs that most owners cannot control,
such as the costs of materials and labor; however, owners
can have, or should have, control over the construction
process and their internal operations that manage that
construction. When an owner is using a delivery method
that it does not think offers the best value, that is a cost of
inefficiency. When we hear multiple comments on the lack
of complete drawings to build the project from an
architect, or an architect not being sufficiently aware of the
cost to build its design, that is a cost of inefficiency,
too. Whether or not we are on the verge of a revolution,
there is certainly a pent-up demand for change in the
construction industry, and if that demand is to be met, our
survey and conventional wisdom dictate that the owner
will drive this change. We hear time and again that there
should be more collaboration between owner, architect,
CM, and contractors, and 80% of owners agree that there
should be formal contractual agreements for collaboration
on projects. At the same time, we see owners shifting risk
to contractors and not providing clear leadership on
projects, as one owner commented:
Another comment about needed change in the construction industry
that reflects the sentiments of many owners answering our survey
was that owners should be:
“Sharing project information openly, defining risk
and profit appropriately, and creating a high level
of trust among all the parties.”
To many, such a comment may sound like a fantasy in an industry
that is too often characterized by the “game.” Again, if owners
desire these changes in the industry, it will be owners that drive the
industry toward more openness on projects, more trust and integrity
in the process, and a greater sense of ownership on the part of all
parties involved in the process. Construction is a complex process
involving many people and companies, but it is not a game. We
detect the winds of change in the results of our survey, but it will be
up to owners to harness those winds rather than stand still and be
tossed around by the passing gale.
“[I would like to see a] stronger focus on
the owner’s role in leading the design and
construction team. Too many owners defer
their leadership responsibilities to the
designers and then wonder why the
finished product does not align with their
business needs.”
Often, when we look for the cause of inefficiency or
problems in the construction process, we look from the
owner’s point of view outward. Again, this year, we asked
owners to critique their own responsibilities and received
many of the same responses that we have heard in the past.
This year’s respondents rated “making timely decisions”
number one on the list at 79% of all responses. “Requiring
a good project definition” came out second on this year’s
list at 42% of responses, while “communicating clear work
scope” was third this year at 39% of responses. All of
these issues are leadership issues confirming the comment
above. The need for a timely decision can get lost in large
organizations, while the lack of a decision can affect
project schedules, truly a cost of inefficiency.
19
Exhibit 18
The top three responsibilities that
owners need to improve
(top five from all responses.)
Quotes and Comments
from Survey Responses
Making timely decisions
79%
Requiring good project definition
42%
Communicating clear work scope
39%
Providing leadership for project collaboration
35%
Communicating clear business goals to design
and construction team
34%
Question: What is the most important
change that you want to see in the
construction industry within the next
five years?
“Architects — Accept responsibility for design, don’t push
shop drawings down to subcontractors. Design to budget.
General contractors should proactively manage budget
and schedule; avoid being a conduit for changes and
schedule impacts.”
“A culture where the contractor takes responsibility for
quality, and we get away from the ‘catch me if you can’.”
“A method of project delivery that adequately and
legitimately spreads risk and reward.”
“The move away from low-bid awards for public projects,
toward a best value approach.”
“Better training and more time devoted to training of new
employees and lower to middle managers. At times, the
construction industry is promoting people before they are
ready, which causes problems.”
“Beyond Spearin: Keep moving towards a system that
requires specifying every nut and bolt, the omission of
which is an added cost to the owner, an embarrassment to
the designer, and point of contention with the builder.”
“Sharing project information openly, defining risk and
profit appropriately, and creating a high level of trust
among all the parties.”
“[I would like to see a] stronger focus on the owner’s role
in leading the design and construction team. Too many
owners defer their leadership responsibilities to the
designers and then wonder why the finished product does
not align with their business needs.”
“Want the CM to be the owner’s advocate and feel like he
is actually working FOR the owner.”
“Within government contracting, allow more collaboration
and/or input from construction entities during the
design phase.”
20
Mark Bridgers is a director with FMI. He works with owners or purchasers
of construction contracting services in the areas of organizational analysis,
construction cost management, accounting and financial issues, and strategy
development. He can be reached at 919.785.9351, or e-mail
mbridgers@fminet.com.
Mark Napier is a consultant with FMI. He works with owners and other
purchasers of construction services in the areas of performance analysis and
improvement, collaborative relationships, and strategy development. He can
be reached at 609.731.7005, or e-mail mnapier@fminet.com.
21
About FMI
Founded in 1953 by Dr. Emol A. Fails, FMI provides
management consulting and investment banking for the
worldwide construction industry.
FMI delivers innovative, customized solutions to
contractors; construction materials producers; manufacturers
and suppliers of building materials and construction
equipment; facility owners, managers, and developers;
engineers, architects; surety companies; industry
trade associations.
FMI’s experienced professionals assist businesses with
strategic planning, leader and organizational development,
business development, research, mergers and acquisitions,
private equity financing, project partnering, team building,
and training.
Raleigh
5171 Glenwood Avenue
Suite 200
Raleigh, NC 27612
P.O. Box 31108
Raleigh, NC 27622
T 919.787.8400
F 919.785.9320
Denver
55 Madison Street
Suite 410
Denver, CO 80206
T 303.377.4740
F 303.377.3535
www.fminet.com
Mission Statement
Building a great future for the construction industry and its
leading organizations.
Number of Employees
112
Tampa
5301 W. Cypress Street
Suite 201
Tampa, FL 33607
T 813.636.1364
F 813.636.9601
Geographic Markets
United States, Canada, Latin America, Europe, and Pacific Rim
1
Consulting Projects
900
Public and Sponsored Programs
600
FMI Survey of Construction Industry Ethical Practices
www.fminet.com

Sixth Annual Owners Survey

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