Annual Report

Annual Report

Annual Report 2015


Building Innovation


At the direction of Chairman Thomas Z. Scarangello, the New York Building Congress Task Force on Innovation and Best Practices was formed in 2014 to spearhead a wide-ranging initiative aimed at improving the way New York City's built environment is designed and constructed. The Task Force, which taps the expertise of more than 50 leading contractors, labor officials, architects, engineers, government officials, and other industry leaders, seeks to identify, evaluate, and foster innovation and the implementation of best practices in everything from procurement reform and alternative project delivery to virtual modeling, modular construction, and beyond.

To mark the first anniversary of the Task Force, Mr. Scarangello assembled an expert panel and moderated a lively discussion on the state of innovation in New York City. To follow are highlights from that conversation.

WHAT IS NEW YORK DOING RIGHT?

MILO: The City has made a lot of progress over the past ten years in using the CM/build process rather than a pure lump sum contractor basis. We [STV] just finished a $700 million project in a joint venture with Turner out in Queens, the New York City Police Academy, which was done through a CM/build process. The project was opened six months before the contract date and it was very successful. Unfortunately, the City has moved away from using the CM/build delivery model and the industry should make an effort to reverse that trend.

PATRICIA: Being an educator, I'm looking at it from a 40,000-foot perspective. I see that the workforce is getting better educated. The projects are more complex. The owners are more demanding. And the workforce needs to face those challenges, and they are. You see it in the Masters program at NYU. We've got some incredible students that are just soaking in the knowledge that they are gaining.

FRANK: I think we're seeing some good practices in New York, especially when it comes to the more complicated building projects. We're utilizing all of the new technology in terms of computer-aided design, such as BIM and Revit programs, to bring the subcontractors in early and work with them in design-assist contracting to break down the difficult elements of the projects. We're on the right track, but we need to focus on how we can make greater use of technology and get even more stakeholders involved sooner.

[W]e are seeing some good practices in New York,
especially when it comes to the more complicated
building projects.

JILL: We've also gotten better about importing best practices. We [Kohn Pedersen Fox] have designed major projects all over the world, and we were able to bring a lot of that expertise back to use on the Hudson Yards Project, where we're integrating really complex, mixeduse development over at the rail yards. It is something we had done in other parts of the world, where we're working to keep something in operation while building above it.

WHAT ARE SOME OF THE IMPEDIMENTS TO INNOVATION AND HOW ARE THEY OVERCOME?

JILL: In certain respects, the construction industry and owners, developers, and some agencies are quite risk-averse here. You don't hear a lot of desire to be particularly innovative. On the other hand, you see a lot of it in different parts of Asia and Singapore, and in parts of China, where there's almost a national agenda to be innovative.

CHARLIE: One of our challenges is getting people to embrace new ideas and certain means and methods. For instance, we were slow to adopt the concrete core-first method of construction in New York, even though it was being done in other parts of the world.

MILO: The best way to bring innovative ideas into New York is to document their successful implementation. When you can prove that an innovation works and show the benefits, you get buy-in. I'd love to see the industry embrace the use of robotics and automation in the field.

FRANK: Right. You have to prove that it is going to work, either by past examples or by getting everyone around the table to explain that we're not really doing anything that differently — just using current technology to make it work.

CHARLIE: We [Turner] were working early on at 2 World Trade Center, and we were debating whether to utilize a concrete core-first method of construction. So we took some of Silverstein's staff to Dubai and showed them what was going on there — the means and methods. And they came back charged to do it. They are using it now at 3 World Trade Center.

PAUL: I think the big obstacle is the political and regulatory will to change and do things differently to free up innovation. But part of that will to change is to adopt some of these new project delivery methods. We need regulatory changes to improve the process. We need to bring in new technologies, and we need to perform construction more like we're manufacturers. That involves some innovations in pre-fab and modular construction and things like that.

FRANK: Forest City Ratner took a leap of faith with the modular 32-story building. Something really valuable and important is going to come from that. I think it could be the beginning of a breakthrough for pre-fab construction and for very cost-effective housing. Forest City Ratner should be applauded.

The best way to bring innovative ideas
into New York is to document their successful
implementation. When you can prove
that an innovation works and show the
benefits, you get buy-in.

WHAT ROLE DO OWNERS PLAY IN INNOVATION?

CHARLIE: The most successful projects are the ones where the owners say, "Let's try something new. Let's do something big!"

FRANK: Owners want great buildings and architects want to design great buildings! As builders we try to build cost effectively. If that's the goal, and it is what we try to focus on — to build a
very complicated project cost effectively, we'll exhaust every possible methodology to try and do it that way.

PAUL: We have a lot of iconic buildings in New York and they're driven a lot by private owners because they are willing to take the risk. Take the Hearst Building, for example. There's a project that pushed the envelope.

PATRICIA: Our industry has a bad reputation and we need to do a better job of telling these good stories. So I'm throwing it over to you, Paul.

PAUL: At Engineering News Record, we try to shine a light on innovation wherever it is. But we need the industry's cooperation. When a firm feels they have an edge through some kind of innovation, sometimes they are reluctant to talk about it. It should be shared and celebrated when it works.

PATRICIA: A big part of that is getting the owners involved.

PAUL: Yes, and that's an impediment, too. Owners collectively have a great stake in seeing construction methods improve. It drives their costs down. It drives their construction program productivity and it gives them a better result. They need to be more open and supportive about communicating what went right on their projects and what went wrong — so everyone can learn from it.

The most successful projects
are the ones where the owners say,
"Let's try something new.
Let's do something big."

WHERE IS GOVERNMENT ON THE INNOVATION SCALE?

TOM: Aren't innovation and best practices most vital to the government? Developers building in a hot market are okay if it costs a couple of more dollars to do it the old way, as long as they are assured the project gets done on time. But when you look at government with fixed budgets and ambitious goals for affordable housing or transit, you would think that building those projects more cost-effectively and with less risk is something they would be very interested in. So if it is more to their advantage than any other group, why does it seem to be the hardest barrier to get through?

MILO: Government is often restricted by legislation when it comes to innovation. It starts right at the capital planning phase, where there's a law that you can't proceed with design work until funding is in place for the entire project. But how does an agency know how much a project will cost if the design process has not even begun and if there are no construction professionals providing costing advice? The way the system works now, budgets are not based on an actual project and, therefore, they are often off-base. This can lead to cost overruns and feeds the public perception that government projects are poorly managed and over budget. Government agencies need to allocate design money and bring CMs into the process early in the design phase to provide accurate project costs. Then construction budgets can be allocated properly.

The big question for government
and for our industry is how do we spur
innovation when there's not a crisis?

MILO: If you look at the Delta Airlines project out at JFK — a billion and a half dollars of construction has been delivered ahead of schedule and under budget. This project could be a model for large-scale public projects.

TOM: People are increasingly talking about public-private partnerships, design-build, and other alternative delivery approaches. What these methodologies have in common is shared risk and reward. When I look at the best jobs we [Thornton Tomasetti] have done, they all shared that element. We've discussed the idea of risk being like energy. It can't be destroyed. It can only change form! And so, if we don't figure out how to share the risk, people just price it in.

There's a message to be learned from the technology industry.
When Microsoft develops an operating system, they put the code out there so that companies can develop applications around that platform. So getting these best practices out as kernels of opportunity for other people to build on is very important.

MILO: When I was at the New York City School Construction Authority, which was given tremendous legislative abilities to deviate from the normal procurement and design practices, we did 45 design-build projects. I can unequivocally say that the design-build process brought the dollar value of construction down in the order of 20 percent and the schedule down by 30 to 40 percent. At STV, we just did a project out at South Beach in Staten Island. It was a design-build project given to us under an Executive Order after Superstorm Sandy. We were able to deliver a full $40 million mechanical building, designed and turned over within a 14-month period.

TOM: But when you see it happen in government, it's usually because there's some crisis. We were involved with the Minneapolis bridge that collapsed. They rebuilt it in record time. Why? Because they went around the procurement rules because they knew they had to reconnect the roadway ASAP. The big question for government and for our industry is how do we spur innovation when there's not a crisis?

HOW CAN WE BETTER SHINE A SPOTLIGHT ON INNOVATION?

CHARLIE: One of the things we developed [at Turner] is called Learning Tree. If you have a best practice, you can post it to the Learning Tree site. We also have something called Webinar Wednesdays in our company that people get on and share their ideas. There is no reason why we can’t do something like that industry-wide — why not share the information if it makes us all better?

MILO: We started something similar at STV. Why solve the problem in Los Angeles only to have to reinvent the solution in New York? Among STV’s 40 offices, we have created virtual groups across the offices and disciplines. Employees post design solutions and discuss how issues were resolved successfully. This allows someone in a different office to leverage best practices, saving time and money and better serving clients.

PAUL: There’s a message to be learned from the technology industry. When Microsoft develops an operating system, they put the code out there so that companies can develop applications around that platform. So getting these best practices out as kernels of opportunity for other people to build on is very important. Groups like the New York Building Congress are saying, “This is an open tent. We need to collaborate and work together.” And this is where the information starts to come together and best practices are developed.

CHARLIE: You’re exactly right. On the construction side, we all benefit if the subcontractors know how they’re going to deal with shop drawings in the same way, whether they work for Turner, Sciame, STV — no matter who they work for. It helps all of us if there’s a similar safety standard and we enforce safety or do a punch list. If we all had a common or similar platform, it helps the entire industry.

PATRICIA: In the Task Force Building Technology and Project Delivery Committee, we’ve held numerous meetings with all of the trades around certain buildings — like 250 West 55th Street. It has been very productive to use the Building Congress as a platform for interaction. What we have found is that we can do things better as an industry without spending any more money, but just by talking to each other and using the right communications platforms.

How do we develop the workforce of tomorrow?

PATRICIA: Workforce development is a big issue, especially as this industry gets bigger. It centers on three points — recruiting the best and brightest, training and retraining, and retention. How do you keep people? Because the Millennials don’t work for the firm; they work for themselves. And that’s an issue. So how do you make the industry attractive? The modern workforce wants life/work balance. They want fun, and they want a fast-paced environment. All of these things are important and the industry must embrace them.

CHARLIE: The good news is that people want to work in New York. It wasn’t like this 25 years, 30 years ago. So we can get the talent in, but as you said, it is the training, retention, and retraining part that is the bigger issue.

JILL: I think in the case of planning and design, New York is really seen as a center for innovation. It maintains its reputation as being a creative hub. The City attracts architects from all over the world.

MILO: The ACE Mentor Program reaches out to high schools in an effort to attract young students to the architecture, engineering, and construction management fields. The hope is that with enough exposure their interest and imaginations will be sparked and they will want to pursue these fields in college. This year we have over 1,000 students in New York City alone going through the program.

JILL: The Applied Sciences Initiative is another area that will yield a lot of benefits by drawing attention to technical jobs and technical training at a very high level. NYU’s Center for Urban Science and Progress is focused on urban initiatives and smart cities. There are similar ideas happening at City College and Columbia. One of Cornell’s three big initiatives is going to focus on the built environment. So I think we should be able to attract great people from all over the world to come here and help make us a more innovative city.

How can we better expand and cultivate the role of women in the workforce?

JILL: We won’t realize the full potential for innovation with just half the population. I think one area where women can play an increasing role and where we’re beginning to see much higher percentages of women involved in construction is in the modular and prefabrication work environment. That bodes well as a vehicle for bringing diversity to the workforce.

The modern workforce wants
life/work balance. They want fun, and they
want a fast-paced environment.

PATRICIA: Quite a few firms citywide now have women-employee groups that are supporting each other. For example, Thornton Tomasetti, Turner, and Sciame each have one. And now these groups are starting to talk to each other. One of the things that firms are finding out is that women have less of a problem with life/work balance than they do with feeling valued. And one of the things these women’s groups do is lend value, which increases retention.

TOM: Whenever I go to any industry events for women, the audience is filled with women and just a few men. You have to get more men there. Important points are being raised about what we need to do to create a stronger and more diverse workforce, but the audience you need is not always in the room. 

What are New York’s success stories?

JILL: The Highline is viewed around the world as a unique and innovative concept. The fact that City agencies were able to get behind that project, change the zoning laws, and allow for the rejuvenation of a new residential district, in a different way, is an example of government and the private sector working together to implement an innovative idea. Hudson Yards also required the collaboration between government and a private developer.

FRANK: The Culture Shed is a project that I think is going to be a model for New York. We have a great owner, who was willing to take a chance. This is a fixed building and a shed 10 stories tall that will move out onto a plaza. It involves kinetics, steel, and a lot of specialty trades. To be successful, we needed a transparent process that involved getting in early, learning, investing in mock-ups, and pre-assembling. It is a model for how to do great buildings cost-effectively.

CHARLIE: At Madison Square Garden, we had big issues with trying to work around existing conditions. A group of our employees developed an app, put it on an iPad, and gave it to all the subcontractors. As soon as an existing condition came up that needed a new sketch, the architects could prepare it and get it to all the foremen. So if the condition affected multiple trades, they all got the sketch at the same time. I also want to recognize Mount Sinai Medical Center, because they’re taking the brave step of pushing an IPD [Integrated Project Delivery] project up at the St. Luke’s campus, which is where I think IPD is a perfect vehicle because you have to figure out how to keep the hospital running while you are doing $100 million worth of work.

TOM: You talk about a success story that’s been going on, I think, for many years, and that’s the whole idea of mockups — virtual mockups, which is more recent. When we incorporated all the exposed steel and a double curtain wall on The New York Times Building, we mocked them up. And the prices they started with and what they ended up with were exactly the same story, the cost estimates and final buy dropped significantly. You took the risk out of the innovation. We need to elevate that story so people can say, yes, we can do this innovation and you should spend a little bit more money up front because when you do, you’re going to save much more down the line.

TOM: The Times said they’d been in their last building for 100 years and they are going to be in the next building for 100 years, so they wanted to take the time to do it right. But ultimately that decision and with a developer partner who was much more bottom line driven, it worked out the best way for both of them, because the price went down and they got the technology that was, at that point, state-of-the-art.

PAUL: New York is poised for a renaissance in the way it builds. I truly believe that, and I think we see that in Engineering News-Record and our coverage in the marketplace. It’s a $30 billion plus market, how can it not succeed? There’s so much construction and so much investment, it is going to change and it’s going to change for the better.

FRANK: To be in this business you have to have the optimism of a test pilot. There’s no bad news. Only challenges to overcome.

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