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AECWeekly examines select top news each week, picks out worthwhile reading from around the web, and special interest items you might not find elsewhere. This issue will feature Industry News, Top News of the Week, Acquisitions/Agreements/Alliances, Announcements, Financials, People, New Products, Around the Web and Upcoming Events.

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Industry News
The Road to AEC Project Execution Success
By Susan Smith

Architecture, engineering and construction (AEC) projects have been under the microscope in recent years, charged with responsibility for declining productivity in the capital asset industry. Many efforts have been made to find out why this is the case, and many software solutions have been developed with the aim of solving the problem, if not in whole, in part.

A recent study conducted by Bruce Jenkins of Spar Point Research, funded by software company Newforma, Inc., entitled “Mitigating Risk in AEC Project Execution: Perspectives from Principals, Counsel and Insurers,” took a fresh look at the industry from three stakeholder viewpoints.

The study takes into account risk sources for A/E firms, the search for solutions in the form of business practices and supporting technologies, and possible avenues to mitigating risk. Spar Point interviewed five principals of leading A/E firms, three prominent legal professionals who are closely involved with the AEC industry and three insurance professionals that specialize in A/E risk management.

Fear of liability and strong aversion to risk exposure were cited as the primary cause of the industry’s declining productivity. Lack of communication between different parties involved in projects has been ensured by the compartmentalizing of responsibility. The maintenance of business processes and project execution processes that further isolation between the different parties has become the norm as it allows each party to shift accountability to others in the asset-creation value chain. This situation, in which fear is wagging the dog’s tail, so to speak, has characterized the industry and fragmented the value chain, which in turn causes more things to go wrong in the end.

The research in this study suggests that a greater exposure to liability could in fact reduce the likelihood and severity of problems on projects. Many industry professionals are looking at a move away from the old practices of avoiding liability and shifting risk, to ways of controlling risk. This involves consciously increasing risk exposure in order to control risk and see where problems arise.

Building information modeling (BIM), business best practices and project execution processes are all suggested as ways to better coordinate projects and information to achieve better risk control. So much comes down to the human factor, and forming a new, healthy relationship model. What was discovered is that firms that were most successful at avoiding errors and omissions, with fewer claims and risk issues, had a corporate approach and culture that valued “training and sensitizing” their employees to identifying risk and then staying on task with a process – rapid detection of a project going off track, and quick and targeted response to remedy the situation. In a nutshell – project execution.

Tools such as BIM address project execution, but what was found in this study is uncertainty as to whether project execution can be addressed by digital technologies, while at the same time, respondents shared a strong sense of the need for these solutions and have definite ideas about what they should be able to accomplish.

When asked the question for the study, Does reduced exposure create greater risk? These were some of the respondents’ replies:

“Uncertainty is a big risk factor,” said Jim Jacobi, PE, senior principal and CIO, Walter P. Moore & Associates, Inc. “In traditional execution process, so much coordination needs to happen among different organizations and different disciplines in a project – and the techniques we use to produce work product are not well suited to that coordination. So as a design progresses into the field, you find things overlooked, misinterpreted, etc. and that leads to claim, or worse. So one big source of risk is rooted in the fact that we have such a drawing-centric approach to design, and there is not enough time to expend the effort needed for every party in a project to become fully immersed in the design. That is much bigger than the risk of doing something wrong within a discipline – making errors or having problems with your own work product.”

“Incentives for conflict, not cooperation, are built into the process, and wrongly so. My drive is to change that for the industry…Ironically, our risk management model that makes fingerpointing more attractive than problem-solving is the biggest source of risk today,” said Tom Owens, principal & general counsel, NBBJ.

Litigation is what A/E firms fear, and yet some participants say that very few conflicts make their way to the courtroom. But where do these conflicts arise?

From Chris Noble, partner, Noble & Wickersham LLP, “Sixty-six percent of claims against architecture firms come from their own clients. The majority of the others come from people who know them well – contractors.”

Greg Bundschuh, J.D., Ames & Gough in Atlanta said that the most prevalent claims his firm encounters from AEC projects are as follows: 1. Owner allegations of cost overrun attributable to design. 2. Design professional’s failure to communicate with owner re design, budget expectations. He added that he feels that BIM and other better automated tools will make it easier for AEC firms and clients to resolve their differences or avoid their having conflicts in the first place.

According to Barry LePatner, partner, Barry B. LePatner & Associates, LLP, architects have been put in the third tier of project execution. Because of this, “they (architects) get sucked into assuming risk they would not face if they were more direct participants.” He suggests that construction managers have urged owners to let them begin the project four months before the drawings are complete, because in their view, the drawings will catch up. But LePatner attests that from an A/E standpoint, this is a disaster. “It ensures a change-order mentality on the project, which is premised not on seeing the drawings complete to price the job, but on errors and omissions.”

Insurance companies across the board believe that a proactive involvement of all parties is necessary at the contract stage.

“One of the issues we still have is untenable contracts,” said Albert J. Rabasca, director of industry relations, XL Design Professional, XL Specialty Insurance Company. “After all these years that we [in the insurance industry] have been espousing contractual responsibility, to this day we still need to talk about it, because often we find the contract simply wasn’t looked at carefully. A/Es are agreeing to things they probably know they shouldn’t be.”

Why and how can A/E firms prevent the claims of their own clients and those of contractors?

In a separate interview, Chris Noble responded, “The design and construction process is very complex, the project participants are numerous and self-interested, and the results as measured by every standard (cost, time, quality) are imperfect. Owners are stretching their resources to build the buildings cheaper and faster, with high expectations and very small contingencies. Many contractors have small profit margins, and seek to pass on to others the risks that are often shifted to them by aggressive owners. In this context, there is little room for errors and omissions, but the likelihood of such errors and omissions happening is extremely high. The result is claims. Risk management strategies for designers include (1) be more efficient and organized in receiving, analyzing, processing, and generating information about project design and construction requirements, (2) negotiate fees that will support the level of project management and related effort that is required to accomplish (1) above, (3) establish and maintain good and productive relationships with other project participants, and (4) perform services under contracts that are reasonably protective of the designer's interests.”

The most prevalent claims that Noble & Wickersham encounters from AEC projects, according to Noble, are as follows: “Construction change orders due to errors and omissions in documents (often coordination problems between systems or disciplines); construction delays due to errors, omissions, ambiguities (documented by contractors' requests for information (RFIs) and submittal review delays; and performance problems with the building envelope and/or the mechanical system.”

Bundschuh said in the study that the "contractors' level of sophistication with respect to both design and construction have risen significantly in the past 10-15 years, but the architect's sensitivity to constructability and value engineering issues has not risen as quickly or steadily."

In a separate interview, Gough elaborated on why that was the case. “Because the contractor bears the risk of cost overruns on a lump sum project, he has more financial incentive to validate and value engineer the design.”

Rich Nitzsche, AIA LEED AP, Principal, CIO, Perkins+Will, stated the single most important factor in reducing risk in AEC projects is “Transparent communications between all parties. A clear rendering of risk & reward, shared risk and benefit, and the elimination of adversarial roles is essential in achieving this. It sounds utopian, but it’s the sort of ideal that will embrace design assist, interdisciplinary coordination and other positive behaviors, one that will put a high premium on problem solving and none on blamecasting.”

Asked whether there was any link to contractors now having access to more automated tools and to the design model earlier in the process, Bundschuh said, “BIM has helped contractors become involved in integrated and collaborative design.”

Noble agreed that BIM and other better automated tools will make it easier for AEC firms and clients to resolve their differences or avoid their having conflicts in the first place. “It appears that this will be a very helpful factor, especially if these technological developments are accompanied by more collaborative and productive project delivery structures and procedures.”

At Perkins+Will, 2008 is "the year of the project manager." This effort extends to project managers implemented BIM in their processes. “Educating and grounding PMs in what BIM is, what it represents and how to plan for it is a major theme of our Project Manager Development Program, launched this year. We’re also running local in-service sessions for established PMs,” said Nitzsche.

According to Nitzsche, BIM is central to improved coordination and communication within the architectural team and out to the extended design team, the client and his contractor. “Anything done to enhance coordination reduces risk.”

Top News of the Week

AutoDesSys, Inc. announced the 16th annual student awards, handed out during the annual conference of the Association for Computer Aided Design in Architecture (ACADIA), held at the University of Minnesota in Minneapolis. The awards were presented by Chris Yessios, President of AutoDesSys. Awards of Distinction received a copy of form.Z RenderZone Plus and one thousand US dollars. Honorable Mentions received an annual academic license. Congratulations and prizes were extended at a dinner that AutoDesSys sponsored for the conference attendees. See winning projects

Z Corporation announced it has joined the Autodesk Developer Network (ADN). The new relationship will benefit current and future Autodesk software customers who need quick and affordable 3D physical models of their architectural, geospatial, mechanical and creative designs.

Acquisitions, Agreements, Alliances

Solibri LLC announced that it has appointed CADeshack with offices in Houston, Texas and Chicago, Illinois, serving the Southwest and Midwest regions as a Solibri Authorized Reseller Partner. Jonathan Widney, CEO of Solibri LLC (the US HQ of Solibri) stated, “We are going to build a strong partner relationship with CADeshack. They are a solid organization that understands the difference between modeling and BIM. Solibri is experiencing dramatic growth and we need to have partners who are committed to providing consistent excellence to the market.

Z Corporation announced it is partnering with Bentley Systems, Incorporated to streamline the generation of physical architectural models from designs created with the help of Bentley software for architecture, engineering, construction (AEC) and operations.

Beck Technology and Apex Cost Consultants announced a joint partnership agreement whereby the two companies will provide strategic implementation services to integrate DProfiler, a Macro BIM (Building Information Models) product, into all Apex’s cost control processes.

TRIRIGA announced that it has formed a strategic alliance with Deloitte. The alliance agreement calls for the two organizations to work together to help global enterprises in their efforts to facilitate corporate growth, achieve strategic objectives and improve profitability and productivity through technology enabled capital, sustainability and real estate transformation.

Announcements

The McGraw-Hill Construction Outlook 2009 Industry Forecast and Trends Executive Conference, a mainstay for construction business planning, will take place at the Capital Hilton in Washington, DC, on October 22-23. The 70th annual conference, attended by more than 400 design and construction industry executives, is the forum for the release of the highly anticipated Construction Outlook report. This closely watched report, authored by Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction, details the construction forecast for the year ahead. McGraw-Hill Construction Outlook 2009 Industry Forecast and Trends Executive Conference,

Autodesk has launched an AutoCAD Resource Center, a Web site providing an abundance of free resources and information on AutoCAD 2009. The AutoCAD Resource Center offers compelling side-by-side “See The Difference” videos, comparing tasks done in AutoCAD 2009 against older versions of AutoCAD. Additional resources include tutorials, tips and tricks, access to informative whitepapers, opportunity to ask questions directly to AutoCAD expert Lynn Allen, and even a free trial download of AutoCAD 2009. Visitors can also find stories and successes from other AutoCAD users.

Financials

Deltek, Inc., provider of enterprise applications software for project-focused businesses, announced preliminary financial results for its third quarter ended September 30, 2008.

For the third quarter, Deltek expects to report license revenue of $18.0 to $18.5 million, compared to guidance of $22 to $23 million. Total revenue for Q3 2008 is expected to be $70 to $71 million, compared to guidance of $74 to $75.5 million.

People

Bentley Systems, Incorporated has appointed Baker Egerton to the newly created position of vice president, lead generation, in Bentley’s marketing group. In this role, Egerton will oversee all lead generation processes, systems, and data to further develop Bentley’s marketing systems.

New Products

Recently launched was the public Beta for Autodesk Design Review 2010. So far feedback has enabled Autodesk to add not only a new user interface but also to include some of the feature requests submitted, including highlighter, security features, digital signatures and more.
To enroll, go to: Autodesk Design Review 2010 Beta
Five new Autodesk Revit extensions: 5 new pretty cool free of charge Extensions for Revit customers on subscription:

• Static Analysis of 2D frames
• Static Analysis of continuous beams
• Retaining wall reinforcement
• Slab corner reinforcement
• Automatic reinforcement for multiple elements together

These Extensions plus all of the others are available in English, French, Italian, Polish, German and Chinese and you can learn more about them here.

Cranes Software International Limited, a provider of Enterprise Statistical Analytics and Engineering Simulation Software Products and Solutions announced the launch of NISA/CIVIL Version 16 - the latest version of its industry leading FEA package 'NISA/CIVIL'. NISA/CIVIL addresses a range of issues of vital significance to architects and civil engineers working with RCC and Steel structures.

QuadriSpace launched the QuadriSpace Affiliate Program, making it the first 3D Communication and Documentation Company to allow websites, bloggers and individuals to generate paid commissions by placing custom links to QuadriSpace's web site. The QuadriSpace Affiliate program will compliment the recently announced Document3D Personal Edition, available for free; and the 3D PDF upgrade, available for $95. QuadriSpace Document3D Suite is the world's most affordable, complete and user-friendly solution for the creation of documents, illustrations and animations from existing 3D models.

Dexter + Chaney has significantly enhanced the popular service management capabilities in its Spectrum Construction Software that contractors throughout the United States have employed for years. The company has updated the Work Order and Service Contract modules to provide contractors with more flexible, fully integrated construction management and service management systems in a single package.

ARCHIBUS, Inc announces the formation of the ARCHIBUS Solution Center — Environment + Sustainability Services (ASC — E+SS), a Columbus, Ohio-based unit that will provide a broad portfolio of environmental management solutions to support an organization’s need to meet environmental goals and government compliance mandates.

UK-based Z+F UK Ltd and Belgium-based VRcontext International S.A. have released an interface for their leading software products -- LFM Server and Walkinside, respectively.

This interface enables owner-operators in the process, power, and marine industries to import massive volumes of laser capture data of their facilities from LFM Server to Walkinside for visualization and simulation in a complex 3D VR environment. The use of point cloud data within the Walkinside environment will afford owner-operators multiple opportunities to reduce project costs, shorten schedules, and improve safety.
Graphisoft announced the availability of the Graphisoft MEP Modeler on Windows and Macintosh platforms. This new tool enables architects to better coordinate building projects with more predictable results, reducing time, waste and cost overruns during the design and construction process.

Pictometry International Corp., a provider of geo-referenced aerial image libraries whose proprietary technology is used globally to capture oblique image libraries, is partnering with database marketer Modern Marketing Concepts, Inc. (MMC) of Binghamton, N.Y. to introduce Pictometry’s patented oblique imagery and measuring software products in the construction and roofing industry.

Around the Web

AU (Autodesk University) Beat podcast features Phil Read, vice president and director of technology at HNTB Architecture, a multi-disciplinary firm known and respected for its work in transportation, architecture and federal markets.
Listen to Phil Read share Building Design PowerTrack on the AU BLAUG.
Hear more podcasts from Autodesk executives and customers at www.autodesk.com/pr-aubeat

Events