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Transcript of 1 Best Value Business Model Kenneth T. Sullivan PhD, MBA Performance Based Studies Research Group...
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Best Value Business ModelBest Value Business Model
Kenneth T. Sullivan Kenneth T. Sullivan PhD, MBAPhD, MBA
Performance Based Studies Research GroupPerformance Based Studies Research GroupSchool of Sustainable Engineering and the Built EnvironmentSchool of Sustainable Engineering and the Built Environment
Ira A. Fulton Schools of EngineeringIra A. Fulton Schools of EngineeringArizona State UniversityArizona State University
www.pbsrg.com
W W W . P B S R G . C O M 2
Who we are: PBSRG OverviewWho we are: PBSRG Overview
Established in 1994 by Dr. Dean Kashiwagi and Dr. Bill Badger
Research effort entails: Information Measurement Theory (IMT): measuring of current conditions to
predict future outcomes Clients’ implementation of Best-Value Business Philosophy to improve the
efficiency of their organizations and projects/services Organizational Transformation Models Performance Information Procurement System (PIPS) Contracting & Project management model (alignment/leadership instead of
management/influence) - PIRMS Performance Information Environment (minimize access and flow of
information) for accountability Risk management by using deductive logic, minimization of decision making
W W W . P B S R G . C O M
Worldwide as a leader in Best-Value Systems Conducting research since 1994 168 Publications 800+ Projects $4.6 Billion Services & Construction 5% Increase in Vendor profit 98% On-time, On-Budget, Customer satisfaction PMI, NIGP, IFMA, IPMA Tests in Netherlands, Botswana/Africa, Malaysia ASU – investments of over $100M due to BV
PBSRG’s Research Results(Performance Based Studies Research Group)
W W W . P B S R G . C O M 4
Research ClientsResearch Clients General Dynamics University of Minnesota General Services Administration (GSA) Heijmans, Netherlands Ministry of Transportation, Netherlands State of Alaska University of Alberta State of Oklahoma State of Idaho Idaho Transportation Department State of Oregon Neogard Tremco US Solar Arizona Parks and Recreation US Army Medical Command USAF Logistics Command University of New Mexico EVIT School District
Arizona State University US Corps of Engineers Arizona Public Service (APS) Salt River Project (SRP) Rochester Public Utility Boise State University University of Idaho Idaho State University Lewis & Clark State College City of Phoenix, AZ City of Peoria, AZ City of Roseville, MN Olmstead County, MN Fann Environmental Brunsfield (Malaysia) Fulbright Program /University of Botswana, Africa US Embassy, Bank of Botswana RMIT, Melbourne Australia Aramark, Canon, Qwest, ISP, Chartwells, AP, Pearson Various Contractors and Consultants
W W W . P B S R G . C O M 5
Working Commission 117 & JournalWorking Commission 117 & JournalInternational Efforts & PartnersInternational Efforts & Partners
5 years15 tests for infrastructureTwo major GCs
Fulbright ScholarUniversity of BotswanaPIPS tests RMIT
Teaching IMTPBSRG platform
Tongji University
BrunsfieldComplete Supply Chain
W W W . P B S R G . C O M 6
What makes our research message What makes our research message unusual…..unusual…..Simplistic
Uses logic
Efficiency: less decision making, less management, and better results (best value and high profits)
It is more important for the vendor who does the work to know what to do than it is for client’s representative to know what the vendor should do
Measurement
W W W . P B S R G . C O M 7
Industry StructureIndustry StructureHigh
High
I. Price-Based/Traditional
II. Value Based
IV. Unstable Market
III. Negotiated-Bid
Specifications, standards and qualification based
Management & Inspection
Best Value (Performance and price measurements)
Quality control
Competition
Pe
rfo
rman
ce
Low
Qualified vendors invited
Owner selects vendor
Negotiates with vendor
Vendor performs Vendor minimizes risk
Client minimizes risk
W W W . P B S R G . C O M 8
Vendor 1
Vendor 2
Vendor 3
Vendor 4
Perf
orm
an
ce
High
Low
Ris
k
High
Low
Perf
orm
an
ce
High
Low
Ris
k
High
Low
Impact of Minimums & Impact of Minimums & ExpectationsExpectations
Vendor 1Vendor 2Vendor 3Vendor 4
W W W . P B S R G . C O M
High
Low
Perf
orm
an
ce
Owners
“The lowest possible quality
that I want”
Vendors
“The highest possible value that you will get”
Minimum
Perception Problems with Perception Problems with Traditional SystemsTraditional Systems
High
Low
Perf
orm
an
ce
Maximum
W W W . P B S R G . C O M 10
W W W . P B S R G . C O M
Initial conditions
Final conditions
Traditional Management
Time
Laws Laws
D2
D1 M&C
D3
D1: Client makes decisions on budget, time, and expectation
D2: Client consultant/professional makes more decisions to make expectations true
D3: Vendors attempt to use the lowest possible price to minimize the risk caused by the decision making of client & consultant/professional
M&C: The client attempts to force vendor to make expectations happen
W W W . P B S R G . C O M
Initial conditions
Final conditions
Project Management Model
Time
Laws Laws
M1
C1 M2
C1: Client Expectations based decisions and various factors – may or may not be “realistic”
M1: Measured vendor plan that more accurately describe the initial conditions replaces C1 – converts to a predictive contract
M2: RMP/WRR measures deviation & performance to plan
M3: Final performance measurement
M3
W W W . P B S R G . C O M 13
Inefficiency vs EfficiencyInefficiency vs Efficiency
Micro-Management Performance dictated by technical
information Specification is the requirement Inspection by client Client’s professional is the expert and has
control No performance measurements Increase flow of information Relationships (partnering, deals, give and
take) used to solve issues Need more people (inefficient) No accountability
Leadership Performance dictated by performance
information Specification is only the intent
Quality control by vendor Vendor has control Performance measurements Decrease flow of information High performance vendors used to
minimize risk Need less people (efficient) Accountability
Can you make the transition?
W W W . P B S R G . C O M 14
Performance-Based Performance-Based FunctionsFunctions
I. Price-Based
II. Performance-Based
IV. Unstable Market
III. Negotiated
Competition
Pe
rfo
rman
ce
Low High
High
Treat as a Commodity Volume Based No Accountability Finger Pointing Management & Inspection Minimum Standards Client minimizes risk
Value & Performance Maximize Profit Vendor Accountability Minimized Management & Inspection Quality Control Vendor minimizes risk
W W W . P B S R G . C O M 15
Best Value OverviewBest Value Overview Complete business model for organizations & projects
A best value selection and management tool (developed and tested over 16 years)
It can be applied to any type of system, organization, structure, procurement, project, or need
Best Value is not just a procurement method. It is a selection and management tool that can be applied in: Business Services (IT, dining, consultants, equipment, doc mgmt, insurance, etc.) Facility Services (maintenance, roofing, janitorial, landscaping, supplies, etc.) Design, bid, build (DBB), Design build (DB), Construction manager at risk (CMAR) A/E & Design, Job Order Contracting (JOC), Indefinite Delivery Indefinite Quantity
BV is not a computer software package, but rather a combination of IMT principles that allows a client to optimize their environment
W W W . P B S R G . C O M
What does the Best Value Model do?What does the Best Value Model do?
Makes things simple (measurement, dominant information)
Minimizes the fuel of bureaucracy (decision making, non-dominant information, management, control, and direction)
Creates transparency
Allows organizations/vendors to be highly efficient and successful
Proposes that to accurately identify what “is” and then to have a plan to efficiently meet the needs will minimize risk
16
W W W . P B S R G . C O M 17
Best Value System: Best Value System: PIPS & PIRMSPIPS & PIRMS
Identification of PotentialBest-Value
Pre Planningand
Risk Management
Measurement ofDeviation from the
Expectation
PHASE 1PHASE 1 PHASE 2PHASE 2 PHASE 3PHASE 3
17
PIPS PIRMSPerformance Information
Procurement SystemPerformance Information Risk Management System
W W W . P B S R G . C O M 18
What is the model?What is the model?Identify the expert with as little effort as possible, using
measurement and differentialTransfer risk and control to the expert through preplanning
and risk minimization, focusing on risk that are not controlledHire the expertUse alignment, planning, & measurement in place of
management, control, and directionCreate a performance information environment to drive
accountability and changeProactive vs. Reactive Supply chain (us mentality)Logic vs. ExperiencePredictable vs. Chance
W W W . P B S R G . C O M
What are we trying to What are we trying to accomplish from a procurement accomplish from a procurement perspective?perspective?
Scenario 1 Scenario 2
Question:
If Purchasing wants to buy a “green circle”, in which scenario is hiring the right “green circle” easiest to justify?
W W W . P B S R G . C O M 20
Filter 1Past
PerformanceInformation
Filter 2Current
Capability
Filter 4Prioritization
(Identify Best Value)
Filter 5Cost
Reasonableness
Filter 6Pre-
Planning & Risk Min
Time
Qua
lity
of V
endo
rs
Filter 3Interview
Key Personnel
Awar
d
High
Low
BV ProcessBV Process
Measurement of Risk & Performance During the Contract
W W W . P B S R G . C O M
Evaluation CriteriaEvaluation Criteria
Past Performance Information
Scope Plan
Technical Risk Plan
Risk Assessment & Value Added Plan (RAVA)
Transition Schedule
Financials/Cost
Interviews
W W W . P B S R G . C O M
VendorNo Summary Criteria Out of A B C1 RAVA Plan 10 5.91 7.09 6.312 Transition Milestone Schedule 10 5.17 6.96 6.333 Interview 25 15.77 16.78 13.534 Past Performance Information - Survey 10 9.80 9.99 9.825 Past Performance Information - #/Clients Raw # 5.67 3.00 4.426 Past Performance Information - Financial 10 7.02 8.67 6.907 Financial Rating 10 4.00 8.00 8.008 Financial Return - Commissions Raw $ 30,254,170$ 60,137,588$ 64,000,000$ 9 Capital Investment Plan Raw $ 14,750,000$ 20,525,000$ 12,340,000$
10 Equipment Replacement Reserve Raw $ 7,213,342$ 4,100,001$ 8,171,811$ Finanical Totals 52,217,512$ 84,762,589$ 84,511,811$
VendorNo Summary Criteria Weight/Out of A B C1 RAVA Plan 28 16.55 19.85 17.672 Transition Milestone Schedule 2 1.03 1.39 1.273 Interview 25 15.77 16.78 13.534 Past Performance Information - Survey 9 8.82 8.99 8.845 Past Performance Information - #/Clients 1 1.00 0.53 0.786 Past Performance Information - Financial 15 10.53 13.01 10.357 Financial Rating 5 2.00 4.00 4.008 Financial Return - Commissions 7 3.31 6.58 7.009 Capital Investment Plan 6 4.31 6.00 3.61
10 Equipment Replacement Reserve 2 1.77 1.00 2.00100 65.09 78.13 69.04
Assessment: based on actuals
W W W . P B S R G . C O M 23
Identifying the Potential Identifying the Potential Best-ValueBest-Value
Best-Value is the lowest priceBest-Value is within [10%] of next highest ranked firm Best-Value can be justified based on other factors
Best-Value is within budget
YesNo
YesYes
Best ValuePrioritizationBest Value
Prioritization
YesNo
Go with AlternateProposal or Cancel
Proceed toPre-Award
YesYes
YesYes
YesYes YesNo
YesNo Proceed to highest ranked proposal within budget
W W W . P B S R G . C O M 24
Best Value SystemBest Value System
Identification of PotentialBest-Value
Pre Planningand
Risk Management
Measurement ofDeviation from the
Expectation
PHASE 1PHASE 1 PHASE 2PHASE 2 PHASE 3PHASE 3
W W W . P B S R G . C O M
Initial conditions
Final conditions
Project Management Model
Time
Laws Laws
M1
C1 M2
C1: Client Expectations based decisions and various factors – may or may not be “realistic”
M1: Measured vendor plan that more accurately describe the initial conditions replaces C1 – converts to a predictive contract
M2: RMP/WRR measures deviation & performance to plan
M3: Final performance measurement
M3
W W W . P B S R G . C O M
V BC
Buyer Controls Vendor Through Contract
Traditional Risk Model
W W W . P B S R G . C O M
V BC
Vendor Manages/Minimizes Risk With Contract- Contract is predictive
Best Value Risk Model
W W W . P B S R G . C O M 2828
Pre Award PeriodPre Award PeriodWhat is it / Why is it importantWhat is it / Why is it important
Period of time allotted to potential best value vendor (aka the Expert) to:
Think about and preplan the project
Set a plan for its delivery / clarify that your proposal is accurate
Identify the risks and issues that could cause the plan to deviate Identify what you don’t know and when you will know it and how
the plan could change based upon what you discover Set plans to minimize those risks from occurring Address all the concerns and risks of the client
W W W . P B S R G . C O M 2929
Pre Award PeriodPre Award PeriodWhat is it / Why is it importantWhat is it / Why is it important
Period of time allotted to potential best value vendor (aka the Expert) to:
Know how they are being successful and adding value (measurement) What metrics you will use and how you will report them What is the current baseline condition we are comparing against
Identify what you need from the client and have a plan for getting it
Have completely aligned expectations between all parties so everyone knows what is going to transpire and what they are supposed to do
W W W . P B S R G . C O M 30
Filter 1Past
PerformanceInformation
Filter 2Current
Capability
Filter 4Prioritization
(Identify Best Value)
Filter 5Cost
Reasonableness
Filter 6Pre-
Planning & Risk Min
Time
Qua
lity
of V
endo
rs
Filter 3Interview
Key Personnel
Awar
d
High
Low
BV ProcessBV Process
Measurement of Risk & Performance During the Contract
No
n-D
eta
iled
No
n-D
eta
iled
No
n-D
eta
iled
No
n-D
eta
iled
De
taile
d
No
n-D
eta
iled
W W W . P B S R G . C O M 31
Pre Award DocumentPre Award Document(Risk Management Plan)(Risk Management Plan)
1. Scope & Project/Effort Plan Clear and Detailed Project Scope (what is and what is not included) –
Set Baseline Expectation2. Cost or Financial Model3. Milestone schedule (linked to performance benchmarks)4. Risk Minimization Plan
Uncontrolled Risks List A list of Risks Proposer does not control with plans to minimize
Identified Risks List A list of all previously identified risks (by other bidders, user, and
client) with plans to minimize5. Client Action Item List6. Weekly Risk Report Set Up7. Performance Metrics8. Other: Agreed to Value Adding Options, Original RAVA Plan, Interview
Minutes, etc…
W W W . P B S R G . C O M 32
Filter 1Past
PerformanceInformation
Filter 2Current
Capability
Filter 4Prioritization
(Identify Best Value)
Filter 5Cost
Reasonableness
Filter 6Pre-
Planning & Risk Min
Time
Qua
lity
of V
endo
rs
Filter 3Interview
Key Personnel
Awar
d
High
Low
AwardAward
Measurement of Risk & Performance During the Contract
W W W . P B S R G . C O M 33
Filter 1Past
PerformanceInformation
Filter 2Current
Capability
Filter 4Prioritization
(Identify Best Value)
Filter 5Cost
Reasonableness
Filter 6Pre-
Planning & Risk Min
Time
Qua
lity
of V
endo
rs
Filter 3Interview
Key Personnel
Awar
d
High
Low
MeasurementMeasurement
Measurement of Risk & Performance During the Contract
W W W . P B S R G . C O M 34
Weekly Reporting SystemWeekly Reporting System Excel Spreadsheet that tracks only unforeseen risks on a project
Client will setup and send to vendor once Award/NTP issued
Vendor must submit the report every week (Friday).
The final project rating will be impacted by the accuracy and timely submittal of the WRS
W W W . P B S R G . C O M35
Unforeseen Risks
PERFORMANCE SUMMARY• Vendor Performance• Client Performance• Individual Performance• Project Performance
RISK MANAGEMENT PLAN• Risk• Risk Minimization• Schedule
WEEKLY REPORT• Risk• Unforeseen Risks
Management by Risk Management by Risk MinimizationMinimization
METRICS• Time linked• Financial• Operational/Client Satisfac.• Environmental
W W W . P B S R G . C O M
Importance of Importance of MeasurementMeasurementMeasurement is critical
Measurement = accountability
Accountability = improved performance, change
Measurement allows definition of value (expertise)
An expert is someone without risk
Measurement is a mirror
36
W W W . P B S R G . C O M
Potential VisionPotential Vision Educate on IMT and Best Value methodology, tool, etc.
Transfer and educate a new tool for procurement
Transfer and educate techniques for preplanning and contracting
Create a measured environment
Measure projects and vendors
Measure the university, organizations, groups, people, etc.
Measurement = accountability = higher performance
Integrated into network of similar partners all trying to become better
Become educators and leaders of your area
37
W W W . P B S R G . C O M
How will you know when How will you know when you have been successfulyou have been successful Potential Goals
Educated and certified Educating others Measured projects and services
Risk Performance Comparison to baseline conditions
Preplanning and risk management plans Creation of a leadership environment
alignment Less client effort required Fewer lawyers needed Better vendors
38
W W W . P B S R G . C O M
Stones vs BricksStones vs Bricks
39
W W W . P B S R G . C O M
Stones vs BricksStones vs Bricks Best value is a leadership based model
Leadership uses measurement and alignment of supply chain participants to optimize efficiency, minimize risk, and reduce costs
Traditional approach Micro-management, direction, control, multiple layers of inspection Dependence upon the contract to ensure performance
Best Value Approach Leadership, alignment, preplanning, and a supply chain perspective Uses of expertise, measurement, and accountability to optimize
performance within the client’s constraints
40
W W W . P B S R G . C O M
Initial conditions
Final conditions
The Event
Time
Laws Laws
D2
D1 M&C
D3
D1: Client makes decisions on budget, time, and expectation
D2: Client consultant/professional makes more decisions to make expectations true
D3: Vendors attempt to use the lowest possible price to minimize the risk caused by the decision making of client & consultant/professional
M&C: The client attempts to force vendor to make expectations happen
W W W . P B S R G . C O M 42
Perceive
Process
Apply
Change
Cycle of LearningCycle of Learning
100%Information
W W W . P B S R G . C O M 43
Perceive
Process
Apply
Change
Processing SpeedsProcessing SpeedsAll Individuals Process At Different SpeedsAll Individuals Process At Different Speeds
100%Information
W W W . P B S R G . C O M 44
Q: How much do we know about Q: How much do we know about everything?everything?
0% Information 100% Information
% Known
This Much? This Much?This Much?
W W W . P B S R G . C O M 45
Proposal: We don’t know very muchProposal: We don’t know very much
0% Information 100% Information
% of Information
What we don’t know
Wh
at w
e k
now
As for me, all I know is that I know nothing.
- Socrates
W W W . P B S R G . C O M 46
Q: How do we solve what we don’t Q: How do we solve what we don’t know? (aka Risk)know? (aka Risk) Do we use what we know to solve what we don’t know?
OR Do we use logic to solve what we don’t know?
0% Information 100% Information
% of Information
What we don’t know
Wh
at w
e k
now
W W W . P B S R G . C O M 47
A: Logic can be applied without A: Logic can be applied without knowledge/experienceknowledge/experience
0% Information 100% Information
% of Information
What we don’t know
Log
ic
W W W . P B S R G . C O M 48
What is the model?What is the model?Identify the expert with as little effort as possible, using
measurement and differentialTransfer risk and control to the expert through preplanning
and risk minimization, focusing on risk that are not controlledHire the expertUse alignment, planning, & measurement in place of
management, control, and directionCreate a performance information environment to drive
accountability and changeProactive vs. Reactive Supply chain (us mentality)Logic vs. ExperiencePredictable vs. Chance
W W W . P B S R G . C O M
Case StudiesCase Studies
49
W W W . P B S R G . C O M
Overview of SHIP Test Overview of SHIP Test ObjectivesObjectives Establish contract with SHIP provider for college students in Idaho
BSU Objectives: Maximize value (performance and cost) of SHIP Have an environment of risk minimization and performance
measurement Minimize client effort in selection and management Minimize decision making Education of PIPS Measurement of differential
BSU would like to create a “consortium” of universities/colleges in Idaho for a single SHIP contract
50
W W W . P B S R G . C O M
DeliverablesDeliverables Major project deliverables include:
1. Set and Educate Project core team and2. Set BSU Strategic Plan3. Capture current level of performance and cost
Plan providers Cost structure Program structure and details Identify differentials, gaps, and overlaps
4. Create RFP5. Educate Vendors6. Run Selection and Interviews7. Run Pre-Planning and Risk Management8. Award & Transition9. Establish and maintain measurement system
51
W W W . P B S R G . C O M State of Idah
o
OverviewOverview Create a statewide Student Health Insurance Plan (SHIP) consortium Create a statewide Student Health Insurance Plan (SHIP) consortium
Boise State University (BSU)Boise State University (BSU) Idaho State University (ISU)Idaho State University (ISU) Lewis-Clark State College (LCSC)Lewis-Clark State College (LCSC)
3-Year Contract | $36 Million3-Year Contract | $36 Million
Measurements of SuccessMeasurements of Success1.1. Reduce internal University program administration costsReduce internal University program administration costs2.2. Maintain or increase Customer Satisfaction (University & Students)Maintain or increase Customer Satisfaction (University & Students)3.3. Maintain or increase cost-effectiveness of program to studentsMaintain or increase cost-effectiveness of program to students
W W W . P B S R G . C O M State of Idah
o
What Should We Include In What Should We Include In RFP?RFP? Request For Information (RFI)
General request to vendors Ask vendors what information they need to see in the RFP to create
and provide an accurate proposal Has no contractual implications, just providing information to the
client
Filter 1Past
PerformanceInformation
Filter 2Proposal & RAVA Plan
Filter 4Prioritize (Identify
Best Value)
Filter 5Pre-Award
Phase (Pre-Plan)
Filter 6Weekly
Report &Post-Rating
Time
Qua
lity
of V
endo
rs
Filter 3Interview
High
Low
RFI RFP
W W W . P B S R G . C O M State of Idah
o
Selection Criteria & WeightsSelection Criteria & Weights Responding contractors were evaluated on:Responding contractors were evaluated on:
Premiums (Student, Spouse, Dependents) Premiums (Student, Spouse, Dependents) (200 Points)(200 Points)
Interviews Interviews (350 Points)(350 Points) Program Administrator Program Administrator Claims Administrator Claims Administrator Waiver Administrator Waiver Administrator Data Base Manager Data Base Manager Marketing Manager Marketing Manager
Risk Assessment and Value Added (RAVA) plan Risk Assessment and Value Added (RAVA) plan (250 Points)(250 Points) Risk Assessment – ability to identify and minimize potential risk unique to this projectRisk Assessment – ability to identify and minimize potential risk unique to this project Value Added Option – ability to add value to the project in terms of time, money or qualityValue Added Option – ability to add value to the project in terms of time, money or quality
Scope Plan Scope Plan (50 Points)(50 Points) Concise synopsis of the work that will be performed (major tasks, steps, or work packages). Concise synopsis of the work that will be performed (major tasks, steps, or work packages). Vendors impression of how they will achieve the objectives of the consortium Vendors impression of how they will achieve the objectives of the consortium
Past Performance Information Past Performance Information (150 Points)(150 Points) FirmFirm Program AdministratorProgram Administrator
W W W . P B S R G . C O M State of Idah
o
55
Filter 1Past
PerformanceInformation
Filter 2Proposal & RAVA Plan
Filter 4Prioritize (Identify
Best Value)
Filter 5Pre-Award
Phase (Pre-Plan)
Filter 6Weekly
Report &Post-
Rating
Time
Qualit
y o
f V
endors
Filter 3Interview
High
Low
Summary of Proposal Summary of Proposal SubmittalSubmittal
Proposal Includes:1) Cost/Financial Information2) RAVA Plan (3)3) Scope Plan (2)4) PPI
W W W . P B S R G . C O M State of Idah
o
Coverage/Plan Coverage/Plan CharacteristicsCharacteristics
Consortium goal was to standardize coverage between all three University's Consortium goal was to standardize coverage between all three University's (to maximum extent possible). However, deviations were made as necessary (to maximum extent possible). However, deviations were made as necessary (BSU athletic coverage, ISU RX Coverage, Capitated Fee, etc)(BSU athletic coverage, ISU RX Coverage, Capitated Fee, etc)
Consortium goal was to increase plan characteristics (to provide better Consortium goal was to increase plan characteristics (to provide better coverage for students)coverage for students)
NO CRITERIA BSU ISU LCSC CONSORTIUM
1 Deductible Per Academic Year (In-Network) $250 $250 $250 $250
2 Deductible Per Academic Year (Out-Of-Network) $500 $250 $250 $500
3 Maximum Benefit (Standard) $100,000 $50,000 $50,000 $250,000
4 In-Network Coinsurance 80% 80% 80% 80%
5 In-Network Max out of Pocket $4,000 No MOP No MOP $4,000
6 Out-Of-Network Coinsurance 50% 60% 80% 60%
7 Out-Of-Network Max out of Pocket $6,000 No MOP No MOP $6,000
8 RX Drug Coverage (Max) $400 None $500 $500*
W W W . P B S R G . C O M State of Idah
o
SHIP AnalysisSHIP AnalysisNO CRITERIA
DETAILED WEIGHTS
FIRM A FIRM C FIRM D FIRM E FIRM F
1 Cost - Overall Annual Cost to Consortium 50 $12,237,529 $11,051,451 $11,437,893 $12,928,466 $13,063,2352 Cost - BSU Annual Student Premium (per-student per-year cost): 38 $1,772 $1,552 $1,685 $1,806 $1,9143 Cost - BSU Annual Spouse Premium (per-individual per-year cost): 6 $2,200 $3,992 $2,865 $3,066 $3,2484 Cost - BSU Annual Dependent Premium (per-individual per-year cost): 6 $1,886 $2,249 $2,444 $2,124 $3,6165 Cost - ISU Annual Student Premium (per-student per-year cost): 38 $1,267 $1,185 $1,113 $1,394 $1,2596 Cost - ISU Annual Spouse Premium (per-individual per-year cost): 6 $1,660 $3,048 $2,827 $2,937 $3,6277 Cost - ISU Annual Dependent Premium (per-individual per-year cost): 6 $1,424 $1,717 $1,209 $2,038 $1,5518 Cost - LCSC Annual Student Premium (per-student per-year cost): 38 $1,228 $1,244 $1,298 $1,484 $1,6159 Cost - LCSC Annual Spouse Premium (per-individual per-year cost): 6 $1,626 $3,200 $3,300 $3,066 $2,222
10 Cost - LCSC Annual Dependent Premium (per-individual per-year cost): 6 $1,394 $1,803 $1,411 $2,124 $2,31011 Interview Rating - The Program Administrator 175 6.7 7.7 7.1 7.4 7.412 Interview Rating - The Claims Administrator 70 6.6 6.1 4.6 5.3 8.313 Interview Rating - The Waiver Administrator 35 5.8 7.6 5.4 6.0 6.014 Interview Rating - The Data Base Manager 35 5.2 5.0 3.9 4.6 4.615 Interview Rating - The Marketing Manager 35 7.8 6.4 5.0 8.1 8.117 RAVA Plan Rating 250 7.42 6.25 7.42 5.58 5.1718 Work Plan Rating 50 6.67 7.17 6.33 5.50 5.5819 PPI - Firm - Satisfaction with the associated costs of the service 14 9.7 9.1 9.9 10.0 10.020 PPI - Firm - Satisfaction with the benefits provided by the service 14 9.9 9.5 10.0 10.0 10.021 PPI - Firm - Ability to manage the service / program 14 9.9 9.8 10.0 10.0 10.022 PPI - Firm - Ability to document and provide accurate reports 14 9.8 9.9 9.9 10.0 10.023 PPI - Firm - Overall customer satisfaction 14 10.0 9.8 9.8 10.0 10.024 PPI - Firm - Number of different projects 14 10.0 20.0 9.0 10.0 10.025 PPI - Firm - Number of different customer responses 14 10.0 20.0 9.0 10.0 10.026 PPI - Administrator - Satisfaction with the associated costs of the service 7 9.7 10.0 9.8 10.0 10.027 PPI - Administrator - Satisfaction with the benefits provided by the service 7 9.9 10.0 9.9 10.0 10.028 PPI - Administrator - Ability to manage the service / program 7 9.9 10.0 9.9 10.0 10.029 PPI - Administrator - Ability to document and provide accurate reports 7 9.8 10.0 9.7 10.0 10.030 PPI - Administrator - Overall customer satisfaction 7 10.0 10.0 9.7 10.0 10.031 PPI - Administrator - Number of different projects 7 10 10 10 10 1032 PPI - Administrator - Number of different customer responses 7 10 10 10 10 10
W W W . P B S R G . C O M State of Idah
o
Analysis of ProposalsAnalysis of Proposals
Total Score: 923 916 886 831 840
NO CRITERIA FIRM A FIRM C FIRM D FIRM E FIRM F
1 Cost - Average Student Premium $1,422 $1,327 $1,365 $1,561 $1,596
2 Cost - Average Spouse & Dependent Premium $1,698 $2,668 $2,343 $2,559 $2,762
3 Average Interview Rating 6.4 6.6 5.2 6.3 6.9
4 RAVA Plan Rating 7.4 6.3 7.4 5.6 5.2
5 Work Plan Rating 6.7 7.2 6.3 5.5 5.6
6 PPI - 1-10 Rating 9.9 9.7 9.9 10.0 10.0
7 PPI - Number of projects and clients 10 17 9 10 10
W W W . P B S R G . C O M State of Idah
o
Overall Best-Value ResultsOverall Best-Value Results
Best-Value Results:Best-Value Results: Student Premium has Student Premium has decreaseddecreased by by 2%2% (-$26) (-$26) Spouse & Dependent Premium has Spouse & Dependent Premium has decreaseddecreased by by 19%19% (-$519) (-$519) In general, Benefits/Coverage have been increasedIn general, Benefits/Coverage have been increased
School Premiums 2006-2007 2007-2008 2008-2009 2009-2010Average
Increase Per Year ($)
Average Increase Per
Year (%)Student $1,012 $1,182 $1,263 $1,385 $124 11%
Spouse & Dependent $1,843 $2,022 $2,104 $2,220 $126 6%
• Previous Program:Previous Program:– Student Premiums increased $124/year (past 4 years)Student Premiums increased $124/year (past 4 years)– Spouse & Dependent Premiums increased $126/yearSpouse & Dependent Premiums increased $126/year
W W W . P B S R G . C O M
Case Study: ASUFood Services Contract
No Summary Criteria ScaleFirm A
(Incumbent)Firm B Firm C
1 RAVA Plan (1-10) 5.9 7.1 6.32 Transition Milestone Schedule (1-10) 5.2 7.0 6.33 Interview (1-25) 15.8 16.8 13.54 Past Performance Information - Survey (1-10) 9.8 10.0 9.85 Past Performance Information - #/Clients Raw # 5.7 3.0 4.46 Past Performance Information - Financial (1-10) 7.0 8.7 6.97 Financial Rating (1-10) 4.0 8.0 8.08 Financial Return - Commissions Raw $ 30,254,170$ 60,137,588$ 64,000,000$ 9 Capital Investment Plan Raw $ 14,750,000$ 20,525,000$ 12,340,000$
10 Equipment Replacement Reserve Raw $ 7,213,342$ 4,100,001$ 8,171,811$ 52,217,512$ 84,762,589$ 84,511,811$ Finanical Totals
No Summary Criteria ScaleFirm A
(Incumbent)Firm B Firm C
1 RAVA Plan (1-10) 5.9 7.1 6.32 Transition Milestone Schedule (1-10) 5.2 7.0 6.33 Interview (1-25) 15.8 16.8 13.54 Past Performance Information - Survey (1-10) 9.8 10.0 9.85 Past Performance Information - #/Clients Raw # 5.7 3.0 4.46 Past Performance Information - Financial (1-10) 7.0 8.7 6.97 Financial Rating (1-10) 4.0 8.0 8.08 Financial Return - Commissions Raw $ 30,254,170$ 60,137,588$ 64,000,000$ 9 Capital Investment Plan Raw $ 14,750,000$ 20,525,000$ 12,340,000$
10 Equipment Replacement Reserve Raw $ 7,213,342$ 4,100,001$ 8,171,811$ 52,217,512$ 84,762,589$ 84,511,811$ Finanical Totals
$32 Million Dollars (Over 10 Years)
W W W . P B S R G . C O M
After 1 Year: Monitoring Based on Measurements Increase sale of food by 14% Increased cash to ASU by 23% Minimized management cost by 80% Increased customer satisfaction by 37% Increased capital investment by 100%
1 Total Revenue ($M) 27.02$ 30.83$ 3.81$ 14%
2 Total Return & Commissions ($M) 2.17$ 2.67$ 0.50$ 23%
3 Captial Investment Contract ($M) 14.75$ 30.83$ 18.08$ 109%
4 Captial Investment 2006 vs. 2007 ($M) 0.26$ 5.70$ 5.44$ 2092%
5 ASU Administration (# of People) 7 1.5 -5.5 -79%
6 Customer (Student) Satisfaction (1-10) 5.2 7.1 1.9 37%
7 Myster Shopper Satisfaction N/A 9.6 -- --
CategoryNoFY 06-07
IncumbentFY 07-08
New VendorDifference % Difference
W W W . P B S R G . C O M
2009 Performance Metrics2009 Performance MetricsNo Catergory
YTD Prior Year YTD Actual
Var Act. vs PY
Var Act. vs PY %
1 Mandatory Meal Plan Sales - Meals ($K) (Meal Swipes) 8,915.5$ 8,212.2$ (703.3)$ -7.9%2 Voluntary Meal Plan Sales - Meals($K) (Meal Swipes) 294.2$ 404.1$ 109.9$ 37.4%3 Retail Sales ($K) 15,408.1$ 17,320.4$ 1,912.3$ 12.4%4 Catering Sales ($K) 2,329.1$ 2,526.5$ 197.4$ 8.5%5 Camp/Conference Sales ($K) -$ 865.2$ 865.2$ #DIV/0!6 All Other Sales (Subcontractors & Sushi) ($K) 3,030.9$ 3,807.2$ 776.2$ 25.6%7 TOTAL REVENUE 29,977.8$ 33,135.6$ 3,157.8$ 10.5%8 Commissions on Total Revenue ($K) 1,902.3$ 2,011.3$ 109.0$ 5.7%9 Subsidy - DPC, West & Polytechnic ($K) 391.7$ 1,381.6$ 989.9$ 252.7%
10 Commissions Paid to ASU ($K) (Commission less Subsidy) 1,723.3$ 629.7$ (1,093.6)$ -63.5%11 Commission % 6.35% 6.07% -0.28% -4.35%
No CatergoryYTD Prior
Year YTD Actual Actual vs PYVar Act. vs PY %
1 Number of Mandatory Meal Plans Sold 5,361 6,159 798 14.9%2 Number of Voluntary Meal Plans Sold 2,128 2,882 755 35.5%3 Customer (Student) Satisfaction Survery (1 - 10 (2x/yr) 7.34 7.27 -0.07 -1.0%
W W W . P B S R G . C O M
Performance Metrics – Combined ASU
FY 2010
No Category
YTD Prior Year - ADJUSTED wk 6
Sep YTD Actual YTD BudgetVar Act. vs
PYVar Act. vs
PY %Var Act. vs
BudgetVar Act. Vs Budget %
1 Mandatory Meal Plan Sales - Meals ($K) (Meal Swipes) 7,914.4$ 14,609.2$ 12,531.2$ 6,694.8$ 84.6% 2,078.0$ 16.6%
2 Voluntary Meal Plan Sales - Meals($K) (Meal Swipes) 390.5$ 372.4$ 264.7$ (18.1)$ -4.6% 107.7$ 40.7%
3 Retail Sales ($K) (Sun $, M&G Vol, M&G Mandatory and Cash & Credit Cards)16,756.8$ 17,656.1$ 22,697.4$ 899.2$ 5.4% (5,041.3)$ -22.2%
4 Catering Sales ($K) 2,475.5$ 2,502.0$ 2,733.4$ 26.5$ 1.1% (231.4)$ -8.5%
5 Camp/Conference Sales ($K) 865.2$ 822.1$ 648.9$ (43.1)$ -5.0% 173.2$ 26.7%
6 All Other Sales (Subcontractors & Sushi) ($K) 3,703.3$ 3,793.8$ 5,169.6$ 90.5$ 2.4% (1,375.8)$ -26.6%
7 TOTAL REVENUE 32,105.7$ 39,755.5$ 44,045.1$ 7,649.8$ 23.8% (4,289.6)$ -9.7%
8 Commissions on Total Revenue ($K) 2,011.2$ 2,413.2$ 2,673.5$ 402.0$ 20.0% (260.4)$ -9.7%
9 Subsidy - DPC, West & Polytechnic ($K) 1,202.3$ 604.6$ 1,157.6$ (597.7)$ -49.7% (553.0)$ -47.8%
10Commissions Paid to ASU ($K) (Commission on Total Revenue less Subsidy) 803.7$ 1,808.5$ 1,515.9$ 1,004.9$ 125.0% 292.6$ 19.3%11 Commission % 6.07% 6.07% 6.07%
No Category YTD Prior Year YTD ActualYTD
BudgetActual vs
PYVar Act. vs PY %
Var Act. vs Budget
Var Act. Vs
Budget %
1 Number of Mandatory Meal Plans Sold 6,133 7,573 7,843 1,455 23.6% -229 -2.9%
2 Number of Voluntary Meal Plans Sold 2,882 4,056 2,215 1,174 40.7% 1841 83.1%
Financial Performance Metrics
Performance Metrics
W W W . P B S R G . C O M
Overview of ASU NetworkOverview of ASU NetworkThe ASU Network consisted of:
64,000 Students and 12,000 Faculty 4 Different Campuses Estimated Cost: $11.1M Number of employees:
18 Full-time employees 8 Students 3 Contract technicians
Main Technical Competencies: Core Infrastructure Design & Engineering Edge (Field) Technicians Project Management & Coordination Documentation Network Information/Operations Technology Solutions (network monitoring/measurement)
W W W . P B S R G . C O M
Technology Options
As I s
$12M
+15,000 Ports
7%
Gig Speed Capability of LAN Devices
Capital Equipment I nvestment
VoIP Implementation w/ new voicemail
system
Additional Services Offered-
PM, HPC, Border & Data Center Mgmt
Commissions to ASU
Call Center Application Upgrade &
Maintenance
University Benchmarking
Wiring Upgrades
I nitial Cabling Audit
I nvestment I n New Technologies
100%
Standard Offering
+15,000 Ports
150
$17M
35% Over 5 Years
100%
100%
Option Set #1
+20,000 Ports
$26M
50% Over 5 Years
50%
50%
$350K
100%
Option Set #2
+25,000 Ports
$31M
80% Over 5 Years
80%
80%
$750K
100%
Value Add #3
100% in 18-24 Months
$35.7M
Up to $300K
100%
100%
100%
100%
+30,000 Ports (100% )
$1.375M
Enhanced Value Add #3
100% in 18-24 Months
$35.7M
100%
Up to $300K
100%
100%
100%
+30,000 Ports (100% )
$1.375M
100%
W W W . P B S R G . C O M
Final ASU IT Networking Final ASU IT Networking ContractContract
ASU IT Networking previously performed in-house
ASU IT Network Details 76,000 Students and Faculty 5 yr. Contract 4 Different Campuses
ASU chose “As-Is” option
ASU MaintenanceAnnual Cost
Qwest MaintenanceAnnual Cost
Total Annual QwestSavings
Total Qwest AnnualValue Added and Savings
$13,981,934 $12,500,000 1,481,934 2,756,934
W W W . P B S R G . C O M
Vendor Created Information Vendor Created Information EnvironmentEnvironment
Old Operational Structure New Operational Structure
Complicated Management Structure
Single Management Structure
“Seamless Organization”
No measurement Fully measured
No accountability Qwest responsible for entire operation
Requires more labor 26% less labor
W W W . P B S R G . C O M
Dominant InformationDominant Information
Dominant Performance Indicators Overall cost of network Top of the line networking Network Sustainability/Accessibility Customer Satisfaction
Documentation of Deviations to financials
Dominant MeasurementsASU
Current Qwest
Value Add
Overall Cost of NetworkAnnual IT Spend Ratio (new vs maintenance) 17/83 48/52
Top-of-the-line Networking% Converged 7% 100%% Mobility 2% 100%% Equipment not out-of-date 58% 95%
Network Sustainability/Accessibility% Equipment not needing replacement (Not at end-of-maintenance) 88% 100%
Customer SatisfactionSpeed/Quickness Available (Wired / Wireless):% 1Gb - Wired Connections 59% 98%% of 300Mb - Wireless Connections 8% 32%
Dev. Cap, Exp. Maint. FOE Costs Total
Year 1 Exp. 4,100,000$ 1,652,000$ 6,818,000$ 12,570,000$
Ex. Risk X 100,000$ 100,000$ -$ -$ 100,000$
Ex. Risk X 100,000$ 100,000$ (25,000)$ -$ 75,000$
Ex. Risk X 50,000$ -$ 50,000$ -$ 50,000$
Ex. Risk X 25,000$ 25,000$ -$ -$ 25,000$
New Year 1 275,000$ 4,325,000$ 1,677,000$ 6,818,000$ 12,820,000$
W W W . P B S R G . C O M 6969
U of MN ObjectivesU of MN Objectives The UMN has a goal to be recognized as a top research institution in the world
In 2005, CPPM partnered with the PBSRG (ASU) to implement the PIPS Best Value Process
CPPM’s Objectives of the Best-Value Program are to: Contract to high performers Respond faster to customer needs Increase performance (on time, on budget, high quality)
Increase efficiency of procurement (spend taxpayers money more efficient)
Create a fair and open process for all vendors
W W W . P B S R G . C O M 70
CPPM Strategic Plan CPPM Strategic Plan First organization to establish and follow a Strategic Plan
Ultimate Goal: CPPM take over entire program and is successful in implementing and sustaining the program. Year 1 – Pilot Testing Year 2 – Evaluation and Continued Testing Year 3 – Expansion Year 4 – Expansion Year 5 – Infusion & Transition Year 6 – Transition
W W W . P B S R G . C O M 71
CPPM Strategic Plan CPPM Strategic Plan Year 1 Identify and educate core group Identify qualified vendors Implement best-value Analyze pilot projects
Year 2 Continue testing best-value Evaluate core group and refine Expand test to different trades (General
Construction) Educate more internal CPPM staff Implement a weekly project tracking
system Refine list of qualified vendors Educate and debrief qualified vendors on
initial project results
Year 3 Allow other CPPM personnel to test Automated online Directors Report Monitor all CPPM projects (LB & BV) Expand testing (A/E Services) Identify performance of UMN PM’s,
Procurement, other critical areas, etc. Train CPPM on all BV components
Year 4 CPPM acquire and perform all best-value
functions (educate and train) PBSRG assist on areas of weakness CPPM handle analysis and tracking of all
weekly reports Implement best-value on a larger scale Educate other UMN groups (Energy,
Zones, Permitting, Codes, ect)
W W W . P B S R G . C O M 72
No Activity Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
1 Education / Training / Debriefing 0% 0% 25% 50% 75% 100%
2 Data Collection (PPI) on Vendors 0% 0% 0% 0% 0% 0%
3 Proposal Analysis / Review / Rating 0% 25% 75% 75% 100% 100%
4 Modeling / Identification of Best-Value 0% 0% 0% 25% 50% 100%
5 Weekly Risk Reporting System 0% 0% 25% 25% 75% 100%
6 Directors Reporting 0% 0% 0% 0% 0% 100%
7 Documentation and Analysis 0% 0% 0% 25% 50% 75%
8 Modification / Evolution / Updating 0% 0% 0% 0% 0% 0%
Transitional PlanTransitional Plan
W W W . P B S R G . C O M 73
Award Analysis: Number of Best-Value Procurements: 161 Awarded Cost: $50.6M (11% below average cost) Average Number of Proposals: 4 Projects Where Best-Value was also Lowest Cost: 53% 85% of projects were awarded to vendor with highest / second highest
RAVA Plan (7.3 vs 5.9)
Performance Information: Contractor Impacts: 0% Change Orders / 4% Delay Vendor post project rating: 9.6 Average Contractor Increase in Profit: 5%
Current Construction Current Construction ResultsResults
W W W . P B S R G . C O M 74
PM 1 PM 2 PM 3 PM 4
Procurement Officer 1 Procurement Officer 2
Director
Contractor 1
Contractor 2
Contractor 3
Contractor 4
Contractor 3
Contractor 6
Contractor 1
Contractor 8
Contractor 9
Contractor 7
Contractor 7
Contractor 2
Contractor 4
Contractor 8
Contractor 9
Contractor 2
Program ReportProgram Report
Director 1 Director 2
PM 1 PM 2 PM 3 PM 4
Vice President
W W W . P B S R G . C O M 75
Report – Overall ProgramReport – Overall Program
W W W . P B S R G . C O M 76
Report - DirectorsReport - Directors
W W W . P B S R G . C O M 77
Report - End UsersReport - End Users TEAM 1
(President / University / Admin)
TEAM 2Academic Health
Center
TEAM 3Provost College
1 Total Number of Projects 19 14 52 Percent of Projects Procured Using PIPS 79% 86% 80%3 Total Awarded Cost: $5,359,995 $2,821,005 $2,353,7614 Average Number of Risks per Project 3 8 12
5 Overall Owner Impacts (Time & Cost) 7.7% 41.3% 41.1%6 Owner Change Order Rate 0.6% 3.4% 20.0%7 Owner Delay Rate 7.2% 37.8% 21.1%8 Percent of Projects without Owner Cost Changes 63% 36% 80%9 Percent of Projects without Owner Delays 68% 50% 80%
10 Overall Contractor Impacts (Time & Cost) 8.1% 19.6% 14.8%11 Contractor Change Order Rate 0.1% 0.1% -0.8%12 Contractor Delay Rate 8.0% 19.6% 15.6%13 Percent of Projects without Contractor Cost Changes 95% 93% 100%14 Percent of Projects without Contractor Delays 79% 79% 60%
15 Total Number of Completed Projects 4 2 116 Total Number of Client Surveys Returned 3 2 117 Percent of Projects Evaluated by Client 75% 100% 100%18 Average PM Post Project Rating of Contractor 6.75 10 1019 Average Client Post Project Rating of Contractor 7.7 8.5 8.020 Average Client Post Project Rating of CPPM 10.7 8.5 7.0
Contractor Impacts
Owner Impacts
Satisfaction Ratings
General Overview
W W W . P B S R G . C O M 78
Report – Internal PM’sReport – Internal PM’s
W W W . P B S R G . C O M 79
Report - ContractorsReport - Contractors
No ContractorTotal
Number of Projects
Total Awarded Cost:
Owner Change Order Rate
Owner Delay Rate
Vendor Change Order Rate
Vendor Delay Rate
Percent of Late Reports
Vendor Performance
1 Contractor 118 3 $ 721,965 0.3% 18.1% 0.2% 66.8% 53% 120%2 Contractor 119 3 $ 220,002 0.7% 10.4% 0.0% 0.0% 69% 69%3 Contractor 120 1 $ 269,850 9.4% 303.0% 0.0% 18.2% 47% 65%4 Contractor 104 3 $ 459,225 1.6% 2.7% 0.0% 18.8% 37% 56%5 Contractor 121 1 $ 241,575 0.0% 21.9% 2.7% 50.0% 0% 53%6 Contractor 105 8 $ 1,611,015 0.3% 32.9% 0.0% 16.3% 32% 49%7 Contractor 106 9 $ 1,280,362 2.2% 31.1% 0.7% 3.2% 35% 39%8 Contractor 122 3 $ 367,650 0.0% 79.1% 0.0% 1.4% 37% 38%9 Contractor 107 1 $ 178,440 0.0% 0.0% 0.6% 11.4% 25% 37%
10 Contractor 123 2 $ 3,227,182 14.9% 0.0% -0.6% 5.4% 30% 35%11 Contractor 108 2 $ 327,295 0.0% 135.4% 0.0% 0.0% 32% 32%12 Contractor 124 1 $ 69,218 3.5% 0.0% 0.0% 0.0% 31% 31%13 Contractor 125 3 $ 1,150,738 1.9% 7.3% 0.0% 4.2% 26% 30%14 Contractor 109 5 $ 534,095 2.0% 23.2% 0.0% 0.0% 29% 29%15 Contractor 126 1 $ 323,000 3.3% 3.4% 0.0% 6.8% 22% 29%16 Contractor 110 1 $ 308,882 1.2% 24.8% 0.0% 0.0% 27% 27%17 Contractor 127 7 $ 1,793,355 3.8% 13.6% 0.0% 0.0% 26% 26%18 Contractor 128 4 $ 2,956,800 1.3% 1.7% 0.0% 12.2% 11% 23%19 Contractor 129 6 $ 1,319,789 2.2% 16.2% 0.0% 11.0% 9% 21%20 Contractor 111 4 $ 1,096,707 0.1% 0.0% 0.0% 9.8% 10% 19%21 Contractor 112 1 $ 446,100 0.0% 6.9% 0.0% 0.0% 15% 15%22 Contractor 113 3 $ 552,815 5.1% 29.4% 0.0% 7.0% 8% 15%23 Contractor 114 2 $ 1,841,157 13.0% 215.8% 0.0% 0.0% 13% 13%24 Contractor 130 4 $ 795,791 0.8% 0.0% 0.0% 0.0% 12% 12%25 Contractor 101 4 $ 322,400 0.0% 0.0% 0.0% 0.0% 8% 8%26 Contractor 115 3 $ 753,660 10.9% 54.7% 0.0% 0.0% 7% 7%27 Contractor 102 1 $ 14,150 0.0% 0.0% 0.0% 0.0% 0% 0%28 Contractor 116 1 $ 109,710 0.0% 0.0% 0.0% 0.0% 0% 0%
W W W . P B S R G . C O M 80
Report – Yearly AnalysisReport – Yearly Analysis
W W W . P B S R G . C O M 81
Report – Top 10 Riskiest Report – Top 10 Riskiest ProjectsProjects
No Project Awarded CostAwarded Duration
Overall Change Order Rate
Overall Delay Rate
Percent of Late Reports
Risk Analysis Factor
PM Director
1 Mayo Remodel Suite A652 $ 269,850 66 9% 321% 47% 377% Wycliffe Waganda Gary Summerville
2 Barn Clean Renovations $ 269,000 80 2% 166% 60% 229% Wycliffe Waganda Justin Grussing
3 WBOB Remodel Suite 150 $ 273,100 99 1% 96% 37% 134% Pete Nickel Gary Summerville
4 Vet Sciences Third Floor $ 96,930 49 3% 86% 28% 116% Pete Nickel Gary Summerville
5Weaver Densford College of Pharmacy
$ 90,862 28 2% 25% 80% 107% Pete Nickel Gary Summerville
6 PWB Remodel Suite 6-240 $ 127,338 82 17% 23% 64% 104% Steve Bailey Gary Summerville
7 PWB Room 7-158B $ 46,504 30 0% 0% 100% 100% Pete Nickel Gary Summerville
8Oak Street Parking Surveillance
$ 246,802 74 0% 0% 100% 100% George Mahowald Justin Grussing
9 Snyder Bldg Exterior Door $ 219,000 121 -4% 81% 22% 100% Wycliffe Waganda Justin Grussing
10 Heller Hall Renovation $ 1,593,561 254 29% 0% 50% 79% Matt Stringfellow Justin Grussing
W W W . P B S R G . C O M 82
Report – Analysis of RisksReport – Analysis of Risks
Risk CategoryNumber of
RisksImpact to
CostImpact to Schedule
Percent Impact to
Cost
Percent Impact to Schedule
1) Client Impacts 114 $660,369 1,200 59% 46%Client Scope Change / Decision 111 660,369$ 976 59% 37%
Client Requested Delay 3 -$ 224 0% 9%
2) CPPM Impacts 135 $329,425 885 30% 34%Design Issue 48 189,876$ 230 17% 9%
CPPM Issue (Codes / Permits) 36 46,140$ 170 4% 7%
CPPM Issue (Energy Mgmt) 2 47,533$ 30 4% 1%
CPPM Issue (Hazardous / Health & Safety) 8 35,407$ 118 3% 5%
CPPM Issue (NTS) 8 10,018$ 64 1% 2%
CPPM Issue (Contract / Payment) 11 -$ 132 0% 5%
CPPM Issue (Other) 22 451$ 141 0% 5%
3) Contractor Impacts 43 $21,005 411 2% 16%Contractor Issue 11 -$ 101 0% 4%
Contractor Oversight of Design 9 21,005$ 38 2% 1%
Contractor Issue with Supplier / Sub 23 -$ 272 0% 10%
4) Unforeseen Impacts 19 $102,544 111 9% 4%311 1,113,343$ 2,607
W W W . P B S R G . C O M
Research from Contractor DelaysResearch from Contractor Delays
Contractor Risks %
Delivery of Materials Delayed 28%
Installation errors 26%
Incorrect material ordered or delivered 11%
Alteration of installation needed 9%
Manufacture didn't have sufficient materials 9%
Misunderstanding of Construction Documents 6%
Door Frames incorrect size 4%
Soil compaction 2%
83
52% of risks due to errors in materials delivered
W W W . P B S R G . C O M 84
Targeted Business GroupTargeted Business Group(Minority & Disadvantaged)(Minority & Disadvantaged)
Out of 63 qualified contractors, 18 are TGB (29%)
Out of 161 PIPS Projects, 26 were awarded to TGB Contractors (16%)
Awards were based on best-value, which shows that there are high performing TGB vendors in the MN community
W W W . P B S R G . C O M
Best Value Vendor CharacteristicsBest Value Vendor Characteristics
Preplans and Minimizes Risk on Each Initiative Has a plan and knows the risks to the plan Is transparent Communicates clearly Asks good questions, knows what they don’t know
Measures Performance and drives accountability
Uses Dominant Information to Differentiate themselves/show value added
Educates the Client and helps the client be a better client
Educates themselves and has a continually enhanced vision Holds themselves and the client accountable Their plan is aligned so that when they win, the client automatically wins
85
W W W . P B S R G . C O M
Best Value Client CharacteristicsBest Value Client Characteristics
Ensures their needs and concerns are known by the vendor Ensures the vendor has a plan that addresses each need/concern/risk Is a facilitator to the vendors development of the plan(s) Enforces the best value structure
Weekly risk reporting is being done Each risk is given a client satisfaction rating Measurements by vendor are being done Do not be pulled into making decisions you do not need to make
Educates themselves and the vendor Avoids reversion Transfers risk and control
Holds the vendor and themselves accountable Ensures the plan is aligned so they win and the vendor wins
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Master of Science Degree Program:Master of Science Degree Program:Facilities Asset and Project ManagementFacilities Asset and Project Management
Masters program: Available on-line and in-person (site visits)
Based on IMT, Leadership, and Best Value
Completely integrated with your job/organization Thesis becomes documentation of best value
implementation at your organization
30 Credits – Only 7 Classes and a Thesis Classes in IMT, Best Value, and PIRMS
Classes in Leadership and FM, and PM (value based)
Classes in Research Methods and Data Analysis
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Comments / QuestionsComments / Questions
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