In three previous articles regarding the Pentagon Renovation Program, I’ve traced the development of new approaches to acquisition, organization and motivation. Little did we know these new ways of doing business would soon be dramatically tested.
We were neophytes in the use of design-build, but the inherent power of the approach enabled us to achieve dramatic cost and technical improvements despite occasional floundering. Simply stated, even when we implemented our design-build model in a less-than-ideal manner, the outcomes were still favorable. From those tentative beginnings evolved powerful new approaches for our design and construction activities.
Although we weren’t aware of them at the time, the capabilities of design-build have been repeatedly documented. For example, research on “Selecting Project Delivery Systems” by Victor Sanvido and Mark Konchar of Pennsylvania State University found that design-build projects were delivered one-third faster than comparable design-bid-build projects; that design-build decreased the time needed for construction by twelve percent; and that design-build resulted in a unit cost that was 6 percent lower than comparable design-bid-build projects. In addition, quality in design-build projects exceeded that of design-bid-build in every measured category.
As we gained experience, we devised improvements to facilitate our performance even more. Looking back, the lessons we learned now seem like common sense. At the time, however, we were struggling to overcome a dearth of practical knowledge. This education became even more important when we were challenged by the events of Sept. 11, 2001. Faced with the destruction wrought by terrorist attack, key leaders within the program met to craft our response. We knew that while struggling to repair the Pentagon, we would be under a microscope, closely observed by both the media and the public. If we failed while using new ways of doing business, the failure would be both public and spectacular. The safe option would be to fall back on traditional design and construction orthodoxy. Instead, we decided to continue our unique way of doing business. We believed in ourselves and our ability to exceed expectations.
Those unfamiliar with the Pentagon Renovation Program frequently wonder about the commitment from the design and construction industry in reaction to the attack. Make no mistake—the patriotism and commitment was extraordinary, but it wasn’t just patriotism and commitment that achieved success. It was mainly old-fashioned, hard work combined with better, more efficient techniques that enabled us to excel. The actions we took were simple and straightforward, yet powerful.
Plan for Success
Success isn’t an accident. The state-of-the-art in design and construction too often expects failure and reflects that expectation in contracts that emphasize what the parties will do once they fail. As a result, owners, designers and contractors give great attention to the administration of penalties, the assessment of deductions, the application of damages and the elaboration of the rules under which we will fight. In the Pentagon Renovation Program we
instead asked, “What would contracts look like if we anticipated success?” We determined that success-oriented contracts would have rewards established for our business partners if they exceeded expectations and performed in a superlative manner.
Communicate a Clear Vision
We were struck by the lack of clear vision in traditional contracts. Though laden with designs, drawings and specifications, they never got around to expressing the ultimate goal. Contracts didn’t communicate how a facility was to be used, its intended purpose or the activities to be pursued there, the reason for building the facility or why the facility was important.
Too often, contracts lack any expression of emotion or aspiration. The government was spending several billion dollars renovating one of the most significant buildings in our nation, but an advertisement for supermarket bologna contained more passion than the contracts we were turning out. If you are about to undertake construction of an important building that will house important people conducting important activities, why not communicate that? Designers and contractors are first and foremost people, and are susceptible to being inspired. People take greater pride in their work if they clearly understand the trust, hope and dreams that fellow citizens invest in them by awarding a contract for an important effort. This country was built by design and construction people using their brains, their brawn, their hearts and sometimes, their blood. Tell them that what they are doing is important and let them feel it.
Hire Better Teams
Elementary school children understand that to win you must select the best players for your team. This fundamental insight often eludes the government, which explains why it often selects based on a low bid. If you are still choosing your team based on low bids, without knowing who your team’s specialty contractors will be or the qualifications of the people you’re hiring, you deserve the drubbing you’ll get.
We used a two-phased source selection process. In phase one, we down-selected to the three most competent competitors based on the demonstrated quality of past performance on projects similar in nature and complexity to our current project. We selected only three because of the substantial cost to competitors vying for a design-build project. We needed to provide a reasonable opportunity to succeed in the competition.
In phase two, the three winners from phase one competed. We disclosed the available budget, and all competitors were required to propose to that dollar amount in a build-to-budget competition. Our requirements were stated in performance terms, keeping design-prescriptive requirements to a minimum. The competition evaluated the innovation and creativity demonstrated by competitors in proposing and justifying optimum content and performance within the budgeted amount.
We fenced a reasonable profit opportunity and established an award-fee pool, which would be used to reward successful achievement of what had been proposed during the competition.
Establish incentives
Every month, we sat down as a team and evaluated performance. This review included extensive feedback to the contractor about what was right and what was wrong. Every third month, we placed an amount of award fee on the table and paid a percentage of the available monies based on the quality of performance. The entire process was accomplished face-to-face and documented in writing.
It is important to note that the government team was invested in doing everything we could to help the contractor earn every penny of available award fee. We understood a fundamental fact: The government doesn’t design or build anything. Contractors design and build. The only way we could be spectacularly successful was by helping the contractor to be spectacularly successful. By providing feedback and working together we assisted one another in
improving everyone’s performance.
Set Clear Team Goals
From the outset, performance specifications established expectations and the design-build contract focused on implementing the most cost-effective technical solutions. Together, the design-build team and the government laid out detailed schedules for optimum program achievement. What, when and how work was to be done was planned and clearly understood by all parties. As necessary during contract performance we devised additional planning and scheduling to track performance with greater granularity.
We conducted a monthly program review on all projects to monitor team performance. This intensive face-to-face meeting reviewed our entire program and involved contractor as well as government personnel. Particular attention was given to critical-path and cost-loaded schedule milestones.
Operate as a Team
While recognizing that contractors held the key to program success, the government team also realized the importance of its own role. Failure by the government to provide timely responses to material submittals or requests for information causes confusion and delay. Failure to pay valid invoices in a timely manner increases costs for the design and construction team.
The government self-reported on performance during the monthly program reviews. Placing government performance under review improved it dramatically. In the case of invoice payments, for example, the average government processing time decreased from over a month to only four days. The resulting cost savings were substantial.
We also developed integrated project teams that coordinated government and contractor resources to increase their effectiveness.
We moved acquisition personnel out of their cloistered government offices, placing them on-site to speed decision-making and to give greater insight into problems being encountered. Suddenly the impact of delay became painfully visible. This halted the practice of turning small-dollar problems into large-dollar problems by allowing them to fester unresolved.
Reward Team Achievement
We celebrated success and made people feel like winners.One approach, learned late in our program, paid significant dividends. Competitors committed to using earned profits to reward the design and construction workforce at all levels, including architects and specialty contractors. This motivated everyone to strive for improved performance.
Recognize Leadership Challenges
Finally, and most significantly, we never lost sight of the fact that successful programs aren’t just a management challenge, they’re a leadership challenge. Managers perform important tasks such as planning, organizing, coordinating, directing and training.
Leaders operate in another realm. They are responsible for creating a vision, then having the courage to promote the vision.
They effectively communicate the vision, structure an organization capable of achieving the vision and inspire people to embrace and accomplish the vision. These leadership tasks require more than technical proficiency; they require genuine commitment to other human beings.
What was the cumulative effect of these techniques? I’ll never forget the worker who lumbered up during one of my many walk-throughs of the jobsite. He strode forward, shook my hand and said, “Sir, I’ve worked construction for forty years…and in forty years, this is the first time I’ve ever had an owner come on the jobsite and shake my hand…it makes a real difference.” There was no doubt in my mind that our program would be successful.
