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.

August Connection Now Available!

The August issue of the Centennial Connection is now online. In addition to this month's message from Mark Bailey and new customer relationships, read more about Centennial's outstanding customer service, learn how it's building brand awareness, and discover the latest news from the field. Plus see an Earth Day Celebration recap and get safety tips and other fast facts!

Centennial's a Green Business Award Finalist!

A couple of months ago, we showed you the world’s first train bridges made from recycled structural composite (RSC) built for the US Army Transportation School at Ft. Eustis. Now, we’re honored that the Washington Business Journal has named Centennial as a finalist in its Green Business Awards- Green Invention category.

Centennial worked with RSC manufacturer, Axion International as well as Parsons Brinckerhoff, Innovative Green Solutions and English Construction Company to complete the project. RSC, which is comprised entirely of post-consumer recycled plastic such as milk jugs, detergent bottles, disposable coffee cups and industrial plastics (car bumpers and computer casings) was invented by scientists at Rutgers University in New Jersey who melted the different types of plastic in a precise formula creating a material stronger and more durable than any recycled plastic.

The material proved to be very similar to working with conventional materials such as wood or steel. It does not leach any toxins into the environment which will also protect the local wildlife and people who come in contact with the bridges. Using RSC on these two bridges kept 334,000 pounds of material out of landfills and saved more than 50,000 gallons of gasoline and 496 metric tons of greenhouse gases.

The Washington Business Journal will announce the category winners at a breakfast honoring the finalists on September 24th.

Is Construction Like Toilet Paper?

I sat in an interesting conference presentation earlier this summer. The entire premise was to compare the purchase of Job Order Contracting to the purchase of toilet paper—complete with props of toilet paper rolls, a picture of house that had been teepeed (that was the illustration of getting ripped off in your construction purchase), etc. Now I have to begin by saying that the presentation actually had some really informative content and it was presented by someone who has a lot of experience with JOC and works for a company that I respect.

But I took huge exception to the comparison of Job Order Contracting to toilet paper. Maybe it is because I have often used the same example to explain why purchasing JOC, or any complex construction service, is not the same as purchasing a commodity (As in “It’s not like buying toilet paper!”) For me, it pointed up an important philosophical debate when it comes to JOC, or any alternative project delivery method, which I thought was worth discussion.

Is construction a commodity? In some provocative dialogue after this presentation, it was argued that a specified doorknob is a specified doorknob—it is a commodity just like toilet paper. The definition of a commodity is a product that is sold by all suppliers without differentiation. The low-bid approach follows that definition. Materials and even construction means and methods and tolerances are prescribed, and the lowest-priced contractor is selected based on the assumption that there is no differentiation between contractors—they are interchangeable and it doesn’t matter who is installing your doorknob, so you might as well get it for the cheapest price.

Except it really does matter a lot who is installing your doorknob. It matters in the quality of installation. It matters in whether the right doorknob was even selected in the first place. It matters whether the installer is accommodating your ongoing operations and working with your end user when they install that doorknob. And it matters whether you have a contractor who will come take care of any warranty concerns on that doorknob without hassle. Now amplify that into a Bio-Safety Level 3 lab, or a time-sensitive school renovation, or any complex project, and the contractor matters even more.

AGC’s Legislative Platforms asserts that construction should not be treated as a commodity. “Construction must be addressed as a service because of the site-specific and design specific distinctions for each construction project, unlike manufacturing which is a repetitive, rarely changing process.” JOC and other alternative delivery methods raise the stakes beyond just the site specific distinctions. They recognize that the contractor has an important role to play in planning and managing the process, and that it takes creative thinking to bring the best, unique solution to each and every project. (I actually think this is one of the things I like best about construction—each and every project is different and demands a different solution, calling for continuous growth from construction professionals.)

So I think owners should carefully consider what they believe about construction before plunging into JOC. If you believe it is a commodity, then why do anything other than low-bid? But I think that most owners who are considering JOC and alternative delivery methods are looking for a better way because they recognize that construction is not a commodity, but a professional service.

Hi! My Name is Lisa.

As David Carrithers leaves Centennial to pursue an opportunity with a startup outside of the construction industry, he passes the baton on this blog to me. David’s shoes are big ones to fill, but he has assembled a team at Centennial through the last five years that will continue the important work he has accomplished. It is hard to overstate how far Centennial has come in this time. We went from virtually no branding beyond a dated logo to a comprehensive branding program including branding standards, a suite of advertisements and direct mail materials, and a brand store. More importantly, there is clarity across our organization about what the brand means, and what it is that we are selling to our customers (hint: it isn’t just construction). The brand was brought to life as the promises we make and keep to our customers.

But there is another role that David played within Centennial that I believe is critical, and that is as the conscience or “gut” of the company. Seeing and feeling where we might not be living up to the brand and inspiring us to do better. Watching the industry and being the bellweather for where the opportunities are.

Big shoes to fill, indeed. David was a marketing guru. I’m more of a construction gal. So the tone of this blog will inevitably change, but it will still bring you the latest news from inside Centennial and highlights about the difference Centennial is making in our world.