Best Value Business Model

1

Best Value Business ModelBest Value Business Model

Kenneth T. Sullivan Kenneth T. Sullivan PhD, MBAPhD, MBA

Performance Based Studies Research GroupPerformance Based Studies Research GroupSchool of Sustainable Engineering and the Built EnvironmentSchool of Sustainable Engineering and the Built Environment

Ira A. Fulton Schools of EngineeringIra A. Fulton Schools of EngineeringArizona State UniversityArizona State University

www.pbsrg.com

http://www.cibworld.nl/website/

W W W . P B S R G . C O M 2

W W W . P B S R G . C O M

Worldwide as a leader in Best-Value Systems Conducting research since 1994 900+ Projects $4.4 Billion Services & Construction 5% Increase in Vendor profit 98% On-time, On-Budget, Customer satisfaction PMI, NIGP, IFMA, IPMA Tests in Netherlands, Botswana/Africa ASU – investments of over $100M due to BV

PBSRG’s Research Results(Performance Based Studies Research Group)


Research ClientsResearch Clients General Dynamics University of Minnesota General Services Administration (GSA) Heijmans, Netherlands Ministry of Transportation, Netherlands State of Alaska Brunsfield (Malaysia) University of Alberta State of Oklahoma State of Idaho Idaho Transportation Department State of Oregon US Army Medical Command USAF Logistics Command University of New Mexico University of Idaho Arizona Parks and Recreation US Solar Neogard

Arizona State University US Corps of Engineers Arizona Public Service (APS) Salt River Project (SRP) Rochester Utility Boise State University Idaho State Lewis & Clark City of Phoenix, AZ City of Peoria, AZ Hennepin County, MN City of Roseville, MN Olmstead County, MN Fann Environmental EVIT School District Fulbright Program /University of Botswana, Africa US Embassy, Bank of Botswana RMIT, Melbourne Australia Aramark, Canon, Qwest, ISP, Chartwells, AP, Pearson Various Contractors and Consultants


Tested Application AreasTested Application Areas Construction & Design/Engineering

Large GC, infrastructure, municipal, laboratory, education, hospital, financial, large specialty, etc.

Small GC, renovation, repair, maintenance, roofing, demolition, etc. DBB, CMAR, DB, IDIQ, JOC, Low Bid Development, supply chain

IT Networking, Data Centers, Software (COTS, custom), ERP, etc.

Facility Services Maintenance, industrial moving, custodial, waste management, services, etc.

Business, Municipal, & University Services Dining, Document Management, Multi-Media Rights, Fitness Equipment,

Online Education, Bookstores, Material Recycling, Furniture, etc. Health Insurance, Medical Services Manufacturing

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Working Commission 117 & JournalWorking Commission 117 & JournalInternational Efforts & PartnersInternational Efforts & Partners

5 years15 tests for infrastructureTwo major GCs

Fulbright ScholarUniversity of BotswanaPIPS tests RMIT

Teaching IMTPBSRG platform

Tongji University

BrunsfieldComplete Supply Chain

Univ of Alberta


What makes our research message What makes our research message unusual…..unusual…..Simplistic

Uses logic

Efficiency: less decision making, less management, and better results (best value and high profits)

It is more important for the vendor who does the work to know what to do than it is for client’s representative to know what the vendor should do

Measurement


Industry StructureIndustry StructureHigh

High

I. Price-Based/Traditional

II. Value Based

IV. Unstable Market

III. Negotiated-Bid

Specifications, standards and qualification based

Management & Inspection

Best Value (Performance and price measurements)

Quality control

Competition

Pro

bab

ility

of P

erf

orm

ance

Low

Qualified vendors invited

Owner selects vendor

Negotiates with vendor

Vendor performs Vendor minimizes risk

Client minimizes risk


Vendor 1

Vendor 2

Vendor 3

Vendor 4

Perf

orm

an

ce

High

Low

Ris

k

High

Low

Perf

orm

an

ce

High

Low

Ris

k

High

Low

Impact of MinimumImpact of MinimumStandards & RequirementsStandards & Requirements

Vendor 1Vendor 2Vendor 3Vendor 4


High

Low

Perf

orm

an

ce

Owners

“The lowest possible quality

that I want”

Vendors

“The highest possible value that you will get”

Minimum

Perception Problems with Perception Problems with Traditional SystemsTraditional Systems

High

Low

Perf

orm

an

ce

Maximum

W W W . P B S R G . C O M 11

Industry Performance and CapabilityIndustry Performance and Capability

Highly Trained

MediumTrained

Vendor XCustomers

OutsourcingOwner

PartneringOwner

PriceBased

MinimalExperience


Initial conditions

Final conditions

Traditional Management

Time

Laws Laws

D2

D1 M&C

D3

D1: Client makes decisions on budget, time, and expectation

D2: Client consultant/professional makes more decisions to make expectations true

D3: Vendors attempt to use the lowest possible price to minimize the risk caused by the decision making of client & consultant/professional

M&C: The client attempts to force vendor to make expectations happen


Initial conditions

Final conditions

Project Management Model

Time

Laws Laws

M1

C1 M2

C1: Client Expectations based decisions and various factors – may or may not be “realistic”

M1: Measured vendor plan that more accurately describe the initial conditions replaces C1 – converts to a predictive contract

M2: RMP/WRR measures deviation & performance to plan

M3: Final performance measurement

M3

W W W . P B S R G . C O M 14

Inefficiency vs EfficiencyInefficiency vs Efficiency

Micro-Management Performance dictated by technical

information Specification is the requirement Inspection by client Client’s professional is the expert and has

control No performance measurements Increase flow of information Relationships (partnering, deals, give and

take) used to solve issues Need more people (inefficient) No accountability

Leadership Performance dictated by performance

information Specification is only the intent

Quality control by contractor Vendor has control Performance measurements Decrease flow of information High performance vendors used to

minimize risk Need less people (efficient) Accountability

Can you make the transition?

W W W . P B S R G . C O M 15

Performance-Based Performance-Based FunctionsFunctions

I. Price-Based

II. Performance-Based

IV. Unstable Market

III. Negotiated

Competition

Pe

rfo

rman

ce

Low High

High

Treat as a Commodity Volume Based No Accountability Finger Pointing Management & Inspection Minimum Standards Client minimizes risk

Value & Performance Maximize Profit Vendor Accountability Minimized Management & Inspection Quality Control Vendor minimizes risk

W W W . P B S R G . C O M 16

Best Value OverviewBest Value Overview Complete business model for organizations & projects

A best value selection and management tool (developed and tested over 17 years)

It can be applied to any type of system, organization, structure, procurement, project, or need

Best Value is not just a procurement method. It is a selection and management tool that can be applied in: Business Services (IT, dining, consultants, equipment, doc mgmt, insurance, etc.) Facility Services (maintenance, roofing, janitorial, landscaping, supplies, etc.) Design, bid, build (DBB), Design build (DB), Construction manager at risk (CMAR) A/E & Design, Job Order Contracting (JOC), Indefinite Delivery Indefinite Quantity

BV is not a computer software package, but rather a combination of IMT principles that allows a client to make an informed decision


What does the Best Value Model do?What does the Best Value Model do?

Makes things simple (measurement, dominant information)

Minimizes the fuel of bureaucracy (decision making, non-dominant information, management, control, and direction)

Creates transparency

Allows organizations/vendors to be highly efficient and successful

Proposes that to accurately identify what “is” and then to have a plan to efficiently meet the needs will minimize risk

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What is the model?What is the model?Identify the expert with as little effort as possible, using

measurement and differentialTransfer risk and control to the expert through preplanning

and risk minimization, focusing on risk that are not controlledHire the expertUse alignment, planning, & measurement in place of

management, control, and directionCreate a performance information environment to drive

accountability and changeProactive vs. Reactive Supply chain (us mentality)Logic vs. ExperiencePredictable vs. Chance

W W W . P B S R G . C O M 19

Best Value SystemBest Value System

Identification of PotentialBest-Value

Pre Planningand

Risk Management

Measurement ofDeviation from the

Expectation

PHASE 1PHASE 1 PHASE 2PHASE 2 PHASE 3PHASE 3

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Pre Planningand

Risk Management


Expectation



What are we trying to What are we trying to accomplish?accomplish?

Scenario 1 Scenario 2

Question:

If Purchasing wants to buy a “green circle”, in which scenario is hiring the right “green circle” easiest to justify?

W W W . P B S R G . C O M 22

Filter 1Past

PerformanceInformation

Filter 2Current

Capability

Filter 4Prioritization

(Identify Best Value)

Filter 5Cost

Reasonableness &Dominance Check

Filter 6Pre-

Planning & Risk Min

Time

Qua

lity

of V

endo

rs

Filter 3Interview

Key Personnel

Awar

d

High

Low

BV ProcessBV Process

Measurement of Risk & Performance During the Contract


Evaluation CriteriaEvaluation CriteriaPast Performance Information (not rated)

[Scope Plan – if needed(rated)]

“Technical” Risk Plan (rated)

“Non-Technical” Risk Plan (rated)

Value Added Plan (rated)

[Milestone Schedule (not rated/not weighted)]

Cost / Financial Proposal (not rated)

Interviews (rated)


WeightingWeighting

General Guideline 30% Price (but always have dominance check!!!!!) 70% Performance

Performance Criteria (typical order of importance) Interview Non-Technical Risk Plan About equal

Technical Risk Plan VA PPI

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Submitting a proposalSubmitting a proposal

Identify best person / team via measurement

Get in a room, plan it out

Identify & prioritize risk w/ solutions

What else does the client need or could be better

Cost it out / financial proposal

Then write up your proposal

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W W W . P B S R G . C O M 26

Filter 1Past


Filter 2Current

Capability



Filter 5Cost


Filter 6Pre-

Planning & Risk Min

Time

Qua

lity

of V

endo

rs

Filter 3Interview

Key Personnel

Awar

d

High

Low


Filter 1 – Past Performance Filter 1 – Past Performance InformationInformation


Critical IndividualsCritical IndividualsPast Performance Information will be collected on all critical team

components, which includes:

Components

The Firm (Company/Firm)

Boss or Money Decider (if service) (Individual)

Project Manager (Individual)

Site Manager (Individual)

Critical Sub-Parties (Firms or Individuals)

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Survey FormSurvey Form

W W W . P B S R G . C O M 29

Filter 1Past


Filter 2Current

Capability



Filter 5Cost


Filter 6Pre-

Planning & Risk Min

Time

Qua

lity

of V

endo

rs

Filter 3Interview

Key Personnel

Awar

d

High

Low


Filter 2 – Current InformationFilter 2 – Current Information


Filter 2 ComponentsFilter 2 Components

Technical Risk Plan

Non-Technical Risk Plan

Value Added

Schedule (not weighted, not rated)

Cost / Financial Proposal

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W W W . P B S R G . C O M 31

Technical Risk PlanTechnical Risk Plan TECHNICAL RISK – Project risk that other vendors have due to lack of

experience and expertise (capability is more important than project detail)

PURPOSE To identify vendor’s technical expertise and risk of other vendors

caused by lack of capability Differentiate vendor based on dominant expertise

Length: 2 page maximum

W W W . P B S R G . C O M 32

Non-Technical Risk PlanNon-Technical Risk Plan Non-technical risk: any non-technical risk by other participants which

could cause time or cost deviation

Purpose: capability of vendor to think in the client’s best interest; vendor understand that this is the most important risk; vendor take charge of the project; vendor minimizes transactions of the project; vendor becomes proactive instead of reactive; vendor preplans activities that they do not control

Length: 2 page maximum

W W W . P B S R G . C O M 33

Value Added Value Added Value added:

Difference from average vendor in vendor’s capability to add value to the project;

what can help project have more value; beyond the scope of the project “technical” requirements Understand need better than client can specify

Adds value or minimize cost ; increases value of delivered service for client

Length: 2 pages maximum


Milestone Schedule Milestone Schedule

The milestone schedule should identify key action steps and milestone

dates for delivery of the service or transition.

Milestone schedule for all phases needed (1-page)

Anonymous

No template – follow your own preference

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W W W . P B S R G . C O M 3535

Format of the PlansFormat of the Plans In order to minimize any bias, the Plans must NOT contain any

names that can be used to identify who the proponent is (such as proponent name, personnel names, project names, etc).

A template is provided and must be used. Proponents are NOT allowed to re-create, re-format, or modify the template.

The plans should not contain marketing material.

The Technical Risk Plan must NOT exceed 2 pages.

The Non-Technical Risk Plan must NOT exceed 2 pages.

The Value Added Options must NOT exceed 2 pages

The Schedule most NOT exceed 1 page

The Pricing must be submitted as to the template

W W W . P B S R G . C O M 36

Plan 1 We will work with the user to minimize the impact of noise from

demolition.

Plan 2 We have planned to demolition during off hours and weekends.

This will have a slight impact on our cost (less than 1%), but the impact to customer satisfaction justifies this.

We will also install rubber sheets on the floors to diminish noise and vibrations.

Both solutions can be performed within your budget. Both solutions have been used on multiple previous projects w/

high levels of customer satisfaction (9.4/10).

Example of SolutionsExample of SolutionsRisk: Risk: Noise from DemolitionNoise from Demolition

Type: Technical RiskType: Technical Risk

W W W . P B S R G . C O M 37

Plan 1 Coordination with [water company] is critical. We will coordinate and

plan with [water company] as soon as the award is made to make sure that we get water to the site to irrigate the fields.

Plan 2 We will coordinate and schedule the water with [water company].

However, based on past experience there is a high risk they will not meet the schedule (the water company does not meet schedule over 90% of the time).

We will have temporary waterlines setup and ready to connect to the nearby fire hydrant to irrigate until [water company] is ready.

We will also have water trucks on-site if there is problems with connecting the lines.

Example of Solutions Example of Solutions Risk: Risk: Getting water to the siteGetting water to the siteType: Technical RiskType: Technical Risk

W W W . P B S R G . C O M 38

Example of Solutions Example of Solutions Risk: Risk: Concrete EscalationConcrete EscalationType: Non-TechnicalType: Non-Technical

Plan 1 The owner can be assured all risks associated with material escalations

will be eliminated because we offer the benefit of an experienced project team that includes the most detailed, prequalified and extensive list of subcontractors and suppliers, from around the world.

Plan 2 The cost of concrete has been rising drastically. Since this project

requires a substantial amount of concrete, cost is a risk. To minimize this risk, we have secured and signed a contract with a local concrete manufacturer to prevent any increase in cost during the duration of this project.

W W W . P B S R G . C O M 39

Example of Solutions Example of Solutions Risk: Risk: Loss of Radio Flagship in Major MarketLoss of Radio Flagship in Major MarketType: Non-Technical Type: Non-Technical Plan 1

We will work very hard to maintain excellent affiliate relationships. If we lose a radio station (e.g. it changes its format) we will move quickly to replace the lost station. If we cannot quickly replace a flagship station, we can be very creative and could even consider purchasing all local inventory from a new flagship station.

Plan 2 In the past 10 yrs, on over 50 accounts, 7 radio stations format changes

have occurred. The following solution is optimal. We own and will maintain two radio contracts covering the area, where

signals can be switched if required. The flagship station will be the station with the stronger signal and greater coverage.

If a station is lost we will have a equal replacement within 2 months. If within two months a replacement is not contracted we will purchase inventory from another station or discount the cost of an inventory purchase and add it to our payments to the client.

W W W . P B S R G . C O M 40

Plan 1 Our internal food safety standards are recognized as being far more stringent

than government regulatory requirements. In the unlikely event of a food-borne illness, our strong relationships with local, state, and national health agencies will ensure and 24-hour response.

Plan 2 If a food safety issue arises, vendor will effectively minimize the client’s risk of exposure

by: 1) Vendor’s system will issue a safety alert and related directives to 10,000+ units and all

ASU email accounts in less than 15 minutes. 2) The vendor will place a lock within in its foodservices purchasing system on any food

with risk so it cannot be purchased, 3) The vendor will remove all potentially harmful products within the first hour of notice. 4) The vendor will identify as many purchasers as possible through credit receipt names

and the client system to notify them individually. Warnings will be placed around campus within two hours of discovery.

Example of Solutions Example of Solutions Risk: Risk: Safe Food Supply/Food Born IllnessSafe Food Supply/Food Born IllnessType: Non-TechnicalType: Non-Technical


Example of Value AddedExample of Value Added

W W W . P B S R G . C O M 42

Example: Value Added Example: Value Added ItemsItems

Reroofing this building will not stop all water leaks. The majority of the leaks are caused by cracks in the parapet walls, broken/missing glass, and poor caulking. For an additional $20K and 3 weeks in schedule we can replace and repair all of these items.

W W W . P B S R G . C O M 4343

Plans SummaryPlans Summary The All Plans are 2 pages maximum each

The Plans must NOT contain any names.

No marketing / No technical information

Avoid general risks / solutions

Identify value added options (and explain why)

The Plans becomes part of the final contract.

The Plans provide a high performing vendor an opportunity to prove their expertise & prove they are not a commodity.

If nobody can clearly differentiate themselves in the Plans, the prioritization will be based on other factors.

W W W . P B S R G . C O M 44

Filter 1Past


Filter 2Current

Capability



Filter 5Cost


Filter 6Pre-

Planning & Risk Min

Time

Qua

lity

of V

endo

rs

Filter 3Interview

Key Personnel

Awar

d

High

Low


Filter 3 – InterviewsFilter 3 – Interviews

W W W . P B S R G . C O M 45

Interview FormatInterview Format The client will actually “interview” each critical individual. This is not a

“presentation”

All individuals will be interviewed separately. The client will not allow group interviews with the proponents team. The client will not allow any other individuals to be present during interviews

Generally, interview times will last about 15-25 minutes per individual

A standard set of questions will be generated and asked to each individual.

The client has the option to clarify any answers (or ask additional questions to clarify an answer).

No substitutions will be allowed. Individuals listed on Proposal Form must be present. If a team member is not present for the interview, they will jeopardize the teams competitiveness.


Primary QuestionsPrimary Questions1. Why were you selected for this project?

2. How many similar projects have you worked on? Individually and as a Team?

3. Describe a similar project you have developed/worked on to the current project.

4. What is different about this project from other projects that you have worked for?

5. Draw out the process for this project by major milestone activities.1. Identify, prioritize, and how you will minimize the risks of this project.2. What risks don’t you control? How will you minimize those risks?3. What do you need from the client and when do you need it?

6. How are you going to measure your performance during the project?

7. What value do you bring to the project in terms of differences based on dollars, quality, expertise, or time?

W W W . P B S R G . C O M 47

Filter 1Past


Filter 2Current

Capability



Filter 5Cost


Filter 6Pre-

Planning & Risk Min

Time

Qua

lity

of V

endo

rs

Filter 3Interview

Key Personnel

Awar

d

High

Low


Filter 4 – Identify the Filter 4 – Identify the Potential Best ValuePotential Best Value


VendorNo Summary Criteria Out of A B C1 RAVA Plan 10 5.91 7.09 6.312 Transition Milestone Schedule 10 5.17 6.96 6.333 Interview 25 15.77 16.78 13.534 Past Performance Information - Survey 10 9.80 9.99 9.825 Past Performance Information - #/Clients Raw # 5.67 3.00 4.426 Past Performance Information - Financial 10 7.02 8.67 6.907 Financial Rating 10 4.00 8.00 8.008 Financial Return - Commissions Raw $ 30,254,170$ 60,137,588$ 64,000,000$ 9 Capital Investment Plan Raw $ 14,750,000$ 20,525,000$ 12,340,000$

10 Equipment Replacement Reserve Raw $ 7,213,342$ 4,100,001$ 8,171,811$ Finanical Totals 52,217,512$ 84,762,589$ 84,511,811$

VendorNo Summary Criteria Weight/Out of A B C1 RAVA Plan 28 16.55 19.85 17.672 Transition Milestone Schedule 2 1.03 1.39 1.273 Interview 25 15.77 16.78 13.534 Past Performance Information - Survey 9 8.82 8.99 8.845 Past Performance Information - #/Clients 1 1.00 0.53 0.786 Past Performance Information - Financial 15 10.53 13.01 10.357 Financial Rating 5 2.00 4.00 4.008 Financial Return - Commissions 7 3.31 6.58 7.009 Capital Investment Plan 6 4.31 6.00 3.61

10 Equipment Replacement Reserve 2 1.77 1.00 2.00100 65.09 78.13 69.04

Example – Assessment is based on actuals

W W W . P B S R G . C O M 49

Filter 1Past


Filter 2Current

Capability



Filter 5Cost


Filter 6Pre-

Planning & Risk Min

Time

Qua

lity

of V

endo

rs

Filter 3Interview

Key Personnel

Awar

d

High

Low


Filter 5 – Dominance Check Filter 5 – Dominance Check w/ Cost Reasonablenessw/ Cost Reasonableness

W W W . P B S R G . C O M 50

Dominance Check & Cost Dominance Check & Cost ReasonablenessReasonableness

Best-Value is the lowest priceBest-Value is within X% of next highest ranked firm Best-Value can be justified based on other factors

Best-Value is within budget

YesNo

YesYes

Best ValuePrioritizationBest Value

Prioritization

YesNo

Go with AlternateProposal or Cancel

Proceed toPre-Award

YesYes

YesYes

YesYes YesNo

YesNo Proceed to highest ranked proposal within budget

Dom

inan

ce C

heck A

lso


Dominance Check Dominance Check (on price)(on price)

If cost of best value is over [10%] above the next submitted best value, dominant information must be provided to show that they are the best value, otherwise the next best value is the best value

If cost is within [10%] of the next best value, they are the best value

W W W . P B S R G . C O M 52

Filter 1Past


Filter 2Current

Capability



Filter 5Cost


Filter 6Pre-

Planning & Risk Min

Time

Qua

lity

of V

endo

rs

Filter 3Interview

Key Personnel

Awar

d

High

Low


Filter 6 – Pre-AwardFilter 6 – Pre-AwardPre-Planning and Risk MinimizationPre-Planning and Risk Minimization

W W W . P B S R G . C O M 53



Pre Planningand

Risk Management


Expectation


W W W . P B S R G . C O M 54

Filter 1Past


Filter 2Current

Capability



Filter 5Cost

Reasonableness

Filter 6Pre-

Planning & Risk Min

Time

Qua

lity

of V

endo

rs

Filter 3Interview

Key Personnel

Awar

d

High

Low

BV ProcessBV Process


No

n-D

eta

iled

No

n-D

eta

iled

No

n-D

eta

iled

No

n-D

eta

iled

De

taile

d

No

n-D

eta

iled

W W W . P B S R G . C O M 5555

Pre Award PeriodPre Award PeriodWhat is it / Why is it importantWhat is it / Why is it important

Period of time allotted to potential best value vendor (aka the Expert) to:

Present their project/service plan

Set a plan for its delivery / clarify that your proposal is accurate

Identify the risks and issues that could cause the plan to deviate Identify what you don’t know and when you will know it and how

the plan could change based upon what you discover Set plans to minimize those risks from occurring Address all the concerns and risks of the client

W W W . P B S R G . C O M 5656



Know how they are being successful and adding value (measurement) What metrics you will use and how you will report them What is the current baseline condition we are comparing against

Identify what you need from the client and have a plan for getting it

Have completely aligned expectations between all parties so everyone knows what is going to transpire and what they are supposed to do

W W W . P B S R G . C O M 5757



Coordinate the schedule

Write the contract in terms of performance information

Get contract signed


Pre Award PeriodSta

rt

Very High Level

Cost Verification

Included in Proposal

Excluded from Proposal

Major Assumptions

Major Client Risks/Concerns

High Level

Project Work Plan

Client Risks/Concerns

PA Schedule

Uncontrollable Risks

Response to all risks

Roles and Responsibilities

Value Added Ideas

Coordination

Review Functionality

Mid Level

Performance Reports / Metrics

Additional Documentation

Technical Details

Project Schedule

High level demos

PA Document

End

W W W . P B S R G . C O M 59

Pre Award DocumentPre Award Document(RM Plan)(RM Plan) The PA Document should contain the following:

1. Scope Clear and Detailed Project Scope (what is and what is not included) – Set

Baseline Expectation2. Risks

A list of Risks vendor does not control with plans to minimize Identified Risks List

A list of all client/user risks with plans to minimize & all vendor’s risks

3. Milestone schedule4. Coordination5. Client Action Item List6. Weekly Risk Report 7. Performance Metrics8. Fee9. Other: Agreed to Value Adding Options, Original Plans, Interview Minutes,

etc…

W W W . P B S R G . C O M 6060

Pre Award Summary Pre Award Summary MeetingMeeting Is not a “Q&A” meeting

All issues resolved All coordination complete All risks that are not in vendors control have been identified All value added options have been addressed

PA Meeting is to summarize all of the coordination that has been complete and walk through the PA Document

Upon successful completion of the PA Meeting, the client will make the award

W W W . P B S R G . C O M 61

Filter 1Past


Filter 2Current

Capability



Filter 5Cost


Filter 6Pre-

Planning & Risk Min

Time

Qua

lity

of V

endo

rs

Filter 3Interview

Key Personnel

Awar

d

High

Low


AWARDAWARD

W W W . P B S R G . C O M 62



Pre Planningand

Risk Management


Expectation


W W W . P B S R G . C O M 63

Filter 1Past


Filter 2Current

Capability



Filter 5Cost


Filter 6Pre-

Planning & Risk Min

Time

Qua

lity

of V

endo

rs

Filter 3Interview

Key Personnel

Awar

d

High

Low


Measure Risk & PerformanceMeasure Risk & PerformanceMeasurement of Deviation from the ExpectationMeasurement of Deviation from the ExpectationManagement by Risk MinimizationManagement by Risk Minimization

W W W . P B S R G . C O M 64

Weekly Reporting SystemWeekly Reporting System Excel Spreadsheet that tracks only unforeseen risks on a project

Client will setup and send to vendor once Award/NTP issued

Vendor must submit the report every week (Friday).

The final project rating will be impacted by the accuracy and timely submittal of the WRS

W W W . P B S R G . C O M65

Unforeseen Risks

PERFORMANCE SUMMARY• Vendor Performance• Client Performance• Individual Performance• Project Performance

RISK MANAGEMENT PLAN• Risk• Risk Minimization• Schedule

WEEKLY REPORT• Risk• Unforeseen Risks

METRICS• Time linked• Financial• Operational/Client Satisfac.• Environmental

Measurement of Deviation from the ExpectationMeasurement of Deviation from the ExpectationManagement by Risk MinimizationManagement by Risk Minimization


ExamplesExamples

EVIT - $20M GMP High School CMAR – Designer & CM/GC Selection

University of Idaho – Housing Management (Dorm Rooms) Software

DMV – ITD - $26M Software build

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W W W . P B S R G . C O M 67

Filter 1Past


Filter 2Current

Capability



Filter 5Cost


Filter 6Pre-

Planning & Risk Min

Time

Qua

lity

of V

endo

rs

Filter 3Interview

Key Personnel

Awar

d

High

Low


Post Project RatingPost Project Rating

Updating of PPI


Best Value Vendor CharacteristicsBest Value Vendor Characteristics

Preplans and Minimizes Risk on Each Initiative Has a plan and knows the risks to the plan Is transparent Communicates clearly Asks good questions, knows what they don’t know

Measures Performance and drives accountability

Uses Dominant Information to Differentiate themselves/show value added

Educates the Client and helps the client be a better client

Educates themselves and has a continually enhanced vision Holds themselves and the client accountable Their plan is aligned so that when they win, the client automatically wins

68


Best Value Client CharacteristicsBest Value Client Characteristics

Ensures their needs and concerns are known by the vendor Ensures the vendor has a plan that addresses each need/concern/risk Is a facilitator to the vendors development of the plan(s) Enforces the best value structure

Weekly risk reporting is being done Each risk is given a client satisfaction rating Measurements by vendor are being done Do not be pulled into making decisions you do not need to make

Educates themselves and the vendor Avoids reversion Transfers risk and control

Holds the vendor and themselves accountable Ensures the plan is aligned so they win and the vendor wins

69

W W W . P B S R G . C O M 70

City of Peoria, AZCity of Peoria, AZResultsResults Number of Best-Value Procurements: 65

Estimated Budget: $586 Million (DB/CMAR/JOC) (Wastewater, Office Buildings, Fire Station, Parks, Roadway) (AE Services, Radio, Maintenance, Software)

Average Number of Proposals per Project: 6

Number of Completed Projects: 10 ($193 Million) Overall C/O Rate: 0.01% (compared to 7%) Final Results: 100% Satisfaction Final Results: 9.1 Rating (10 max)

5 Projects where money returned

W W W . P B S R G . C O M 71

Rio Vista ProjectRio Vista ProjectNO SUMMARY OF INFORMATION FIRM A FIRM B FIRM C FIRM D FIRM E FIRM G FIRM H

1 Schedule (Days) 598 730 923 587 478 850 630

2 Risk Assessment Plan Rating 7.3 7.3 2.9 5.3 4.4 5.9 6.5

3 DB Firm Performance Ratings (1-10) 9.9 9.8 9.4 9.2 9.6 9.4 9.5

4 DB Firm Number of Surveys (#) 25 26 5 2 25 9 17

5 Project Manager Performance Ratings (1-10) 10.0 9.8 8.4 9.2 9.5 7.5 9.7

6 Project Manager Number of Surveys (#) 11 15 3 2 3 1 5

7 Site Superintendent Performance Ratings (1-10) 9.9 10.0 9.9 9.1 9.5 5.0 9.4

8 Site Superintendent Number of Surveys (#) 7 1 3 1 2 1 2

11 Lead Architect Performance Ratings (1-10) 9.5 9.5 9.4 8.1 9.8 9.4 9.6

12 Lead Architect Number of Surveys (#) 18 6 5 1 7 8 4

13 Estimator Performance Ratings (1-10) 10.0 9.6 9.5 5.0 9.9 5.0 9.6

14 Estimator Number of Surveys (#) 15 10 3 1 2 1 5

15 Landscaping Designer Ratings (1-10) 9.1 9.2 5.0 9.8 9.5 9.5 8.7

16 Landscaping Designer Surveys (#) 13 19 1 5 11 6 2

17 Landscaping Contractor Ratings (1-10) 10.0 9.0 9.5 7.6 9.9 5.0 9.5

18 Landscaping Contractor Surveys (#) 11 18 6 3 3 1 6

NO SUMMARY OF INFORMATION FIRM A FIRM B FIRM C FIRM D FIRM E FIRM G FIRM H

1 Schedule (Days) 598 730 923 587 478 850 630

2 Risk Assessment Plan Rating 7.3 7.3 2.9 5.3 4.4 5.9 6.5

3 DB Firm Performance Ratings (1-10) 9.9 9.8 9.4 9.2 9.6 9.4 9.5

4 DB Firm Number of Surveys (#) 25 26 5 2 25 9 17

5 Project Manager Performance Ratings (1-10) 10.0 9.8 8.4 9.2 9.5 7.5 9.7

6 Project Manager Number of Surveys (#) 11 15 3 2 3 1 5

7 Site Superintendent Performance Ratings (1-10) 9.9 10.0 9.9 9.1 9.5 5.0 9.4

8 Site Superintendent Number of Surveys (#) 7 1 3 1 2 1 2

11 Lead Architect Performance Ratings (1-10) 9.5 9.5 9.4 8.1 9.8 9.4 9.6

12 Lead Architect Number of Surveys (#) 18 6 5 1 7 8 4

13 Estimator Performance Ratings (1-10) 10.0 9.6 9.5 5.0 9.9 5.0 9.6

14 Estimator Number of Surveys (#) 15 10 3 1 2 1 5

15 Landscaping Designer Ratings (1-10) 9.1 9.2 5.0 9.8 9.5 9.5 8.7

16 Landscaping Designer Surveys (#) 13 19 1 5 11 6 2

17 Landscaping Contractor Ratings (1-10) 10.0 9.0 9.5 7.6 9.9 5.0 9.5

18 Landscaping Contractor Surveys (#) 11 18 6 3 3 1 6

W W W . P B S R G . C O M 72

ResultsResults

Top Award 2007 Gold Award2007 Gold Award

for

Project LeadershipRio Vista Recreation Center

W W W . P B S R G . C O M 7373

Model Ranking: 90% 87% 89%NO CRITERIA FIRM C1 FIRM C2 FIRM C3

1 Interview Rating 7.9 6.4 7.4

2 RAVA Plan Rating 6.5 5.7 6.3

3 PPI - GC Firm (1-10) 9.6 9.9 9.5

4 PPI - GC Firm (Surveys) 18 12 13

5 PPI - Key Individuals (1-10) 9.4 9.6 9.4

6 PPI - Key Individuals (Surveys) 5 7 6

Model Ranking: 29% 76% 22% 98%NO CRITERIA FIRM D1 FIRM D2 FIRM D3 FIRM D4

1 Interview Rating 5.9 7.0 6.7 8.2

2 RAVA Plan Rating 6.5 5.2 5.5 6.9

3 PPI - Design Firm (1-10) 9.8 9.8 9.3 9.5

4 PPI - Design Firm (Surveys) 23 17 6 17

5 PPI - Lead Architect (1-10) 9.8 9.8 9.5 9.5

6 PPI - Lead Architect (Surveys) 10 9 4 10

7 PPI - Mechanical Engineer (1-10) 9.8 9.6 9.0 9.8

8 PPI - Mechanical Engineer (Surveys) 5 1 3 9

9 PPI - Electrical Engineer (1-10) 1.0 9.4 1.0 9.8

10 PPI - Electrical Engineer (Surveys) 1 2 1 6

Fire Station 7Fire Station 7

“Gold Medal Design Excellence” (Fire Chief Magazine – 2007)

“Design Excellence Merit Award” (Fire Rescue Magazine – 2007)

Masonry Guild Design Excellence Award - 2008


74

City of Peoria AZ ResultsCity of Peoria AZ ResultsCriteria Low Bid Best Value Difference % Change

Number of Projects 38 9 NA NA

Awarded Cost $74,181,566 $187,935,047 NA NA

Actual Cost $79,315,696 $188,683,729 NA NA

Average % Over Budget 7% 0.4% -6.5% -94%

Average Change Order % 14% 0.5% -13.5% -96%

% Projects On Budget (Yes/No) 3% 66% 63% 2100%

Awarded Duration (Days) 6016 3792 NA NA

Actual Duration (Days) 8135 4013 NA NA

Average % Delay 35% 6% -29.4% -83%

% Projects On Time (Yes/No) 37% 44% 7% 19%

Owner Satisfaction 20% 93% 73% 365%


Overview of SHIP Test Overview of SHIP Test ObjectivesObjectives Establish contract with SHIP provider for college students in Idaho

BSU Objectives: Maximize value (performance and cost) of SHIP Have an environment of risk minimization and performance

measurement Minimize client effort in selection and management Minimize decision making Education of PIPS Measurement of differential

BSU would like to create a “consortium” of universities/colleges in Idaho for a single SHIP contract

75


DeliverablesDeliverables Major project deliverables include:

1. Set and Educate Project core team and2. Set BSU Strategic Plan3. Capture current level of performance and cost

Plan providers Cost structure Program structure and details Identify differentials, gaps, and overlaps

4. Create RFP5. Educate Vendors6. Run Selection and Interviews7. Run Pre-Planning and Risk Management8. Award & Transition9. Establish and maintain measurement system

76

W W W . P B S R G . C O M State of Idah

o

OverviewOverview Create a statewide Student Health Insurance Plan (SHIP) consortium Create a statewide Student Health Insurance Plan (SHIP) consortium

Boise State University (BSU)Boise State University (BSU) Idaho State University (ISU)Idaho State University (ISU) Lewis-Clark State College (LCSC)Lewis-Clark State College (LCSC)

3-Year Contract | $36 Million3-Year Contract | $36 Million

Measurements of SuccessMeasurements of Success1.1. Reduce internal University program administration costsReduce internal University program administration costs2.2. Maintain or increase Customer Satisfaction (University & Students)Maintain or increase Customer Satisfaction (University & Students)3.3. Maintain or increase cost-effectiveness of program to studentsMaintain or increase cost-effectiveness of program to students


o

What Should We Include In What Should We Include In RFP?RFP? Request For Information (RFI)

General request to vendors Ask vendors what information they need to see in the RFP to create

and provide an accurate proposal Has no contractual implications, just providing information to the

client

Filter 1Past


Filter 2Proposal & RAVA Plan

Filter 4Prioritize (Identify

Best Value)

Filter 5Pre-Award

Phase (Pre-Plan)

Filter 6Weekly

Report &Post-Rating

Time

Qua

lity

of V

endo

rs

Filter 3Interview

High

Low

RFI RFP


o

Selection Criteria & WeightsSelection Criteria & Weights Responding contractors were evaluated on:Responding contractors were evaluated on:

Premiums (Student, Spouse, Dependents) Premiums (Student, Spouse, Dependents) (200 Points)(200 Points)

Interviews Interviews (350 Points)(350 Points) Program Administrator Program Administrator Claims Administrator Claims Administrator Waiver Administrator Waiver Administrator Data Base Manager Data Base Manager Marketing Manager Marketing Manager

Risk Assessment and Value Added (RAVA) plan Risk Assessment and Value Added (RAVA) plan (250 Points)(250 Points) Risk Assessment – ability to identify and minimize potential risk unique to this projectRisk Assessment – ability to identify and minimize potential risk unique to this project Value Added Option – ability to add value to the project in terms of time, money or qualityValue Added Option – ability to add value to the project in terms of time, money or quality

Scope Plan Scope Plan (50 Points)(50 Points) Concise synopsis of the work that will be performed (major tasks, steps, or work packages). Concise synopsis of the work that will be performed (major tasks, steps, or work packages). Vendors impression of how they will achieve the objectives of the consortium Vendors impression of how they will achieve the objectives of the consortium

Past Performance Information Past Performance Information (150 Points)(150 Points) FirmFirm Program AdministratorProgram Administrator


o

80

Filter 1Past


Filter 2Proposal & RAVA Plan

Filter 4Prioritize (Identify

Best Value)

Filter 5Pre-Award

Phase (Pre-Plan)

Filter 6Weekly

Report &Post-

Rating

Time

Qualit

y o

f V

endors

Filter 3Interview

High

Low

Summary of Proposal Summary of Proposal SubmittalSubmittal

Proposal Includes:1) Cost/Financial Information2) Risk Plans (3)3) Scope Plan (2)4) PPI


o

Coverage/Plan Coverage/Plan CharacteristicsCharacteristics

Consortium goal was to standardize coverage between all three University's Consortium goal was to standardize coverage between all three University's (to maximum extent possible). However, deviations were made as necessary (to maximum extent possible). However, deviations were made as necessary (BSU athletic coverage, ISU RX Coverage, Capitated Fee, etc)(BSU athletic coverage, ISU RX Coverage, Capitated Fee, etc)

Consortium goal was to increase plan characteristics (to provide better Consortium goal was to increase plan characteristics (to provide better coverage for students)coverage for students)

NO CRITERIA BSU ISU LCSC CONSORTIUM

1 Deductible Per Academic Year (In-Network) $250 $250 $250 $250

2 Deductible Per Academic Year (Out-Of-Network) $500 $250 $250 $500

3 Maximum Benefit (Standard) $100,000 $50,000 $50,000 $250,000

4 In-Network Coinsurance 80% 80% 80% 80%

5 In-Network Max out of Pocket $4,000 No MOP No MOP $4,000

6 Out-Of-Network Coinsurance 50% 60% 80% 60%

7 Out-Of-Network Max out of Pocket $6,000 No MOP No MOP $6,000

8 RX Drug Coverage (Max) $400 None $500 $500*


o

SHIP AnalysisSHIP AnalysisNO CRITERIA

DETAILED WEIGHTS

FIRM A FIRM C FIRM D FIRM E FIRM F

1 Cost - Overall Annual Cost to Consortium 50 $12,237,529 $11,051,451 $11,437,893 $12,928,466 $13,063,2352 Cost - BSU Annual Student Premium (per-student per-year cost): 38 $1,772 $1,552 $1,685 $1,806 $1,9143 Cost - BSU Annual Spouse Premium (per-individual per-year cost): 6 $2,200 $3,992 $2,865 $3,066 $3,2484 Cost - BSU Annual Dependent Premium (per-individual per-year cost): 6 $1,886 $2,249 $2,444 $2,124 $3,6165 Cost - ISU Annual Student Premium (per-student per-year cost): 38 $1,267 $1,185 $1,113 $1,394 $1,2596 Cost - ISU Annual Spouse Premium (per-individual per-year cost): 6 $1,660 $3,048 $2,827 $2,937 $3,6277 Cost - ISU Annual Dependent Premium (per-individual per-year cost): 6 $1,424 $1,717 $1,209 $2,038 $1,5518 Cost - LCSC Annual Student Premium (per-student per-year cost): 38 $1,228 $1,244 $1,298 $1,484 $1,6159 Cost - LCSC Annual Spouse Premium (per-individual per-year cost): 6 $1,626 $3,200 $3,300 $3,066 $2,222

10 Cost - LCSC Annual Dependent Premium (per-individual per-year cost): 6 $1,394 $1,803 $1,411 $2,124 $2,31011 Interview Rating - The Program Administrator 175 6.7 7.7 7.1 7.4 7.412 Interview Rating - The Claims Administrator 70 6.6 6.1 4.6 5.3 8.313 Interview Rating - The Waiver Administrator 35 5.8 7.6 5.4 6.0 6.014 Interview Rating - The Data Base Manager 35 5.2 5.0 3.9 4.6 4.615 Interview Rating - The Marketing Manager 35 7.8 6.4 5.0 8.1 8.117 RAVA Plan Rating 250 7.42 6.25 7.42 5.58 5.1718 Work Plan Rating 50 6.67 7.17 6.33 5.50 5.5819 PPI - Firm - Satisfaction with the associated costs of the service 14 9.7 9.1 9.9 10.0 10.020 PPI - Firm - Satisfaction with the benefits provided by the service 14 9.9 9.5 10.0 10.0 10.021 PPI - Firm - Ability to manage the service / program 14 9.9 9.8 10.0 10.0 10.022 PPI - Firm - Ability to document and provide accurate reports 14 9.8 9.9 9.9 10.0 10.023 PPI - Firm - Overall customer satisfaction 14 10.0 9.8 9.8 10.0 10.024 PPI - Firm - Number of different projects 14 10.0 20.0 9.0 10.0 10.025 PPI - Firm - Number of different customer responses 14 10.0 20.0 9.0 10.0 10.026 PPI - Administrator - Satisfaction with the associated costs of the service 7 9.7 10.0 9.8 10.0 10.027 PPI - Administrator - Satisfaction with the benefits provided by the service 7 9.9 10.0 9.9 10.0 10.028 PPI - Administrator - Ability to manage the service / program 7 9.9 10.0 9.9 10.0 10.029 PPI - Administrator - Ability to document and provide accurate reports 7 9.8 10.0 9.7 10.0 10.030 PPI - Administrator - Overall customer satisfaction 7 10.0 10.0 9.7 10.0 10.031 PPI - Administrator - Number of different projects 7 10 10 10 10 1032 PPI - Administrator - Number of different customer responses 7 10 10 10 10 10


o

Analysis of ProposalsAnalysis of Proposals

Total Score: 923 916 886 831 840

NO CRITERIA FIRM A FIRM C FIRM D FIRM E FIRM F

1 Cost - Average Student Premium $1,422 $1,327 $1,365 $1,561 $1,596

2 Cost - Average Spouse & Dependent Premium $1,698 $2,668 $2,343 $2,559 $2,762

3 Average Interview Rating 6.4 6.6 5.2 6.3 6.9

4 RAVA Plan Rating 7.4 6.3 7.4 5.6 5.2

5 Work Plan Rating 6.7 7.2 6.3 5.5 5.6

6 PPI - 1-10 Rating 9.9 9.7 9.9 10.0 10.0

7 PPI - Number of projects and clients 10 17 9 10 10


o

Overall Best-Value ResultsOverall Best-Value Results

Best-Value Results:Best-Value Results: Student Premium has Student Premium has decreaseddecreased by by 2%2% (-$26) (-$26) Spouse & Dependent Premium has Spouse & Dependent Premium has decreaseddecreased by by 19%19% (-$519) (-$519) In general, Benefits/Coverage have been increasedIn general, Benefits/Coverage have been increased

School Premiums 2006-2007 2007-2008 2008-2009 2009-2010Average

Increase Per Year ($)

Average Increase Per

Year (%)Student $1,012 $1,182 $1,263 $1,385 $124 11%

Spouse & Dependent $1,843 $2,022 $2,104 $2,220 $126 6%

• Previous Program:Previous Program:– Student Premiums increased $124/year (past 4 years)Student Premiums increased $124/year (past 4 years)– Spouse & Dependent Premiums increased $126/yearSpouse & Dependent Premiums increased $126/year


Case Study: ASUFood Services Contract

No Summary Criteria ScaleFirm A

(Incumbent)Firm B Firm C

1 RAVA Plan (1-10) 5.9 7.1 6.32 Transition Milestone Schedule (1-10) 5.2 7.0 6.33 Interview (1-25) 15.8 16.8 13.54 Past Performance Information - Survey (1-10) 9.8 10.0 9.85 Past Performance Information - #/Clients Raw # 5.7 3.0 4.46 Past Performance Information - Financial (1-10) 7.0 8.7 6.97 Financial Rating (1-10) 4.0 8.0 8.08 Financial Return - Commissions Raw $ 30,254,170$ 60,137,588$ 64,000,000$ 9 Capital Investment Plan Raw $ 14,750,000$ 20,525,000$ 12,340,000$

10 Equipment Replacement Reserve Raw $ 7,213,342$ 4,100,001$ 8,171,811$ 52,217,512$ 84,762,589$ 84,511,811$ Finanical Totals

No Summary Criteria ScaleFirm A

(Incumbent)Firm B Firm C

1 RAVA Plan (1-10) 5.9 7.1 6.32 Transition Milestone Schedule (1-10) 5.2 7.0 6.33 Interview (1-25) 15.8 16.8 13.54 Past Performance Information - Survey (1-10) 9.8 10.0 9.85 Past Performance Information - #/Clients Raw # 5.7 3.0 4.46 Past Performance Information - Financial (1-10) 7.0 8.7 6.97 Financial Rating (1-10) 4.0 8.0 8.08 Financial Return - Commissions Raw $ 30,254,170$ 60,137,588$ 64,000,000$ 9 Capital Investment Plan Raw $ 14,750,000$ 20,525,000$ 12,340,000$

10 Equipment Replacement Reserve Raw $ 7,213,342$ 4,100,001$ 8,171,811$ 52,217,512$ 84,762,589$ 84,511,811$ Finanical Totals

$32 Million Dollars (Over 10 Years)


After 1 Year: Monitoring Based on Measurements Increase sale of food by 14% Increased cash to ASU by 23% Minimized management cost by 80% Increased customer satisfaction by 37% Increased capital investment by 100%

1 Total Revenue ($M) 27.02$ 30.83$ 3.81$ 14%

2 Total Return & Commissions ($M) 2.17$ 2.67$ 0.50$ 23%

3 Captial Investment Contract ($M) 14.75$ 30.83$ 18.08$ 109%

4 Captial Investment 2006 vs. 2007 ($M) 0.26$ 5.70$ 5.44$ 2092%

5 ASU Administration (# of People) 7 1.5 -5.5 -79%

6 Customer (Student) Satisfaction (1-10) 5.2 7.1 1.9 37%

7 Myster Shopper Satisfaction N/A 9.6 -- --

CategoryNoFY 06-07

IncumbentFY 07-08

New VendorDifference % Difference


Performance Metrics – Combined ASU

FY 2010

No Category

YTD Prior Year - ADJUSTED wk 6

Sep YTD Actual YTD BudgetVar Act. vs

PYVar Act. vs

PY %Var Act. vs

BudgetVar Act. Vs Budget %

1 Mandatory Meal Plan Sales - Meals ($K) (Meal Swipes) 7,914.4$ 14,609.2$ 12,531.2$ 6,694.8$ 84.6% 2,078.0$ 16.6%

2 Voluntary Meal Plan Sales - Meals($K) (Meal Swipes) 390.5$ 372.4$ 264.7$ (18.1)$ -4.6% 107.7$ 40.7%

3 Retail Sales ($K) (Sun $, M&G Vol, M&G Mandatory and Cash & Credit Cards)16,756.8$ 17,656.1$ 22,697.4$ 899.2$ 5.4% (5,041.3)$ -22.2%

4 Catering Sales ($K) 2,475.5$ 2,502.0$ 2,733.4$ 26.5$ 1.1% (231.4)$ -8.5%

5 Camp/Conference Sales ($K) 865.2$ 822.1$ 648.9$ (43.1)$ -5.0% 173.2$ 26.7%

6 All Other Sales (Subcontractors & Sushi) ($K) 3,703.3$ 3,793.8$ 5,169.6$ 90.5$ 2.4% (1,375.8)$ -26.6%

7 TOTAL REVENUE 32,105.7$ 39,755.5$ 44,045.1$ 7,649.8$ 23.8% (4,289.6)$ -9.7%

8 Commissions on Total Revenue ($K) 2,011.2$ 2,413.2$ 2,673.5$ 402.0$ 20.0% (260.4)$ -9.7%

9 Subsidy - DPC, West & Polytechnic ($K) 1,202.3$ 604.6$ 1,157.6$ (597.7)$ -49.7% (553.0)$ -47.8%

10Commissions Paid to ASU ($K) (Commission on Total Revenue less Subsidy) 803.7$ 1,808.5$ 1,515.9$ 1,004.9$ 125.0% 292.6$ 19.3%11 Commission % 6.07% 6.07% 6.07%

No Category YTD Prior Year YTD ActualYTD

BudgetActual vs

PYVar Act. vs PY %

Var Act. vs Budget

Var Act. Vs

Budget %

1 Number of Mandatory Meal Plans Sold 6,133 7,573 7,843 1,455 23.6% -229 -2.9%

2 Number of Voluntary Meal Plans Sold 2,882 4,056 2,215 1,174 40.7% 1841 83.1%

Financial Performance Metrics

Performance Metrics


ASU Dining Performance ASU Dining Performance SummarySummary

W W W . P B S R G . C O M 8989

U of MN ObjectivesU of MN Objectives The UMN has a goal to be recognized as a top research institution in the world

In 2005, CPPM partnered with the PBSRG (ASU) to implement the PIPS Best Value Process

CPPM’s Objectives of the Best-Value Program are to: Contract to high performers Respond faster to customer needs Increase performance (on time, on budget, high quality)

Increase efficiency of procurement (spend taxpayers money more efficient)

Create a fair and open process for all vendors

W W W . P B S R G . C O M 90

CPPM Strategic Plan CPPM Strategic Plan First organization to establish and follow a Strategic Plan

Ultimate Goal: CPPM take over entire program and is successful in implementing and sustaining the program. Year 1 – Pilot Testing Year 2 – Evaluation and Continued Testing Year 3 – Expansion Year 4 – Expansion Year 5 – Infusion & Transition Year 6 – Transition

W W W . P B S R G . C O M 91

CPPM Strategic Plan CPPM Strategic Plan Year 1 Identify and educate core group Identify qualified vendors Implement best-value Analyze pilot projects

Year 2 Continue testing best-value Evaluate core group and refine Expand test to different trades (General

Construction) Educate more internal CPPM staff Implement a weekly project tracking

system Refine list of qualified vendors Educate and debrief qualified vendors on

initial project results

Year 3 Allow other CPPM personnel to test Automated online Directors Report Monitor all CPPM projects (LB & BV) Expand testing (A/E Services) Identify performance of UMN PM’s,

Procurement, other critical areas, etc. Train CPPM on all BV components

Year 4 CPPM acquire and perform all best-value

functions (educate and train) PBSRG assist on areas of weakness CPPM handle analysis and tracking of all

weekly reports Implement best-value on a larger scale Educate other UMN groups (Energy,

Zones, Permitting, Codes, ect)

W W W . P B S R G . C O M 92

No Activity Year 1 Year 2 Year 3 Year 4 Year 5 Year 6

1 Education / Training / Debriefing 0% 0% 25% 50% 75% 100%

2 Data Collection (PPI) on Vendors 0% 0% 0% 0% 0% 0%

3 Proposal Analysis / Review / Rating 0% 25% 75% 75% 100% 100%

4 Modeling / Identification of Best-Value 0% 0% 0% 25% 50% 100%

5 Weekly Risk Reporting System 0% 0% 25% 25% 75% 100%

6 Directors Reporting 0% 0% 0% 0% 0% 100%

7 Documentation and Analysis 0% 0% 0% 25% 50% 75%

8 Modification / Evolution / Updating 0% 0% 0% 0% 0% 0%

Transitional PlanTransitional Plan

W W W . P B S R G . C O M 93

Award Analysis: Number of Best-Value Procurements: 161 Awarded Cost: $50.6M (11% below average cost) Average Number of Proposals: 4 Projects Where Best-Value was also Lowest Cost: 53% 85% of projects were awarded to vendor with highest / second highest

RAVA Plan (7.3 vs 5.9)

Performance Information: Contractor Impacts: 0% Change Orders / 4% Delay Vendor post project rating: 9.6 Average Contractor Increase in Profit: 5%

Current Construction Current Construction ResultsResults

W W W . P B S R G . C O M 94

PM 1 PM 2 PM 3 PM 4

Procurement Officer 1 Procurement Officer 2

Director

Contractor 1

Contractor 2

Contractor 3

Contractor 4

Contractor 3

Contractor 6

Contractor 1

Contractor 8

Contractor 9

Contractor 7

Contractor 7

Contractor 2

Contractor 4

Contractor 8

Contractor 9

Contractor 2

Program ReportProgram Report

Director 1 Director 2

PM 1 PM 2 PM 3 PM 4

Vice President

W W W . P B S R G . C O M 95

Report – Overall ProgramReport – Overall Program

W W W . P B S R G . C O M 96

Report - DirectorsReport - Directors

W W W . P B S R G . C O M 97

Report - End UsersReport - End Users TEAM 1

(President / University / Admin)

TEAM 2Academic Health

Center

TEAM 3Provost College

1 Total Number of Projects 19 14 52 Percent of Projects Procured Using PIPS 79% 86% 80%3 Total Awarded Cost: $5,359,995 $2,821,005 $2,353,7614 Average Number of Risks per Project 3 8 12

5 Overall Owner Impacts (Time & Cost) 7.7% 41.3% 41.1%6 Owner Change Order Rate 0.6% 3.4% 20.0%7 Owner Delay Rate 7.2% 37.8% 21.1%8 Percent of Projects without Owner Cost Changes 63% 36% 80%9 Percent of Projects without Owner Delays 68% 50% 80%

10 Overall Contractor Impacts (Time & Cost) 8.1% 19.6% 14.8%11 Contractor Change Order Rate 0.1% 0.1% -0.8%12 Contractor Delay Rate 8.0% 19.6% 15.6%13 Percent of Projects without Contractor Cost Changes 95% 93% 100%14 Percent of Projects without Contractor Delays 79% 79% 60%

15 Total Number of Completed Projects 4 2 116 Total Number of Client Surveys Returned 3 2 117 Percent of Projects Evaluated by Client 75% 100% 100%18 Average PM Post Project Rating of Contractor 6.75 10 1019 Average Client Post Project Rating of Contractor 7.7 8.5 8.020 Average Client Post Project Rating of CPPM 10.7 8.5 7.0

Contractor Impacts

Owner Impacts

Satisfaction Ratings

General Overview

W W W . P B S R G . C O M 98

Report – Internal PM’sReport – Internal PM’s

W W W . P B S R G . C O M 99

Report - ContractorsReport - Contractors

No ContractorTotal

Number of Projects

Total Awarded Cost:

Owner Change Order Rate

Owner Delay Rate

Vendor Change Order Rate

Vendor Delay Rate

Percent of Late Reports

Vendor Performance

1 Contractor 118 3 $ 721,965 0.3% 18.1% 0.2% 66.8% 53% 120%2 Contractor 119 3 $ 220,002 0.7% 10.4% 0.0% 0.0% 69% 69%3 Contractor 120 1 $ 269,850 9.4% 303.0% 0.0% 18.2% 47% 65%4 Contractor 104 3 $ 459,225 1.6% 2.7% 0.0% 18.8% 37% 56%5 Contractor 121 1 $ 241,575 0.0% 21.9% 2.7% 50.0% 0% 53%6 Contractor 105 8 $ 1,611,015 0.3% 32.9% 0.0% 16.3% 32% 49%7 Contractor 106 9 $ 1,280,362 2.2% 31.1% 0.7% 3.2% 35% 39%8 Contractor 122 3 $ 367,650 0.0% 79.1% 0.0% 1.4% 37% 38%9 Contractor 107 1 $ 178,440 0.0% 0.0% 0.6% 11.4% 25% 37%

10 Contractor 123 2 $ 3,227,182 14.9% 0.0% -0.6% 5.4% 30% 35%11 Contractor 108 2 $ 327,295 0.0% 135.4% 0.0% 0.0% 32% 32%12 Contractor 124 1 $ 69,218 3.5% 0.0% 0.0% 0.0% 31% 31%13 Contractor 125 3 $ 1,150,738 1.9% 7.3% 0.0% 4.2% 26% 30%14 Contractor 109 5 $ 534,095 2.0% 23.2% 0.0% 0.0% 29% 29%15 Contractor 126 1 $ 323,000 3.3% 3.4% 0.0% 6.8% 22% 29%16 Contractor 110 1 $ 308,882 1.2% 24.8% 0.0% 0.0% 27% 27%17 Contractor 127 7 $ 1,793,355 3.8% 13.6% 0.0% 0.0% 26% 26%18 Contractor 128 4 $ 2,956,800 1.3% 1.7% 0.0% 12.2% 11% 23%19 Contractor 129 6 $ 1,319,789 2.2% 16.2% 0.0% 11.0% 9% 21%20 Contractor 111 4 $ 1,096,707 0.1% 0.0% 0.0% 9.8% 10% 19%21 Contractor 112 1 $ 446,100 0.0% 6.9% 0.0% 0.0% 15% 15%22 Contractor 113 3 $ 552,815 5.1% 29.4% 0.0% 7.0% 8% 15%23 Contractor 114 2 $ 1,841,157 13.0% 215.8% 0.0% 0.0% 13% 13%24 Contractor 130 4 $ 795,791 0.8% 0.0% 0.0% 0.0% 12% 12%25 Contractor 101 4 $ 322,400 0.0% 0.0% 0.0% 0.0% 8% 8%26 Contractor 115 3 $ 753,660 10.9% 54.7% 0.0% 0.0% 7% 7%27 Contractor 102 1 $ 14,150 0.0% 0.0% 0.0% 0.0% 0% 0%28 Contractor 116 1 $ 109,710 0.0% 0.0% 0.0% 0.0% 0% 0%

W W W . P B S R G . C O M 100

Report – Yearly AnalysisReport – Yearly Analysis

W W W . P B S R G . C O M 101

Report – Top 10 Riskiest Report – Top 10 Riskiest ProjectsProjects

No Project Awarded CostAwarded Duration

Overall Change Order Rate

Overall Delay Rate

Percent of Late Reports

Risk Analysis Factor

PM Director

1 Mayo Remodel Suite A652 $ 269,850 66 9% 321% 47% 377% Wycliffe Waganda Gary Summerville

2 Barn Clean Renovations $ 269,000 80 2% 166% 60% 229% Wycliffe Waganda Justin Grussing

3 WBOB Remodel Suite 150 $ 273,100 99 1% 96% 37% 134% Pete Nickel Gary Summerville

4 Vet Sciences Third Floor $ 96,930 49 3% 86% 28% 116% Pete Nickel Gary Summerville

5Weaver Densford College of Pharmacy

$ 90,862 28 2% 25% 80% 107% Pete Nickel Gary Summerville

6 PWB Remodel Suite 6-240 $ 127,338 82 17% 23% 64% 104% Steve Bailey Gary Summerville

7 PWB Room 7-158B $ 46,504 30 0% 0% 100% 100% Pete Nickel Gary Summerville

8Oak Street Parking Surveillance

$ 246,802 74 0% 0% 100% 100% George Mahowald Justin Grussing

9 Snyder Bldg Exterior Door $ 219,000 121 -4% 81% 22% 100% Wycliffe Waganda Justin Grussing

10 Heller Hall Renovation $ 1,593,561 254 29% 0% 50% 79% Matt Stringfellow Justin Grussing

W W W . P B S R G . C O M 102

Report – Analysis of RisksReport – Analysis of Risks

Risk CategoryNumber of

RisksImpact to

CostImpact to Schedule

Percent Impact to

Cost

Percent Impact to Schedule

1) Client Impacts 114 $660,369 1,200 59% 46%Client Scope Change / Decision 111 660,369$ 976 59% 37%

Client Requested Delay 3 -$ 224 0% 9%

2) CPPM Impacts 135 $329,425 885 30% 34%Design Issue 48 189,876$ 230 17% 9%

CPPM Issue (Codes / Permits) 36 46,140$ 170 4% 7%

CPPM Issue (Energy Mgmt) 2 47,533$ 30 4% 1%

CPPM Issue (Hazardous / Health & Safety) 8 35,407$ 118 3% 5%

CPPM Issue (NTS) 8 10,018$ 64 1% 2%

CPPM Issue (Contract / Payment) 11 -$ 132 0% 5%

CPPM Issue (Other) 22 451$ 141 0% 5%

3) Contractor Impacts 43 $21,005 411 2% 16%Contractor Issue 11 -$ 101 0% 4%

Contractor Oversight of Design 9 21,005$ 38 2% 1%

Contractor Issue with Supplier / Sub 23 -$ 272 0% 10%

4) Unforeseen Impacts 19 $102,544 111 9% 4%311 1,113,343$ 2,607


Research from Contractor DelaysResearch from Contractor Delays

Contractor Risks %

Delivery of Materials Delayed 28%

Installation errors 26%

Incorrect material ordered or delivered 11%

Alteration of installation needed 9%

Manufacture didn't have sufficient materials 9%

Misunderstanding of Construction Documents 6%

Door Frames incorrect size 4%

Soil compaction 2%

103

52% of risks due to errors in materials delivered

W W W . P B S R G . C O M 104

Comments / QuestionsComments / Questions
