CII Annual Conference 2005: Research Presentation

Commodity vs Value-Added Services: Lost in Translation

presented by Commodity vs Value-Added Contractor Services Research Team

Commodity vs Value-Added Contractor Services Research Team (RT 205) • • • • • • • • • • • • • • • • • Jose A. Buitrago Jim Early Tom Garrett Barry Hall Jim Hershauer Mark Loper Dan Martin Robert McManus Robert Nartonis Kevin O’Leary Stan Schaffer Don Sutphin Graeme Telford Travis Twardowski Jack Wacker Robert Wasmund Ken Walsh CSA Group BE&K, Co-Chair Honeywell International Lockwood Greene Arizona State University AZCO WorleyParsons Group Southern Company M.A. Mortensen HATCH Anheuser-Busch, Co-Chair Baker Concrete GlaxoSmithKline Rohm and Haas Arizona State University DuPont San Diego State University

Research Team Project Objectives

• Develop precise

definitions

of terms.

• Develop understanding of owner and contractor

marketing and procurement strategies

in capital project delivery process.

• Develop and test

conceptual models

for use by owners and contractors.

• Develop

implementation materials

to support deployment of the models.

Findings

•

Common definitions

are critical in order to overcome communications barriers.

• Owners looking for

net

value-added services.

• More investment in front-end loading increases

net

value-added to owners.

•

Perceptions

drive responses and

net

value-added.

Recommendations

•

Owners and Contractors

 Ensure you understand each other (definitions).

•

Owners

 Use bid selection tool understood by both parties.  Identify commodity vs net value-added services.

•

Contractors

 Provide net value-added proposals.

 Understand when providing commodity vs net value add.

 Use available tools to differentiate services.