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When project risk looks like this: Everyone can stay comfortable in their silos. Everyone feels like they are in control.

Sooner or later your risk on a project looks like this…

Procurement Award to lowest compliant bidder. Assumption: Vendor will do exactly what we tell them to do, at the lowest cost. Outcome: Vendor is rewarded for cutting corners and profits on our errors. Experts see their work as valuable, and are not attracted to cutting corners or poor end-products.

Legal Contract (often standard form) written by ourselves. Assumption: Contract will give us control over the vendor’s activities. Outcome: Vendor sees the contract as one-sided and possibly hostile. They are disempowered, and do not take ownership of the work. When risks materialize, this setup discourages collaboration. Experts own their work, and will seek arrangements that provide them the freedom to succeed.

Project Management Project Manager directs the work. Assumption: The Project Manager must control the vendor at all times. Outcome: The Project Manager must micro-manage to be successful, and thereby assumes more risk. Experts know their work, manage risk well, and despise being micro-managed.

Results Change order rate of 14%+ Although functionally complete in time for September, substantially completion certificate was issued in December. Three separate liens were contemplated (none perfected). Hidden financial and human cost of time lost. Losses accumulate against this project, and also against other concurrent and future projects.

Experts: Experts see their work as valuable, and are not attracted to cutting corners or poor end-products. Experts own their work, and will seek arrangements that provide them the freedom to succeed. Experts know their work, manage risk well, and despise being micro-managed.

Win-Win Thinking is Collaborating with Experts PROCUREMENT Experts: Use logical deduction to remove the risk of bias. LEGAL Experts: Use mutually beneficial agreements to create collaborative relationships. Project Management Experts: Organize other experts so they can mitigate risk and create value.

Alignment of Expertise creates Value We mitigate risk best when we are all aligned to perform as together as experts.

1st BVBM Project at Dal Excavation & Soil Remediation Dal internal comparison with a recent excavation project Note: this was the low bidder on the BVBM project! Performance Criteria Recent Non-BV 1st BVBM Project # of change orders 4 Cost Impacts 11.6% -5% Schedule Impacts 3.6 weeks delay 3.0 weeks early Owner Satisfaction 41% 100%

Proposal Differentiation Range of Evaluation Scores

Integrating Procurement & Operations Total # of Construction Projects 16 Best Value was also the Lowest Cost 44% Awarded to the Lowest Cost 50% Award vs. Market -4.1% Total Award vs. Total Budget -14.3%

Project Results -80% -- +19% Performance Area Baseline BVBM+ Impact Total Change Orders +7-9%* +1.5% -80% Schedule Delays 60 days* -1.4% -- Owner Satisfaction 79%** 94% +19% * All Dal Minor Constr. projects from FY 2013 – FY 2015 ** Based on 33 recent projects from Dalhousie PMs +BVBM: first 6 project close outs

Building Organizational Expertise # of BVBM Projects Personnel Involvement *Current projection for Year 3 activities

Collaboration across Silos Rapid Expansion Launching Launching # of BVBM Projects Implemented

Please stop by the ASU Booth! Mike Drane Procurement Director Dalhousie University Mike.Drane@Dal.ca 902-494-2363 Brian Lines Assistant Professor University of Kansas brianlines@ku.edu 785-864-6503 Jeff Sawyer Director Strategic Engagements Arizona State Univ. Jeff.Sawyer@asu.edu 480-965-2313 Ian Wagschal Asst. Director FM Minor Projects Dalhousie University Ian.Wagschal@Dal.ca