Listen. think. deliver. CMAA Water Summit Service Provider Executives Forum July 19, 2010 Richard D. Fox Chairman & Chief Executive Officer Camp Dresser.

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Presentation transcript:

listen. think. deliver. CMAA Water Summit Service Provider Executives Forum July 19, 2010 Richard D. Fox Chairman & Chief Executive Officer Camp Dresser & McKee Inc.

listen. think. deliver. Infrastructure Investment ($ billions) Water Water Resource Wastewater Underfunded Investment Is Clear But No Obvious Way Forward “More for Less” (Needed) (Actual)

listen. think. deliver. Opportunities u Improving the Delivery of Assets u Better policies / regulations u More sustainable infrastructure u Technology advancement u Raising the Value of Water

listen. think. deliver. Productivity of US construction versus productivity gain in non-farm industries Source: US Department of Labor

listen. think. deliver. Why? Master Plan Investment Phase DesignBid Construct Design-Bid-Build (D-B-B) Commission Operate/ Maintain

listen. think. deliver. Service Provider Opportunity Master Plan Investment Phase DesignBid Construct Design-Bid-Build (D-B-B) Commission Operate/ Maintain Level of Investment 1 – 5 years7 – 9 years20 – 30 years

listen. think. deliver. Seizing the Opportunity u Gain Productivity: Eliminate interfaces Lower LOE Reduce re-work Reduce schedule Reduce change orders u Improve Owner Comfort: Visualization Transparency u Rationale Risk Transfer: Procurement process Knowledgeable advisor Co-sponsored risk register Collaborative 4-D Design

listen. think. deliver. Owner Comfort u Rehab u Consistency u Aesthetics/ Noise/Odor High levels of design control Traditional design build ≠ EPCM Procure 65 % Design Negotiate Construct/Commission – – –– – –

listen. think. deliver. Transparency ProcureDesign / Construct / Commission D-B Competitive Price / 10% Design Escalation Change Orders D-B-B Criteria/Price Market Competitive Price Change Orders Criteria/Price Construction Manager Select Designer Design BidConstruct Commission EPCM Procure 65 % Design Negotiate Construct/Commission Target Price Criteria/Design Firm Price Sub-bids

listen. think. deliver. Risk Transfer u General LiabilityInsurance0.1% - 0.2% u Errors/OmissionsProfessional Liability0.1% - 0.3% u Worker InjuryWorkman’s Compensation0.1% - 3.0% u Contractor PaymentBonds0.5% - 1.0% u Contractor Performance -Schedule Liquidated Damages 0% - 10% -Overall Contractual Transfer 0% - 7% u Force MajuereContract Exclusion0% - 0% u Facilities PerformanceContract Transfer (warranty)0% - 3% u Limits on LiabilityContractual TermsErratic/Exorbitant u ConsequentialsContractual TermsErratic/Exorbitant RISKSMEANS/METHODSPRICING

listen. think. deliver. 4-D Design

listen. think. deliver. Orlando DB Center

listen. think. deliver. Summary u Global forces demand “More For Less” u Productivity of traditional delivery u Design Control = Modified D/B or EPCM u Transparency –A real, client specific issue –Discuss it / manage it u Risk Transfer –Rationale – Fair Pricing –Full – Exorbitant Pricing/No Responsible players