Ladder of Success

Construction Owner Reps, with Steve Cooper

October 07, 2019 Bailey @ BuffaloConsults
Ladder of Success
Construction Owner Reps, with Steve Cooper
Chapters
0:00
Intro
0:43
How Does an Owner's Rep Work?
1:50
Importance During Pre-Construction
3:39
Intensity of Management
5:31
Improving the Odds of Success
7:22
Debunking Value Engineering
9:35
Trust Between Contractor and Owner
15:02
To Hire an Owner's Rep or Not
Ladder of Success
Construction Owner Reps, with Steve Cooper
Oct 07, 2019
Bailey @ BuffaloConsults

Over the past 12 years I have worked mainly with construction professionals, but there was a two-year stretch in there where I was a representative on simultaneous projects in which the owners were located in Europe.  Representatives act in the interests of the project owner, but contractors can also benefit from their presence.

Steve Cooper, with Cooper Project Advisors in Oklahoma City, is one who specializes in the role of representing the owner during the construction process.  Rather than consider him as a competitor, I reached out to him for this podcast so that he can help shed some light on what project owners want and need, based on his 34 years of experience.

Whether you're a project owner wanting to understand the benefits of the cost of hiring a representative, or a contractor wondering why the owner has a representative closely associated with a project, you can learn something from the following 20 minutes.

Thanks for listening.

As always, let me know via [email protected] if there is any particular topic you would like to hear some insights on.

Show Notes Transcript Chapter Markers

Over the past 12 years I have worked mainly with construction professionals, but there was a two-year stretch in there where I was a representative on simultaneous projects in which the owners were located in Europe.  Representatives act in the interests of the project owner, but contractors can also benefit from their presence.

Steve Cooper, with Cooper Project Advisors in Oklahoma City, is one who specializes in the role of representing the owner during the construction process.  Rather than consider him as a competitor, I reached out to him for this podcast so that he can help shed some light on what project owners want and need, based on his 34 years of experience.

Whether you're a project owner wanting to understand the benefits of the cost of hiring a representative, or a contractor wondering why the owner has a representative closely associated with a project, you can learn something from the following 20 minutes.

Thanks for listening.

As always, let me know via [email protected] if there is any particular topic you would like to hear some insights on.

Bailey:

Well, this particular podcast was fun to do because my guest is local, so we did the interview in person. In a way I could consider him a competitor of the project-related side of what I do, but that being said, he has so much experience that it would be a disservice not to interview him and get some thoughts on a few topics. Our main focus today is on his work as an owner's representative and that is to say he is the advisor to construction project owners. His co mpany's n ame is Cooper project advisors. They're located here in beautiful Oklahoma city. So without wasting time, I'm going to jump over to the recorded interview. Thanks for listening, you're awesome, and I hope you learned something. Enjoy. Alright, talking to Steve Cooper with Cooper Project Advisors in Oklahoma City. Steve let's start out with, let's go to the marketing yourself first. What is your company do, Cooper Project Advisors, overall and as far as helping project owners?

Steve:

Well, so we are what I like to refer to as owner's representatives. A l ot of people refer to it as maybe program management or project management, but I like owner's rep because I think that moves us a little bit to a higher level than just managing a project. We are trying to represent the owner as they go out into the world, and engage all of the people it takes to make a construction project happen. It's not just about what happens on sit e on ce construction begins, but how do we, select, engage with, contract with architects, engineers, all th e consultants that are required. How do we bring a co n tractor onto the team? When do we bring a con t ractor onto the team, and how do we build that team so that it can best position itself to deliver an effective and successful proje cts to t he client.

Bailey:

Interesting. So , when you go to a prospective client, you know, one that you want to be a client but they're not willing to work with you just yet.... sometimes people, owners, I know from a contractor perspective, a lot of contractors don't like the idea of an owner's rep. They think that's just one more person looking over their shoulders. And I've heard some of them actually go back to the owners and architects and try to say, "Look, you can get this person out of our way? They're messing us up," So from your position talking to the prospective clients, what kind of sales pitch do you use to turn them into actual clients?

Steve:

Well, I think that an owner's rep role is often one that's unfamiliar to people doing projects and I think a natural, but the way clients naturally think about doing a project, is fairly simple. I h ired an architect; he draws some plans. I hire a contractor. And the structure of that, the timing of those things, they just kin d of do n't think about often. And so I try to get people to understand that really a successful project is a collaboration of a lot of people and that suc cessful projects happen.... Projects are made successful by the activities that happ ened pri or to the start of construction. And we can manage the construction process, we can oversee what happens on site, we can scrut inize chan ge orders and things like that and make sure we're delivering value and not over paying for those things, but better is to engage in a pre-construction process that minimize the issues that come up through construction and avoid having to deal with them during construction. Owners understand that projects are often challenging. And it is almost as if it is their expectation that t hat's going to be a problem. And yeah, there are studies out there that 70% of projects fi nished l ate and 73% of them are over budget and either through personal experience or anecdotally, it's almost as if owners expect that to happen. And yea h, t hat's a darn shame. In fact, it's a pretty poor performance for an industry if that is both the reality of what we do and the way our customers, our clients expe ct us t o do. And I think it's my goal to try to do better than that, and to organize a project and organize a team so that we don't have those kinds of outcomes. And so I want owners to see that successful projects come from and intensity of management that it's awfully hard for busy owners to give. I hire a contractor, hire an architect. I have a meeting and they 'll go draw and they'll come back in a month and show you what those drawings are. But what's happening in between those? Is anybody looking at those drawings? Are they spending your money with the lines they draw efficiently or are they building in inefficiencies through no fault of their own? And so it's my belief that successful projects com e from a n intensity of knowledge ab le management. And I think as a third party owner's rep for my clients, I am able to bring both a level of experience with project management and the time to really get into the details of a project, especially during pre-construction.

Bailey:

And you used, 70% of projects finished late, 73% are over budget, you use "Partnering for Lean Construction" by Cain Thomas for those numbers?

Steve:

I think that's where that came from.

Bailey:

I've heard, I've heard similar numbers elsewhere, so I don't really see a point to debating them because there's many sources of studies that show that's, and I'm sitting here from the contractor perspective, I'm kind of shocked as the best that we can do.

Steve:

Well, and I quote those numbers a lot, and I've never heard anybody say, "Well that's impossible, there's no way." It's p eople's experience. And I think the other, there's also a study, there's a book, "The Commercial Real Estate Revolution", and in that the author talks about the wa ste t hat happens in a p roject, and he estimates that 50% of every dollar sp ent o n construction is wasted, which is a huge number, almost unbelievable. But if you look at the breakdown, and actually these breakdowns come from another study that says like 7% of every dollar is wasted in tr ansmitting documents back and forth, and 12% wasted in re work. And I should've brought those. But if you look at the components of those, they add up to c lose to that number. And when you look at the individual elements of that it's things we all experience every day. And it would be fun to be able to say, well, "Hire me and I can make the buildings cost half as much." And, unfortunately that's not the case. But what that says to me is there's a n oppor tunity to do better. And if we can be smart about how we build a team and engage that team and how we get them to collaborate, heck, maybe we only drive 7% of that cost of that waste out, but that's a meaningful number and it's a number that can easily pay for the services of a firm like mine.

Bailey:

So what kind of, what's the key word I'm looking for? Value engineering. What kind of steps do you add in to help the client between, you mentioned between the design phase and construction, what can you do in there to save the cl ients m oney?

Steve:

It's interesting that you asked that. And, I have a theory about value engineering, and i t is a term that I tried to ban from the projects that I get involved in, because there's nothing about it that is really truly valuable and there is nothing about it that's engineering i n the way it is normally done. Normally value engineering means you take a building after having drawn what the owner wants and having realized that he can't afford it, and you start stripping away features and elements that you have to strip away in order to get it in budget. That's not engineering and that's really not good value. So what I have often said to my design and construction teams is w e' re not gonn a use that word. You're going to call it what it is. If you're taking off a feat u re that I like, call it that. Don't come and tell me that it's value engineering. And let's do our homework before we get to that point so we don't end up there. Because in my mind, if you're going through what is traditionally known as the value engineering process, something broke down in the project earlier or you wouldn't be having to do this. So that's my rant on value engineering.

Bailey:

And I kind of had to confess, I love bringing keywords up because I did a podcast a couple of weeks ago with a lean construction consultant. And he specializes in lean values in construction; it's what he does, it's the only thing he does. And he likes to rant about lean construction because a lot of contractors say, "We, oh, we use [airfingers quote] 'lean practices'," when they don't do anything differently than they've done for the last 20 years. So the key words are kind of fun to spout. We all get caught up in a nd without doing anything.

Steve:

We use them without thinking. And when we do anything without thinking we're likely to do it poorly. Projects finish late. They go over budget. We know time is money, so le t's j ust focus on the schedules and I'll let you listen to a c lip from a friend of mine who I did a podcast with. She says that general contractors overall are ba d at creating what she calls "time trust" with owners. So what do you see from, let's start with contractors, what do you see that contractors themselves could do better to create that kind of trust with their clients? Well, I heard that quote and certainly I see contractors who could do that better. But my experience, in fact my expectation which I would lay out for a contractor o n a project t hat i s mine, is that t hey develop a believable schedule. And ok ay, I think I have enough, I've seen enough schedules to know if they're not based in reality. And they update that on a regular basis. And regular basis can mean monthly, it woul d mea n every week we're in the last six weeks of a project with a hard deadline. I find that if you insist that contractor do that and challenge it or look at it knowledgeably, it may not have to be challenged, but just know.... I don't, a good contractor is creating a schedule and living by it and ifthey're not, well, first off you shouldn't have them in the first place. And so if I have to manage a cont r actor's schedule, then I failed in my contractor selection. Yeah and so I don't know if I would actually agree with that. I mean, I know there ar e con t rac tors, there ar e con t rac tors that do everything. There are ways that contractors breakdown, but I find that good contractors live by their schedules and I want to see them on a regular basis. I end up in places where I think I trust th e ir schedule. Now, stuff happens, and so you can't r eal ly blame them if it rains for six weeks, and we got to d ea l with that. And I think if you look at it, if you update it and look at it regularly, you build in that trust. If they do a schedule at the beginning and you don't see another one for six months, how the heck do you know what's happening? There is no trust there.

Bailey:

So I know on the federal projects I spend time on it's a monthly requirement no matter what, and if something changes, they want to see it resubmitted officially through the proper channels. And it's one of those areas where I think private, a lot of contractors I know that do federal work act like they hate doing the federal work because of all the b loat, all the paperwork and the red tape. But some of the red tape's th ere f or a reason that maybe we should bring some of it over to the private sector work.

Steve:

Well, a contractor should be doing a schedule at least monthly. They should be sitting down a nd looking at it and if they're doing it, why wouldn't they share it?

Bailey:

Right. Well, how active do you have to be to track those changes on say your average project in Oklahoma city?

Steve:

Well I go to, you know, we generally have OAC's, owner, architect, contractor meetings every other week. And we get in a rhythm of generally every other one of those, we look at a new schedule. So not, that's the expectation, we se t i t early, we defined that's how we're go nna o perate, and I generally don't see a problem making that happen.

Bailey:

So give me the good news here from your involvement on projects back to the 73% and 70% numbers. Don't tell me that when you're involved in projects that those kinds of schedule and budget overruns still happen.

Steve:

Well, I wish I could tell you it still never happens. I think if I look at what I've done with the projects that I'm working on now, I feel really good about where we are budget wise. I feel like the, the bu dget s urprises a r e definitely minimal, and when cost increases happen they're self-inflicted rather than imposed upon us by unforeseen circumstances. Okay. With weather that we had this spring, it's, I can't sit here and say that all eight of my projects currently under construction are on schedule because the weather has impacted them. I think we've managed that to the extent it can be managed, but you don't ever build a schedule with as much rain as we had this year. That would be irresponsible. Now in hi ndsight it would have b een the right thing, but that's just not the reality sitting here today.

Bailey:

I remember, what was it, 2015 we had record rains like hundred year floods and, oh good, we're good for the next.... 2019 just kidding. We're doing worse now.

Steve:

Explain that to me. I can . I can't figure it out.

Bailey:

Well, I guess it would have been a good time to invest in boats. I think I know what y our answer to this last o ne i s going to be. Let's put myself in the shoes, I'm a commercial developer moving into the area and I'm, say I'm on the fence. Do I want to hire a rep or do I think I can just trust the architect to manage the project for me? What would your advice be if I come to you?

Steve:

I would say that I can work for you on your behalf, and charge you a fee for my services and through my efforts manage the process so ws to drive as much cost out as I cost, andyour life will be easier f or the next, who knows how long, two years as we work through this process if you engage me to work on your behalf. I find that savings not by , I have found, I think, you alluded earlier to architects and contractor resistance, and I think there are owners' reps out there who I f eel like they earn their keep by beating down contractors on fe e a nd creating huge stacks of reports and paperwork that they have to create every month. And then I can slip to my owner every month a three, fou r in c h, t hree ring binder full of paper that nobody ever looks at. It says here, "Here, see I've see I've done my job." And so, I t ry not to be that. I will hold folks accountable. I want to pay fair fees. I want my architects and my contractors that are on our projects to make a profit. If I drive them to a place with my fee or my scope of work expectations that they can't make any money, that's not good for my project. Because they don't want to spend time on it or they reach a point where they've spent all their budget. An d so I say to those architects and contractors that actually, I say it th i s way, I say to my owners, I will manage our design team, the architects, contractors, consultants. And I say to that design team, "I will help manage the o wners. " Owners cause, you look at the root cause of many problems. It often comes back to owners who have unrealistic expectations, who changed their mind, who say blue this week and red the next, and then don't expect that to cost them anything or have any ramifications or ripple effects through the process. And the architects and owners that have worked with me generally at the end will look and say, "Steve, this worked better for me because you were there." And and it is a matter, it's managing owners and managing the design team. And I've worn all those hats at various times in my career. I understand how architects think and how that's different than contractors think and how we need both of th os e skill sets working well together. So that's howI approach projects, that's how I create value, and when that team is able to work best, when they can collaborate and work as a cohesive team, the project costs go down - not by me saving a half a point on a fee, but by us figuring out.... I've been in mee ti ngs where, you kn ow, we s ave h undr eds of thousands of dollars in structural steel because you get the right people in the room. Not because I know what to do, but because I get all the right people in the room and say, let's get the ste el supplier in here along with the engineer and the architect and let's have a conversation about how the best way to frame this is, or mechanical systems or some b ig variables like that. So it's orchestrating that that drives value. And so I would in the end say to an owner, let me do that for you. Let me do that on your behalf, and you'll have a project that goes better for you. Your life will be easier. And I think in the end it will cost you less.

Bailey:

Sounds like it would. I don't think I c ould dispute any of that. So alright, again, let's say I'm an owner that's looking to build something and I want to hire a r ep. How would I reach out to you?

Steve:

My website is cooperpa.com and I would love to, the phone number is there. All you gotta do is reach out to me and I will be with you quickly.

Bailey:

Sounds good with that, Steve Cooper, we'll call it a wrap. Thank you so much for the time.

Steve:

Thank you, Bailey. Appreciate it.

Intro
How Does an Owner's Rep Work?
Importance During Pre-Construction
Intensity of Management
Improving the Odds of Success
Debunking Value Engineering
Trust Between Contractor and Owner
To Hire an Owner's Rep or Not