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CONSTRUCTION KNOWLEDGE BLOG

April 15, 2013

Reputation Monitoring: An Idea to Consider
Filed under: Innovation in Construction — Tags: — nedpelger

A fellow I know, Darren Slaughter, does good work helping contractors improve their websites to grow their businesses. Darren just came out with a new service that makes sense to me…Reputation Monitoring.

Now and in the future, many people will be finding you from a search engine. Maybe a satisfied customer tells a friend about your great service. The friend goes home, types some form of your name into a search engine and what comes up?

Hopefully it’s your professional website that helps convert this prospect to a customer. But maybe it’s a Forum where you get blasted or a bad Yelp review or a Facebook shaming.

To begin, do you utilize the free Google Alerts service? Just follow the link and set up several alert links for words and phrases folks may use to search for your company.  If you aren’t yet doing that, you should start today. You get an email for every hit to your selected word or phrase.

So Google Alert is a decent place to start, but many of these reputation killers won’t show up on Google Alerts. Facebook and Yelp postings won’t show up there and could be a problem for you.

Darren offers a $19/month service to provide a more thorough and contractor specific approach to Reputation Monitoring. You should certainly consider this service.

Look into the likely future and what do you see about how you will get work? Personal relationships will continue to be most important, but the internet will gain significance for many years to come. So make sure you aren’t left behind on internet marketing. Make sure you have an excellent web page and that you monitor your reputation.

CONSTRUCTION KNOWLEDGE BLOG

April 9, 2013

The Value of Openness
Filed under: Innovation in Construction — Tags: — nedpelger

PA Gov Corbett ordered an investigation into the the PA Turnpike Commission corrupt contract awards. Seems Denver based Cider, Inc. has been acting badly. The quote below from the Pittsburgh Tribune-Review amazes me:

In 2005, Ciber won a state job even though its $3.2 million bid was almost seven times that of the lowest bidder, the grand jury said. Within a year, turnpike officials increased that contract by $58.3 million, which the grand jury called “dramatic and unprecedented.”

One of the guys working at Cider also managed to get his inexperienced daughter paid $100/hour by the Turnpike Commission. Cider was recently tied to a kickback and corruption scheme in New Orleans.

So what’s the take away? As we try to contract more efficiently, getting away from the 100% complete design (generally over-designed and full of errors) and straight competitive bid process, we open more opportunities for corruption.

The key, though, whether in public contracting or your own business life, is to become more open in every way. Look at every process you perform and think about a way to make it more open and above board. Strive to make accountability clear.

Don’t be afraid to show real costs to your customers. Work with folks that are smart enough to understand that you need to make a living as you help them get what they want. You’ll find this business much more enjoyable with more folks working together on your team.

CONSTRUCTION KNOWLEDGE BLOG

April 2, 2013

The Art of Pricing
Filed under: Innovation in Construction — Tags: — nedpelger

The article Pricing Experiments You Might Not Know, But Can Learn From has some great testing insights into selling and pricing. One of the fundamental truths in business: pricing is an art, not a science.

We think our customers make purchase decisions completely rationally, deciding on the option with the highest utility. But the above article shows that neither our customers nor ourselves tend to make pure rational purchase decisions.

So what do I take away from the article and my own experience for construction pricing?

  1. Asking people what they want to pay (their budget) rarely works. They almost never have enough data to really know what’s reasonable.
  2. Helping them know what’s reasonable is your job. It’s particularly valuable to let customers know what similar projects, built by others, have costed. Knowing construction cost databases, even showing the Means Cost Data pricing, is worthwhile.
  3. When trying to get a decision, remember that choosing between three prices is generally easier than choosing from two. Think about the pricing psychology and present estimates accordingly.

As is the case with most areas of business, there’s more to pricing than just doing the work. Take some time to learn about pricing and run some tests to gain some insight.

Too many folks in this crazy construction business work for decades with almost nothing to show for it but callouses. Take some time to think and learn about pricing. There should be some reasonable rewards for all the risks you endure in construction contracting.

CONSTRUCTION KNOWLEDGE BLOG

March 6, 2013

Natural Gas Vehicles a Rising Trend
Filed under: Innovation in Construction — Tags: — nedpelger

I like to share trends with you when I spot them. Natural gas vehicles (NGVs) look like a winner in the upcoming years. Ford announced that they tripled their sales of NGVs from 2010 to 2012. Natural gas is becoming the fuel of choice for truck fleets, buses and taxis.

Due to a lack of re-fueling stations, and the relatively long time needed to re-fuel, consumer NGVs don’t look to be over-taking the market any time soon. Bifuel (gasoline and natural gas) vehicles could become popular, but hybrid technologies rarely end up being major game changers.

For commercial fleets that come back to a yard each night, though, the NGVs outlook looks strong. The functional fuel cost of natural gas is about half of that for gasoline or diesel. The pollution and greenhouse gas issues are better for NGVs. With the wide spread fracking technology improving dramatically, the long term cost outlook for natural gas should be much lower (and more stable) than in the past.

Bankrate.com notes in an article about the pros and cons of NGVs that:

Today, 40 percent of new garbage trucks and 25 percent of new buses in the U.S. can run on natural gas, Kolodziej says. “In the city of Los Angeles, all the buses are now running on natural gas,” he says.

For consumer vehicles, my bet remains on electric cars. They are zero emissions at that hard to get efficient individual car level. Then the natural gas can be efficiently burned at the power plant (replacing more problematic coal generation). That’s where I think the car trend will go.

But if you run a construction fleet, look hard at NGVs. The return on investment will push you toward an immediate decision.

CONSTRUCTION KNOWLEDGE BLOG

February 25, 2013

Skanska Pre-Fabbing Hospital Rooms for $250M DE Project
Filed under: Innovation in Construction — Tags: — nedpelger

Take a few minutes to read the ENR article about Skanska pre-fabbing hospital rooms. It’s fascinating how repetitive projects (like hospital rooms or dorm rooms) can be done so efficiently off site. The article goes on to say:

In the slow recovery from the construction slowdown, Skanska, owned by a Swedish company, has been adapting European prefab models to commercial projects, including both Nemours and an 800-unit, six-story dorm project at the nearby University of Delaware, among others.

“This is a radical departure,” Corrado said. Instead of building every tray, curving every pipe, fitting every duct, and walking them up ladders to bang together into a suite of rooms, everything goes in what Corrado called “one big box.” Then it is linked by headwalls studded with gas, water, electric, air and dentist-office-style folding booms, and approved, pre-installation, by inspectors from Underwriters Laboratories, as if each room was a giant appliance.

So, as you consider project that have a repetitive component, think about the possibility of pre-fabrication. We’ve got to keep changing our methods to increase efficiency.

CONSTRUCTION KNOWLEDGE BLOG

December 5, 2012

Telling Your Story: Industrial Museums
Filed under: Innovation in Construction — Tags: — nedpelger

Some of my favorite museums in the world were built to showcase industrial brands. The SPAM Museum in Austin, MN provides quirky entertainment and teaches lessons about marketing history. My Dad and I loved the tour and had SPAM burgers to celebrate. Hormel spent millions on that museum, but has seen a nice return on their investment.

They built their brand with some creativity and a building. Of course, having Monty Python mock you helps as well. Watch the video below and give yourself a good laugh. By the way, I learned at the SPAM Museum why this was so funny to Brit baby boomers. During WWII, America  sent millions of cans of SPAM to England, which was almost the only meat available. The children raised during that time had a SPAM heavy diet.

httpv://www.youtube.com/watch?v=anwy2MPT5RE

I first learned about industrial museums 25 years ago when visiting the Coca Cola Museum in Atlanta, GA. Again, the displays were creative and I learned much about business marketing and risk taking. Here’s an excellent video that shows the highlights.

I recall the Heineken Experience in Amsterdam also being excellent. The Economist also mentions the Kohler Design Center in Kohler, WI, the Cumberland Pencil Museum in Keswick, England, the Harley-Davidson Museum in Milwaukee, WI, the John Deere Museum in Moline, IL and the Hershey Experience in Hershey, PA.

Beyond good travel destinations, though, I challenge you to think about how these successful companies built their brands by telling their stories in a creative way. So what’s the story of your business? How do you share it? Most of us won’t be building museums to ourselves, but we need to think about sharing our stories and building our brand.

That’s a good topic to contemplate as this year ends and we look to 2013.

CONSTRUCTION KNOWLEDGE BLOG

December 3, 2012

The Beauty of Public Private Partnerships
Filed under: Innovation in Construction — Tags: — nedpelger

The Kentucky Transportation Cabinet (KTC) and the Indiana Finance Authority (IFA) want to build two 2500′ cable stayed bridges spanning the Ohio River. Rather than proceeding with the traditional complete design and public bid method, the KTC and the IFA went with a Public Private Partnership (P3).

They engaged Engineering firms to produce conceptual bridge designs, estimated costs and schedules. Then they interviewed and short-listed four firms to prepare more detailed designs, with bid costs and schedules.

The Walsh Group from Chicago, IL won both competitions. The Indiana project had a price of $763M US. That price was 23% lower than the estimate and the completion date of October 2016 was eight months ahead of the conceptual schedule. The Kentucky project was $860M US, which was about 10% under budget and 18 months ahead of schedule.

The further beauty of these P3 projects will be the lack of change orders due to design deficiencies. When the design-build contractor gets to control the design, the designs improve and the savings accrue for everyone. With the need for increased efficiency for spending public funds, this method needs to see more use in all the states.

CONSTRUCTION KNOWLEDGE BLOG

August 22, 2012

Energy Innovation at the London Olympics
Filed under: Cool Projects,Innovation in Construction — Tags: — nedpelger

GE’s Cheif Marketing Officer Beth Comstock wrote a great article about energy innovation and the Olympics. For example, sponsor EDF Energy modeled smart monitoring of power usage during the Games, allowing anyone to track power usage at different venues, in real-time, on dashboards available online. Athletes were able to track and reduce their energy use.  By becoming more aware of our energy footprint, we tend to behave better (think about the roadway signs that show you your actual speed, don’t you usually slow down?).

Regarding lighting, the LED seemed everywhere. The Tower Bridge shown below debuted its energy efficient, 18,000 LED lighting system. It’s beautiful, innovative and practical.

Below are a few more cool items Beth uncovered:

• EyeStop: the next generation of smart urban furniture. Combining sensors, interactive services and touchscreens, the bus stop of the future will give riders real time updates, community information and entertainment, while also allowing them to contribute updates and knowledge.

• The Copenhagen Wheel: in addition to turning any bicycle into a hybrid e-bike powered by saved energy that is dissipated while cycling and braking, the Copenhagen Wheel also maps pollution levels and traffic conditions in real time and shares that info with other users.

• Flyfire: the public art of the future will not be boring. Flyfire’s goal is to turn ordinary spaces into immersive and interactive display environments. In its first application, a large number of “self-organizing micro helicopters” containing LEDs acted as smart pixels, forming elastic display surfaces anywhere.

CONSTRUCTION KNOWLEDGE BLOG

July 25, 2012

History of the Builder
Filed under: Innovation in Construction — Tags: — nedpelger

Walking back from the Tower of London, having just been entertained with the surprising number of ways to gruesomely execute people, I came across this plaque:

It says:

THE BUILDING WORKER

For the thousands of building workers who have lost their lives at work, we commemorate you. For the thousands of building workers who are today building and rebuilding the towns and cities across the United Kingdom, we celebrate you.

The plaque got me thinking about all the tradespeople through history that lent their hands and backs to improve the built environment.  Whether it’s a fun playground

or the beautiful St Andrews cathedral,

everything that gets built includes the Building Worker’s sweat and talent. I wonder if there’s a way to better celebrate the contributions of the Building Worker?

I’ve often done pizza and ice cream lunches for the workers on a project as a way to thank them for their efforts. Everyone appreciates the gesture, but it seems small.

When I see the workmanship shown in this little church near Penrith, I wonder about all the construction workers who quietly ply their trade, appreciated by few. Any ideas for ways to better celebrate the tradesmen and women of our times?

CONSTRUCTION KNOWLEDGE BLOG

July 9, 2012

Two Stories that are Cautionary Tales
Filed under: Innovation in Construction — Tags: — nedpelger

My ENR Daily News Alert today (have you signed up for this useful service?) listed two top stories that seem to have no connection. California approved the $168B high speed rail program and Palm Beach, FL just spent $150M on a jail that doesn’t seem needed and isn’t going to be finished.

A train system and a jail, located at opposite sides of the county, with a thousand fold difference in project cost don’t seem too related. As I read both stories, though, I thought about the folly of our public construction project decision making process.

To start, the consultants doing the feasibility studies often end up doing the project design. It’s like asking the barber if you need a haircut. These consulting firms do the feasibility studies as loss leaders, knowing they will get fat fees if the project proceeds.

A simple rule that bars the firm studying the project feasibility from working on the future project in any way would go far to reduce this clear conflict of interest.

After deciding if the project really is needed, the complexities of managing a large design and construction project often overwhelm public agencies. When the Sun Sentinel studied the jail project, they found the following:

* Consultants hired by the county wrongly predicted an increase in inmates, fueling the grand expansion plan.

* Architectural designs — submitted by the HOK firm and approved by county officials — failed to meet state building codes. That set off a domino effect of changes that helped escalate costs.

* County officials approved a staggering 180 changes to the project for the lead contractor, Broward County-based Moss & Associates. Most of these “change orders” were submitted in amounts low enough that they didn’t require County Commission review. But together they nearly reached $9 million.

* The contract allowed Moss nearly $900,000 for contractors’ travel and relocation expenses — without requiring contractors to document how much they actually had spent.

So now they have an unfinished jail project that isn’t really needed if it gets finished…for which there is no more money. This failure to manage the development process needs to be improved for public projects.

As I’ve written before, innovative funding which allows private investors to fund projects helps assure the project feasibility and oversight is reasonable. The use  of design/build single source project delivery methods also helps.

Will we be reading about the grand project failure in the CA train project in a few years? I hope not, but that’s where the odds look highest to me.

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