A REPORT BY THE New York Building Congress Task Force on and Best Practices Message from the Chairman

When I was asked to serve as Chairman of the New York Building Congress, I wholeheartedly agreed, on one condition — that the Building Congress address the issue of innovation and best practices in our industry as part of its agenda.

With the City in the midst of another building boom, now is the perfect — and most important — time to devote our attention to building smarter, faster, more safely, and more economically. To accomplish these goals, we must be willing to challenge the status quo, embrace best practices, and implement new ideas and technologies.

Over the past two years, the Building Congress Task Force on Innovation and Best Practices has been fully engaged in that process of self-evaluation, thoughtfully considering what we can do as an industry to make us better in everything from procurement reform to building technology and processes, site management, and workforce development.

We have found that innovation is all around us, but unfortunately, it hasn’t been as widely distributed and replicated as it needs to be. While many other industries see innovation as a fact of doing business, the building industry has been slow to adopt innovative tools and methods on a broad scale. We continue to build fundamentally the same way we did 50 years ago and arguably even earlier. Yet, imagine going out today and buying a car that was built the same way as the 1965 Studebaker or a with 141k of RAM (what a 1965 Univac offered).

We are stuck, in part, for the same reason many people get stuck: unquestioned habits. , for example, is the envy of many cities around the world because our two-day cycle per floor enables very rapid high-rise construction. But the two-day construction cycle is so ingrained in our thinking that it can inhibit us from taking a fresh look at other solutions. Entrenched in our ways, we tend to leave untapped the great potential for improving how our built environment is designed and constructed.

This report, which provides an overview of the Task Force’s efforts, shines a light on just some of the opportunities for productive change that can raise the bar while also setting benchmarks that are feasible and attainable. It is an initial step toward elevating innovation and best practices in the New York City building community on an ongoing basis by sharing what has been learned so far and offering recommendations for a path forward.

I thank the more than 40 dedicated industry professionals who have actively participated on the Task Force. Their leadership and commitment to our industry are, in and of themselves, best practices that we can all strive to emulate.

Thomas Z. Scarangello, P.E. Chairman, New York Building Congress and Task Force on Innovation and Best Practices Chairman and Chief Executive Officer,

2 TABLE OF CONTENTS

Introduction: Seeding Innovation and Best Practices...... 1

More Progressive Public Procurement...... 2

Best Practices in Project Delivery...... 5

Better Sidewalk Sheds, Better Streetscapes...... 7

Conclusion...... 9

Introduction: Seeding Innovation and Best Practices

Building Innovation highlights the work and recommendations of the New York Building Congress Building Innovation is Task Force on Innovation and Best Practices, which spearheaded a intended to inspire continuing, wide-ranging initiative to promote construction innovation and improve collaborative discussions the way New York City builds. across industry sectors. Formed by Chairman Thomas Z. Scarangello in 2014, the Task Force was born out of a growing awareness that the City and the development, product and process and constructed, with examples building industry must do more to , site management, and taken from the work of three remain at the forefront of building improved communications among Task Force committees — the technology and best practices stakeholders. Government Procurement and while helping to realize a 21st Procedures Committee, Building century vision of New York’s built Participants examined topics Technology and Project Delivery environment — one that is greener, ranging from procurement reform, Committee, and Site Management more resilient, and more responsive alternative project delivery, and Lean Committee — whose full reports are to human needs. principles to modular construction, available on the Building Congress construction sheds, and industry website. The Task Force tapped the expertise workforce supply and demand, all of more than 40 leading contractors, with the goal of identifying ways Most importantly, Building architects, engineers, government to increase efficiency and reduce Innovation is intended to officials, and other industry leaders the comparatively high cost of inspire continuing, collaborative and organized six committees to construction in the City. discussions across industry sectors focus on and develop practical to share lessons learned and best deliverables related to building The Task Force prepared Building practices as well as encourage technology and project delivery, Innovation to illustrate the potential the development of a culture of government procurement and for meaningful change in how the innovation within the building procedures, workforce City’s built environment is designed community.

Cover: BIM Model of , Credit: Thornton Tomasetti 1 More Progressive Public Procurement

“New York City government adversarial relationships between As a result, project funding levels agencies are responsible for a large agencies and contractors, such as are established based on limited capital construction program that the City’s divided management of information, leading to major cost has a significant impact on public works projects and approval increases when the appropriate the local economy and on the processes for payments and change consulting work is done and the true ‘state of good repair’ of the local orders; and outdated project cost of the project revealed. infrastructure,” said Mark Blumkin, delivery methods. Director — Capital Projects “The problem starts at the capital Consulting for Deloitte Financial The Task Force drew from best planning phase, because bond Advisory Services and Co-Chairman practices in the public and private financing regulations prohibit the of the Government Procurement sectors as well as experience in use of capital funds to pay for and Procedures Committee. “Often using alternative project delivery design until the overall project is the means by which these agencies methods to create proposals for included in the capital plan,” said procure and manage this capital realistic, achievable reforms that Milo E. Riverso, President and portfolio are hampered by outdated would improve the public sector’s Chief Executive Officer of STV and cumbersome regulations and procurement and capital planning Group, Inc. and Co-Chairman of methods that delay projects and processes so that projects can be the Government Procurement and increase the cost of work to the delivered faster and more cost Procedures Committee. “But asking taxpayer.” effectively. for the funding for construction before putting pen to paper on a concept dooms the budget. Construction managers should be invited to participate during the design period to get the best collaboration possible from the outset so that the design can be completed and the budget formed before going to get the construction funds.”

In recent years, the City has taken steps, including appropriating funds, to address this problem with a program administered by the Office of Management and Budget New NY : Tappan Zee Bridge Replacement, Credit: New York State Thruway Authority (OMB) for Capital Project Scope Development (CPSD) services, Based on various studies performed intensive scope development and by Deloitte and others over the past CAPITAL PLANNING cost estimating services, that may decade, the Task Force identified AND PREPARATION be requested by City agencies key drivers of construction costs for certain capital projects. These and delays on public works projects, Most capital projects procured preliminary assessments enable the including the lack of adequate by government agencies lack City to accurately estimate the true capital planning and preparation; adequate preliminary scoping, costs of selected projects and, if controls that are designed to prevent design, and estimating, largely necessary, investigate less expensive corruption but effectively create due to resource constraints within alternatives prior to capital government agencies and the lack commitment. of funds available for consulting services until the project is funded.

2 Number 1 Subway Line Rebuild Following 9/11, Credit: Patrick Cashin/Metropolitan Transportation Authority

The Task Force recommends that these impacts more keenly felt by The Task Force recommends the City expand the CPSD program contractors than in the change order that the City adopt a more to require all agencies in charge and payment approval processes. streamlined approach to project of major capital projects (e.g., any Uncertainties and delays in these management that assigns oversight project with a preliminary budget processes have led contractors responsibility and authority to estimate exceeding $50 million) to to increase their bids on public the agency managing the project use CPSD services. By facilitating projects to cover their costs and risk once the budget and contingency the development of more accurate exposure. have been set. As part of this scopes, estimates, and timelines, streamlined approach, the Task this “Phase 0” would improve “Multiple agencies may be Force recommends the following project planning and help ensure necessary in the lead-up phases additional reforms: that projects are approved with to establishing a capital project,” appropriate budgets and schedules. said Jay Badame, President and Chief Operating Officer of Tishman The managing agency’s Construction — An AECOM oversight responsibility should PROJECT MANAGEMENT Company and Co-Chairman of include budget control, with a the Government Procurement and 10 percent contingency — the Procedures Committee. “But once industry standard — to cover Too often, public sector the capital project is funded and change orders. In the event the management of capital projects launched, it would be far more managing agency needs to exceed is divided among more than one efficient and improve accountability the 10 percent contingency, then government agency, slowing to have the responsibility and additional oversight by OMB and approval processes, compromising authority for delivering the project the New York City Comptroller’s accountability, and delaying project rest with a single agency.” Office should be introduced. completion. Perhaps nowhere are

3 The managing agency translate into accelerated project “A one-size-fits-all approach to should establish a delivery and cost savings. Such project delivery should be a thing of contingency management alternative project delivery methods the past,” said Mysore L. Nagaraja, plan that includes include design-build, design-build- Partner/Co-Founder of Spartan monitoring of expenditures as the finance-operate, Construction Solutions and Co-Chairman of the project progresses. Any expenditure Management (CM) at Risk with a Government Procurement and that exceeds the plan should trigger Guaranteed Maximum Price (GMP), Procedures Committee. “Experience review by the agency’s and integrated project delivery (IPD). has shown us the benefits of Audit Officers, OMB, and the using alternative project delivery Comptroller’s Office. While these and other methods of strategies. For example, when I alternative project delivery have a led the MTA Capital Construction record of success in New York and Company, we used an IPD-like Each agency should other jurisdictions, they have had process to rebuild the Number 1 develop a project relatively limited use in New York subway line after 9/11, which was management plan that — particularly prior to passage of completed in just nine months. establishes mandatory the New York State Infrastructure That simply would not have been review cycle times for processing Investment Act in 2011. That possible using design-bid-build. The change orders and payments as well legislation authorized five State problem is, public agencies are not as quarterly reviews of project costs, agencies — the Department of using these alternative strategies schedules, and safety. Transportation; Thruway Authority; nearly enough.” Office of Parks, Recreation and Historic Preservation; Department The Task Force recommends of Environment Conservation; and that the State and City take the ALTERNATIVE PROJECT Bridge Authority — to manage the necessary steps to modernize their DELIVERY METHODS delivery of construction projects procurement laws and practices using design-build through the end to allow greater use of alternative Various New York statutes generally of 2014. methods of project delivery. require State and local agencies Among these steps: to use the traditional design-bid- In 2014, Governor Cuomo build approach to public works proposed that design-build be procurement. Unless an exception made permanent and extended The Cuomo administration to the general requirement applies, to other State agencies, but the and the State Legislature alternate methods of procurement State Legislature did not act on that should pass legislation to are prohibited, placing major public recommendation. Instead, in 2015, make permanent design-build works projects outside of current lawmakers approved an extension authority and extend it to all State mainstream construction practices of the five agencies’ design-build agencies and local governments. that often produce better value in authority through March 2017, shorter timeframes. without expanding that authority to other State agencies or local The City should give more Alternative project delivery methods governments. routine consideration to have largely superseded design-bid- using CM at Risk with a build in the private sector, and they Since the Infrastructure Investment GMP as another way to are increasingly being authorized Act became law in 2011, improve coordination between and used by the federal government construction has begun on the contractors while reducing change and many states. This growing replacement of both the Tappan orders and delays. trend can be attributed, in part, Zee and Kosciuszko . Using to the process improvements that design-build, the cost and time to have characterized alternative complete both critical infrastructure The City should implement project delivery — such as early projects are estimated to fall well an IPD pilot program, collaboration and improved below initial government estimates with the goal of adopting it coordination between design and that envisioned the use of design- as a standard option in construction disciplines, which bid-build. delivering major public works projects.

4 Best Practices in Project Delivery

Everyone involved in the construction process has a stake in delivering projects faster, more safely, and at a lower cost — from the project owners who want high quality buildings and improved bottom lines, to the contractors and designers who want to satisfy clients while maximizing productivity and profitability. These goals can be advanced by increasing efficiency in every phase of a project life cycle.

“The first step towards more efficient construction is to recognize when and where there is waste in the current processes,” explained Charles F. Murphy, Senior Vice President of Turner Construction Company and Co-Chairman of the Building Technology and Project Delivery Committee. “Once those wastes are identified, long-term Lean construction strategies can be developed to address them.”

Lean is a modern approach to construction aimed at eliminating waste through continuous improvements to design and construction processes. The concept of Lean is credited to the manufacturing industry, beginning with Henry Ford’s efforts to improve efficiency in the automotive industry, which later 7 Bryant Park - Lean Construction Project, Credit: Turner Construction Company inspired Toyota Motor Company to create a systematic approach to continuous improvement. Since it The Task Force formed six working Composed of Lean practitioners, was pioneered in the construction groups that used Lean concepts owners, architects, engineers, industry more than 25 years ago, of Value, Value Stream, Flow, Pull, trades, and general contractors Lean construction has evolved into a and Continuous Improvement to to ensure a diverse range of transformative business strategy that evaluate and find opportunities to perspectives and knowledge, embraces widespread collaboration, improve the construction processes each working group was assigned promotes the standardized use of of six building systems: foundations, a building system and developed advanced building practices, and structure, electrical, mechanical, a Value Stream Map (VSM) for it. leverages new technologies. enclosure, and drywall/finishes. Value Stream Mapping offers a

5 routine method of analyzing all at least 6 months of rework in the and non-practitioners alike cited lack the steps in a process to identify award and shop drawing phases of knowledge and understanding the wastes, such as errors, rework, alone. In particular, the VSM showed of Lean as the key challenges to transportation, and underutilized that Requests for Information its implementation. Employee talent, and then develop (RFIs) and addendums result in resistance also made the list of countermeasures to reduce them. overproduction and underutilized significant challenges, though personnel. In addition, incomplete most Lean experts reported that The working groups documented documents at the beginning of the employees become enthusiastic and the steps in the current construction processes cause a lack of integration engaged after they experience the process of each building system and transparent communication benefits of Lean. and measured the following: downstream. • Process Time: The number of “An industry shift towards Lean working hours spent on process The foundations and structure requires a cultural renaissance steps (not including waiting time). working groups identified potential of building practices that begins • Down Time: The number of measures to improve the processes, with education,” said Carl Galioto, working hours spent making focusing on increasing collaboration Managing Principal of HOK and revisions or waiting for and the implementation of Co-Chairman of the Building information or a deliverable. common standards. These include Technology and Project Delivery • Percent Complete and Accurate: beginning both processes with a Committee. “The industry needs to The percent of occurrences where fully dimensioned and coordinated become better informed about the a process step is completed model, working with a common set inefficiencies in current construction without needing corrections or of PDF standards and a common processes and the ways in which requesting missing information. technology platform, and getting the taking a Lean approach can make trades involved earlier in the process. real and substantial improvements in By looking at the process steps as the delivery and quality of projects.” a whole, the working groups were The VSMs for the other building able to detect weaknesses and systems likewise exposed wastes As Lean is still an emerging practice persistent points of failure as well that could be readily “leaned.” in the building industry, the Task as spot the areas with the greatest While there were some variations Force recommends the following to opportunity for improvement — among the wastes associated with help it gain a stronger foothold: namely, those steps with high Down each building system process, the Time and low Percent Complete and Task Force’s most striking discovery Accurate. was that current construction Industry associations should processes are extremely duplicative offer more information about For example, a VSM of the current and redundant across the board. Lean, including by sponsoring processes for foundations and The good news is that applying research to demonstrate the structural steel from bid and award Lean principles and practices offers need for greater efficiencies and by to the creation of shop drawings opportunities to address these and actively promoting Lean’s core tenet revealed that both typically take other inefficiencies, yielding tangible of continual improvement. much longer than necessary due to benefits, such as better quality, rework. Foundations bid and award improved safety, faster completion, phases occupy 6-7 months and the reduced costs, and increased value Lean practitioners should development of shop drawings an to the owner. encourage their industry additional 2-3 months, whereas partners to learn more the steel bid and award phases Unfortunately, Lean construction is not about and adopt Lean occupy 12 or more months and as widely adopted and implemented principles and practices. development of shop drawings an as it should be. According to a additional 5-6 months. McGraw Hill Construction Smart- Market Report, “Lean Construction Public and private owners The VSM exposed areas of wasted — Leveraging Collaboration and should demand the use effort, demonstrating that each Advanced Practices to Increase of Lean practices in the process presently cycles through Project Efficiency”, Lean practitioners delivery of their projects.

6 Better Sidewalk Sheds, Better Streetscapes

In order to grow and prosper, New from construction taking place right York City must continuously build, over their heads, they have failed whether it is brand-new construction in terms of their impact on New or renovation and modernization Yorkers’ quality of life,” said Frank J. of existing structures. While the Sciame, Chairman and CEO of process of building is a welcome Sciame Construction LLC and sign of a City in a constant state Chairman of the Construction Site of reinvention, it can come at a Management Committee “The goal temporary cost to the quality of life of our committee was to seek fresh in and around individual building ideas from the industry on how to sites. create a safe, thoughtful, and far more visually appealing sidewalk

Given its close proximity to Side+Ways+Shed by Francis Cauffman shed.” neighbors and the importance of public support for its work, the To generate ideas for improved building community can and should construction shed designs, the Task seek ways to advance improved Force joined forces with the New construction site management York Building Foundation to launch practices, while enhancing its image an industry-wide design competition as a good neighbor and a welcome in July 2015. Members of the and essential part of the City’s building community were invited to evolution. Nowhere is that more submit one conceptual or schematic apparent than with the sidewalk design for a buildable construction sheds, which currently line nearly shed that would be evaluated 200 miles of New York City streets. based on aesthetics, ability to meet engineering standards, functionality, “While New York City’s sidewalk safety, and constructability. sheds have served the practical function of protecting pedestrians The goal was to leverage the SCAFFOLDWING by Gannett Fleming expertise and ingenuity of the Engineers and Architects, P.C.

UrbanArbor by PBDW Architects and G-Shed by Gensler Anastos Engineering Associates 7 building industry to develop new that the designs minimize additional Government should use the shed concepts that could meet costs to building owners and be new shed designs and find rigorous New York City Department easy to assemble to encourage ways to encourage private- of Buildings requirements while adoption by the industry. sector use of them on elevating the current standard public projects. design to address a major quality Although the selection of four of life issue for New Yorkers, whose imaginative and innovative shed primary interface with the industry design concepts is a promising first Owners and contractors is passing underneath the imposing step, the longer-term objective is should consider the sheds. to see their broad implementation new shed designs and throughout the City. This will require implement them, where Of 33 submissions, four winners securing the City’s buy-in as well as feasible, on upcoming projects. were selected by an expert jury increasing awareness and promoting Experiences using the new shed composed of architects, engineers, use of the new shed designs among designs should be promoted and contractors, and building owners. owners and general contractors. shared with industry colleagues. The winning submissions met the design criteria in different ways, The Task Force recommends that: “The New York Building Congress each presenting an innovative issued a challenge to the entire approach to reducing or eliminating industry to use its ingenuity and the bracing that blocks natural light The Building Congress, expertise to offer fresh ideas for and interferes with the pedestrian working with other industry solving a vexing quality of life experience. organizations, should issue for New Yorkers,” added Mr. expand efforts to increase Sciame. “The industry’s collective The winning teams also awareness and promote the use response to that challenge has been demonstrated close attention to of the new shed designs among truly inspirational and should serve the aesthetics of their structures — owners and general contractors, as a model for the industry moving creating off-the-shelf designs that including by facilitating meetings forward.” will be more attractive than standard with shed designers and shed sheds. While elegant, all of the supply firms and supporting designs are simple to erect and use measures to enhance the readily available materials, satisfying constructability and/or affordability a key objective of the competition of the new shed designs.

Cultivating innovation and best practices throughout the industry must be treated as a never-ending process that requires an ongoing and collective buy-in from each stakeholder in the process.

8 Conclusion

Cultivating innovation and best practices throughout the industry must be treated as a never-ending process that requires an ongoing and collective buy-in from each stakeholder in the process. To facilitate that effort, the Task Force offers the following overarching recommendations, all of which have been pulled directly from its discussions.

OPEN THE CONVERSATION EARLY AND KEEP IT GOING. No single person on any project team has a monopoly on good ideas. Bring all project stakeholders together early and often, and give them a voice at the table. There is no innovation without collaboration and mutual respect.

SEE OPPORTUNITY WHERE OTHERS FOCUS ON RISK. Saying “yes” to innovation means doing the work to understand, manage, and mitigate its risks, rather than taking the easy path and assuming the risk is too high. Innovators, by definition, must behave like entrepreneurs.

CHALLENGE THE BUILDING INDUSTRY TO GROW. The building community must challenge itself, clients, and colleagues to look beyond what has been done before and develop the habit of working outside comfort zones. This includes looking to other industries for best practices and innovation that can be adapted for use in the building industry.

These recommendations will help guide a new Council on Innovation and Best Practices recently established by the Building Congress to continue the conversation begun by the Task Force and advance the work already underway by its Workforce Development and Product Innovations Committees.

“What the Task Force did so effectively over its two-year term is bring together some of the best and brightest from all sectors of the industry to share information and brainstorm ideas to make the building community in New York City stronger and more effective,” said Richard T. Anderson, President of the Building Congress. “But for all that the Task Force accomplished, we should view this as the end of the beginning, rather than the beginning of the end. There’s still much more to do, and quite frankly, the process of innovation has no end date. The addition of this new, permanent Council to the Building Congress program is an important and significant next step in the right direction.”

9 CHAIRMAN Carl Galioto, FAIA Mysore L. Nagaraja Thomas Z. Scarangello, P.E. HOK Spartan Solutions LLC Thornton Tomasetti Co-Chairman, Building Technology and Co-Chairman, Government Procurement Project Delivery Committee and Procedures Committee PRESIDENT Richard T. Anderson Guy Geier, FAIA Dr. Feniosky Peña-Mora FXFOWLE ARCHITECTS, LLP NYC Department of Design & MEMBERS Construction Joseph J. Aliotta, AIA Susan Hayes Perkins Eastman Architects, D.P.C. FC Modular, LLC Denise M. Richardson Co-Chairman, Workforce Development General Contractors Association of Jay Badame Committee New York, Inc. Tishman Construction – An AECOM Company Cyrus J. Izzo, P.E. Milo E. Riverso, P.E. Co-Chairman, Government Procurement Syska Hennessy Group, Inc. STV Group, Inc. and Procedures Committee Co-Chairman, Government Procurement Suri Kasirer and Procedures Committee Sherveen Baftechi Kasirer Consulting, LLC The Howard Hughes Corporation Howard Rowland Leevi Kiil, FAIA E.W. Howell Co., LLC Rick Bell, FAIA Leevi Kiil Consulting/Global Design NYC Department of Design & Alliance Robert P. Sanna Construction Forest City Ratner Companies Sue Klawans Co-Chairman, Product and Process Mark Blumkin Gilbane Building Company Innovations Committee Deloitte Financial Advisory Services LLP Co-Chairman, Government Procurement Gary LaBarbera Scott Schneider and Procedures Committee Building & Construction Trades Council Thornton Tomasetti

Paul Bonington Andrea Lamberti, FAIA Frank J. Sciame Bonington Associates Rafael Viñoly Architects, P.C. Sciame Construction LLC Co-Chairman, Communications Chairman, Site Management/ Jill N. Lerner, FAIA Committee CLC Committee Kohn Pedersen Fox Associates, P.C. Laurie Butler, AIA Frederick E. Smith, P.E. George E. Leventis Perkins+Will MTA Long Island Rail Road Langan Louis J. Coletti Sam Spata, AIA Kenneth A. Lewis, AIA Building Trades Employers’ Association Bergmann Associates Skidmore, Owings & Merrill LLP Raymond P. Daddazio, P.E. Co-Chairman, Product and Process Mark Townsend Thornton Tomasetti Innovations Committee Kohn Pedersen Fox Associates, P.C.

Jon DiBiase Peter A. Marchetto David Wallance, AIA E.W. Howell Co., LLC Tishman Construction FXFOWLE ARCHITECTS, LLP – An AECOM Company John M. Dionisio Christopher O. Ward AECOM Anthony Mosellie AECOM Co-Chairman, Workforce Development Kohn Pedersen Fox Associates, P.C. Committee Eli Zamek Charles F. Murphy Vornado Realty Trust Ralph J. Esposito Turner Construction Company Lend Lease (US) Construction LMB, Inc. Co-Chairman, Building Technology and Peter Zipf Project Delivery Committee HDR James W. Feuerborn Jr. Co-Chairman, Communications Thornton Tomasetti Committee

was prepared by Laura Gallo with the assistance of Andrew Hollweck and consultants David J. Burney, FAIA, and Patricia J. Lancaster-Brown, FAIA.

To see the full Task Force Committee reports, go to buildingcongress.com.

For information on membership, publications, and events, contact: buildingcongress.com • @bdgcongress • Tel: 212.481.9230 • Fax: 212.481.9290 44 West 28 Street, 12th Floor, New York, NY 10001

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