Managing Change Orders

A change order in construction is a document used to record an amendment to the original construction contract. They create a record of services either added or removed, along with the cost of those services. Few construction projects go from start to finish without a change. The ability to manage changes in a formal, organized fashion is imperative to successfully control costs within budget, avoid disputes, and keep the project on schedule.

A Construction Manager’s role should first start in the preconstruction phase to reduce the need for change orders during construction. They should:

  • Be involved during the Design Phase – A good Construction Manager will study the design drawings as they are progressing and provide recommendations for better construction means and methods, as well as identify areas of conflict and overlap. All of these, if not addressed, can cause change orders to arise during the construction phase.
  • Create a Scope of Work for each bid package – A defined scope of work summary should be made for each trade contractor bidding the project. By clearly defining each trade’s scope of work, and including that narrative in the specification, the opportunity for unnecessary change orders is reduced or eliminated.

When a change order is needed, the item will first be assigned as a “Potential Change Order (PCO)”. After thorough review and adjusting for any discrepancies, it will then be submitted to the Owner and Architect for review. No work should begin until the Owner provides written authorization for the change order to be implemented.

Having this change order process in place helps manage expectations of everyone involved in the project, making sure everyone is on the same page with how change orders are to be initiated and processed.

Riley has extensive experience drafting and implementing successful change management and change order procedure plans. Working with the design team, we develop and implement a formal change management process for each project that incorporates a thorough tracking system for change orders. Contact us for more information.

Women in Construction

By Heather Vyvyan, Marketing Coordinator

Women are currently underrepresented in the construction industry, even though they make up about half of the total working population. The percentage of women employed in construction has stayed constant since 2002 at only 9%. But there are many jobs for women to claim in the construction industry. Breaking down the stereotype of construction as a male-dominated field, exposing girls to construction careers, and ensuring an inclusive environment are all essential to continued industry growth.

Huge Job Opportunities in Construction

Construction is one of the fastest growing job categories — employment in this sector rose by 13,000 in June and is up 282,000 over June 2017, according to Associated General Contractors (AGC) of America. Construction industry trade jobs pay relatively well and do not require a college degree. With the cost of a college education continually increasing, trade jobs are a great alternative. The tight labor market for construction workers will create more opportunities for all workers, including women.

With the unemployment rate at record lows and not enough skilled laborers to fill open positions, the construction industry is trying hard to recruit the next generation of tradesmen and women. The goal is to expose children to potential construction careers early in life. Many companies and organizations are not only attending career fairs at high schools but are also hosting events at elementary schools. The future of the construction industry is dependent on increasing the number of qualified workers, especially women entering the industry, both in management and trades roles.

Recent advances in construction technology have also led to more STEM (science, technology, engineering and mathematics) jobs for women in construction, including civil engineering, mechanical engineering and surveying. The U.S. Bureau of Labor and Statistics predicts that jobs in STEM industries will increase by 17% between 2014 and 2024. This increase will create thousands of new job opportunities for women in construction. Women who enter STEM careers earn an average of 33% more than women in other jobs.

Women continue to break boundaries and challenge misconceptions in the construction workforce. Historically, women primarily worked in office roles in the industry. According to NAWIC (National Association of Women in Construction), in 1985, 68% of women in construction served in clerical or other support roles. By 2016, only 45% of women in construction were serving in sales or office positions. Women are gaining representation in a variety of other construction roles, with 21% of women working in the construction trades. Between 2010 and 2016, the percentage of females in construction management and other professional roles nearly doubled, rising from 16% to 31%.

Construction is a busy and ever-changing industry. Every project is different and never boring. It’s also a chance to have an impact on the future of your community. A career in construction brings personal pride in what you are building – whether hospital, school, warehouse or municipal building. Young women should research and consider the opportunities of this busy industry. An exciting career awaits! Check out the current opportunities at Riley here.

The ladies of Riley at a recent outing.

Staying Safe

Riley Construction just reached 1,000 days without a lost time injury, equal to 1,191,479 man hours! This is a very important milestone that has only been reached because everyone is involved in the safety process.

We believe that every accident is preventable, and that philosophy is embedded into every project through a combination of field procedures and ongoing safety training. Riley’s goal is for all employees, subcontractors and clients to return home to their families safely every evening. We attribute our safety success in part to having a formal, complete safety and health program in place.

Safety and Health Programs

The first item needed to be safe in construction is a formal Safety and Health Program describing the organization’s commitment to safety and health, and pledging to establish and maintain a safety and health program for all workers. Expectations are spelled out, safety and health concerns are considered in all business decisions, and resources are available to implement the safety and health program. The main goal of safety and health programs is to prevent workplace injuries, illnesses, and deaths, as well as the suffering and financial hardship these events can cause for workers, their families, and employers.

Safety and health programs foster a proactive approach to “finding and fixing” job site hazards before they can cause injury or illness. Rather than reacting to an incident, management and workers collaborate to identify and solve issues before they occur. This collaboration builds trust, enhances communication, and often leads to other business improvements.

To be effective, any safety and health program needs the meaningful participation of workers and their representatives. Workers have much to gain from a successful program, and the most to lose if the program fails. They also often know the most about potential hazards associated with their jobs. Successful programs tap into this knowledge base. Worker participation means participation in establishing, operating, evaluating, and improving the safety and health program.

All workers:

  • Are encouraged to participate in the program and feel comfortable providing input and reporting safety or health concerns.
  • Have access to information they need to participate effectively in the program.
  • Have opportunities to participate in all phases of program design and implementation.
  • Are encouraged to raise safety and health concerns; report injuries, illnesses, and hazards; participate in the program; and exercise safety and health rights.

Workers are often best positioned to identify safety and health concerns, such as emerging job site hazards, unsafe conditions, close calls/near misses, and actual incidents. By encouraging reporting and following up promptly on all reports, employers can address issues before someone gets hurt or becomes ill.

Including worker input at every step of program design and implementation improves the ability to identify the presence and causes of job site hazards, creates a sense of program ownership among workers, enhances their understanding of how the program works, and helps sustain the program over time.

*Adapted from OSHA. More information can be found here.

 

A Real (Lean) World Scenario

By Brian Lightner, Lean & Quality Control Manager

Productivity is a mathematical equation: Productivity = Output/Input. But if it’s really that simple, then why does the construction industry have so much trouble accurately measuring and tracking productivity? The solution lies in Lean thinking. The following example is based on a true story and magnifies the difference that Lean methodology makes in project efficiencies.

Here’s an actual process chart from a door frame installation:

The cycle time is 52 minutes – 13.3% better than the estimate of 1 per hour. Using the definition of productivity, that’s 1.125 units of output per 1 hour of work. Measured in dollars, let’s use 200 door frames x $80.00 per hour in labor costs. That’s $90.00 dollars of output produced versus $80.00 of input.

But to accurately understand the rate at which that value is added, we need to apply a few lessons from Lean thinking. Firstly, better understand the process and the implications about how value is produced. The red bars include all the time – waste and value both. This includes waiting for information, dealing with inadequate tools, and trying to install the frame in a stud wall that led to an unnecessary 26- minute delay.

Here’s the same process after implementing Lean thinking:

With waste eliminated, the cycle reduces to 16 minutes! Productivity is now 3.75 units of output per labor hour, or $300.00 of output versus $80.00 of input. That is almost a 400% improvement, considering only direct costs and value and not the additional capacity created now that the same work is completed in ¼ the time. Ready to think Lean yet?

Bubbling with Benefits

Building with less concrete by using BubbleDeck technology

 

Riley Construction recently saved a client both time and money by using an innovative concrete slab technology on a large healthcare construction project. This patented technique, called BubbleDeck, replaces up to 35%* of a concrete slab with plastic air-filled bubbles that act as a void. The bubbles are inserted into the slab and held in place by reinforcing steel mesh on the top and bottom. The bubbles displace concrete without sacrificing structural strength.

Customer Benefits

Cost: By using prefabricated panels and less concrete, cost can be reduced by about 10% versus traditional site-cast concrete.

Flexibility: Lighter, thinner, prefabricated slabs, and smaller and fewer columns and beams create longer spans for more extensive and open floor plans. The system also offers wider access for overhead MEP systems, and the material is easier to cut through later during remodels.

Schedule: Floor cycles can be up to 20% faster than traditional construction methods.

Safety: Off-site manufacturing, fewer vehicle trips and crane lifts, and simple installation all minimize operating and health & safety risks. BubbleDeck systems are fire-rated, so there is no additional fire proofing needed.

Environmental: Reduced construction materials and lower energy consumption, combined with the use of recycled plastic “bubbles,” helped Riley and the customer lessen environmental impact.


A Global Team Effort

To implement this creative construction technique, Riley Project Manager Craig Matthews and his team had to be equally creative in their procurement methods.

“We sourced the steel lattice gutters from Europe, where BubbleDeck originated,” Matthews explained. “The plastic bubbles came from a recycled plastic manufacturer in Madison, Wisconsin. We were able to obtain the prefabricated panels from a local precast concrete manufacturer.”

The team’s extra effort paid off in the end. “The client is happy with the reduced costs and increased flexibility the BubbleDeck system provided, while not lessening quality,” said Matthews.

 

*All percentages are according to BubbleDeck North America LLC.

Value Engineering/Collaborative Savings

Value Engineering, also called Collaborative Savings, is an organized effort to analyze construction systems, equipment and supplies and achieve the required results at the lowest overall cost, while maintaining quality.

The basic procedure consists of 1) identifying and defining a high cost area; 2) determining the basic function of the item; 3) “brainstorming” the problem to create a list of alternative ways to perform the function; 4) selecting the best alternative that will perform the function at lowest cost; and 5) presenting a proposal or alternative proposals for the design team approval. Participation in the early stages of project allows construction managers to apply ingenuity and technical know-how and produce a more economical design without sacrificing quality.

A construction manager should conduct a systematic and aggressive collaborative value engineering program in conjunction with the design team, with particular emphasis on areas of high cost and those impacting the construction schedule. Areas typically studied include foundations, structural frame, building envelope, floor systems, HVAC systems, ceilings, and luminaries. The evaluation process includes cost analysis, construction feasibility, considerations relative to labor and material availability and effect on the project schedule.

The range of cost factors that should be studied and included in the analysis of alternative choices varies widely, but should include such items as:

  • Construction Costs
  • Comparative Qualities and Aesthetics
  • Impact of Users or Occupants (i.e., power, gas, water, etc.)
  • Ultimate Cost of Utilities (i.e., power, gas, water, etc.)
  • Maintenance (cleaning)
  • Repairs and Replacements
  • Interest on Increased Capital Costs

Promotions and Additions

Riley Construction’s growth throughout the Chicago – Milwaukee corridor has prompted the company to make several key personnel changes and additions.

New Employee and New Position
Riley is pleased to welcome Project Executive Dan Sullivan to the Chicago office team. Sullivan brings over 16 years of industry experience to his role, which will focus on executive leadership of Riley’s Chicago-area projects and oversight of the office’s strategy and operations.

Chris Siefert, a 16-year Riley team member, has accepted the newly created position of Vice President of Strategic Projects. In his new role, he will oversee the planning and execution of the company’s largest and most complex projects in key markets, particularly the pharmaceutical sector.

“Bringing Dan to the team, as well as allowing Chris to focus his expertise on strategic-level projects, are both decisions based on the steady and measured growth Riley has enjoyed in recent years,” said Matt Prince, President of Riley Construction. “The changes reflect our optimism for the future.”

Promotions
Ben Kossow, who joined Riley in 2000, was recently promoted to Executive Vice President of Operations. Kossow was an integral part of the company’s growth in the Milwaukee metro area and will continue to lead that office as well as provide oversight of the entire company’s field resources. He will also manage Riley’s safety, Lean/Quality Control, Virtual Design and Construction, and Project Development departments.

Erin Anderson, a 17-year Riley employee, accepted a promotion to Vice President of Project Management. She will lead the company’s project management strategy and ensure that customer service and value are delivered on every Riley job.

John Delavan has been promoted to Vice President of Preconstruction. He joined Riley in 1996 and is largely responsible for creating the company’s dedicated Preconstruction Department. In his new role, Delavan will continue to lead a team of world-class estimators as well as manage Riley’s IT group.

Erik Dillon joined Riley in 2006 and most recently served as a Senior Project Manager before his recent promotion to Project Executive. Dillon will use his extensive industry experience to provide high-level oversight of jobs in the Southeast Wisconsin area, particularly in the industrial and healthcare sectors.

“It’s exciting to note that every one of these promoted employees has been with Riley for their entire careers,” said Prince. “That speaks volumes about how the company values its people and is a direct reflection on our commitment to our core ‘HIFI’ values of Humility, Integrity, Flexibility and Initiative.”

Benefits of Prefabrication

Fast, efficient project delivery is the ultimate goal for everyone involved in a construction project. Prefabrication, where certain building system components are assembled offsite and then transported to the construction jobsite, is an option for many projects that can save time and money.

  1. More room on the jobsite. When bulky systems are prefabricated in a shop setting and not shipped to the site until it’s time to install them, there isn’t a need for extensive laydown/staging space. This is particularly helpful on congested, urban sites or remodeling projects in occupied spaces.
  2. Lower material cost. Contractors that prefabricate often purchase common materials (like pipe and ductwork) and supplies (such as hardware) in bulk for a discount from suppliers.
  3. Higher quality. Since prefabricated construction occurs in a controlled environment and follows specific standards, the components are built to a uniform quality.
  4. Improved Safety. Prefabrication eliminates the variables of an active jobsite that can affect safety. Factors like noise, temperature and ergonomics are easily controlled in a shop setting.
  5. Less time and money overall. When contractors use prefabrication on a project, they are better able to control the planning, scheduling and craftsmanship of their building systems. This translates to a job that is completed on time and under budget!

Which Project Delivery Method is Right for Your Project?

Each construction project is different, and the project delivery system should be tailored to the individual requirements of that unique project. Selection of a delivery method is typically based upon how your organization operates, internal resources available and their level of expertise or knowledge, funding requirements, and overall schedule for delivery. The chart below shows the organization of each delivery system, plus benefits and challenges. Click on the chart to enlarge it.