Owners Perspective | Spring/Summer 2014

Spring/Summer 2014 1

Integrated Project Delivery Optimizing Project Performance

Spring/Summer 2014

Integrated Project Delivery Optimizing Project Performance

The Magazine of The Construction Owners Association of America

Project Leadership Gold Award WinnerMethodist Olive Branch Hospital

Project Leadership Gold Award WinnerMethodist Olive Branch Hospital

2 OwnersPerspective.org

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Published By:

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PresidentKevin Brown

General ManagerTrevilynn Blakeslee

EditorChris [email protected]

Graphic DesignerJen Canady

Senior Sales ManagerMaureen Hays [email protected] or call 877.234.1863, ext. 6717

Account ExecutivesWalt Daniels, Steve Hazouri,Jennifer Siorek, Kevin Mizell

© 2014 All rights reserved. The contents of this publication may not be reproduced by any means, in whole or in part, without the prior written consent of the association and publisher.

SPRING/SUMMER 2014 CONTENTSFEATURES6 Project Profile

Project Leadership Gold Award Winner: Methodist Olive Branch HospitalBy Chris Towery

14 Owner InterviewA Conversation with Kevin L. Lewis, P.E of Loudon County Public SchoolsBy Randle Pollock

16 Project DeliveryIntegrated Project Delivery: Optimizing Project PerformanceBy Howard Ashcraft

22 SustainabilityGreen Globes Gains Traction:New Sustainable Building Rating System Offers Alternative to LEEDBy Chris Towery

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5000 Austell Powder Springs Rd, Suite 217Austell, GA 30106

Magazine Editorial Committee

Lisa BerkeyPennsylvania State University

Randy PollockHDR

Dean McCormick Iowa State University

Stan ScottHill International, Inc.

The official publication of

Cover: The Methodist Olive Branch HospitalPhoto: Courtesy Methodist Le Bonheur Healthcare

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Our construction services meet the needs of today’s college students.

George Mason University Exploratory Hall Expansion & Renovation

WE CALL THAT

GENUINE DONLEY’S

5 President’s Corner11 Owner Alerts25

27 Chapter News

28 New Members30 Calendar of Events

Driving for a Hole-in-One: A Recap of COAA’s 2014 Fall Owners Leadership Conference in La JollaBy Chris Towery

30 Index to Advertisers


President’s Corner

In a former life, I presided over an association related to the local building industry. During my tenure, I had an opportunity to talk with a colleague and asked why we hadn’t seen him at our recent meetings. His response stays with me to this day: “I went to one of those meetings. It was okay, but I didn’t get any work out of it, so I never went back.”

This person was a well-respected professional with a successful contracting business. I must confess that I failed in my efforts to persuade him to engage in the group. I was unable to provide a convincing argument that “we” as a group could effect change in our industry, provide education for our members, administer leadership to our peers, and in some cases, our governing agencies.

I shared testimony of how much I had learned from seasoned professionals, such as him, and how much I hoped, one day, to be able to impart some wisdom to others. I admitted that this particular group was competitive in nature—meaning that we all spent our day jobs searching and competing against each other for the next project. I confirmed, once a month we all came together, put our differences aside, and worked toward a common goal. As a young person in the industry, I was amazed by the fact I was accepted by folks I looked up to as experts in their fields simply because they recognized me as someone who knew the value of industry participation. It didn’t take long for me to realize you get a lot more out of such efforts than you put into them.

Sound familiar? Now, the nature of COAA may be a little different. We don’t lobby the government or directly compete against “all” of our fellow members, but we are united in moving our industry forward. The very first Virginia Chapter meeting I attended is a perfect example of what I am trying to convey. There were less than a dozen folks attending that meeting, but three speakers traveled from three different states to deliver a presentation on “Best Value Contracting” to a group of K-12 Owners who were not likely to choose that delivery method.

Being my first COAA event, I was not familiar with the format, and as a field project manager, I showed up in jeans and work boots. The speakers, on the other hand, were

Every Journey Starts SomewhereBy Kevin Lewis, PE

professionals, based on the quality of their appearance and the dignity of their attitude. They spoke to us as if we were the most important presentation they’d given in their career. They shared their expertise with folks that may not have understood a word they said, nor plan to engage in the delivery methods presented. What they did know is that every education, every career, and every journey starts somewhere, and indeed, they helped some of us start our journey that very day.

COAA is a lot of things, but most of all we are people. And we’re people that understand our industry, the education process, and most of all, other people. I regret that I can’t recall the names of the presenters from that day some 12 years ago, but I can tell you that they left a great impression on me and had a huge impact on my career. COAA has been a staple of my training ever since, and many of you have contributed to my education, and for that I am grateful.

So what am I saying here? If you are reading this, you are likely exposed to COAA in some manner and are familiar with at least a few of the benefits of membership. What COAA needs and what our industry needs is participation from people like the ones I described earlier. We need their insight, their expertise, and their opinion. We can learn from them just as they can learn from us. We become better able to serve our employers and our communities. You never know when one presentation will jump-start a career or just change the way we see our operations. This is not about numbers or making our team bigger, this is about sharing what we know to the entire industry.

Remember the television commercial in the 1970s (ok, maybe you don’t remember the ‘70s) for a particular hair-care product with the tag line: “and they’ll tell two friends, and they’ll tell two friends… and so on and so on…” As the line was repeated, the number of photos multiplied on the screen until it was populated with what seemed like millions of photos. That’s your takeaway: invite a friend to the next COAA event—it may affect someone’s career; it may affect someone’s life.


Compiled by Chris Towery

Project Leadership Gold Award Winner: Methodist Olive Branch Hospital

Owner Methodist Le Bonheur Healthcare

Architect Gresham, Smith & Partners

Consulting Engineer Smith Seckman Reid

Construction Professional Turner Construction

Type of Project Healthcare

Delivery Method Integrated Project Delivery

PROJECT DETAILS

Project Profile

DeSoto County, Mississippi, has experienced tremendous growth over the past two decades. To ensure the county’s burgeoning population has access to high-quality healthcare services, Methodist Le Bonheur Healthcare (MLH) built a 100-bed, full-service, faith-based hospital in the city of Olive Branch. The 208,000 square-foot facility includes four operating rooms, 18 emergency department exam rooms, an intensive care unit, as well as labor and delivery facilities. The total budget for the new hospital was set at $100 million (including medical equipment, land cost, furniture, etc.), and the goal of the project was to deliver an energy efficient, LEED-certified, modern healthcare facility without exceeding the budget. To help achieve this goal, the project team employed Integrated Project Delivery (IPD), Building Information Modeling (BIM), and LEAN Construction principals, all of which ultimately allowed the team to deliver a successful project ahead of schedule and below budget.


Overall Project Management MLH Project Manager Richard Kelley headed up the project team, with support from the company’s internal director of facility management, Vice President David Rosenbaum. In 2011, MLH adopted IPD to more effectively deliver complex construction projects, and the Methodist Olive Branch Hospital—MLH’s first IPD project—demonstrates just how successful such a collaborative approach can be. After issuing an RFP for an IPD team to deliver the Methodist Olive Branch Hospital, MLH brought on board contractor Turner Construction, architect Gresham, Smith and Partners, and consulting engineer Smith Seckman Reid.

To further enhance collaboration, MLH developed clear protocols for communication on the project by establishing ground rules for interaction between all stakeholders and setting project-specific goals. A Core Team was formed consisting of representatives from the Owner, architect, consulting engineer, and contractor to manage the critical coordination of the project. The main function of the Core Team was to develop a consensus when decisions dramatically affected the scope, schedule, and budget of the project. Regularly scheduled meetings were held to ensure all parties were well-versed in the progress and direction of the project. An Executive Team was established as well, and its purpose was to provide oversight at the individual firm level should the need arise. The Core Team held bi-annual meetings with the Executive Team to inform them of project schedule, budgets, successes, and obstacles. This extensive coordination, led by Kelley, established clear channels of communication for each aspect of the project and helped the team meet project goals while remaining on schedule and under budget.

Project Scheduling: The project schedule was extremely aggressive for a greenfield hospital of this size and complexity. The project team was tasked with moving from the inception of design to substantial completion in just 23 months, so all stakeholders had to buy into the process and allocate the resources necessary to complete the project within this limited time frame. Extensive time was devoted in the planning phase to outline design and construction schedules and determine early-release packages to accelerate the start of construction.

Work packages were coordinated so that once Turner was mobilized, a logical sequence of construction activities could occur with seamless information issued by the design team. For this schedule to be successful, MLH had to contribute many of their own resources to the project. With leadership from Kelley and Rosenbaum, the team was given unlimited access to MLH’s internal medical equipment planners, interior designers for standards, information technology specialists, and clinical operational leaders, among other assets.

Timely decision making was vital to meeting the schedule’s strict deadlines. Critical decisions had to be made early and aggressively. Under the leadership of MLH and the Core Team, pull schedules and one- to three-month look-ahead schedules were developed to ensure the overall schedule was followed from day one. LEAN construction methods and IPD were also used as tools to monitor the schedule.

Cost Management: In order to monitor and control costs, MLH held weekly meetings with the project team to review the project’s status and budget through each of the design phases. This effort utilized component team pricing, a method in which the project is divided to smaller cost centers similar to CSI format.

Each cost center is assigned an agreed budget and monitored weekly to ensure compliance. Using this method, any variance from the projected cost can be dealt with immediately. From there, the area in question can be evaluated and brought back into budget, or other areas of the project can have their budgets adjusted to compensate for overtures. The goal of this pricing exercise is to keep the entire team informed of budget issues in real-time, as opposed to using milestone pricing. With


this method, issues were addressed weekly, without wasted effort or lost time by the team.

Quality Management: Maintaining overall project quality was a primary goal throughout the entire design and construction processes. With IPD, silos of Owners, designers, and contractors are torn down, and quality management becomes the responsibility of the entire team. MLH understood that quality management is similar to safety management, in that neither can be delegated. Rather, they must be an integral part of the project’s culture. One aspect of implementing a culture of quality was to have full-team, “big room” reviews of the documents during various stages of design. The team also empowered the mechanical, electrical, and plumbing subcontractors to engage in design assist with the engineers and to work jointly in a single BIM model. This provided for a reduction in overall scheduling by allowing the subcontractors to commence with fabrication drawings while the design was being completed. Since the completion of the BIM model was a joint effort, clashes and constructability issues were openly discussed between team members, and resolutions were developed in the world of virtual reality, instead of losing time and money by waiting until the actual construction.

Overall Project Success Complex projects such as hospitals can achieve success on many different levels. For the Methodist Olive Branch Hospital, the management team engaged in a retreat, where MLH established clear direction on the project’s mission, vision, and guiding principles. This direction formed the foundation for the final product. Project directives established at the retreat include:

Mission: To build an affordable community hospital that provides safe, high-quality care that will meet the healthcare needs of the community. Olive Branch Hospital will be the spiritually-based, premiere healthcare destination for clinical excellence, as seen through the eyes of our patients, staff, and community.

Vision: Our vision at Methodist for Olive Branch is to become a regional center of excellence by actively listening and partnering to meet the individual healthcare needs of those we serve. We are following this vision as we design and construct the new hospital, to ensure it meets the needs of our patients, employees, physicians, volunteers, and visitors.

Guiding Principles

Safety and Care Excellence Healing Environment Fiscally Responsible Recruitment & Retention State-of-the-Art Technology Efficiency and Waste Reduction Mission & Ministry Community Asset Intelligent Design that Promotes Growth & Flexibility


This was the first IPD project for MLH, and they researched the process thoroughly. The project team’s selection was due in large part to their success with previous IPD projects. From there, MLH combined the team’s practical experience with their own expectations, which relied on the principles of Reliance, Trust, Optimize, Improve, Collaborate, and Innovate to shape how members of the project team related to one another. The project team worked closely to develop a partnering agreement and incentive plan, which was signed by MLH, Turner Construction, Gresham, Smith and Partners, and Smith Seckman Reid. The agreement laid a clear expectation for how the different firms would communicate with one another, and it created rules for the team to follow. Below are several important declarations pulled from the agreement:

“Fundamental to the success of Integrated Project Delivery is the willingness and ability of all IPD team members to make and secure reliable promises as the basis for planning and executing the Project.”

“The Project Team will be expected to openly share information and cooperatively collaborate for the benefit of the Methodist Olive Branch Hospital”

“By forming an Integrated Team, the parties intend to gain the benefit of an open and creative learning environment, where team members are encouraged to share ideas freely in an atmosphere of mutual respect and tolerance. Team Members shall work together and individually to achieve transparent and cooperative exchange of information in all matters relating to the Project, and to share ideas for improving Project Delivery as contemplated in the Construction Documents. Team members shall actively promote harmony, collaboration and cooperation among all entities performing on the Project.”

“None of the parties can proceed in isolation from the others; there

must be deep collaboration and ongoing flow of information. When a question or issue is uncovered, it is very important that both sides be able to state their point of view before a solution is made. ‘No’ should never be the first response to a question.”

“The parties accept the relationship of mutual trust and confidence established with each other by this Agreement, and promise to furnish their best skills and judgment and to collaborate and cooperate with each other and with other project participants in actively pursuing an integrated project and furthering the interests of the Project.”

“IPD Team shall provide ongoing review and recommendations on construction feasibility throughout the construction phase; actions designed to minimize adverse effects of labor or material shortages; time requirements for procurement, installation and construction completion; and factors related to construction cost including estimates of alternative designs or materials, preliminary budgets and possible economies.”

The members of the project team were deeply committed to treating one another with mutual respect. For example, when challenges arose, discussions were conducted in an atmosphere of respect, not conflict, and as a result, all players worked diligently to find the optimum resolution for the good of the project, rather than their own narrow self-interest. The clear direction and environment of trust and respect that Kelley, Rosenbaum, and the rest of MLH established and fostered were among the most significant contributors to the overall success of the Methodist Olive Branch Hospital.

It wasn’t enough for the project to be completed ahead of schedule and under budget: the team was committed to delivering top-quality results for every phase of the project. The team placed individual performance measures as a basis for an overall incentive plan. The ability to meet

project milestones, maintain budget without the need for end-of-phase value engineering, and adhere to their promises all factored into the individual firm successes. Further, to help determine the hospital’s ultimate success, a one-year post-occupancy evaluation will be conducted to evaluate patient satisfaction scores (HCAHPS), Energy Star ratings, staffing efficiencies, and other parameters.

Project Complexity The following are three issues that added to the complexity of the Methodist Olive Branch Hospital project:

Designing without end-user input: One major challenge was determining how to design a building as complex as a hospital without end-user input. At its inception, Methodist Olive Branch Hospital was a greenfield hospital with a staff of one. David Baytos was named the CEO of the hospital, and he relied on MLH’s internal facility-management group to manage the design and construction. MLH recognized that the schedule was dependent upon making service line directors and key personnel from their other hospitals available to the design team early in the planning and schematic plan phases. These individuals attended a series of comprehensive schematic design sessions and medical equipment planning charettes to provide critical input to the design team. This collaboration assured that the new hospital would meet the clinical needs of patients for years to come.

Infrastructure challenges: The new hospital is located in an area outside the Olive Branch central business district. Because of this, roads and utilities had to be upgraded to support such a development. The project received funding for infrastructure improvements from Mississippi Development Authority (MDA,) an agency tasked with promoting business development in the state. The utility and road work portions of the scope of work were broken out into different


contracts, separate from the hospital’s contract with the city of Olive Branch. As a result, MLH was managing the work of several contractors working on the same site. Though challenging, this approach was key in bringing the hospital on line by the scheduled completion date.

Public Engagement: As with any major development, the local planning commissions have tremendous influence in the site planning and aesthetics of the campus. The opening of Olive Branch Hospital has been anticipated for more than a decade. MLH was rejected in its application for a Certificate of Need (CON) several times over the last 15 years, until a revision in the state health plan allowed for the new hospital. During the interim, Rosenbaum and his staff had been diligent in forming relationships with the authorities in Olive Branch. This gave the planning commission confidence in approving the facility at the schematic design level, knowing the integrity of the Owner would lead them to deliver on promises made.

SustainabilityMLH’s Dave Rosenbaum is a thought leader in the area of sustainability. His insight has helped MLH become one

of the largest Owners to lead the way in conservation and sustainability. This project is measured under LEED’s 2009 Standard for Healthcare, and it is one of the only hospitals in world to receive LEED Gold in this category.

Central elements in the hospital’s sustainable design include:

• A water source heat pump HVAC system with a geothermal bore field for heat sink/source, along with dedicated outside air treatment units for optimal indoor air quality control. MLH was willing to engage a robust HVAC selection process that evaluated all aspects of cost and performance of the system, as well as impact on other disciplines and facility operation. The process evaluated cost of space utilized, impact of glass type and area, impact to electrical distribution, operation and maintenance costs, and other factors to arrive at a true life cycle cost. While the water source heat pump system proved to have the best life cycle cost, the Owner was willing to investigate further to determine if a geothermal heat sink/ source would be advantageous. After a detailed ROI analysis of the added cost for the geothermal field, the decision

was made to adopt this feature. The final energy model indicates the facility will have an Energy Utility Index of about 150 kbtu/sq.ft./year range, in an industry that averages closer to 260 kbtu/ft/year.

• A specialized electrochromic window system was added to the hospital’s main entrance. The unique glass of this system reduces energy use and cost by limiting the amount of sunlight and heat that enter through windows. The glass automatically transitions between clear and variable tint, providing control over the amount of light and heat entering a building.

• The team employed enhanced commissioning, starting at overall system selections to final testing of the finished building.

• Upon investigation of the site, two wetlands were discovered. Additionally, a protected, blue-line stream bisects the site. Designers were challenged to design a hospital and site that would accommodate these two features. The site and its limitations had a tremendous impact on the design of the building, affecting its location, orientation, façade, and landscaping. The Owner charged the design team with providing a 100-bed chassis that was expandable to a 400-bed facility. The position of the stream and the need for future expansion were both determining factors in choosing the hospital’s site location, and the axis was skewed in order to take advantage of solar orientation and expanded views.

For their exemplary project management, Methodist Le Bonheur Healthcare was selected as the winner of COAA’s 2013 Project Leadership Gold Award for the Methodist Olive Branch Hospital. For more information on this project, visit www.methodisthealth.org.


A Contract is Only Good if it is Enforced and Enforceable A great deal of ink is spilled in describing essential contract clauses that provide the greatest clarity of the expectations of the parties on their relative performance obligations. However, if the language that was so dearly bargained for at the outset of the project is not enforced, those benefits could be lost. Whether the contact required a specific notice provision or excluded certain categories of cost from the price of the project, lax enforcement or a failure to object could result in that provision becoming ineffective. For example in Allstate Interiors, Inc v Stonestreet Construction, LLC, No. 12-2431 (1st Circuit, September 20, 2013), the First Circuit Court of Appeals affirmed the trial court’s award of delay damages that included amounts for “secretaries and estimators” at the contractor’s home office despite a contractual exclusion of those costs. The Owner and the Contractor agreed to payment of lump sum general conditions, and those “overhead items” were explicitly included in the Contractor’s breakdown of the lump sum general conditions. The Owner paid 13 requisitions without objection. Both courts found that the Owner had waived that contractual exclusion when it agreed to the lump sum general conditions containing those line items and when it paid those requisitions without objection.

Another provision that can be troublesome is the notice provision in the event of an actual or potential claim. In Bovis Lend Lease (LMB), Inc. v. Lower Manhattan Development Corp., 2013 NY Slip Op 03804 (Appellate Division, May 28, 2013), the trial court was affirmed in denying relief to the “deconstruction” contractor for

By Jon Sier

Owner Alertsclaimed extras resulting in part from excessive intervention by regulators during the asbestos abatement process. The contract assigned virtually all risks of delay to the contractor, but allowed that the contract could seek additional compensation for extra work if the contractor provided the owner with notice of the extra work within 72 hours of complying with an order to perform the extra work. The extra work could only be compensated through a written change order signed by both parties. While the court noted that the notice and the written change order provision can be waived by the parties through conduct, the court found that the owner did not waive the protection of either the notice provision or the written change order requirement and was entitled to insist on strict compliance with the contract.

The other side of enforcing the contract language is making sure that the language comports with the legal requirements in the applicable jurisdiction. While an owner of contractor may want complete and absolute indemnity and to be absolved from any responsibility for its own negligence and will insist on such language being included in contracts and subcontracts, that language may be legally unenforceable. There are some states that will allow a party to be indemnified from its own negligence so long as the party is not solely negligent [Michigan, MCLA 691.991], but there are also other states that provide “every covenant, promise or agreement to indemnify or hold harmless another person from that person’s own negligence is void as against public policy and wholly unenforceable.” Ill. Rev. Stat. ch. 29, section 61. Even attempting to get around such a prohibition by requiring the other party to purchase insurance could itself be void; “[a] provision that requires a party to provide insurance coverage to one or more other parties, including third parties, for the negligence or


intentional acts or omissions of any of those other parties, including third parties, is against public policy and is void and unenforceable.” Minn. Stat. § 337.05, Subd. 1(b). When negotiating contracts, the parties must be certain of the applicable law and the limitations imposed by that jurisdiction.

The contract is the most important document describing the legal and financial relationships of the parties, but a contract that is not enforced provides no protection, and a contract that does not comport with legal requirements provides false security. Negotiating, executing and enforcing a contract with the assistance of counsel versed in the various requirements and limitations are the first steps in managing risk.

Insurance Broker May Owe Duties to Additional Insured to Procure Appropriate InsuranceMany Owners require the general contractor to procure specific forms of insurance and name the owner as an Additional Insured. Yet, the impact of that contractual requirement typically does not get reviewed unless there is a major claim that reveals defects in the coverage. The decision from the Sixth Circuit Court of Appeals illustrates that catastrophic claims can arise from narrow contracts. Cleveland Indians Baseball Co. L.P. v. New Hampshire Insurance Co., 12-1589 (6th Cir. 2013).

The Cleveland Indians hired National Pastimes to produce some family fun day events, including one with an inflatable slide. National Pastimes was responsible to purchase insurance and name the Indians as an additional insured. National Pastimes hired CSI as the broker to procure the insurance, and the application disclosed that inflatables were going to be used at the event. CSI procured insurance from New Hampshire Insurance Company (NHIC), but the insurance from NHIC specifically excluded claims relating to inflatables.

During the event, an inflatable slide collapsed and killed one of the attendees whose estate sued the Cleveland Indians. When the Indians tendered the defense, New Hampshire Insurance denied coverage based on the exclusion, and that denial was affirmed by the trial and appellate courts. The Indians also sued CSI, the broker for National Pastimes, for negligence in failing to procure the correct insurance; the District Court dismissed the claim based on the lack of duty of a broker to an additional insured.

The Court of Appeals reversed and found in a 2-1 decision that the broker did in fact owe a duty to the additional insured to procure the correct and adequate coverage. While the decision was based on a review of Michigan law, the principles discussed could be similar in states where the economic loss rule has been limited in application. The opinion noted that similar results could occur in Iowa, Colorado, Utah and Illinois based on a review of cases involving claims against an insurance broker for negligently procuring insurance. The majority observed that “a contracting party owes a separate and distinct common law duty of care to all those whom the party knew or reasonably should have foreseen would be injured by the party’s negligent acts or omissions.” The Court noted that this principle has applied to cases involving attorneys, title abstracters and engineers. While the economic loss rule has been invoked to preclude recovery of damages under a tort or negligence theory in the absence of physical harm, the court found the concept of responsibility for foreseeable harm more compelling and allowed the lawsuit t proceed against the broker.

This decision provides an Owner a possible avenue for recovery against a contractor’s insurance broker who fails to procure the required insurance on which the owner was to be an additional insured.

American Arbitration Association Issues Optional Appellate Arbitration Rules Every party to commercial and construction contracts has a perspective on arbitration as a means of dispute resolution, and not all of those perspectives are positive. While one of the purported benefits of arbitration is finality and lack of judicial review, that is also an objection frequently raised by reluctant parties who are concerned about “rogue” arbitrators who either refuse to follow the law or incorrectly

On A wing and a prayer?When it comes to construction projects, you can’t simply rely on luck to see things through. Let the Kitch firm help you anticipate and resolve construction or legal issues that may arise – or better yet, avoid them all together.

Call John Sier at 313.965.2915 or email [email protected] to discuss your next move.

www.kitch.com

Kitch_3.333x4.583.indd 1 1/21/09 9:17:05 PM


apply the facts to the applicable law. Partly in answer to those concerns, the American Arbitration Association issued the Optional Appellate Arbitration Rules (Appellate Rules) to provide parties a standardized process for review of arbitration awards [and as an alternative to the appellate procedures promulgated by some other ADR providers].

Typically, an arbitration award is given great deference by the federal and state courts, and the legal and factual findings of an arbitrator are not reviewed by a court. Rather, the judges only examine the process and arbitrator’s conduct for indicia of fraud or bias. The AAA Appellate Rules would allow a broader review for material and prejudicial errors of law and clearly erroneous findings of fact by a specially appointed appellate panel. The Rules could only be invoked upon mutual agreement of the parties to submit the underlying award to appellate review, but the Appellate Rules do not replace the process for modifying or correcting the award under the rules applicable to the original proceeding.

In essence, if the parties agree, the Appellate Rules allow a party to file a Notice of Appeal within 30 days of issuance of the underlying reasoned award that would identify the portions of the award being appealed and a description of the errors together with a statement of the description of the qualifications for the appellate arbitrators. Unless the parties otherwise agree, the AAA would appoint a panel of

three arbitrators from the AAA Appellate Panel. There is a relatively quick briefing schedule that could be completed in roughly three months from the date of filing the appeal if the schedule is not otherwise modified by the parties. The Appellate Rules dispense with oral argument unless specifically requested, and the arguments are to be scheduled within thirty days of filing the last brief. The Appellate Panel are expected to issue a decision within 30 days of oral argument or the filing of the last brief.

The concept of appellate review of an arbitration decision may be no more palatable to some owners than arbitration itself. Additionally, there is no clear indication how a court would review or consider a further inevitable appeal from an appellate arbitration ruling. The appellate examination of material and prejudicial errors of law and clearly erroneous determinations of fact could result in a new body of case law applying the principles of the Federal Arbitration Act to an appellate panel. The one certainty under the Appellate Rules is that the $6,000 Administrative Fee paid by the appealing party is non-refundable.

John Sier, with the firm of Kitch Drutchas Wagner Valitutti & Sherborook in Detroit, Michigan, is Associate Counsel to COAA.

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Recently elected national president of the 2014 Construction Owners Association of America Board of Directors, Kevin Lewis is the Assistant Superintendent for Support Services for Loudoun County Public Schools, located in Loudoun County, Virginia. Loudoun County is roughly 25 miles northwest of Washington, D.C., and it’s consistently listed as one of the top-three fastest-growing counties in the United States, with 84 school campuses in the district. In his role, Kevin manages and provides direction for Design and Construction, Facilities Services, Student Transportation, Food Services, Custodial Services, Safety and Security, and a Central Distribution Center.

Prior to his role on the national COAA board, Kevin was Past-President of COAA’s Virginia Chapter as well as the Top of Virginia Building Association. He serves as a member of the Lord Fairfax Community College Science Curriculum Advisory Committee, Loudoun County Energy Task Force, and the Loudoun County Watershed Implementation Plan Stakeholders Committee.

Kevin holds a bachelor’s degree in Civil Engineering Technology from Old Dominion University and is a licensed Professional Engineer (Architectural Engineering) in the Commonwealth of Virginia.

We talked with Kevin Lewis recently about COAA, its challenges and opportunities, and his plans for the organization. He shared his thoughts and insights about what’s going on, what he and his team are doing at Loudoun County Public Schools, and what he sees on the horizon.

“The biggest challenge for our industry is communication.” –Kevin L. Lewis

COAA’s New National President

A Conversation with Kevin L. Lewis, P.E. of Loudoun County Public Schools

By Randle Pollock On COAARandy Pollock (RP): How long have you been a member of COAA and what prompted you to get involved?

Kevin Lewis (KL): I joined COAA in 2002 after being invited to participate in COAA Virginia Chapter events and found them to be informative and educational in nature.

RP: How has your involvement with COAA impacted you professionally and personally?

KL: In addition to a tremendous education from industry peers on project delivery methods, technological advances in the industry, and project-specific advice and guidance, I have made life-long professional relationships that afford me the opportunity to pick up the phone and call a friend for advice on literally any industry-related subject.

RP: What do you hope to bring to COAA as president?

KL: My goal as president is to promote the construction owners’ perspective throughout the industry. The leadership and membership of COAA consists of executive-level professionals representing Owners, Constructors, and Designers who provide an opportunity to share and guide the rest of the industry. The job of the Executive Committee and Board of Directors is to reach out and create those opportunities.

RP: What do you see as the biggest challenges for COAA and the industry in general?

KL: The biggest challenge for our industry is communication. And by that I mean establishing relationships among the stakeholders where communication with one another—across the table, if you will—is supported with an understanding of the respective roles we play.

That is one of COAA’s core missions: bringing Owners, Constructors, and Designers together in the same organization to discuss the specific challenges of our industry and address them from a shared perspective.

RP: What do you see as the role of COAA going forward; how do you see it evolving?

KL: COAA is and will continue to be recognized as a leader in our industry as well as a resource for information and expertise. The Owner’s role is pivotal in embracing new technology and project delivery methods where competition among other stakeholders sometimes slows the implementation of new technology.

Owner Interview


On trends in the construction of facilities for K-12 educationRP: In terms of project delivery/construction-contracting methods, what are the most significant changes in the execution/implementation of your projects at Loudoun County Public Schools?

KL: First, one has to recognize the diversity of the COAA organization from the Owner-membership perspective. Our sectors include K-12 education, higher education, corporate, healthcare, etc. Each sector has discrete circumstances related to their project goals, which include delivery methods. For Loudoun County Public Schools (LCPS), we are one of the fastest-growing school systems in the country, located in the Washington, D.C., metropolitan region. Unlike many of our COAA associates, our growth is accommodated with the construction of prototypical building models in a state where, with some exceptions, design-bid-build is the rule. In the region, numerous designers and constructors have created a procurement environment we believe is best suited with design-bid-build.

As we know, our industry never stops evolving. We must do the same to provide the best value to our clients, which, in my case, are the citizens of Loudoun County.

On what you are doing nowRP: In your position at Loudoun County Public Schools, you have Facilities, Design, and Construction reporting to you. Given this, have you been able to smooth the transition between these groups and help them work together in more friendly/productive manner? How so?

KL: This is one of the most important relationships in any organization. In my previous position as Director of Construction Services, I worked with my colleague in Facilities Services to provide a better project transition and general interdepartmental communications.

Continuing that effort, I have created a project task force that meets weekly to share information and work collaboratively on projects while eliminating project silos. As we all know, communication is the key, and we have found that sometimes, just knowing what is going on in the “other camp” is enough to reduce the stress between the teams.

On trends that are impacting the future of your organizationRP: How does your background shape your understanding of the work Owners do?

KL: Over the last 30-plus years, I have been fortunate to participate in the industry from many different perspectives. My career started in MEP design, transitioned through an architectural firm, and a couple of different contractors.

Ultimately, my passion has been as an Owner in private and government organizations. I have benefited from my peek under the other tents and believe COAA is perfectly positioned to open opportunities to anyone in our industry for a better understanding of the folks sitting across the table.

About the Interviewer A member of COAA’s national Communications/Editorial Committee since 2010 and active

in the COAA-Texas chapter, Randle Pollock is Director of Science + Technology, South Region, for HDR Architecture (www.hdrinc.com). Based in HDR’s Houston office, Randy can be

reached at 713-335-1949 and [email protected].


The Value Proposition Projects are undertaken because they provide value to the organization. Project value might be lowest first cost, lowest lifecycle cost, improved operations, enhanced user effectiveness, or other measures. Regardless of which value, or blend of values, is most important to the Owner and end users, the project delivery system should reliably maximize value.

By this standard, current project delivery systems are woefully inadequate. They occasionally deliver good results, but often are contentious, late, over budget and plagued with disputes. Estimates of waste in design and construction exceed 50 percent and projects, especially large projects, routinely exceed schedule and budget (Miller, Strombom, Iammarino, & Black, 2009). A recent study of large oil and gas projects found that only 22 percent could reasonably be called successful,1 even using a relatively lax standard for success, although there were occasional successes (Merrow, 2012). Another historical study of large projects found that nine out of ten projects had cost overruns, cost overruns of 50 to 100 percent were common, and overruns above 100 percent were not uncommon (Flyvbjerg, 2005). Clearly, traditional project delivery is not optimal or reliable.

We should not be surprised. Traditional project delivery incentivizes uncoordinated behavior by tying firm compensation to the firm’s performance, rather than project outcome. In addition, traditional structures allow the individual firms to profit by transferring risk and blame to other parties. In this framework, it is more advantageous—at the individual firm level—to blame others for a problem than it is to expend the effort to avoid or solve the problem. Although local optimizations is economically rational for the many individual firms that engage in design and construction, but these local optimizations are expensive for the Owner that has to pay the bills. Each one of these local optimizations reduces value and places the project at risk. Thus, it can be that traditional project delivery, not IPD, is the risky approach to delivering complex projects.

Integrated Project Delivery:

Optimizing Project PerformanceBy Howard Ashcraft, Hanson Bridgett LLP

1 A project was a “failure” in this study if it failed on anyone of five measures. But key measures such as cost and schedule, were still “successful” if they only overran by less than 25 percent.

Project Delivery

LESSONS LEARNED

1. Structure matters. Traditional delivery methods inadvertently misalign parties, creating incentives for individual and antagonistic action. IPD aligns the parties to common goals and incentivizes project—rather than individual—outcomes.

2. Experience matters. Teams undertaking IPD should seek knowledge and training to speed their transition to IPD delivery.

3. The IPD business model should be crafted to encourage behavior and outcomes consistent with the agreed project goals.

4. IPD is particularly appropriate for challenging and complex jobs. It should not be used if the Owner cannot engage in the process.

5. IPD places the Owner where he/she can positively affect project success.

6. The IPD Owner should be engaged, committed and an authentic leader.


Ideal Project Delivery An Owner has four paths to changing project outcomes: It can change the people executing the project, the processes being used, the product being created, and the structure in which people and processes work. Integrated Project Delivery, IPD, focuses on people, processes and structure. This article focuses on the IPD structure and how it influences project success. But a complete IPD implementation includes choosing the right people and implementing the right processes. 2

The IPD structure affects two primary project characteristics: value and reliability.

Reliability is gained by having a system that is homeostatic, i.e., a system that responds to problems by solving them and returning to the project goals. In traditional project delivery, project members try to escape from a problem through change orders, claims, and litigation. Figure 1. In an integrated project, change orders, claims, and litigation are proscribed or severely limited. Figure 2. Moreover, the parties’ economic fates are linked. Thus, they must solve problems together because they have no other option and failure to do so hurts each of them in proportion. In an integrated project, the participants agree to common goals and tie their individual profits to project performance. Alignment on goals is transformed into aligned action.

The result is a project structure that is efficient, innovative, agile, replicable and reliable. It is designed to improve value through aligned action and to create a structure where problems must be solved within a closed system. Empowerment and accountability are increased.

Structure The IPD structure can be divided into a business model and a contract structure. When we create IPD projects, we begin by identifying the key values and goals, and then we develop a business model that supports these values and incentivizes the goals. Figure 3.

There are many different business models and each of which is designed to emphasize particular values. In some instances, the value may be cost, schedule, or sustainability. In other instances, quality or community involvement may be paramount. And in most instances there is a mix of values and constraints that need to be considered when creating the business model. Once the business model is developed, it can be incorporated into an IPD agreement that binds the parties to their shared goals and values. In this process, the IPD agreement documents the business model rather than imposes it.

Figure 2

2 A 2011 study sponsored by the Construction Industry Institute examined what an optimal project delivery method would be—if you had no preconceptions—and conclude that it was a Lean project supported by IPD. (Ballard, Kim, Myers, Rodgers, Strickland, Taylor & Voll, 2011) 3 The fixed profit may be initially based on projections of how much work needs to be accomplished, but it is converted into a fixed amount before work proceeds.

Figure 1


would never see change orders or litigation on these types of projects, except for true Owner’s elective changes. What actually occurs is that the contracting parties insert contingencies into their prices to protect against a cost overrun and they use change order and claims provisions to escape the constraints of the lump sum, NTE or GMP. Worse yet, this padding is inserted into each sub-tier contract because the fixed price cap is imposed on these parties, too. This results in multiple (and in aggregate, excessive) contingencies and the possibility that the Owner will pay for this risk twice—through change orders and claims.

In the IPD business model, the Owner agrees to pay for the variable costs (not the profit) without any cap. Thus, there is no need for the excessive contingencies carried in most projects. Moreover, because IPD projects generally use a design-to-cost-target approach, design contingencies are not required, either. The result is that the Owner only pays for what the project actually costs, not for the parties’ excessive perception of their risk. Although the absence of a contractual cost cap may seem bold, it is balanced by strict limitations on change orders and the ability to use party profit as a buffer against overruns. And as mentioned above, lump sum and GMP do not prevent cost overruns and claims.

Profit Based on Project Outcome: The fixed profit is contingent on project outcome. If the goals are not met, project profit is reduced or even eliminated. If the project

The New Business Model Although the IPD business model is tuned to a specific project, we have found that a few principles are important to project success. These principles reflect a new balance between the parties and create a system where the structure and inherent incentives keep the project centered on the agreed goals.

Fixed Profit. Profit in traditional projects is related to the amount of work done. Fees are based on the cost of the work and lower tier work is marked-up by the prime. For designers, profit is embedded in each hour billed. Profits grow as work increases, which incentivizes inefficiency. In an IPD project, the parties agree to a fixed prospective profit that is not linked to the actual labor, materials, or project cost.3

A fixed profit creates an incentive to reduce the variable costs to increase each party’s margin. Because variable costs (labor, material, and equipment) account for most of a project’s cost, reducing these costs directly benefits the Owner. Moreover, because adjustments in scope do not affect the fixed profit, 4 work may be easily transferred between parties. For example, if one party can efficiently install all the hangers needed for electrical, mechanical, plumbing, and fire protection, then the work can be shifted to that party. No one needs to fight for scope in order to maintain profit. This allows the project team to look at what resources the project needs, remove duplications, and improve efficiency.

Variable Costs without a Cap: A lump sum, Guaranteed Maximum Price (GMP), or Not to Exceed (NTE) contract transfers—at least on paper—the risk of a project overrun to the contracting parties. If this really worked, then you

4 Major scope swaps may require adjustment of the profit between parties. Day to day scope swaps, however, do not.

Figure 3

Figure 4


Figure 6

performs better than the goals, the project profit is increased. Each party shares in the increase or decrease based on their percentage of the project profit. The profit should be 100-percent at risk. This increases the buffer against overruns and maintains the division between profit and variable costs. Alignment among the participants is strengthened because individual profit can only be preserved, or increased, by improving overall project performance with respect to the agreed goals.

The most common performance metric is project cost. In the simplest model, the parties agree to a target cost and a fixed at-risk profit. Figure 4. The parties are paid their actual costs (without profit) and if those costs are equal to the target cost, the parties receive the agreed profit. If they can deliver for less than the target cost, their profit is increased; if the costs are greater than the target cost, the profit is reduced—potentially to nothing. In that case, the Owner remains responsible for costs—without profit—until completion.5

In many instances, an Owner is more interested in maximizing the value achieved for a specific budget. In this instance, a model might be chosen, similar to Figure 5 that incentivizes increased value during the design/pre-construction phase and smooth execution during construction. In order to set a target early to gain the maximum benefit from target value design, a model might be chosen, like Figure 6 that allows for a dead band between the at-risk target and the shared savings target. Models can also be chosen to focus on sustainability, perceived quality, performance, or combinations of all of these goals.

The essential point is that the model that is used should be designed to align with the Owner and team goals.

Limited Change Orders: Many IPD projects have a zero change order goal and most have far fewer change orders than conventional projects. The business model combined with joint project management leads to a rebalancing of budget in response to change rather than issuance of change orders. Moreover, properly crafted, the IPD agreement should limit change orders to a few specific reasons, such as an Owner’s elective change or differing site conditions. Design errors and omissions, a fertile ground for claims in traditional projects, should not be a basis for a change order because design errors are a team risk to be managed and mitigated by the team. Similarly, contractor delay is not a reason for designers receiving augmented construction administration fees. The limits on change orders force the team to plan thoroughly, coordinate closely, and react swiftly when problems arise.

The New Contract Model The IPD business model aligns the parties to the common goal and encourages the team to focus on optimizing project outcome. The IPD agreement extends this by creating the closed system that requires the parties to solve problems rather than deflect them.

Although you can theoretically create an IPD project from a series of interlocking contracts,6 it is much easier to accomplish in a single agreement. These take two general forms, a multi-party agreement between Owner, prime contractor, and prime designer and a poly-party form that

5 In a truly disastrous project, the Owner could terminate for convenience. However, in 53 plus IPD projects, we have never seen an exhaustion of the profit layer. Thus, this is a possible, but highly unlikely, occurrence. 6 Interlocking agreements may be necessary when trying to create public IPD agreements because of limitations applicable to many governmental Owners.

Figure 5

Figure 7


concepts can more accurately choose systems and layouts that efficiently achieve the project goals. Moreover, the key specialty contractors can provide pricing information that is current and accurate, leading to better price control and fewer surprises. Finally, when parties are engaged in developing the project design, they develop a commitment to the overall project, not just to their individual component.

The timing of key participant involvement is also important. Key participants should become engaged when their participation will benefit the project. This is almost always earlier than traditional design and construction practice, and the reference to “early” is meant to highlight this change in practice. It does not imply that all key participants commence simultaneously, and in most projects, the core team will be augmented by additional key participants as the project progresses.

Shared Risk/Reward Based on Project Outcome: IPD agreements tie compensation to achievement of project objectives. Although formulations vary, the participants’ profit is placed at risk and may increase if project performance is met or exceeded. Individual profit is not a function of the amount of work performed, or of individual productivity, but is proportionate to overall project success. As noted in the discussion of the business model, the risk/reward plan should be tuned to the goals being sought and should extend to all key IPD participants, not just the Owner, contractor, and designer.

Joint Project Control: Joint project control reinforces the communal nature of the undertaking. It is not “their project”; it is “our project.” In addition, joint project control balances the interests of the parties and provides a check against favoring the interests of one party over the other. It also reflects a fundamental fairness. Parties that accept risk based on project outcome should certainly have a voice in decisions that affect those risks. Moreover, joint project control affects the perception of risk, as well as risk itself (Slovic, 1987). Risks that a party cannot influence are feared more than those it can control, leading to defensive behavior and excessive contingencies.

Joint project control also places decision making at the level with greatest access to information. Moreover, decisions made in well-managed teams are more accurate than those made individually (Robins & Judge, 2012).

Reduced Liability: IPD thrives on a diversity of backgrounds, experience, and opinions. Direct communication and vigorous discussion are positively correlated to higher creativity and efficiency is improved when participants know what the others will be doing and can plan accordingly. A key goal in many IPD projects is to drastically reduce latency, i.e., the time required to transfer information, such as a response to a question. The direct and continuous communication that is the lifeblood of IPD is discouraged or prohibited in traditional project delivery because of liability concerns. By

includes all risk/reward team members in a single agreement.

In the multi-party form, the risk/reward team members are engaged through specialized subcontracts and consulting agreements with the prime contractor and prime designer. In the poly-party form, the risk/reward team members all sign the original IPD agreement. If risk/reward team members are added to the project after the IPD agreement is signed, they are included through joining agreements that bind them into the IPD agreement. Figure 7. The multi-party approach is more common, because it reduces the Owner’s effort to manage the many relationships in the poly-party form, but each has its advantages and the poly-party approach may be the better fit for a specific Owner, project, and team.

Although there are many aspects to an IPD agreement, we believe that five factors are particularly important. These factors, shown in the rectangles in Figure 8 have a direct influence on project outcome.

Early Involvement of Key Participants: Early involvement of key participants-defined as those who have the greatest influence on project success-is the most important IPD element. One of the key studies on project delivery noted that the most successful projects assembled their teams before design was 20-percent complete (Konchar & Sanvido, 1996). Identification of key participants is specific to a given project, but—in addition to the Owner, designer, and builder—key participants generally include the mechanical, electrical and plumbing designers, and contractors because their knowledge strongly affects design and these parties must cooperate closely for the project to proceed smoothly. Depending upon the project, steel erectors, framers, curtain wall contractors, major equipment vendors, and others may similarly be key participants.

The key participants’ diverse viewpoints improve project performance in many ways. Studies of creativity in commercial contexts note that teams with diverse backgrounds are more creative (Robbins, 2008; Amabile, 1998). The broad experience of the diverse team also benefits target value design. Designers provided with information concerning effectiveness and constructibility of alternative

Figure 8


reducing risk through contractual liability waivers, liability concerns are reduced and communications is enhanced.

Jointly Developed/Validated Targets: Jointly developed targets document the parties’ agreement and confirm that the objectives are achievable. In addition, the targets serve as metrics for compensation adjustment and as goals for target value design. Because they are jointly developed, each party owns the objectives and is committed to their achievement. The Owner must lead this process because its goals and financial and other constraints establish the project framework.

Five Characteristics of Successful IPD Owners “What drives value into the program is Owner engagement.” -William Seed, Universal Health Services.

IPD enhances an Owner’s opportunity to influence project outcomes. But this opportunity can only be realized if the Owner is actively engaged in the project and process. We recently interviewed a group of experienced Owners about IPD and have summarized their thoughts in a white paper, Integrated Project Delivery: The Owner’s Perspective (Ashcraft, 2013). These interviews reinforced the critical role of the Owner in IPD and highlighted the following five characteristics of successful IPD Owners.

1. Clarity: The Owner must be able to define what it wants and what the IPD team must achieve. It must explain the need that justifies the project in order to strategically engage the team in developing solutions to the need, not just to a programming statement.

2. Commitment: IPD requires difficult changes in behavior and processes. Under time and budget pressure, team members will be tempted to revert to what they know—even if they realize that better outcomes cannot be achieved by repeating old behaviors. The Owner must remain steady during difficulty and doubt, providing a light for others to follow.

3. Engagement: IPD provides the Owner with an opportunity to be engaged in all of the key decisions that affect project value. But the Owner must dedicate the time and resources to use this opportunity and will gain most when it is actively engaged.

4. Leadership: The Owner has a unique leadership role in IPD. It sets the agenda, and models the collaborative behavior it is seeking. The Owner does not make all of the decisions, but does create the environment in which decisions will be made. By taking the first steps forward, the Owner enables the team to follow.

5. Integrity: IPD participants must learn to trust each other, and trust is built from competence, reliability, and integrity. If an Owner does not meet its commitments, hides

information, or does not speak truthfully, it can hardly expect different behavior from the team.

Conclusion Integrated Project Delivery removes impediments to effective project performance, aligns the parties to common goals, and encourages action that benefits the project. It is not a panacea. It increases the likelihood of success, but requires rethinking project management and increases project-planning efforts. It is a framework that supports effective implementation of Building Information Modeling and is especially powerful when combined with Lean principles and effective, team based, management. Owners considering complex projects should evaluate whether IPD is the appropriate process for their projects and organization.

Howard Ashcraft is a senior partner and heads the Construction Group in the San Francisco law firm Hanson, Bridgett LLP.

References Amabile, T. (1998). How to Kill Creativity. Cambridge: Harvard Business School Publishing Corporation.

Ashcraft, H. (2013). Integrated Project Delivery: The Owner’s Perspective. San Francisco: Hanson Bridgett LLP.

Ballard, Kim, Myers, Rodgers, Strickland, Taylor & Voll. (2011). Starting from Scratch: A New Project Delivery Paradigm -- Research Summary 271-1. Austin: Construction Industry Institute.

Flyvbjerg, B. (2005). Design by Deception. Harvard Design Magazine, 50-59.

Konchar, M., & Sanvido, V. (1996). Comparison of U.S. Project Delivery Systems. Journal of Construction Engineering and Management, 435.

Merrow, E. (2012). Oil and Gas Industry Megaprojects: Our Recent Track Record. Oil and Gas Facilities.

Miller, R., Strombom, D., Iammarino, M., & Black, B. (2009). The Commercial Real Estate Revolution. Hoboken: John Wiley & Sons, Inc.

Robbins, S. (2008). The Truth About Managing People (2nd Ed.). Upper Saddle River: Pearson Education, Inc.

Robins, S., & Judge, T. (2012). Essentials of Organizational Behavior (11th Ed.).

Upper Saddle River: Prentice Hall.

Slovic, P. (1987). Perception of Risk. Science.


When it comes to assessing and rating the environmental sustainability of buildings, the LEED program has held a virtual monopoly within the construction industry for more than 10 years. LEED (Leadership in Energy & Environmental Design) is run by the nonprofit US Green Building Council in Washington, D.C. and seeks to reduce the use of energy, water, and greenhouse gas emissions in new construction and renovation projects.

Over the years, LEED has been widely adopted in both commercial and government construction projects. While the program is voluntary and market-based, numerous states, cities, and even the federal government require or incentivize LEED’s use in public buildings. Currently, LEED is being used in more than 44,000 projects in the U.S., including many of projects being overseen by COAA members.

But now, LEED has some serious competition.

That competition is Green Globes, a sustainable building rating system

By Chris Towery

run by the Oregon-based nonprofit Green Building Institute (GBI), which is touting the system as a web-based, lower-cost alternative to LEED. Though Green Globes has been available in the US since 2005, it was given a huge boost in October 2013, when the General Services Administration (GSA) announced that federal agencies may now use either LEED or Green Globes as their green building certification system. Previously, LEED was the only option for certifying the sustainability of federal construction projects. But with the GSA’s seal of approval, the door is now wide open for Green Globes to capture a more healthy share of the booming green building market, which is expected to reach $204 billion by 2016.

However, because Green Globes has been so overshadowed by LEED, many Owners aren’t aware of the program’s existence, much less how it works. Here, we’ll look at the history of Green Globes, how the system can be used to certify projects, and how it stacks up to its rival.

New Sustainable Building Rating System Offers Alternative to LEED

Sustainability

Green Globes Gains Traction


A Canadian Import The origin of Green Globes comes from the Building Research Establishment’s Environmental Assessment Method (BREEAM), which was created in the United Kingdom in 1990. In 1996, the Canadian Standards Association (CSA) launched BREEAM Canada for Existing Buildings, which was later converted into an online sustainability rating system and renamed Green Globes for Existing Buildings in 2000. By 2004, the Building Owners and Managers Association of Canada had adopted Green Globes, and today the system is used by numerous large developers in the country as well as in all of Canada’s federal construction projects. It was also in 2004 when GBI acquired the rights to operate Green Globes in the US.

Since starting in the US, Green Globes has been used to certify some 850 buildings, including nearly 300 federal buildings. Now, with the green light from the GSA, Green Globes is poised to increase those numbers in both the public and private sectors. Like LEED, Green Globes is a points-based system that awards between one and four “Globes” depending on how many points the project earns. While LEED offers a maximum of 110 points, Green Globes point scale goes up to 1000. The GSA is advising agencies looking to design sustainable buildings to score at least LEED silver (50-59 points) or two Green Globes (55 percent of 1000 points). Viewed side by side, the Green Globes scoring system of one to four Globes is seen as mirroring LEED’s platinum, gold, silver, and basic certifications.

A New AlternativeTo entice builders to adopt Green Globes, GBI is specifically marketing the system as a faster, cheaper, and more user-friendly alternative to LEED. To this end, Green Globes seems specifically tailored to capitalize upon on some of LEED’s problem areas. For example, given LEED’s notoriously laborious certification process, one of Green Globes main selling points is its ease of use.

Unlike LEED, which requires project teams to produce copious amounts of paperwork and documentation that are analyzed and scored by consultants, Green Globes initially has project teams perform a self-assessment using an interactive online program. Depending on the type of project, Owners register online as either a new project (New Construction) or a renovation (Continual Improvement of Existing Buildings). Then the project manager completes a lengthy web-based questionnaire that tallies the preliminary score of the project based on its sustainable attributes. For new projects, Green Globes offers seven assessment areas: Energy, Indoor Environment, Site, Resources, Water, Emissions and Effluence, and Project Management. Renovation projects include six assessment areas: Energy, Indoor Environment, Emissions and Effluence, Resources, Environmental Management, and Performance.

Once a project attains a minimum of 35 percent of the 1000 available points on the questionnaire, the Owner can order a third-party assessment and certification. This third-party

Project ManagementConstructionManagementProgramManagement

www.afgcm.com

AFG brings owners success bycost effectively delivering facilities that

meet stakeholders’ needs.

certification is conducted by a Green Globes Assessor, who examines all of the project data and conducts an on-site evaluation to validate the results. Additional consultants, such as independent commissioning agents, may be required during the final stages of certification; however, most of the work on the front end is done by the project team, rather than outside consultants. This is specifically designed to save both time and money, as the online component determines the project’s eligibility before the Owner has to invest in third-party assessment and certification.

In fact, GBI’s Vice President for Business Development Sharene Rekow told ECOBUILDING Pulse that Green Globes program fees are 30 to 50 percent that of LEED. Further, the GBI website estimates the certification process for LEED can take up to four times longer than Green Globes. If these figures are accurate, the time and money saved using Green Globes should be a major attraction to Owners, who often list the added time and expense of LEED certification as one of its primary drawbacks.

Another area where Green Globes is designed to have an advantage over LEED is in the flexibility and weighting of its scoring system. Unlike LEED, Green Globes has no prerequisites, so all of the points achieved by a project count toward the final rating and certification. Critics of LEED argue that having prerequisites discourages the ultimate goal of increasing building sustainability because it excludes some projects, especially smaller ones, from the green assessment and rating process.


Moreover, Green Globes allows a limited number of questions to be marked as “non-applicable” if it would be impossible or unreasonable for a building to achieve those points. This lowers what would be considered a perfect score, and then allows the project to work towards points based on a percentage of the new potential perfect score. The GBI says this helps eliminate “point chasing” and allows for a more common-sense approach to sustainability by taking into account regional variations, building occupancy type, and conflicts with state or local jurisdictions. Additionally, Green Globes requires the third-party Assessor to review all N/A answers for accuracy and limits the number of N/A designations to a total of 100 points for each project.

Clash of the Green GiantsGreen Globes, however, is not without its own critics. The biggest criticism of Green Globes is that it’s designed to skirt LEED’s strict environmental standards by offering a new rating system that’s more friendly to big business interests, such as timber, plastic, and building materials companies. Critics point to the fact that GBI, which oversees Green Globes, was founded by a former timber executive and has a board of directors that includes members of Dow Chemical, American Chemistry Council, the American Wood Council, the Vinyl Institute, and the American Gas Association.

U.S. Green Building Council Senior Vice President Scot Horst told Charleston, South Carolina’s, Post and Courier that Green Globes is simply a way for these industry groups to avoid having to deal with LEED’s increasingly stringent regulations.

“The industry supports Green Globes because it does not represent a threat to them—it’s their way of having a green building without having to change their practices,” Horst said. “It’s a good tool, but it’s a light tool.”

Others contend that Green Globes is specifically designed to undercut LEED and could negatively impact the progress LEED has made toward increasing sustainability in the built

environment. Lloyd Alter, a writer for TreeHugger.com who has extensively investigated Green Globes over the past few years writes, “Green Globes serves just one purpose: to be a building certification system that is friendlier to big wood and to the plastics industry and to displace LEED.”

The GBI contends that they’re not out to get rid of LEED, rather they simply believe the market deserves an alternative that’s simpler, less costly, and less time consuming—especially for those Owners who might otherwise not incorporate sustainable features into their projects.

“We felt like the marketplace needed a choice,” Rekow told Oregon’s Portland Tribune.

The Value of CompetitionIn the long run, LEED’s competition with Green Globes may indeed prove beneficial for the market. Now that it has a rival, LEED will likely have to address some of its shortcomings to stay competitive, which could ultimately lead to lowered costs and enhanced customer service. And while LEED is widely acknowledged as holding more rigorous environmental standards, it’s not a perfect fit for all projects. So having another way to become certified will likely be viewed as a positive development for certain Owners. Lawrence Clark, principal of Sustainable Performance Solutions LLC, is both a LEED Accredited Professional and a Green Globes Assessor. In a blog for HPAC Engineering, he compares LEED and Green Globes side by side and concludes that there’s room for both systems.

“Like everything else in our industry, there is no one-size-fits-all solution,” writes Clark. “Each project should be evaluated based on its own goals and objectives, and the most beneficial outcome to the Owner should be the deciding factor in selecting which green label to pursue.”

After all, for Owners who are unable to pursue LEED certification, using Green Globes will certainly be more environmentally responsible than doing nothing at all.


This past October, COAA held its 2013 Fall Owners Leadership Conference in beautiful Southern California. The three-day event was held at the Hilton La Jolla Torrey Pines, which offered stunning views of the Pacific Ocean and the historic Torrey Pines Golf Course. With such close proximity to one of the world’s most legendary golf courses, it’s no wonder the conference’s theme “Driving Project Success” boasted a golfing metaphor, and the event’s numerous presentations and sessions were specifically designed to help Owners maximize their drive on future projects.

Working Together A key part of any successful project is getting all of the parties involved to work together as a team, rather than as adversaries. With this in mind, COAA devoted Wednesday afternoon’s presentations to the subject of collaboration. With three sessions and an open forum on this topic, the presentations covered collaboration from all angles, including fostering a sense of teamwork in places where Owners face certain constraints—corporate policies, state statutes, or federal law—which can make collaboration challenging. To this end, the conference showed that a project’s partnerships can be

Driving for a Hole-in-One A Recap of COAA’s 2014 Fall Owners Leadership Conference in La Jolla

By Chris Towery

strengthened even when outside factors prevent Owners from using more progressive delivery methods.

“One takeaway for enhancing collaboration is simply to have the construction staff on-site prior to the start of a project,” said Raymond McKeeman, Facilities and Projects Manager for the West Goshen Township in Pennsylvania. “That way, everyone is working in one area, so there’s no isolation, which provides for better teamwork and allows for a quicker reaction to field issues before they impact the schedule/budget.”

Wednesday’s presentations discussed ways in which Owners can not only be more collaborative with outside parties, such as design and construction, but also within one’s own organization. This idea of “looking inward” was particularly valuable for attendee Barry Miller, Senior Project Manager with the State of Idaho’s Division of Public Works.

“I came away from Wednesday’s sessions thinking about how little time we spend in focused collaboration within our own organization and what the benefits would be if we just succeeded in working well together internally,” said Miller.

Sustainability First Sustainability is always a hot topic at COAA’s national conferences, and this was especially true this time around. With the conference held in a state that boasts some of the nation’s most progressive environmental policies, COAA brought in several of California’s top Owners to discuss the ways in which their organizations are making major strides in sustainability. With sessions on Thursday and Friday covering such impressive achievements as the University of California at San Diego’s creation of the world’s first carbon neutral laboratory facility, California Institute of Technology’s evolution into a leading sustainable institution, and UCSD’s continuous commissioning program, attendees were offered a wide array of strategies for increasing their environmental efficiency as well as enhancing their bottom line.

In the session “Zero to 100%: Caltech’s Journey into Sustainable Design,” California Institute of Technology’s Ken Hargreaves discussed how he helped the school evolve from an institution that viewed sustainability as an afterthought to one that now requires LEED Gold for all new construction projects. Hargreaves was able to get the school to agree to fund green projects by

The Hilton La Jolla Torrey Pines. ©2014 Hilton Hotels & Resorts


demonstrating the numerous financial benefits of sustainable design and aligning his proposals with the institute’s core values.

“Caltech achieved great success,” said McKeeman. “The push for sustainability at the school involved a very thorough collection of data, which was used as a basis for moving toward enhanced sustainability. The Owner really knew his audience and was able to win them over with concrete evidence of sustainability’s many benefits.”

Going LEAN Another popular session at the conference, “LEAN Construction, Pull Planning and Collaboration,” discussed how the San Diego Community College District used the principles of LEAN construction and collaboration to execute more than $1.6 billion in capital improvement projects between 2007 and 2013. By incorporating LEAN practices, Pull Planning, and IPD, the district was able to greatly increase efficiency and provide significant value to each of its projects.

“Sometimes we become so focused on getting the project done that we fail to see opportunities for improvement,” said Miller. “This presentation demonstrated that LEAN construction practices can dramatically reduce waste and increase productivity.”

Lester Felder, a project manager for the University of Texas at Austin, agreed with Miller and noted that the session provided him with some valuable insights he can take back to his organization: “I really liked the session on LEAN construction. It offered some useful ‘lessons learned’ and provided ways for general contractors to coach their subcontractors into using better and more efficient practices on the construction site.”

Awarding Excellence During the conference’s catered lunch on Thursday, COAA presented their annual Project Leadership Awards (PLA), which recognizes Owners from across the nation that demonstrate superior leadership in capital construction projects. Every year,

the PLA winners establish new benchmarks for excellence that all Owners can aspire to achieve within their own organizations.

For 2013, two Owners were honored with Project Leadership Awards. The year’s gold award went to Methodist Le Bonheur Healthcare for the Methodist Olive Branch Hospital project, and the silver was presented to the University of Washington for the Odegaard Undergraduate Library renovation. For more details on these award-winning projects, the Methodist Olive Branch Hospital is profiled in this issue starting on page 6, and the Odegaard Library renovation will be profiled in the Fall/Winter 2014 issue.

Real-World Experience One of the most important benefits of COAA’s Leadership Conferences is the incredible opportunity they provide Owners to meet and develop relationships with others in the industry. While the presentations offer attendees a good overview of many different topics, the networking that’s available at the events gives them a chance to meet other professionals who’ve dealt first-hand with these issues. Such connections can prove to be an invaluable resource that you simply cannot find anywhere else.

“The leadership conferences always offer real-world examples of the latest innovative practices going on in today’s industry,” said Felder. “Having the opportunity to walk up to a presenter or colleague and ask them a specific question about a process or they lessons they’ve learned is tremendously valuable. Whenever I attend one of these national conferences, I always come away with something new.”

For those members unable to make it to the fall conference, the presentations are available on COAA’s website, www.coaa.org. To access these files, log in, select “Members Only Content” and then “Archives.” While you’re there, don’t forget to reserve your spot at the Spring 2014 Owners Leadership Conference, which will be held May 14-16 in Houston.

Accepting the Project Leadership Gold Award (from L-R): Richard Kelley, Patrick Johnston, Dave Rosenbaum, Greg Gore, and Clay Seckman.


Georgia Chapter

The COAA-Georgia Chapter is thriving and completed many “firsts” for the Chapter focusing on education, collaboration, and networking.

In 2013, the Chapter was honored to host the COAA Spring Owners Leadership Conference in Atlanta as well as two Chapter workshops. The topic for the Spring Chapter Workshop was “How to Develop Good End Users.” The fall workshop included three topics: “Owner Driven Strategies for Energy Reduction,” “LEAN: How Should Owners be Involved” and “Twitter as a Project Communication Tool.”

The Chapter also hosted its first evening social event in 2013, where members had a chance to network in a casual atmosphere. In addition, they hosted two joint social events with the Construction Management Association of America (CMAA)—another first for the Chapter—that were very successful at building new relationships.

The Chapter is excited and invigorated for 2014 and proud to have recently hosted its first COAA Owner Training Institute (OTI) course “Managing the Design Process.” The sold-out course was a huge success, as participants were highly involved in conversations under the leadership of Howie Ferguson (University of Florida), Cathy Roche (Schenkel Shultz Architecture) and Michael Kenig (Holder Construction).

Chapter News

The following day, the Chapter held its 2014 Spring Workshop, where the OTI participants shared highlights from the class. Workshop attendees enjoyed the unique opportunity to get real-time reflective thoughts from participants the day after the OTI course.

Two other topics were also presented at this workshop. The first, “Contracting Directly with Engineers: Pros & Cons” led to interesting conversations between Owners and engineers. The second topic, “Deeper Dive into LEAN: An Owners Journey,” discussed how the LEAN Process is being used on a Northeast Georgia Healthcare System project.

Elections were also held at the Spring Workshop, and the new Georgia Chapter Leaders include:

President Marvin Woodward Georgia State Financing and Investment Commission

Vice President Nancy Bayly Emory University

Treasurer Jay Jenkins Georgia Institute of Technology

Secretary Barry Bloom University of Georgia

The COAA-GA Chapter continues its work to increase membership and looks forward to continued growth in numbers and knowledge in 2014. To contact the COAA-GA Chapter, send correspondence to [email protected]


New MembersOwners Abilene Christian UniversityGustavo Espinoza Kristian Allen

Arapahoe County, ColoradoAnn BaertleinDick HawesKen MorrisKevin Keens

Board of Regents/ University System of GeorgiaJim JamesKen Crowe

California Institute of TechnologyWayne BottomleyDonna PettJim CowellElizabeth GibbBart HaleJeanne HaritonDavid MispagelGregory NordenAnthony ParkerJean-Michel ReynoldsBradley SmithPhillip VaziriNick GrewalElvin Nixon

Case Western Reserve UniversitySusan KirkhopeChristopher PanichiShannon Smith

Cedars Sinai Medical CenterPeter GolerkanskyRobert CullMildred SotoRudy PerezZeke TrianaPatrick BartonRaymond ChengJohn BoothSoussan SemerciyanAdrienne HaynesAngela BuickansIan GrantIsabelle ChemlaJon WhitneyJovita YbanezOsvaldo DiazAndrea BarrilChitose FreemanKevin Hsu

Tom DalyKelly RedricoRobin WeinbergSherrie Wray

Children’s Healthcare of Atlanta, Inc.Twannia Holeman Whitni Kalman Steve Lange Gerald Smith Scott Robinson Felicia Arfaoui Christine McCawley Natalie Owens Lillie Collins Chuck Jansen

City of Peoria, Engineering Dept.Daniel K Davis Emory UniversityDwight Raby Ann Marie Arthur-Nedrick Joan D Kowal

Frederick County Public SchoolsAl OrndorffTim CrismanScott KeelerJohn LeeDiane RobinsonThomas Haas

Georgia State Financing & Investment CommissionJerry MastrellaAnja MathewsJason ParkerBobby CromerSteven AbbottHoward ForschEleanor FurlowGlenn HallerRonald KernJustin PobleteShirley SmithLaura Leigh BarrettMegan BeasingerWes BerryRaquel ClementAmos DurrStephanie FarleyAnee FryKeenan GistJoel HeatonJacqueline JohnsonBrenda Minter

Michael MortonSteven NawrockiLucas Nichol

Georgia State UniversityCraig Wertz

Iowa State UniversityDon SloanPatrick CioffiMichael Garcia

Kodiak Island BoroughBill BartonJenny Clay

Loudoun County Public SchoolsRay MeekerD.B. Combs, IIJay Montero

Maryland National Park and Planning CommissionTony DerroYvonne T. JohnsonVincent CoxKofi AnsuCameron DuncanJoseph MathaiMonica Wharton-HenleyRobert ClarkLawrence QuarrickDarin ConfortiMitra PedoeemPatricia McManusAndrew FrankMichael MaJudie LaiCarl MorganThomas ZylaTrevor BourneDon Herring

MD Anderson Cancer CenterScott VetterShane WeissingerMark HandleyChristopher EversGeorge KapacinskasKamal KahlilLillian Wanjagi

Metro Nashville Airport AuthorityRobert RamseyBeth GelbandTraci C. HoltonBryan W. BartonRick WilliamsTJ JuMichael Fulghum

Moody Bible InstituteKonrad Finck

Mount Carmel HealthBrian D. Teske

National Heritage AcademiesJoseph SprysBrian A FinosDustin Sommer

Northern Virginia Community College (NOVA)Sally WrennRizwan RahmanEssala LoweMaxine ToliverDonald ColeMarion Devoe

Oakland UniversityBryan Ward

Oregon Health & Science University HospitalDennis MinsentHeather OilandJordan LambRon Lai

Oxford Development CompanyLou DiNardoR. Scott PollockMark GrassoDave HeatonShawn FoxMegan Stearman

Parkland Health & Hospital SystemBill WaltherMoussa MoussaVeronica MendezCorina HeizerLorie RodriguezChelle McClainEric EnglishMiranda JolliffLou SaksenMichael Rader

San Antonio River AuthorityMike W Lackey

Signet Enterprises LLCJason Perry

Stanford UniversityMike W LackeyMarisa CavalieriRick Elmasian


Julia MullinLaura LippincottPeter McColganKathleen MillsNoel J.P. McFadden

State of Tennessee Department of General ServicesRobert Oglesby

Temple UniversityBrandon BenjaminBob SiegfriedMike GentileBill MalazitaJohn Mc Carroll Kurt BresserRonald JohnsonKevin CaseyMarisa CavalieriRick ElmasianJulia MullinLaura LippincottPeter McColganKathleen MillsNoelJ.P. McFaddenTexas A&M Health Sciences CenterRichard Lynn

Texas Children’s HospitalMarcus HuntAnat ZeidmanDaniel IobScripps HealthJeffrey BensonBruce RaineySuzanne OsburnRoss Caulum

The Jackson LaboratoryJohn Fitzpatrick

UCSF Medical CenterAlvin Cantor

University Health SystemColeman A KavanaghMark WebbTom UnruhJoseph GonzalesHector MartinezDavid VasquezJames CavazosArt DominguezLouis StranahanArthur Sosa

University of Alabama at BirminghamBryan Horsley

University of Florida Dennis Hines

University of IllinoisJ. Michael MolnarAllan StratmanAutumn GoodrumArt WestleFred ColemanKarn DeeringSandra YooAdam Kimball

University of MarylandA.M. Nancy JonesRalph BennettBrenda Testa

University of Maryland Baltimore CountyDavid BrooksSharon QuinnMike Pound

University of Maryland College ParkCharles SturtzWarren L. KelleyFrank A. SchmidtleinWilliam McLeanStewart EdelsteinPatrick H. EibelKrista CarterMichelle TanMichael LandiNancy YeroshefskyBrian SnyderJohn GreyWilliam CampbellMatthew LansberryDavid GriffithLawrence WuNeil Bhatt

University of North Texas SystemStephanie HunterDavid ReynoldsPat DunlapJames DavisJulie Sands

University of PennsylvaniaMichael DauschRobert LundgrenKe FengKen Ogawa

David HollenbergSteve BeckerMariette BuchmanChris KernJennifer WetzelEd BenfoldMark BreitenbachMarc CooperDave DunnChristopher GallagherJohn MahonyJames PalkaMargo Pietras-BarnesMichael SwiszczRobert AngstadtTerence BrooksEric DelssWilliam DierkesMarc DranoffTanya KeyhaniBrenda LoewenColin McKelvieDave PancoeRyan RoseMark KocentDan GarofaloRichard RussellTaylor Berkowitz

University of Texas at AustinTom BlackwellJill StewartAziz Hussaini

University of Texas SystemPaul CravensStacy YoungdaleBenny VandenAvondUniversity of VirginiaThomas SnowDavid VilliottKate MeyerTim RolandKim BreedenBetty BowmanMolly ShifflettSteve ClarkDana HodgesMark HumbertsonEd EdgarShawn WalkerMaria Ragland

UT Health Science Center-HoustonLamar SingletaryKatie Summers

Wayne State UniversityFran Ahern

West Virginia UniversityMark IacobucciJosh ShinnBrian GillespieJeff Palermo

AssociatesAFG Group IncMichael O’Connor Datum EngineersMichael Brack

FC Background, LLCMelanie Laird

Fort Hill Associates, LLCCurtis Plyler

Hanson BridgettHoward Ashcraft

Hill International, Inc.Robert Ferguson

HKS, Inc.Kim Bruffy Hunt Construction GroupPam McNealy

Kaufman Lynn ConstructionLisa King

Linbeck Group, LLCBill Scott, III

Mas-Tek Engineering & Associates, Inc.Stephen Douglas Mason

McCarthy Building CompaniesCrystal Carter

Scan ConsultingMarkku R. Allison

Schneider ElectricDana E Manners

SiemensValerie Klengson

Stantec IncThomas Walsh

W.E. O’Neil ConstructionK.C. Wigle

Zurich North AmericaNils Sorenson

StudentsGeorgia Institute of TechnologyAdedamola M Fajinmi


Calendar of EventsOWNER TRAINING INSTITUTE: COST MANAGEMENT

May 12, 2014Omni Houston at the GalleriaHouston, TX

OWNER TRAINING INSTITUTE: PROJECT MANAGEMENT—AN OWNERS PERSPECTIVE


OWNER TRAINING INSTITUTE: SCHEDULE MANAGEMENT


2014 COAA SPRING OWNERS LEADERSHIP CONFERENCE

May 14–16, 2014Omni Houston at the GalleriaHouston, TX

2014 COAA FALL OWNERS LEADERSHIP CONFERENCE

November 19-21, 201420th Anniversary ConferenceLoews Vanderbilt HotelNashville, TN

Index to AdvertisersAFG Group, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . .23, 30

AGC of America . . . . . . . . . . . . . . . . . . . . . . . . . . OBC

COAA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4, 13, IBC

Donley’s Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .IFC

Kitch Drutchas.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

CONSTRUCTION/PROGRAM/PROJECT MANAGEMENT

AFG Group, Inc. P: 703.435.0029F: 703.435.0056www.afgcm.com

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2014 SPRING OWNERS LEADERSHIP CONFERENCE800.994.2622 / www.coaa.org

MAY 14 – 16, 2014

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Owners Perspective | Spring/Summer 2014

Documents

Transcript of Owners Perspective | Spring/Summer 2014