vendor centric approach: the bva mechanism

www.ksm-inc.com 1KASHIWAGI SOLUTION MODEL INC

Vendor Centric Approach:

The BVA MechanismDelbert Feenstra, LEED AP, Senior Estimator / Procurement ManagerBVA Expert

KNUTSON CONSTRUCTIONABOUT US▪ In continuous operation since 1911

▪ Family owned – 3rd Generation

▪ 6 office locations

▪ 450 current employees

▪ Annual volume - $500 million

▪ Experience in 18 states + Canada


Procurement PerformanceDescription Metrics

# of Project Proposals 44

Proposals Total Cost ($M) $484

# of wins 29

Cost of Projects won ($M) $370

Win % 66%

Next closest 13%

Loses are attributed to:

-Cost Reasonableness

-Misalignment


BVA Project PerformanceOverall performance Overview

# of Projects 29

Original Project Cost ($M) $370

Customer Satisfaction 95%

Total % Over Budget 3%

% due to owner 2%

% due to Designer 2%

% due to contractor -1.5%

% due to unforeseen 0.5%

• Start measuring yourself and your team if you aren’t already.


First Encounters with Best Value

• 2009-2010

– Knutson submitted proposals on five projects and failed.

Upper Management met with Dr Dean.

• Focused on changing people

• Requires lots of resources

• Relationship / bias driven

• Management didn’t understand the individuals

Control and Influence


First Encounters with Best Value

• 2011 Experts identified and sent to AZ training.

• Focus is on changing system

• Leader is the constraint

• Requires fewer resources

• Information driven

• Requires the leader to understand and identify individuals Alignment

• Lesson learned: not everyone is an expert.


Case Study: City Of RochesterMayo Civic Center

March 2015

March 2015


Background

• Budget: $67M | 188,000 SF

• Two-story convention facility addition – 40,000 SF Ballroom– Meeting rooms – Hold two 1,000 person conventions - simultaneously – Why? In 2008, Rochester lost out on over 70 conventions ($74M

revenue)

• Schedule– RFP Released on 11/21/2014– 61 calendar days to submit proposals– 12 calendar days to evaluate– 29 calendar days for clarification and award


Prioritization Comparison (Top 2 Ranking Vendors)

NO CRITERIA WEIGHTS FIRM A FIRM D FIRM A FIRM D

1 Cost 250 65,605,923$ 60,394,872$ 230 250

2 Risk Assessment 225 7.9 8.4 212 215

3 Value Assessment 175 8.8 8.6 172 164

4 Interviews 350 8.2 7.6 350 324

1,000

Price Points (250): 23% 25%

Performance Points (750): 73% 70%

TOTAL POINTS (1,000): 96% 95%

RAW DATACRITERIA & WEIGHTS PRIORITIZED DATA


Project Results

• Project finished on time

• Cost Deviations

– Owner Change orders: 3%

– Contractor Changes: -2%

• Realized during Clarification process so owner could add scope.

– Client gets best value for a lower cost, on time with satisfaction.


The Knutson Experience

• Company culture of BV on all projects

– Alignment of experts every time

– Open and transparent with all stake holders

– WIN-WIN

• Hard Bid / Non-BVA Client

– We still use all the tools from BVA

• It’s an expectation!


What Next?

• 2015-2020 - 21 BVA proposals - 15 wins 6 loses.

• Only 2 Contractors submitting proposals.

– Both high performing with experts pre-planning

the work.

– Resulted in projects being awarded based on cost.

The future:

We anticipate Owners (public and private) wanting to

move to hiring BVA experts as consultants during

pre-construction.


Our Plan

• Become a BVA Licensed Partner in Minnesota.

– (Achieved Spring 2020. First in the Nation.)

• Have A+ Certified Expert in house. (Achieved 2020)

• Expand BVA to other regional public sector owners.

• Expand BVA to the private sector which has traditionally

been relationship based with negotiated projects.


Delivering BVA as a Licensed Partner.

Selection Execution

1 project - $30M

❖ 2-story 100,000 sf

elementary school

2 projects – $100M

❖ 3-story; 180,000sf

Middle School

❖ 2-story; 100,000sf

Elementary School

Preparation

4 projects - $165M

❖ Street & Utility Project

❖ 7- story medical

research building

❖ 2-story, 100,000sf

elementary school

❖ High school pool

addition.

Use BVA approach to select

1) Schedule critical path scopes of work

2) Building envelope trades.

Clarification


BVA is the way.

• Benefits to Vendor using BVA:

– Good Margins

– Satisfied Customers

WHY?

– Identify risk , Provide solutions , Execute plan

– BVA allows forward-thinking.


Questions

vendor centric approach: the bva mechanism

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