chris voros construction management april 25, 2007 cancer institute hershey, pa cancer institute...
Post on 19-Jan-2018
216 Views
Preview:
DESCRIPTION
TRANSCRIPT
Chris VorosConstruction Management
April 25, 2007Cancer InstituteHershey, PA
Cancer InstitutePenn State Milton S. Hershey
Medical CenterHershey, Pennsylvania
Chris VorosConstruction Management
April 25, 2007
Chris VorosConstruction Management
April 25, 2007Cancer InstituteHershey, PA
Project Overview Building summary, existing conditions, construction
sequence, cost analysis
Structural Breadth-Foundation Redesign Intermediate, Geopier-reinforced Mat Slab vs. Micropile
Foundation System Avoid subsurface issues encountered at nearby Parking
Garage project Conclusions- $500,000 Cost Increase with new system;
Children’s Hospital Option
Electrical Breadth- Utility Redesign and Energy Impact Utility rerouting plan & energy loss study for PSHMC’s East
Campus Phase HV utility installation in one activity for PG, CI, &
Children’s projects Conclusions- $55,000 construction savings, $225/yr energy
savings
Depth Study- Industry Influences on Subcontractor Markups Identify factors that impact a subcontractor’s “multiplier”
value
Thesis Content
Chris VorosConstruction Management
April 25, 2007Cancer InstituteHershey, PA
Building Respect:
Industry Influences on Subcontractor Markups
Chris VorosConstruction Management
April 25, 2007Cancer InstituteHershey, PA
Goal Improve Construction Manager and General Contractor
Relationships with their Subcontractors
Approach Identify factors that go into a subcontractor’s “multiplier”-
the value added above allowable bid package markup
Methodology Two surveys, one tailored to CM/GC professionals and one
to Subcontractors Create a “Multiplier Matrix” that predicts a BP multiplier
based on a given set of conditions Compare and Contrast results from both surveys with
respect to perceived markup determinants
Chris VorosConstruction Management
April 25, 2007Cancer InstituteHershey, PA
Survey ContentsCM/GC
• Anonymous• Mailed Packet• Qualitative/ Written
Responses• Question Base:
– 10 Questions– Bid Package vs.
Contract Markups– Determinants of a BP
Markup– Company Self-
Assessment
Subcontractors• Anonymous• Online Survey• Quantitative & Qualitative• Question Base:
– Part 1-• 10 Questions/Scenarios• Select impact on multiplier
based on a scale from -3 (decrease) to +3 (increase)
– Part 2-• 3 Case Study Analyses• Assign a markup/multiplier
and provide reasoning
Chris VorosConstruction Management
April 25, 2007Cancer InstituteHershey, PA
CM/GC Survey Results• Contract Markups:
– 10% to 20% (incl. OH&P)– Dependent upon trade
• Bid Package Markups:– -2% to 8%– Multiplier factor
• CO Negotiations– “Fair but Firm”– Extensive in-house review
• Self- Assessment:– Reputable companies– 90-100% Returning Subs– 70-90% Repeat Clients
• Markup Determinants– Majority are objective/quantifiable
Chris VorosConstruction Management
April 25, 2007Cancer InstituteHershey, PA
Subcontractor Survey Results- Part 1Relationship-oriented Factors:
• Past successes with CM/GC, incl. some of team personnel
• Bad history with company, but none of personnel
• Bad history with CM/GC personnel
Chris VorosConstruction Management
April 25, 2007Cancer InstituteHershey, PA
Subcontractor Survey Results- Part 1Business-related Factors:
• AIA Contract is vague with respect to markup procedures (for subs and subs’ subs)
• CM/GC bid-shops on a regular basis to trim overall bid to owner
• CM/GC uses “nickel-and-diming” practices on CO negotiations
• CM/GC keeps to scheduleand meets all milestone dates(Not pictured - Avg. = -0.28)
Chris VorosConstruction Management
April 25, 2007Cancer InstituteHershey, PA
Subcontractor Survey Results- Part 1Regional Factors:
• CM/GC is a start-up company
• CM/GC is national firm, but new to region
• Project at bid is a “target of opportunity” (one-shot deal)
Chris VorosConstruction Management
April 25, 2007Cancer InstituteHershey, PA
• Apply to Part 2 case studies to test validity of Part 1 responses
Subcontractor Survey Results- Multiplier Matrix
Using the Matrix:
1. Choose which scenarios apply and calculate an overall average.
2. Use the Markup Impact Scale to determine the magnitude of the expected markup.
Chris VorosConstruction Management
April 25, 2007Cancer InstituteHershey, PA
Subcontractor Survey Results- Part 2Case Study #1: Alpha Construction Company-Dominant CM/GC moving into region-Generally negative scenario for subs due tobusiness practices and CM personnel onProject (superintendent)
Case Study #2: Beta Contractors-Start-up company of experienced principals-Good and bad factors- personal versuscompany experience; largest job to date
Case Study #3: Choice Management-Respected CM, by owners and subs alike-Overall desired scenario- good people and reputable company
Alpha Survey Average = 3.31%
Beta Survey Average = 1.6%
Choice Survey Average = 0.1%
Chris VorosConstruction Management
April 25, 2007Cancer InstituteHershey, PA
Survey Comparison:
• Key deciding factor is Regional Economics (supply vs. demand, work availability, competition)
• CM/GC professionals take an objective view, placing less emphasis on business relationships
• Subcontractors value reputations of CM/GC/A/E above other factors, contradicting CM/GC survey responses
• CM/GC companies need to value & actively maintain their sub relationships in order to minimize BP markups
Chris VorosConstruction Management
April 25, 2007Cancer InstituteHershey, PA
• There are simply too many factors (many subjective) influencing a sub’s markup that a prediction matrix is not feasible
• Subcontractors place great value in a CM or GC’s reputation
• Maintain positive business relationships to build respect among subcontractors
• Positive relationships result in favorable markups
Closing Remarks
Chris VorosConstruction Management
April 25, 2007Cancer InstituteHershey, PA
-AE and Construction Management Faculty:Dr. David R. RileyDr. Michael J. HormanDr. John I. MessnerProfessor ParfittProfessor Holland
-The Penn State Milton S. Hershey Medical Center:Dick AradineMike LekeyDonna Martin
-Gilbane Building Company, Hershey Project Team:Dennis VanceDon HergenrederPatrick HardisterTom GuthermanAndrew NotarfrancescoMarianne Jones-PichlerJohn VicanovickDan Munn
-Chris Leyenberger, Centerline Associates-Mike Connor, Array Healthcare Facilities Solutions
Acknowledgements
Questions?
-Dick Harris, PSU Office of Physical Plant-Shad Hoover, CMT Labs-John Masland, ARM Group, Inc.-Kord Wissman, Geopier Foundation Company, Inc.-GeoStructures, Inc: Mike Perlow Eric Hilberath Ed O’Malley-James G. Davis Construction Corporation: Bill Moyer David Argentieri-All the survey participants
…and to My Family and Friends- Thank you all!
top related