Welcome to Session 228

The Benefits of EPCM Project Delivery

for Your Distribution Facility
Presented by:

Sponsored by:

Stephen Donohoe, PMP Manager of

Construction
Ted Dalferes, P.E. Director,
Distribution Center Design
Tim Johnson Project Manager
2011 Material Handling Industry. Copyright claimed as to audiovisual works of seminar
sessions and sound recordings of seminar sessions. All rights reserved.

Agenda
Speaker Introductions
Factors & Influencers
Owners Control & Risk
Why Use an EPCM* Approach?
*Engineering, Procurement, Construction Management

Factors & Influencers

When to bring on CM or GC
Owner Requirements
How much control
Schedule objectives
Cost objective
Quality objectives
Safety, claims, etc. objectives

Degree of Project Complexity

Typical Owners Requirements

Budget
On budget
Min contingency remaining at completion

Schedule
Meet commitments

Design
Quality
Functionality

NO
CHANGES!

LOWEST
COST!

MAXIMIZE
CONTROL!

Construction
No defects
No claims
No accidents

Coordination
Minimize impact to operations

SHORTEST
SCHEDULE!

Delivery Method Influencers

Owners:

Budget & risk objectives guarantees?

Schedule objectives degree of urgency
Desire for control design & construction
Resources experienced & qualified PMs

Project complexity & design

Procurement flexibility
Single project or multiple projects
New construction vs. renovation

Balancing the Variables

Risk

Exposure

Low

High

Procurement Flexibility
Public

Private

Owner

Control

Min.

Max.

Schedule Criticality
Low

High

Owners Control & Risk

OWNER CONTROL
HIGH

Where do you
want to be?
CONTROL
AND RISK

LOW
CM Agent CM Cost
Multi-Prime
Plus

CMR

CMR = w/ Negotiated GMP

CMR-GMP w/ Competitive GMP

CMR-GMP

GC Lump
Sum

Dont confuse project management

methods with project delivery
methodsthey are different!
Project Management
Methods
In-house staff
Owners representative
Agency construction
manager
Program manager

Project Delivery Methods

Design / bid / build (GC
Lump Sum)
CM at Risk with
competitive GMP
CM at Risk with negotiated
GMP
CM at Risk Cost Plus
CM Agent Multi-Prime

Why an EPCM Approach?

Provides a single point of contact, accountability and
responsibility
Maximizes execution flexibility
Controls / saves cost
Improves safety
Reduces project schedule
Eliminates redundant project management / site
indirects
Focused change control

Design-Bid-Build

CM-Based Delivery

CM Gives More Opportunity to Reduce Schedule

Setting the Stage

Construction costs are out of control
Escalation of materials & equipment is
unprecedented
Project delivery time needs to be reduced
to meet customer needs
Traditional construction delivery is not
conducive for teamwork and controlling
cost

Time is Money
cost
curve

selection of
delivery method
CONCEPT

CONSTRUCTION
DOCUMENTS

PROJECT

LEVEL of
INFLUENCE

DESIGN
DEVELOPMENT

BIDDING
CONSTRUCTION
CLOSE
OUT

EXPENDITURES

SCHEMATIC

influence
curve

PROJECT LIFE CYCLE

Clients Looking for Change

Control & ownership of budgets Design
and Construct to budget
Schedule-driven projects
Staffing resource challenged
Risk mitigation critical for project success
Lean execution for streamlined project
delivery

Why EPCM cost reimbursable fixed

fee open book approach?
CM GMP has bad track record for increased cost
Costs are rising faster than can be forecasted
Schedule does not allow for detailed GMP early
Clients looking for integrated team by 1 firm
single point of accountability / responsibility
Client only pays for actual cost of project
Client wants assurance and comfort in working
with contractor

Selling EPCM Cost Reimbursable

Fixed Fee Open Book Integrated
Project Delivery
Requires selling outside the box
Requires passion for process
Requires courage to challenge norm
Requires discipline and strong project
controls similar to lump-sum
Requires a firm like Jacobs

Benefits of An EPCM Delivery Model

Integrated project delivery team
Project execution based on the end in mind
commissioning and turnover
High degree of cost visibility we are open
book
Continually tracks & informs client of real time
costs
Allows escalating costs of steel, energy,
shipping and labor to be managed and
minimized

continued

Benefits of An EPCM Delivery Model

(continued)

Allows design to overlap construction

Procurement can be arranged to achieve the
best value for our clients
Pre-purchase equipment detailed in final
design
Allows major subcontractors to provide input
to design to allow for best value in the field
Rapid response to field issues keeps project
on schedule

Benefits of An EPCM Delivery Model

(continued)

Quality management plan maximizes efficiency

through administration, communication, quality
control, schedule control
Flexibility to divert or focus resources as needed for
the project
Established field procedures to hit the ground
running
Detailed early commissioning plans and schedules
with maximum involvement of client operations and
maintenance staff, as well as equipment vendors

For More Information:

Speaker: stephen.donohoe@jacobs.com
Speaker: thomas.dalferes@jacobs.com
Speaker: timothy.johnson@jacobs.com
Home Page: www.jacobs.com
Visit ProMat 2011 Booth 2678

2011 Material Handling Industry. Copyright claimed as to audiovisual works of seminar

sessions and sound recordings of seminar sessions. All rights reserved.