CEIE370 Week 5 Partnering VE PDF

Partnering It is a concept that recognizes that every contract has an implied covenant of good faith. It attempts to establish a working relationship among all parties (stakeholders) through a mutually developed formal strategy of commitment and communication.  Key Elements of Pa...

Partnering It is a concept that recognizes that every contract has an implied covenant of good faith. It attempts to establish a working relationship among all parties (stakeholders) through a mutually developed formal strategy of commitment and communication.  Key Elements of Partnering Commitment Equity Trust Goals Implementation Evaluation Responsive  Commitment Commitment to partnering must come from top management. The jointly developed partnership charter is not a contract, but a symbol of commitment by all stakeholders.  Equity All stakeholders’ interests are considered in creating mutual goals. There must be a commitment to satisfying each stakeholders’ requirements for a successful project by creating win/win relationships.  Trust Teamwork is not possible where there are doubts about other’s motives. Through the development of personal relationships and communication about each stakeholder’s risks and goals, there is greater understanding. With understanding comes trust and with trust comes the possibility for a cooperative relationship.  Development of Mutual Goals Project stakeholders should identify all respective goals for the project in which their interests overlap. These common goals my include: – Achieving value engineering savings – Meeting the financial goals of each party – Limiting review periods for contract submittals – Early completion – Safety and no lost time because of injuries – No litigation  Implementation Stakeholders should together develop strategies for implementing their mutual goals and the mechanisms for solving problems.  Continuous Evaluation Project stakeholders should agree to plan for periodic joint evaluation based on the mutually agreed to goals to ensure the plan is proceeding as intended and that all stakeholders are carrying their share of the load.  Timely Responsiveness Timely communication and decision making can keep problems from growing into disputes. Project stakeholders should develop mechanisms for encouraging rapid issue resolution, including the escalation of unresolved issues to the next level of management immediately.  The Partnering Process To ensure a successful partnering program, several steps must occur regardless of the size and complexity of the project. – Educate your organization – Make partnering intentions clear – Commitment from top management – The partnering workshop – periodic evaluation – Occasional escalation of some issues – Final evaluation and celebration  Educate Your Organization Understanding and commitment are essential. Whether you are an owner or a contractor, you must educate your own organization about partnering before attempting a project using this concept.  Make Intentions Clear The owner’s intention to encourage partnering can be mentioned in the project solicitation advertisement. The provision should emphasize that the costs associated with implementing partnering would be shared equally with no change in the contact price. A letter can be sent to the CEO of every company on the bid list, and the pre-bid conference can include a presentation on partnering. In the context of a negotiated contract, it might be the contractor who proposes the use of partnering. Even in public works contracts, the contractor can propose and initiate a partnering agreement after the award because the partnering process does not change the contract.  Commitment from Top Management Following the award, the owner or the contractor can request a meeting at the CEO level to discuss the partnering approach. Upon agreement, each party will designate a partnering leader. These leaders will plan a partnering workshop.  The Partnering Workshop All key players should participate in a partnering workshop at a neutral site. Key players from each party are those who will be actually involved in contract performance and those with decision-making authority. They might include the following: – Contractor’s area manger, project manager, superintendent, and project engineer – A/E’s chief designer – Subcontractors’ project mangers or superintendents – Owner’s representatives – Representatives from suppliers and vendors – Representatives from community organizations – Representatives from key public officials  The Partnering Workshop The designated partnering leaders are the ones in charge of it. They should introduce the partnering concept and outline the products to be developed in the workshop. Workshop discussions should include definitions of each key player’s role and what makes the job successful for that role. Participants’ experiences (good and bad) should be put on the table. Risks and potentially difficult areas of the contract should be discussed openly.  The Partnering Workshop Understanding others’ risks and concerns, and seeing where one’s portion of the contract fits in relation to others’ helps to build the essential team attitude rather than we/they attitudes. A facilitator can be very helpful in organizing the workshop agenda and providing training in conflict management and communication skills. Her role is to elicit from the stakeholders their particular goals for the project and help producing the following products: – The Partnering Charter – The issue resolution system – The joint evaluation system  The Partnering Charter The partnering charter should include all the project goals that are common for all stakeholders. The charter is a symbol of the stakeholders commitment to partnering and can be used as the scale against which the process implementation can be evaluated. The Issue Resolution System Specific teams composed of personnel from the various stakeholders, who are knowledgeable about their particular technical portions of the contract, discuss potential problems and the way they would like to see them handled. They also decide how issues that are not resolved at their level will be escalated to the next level in a timely fashion. The Joint Evaluation System The effectiveness of the process is reviewed and evaluated periodically by all participants. Evaluation can be in periodic written form, and through periodic meetings of the key players and periodic executive meetings.  Periodic Evaluation Formal, periodic evaluation helps ensure that the relationships and attitudes created in the workshop are not lost. It also helps to keep the project implementation on target by looking back at goals and assessing progress in relation to these goals.  Value Engineering Definitions Is an organized, creative approach which has for its purpose the effective identification of unnecessary costs, i.e., costs which provide neither quality nor use nor life nor appearance nor customer features. Is a systematic evaluation of a project design, and construction methods and resources to obtain the most value for every dollar of cost.  History Emerged during World War II when shortages of critical resources necessitated changes in methods, materials, and traditional designs. After the war, GE pioneered in the development and the implementation of an organized value analysis program for industry. In 1962, it became a mandatory requirement in the Armed Services Procurement Regulations. This led to the introduction of value engineering to two of the largest construction agencies in the country, the U.S. Army Corps of Engineer and the U.S. Navy Bureau of Yards and Docks In the 60s and 70s, several other government agencies adopted value engineering, including the Bureau of Reclamation, NASA, US DOT, and the Public Buildings Service  Value Engineering Job Plan Most successful value engineering techniques include a systematic job plan which should be developed by group of knowledgeable people. This plan has a number of phases: – Information Phase - Get facts – Speculation Phase - Brainstorm – Analysis Phase - Evaluate alternatives – Development Phase - VE proposal – Presentation, Implementation, and Follow-up Phases  Information Phase This phase has three objectives: – Understanding the item being studied. This includes gathering and tabulating data concerning the item as presently designed. (What is the current item?) – Determining the item’s function(s). Functions should be described by two word; for example, a water pipe transports water. Also, a door may provide access, provide security, control traffic, provide visibility, or express prestige (what does it do?) – Evaluate the current design and functions. The value engineering group must evaluate the quality, reliability, and maintainability attributes as well as the quantities and costs involved for the current design. They also should question the need for each function and the reasons the item was selected for (what does it cost and worth?)  Speculation Phase The purpose of this phase is to generate numerous alternatives for providing the item’s basic functions. This is should be done in a brainstorming session where each participant’s thinking is stimulated by others in the group. (What else might do the job?).  Analysis Phase During this phase, the group examines alternatives generated during the brainstorming. The purposes of this phase are: – To evaluate, criticize, refine and test the alternatives generated during the speculation phase – To analyze the worth/costs of each alternative – To determine the alternative(s) which offer the greatest potential for cost savings The value index (Worth/Cost) or (Utility/Cost) can be very beneficial during this phase.  Development Phase In this phase, the surviving alternatives are evaluated further and documented in details in a VE proposal. The objectives of this phase are: – To assess the technical feasibility of each surviving alternative. – To thoroughly review all surviving alternatives to assure that the highest value is being offered. – To develop written recommendations in the form of a VE proposal The proposal should include a discussion designed to answer any objections likely to be raised.  Presentation, implementation and Follow-up In the presentation phase, the VE proposal is presented to the owner and get assurance that the recommendations will be implemented. Actions during the Implementation phase include the following: – Fund the proposal – Translate ideas into actions – Expedite using the VE team – Set deadlines and designate responsibilities. The objectives during the follow-up phase are to: – Audit actual results – prepare final assessment report – Make awards – Initiate new project ideas