optimizing delivery of hospital projects
TRANSCRIPT
Rakan W. Ayyoub, Assoc. AIA
Optimizing
construction &
delivery of hospitals Abstract
Hospitals and healthcare facilities require many different construction methods and skills,
the presence of medical systems such as medical gas and other ambulatory services poses
a great demand for special considerations. This paper outlines the latest techniques,
practices and innovations in the hospital construction industry.
Optimizing construction & delivery of hospitals
1. Introduction 1
Contents 1. Introduction .........................................................................................................................................................2
2. Background: Why are hospitals so different .................................................................................................2
3. Hospital Construction Budgeting ....................................................................................................................3
a. The process: ..................................................................................................................................................3
b. The cost of construction and the project ...................................................................................................5
c. The budget ....................................................................................................................................................5
d. Managing Cost .............................................................................................................................................7
4. Hospital Delivery Methods ..............................................................................................................................8
a. PDSs “project delivery systems” ...............................................................................................................8
i. DBB Design Bid Then Build Project ...................................................................................................8
ii. CMA Construction Management Agency ........................................................................................10
iii. CMR Construction Manager at Risk .............................................................................................11
iv. Alliance Project management .............................................................................................................15
Integrated Project Delivery (IPD). .............................................................................................................17
i. Lean Project delivery (LPDS) .............................................................................................................18
5. Conclusion .........................................................................................................................................................21
Bibliography ...........................................................................................................................................................22
Media Bibliography ...............................................................................................................................................22
Optimizing construction & delivery of hospitals
1. Introduction 2
1. Introduction
ith the changing face of the healthcare environment, the looming age of built hospitals, the
introduction of the affordable care act, and the aging of baby boomers, millions of American
patients will require access to quality healthcare in the coming years.
“Since the Affordable Care Act was signed into law in March 2010, the health care industry has
gained nearly 1 million jobs—982,300, to be more precise—according to Bureau of Labor Statistics
estimates released on Friday.” (Diamond, 2014)
“This year, the last of the baby boomers turn 50. The oldest are on the cusp of 70. As people born
between 1946 and 1964 are getting older and becoming a predominant health care demographic,
facility designs are responding to their needs and expectations”. (Eagle, 2014)
2. Background: Why are
hospitals so different
onsidering fire evacuations of hospitals these are very complicated procedures where disabled
patients need to be evacuated in emergencies and be continuously supplied with their life
support. The Facility Guidelines Institute (FGI) for design and construction of healthcare
facilities states that many patients are “incapable of self-preservation”. This assumption means that a
high skill in construction is needed with a high reward for the contractors’ quality control, in new
constructions or renovations when patients maybe around the construction area.
The fact that hospital buildings operate on a daily basis and medical services cannot be disrupted is also
a major implication for the successful construction team if a renovation is taking place. Hospitals also
face a challenge in case of a disaster such as a hurricane or an earthquake, as patients rush in for medical
services and shelter, the hospital should be constructed in a way that can serve the needs of these people
in times of disaster.
On the other hand hospitals are required to comply with hundreds and hundreds of regulatory codes
that pose a great challenge for both designers and construction professionals. Knowing that a hospital is
a shared communal space where people experience many emotional ups and downs of happiness or
sadness, construction teams must be aware of the quality of their work and thus provide the best
construction practices in place for one of the most sensitive sectors of the construction industry.
(Gormley, 2014)
W
C
Optimizing construction & delivery of hospitals
3. Hospital Construction Budgeting 3
3. Hospital Construction
Budgeting
ombining a design and construction crew that have enough skill in the art and science of
budgeting a project is of crucial importance to produce a project cost estimate. Many tools are
used in this process and major time, cost and quality tradeoffs are utilized. Producing an on
budget, on schedule healthcare construction project that keeps in mind the quality of the building is not
only crucial to both the patients and the users but also to the developer. (Gormley, 2014)
a. The process:
When dealing with healthcare projects it is a good idea to take into account the entire project cost rather
than just the construction cost of the project. The total construction cost of a project may account for about
70 percent of the total project cost, the remaining 30 percent is split between a 15 percent mark for the
information technology, furnishing and medical equipment systems, and the remaining 15 percent
accounts for design and predesign implementation and testing fees. (McCurley)
Figure 1 healthcare project costs
Fees and Testing
2% Consultant Fees
10%
Furnishing and Equipment
15%
Misc. Costs
3%
Construction
70%
healthcare project total cost
Fees and Testing
Consultant Fees
Furnishing and Equipment
Misc. Costs
Construction
C
Optimizing construction & delivery of hospitals
3. Hospital Construction Budgeting 4
It is wise to look at project cost data from previous projects, however it is also essential to stay up to date
with current healthcare construction project cost data. It is hence crucial for a very early involvement of
the construction management firm or the contractor to select a project construction management delivery
method in the early stages.
Contingency amounts are often accounted for in the construction and design phases, and it is a good
practice to estimate this amount, thus requiring experience and careful consideration of issues that are
not apparent at first. The following table describes a typical hospital project budget. (Gormley, 2014)
Optimizing construction & delivery of hospitals
3. Hospital Construction Budgeting 5
By reviewing per square foot cost data of various spaces in a hospital and across a wide range of projects,
and by adding sufficient market factors such as geographical location, the construction manager can
arrive at project cost percentages that are pretty close to other previous projects. Geographical location
data can be of vital importance especially in a sudden fluctuation in the price of a certain construction
material due to market supply and demand. For example the price of concrete may change suddenly
during after the design process, and the construction manager may apply this new data to the budget
calculations and hence update them quickly. The derived cost estimates are only preliminary project cost
estimates and may not be used for a bidding process. (Gormley, 2014)
b. The cost of construction and the project
Contractors and construction managers don’t often consider the total capital cost when they deal with
the healthcare construction process.
“ It is important that all of the project team members have a clear understanding of the entire project
budget, how it is prepared, and the meaning of the key financial indicators. “ (Gormley, 2014)
Deciding on the used computer program for project management is a very important aspect in the early
stages of the project. These software packages have usually “dashboard” (Gormley, 2014) capabilities
and can provide many reports and can track change orders, expenditures, RFIs and Submittals. The
systems also allow for document control and cloud storage. (Gormley, 2014)
c. The budget
Conceptual design phases are usually considered as planning phases, where designer start designing the
hospital before a budgeting plan is reached. Designers produce many options for a design trying to
please all stakeholders in the project thus increasing the project’s general scope and thus skyrocketing
the budget leading for the design to never be built. This can be solved by introducing a specialized
planning firm that can take care of budget issues while designers feel free to produce their schematic
designs within budget. Planning services can include studies on demographics, the market, finances,
competition and etc., and usually account for 1 % of the total project cost. (Gormley, 2014)
Development project costs dealing with rezoning and various urban planning issues are usually added
to the architectural or construction cost categories with a price per square foot.
Environmental costs are usually concerned with the treatment of a hostile building site that may pose
dealing with toxic or life threatening materials such as asbestos.
0.91 %
0.09 %
0.44 %
Optimizing construction & delivery of hospitals
3. Hospital Construction Budgeting 6
Testing and Misc. costs usually deal with soil testing and other site inspection works, legal fees, permits
and etc.
Professional Services costs, usually include the costs of design consultant with all the AEC disciplines.
“These may be contracted as a lump sum, a percentage of construction costs, or on a cost-plus-fee basis
with hourly rates.” (Gormley, 2014).
Building Fees are costs associated with permits, state regulatory fees, county environmental fees, and
other inspection fees. (Gormley, 2014)
Construction cost is the major fee in the capital cost of a hospital project, “these fees are the responsibility
of the construction manager, subcontractors, and suppliers.” (Gormley, 2014) These are known as the
Brick and Mortar costs and usually account for the cost of materials, labor, equipment, fees and taxes.
2.00 %
14.6 %
3.53 %
64 %
Optimizing construction & delivery of hospitals
3. Hospital Construction Budgeting 7
Site work fees are high risk fees due to the uncertain underground conditions such as the presence or
absence or rock bed, or vulnerability of soil types. This cost is usually separated from the main
construction cost due to the depreciation in land value, and it is useful to separate them due to their
variable nature depending on the site its self. (Gormley, 2014)
Tenant Build Out cost are usually costs that are offered to retail or medical office building Tenant
improvement allowances for interior work and etc. this depends on the type of lease agreement signed
between the owner and the tenant. Other costs in this section may be accounted for any upgrades to
equipment or certain future renovations within the hospital building.
Contingency costs were described in the previous section.
Equipment and IS costs usually account for the biomedical equipment, furniture, information technology
and electrical equipment costs.
Land costs are typical land purchasing costs including all fees and transaction charges.
Bonds and Financing costs are the costs related to bonds, financing, debt services, during the construction
period and the funding period as is not related to any long term interest of the a loan. (Gormley, 2014)
Department Overhead is associated with the owners own teams and not revenue.
d. Managing Cost
Real time project cost and scheduling information is a very attractive process of a good construction
management firm. Owners are usually not happy if a project goes over budget, or even if it goes under
budget and the owner has not been notified early on. The cost management system should allow for
meticulous entry and tracking of expenditures and must allow for up to date cost status and future
projections for the project.
3.52 %
8.00 %
27.8 %
Optimizing construction & delivery of hospitals
4. Hospital Delivery Methods 8
4. Hospital Delivery
Methods
hile other industries streamline their processes to become more productive over time,
the building industry has faced a decrease in productivity, especially during the
construction phase. This is especially true with healthcare facilities, which are
becoming increasingly more expensive to build. In fact, by some calculations, the quantity of work
constituting waste on a typical healthcare project may approach 50 percent of the total work performed.
These inefficiencies are being absorbed by owners in the form of increasing costs of construction.” (Seed,
2011)
Hospitals are extremely complicated projects to design and build. The larger the project gets in its total
bed size the more complicated it becomes.
a. PDSs “project delivery systems”
The project delivery system is the process of designing, procuring, constructing, and maintaining a
healthcare project. These can be further split into Traditional PDSs or Modern PDSs. Traditional PDSs
are the common Design Build Bid (DBB), Integrated Design Build Bid (IDBB), Construction Management
Agency (CM-Agency), Construction Management at Risk (CM-At Risk), and the Design Build (DB) PDSs.
Modern Project Delivery Systems on the other hands include prefabrication on various construction parts
and deal with Integrated Delivery methods. The following section will outline the main features of each
of the 5 delivery methods along with a case study, and hence concludes with their advantages and
disadvantages.
i. DBB Design Bid Then Build Project
The traditional design bid build PDS is an increasingly popular
system. It is the system where there is a contractual relationship
between the owner the consultant and contractor, an indirect
relationship between contractor and consultant. DBB provides a
very low bidding price, a well-defined body of insurance and
bonds. The method also enhances competition amongst private
sector companies and reduces favoritism among the public sector
companies. However DBB poses many disadvantages where a
“W
Figure 2 Relationships in DBB
Optimizing construction & delivery of hospitals
4. Hospital Delivery Methods 9
lower project quality maybe be produced, and major increases of project value overtime may occur, this
method may raise many disputes, claims and litigation amongst various contracting parties and
discourage cooperation, hence there are no incentives for time – cost tradeoffs. The following table
outlines the major advantages and disadvantages of using this system. (Gormley, 2014)
Advantages Disadvantages
Can be used in many project types
A Very popular delivery system
Provides the lowest bidding price
Bonds and Insurance are well defined
Increases competition in the private
sector and decreases favoritism in the
public sector.
Lower project quality
Many inspections to insure quality
Low bid price vs. Final Project value
Discourages cooperation between
contracting parties.
Incentives are not present for cost-time-
quality tradeoffs.
Cost and time are very likely to increase
during construction.
May lead to disputes, claims and
Litigation
Table 1 DBB advantages and Disadvantages (Gormley, 2014)
Design Bid Build Case Study:
The Fort Belvoir Community hospital allowed the
U.S Army Corps of Engineers USACE to develop a
new procurement method. The project cost was at
$958 million, with a project duration of 5 years and a
total built up area of 2.3 million square feet.
USACE was also able to develop a new fast racking
method by creating an integrated Design Build then
bid IDBB delivery method. The method enabled a
faster processing of paperwork, submittals, reporting
and decision making between the contractors
“Turner Construction”, and the Consultant “ HDR
Inc. “. HDR Inc allowed Turner construction to get
involved in the design process at the 12% design
phase completion mark. (Gormley, 2014)
Figure 3 Fort Belvoir Community Hospital
Owner: USACE
GC: Turner Construction
Consultant: HDR Inc., Alexandra.
Total Cost: $958 Million
Total Area: 2.3 Million sqf
Duration 5 Years
Techniques: - Integrated Design Bid and Build.
- New procurement methods.
- Early contractor involvement
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4. Hospital Delivery Methods 10
ii. CMA Construction Management Agency
The CMA agency employs a construction manager to take care of most of the project delivery. The CM
agent directly replies back to the Owner, where the owner usually manages its relationship with
contractors and any other trades. The CM agent does not have a lot of influence over the consultants and
thus the consultant will reply back to the owner for any
actions necessary. CM agents are usually selected on their
expertise. However as there is no direct relation between
the subcontractors and contractors the CM agent usually
works the role of the general contractor along with the
owner. This allows for fast-tracking of the project where
design and construction can overlap sequentially
depending on the completion of various construction and
design packages. Because the owner mainly runs the
show, there is no bias towards a certain party in the
project which allows for mutual relations and less
problems to arise during the design and construction
processes. However this comes with a risk of a higher
maximum and an increased indirect cost fee due to the
construction administration services.
Fast Tracking:
Fast tracking can surely increase the speed of the project delivery however the owner will face the choice
to commence construction of various design packages without determination of the final project cost.
Preparation of these design packages comes at an extra cost from the consultant. After a certain package
is constructed it is very hard to do any changes to the design and this causes serious problems to the
owner in case of necessary design changes, delays and a major increase in the cost. And in case of lack of
communication between the owner, construction manager and consultant, this can wreak havoc on the
outcome of the project.
Figure 4 Relationships in CMA
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4. Hospital Delivery Methods 11
Advantages Disadvantages
Construction managers are selected
depending on their qualifications
An ability to overlap design and build
phases by using fast racking
There is no bias towards a certain
party in the development process
Construction managers do not sign
contracts with subcontractors.
Construction manager controls main
construction operations, a very non
democratic approach to construction.
A higher cost, without a fixed
maximum price, where this is
determined only after bidding on all
packages.
Owner has to pay a higher cost for the
construction administration process.
Table 2 CMA advantages and Disadvantages (Gormley, 2014)
iii. CMR Construction Manager at Risk
CMR agency works as a consultant for the owner during the design phases and as a responsible general
contractor during the construction phase. The construction manager and the agency will usually
determine a GMP or a guaranteed maximum price, and the CM is at risk of going beyond that. The
method usually enables more innovation in the design
process, there is less risk on the CM in terms of construction
inaccuracies, and there is more tendency to produce a very
accurate cost estimate for the project. This determination to
achieve the maximum price enables the construction
manager to very motivate to produce a project within the
funding limits and focus more on quality. However
determination of this maximum price does not come at an
easy price, there is a huge difficulty in the cost estimation
process, and in case of a large inaccuracy the quality of the
project may be compromised.
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4. Hospital Delivery Methods 12
Advantages Disadvantages
Construction managers are selected
depending on their qualifications
Enables a higher innovation in
construction processes during the
design phases.
All contracts are held by the
Construction manager, thus all
performance risks are given to the
general contractor.
A higher general contractor accuracy in
cost estimation.
Ability to fast track.
A guarantee on the maximum price
with opportunities to share savings
allows motivation for the CM for
better cost control and work within the
funding limits.
Difficulty to determine the guaranteed
maximum price (GMP) from the
owners’ perspective.
GMP price may reduce the quality of
the project.
Construction manager controls main
construction operations, and works as
the general contractor, causing many
tensions to arise.
Table 3 CMR advantages and Disadvantages (Gormley, 2014)
CMR Case Study:
The Monroe Carell Jr. Children’s hospital renovation
and expansion shows how Ballfour Beatty the CMR
coordinated and smoothed meetings between
different users in the hospital at different floors, the
CMR joined the consultant early to provide a GMP
using a third party estimation company. Due to this
early involvement the CMR and Consultant provided
numerous realistic options for infection control
within the hospital. The Involvement also allowed for
the creation of various fire zone options, which
allowed for lowered costs, and rooms that where
being renovated to be returned to service about 7
weeks ahead of schedule.
Figure 4. Monroe Carell Jr. Children’s Hospital
Owner: Vanderbilt University
CMRs: Balfour Beatty
Total Cost: $25.78 Million
Total Area: 30000 sqf
Duration 1 Year
Benefits: - Early contractor involvement
- More design options
- Decreased cost and shorter
durations.
Optimizing construction & delivery of hospitals
4. Hospital Delivery Methods 13
DB Design Build
A design build company is one that mainly acts as both the consultant and contractor for the entire
projects. Many forms of the arrangement arise, including variations such as design build maintain, where
the building is usually guaranteed for maintenance after its completed, design build operate is another
variation where the project can be operation managed after its construction. Another variation of design
build is design build and finance where most financing of the project is received by the DB Company
and is able to design build, and operate the facility at the same time. In this theme of project delivery the
agency is mainly responsible for the design and construction, fast racking of the project is more
controlled. Due to a better management of the teams there is a better coordination between the design
and building teams. An earlier project delivery time with a
higher accuracy is usually obtained. The design build
company usually handles most of the risk of the construction
thus reducing any liability to the owner. The design build
delivery method also offers the best flexibility in producing
the design options. However the operation of this company
comes at a risk to the local competitors where the competition
is very low in the market and the price of the project can
usually be much higher. The project quality may be
compromised by seeking a lower direct cost price and higher
profits, for the fact that the company does most of the
procurement operations, a lower quality of equipment with a
higher price in the procurement is usually the case.
Advantages Disadvantages
Agency is responsible for both the
design and construction.
An ability to FastTrack the project.
Better coordination between the
design and building teams.
Earlier project completion time and
more cost accuracy.
Fewer competitors to this method, thus
this may increase the initial project
costs.
Cost and time tradeoffs may reduce
projects quality since a designer is not
present to check on the construction
process.
Figure 5 DB relationships
Optimizing construction & delivery of hospitals
4. Hospital Delivery Methods 14
Design Build Company handles all
risks thus reducing any owner’s
liability.
Flexibility, innovation, and more
design options available with this
method.
Procurement costs are higher
Traditional funding for projects in this
method may not cover the FastTrack
theme of the project, due to faster
overdraft needs.
An increased workforce may increase
labor cost due to the need for more
resources due crashing needs.
Table 4 DB advantages and Disadvantages (Gormley, 2014)
DB Case Study:
The Smyth County Community hospital had a tight
budget to work with, the Mountain States Health
Alliance chose to use the Design build method for its
lower costs and faster execution. Design build
required more communication between all team
members, bringing a higher design and project
quality. BIM was extensively utilized to produce
construction documents. BIM increased
collaboration, allowed for better procurement, and a
higher quality control over the entire project.
Prefabrication due to BIM allowed less waste
production. Prefabrication allowed for production of
various project components indoor to carry on during
bad weather conditions, thus a reduction in lost
construction days due to bad weather.
Prefabrication also affected the safety of the workers,
as they were working in enclosed conditions at
ground level, before moving the prefabricated components to their designated places. Workers suffered
less falls, less fatigue, injury and sick days to the usual bad weather conditions.
Keeping in mind that prefabrication produces higher quality units, it also produces higher quality
installations since workers can work on ground level and are allowed easy access to various components
before moving them to their designated places.
Figure 4. Smyth County Community Hospital
Owner: Mountain States Health Alliance
DB: Balfour Beatty
Total Cost: $47 Million
Total Area: 30000 sqf
Duration 1 Year
Benefits: - Less design & field mistakes
- Decreased cost, shorter
durations, Improved quality.
- Decreased waste.
-Safer working environment due to
prefabrication.
-Delivered 2 months ahead of
schedule.
Optimizing construction & delivery of hospitals
4. Hospital Delivery Methods 15
iv. Alliance Project management
Today’s healthcare construction projects are extremely complicated and there are increasingly higher
requirements for less time, less cost, higher quality and more safety. “Change is a defining
characteristic and is inevitable”. (Gormley, 2014). Many traditional contractors try to negate changes,
where they pose a liability, focusing on mere profit interests rather than a collaborative working
environment that enhances output.
Project Alliancing enables all project participants to work as an integrated team, by providing a
method where all parties are monetarily incentivized to increase collaboration and produce a higher
quality project, Hence all team members will be responsible for the project delivery and take
collective ownership of risk involved in the project, thus they all share a certain pain or gain of a
project.
In the early 1990s British petroleum estimated that drilling for the North Sea Andrew Filed project
was uneconomical due to development cost of nearly 450 million British Pounds back then. The
project alliance system was then developed and BP along with 7 contractors reached a final project
mark of 373 million British Pounds. The project was constructed for a mere cost of 290 million British
Pounds and was delivered 6 months earlier than the scheduled delivery plan. (Ross, 2003)
This 21 % reduction in the estimated cost was due to the following factors (Bakshi, 1995):
The reduction of the BP workforce by combining resources.
Improving supplier relationships.
Less documentation.
Non-prescriptive specifications.
Integration of design and fabrication teams.
Innovations in Design.
The following are features of project alliancing (Gormley, 2014):
A target cost is reached by the alliance members, and is then estimated using an estimation
company.
The final project costs are usually compared to the projected costs. The alliance group hence shares
any profits or losses involved in the process.
All alliance members share project decisions based on improving project outcomes rather than
selfish personal gains.
All resources are usually shared between members
Litigation is usually minor
Optimizing construction & delivery of hospitals
4. Hospital Delivery Methods 16
Figure 6 Project Alliance Phasing
The phases of project alliance are
basically the establishment of the
alliance where the owner promotes
contributors depending on their
performance criteria rather than a
financial decision.
Then a project alliance agreement is set
on fees, performance criteria etc… The
project development phase is when the
contributing teams set forth a target on
the cost and performance criteria.
The implantation phase are where these
targets are realized. If all targets are met
to a minimum the teams break even, if
their performance exceeds for the next
24 months without any corrections their
expectation they share the Limb 3 Gain
costs.
Under performance means that the
teams will enter into a pain Limb 3 cost.
(Gormley, 2014)
Figure 7 Limb Costs in Project Alliance
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4. Hospital Delivery Methods 17
Integrated Project Delivery (IPD).
IDP tries to transfer the concepts used in product manufacturing to the construction industry. The
system stems from the Toyota created production method in the early 1950s. The system is known
for the JIT concepts “just in time” production, and the TQC “total quality control” concepts.
IPD is not basically a form of project alliancing but it is inspired by its methods. Alliancing “as a form
of contract and organizational governance” (Howell, 2005) and IPD can be seen “as the operating
system” (Howell, 2005).
Traditional project delivery methods usually try to improve and optimize the entire project delivery
by focusing on the optimization of distinct parts of the project. Most of these delivery methods are
managed by the traditional Critical Path Method CPM.
Integrated project delivery is largely linked to the Concurrent Engineering Methods CE. Concurrent
engineering is based on two building blocks “integration and concurrency.” In other words
integration aims at sharing and transferring all project information about any tools and technologies
used in the project development process between all team members. And concurrency is based on
the fact that tasks are scheduled based on the interactions of all team members in the project
development process. (Kamara, 2007)
Integrated project delivery requires many
workshops between all team players and
their regular collocation in a “big room”
where many early project issues, analysis
and life cycle considerations are planned
out. IPD also relies heavily on Building
Information Modeling BIM practices to
increase team collaboration. BIM serves
as the cornerstone of IDP. (Gormley,
2014).
Figure 8 Integrated Project Delivery Process
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4. Hospital Delivery Methods 18
i. Lean Project delivery (LPDS)
Lean project delivery is a type of integrated project delivery. It is referred to as LPDS or the lean
project delivery system. LPDS was termed by the lean construction institute LCI. Many refer to IPD
as lean project delivery due to their similarities.
Lean design and construction can be termed as “the
continuous process of eliminating waste, meeting or
exceeding all customer requirements, focusing on the
entire value stream, and pursuing perfection in the
execution of a constructed project”. (Gormley, 2014)
Waste elimination is the process of reducing overproduction,
waiting, unnecessary transportation, over processing, excess
inventory, unnecessary movement, defects and rework, not
using employee talents, and environment and energy
concerns.
Lean project delivery strives to produce a project optimized
for its maximum value. Lean projects start the
implementation of
the system early on
in the design
phase, where the teams present a comprehensive value
analysis and a well-organized project schedule. Various
design documents are produced depending on obligations
set forward by various team members.
Milestones are produced during the design phase, and
hence the project schedule is produced. The planning of the
activities can get extremely detailed. This allows for the
project teams to foresee any problems in the scheduling of
the activities, and thus allow for a strict adherence to the
schedule. Lean project delivery is built on the idea of
mutual respect, and peer pressure from various teams allow
for a higher rates of productivity. Each team member is
Figure 9 Summarizing Lean Project Delivery
Figure 10 Waste Reduction in LPDS
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4. Hospital Delivery Methods 19
motivated to become a leader rather than just a player in the delivery process.
Lean project delivery as stated before is largely reliant on BIM modeling. The American Institute of
Architects California Council AIACC released various publications that describe the model
ownership of various parties, thus the model owner is the person with much more capabilities than
other parties. Model inaccuracies are very risky, and thus clash reports on a weekly basis and model
publishing are a very important part of a successful lean project delivery. BIM can also be very
beneficial for building operations management also, but these claims are still under further
investigation. (Gormley, 2014)
A part of Lean project delivery is the process of prefabrication, or more known as PPMOF,
prefabrication, preassembly, modularization, and offsite fabrication. In hospital patient rooms,
toilets, operation theaters, head units and many other parts of the project can be produced using
PPMOF. PPMOF is significantly good for the A/E/C industry, general benefits can be summarized
as follows.
a. More Safety
b. Higher Quality
c. Shorted completion schedules
d. Accurate cost control
e. Less Waste
f. Reduces site crew congestion
g. Less weather delay due to indoor offsite fabrication
h. Indoor fabrication allows for factory tools and quality control
For healthcare projects PPMOF serves the following purposes and allows the following benefits:
a. Crews can work in certain infection controlled spaces and various HVAC components offsite without
any space limitation in the case of renovations.
b. Modularity allows for easy upgrading of outdated technologies and simplifies the process of
renovations and additions.
c. For rural areas construction projects may face problems with finding local workers. Prefabrication
offsite totally reduced this challenge. (Gormley, 2014)
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4. Hospital Delivery Methods 20
Advantages Disadvantages
All participants share risks
Early involvement of all parties allows
for more accurate project planning.
Reduced need for construction
administration.
Transparency in all project
transactions.
Higher efficiency in production.
Direct Cost absence reduces
competition and all project performance
objectives can be easily achieved.
No legal action can be used
Not very popular in north America
More risks than regular projects.
All teams are liable for the performance
of other teams.
Higher procurement costs.
Table 5 Lean project delivery advantages and Disadvantages (Gormley, 2014)
IPD Case Study:
The Stutter Health Fairfield medical office building
is a small part of many centers with a budgeted cost
of about $6.5 billion. The owner hence was able
experiment with a new delivery system for the
project.
A pioneer in using a three way integrated form of
agreement known as IFOA in healthcare projects as
the basis of the design and construction of the
project. All project participants became increasingly
cooperative, collaborative with a vision for
overachievement of the project goals.
Three way contracts meant that the owner,
consultant and contractor choose the subcontractors
very early in the design process, and set out bid
prices as highly competitive lump sum prices.
An IFOA or an integrated form of agreement means
that all participants shared the risks, thus financial
incentives were a key motivator for all parties in the project. This reward system allows all participants
to exceed the requirements set forth. IFOA also means that any errors is the responsibility of the
consultant and the contractor, as in alliancing, a transparent open book system was utilized.
Figure 4. Stutter Health Fairfield MOB
Owner: Stutter Medical Foundation
Consultant: HGA Architects and Engineers
Contractor: The Boldt Company
Total Cost: $19.43 Million
Total Area: 70000 sqf.
Duration 1 Year
Benefits: - Less design & field mistakes
- Decreased cost, on schedule.
- Decreased waste.
-Safer working environment due to
prefabrication.
-Higher fee control
- Team reciprocal respect and
satisfaction
-Highest owner satisfaction.
Optimizing construction & delivery of hospitals
5. Conclusion 21
Weekly meetings from all participants were a key factor on the success of the project, the team was
known as the IPT or the integrated project team. A higher level executive team took care of any decisions
that could not be reached by the IPT team. The IFOA also meant a limited liability to each party, and any
problems arising can be solved by a third party.
The building was hence delivered at $19.43 million less than the estimated $22.25 million estimated by a
third party. Using BIM meant that most clashes were detected very early on in the design process. GPS
enabled BIM components were used and many prefab components were installed into place accurately.
The PMIS “project management information system,” reduced the amount of used paper extensively and
allowed for an open book method and a higher transparency. (Gormley, 2014)
5. Conclusion
Owners in general want a healthcare project that is delivered on time and within the estimated budget.
Selection of the best delivery methodology is of vital importance to all project members. Whiten the last
decade many owners did not change any of the healthcare delivery methodology employed in place
during that period.
In 2004 the construction industry institute presented a research investigating the costs, quality, schedule
accuracy and safety of about 127 construction projects over a span of 7 years. Design build methodologies
where the most performance effective followed by the construction manager at risk then the traditional
design bid build strategies.
Integrated project delivery seemed to shift these conclusions even further, with the introduction of BIM,
and more easily ready prefabrication strategies, made the construction process of more complex and time
consuming project into easier less costly and higher quality construction projects. (Gormley, 2014)
Optimizing construction & delivery of hospitals
Bibliography 22
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Media Bibliography
Cover image courtesy of Perkins and Will, Dargroup © 2014 all rights reserved.