Centennial Wins Golden Shovel!

Centennial has proven it’s not only a leader in Job Order Contracting, but also in sand sculpture! This year, Centennial won the Golden Shovel in the annual Sand in the City event benefitting the Olympia Hands On Children’s Museum.

This is Centennial’s sixth consecutive year fielding a team for the benefit. About 20 Centennial employees participated in the event. The team spent hours planning the design and had six hours to build the actual sculpture on-site. Centennial has placed in the competition every year, and 2010 Golden Shovel was the third time the organization has earned first place. 

The Hands On Children’s Museum stimulates curiosity, creativity and learning through fun, interactive exhibits and programs for children, families and school groups. Centennial also sponsors a community team in the event. 

Strong Subcontractor Base Key to Design-Build Success

Whether a construction company is expanding into a new geographical territory or a new market, the key to success is establishing a strong, reliable subcontractor base. Attendees at the Design-Build Institute of America’s (DBIA) 2010 Conference next month will learn how to build this critical base thanks to Centennial’s Gary Sylvester and Scott McGrew.   

Overseeing Centennial's Design-Build department, Gary, design build manager and Scott, senior project general manager, both have a great deal of experience with this construction delivery method.

Gary and Scott will identify helpful tools to find qualified subcontractors, discuss meeting minority requirements and describe how to build lasting long term relationships with reliable subcontractors. They'll also cover introducing a new subcontractor to Design-Build processes and procedures as well as the terms and conditions of the Design-Build contract as they impact the subcontract. Gary and Scott will include discussions regarding subcontractor budget pricing, final fixed pricing and early teaming as well as the impact of LEED Certification as it relates to the subcontractor’s requirements.

Centennial is also excited to be an exhibitor and the Diamond Sponsor of the DBIA Conference in Las Vegas. In addition to our company booth, we're hosting a special booth where attendees can “Relax Their Backlog” with professional neck massages, so stop by and say hi!

Owners, Who is Reviewing Your Construction Estimates?

A recent webinar on Job Order Contracting by RS Means (view the archive here: http://bit.ly/czfWcl) highlighted for me the importance of proposal review in the JOC process, and I wanted to share the guidance of a couple of the panelists, and share some of my own thoughts.

Allen Henderson, former Facility Manager for Texas State University, emphasized the “Trust but Verify” approach, which Centennial absolutely champions. We want our clients to understand the line item proposals and have confidence in the pricing structure.

When I was first hired by Centennial, I was working on a team with a new operational manager who insisted that we not provide a detailed line items proposal to clients, because he was afraid they would pick it apart. He and I did some rounds on this one, because I believed it was critical to validating our pricing and building trust with the client. If you have questions about pricing, I want us to deal with those upfront. I don’t want you to have buyer’s remorse. Needless to say, this manager didn’t last too long with Centennial, because he wasn’t doing it the Centennial way. Any good Job Order Contractor should be willing to sit down and review a line item proposal with the customer, explaining the logic behind the selection of line items and sharing takeoff calculations. If a JOC contractor won’t, that’s a red flag.

OK, so we all agree that doing a proposal review is important, but who is going to do it for the owner? Allen had some good suggestions on this one. In-house tradesmen who are familiar with the details of work can be a good option. Purchasing personnel, who often administer compliance efforts for Job Order Contracts, generally lack the construction know-how to review line items for accuracy and appropriateness. Whoever is reviewing the proposals should have training in line item estimating and the specific unit price book used to build the proposal.

Some of our more sophisticated owners actually use the same JOC software to build their own estimate at the same time the JOC contractor is building theirs, and then compare the two. Though not every client will have the capability or people resources to build an independent estimate, a review of two line item estimates can add tremendous value by revealing differences in how owner and contractor are approaching the job that can enlighten both parties and ensure that final scope of work is fully aligned.

John Murray of the State of Missouri pointed out that proposal review should cut both ways, with the goal of both parties being the most accurate estimate to produce the right final lump sum price before proceeding. This means a contractor should be willing to review and explain line items that the owner may have questions about, but the owner shouldn’t just be looking to eliminate or cut back line items, but to ensure that all line items are captured. John says they have had instances where their internal estimate review staff has caught line items that the contractor missed, and requested that they be added to ensure the full scope was captured. I don’t know if there are many owners that would actually request a price add like that, but it demonstrates that the State of Missouri team is working in true partnership with its JOC contractor.

If you don’t have the expertise or man hours in house to review JOC proposals, you have options. Experienced consultants can perform this service for you, either as part of a turnkey JOC program like The Gordian Group’s, or from an independent consultant who works with an off-the-shelf unit price book like RS Means and software you have selected.

And while most of the above pertains to Job Order Contracting, I think the principles are the same for any contracting methodology. If you don’t have some level of transparency and communication in you pricing discussions, and faith that you are receiving value for the dollar, you probably have the wrong contractor, or the wrong delivery method, or both.