Optimizing Delivery of Hospital Projects

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


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


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



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)



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 %



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 %



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 %


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



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



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




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.




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.



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.


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



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.



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



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



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



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



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)




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.


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)


Bibliography 22

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Media Bibliography

Cover image courtesy of Perkins and Will, Dargroup © 2014 all rights reserved.

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Optimizing Delivery of Hospital Projects