Cornerstone - Winter 2015 - (Page 17)

Target Budget Design Providing Value with Cost Certainty BY JIM MYNOTT, DBIA, LEED AP BD+C, VICE PRESIDENT OF DESIGN MANAGEMENT, MCCARTHY BUILDING COMPANIES, INC. THE GrOWING MArKET rESPONSE TO design-build delivery requires a different level of integration for the project delivery team. In a recent article prepared by RS Means, the growing market penetration of design-build ranges from 17 percent to 71 percent of all projects in the United States, with the military utilizing designbuild on 81 percent of all projects. As owners and governmental agencies continue to look for ways to improve their procurement approaches for their projects, a clear transition is underway in all major market and geographic sectors to consider designbuild delivery. What has become apparent during these transitions to design-build is that the project team needs to establish an early commitment to cost to ensure team alignment and consistency in executing design to construction and through operation. As we have seen in the California market, the advent of "performance-based" designbuild RFPs requires teams to propose a project solution within a Maximum Allowable Contract (MAC); thus, Target Budget Design becomes a critical component of the overall project pursuit approach. What is the Target Budget Approach? Simply stated, the Target Budget Approach establishes the costs of the project before the design documents are produced not as a function of design document production, reversing the roles of the budget from reactionary report to a proactive, integrated team alignment tool. As a byproduct, the "target budget" approach continuously integrates budget into the project scope and project requirement discussions and decisions. In essence, this approach focuses on team alignment and integration at the earliest point in the project to affect the best results for the project and owner. Winter 2016 Target Budget Design Transcends Delivery Methods Grounded in design-build and Lean processes, the Target Budget Approach functions as a continual barometer to the project. This approach requires different skill sets for all team members in order to collaborate toward the best solutions. Team members are now required to be able to synthesize the creative aspects of the design process, schedule/progress of the design, the owner's requirements, contractual obligations and budgeting. A few of the new critical skill sets include: * Conceptual Estimating * Understanding the "language of design" * Developing flexible approaches to managing design process * Communicating across multiple disciplines * Working with less information than in the past * Application of Lean processes to eliminate waste, foster pre-fabrication, and support expedited decision making Continual Balance of Three Overlapping Circles In order for Target Budget Design to be successful, the project team needs to achieve a confluence of design, estimating and the owner's requirements centered on the Target Budget Approach. When achieved, the entire team receives real-time feedback, and the design team authors content one time, thus avoiding re-authoring design content. Cost Models and Target Budget Level of Detail Progression Managing real-time cost models of current scope in design with that of the target budgets allow the team to aggregate the available information in the most suitable way for the project. By having both the target budget and on-going detailed cost Continual Balance of Three Overlapping Circles The intersection of the three major project influences is the ability to manage Target Budget Design in the context of integrated design processes. Managing and Monitoring Content True collaboration and budget management is the function of repetitive approaches with the integrated team. Developing a weekly work plan to update design and quantities leads to efficient design progression. models, the team is able to focus their efforts toward gaining the best understanding of design solutions to meet the owner's wants and needs as early as possible in the project life cycle. For example, by identifying and understanding the larger constraints of the project, such as location, orientation and massing, allows the team to set target budgets based on the available parameters and detailed cost histories from the design-builder's past projects. A good way to think about Target Budget Design is that it is a combination of both parametric estimating and quantity surveys to capture the project cost and scope requirements, where in the beginning 17

Table of Contents for the Digital Edition of Cornerstone - Winter 2015

From the Chairman of the Board, Bill Scott, III
Meet Your New Board of Directors
Upskill Houston: The nation’s first business-led, community-wide, integrated effort to increase the “middle skills” workforce.
Berger Iron Works Receives AIA Houston Artisan of the Year Design Award
Great Apes Return to Houston: W. S. Bellows Construction Corp. takes on a unique journey to create the Houston Zoo’s African Gorilla Forest
Target Budget Design: Providing Value with Cost Certainty
Past Events
Member News
Index of Advertisers/

Cornerstone - Winter 2015