Procuring Innovation in Construction a review of models, processes and practices An initiative of the: A note from the BC Construction Association With the publication of this follow-up to the Construction Innovation Study (published in 2016), the BC Construction Association (BCCA) is pleased to continue its leadership role in the discussion of innovation in BC’s construction industry. As a trusted representative of the industrial, commercial, and institutional construction sector in our province, the BCCA has a policy to equally support the use of all building materials. We recognize that there is innovation in many assemblies and products, including wood, steel and concrete. Construction procurement is a major focus for public owners such as Ministries, school districts, and health authorities, as well as for private owners. As international competition for large projects intensifies, true innovation calls for a shift from a culture of “lowest bid” to a focus on quality and “whole life” value. “Procuring Innovation: a review of models, processes and practices” is a significant step forward in that shift. We hope you will find this paper informative and inspiring. © 2017. BC Construction Association. All rights reserved. i Authors This report was prepared by for the BC Construction Association by Brantwood Consulting. Lead author: Helen Goodland RIBA MBA Contributors: Jim Taggart FRAIC Kevin Hanvey MAIBC AAA MRAIC, Omicron Tyler Galbraith, Jenkins Marzban Logan, LLP Acknowledgements This report was made possible by funding from the BCCA Construction Association and Forestry Innovation Investment Ltd. The Vancouver Regional Construction Association hosted the best practices workshop (Appendix A). The authors also wish to thank representatives from the following organizations who provided input into this report. Acton Ostry Architects Graham Construction BC Housing Kinetic Construction BFL Insurance Local Practice Architecture + Design Brisco Partnerships BC Britco Progressive Construction BTY Group Sandra Hamilton Business Consultants City of Coquitlam Seagate Structures City of Vancouver Simon Fraser University Construction Scotland Innovation Centre SFU Community Trust Cornerstone Architects SNC-Lavalin Division 15 Mechanical Stuart Olson Eurban Translink Equilibrium Engineering Turner & Townsend Fast & Epp Structural Engineers University of British Columbia Footprint / Smith & Anderson Canadian Wood Council / WoodWORKS! BC ii Contents 1 About this report ............................................................................................................1 2 Construction procurement state of play .......................................................................3 3 Innovation in construction ............................................................................................4 3.1 Innovative wood technologies...................................................................................................................... 7 3.2 Procurement barriers to innovation ........................................................................................................... 11 4 The role of the owner ................................................................................................... 12 5 Setting requirements and targets ............................................................................... 13 5.1 Capital cost versus life-cycle cost ............................................................................................................... 14 5.2 Defining “Quality” ....................................................................................................................................... 15 5.3 Sustainability performance ......................................................................................................................... 16 6 Creating an integrated, collaborative team ................................................................ 18 6.1 Early market engagement .......................................................................................................................... 19 6.2 Sanctioned design competitions................................................................................................................. 21 6.3 Competitive dialogue.................................................................................................................................. 21 6.4 Performance incentives .............................................................................................................................. 23 7 Tenders and Requests for Proposal (RFPs) ............................................................... 24 8 Delivery models ............................................................................................................ 27 8.1 Design-Bid-Build ......................................................................................................................................... 28 8.2 Construction Management ......................................................................................................................... 30 8.3 Design-Build ................................................................................................................................................ 32 8.4 Public Private Partnerships (P3s) ................................................................................................................ 33 8.5 Single Purpose Entity for Integrated Project Delivery (IPD) ....................................................................... 35 8.6 Summary of procurement models in the context of innovation ................................................................ 39 8.7 Dealing with risk ......................................................................................................................................... 40 8.8 Encouraging small businesses .................................................................................................................... 40 9 Tools to facilitate innovative solutions ....................................................................... 41 9.1 Digital design and construction .................................................................................................................. 41 9.2 Encouraging a manufacturing mindset ....................................................................................................... 43 9.3 Digital procurement.................................................................................................................................... 45 9.4 Project feedback loops ............................................................................................................................... 46 10 Engaging the R&D community .................................................................................. 47 10.1 Working with specialists ........................................................................................................................... 48 10.2 Further work for researchers and industry stakeholders ......................................................................... 49 11 Summary of best practices ........................................................................................ 50 Appendix A: Research methodology ................................................................................. A1 Appendix B Selection of innovation funding programs ....................................................... A1 References ........................................................................................................................ A7 iii 1 About this report The objective of this report is to help public and private owners become “innovation friendly” in their construction procurement – to enable them to access the potential environmental, economic and social benefits that innovative construction solutions can bring. It is also intended to assist architecture, engineering and construction (AEC) firms set up their competitive response processes so they can bring their best to projects that push technical and logistical boundaries. The question this report hopes to answer is: using mass timber as a case study, how can the procurement process be best deployed to Mountain Equipment Co-op (MEC) accommodate project specific R&D, allow for new technologies sees sustainability and the use of and processes and encourage project team creativity? wood as consistent with its corporate philosophy, and something with Public procurement, in particular, is a major source of investment in which it can reinforce its brand R&D. Evidence of this can be seen in Canada’s support for forestry identity: not just with its own sector, which is a global leader in state-of-the-art, sustainable forest members (customers) but with a management and wood product processing, the majority of which is broader public interested in demonstrations of corporate social destined to construction markets at home and abroad. responsibility. Innovation is a hot topic in Canada’s construction industry but its scope is vast. This report uses recent examples of innovation in wood design and construction as a means to illustrate broader themes that can be applied How innovative projects are different to a wide range of building products and materials. Wood is used as a An innovative construction project is case study because there have been significant recent advances in the different from a conventional one in area of new wood structural systems and because