All Things Tech - The Contractor's Compass - June 2019

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ASA’s THE OFFICIAL EDUCATIONAL JOURNAL OF THE AMERICAN SUBCONTRACTORS ASSOCIATION

JUNE 2019

WWW.ASAONLINE.COM

Converging Technology: Creating a Long-Term IT Strategy that Unifies Your Company

by Steve Antill, VP of Business Development, Foundation Software

LEGALLY SPEAKING The Increasing Use of Drones in Construction and Related Issues

All Things Tech

by Jim Sienicki and Ed Hermes, Snell & Wilmer L.L.P.

Teamwork & Technology—The Business Strategies Case Study

by Stephane McShane, Director at Maxim Consulting Group

No More Field Paperwork!

by Chris Kinghorn, Partner, DataStreet

Drone Services for Efficiency and Cost Savings

by David Dengler, licensed FAA 107 UAV / UAS (drone) pilot

3D Laser Scanning for Accurate Existing Conditions

by Garrett Maldoon, Kelar Pacific

Mastering Material Takeoffs Using Digital Methods

by Lindsay Powers, VP of Marketing, STACK Construction Technologies

Propelling Risk Management Success through Pilot Programs

by Dave Galbraith, MS, AIM, CSP Amerisure AVP of Risk Management, Risk Management Technical Lead

American Subcontractors Association 1004 Duke St. . Alexandria, VA 22314 . www.asaonline.com (703) 684-3450 . communications@asa-hq.com

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June 2019

F E AT U R E S EDITORIAL PURPOSE The Contractor’s Compass is the monthly educational journal of the Foundation of the American Subcontractors Association, Inc. (FASA) and part of FASA’s Contractors’ Knowledge Network. The journal is designed to equip construction subcontractors with the ideas, tools and tactics they need to thrive.

Converging Technology: Creating a Long-Term............................................. 7 IT Strategy that Unifies Your Company

by Steve Antill, VP of Business Development, Foundation Software

The views expressed by contributors to The Contractor’s Compass do not necessarily represent the opinions of FASA or the American Subcontractors Association, Inc. (ASA).

Teamwork & Technology—The Business Strategies Case Study................. 12

MISSION

No More Field Paperwork!.....................................................................................................17

FASA was established in 1987 as a 501(c)(3) tax-exempt entity to support research, education and public awareness. Through its Contractors’ Knowledge Network, FASA is committed to forging and exploring the critical issues shaping subcontractors and specialty trade contractors in the construction industry. FASA provides subcontractors and specialty trade contractors with the tools, techniques, practices, attitude and confidence they need to thrive and excel in the construction industry.

by Chris Kinghorn, Partner, DataStreet

FASA BOARD OF DIRECTORS Richard Wanner, President Courtney Little Richard Bright Anthony Brooks Brian Cooper Jack Austhof SUBSCRIPTIONS The Contractor’s Compass is a free monthly publication for ASA members and nonmembers. For questions about subscribing, please contact communications@asa-hq.com.

ADVERTISING Interested in advertising? Contact Richard Bright at (703) 684-3450 or rbright@ASA-hq.com or advertising@ASA-hq.com.

EDITORIAL SUBMISSIONS Contributing authors are encouraged to submit a brief abstract of their article idea before providing a full-length feature article. Feature articles should be no longer than 1,500 words and comply with The Associated Press style guidelines. Article submissions become the property of ASA and FASA. The editor reserves the right to edit all accepted editorial submissions for length, style, clarity, spelling and punctuation. Send abstracts and submissions for The Contractor’s Compass to communications@ASA-hq. com.

ABOUT ASA ASA is a nonprofit trade association of union and non-union subcontractors and suppliers. Through a nationwide network of local and state ASA associations, members receive information and education on relevant business issues and work together to protect their rights as an integral part of the construction team. For more information about becoming an ASA member, contact ASA at 1004 Duke St., Alexandria, VA 22314-3588, (703) 684-3450, membership@ASA-hq.com, or visit the ASA Web site, www.asaonline.com.

LAYOUT Angela M Roe angelamroe@gmail.com © 2019 Foundation of the American Subcontractors Association, Inc.

by Stephane McShane, Director at Maxim Consulting Group

Drone Services for Efficiency and Cost Savings................................................... 20

by David Dengler, licensed FAA 107 UAV / UAS (drone) pilot

3D Laser Scanning for Accurate Existing Conditions........................................ 22

by Garrett Maldoon, Kelar Pacific

Mastering Material Takeoffs Using Digital Methods ...........................................24

by Lindsay Powers, VP of Marketing, STACK Construction Technologies

Propelling Risk Management Success through Pilot Programs.................. 26

by Dave Galbraith, MS, AIM, CSP Amerisure AVP of Risk Management, Risk Management Technical Lead

D E PA R T M E N T S ASA PRESIDENT’S LETTER..................................................................................................... 4 CONTRACTOR COMMUNITY................................................................................................. 5 LEGALLY SPEAKING The Increasing Use of Drones in Construction and Related Issues........... 10

by Jim Sienicki and Ed Hermes, Snell & Wilmer L.L.P.

QUICK REFERENCE ASA/FASA CALENDAR....................................................................................................... 28 COMING UP.............................................................................................................................. 28

PRESIDENT ’S LE T TER Dear ASA Members: First, and most important of all, I want to say thank you. Thank you for an amazing year. It has been my immense pleasure, as well as incredible honor, to serve as your ASA President for the past year. We have shared best practices, improved our companies, and done amazing work for the overall subcontracting community. For all of that, I thank you all.

We have made some incredible strides with our new advocacy team. In the halls of Capitol Hill, we have been hard at work fighting for the issues that affect us all. ASA has seen legislative victories in Washington and across the country, and each of those successes has made our industry stronger. When subcontracting companies have the protections and legal support they need to succeed, the entire construction industry prospers.

One area that I am immensely proud of is the introduction and opportunity to join peer groups. Peer groups have been instrumental to my business.

ASA also made incredible strides in becoming a more transparent organization which has increased and improved engagement with our Board and members. The changes in how our Board operates continue to make the American Subcontractor Association a top-notch trade organization, up there with the best of the best.

In March, we gathered together in Nashville for our annual convention, SUBExcel. I have to say; I look forward to this event every year. As an ASA Member for years, I am amazed at how that event has grown. Our membership is strong, our sponsors are incredible, and our exhibitors are growing year after year.

As we look ahead, I am excited for the future of the American Subcontractors Association. For every battle we have won, there are new challenges coming, and I am confident that as an organization we will rise to each and every one of them. I encourage you all to never stop fighting for the issues important to us all. Together, we will continue to support our industry and make it stronger than ever.

I am confident that I leave you in good hands with our incoming President, Anthony Brooks. I know that he will lead us into exciting new places, and I can’t wait to see what our future holds.

Once more, thank you,

Courtney Little President, American Subcontractors Association

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ASA of Arizona Legislative Victory

ASA of Colorado Legislative Victory!

The American Subcontractors Association is pleased to announce that ASA of Arizona achieved a tremendous legislative victory with the passing of Arizona Senate Bill 1271.

SB 1271 limits indemnity agreements in dwelling construction contracts, establishes a construction professional’s right to repair or replace any alleged construction defects prior to the commencement of a dwelling action, and outlines procedures for allocating liability amongst parties to a dwelling action. Under Arizona law, a dwelling action is defined as legal action brought against a person or entity engaged in the design, construction or selling of a dwelling found to have a defect. Additionally, a construction professional includes any architect, contractor, subcontractor, developer, builder, builder vendor, supplier, engineer or inspector performing or furnishing the design, supervision, inspection, construction or observation of the construction of any improvement to real property.

SB 1271 passed the Arizona House of Representatives on Wednesday, April 3, 2019 by with a vote of 48-11, and was unanimously passed the Arizona State Senate on Thursday, April 4, 2019. Arizona Governor Doug Ducey signed the bill into law on April 10, 2019. ASA National wishes to congratulate ASA of Arizona on their relentless work on advocating on behalf of this legislation. Stay tuned to ASAToday to learn more about SB 1271 and ASA Arizona’s journey to make this legislation a reality.

The American Subcontractors Association is proud to announce a legislative victory in the state of Colorado!

After a four-year effort lead by the ASA of Colorado, Colorado Governor Jared Polis signed Senate Bill 19-138 into law on April 16th. SB 19-138 addresses bonding requirements for contractors that are a party to certain public-private initiatives.

Under current state law, when a contractor enters into a contract with a county, municipality, school district, or political subdivision, the contractor is required to execute performance bonds and payment bonds. With the enactment of SB 19-138, new payment provisions are offered to the construction industry through the expansion of bonding requirements to projects using public or private money or financing on public real property We congratulate ASA of Colorado on their tremendous legislative victory. Stay tuned to ASAToday for further information on SB 19-138 and how its passage effects subcontractors in Colorado!

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The Construction Industry is Driving the Expansion of Workplace Safety Jobs The workplace safety and health career field continues to grow as the construction industry continues to boom. Per the Bureau of Labor Statistics (BLS), the number of people working in occupational safety

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and health jobs is predicted to outpace the overall employment growth for the country through 2026. For all career fields, the BLS projects a 7.4 percent gain from 2016 to 2026, increasing the workforce to 167.6 million. Projected gains for occupational safety and health career fields range from 8.1 percent to 10.1 percent, depending on education requirements and job responsibilities. Alan Zilberman, employment economist with the BLS stated that “the number of safety and health positions should continue to grow because industries where safety is a major concern, such as construction, are expanding.”

House Hearing on Promoting Economic Growth and Workers Rights On Wednesday, April 15, 2019, the House Financial Services Committee held a hearing entitled “Promoting Economic Growth: A Review of Proposals to Strengthen the Rights and Protections for Workers.” The hearing dealt with draft legislation regarding: outsourcing, disclosure information on human capital management, a Security Exchange Commission (SEC) study on stock buyouts and greater accountability in Pay. To learn more information about these legislative proposals or hearing, please visit: https://financialservices.house.gov/ uploadedfiles/hhrg-116-ba16-20190515sd002-u2_-_memo.pdf

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Certain CNA Financial Corporation subsidiaries use the “CNA” trademark in connection with insurance underwriting and claims activities. Copyright © 2019 CNA. All rights reserved.

F E AT U R E Converging Technology: Creating a Long-Term IT Strategy that Unifies Your Company

by Steve Antill, VP of Business Development, Foundation Software It’s the way of emerging technology that, if it’s new, we want it. Today, for example, everyone wants to go to the cloud — and for good reason. But what’s important in a move like this is looking at what platforms your business is currently using for its software, how your software talks with one another, and where you hope to take your technology in the next three and five years.

This is because among all of the emerging technologies around the construction industry today, nothing is as critical for contractors as getting field operations, accounting and estimating on the same page and working toward the same goal. Disconnected workflows, overlapping technology and inefficient communication create everyday problems and long-term issues for construction companies. That’s why before you add another piece of technology, your business needs to begin thinking about a long-term IT strategy.

That said, it’s easier than you may think.

Here’s how you can start building your technology in the direction of your future:

1. Create a Map of Your Core Software Before you add, know what you have.

After all, the only way you can draw a map to where you want to be is if you first pinpoint where you are. Begin by identifying all of your core business software and whether each application is installed on your own servers, running on the vendor’s cloud, or hosted on a thirdparty cloud like Amazon Web Services (AWS).

Doing this before you add additional software should help allow you to figure out what next steps make sense for your company. This is an opportunity to think through what applications might be moved to the cloud or on-premises, as well as what might be replaced, retired, consolidated, or even managed differently

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Getting Software Moving in the Same Direction This is true, first of all, with respect to where your software is and where it’s going. For example, if your company recently made a large investment in onpremises software or significant in-house IT infrastructure to support it, it may not make sense to move your other software to the cloud just yet. If most of your core business software is already on the cloud, however, most companies will want to continue moving in this direction.

Eventually, you want to put together a plan of where you want to be in the next year, three years and five years — running on internal servers or on the cloud — and begin to move and consolidate there. In the meantime, you have to know where you are and where you’re headed.

Controlling the Tech Sprawl You also need to look at how your technology is working together. As new technology increases, businesses need to be especially aware of a problem called “technology sprawl.” This is when a company has more technology in play

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than it can manage effectively from an organizational perspective. The result will often be inefficiency and lack of communication between software — leading to anything from higher IT costs to manual reentry and erroneous data.

This kind of sprawl takes countless forms. It might occur when teams are using multiple tools or software applications to accomplish the same task — for example, if operations and accounting are using two different programs to track project financials. It also shows up where contractors store their business data locally on different hard drives instead of one central, secure and backed-up location.

In both cases, as long as their software doesn’t communicate, they may have to manually reconcile their data to prevent costly errors—and that’s not managing effectively.

It’s important to look at sprawl from an overall company point of view. Each team or department may feel that they have the right mix of software and tools, and their workflows and communication may be smooth because they’re connected on the same platforms and trained with best

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practices. But from a higher altitude, you may be able to identify clear inefficiencies in how data moves from one department to another, such as operations to accounting, or see severe limitations on which technologies are even able to talk with one another.

may be one of the most overlooked issues that every construction company needs to watch out for — especially where it can cause a disruption in workflows.

Identifying Key Gaps

Finally, it’s vital in your IT strategy to address any of the costly disconnection that can occur between estimating, operations and accounting experienced by many construction companies. The differences in how these staffs work need to be understood and reconciled before new technology is rolled out that accelerates their disconnection.

You’ll also be looking for gaps you should be aware of, where technology and processes are mismatched to each other, such as: • workflows that aren’t being supported by current software • technology that isn’t communicating with each other • places where information or data might be falling through the cracks • functionality that may be under-utilized It’s necessary then to step back, assess the whole picture and really determine the best way forward. It may not actually be finding the missing pieces of technology.

It may be pursuing additional training for existing technology, consolidating or replacing technology, and, more often than not, realigning processes to bring the right people together to begin using what you have more successfully.

2. Locate Each Department’s Uses and Needs Your entire company needs to be involved in the conversation — operations, office staff and leadership — to ensure that everything and everyone is accounted for in your IT strategy. Having mapped your company’s current technology with how your teams use them, interview end users to determine what processes are being supported well with technology and which are under-supported. Where is there disconnection? Find out what isn’t being used or what’s being underused and why.

This process can have several useful outcomes. First, it may reveal implementation issues that can be corrected for the future. It may also reveal mismatches between your technology and processes. Or, it may expose processes that need to be clarified, outlined and improved before new technology begins to amplify bad habits.

In the urgency to implement a solution to fix inefficiencies and gain a competitive edge, aligning processes to technology often gets pushed to the side, and this

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3. Bridge Your Office and Operations Workflows

Diagnosing Disconnection There are numerous places where companies experience their teams working off different pages on the same projects.

The difference in cost code breakdowns used by the estimating, operations and accounting teams is one example which can cause troublesome issues, tying costs back to budgets and producing usable information for forecasting and estimates.

Another commonly unaddressed issue is discontinuity between how project management and accounting each account for work in progress. In either case, technology on its own won’t be the solution; instead, companies need to first get their teams working on the same page.

Because project management, estimating, and accounting work differently, contractors need to be able to adapt to these realities and have strong processes to communicate when they occur — such as software integrations, percent-complete and change-order review meetings, and the tried-and-true method of just picking up the telephone.

Opening Lines of Communication In construction, real-time changes may happen faster than some software-based processes will communicate them. And with the kind of precision required in construction accounting to cut the cost of error, respond to fade and protect thin profit margins, your lines of communication and processes for collaboration need to be up to speed.

This communication will occur more smoothly and effectively the more understanding and empathy there is for

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each other’s work and perspective in making the project successful. Everyone is working on the same “team” toward the same goal, and it’s critical to foster this sense between departments. By doing so, accounting may better understand why operations might have been working off an unapproved change order. Conversely, project managers might keep in mind how uncommunicated change orders can negatively impact financials if they don’t keep accounting in the loop.

Creating specified checkpoints and scheduled meetings with open dialogue over the course of a project cycle will be one place where a culture of collaboration is set between operations, accounting and estimating. If everyone feels supported in their contribution to the overall mission of completing jobs on-time, on-budget, asspecified and at a profit, additional lines of communication can open up, be identified, and be seized as opportunities. And if real-time communication becomes more natural, teams can be fully prepared to work together to leverage their technology for the benefit of the whole organization.

Conclusion Technology for the construction industry is being developed and implemented at such a rate that contractors can’t afford not to be strategic — and while no single IT strategy will be one-size-fits-all, the groundwork to a truly unified IT strategy for your construction company should look the same. To get to where you’re going, you first need to identify where you are by mapping your core software. You’ll also need to locate each department’s needs and the technology that fits their uses.

Finally, it’s critical to build the bridges between all sides of the construction project — estimating, operations and accounting — so that the technology you do bring on board can have everyone working well toward their common goal: take home profits.

Steve Antill is VP of business development at Foundation Software and Payroll4Construction.com, where he’s responsible for strategic market planning and new business growth. Steve invests his time building relationships across the construction industry with contractors, CPA firms, associations, and technology partners. For more information visit www. foundationsoft.com.

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L E G A L LY S P E A K I N G The Increasing Use of Drones in Construction and Related Legal Issues

by Jim Sienicki and Ed Hermes, Snell & Wilmer L.L.P.

Unmanned Aerial Vehicles (“UAVs” or “drones”) have made and continue to make their way into the construction industry. Drones now assist project managers, superintendents, and design & construction teams to build maps, 3D models, and collect real-time data about projects to understand what’s happening on the construction site. Aerial insights may improve progress tracking and even catch problems early. Drones provide an effective means to provide a surveillance tool to track productivity, and the aerial capture of data. Drones may also help improve evaluation of a project, project security, and project inspections. This article is a brief look at how drones are being used in the construction industry and related legal issues to consider.

Surveying Land UAVs are rapidly replacing traditional land-surveillance methods. Drones reduce the labor and time involved in

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producing accurate surveys. Drones may eliminate some of the human error involved in the surveying process and drones may have the ability to capture data in much less time than traditional methods would take.

Communication and Management Drone technology has allowed instant connectivity and communication on the job site. Drones are being used more and more as a means of maintaining constant contact at worksites. Mounted cameras on drones can provide real-time video footage to facilitate communication and surveillance.

Drones allow owners to monitor progress by general contractors and allow general contractors to coordinate with subcontractors. Drones may allow contractors and subcontractors to more efficiently collect and communicate realtime data to prevent or mitigate potential

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delays. Because many inspections are performed as part of a preprogrammed flight plan, the same flights can be duplicated periodically to monitor the progression or remediation of any event and/or any related consequences.

When it comes to claims of delay, disruption, and inadequate staffing, parties often rely on sign-in logs and daily worksite notes. Then the parties often dispute whether machinery was operational, workers were on site, or whether certain activities of the project on the critical path had been completed by a specific date. Drone footage showing a contractor’s or subcontractor’s staffing, activity, and completion of specific milestones could prove to be definitive evidence when pursuing or defending delay and/or disruption claims in the future.

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Showing Job Progress to Owners and General Contractors General Contractors and subcontractors generally take numerous photos at the jobsite to keep Owners and General Contractors apprised of progress, to make inquiries to design professionals, and to document that work was done correctly and on time.

Drone surveillance footage may expedite these processes, and some General Contractors may want to provide Owners or the Owners’ investors with access to see the jobsite via drone footage.

Likewise, drone footage could also assist with giving remote owners or investors real time information on the progress of the project.

Risks Associated with Drones However, not all observers are enthused about the prospect of increased use of drones on construction sites. In a column by attorney Mark A. Dombroff (“Why Contractors Should Nix ‘Casual Use’ of Jobsite Drones”), he notes that a higher volume of drone flights over construction sites inevitably translates into greater risk of accidents and regulatory violations. The industry has already seen at least one crash involving a drone flying over a construction site: In 2018, a survey pilot in the United Kingdom reportedly flew a 3D Robotics Solo drone into a crane. Dombroff opines that other negative events may become more likely as the number of flights increases. “In March, a man in Forest Park, GA, was electrocuted after trying to use a metal pole to dislodge a drone from a tree,” Dombroff cites, as an example. Dombroff further comments that “It is not difficult to imagine a similar tragedy occurring at a construction site where a drone could snag on exposed rebar or end up in some other hazardous spot.”

While direct injury from a lightweight photography drone might seem unlikely, in one case, a bystander at a wedding was partially blinded by a drone. The production company’s insurance carrier rejected the claim, and argued that drones are federally regulated as aircraft,

and the policy excluded coverage for aircraft - or aviation-related injuries. A federal judge sided with the insurance carrier late last year.

The Legal Landscape of Drone Use on Construction Projects In January 2018, U.S. Department of Transportation Secretary Elaine Chao announced that the Federal Aviation Administration (FAA) had received registrations for more than one million drones. Press Release, U.S. Dept. of Transportation, FAA Drone Registry Tops One Million (updated Jan. 10, 2018), available at www.transportation.gov/ briefing-room/faa-drone-registry-topsone-million/.

Currently, the single most controversial regulation governing the operation of a commercial drone is the requirement that the drone must always remain within the visual line of sight of the remote pilot. This means that in the absence of a waiver from the FAA, a drone is very restricted on the distance and topography it can fly. As the FAA collects more data and becomes comfortable with the safeguards and redundant capabilities included in the drone technology, this regulation and others are likely to become more user friendly. In the meantime, in the absence of a waiver, all drone programs must comply with the FAA’s Part 107 regulatory requirements and limitations.

14 C.F.R. Part 107. Decisions to establish a commercial drone program typically involve a business case evaluation that takes into consideration the interests and objectives of the users of the drones as well as the considerations of other functional team members (i.e., technology, legal, insurance, and risk departments). To fly a drone as a commercial pilot in the state of Arizona (i.e. for work/business purposes), you are obligated to follow the requirements of the FAA’s Part 107 Small Drone Rule, which includes passing the FAA’s Aeronautical Knowledge Test to obtain a Remote Pilot Certificate.

Furthermore, Arizona recently passed a law making it a state crime to operate a drone in violation of these FAA

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regulations. A.R.S. 13-3729. Additionally, Arizona makes it a crime to fly a drone in a way that interferes with a manned aircraft, police operation, or causes the death of a bird (whether intentional or unintentional), or to fly the drone within a horizontal distance of 500 feet or a vertical distance of 250 of a critical facility such as a hospital or school.

Furthermore, this statute prevents cities and towns from enacting ordinances that further restrict drone use.

Before the construction industry wholly incorporates drones into its arsenal of services, consideration must be given to some of the existing hurdles and risks that are inhibiting the use of drones and the resulting data. Among other things, the industry’s use of drones likely will require the establishment and implementation of policies and procedures to ensure that information contained in the drone payload or built into the program or recorded by the drone, that may contain proprietary information, is not inadvertently released in a way that violates state or federal privacy laws. Contractors and subcontractors should do all they can to make sure all parties understand that drones should not be flown on site without explicit, written permission and understood terms. All workers at the jobsite need to understand that drones are not just harmless toys – they are in fact regulated by the FAA. Contractors and subcontractors may want to consider getting assurances in writing from other parties at the site that they will not fly drones on site without a formal agreement. While drones may have many beneficial uses on the worksite, contractors and subcontractors must ensure that they are used in compliance with federal and state law and in a way that maximizes safety and mitigates liability risk.

James Sienicki and Edward Hermes are construction attorneys with Snell & Wilmer, LLP, a business law firm founded in 1938. The firm has 400 attorneys practicing in 12 locations in the western United States and Mexico. For further information, please visit www.swlaw.com.

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F E AT U R E Teamwork & Technology— The Business Strategies Case Study

by Stephane McShane, Director at Maxim Consulting Group With the surge in technology deployment in our industry today, an opportunity exists to leverage these tools in order to strengthen the communication and engagement of the project team.

The ability to quickly and easily share information that allows for accurate performance metrics, as well as risk mitigation, will become critical moving forward.

Best in class firms are not just exploring which platforms to utilize, but how to best implement these solutions to create the greatest benefit. In this article, we will explore a case study of risk mitigation as it relates to loss of labor productivity.

All too often, we are impacted in our work on the jobsite. Other trades slow our progress, the schedule is incorrect forcing inaccurate planning, trades are stacked causing inefficiency. There are a multitude of reasons this occurs. The challenge lies in the ability to effectively prove an impact to create an opportunity for appropriate compensation. Proving this takes two parties: The office and the field. In order to increase your chances of recovering damages for these types of impacts, there are several steps necessary. In this case study, we will show that proving this case will require: • Creation of a constructible budget • Diligent use of short interval planning tool

• Accurate reporting of time • Accurate reporting of quantities installed • Comprehensive use of daily project reports • Mining of data to create production information

Understanding the Budget First and foremost, the team who is responsible for building the project, specifically the project manager and field leader, must come to consensus on what the budget should be. The budget should be in alignment with the means and methods of how a project will be built and should contain both hours and quantities. This would require a fairly extensive preconstruction planning process, but is well worth the investment of time to ensure that the team who is building the job has the right budget, and is well prepared to execute. Everyone on the team must understand the description, quantities, hours, and unit of measure for each budget item. Organizations should have well-established standard cost codes and work breakdown structures to ensure a process that can be replicated and compared area to area and job to job. This budget should be housed in the project accounting software so that, as change orders are

issued, the budgets can be immediately updated with both quantities and hours.

Figure 1 is an example of a portion of a project budget.

Creating a Plan A short interval plan, or 3-week lookahead (Figure 2), is one of the most powerful communication tools that exist in our industry. That said, it is one of the most poorly deployed. The premise behind a look-ahead is the ability for the field leader to tell us which activities are being worked on according to the GC or owner’s schedule, how many people will be working on each activity, the source and status of the material required for each activity, the status of the tools and equipment needed for each item, and quantifiable production targets for the field leaders given the proposed man loads. The ability to leverage a technology tool that allows for ease of entry by the field leader in order to minimize frustration is paramount. It also allows for ease of viewing by the remainder of the project team to ensure that any obstacles that exist between the field leader and his plan can be quickly resolved in a proactive manner, allowing for increased field productivity. The use of a technology platform allows for changes to be made to the plan from anywhere in the

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field, allowing the foreman or superintendent to revise the plan when changes occur, not having to rely on remembering to change it later.

anywhere, anytime via apps, tablets, or laptop. Figure 3 is an example of a technology solution built for this type of daily entry.

Time Reporting

Quantity Reporting

The use of a solid technology tool to capture time reporting creates several positive opportunities. First, it creates visibility of whether time IS being reported daily, as the level of accuracy required is high. Additionally, it allows for speed and accuracy since only the cost codes that have a budget and are active should be shown as open and available to report time to, lessening the chance of misreporting. Lastly, the use of technology allows for our tech savvy emerging leaders to complete this entry

For most trades, updating the quantities installed, or percent complete, on a weekly basis is frequent enough to keep a handle on medium to large construction projects. Some trades, such as sheetrock and framing, would tend to enter quantities daily due to the short duration and large manpower allocation to their activities. The reporting of quantities allows us to see whether we hit the week’s production targets, which is highly useful to both field leaders and project managers. Additionally,

by comparing the planned activities to those reported on timecards and quantity reports, we can identify those activities that we worked on that were not planned. This is a critical step in risk mitigation. In the example on the next page (Figure4), there are some items that have a description that is in italicized type.

Those activities did not appear on our short interval plan. By the use of reporting and data mining, we can identify any time our unplanned activities exceeded a predetermined threshold, spurring the ability to investigate the cause and send notification of impact in a timely fashion.

Daily Project Reporting When we think about the most credible piece of documentation that exists

Figure 3

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Figure 4

to prove an impact to our work, none exceeds that of the field leader’s daily project report (Figure 5). It is the piece of documentation done by the person closest to the work that tells the story of the project. It documents what happens, on a daily basis. That said, it isn’t always done consistently, or comprehensively. The use of a technology tool allows for visibility on its completion, as well as the ability

to mine this information at a later time.

Some technology platforms also allow for the attachment of photographs specific to each section of the daily project report, which is a very valuable function.

Production Dashboards Production dashboards allow the field leader to have a metric on labor productivity that is updated with each labor and

quantity entry they perform. The use of technology allows them to see the job including all cost codes, as in the example below, or they can sort the data by building, floor, or even a single activity. Translating information into a graphical format allows for our field leaders to identify those areas that are ahead in productivity, and those that are behind in a very quick and easy manner. For the

Figure 5

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project manager, it allows visibility on the labor forecast for each labor item, given the current production rate of that item to date. This is powerful information for both field leaders and project managers.

Production Reports Production information utilizing technology integration allows for us to view production information for any given payroll week, or any given phase code easily in order to compile data for an impact claim. In the example (Figure 6), this is a summary of the activities in a specific area that were heavily impacted by external causes. It is easy to see what the budgeted hours were, and compare them to what we used (taken from time reporting) versus what we should have used (calculated from quantity or percent complete reporting). The conditional formatting in reports allows the eye to be drawn to exactly the data we wish for project managers and field leaders to view, without them having to read all of the data to determine where to focus their attention. Additionally, this will allow us to accurately quantify the impact of loss of productivity. In this example, we should have spent 530 hours, but we actually spent 614.5 hours.

The Challenges Historically, we have seen many examples of the, “us versus them,” mentality. Meaning, the field versus the office.

Adversarial relationships were more frequent in the past as the two parties felt very independent of one another, and were angered when one stepped into the world of another with direction or dictatorship. Using the example of a project manager and a field leader, it’s devastating to see an uncommunicative relationship between these parties due to the necessary nature of their codependent workflow. The effectiveness of a project manager, at its simplest form, is steeped in the measurement of margin (profit) gain or fade. The effectiveness of a field leader, taking this same approach, is measured by productivity. However, each of these parties CANNOT reach the epitome of success without the other.

The Results The case study noted above allows this client to effectively mitigate the risk associated with a project that was not going well, due to no fault of their own. Their ability to quantify the impact utilizing the processes they had defined, along with proper notification, allowed for significantly higher recovery of damages than they would have received without this data. The use of teamwork and technology to create a culture of effective

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communication, proactive planning, and data centric production tracking allows not only for our own forces to foresee challenges in a project early enough to effect a change in the outcome, but also allows for the compilation of quantifiable evidence of an impact. The teamwork allows for great communication to occur.

The technology allows for ease of use and speed of information sharing. The first step of any technology implementation is a comprehensive definition of what information is needed, in what format, by each position in the organization.

Then, and only then, can the right technology be identified and deployed to give each and every person on your team the information they need to be project leaders, and not project witnesses.

Stephane McShane, Director at Maxim Consulting Group, is responsible for the evaluation and implementation processes with our clients. With a large depth of experience working in the construction industry, Stephane is keenly aware of the business and, most specifically, operational challenges firms face. Her areas of expertise include: Leadership development, organizational assessments, strategic planning, project execution, business development, productivity improvement, and training programs. For more information visit www.maximconsulting.com

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Built for the Field That means your crews will actually use it: no more expensive software sitting idle. With Raken, you’ll get visibility into what’s happening on your projects with summaries, budgeted hours, progress tracking, and a data analytics dashboard.

Each Raken daily report is completely searchable so you’ll have the backup you need should litigation arise.

Schedule a demo Email Demo@Rakenapp.com to get started.

Top: Daily Reports Middle: Timecards Bottom: Toolbox Talks

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rakenapp.com

F E AT U R E No More Field Paperwork!

How to Track All T&M work, Create and Track Fixed Price CORs/Quotes and Document All Schedule Delays—Without any Paper

by Chris Kinghorn, Partner, DataStreet As the construction industry turns to apps and software to help eliminate paperwork and streamline company flows, there are many questions that you might be asking when trying to identify the right platform. Will my team utilize the programs and understand how to work with them? Will these platforms really help streamline my business? And the most common one, what’s wrong with how I am doing business now?

In the world of construction, there are many things important to running a successful project. The quality of the product and timeline of the project will always be top priorities. These help make sure that you are profitable.

But above and beyond that, you need tools that help with documentation.

You need the ability to see where your projects and outstanding items

stand. With the today’s technology, a project manager should not need to drive out to a project to identify if a task has been completed, they shouldn’t even need to pick up the phone – they should be able to do all of this by using an app on a phone or a web portal.

There is an abundance of tools available, with new apps and software for construction released daily; nevertheless, it is important that you understand your company’s needs when finding the best app for you.

Some apps will streamline your entire company – but these come with a larger price tag. Others will digitize parts of your workflow, but they may not talk to other apps. You must understand how you want your company to flow when making these important decisions. For this article I am going to be highlighting Change

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Order Work specifically and how you should no longer be tracking it via paper.

The dream of project managers and companies is a dynamic Webbased app that would eliminate all field paperwork required for Time & Materials(T&M) work, i.e. a web based/ paperless system with 24/7 access from any smartphone, tablet, laptop or desktop. And it does exist. You can now create Fixed Price CORs/Quotes, Schedule Delay Notices and access a real time COR Log and Report log. I’ll be describing the system we developed at DataStreet.

T&M Tracking Tracking T&M work on paper costs you in multiple ways.

First let’s talk about those paper tickets/tags that always seem to be

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lost, late or damaged. With digital tickets, nothing shows up late to the office, tickets don’t get lost and everything is legible and complete.

Because tickets can typically be created from the mobile app or from the web, your tickets are always safe, accessible and easily amended.

Your field personnel can track Labor, Material, Equipment and snap photos in seconds. If you prefer your office personnel to do the tracking, it’s just as easy to add these items from the office.

Make sure the system you choose is flexible.

Next, let’s discuss processing a ticket and creating a Change Order Request. Typically, some tickets may take 10 minutes to process, others may take 20 minutes, and then you might get those real nasty tickets that are half missing and may take 45 minutes or more to process into a formal Change Order Request (COR). If your company is doing a high volume of T&M work, this could cause a PM or office employee to dedicate needless hours each week to deal with the paperwork brought in from the field – and fingers crossed that “All” the paperwork actually made its way to the office. Reviewing and processing a T&M Ticket digitally will only take seconds. All Man Hours, Material, Equipment, Photos and Notes are consolidated into a formal COR with just a few clicks. Your employees who previously had to deal with processing those paper tickets are now freed up to help with other tasks.

Generating Fixed Priced CORs/ Quotes If your company is consistently doing T&M work, then I am sure that you are also being asked to provide fixed pricing for proposed changes to your scope of work. Digital platforms allow you to quickly generate Fixed Price CORs/Quotes and send them to General Contractors with just a few clicks of the mouse. Your “Fixed Price Change Order Requests” can

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be emailed directly to the General Contractor. Any changes/updates that may be required to a fixed price COR once it’s been submitted can easily be accomplished. And revisions are tracked as well. All original and revised CORs are automatically stored in real time. No more digging through Excel files or Outlook to find past quotes sent previously.

you need their signature, you may capture their signature via email.

Providing these signature options is a necessity in today’s world as the general contractor’s(GC) authorized signer(s) may not always be available right when you need them; however your work must continue as there’s always a schedule that must be met.

COR Log

Documenting delays is helpful for subcontractors for many reasons, sometimes you may be reimbursed for “lost/down time,” other times you may just want to document why you were not able to start or continue work in a specific area. Whatever the reason, it’s worth documenting. Your digital application should allow you to track and document any and all lost/down time, failed inspections, trade delays, equipment failures, owner changes, etc., that have negatively impacted your ability to perform your work in a timely manner. In addition, you should be able to add photos to the Schedule Delay notice if needed. With a few simple clicks, all the data and photos are combined into a straightforward, easy to understand email. When you are setting up your project preferences, determine who should receive these emails. This means that you can have members on the GC team receive schedule delay notices immediately as they are created, or you can opt to send them out manually at a later date and time. Flexibility is key! We know that there is a fine line that General Contractors and Subcontractors walk from time to time and so the digital world is starting to provide the tools needed to maintain a successful, strong & fair relationship with all of your clients.

Chris Kinghorn is a partner at DataStreet, which provides a webbased solution for Change Order Needs. For more information visit DataStreetApp.com.

From your real time COR Log, you can view, update, edit, send and/or re-send all of your T&M and Fixed Price CORs as needed. When a new T&M Ticket is created, it is immediately housed in the COR Log. From there, your office personnel can view & track any and all additions to the ticket.

This includes all man hours, material, equipment, photos and any Authorized Signers signatures that may have been required. Locating a single COR or a group of CORs takes just a few seconds via the built-in filters. In addition, the DataStreet COR Report feature allows you to view, download and or send custom reports such as: Open Items, Submitted Items, Change Orders Received, Work in Progress, No Charge Items, Rejected Items, etc.

Documentation and Signatures When completing extra work, we highly recommend capturing an approval signature for the scope of work, as well as for all labor/hours worked each day. When setting up a new project, you will identify who is an authorized signer – who on the GC has team has the authority to sign off on authorizations and hour logs. DataStreet allows you to capture these important signatures in multiple ways, and at different times during the ticket’s lifespan. This can be done via a mobile device or through email approval. What this means is that your field personnel can capture signatures from the field at any time, or if your authorized signer is not available and

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F E AT U R E Drone Services for Efficiency and Cost Savings

by David Dengler, licensed FAA 107 UAV / UAS (drone) pilot

As a subcontractor, you may wonder if can you leverage drone technology in your current workflow? The answer is – Yes. Let’s look at how and where it makes sense. Drones can provide meaningful data throughout the entire process – from concept through completion.

Many firms are discovering that outsourcing or subcontracting drone technology, saves them time and money on all kinds of projects. While drone technology is safe, scalable, and easy to integrate into current workflows, subcontracting leaves the regulatory and maintenance matters to a specialized professional.

Here are some ideas for integration: • Site selection • Mapping (photomosaic) • Feasibility studies • Determining or verifying view corridors • Shooting still and moving images for promotional uses • Following the grading process • Tracking cut and fill • Volume calculations

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• Creating point clouds and DTM’s • Verifying the construction process, (i.e. “Was all the rebar placed correctly?”)

• and the list goes on and on.

A Single Source of Truth For now, let’s focus on a high-level concept drones can provide that speaks to the above list. A Single Source of Truth. What do we mean by a single source of truth?

Achieving a single source of truth means being able to operate at an enterprise-level, system-wide, crossplatform, and cross-discipline by sharing the data most recently collected from the field as a foundational source.

Or put more simply, all the stakeholders on the project know the exact current state of the project. The benefits are realized in saving time, scheduling, ordering, waste control, conflict resolution, expediting RFIs, safety, and more. The drone imagery also creates a historical record that can be used for verifications, if required.

Does this sound like a monumental task? It really isn’t. And the best part

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is having a single source of truth that is scalable along with the scope of a project. Drone technology can be implemented at a base subcontractor level for the entire project, or simply on demand when needed. Some firms require daily flights while others only need one or two flights for the entire project. The level of integration is dictated by the project itself.

The collected imagery and data processed create one undeniable source of truth where all stakeholders are assured of the current state of the project. Are the teams on schedule?

Do RFIs get back to the field in time to avoid timeline delays? Is everyone communicating? You can have these answers, many times, before they become questions.

So, how can you achieve the project “truth”? We use a process called photogrammetry.

The Photogrammetry Process Wikipedia defines photogrammetry as “the science of making measurements from photographs, especially for recovering the exact position of surface

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points. Photogrammetry is as old as modern photography, dating to the mid-19th century and in the simplest example, the distance between two points that lie on a plane parallel to the photographic image plane, can be determined by measuring their distance on the image, if the scale of the image is known.”

Drones are the perfect tool to accomplish photogrammetry, using GPS, and known points on the ground called Ground Control Points (GCP).

The drone flies in a precise pattern and altitude while taking hundreds, and sometimes more than a thousand photographs.

Next, the imagery is coordinated using the photographic metadata and the GPCs in post flight processing to create a point cloud. While it is possible to work directly from the point cloud (delivered in .rcs or .las formats), you can also produce other formats that many clients find more usable, including: • 2D Orthomosaic (.tiff), a flattened, high resolution, aerial 2D image that

is created from the photographs and is stitched together by referencing the point cloud making it scalable and able to be used as a background image; • Digital Terrain Model, DTM (.tiff); • Digital Elevation Model, DEM (.tiff); • Contour Model (.shp, .dxf); • 3D Mesh (.rcm, .obj); • Even native AutoCAD and Revit files where you can start your design work.

Again, the project drives the technology and the information needs.

Using an outside subcontractor relieves you of the burden of technology investment, education, certification, and most notably the liability. It is important, however, to verify the subcontractor you choose is licensed and knowledgeable of the construction industry as well as compliant with local and federal flight laws.

Once the site has been ‘scanned’, you have a digital twin of reality – in this case, the truth of the project at a point in time. And, by sharing the

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digital twin with your project team and stakeholders, everyone is working with the same reality. Consider the effect on weekly team meetings where the exact site image can achieve faster solutions and reduce disputes.

How do you get started? Compare your current process for capturing existing conditions to one using a drone subcontractor. You will find you can receive the data faster and eliminate return site visits as the project begins.

The progress reports provided by drone imagery are especially useful for tracking project milestones and more.

A single source of truth – the drone way.

Kelar Pacific specializes in project solutions specific to Building Information Modeling (BIM), Cloud computing services, Project Management consulting and Computer Aided Design (CAD). David Dengler is a licensed F AA 107 UAV / UAS (drone) pilot.

More information is at www. kelarpacific.com.

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F E AT U R E 3D Laser Scanning for Accurate Existing Conditions

by Garrett Maldoon, Kelar Pacific As-built drawings, if available, are only as good as the point in time of their construction. Rarely updated with intermediate modifications, you are left to estimate projects based on incomplete data. You win the bid. The only problem is the location of your pipe or duct connection is not accurate to the drawings you bid on. Now it’s time to dive into producing your own set of as-builts.

How you gather as-built details may depend on variables such as the size or complexity of a project. Tape and laser measuring still prevail as popular options. However, the new kid on the block, 3D laser scanning or LiDAR, presents meaningful benefits over the traditional methods in many cases. It is worth comparing your as-built budget with laser scanning services. Here’s why.

Considerations for 3D Laser Scanning • Time—LiDAR (LIght Detection And Ranging) sends out a laser beam and measures the length of time it takes for the beam to return. It is the same process your laser tape uses to measure, except laser tape is limited to capturing three points per second, whereas most laser scanners capture over 100,000 points per second.

• Cost—How many people are sent to the job site to take measurements?

One person to measure and another to take notes is common. And, for how many days? Sizable projects tend to take a several weeks or more.

Laser scanning can be done by one person although a team of two people can tackle any size project in 1/10 the time of traditional methods.

• Accuracy—When accuracy is important, there’s no substitute for 3D laser scanning. You receive down to +/- 2mm accuracy in the collected

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point cloud for indoor or outdoor distances of up to 330 meters. You can even read equipment labels in the photography layer.

• Safety—You reduce the risk of injury by limiting the construction site time needed to gather information. And, laser scanning can capture details above the ceiling where accessibility

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is a challenge and insurance requirements increase.

• Site Revisits—With a digital twin of the project site available on your office computer, you can eliminate additional site visits required for missed measurements. The travel time savings alone can be significant.

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model, if necessary. Your designer or detailer can interpret the point cloud as they create the CAD drawings or BIM model. If you work with piping, AI software exists that can identify cylinders and planes to help with the task. Creating models with a point cloud delivers accurate as-builts thus eliminating field issues experienced on renovation projects.

Outsource 3D Laser Scanning

• Phase Progress Reports—A point cloud and picture are worth more than 1,000 words. Laser scans can easily track project changes, deviations, and critical progress points to backup regular phase reporting.

The Point Cloud The laser scan produces a complete picture of the existing conditions known as the point cloud. Pictures can accompany the point cloud to provide additional context. Let’s look at three ways you can harness the point cloud information.

1. Measurements – Imagine doing site verification from the comfort of your office. Most laser scanners

enable you to view the point cloud and associated pictures using a Web browser. Now any project stake holder can take exact measurements and exchange ideas in the real context of the project site.

2. Background – View the point cloud as a CAD or BIM background in place of architectural drawings. The point cloud enables you to design your detailed shop drawings with accurate context of the space.

Not only is the point cloud a better method, but it also provides realistic information compared to measurements alone.

3. Convert the Point Cloud into Geometry – The point cloud delivers enough data to create a complete

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The next bid you win presenting a monumental as-built effort is the perfect project for 3D laser scanning. Start with an AEC services firm who can deliver the collective point cloud if you prefer to create the CAD / BIM models yourself. Otherwise, look for a firm that can deliver both the point cloud and the model according to your required Level of Detail (LOD). You might even find “scanning to BIM” is the solution for participating in BIM required projects when you don’t have a BIM team.

With 3D laser scanning, you can greatly reduce those shrugs of uncertainty and interrupted sleep wondering when the next major issue will appear. Working with the real existing conditions from the start contributes to successful project delivery throughout the construction phase.

Garrett Maldoon is an AEC Specialist and Revit Certified Professional at Kelar Pacific, LLC. Kelar Pacific provides technology services, software, and training for the architecture, engineering, and construction (AEC) industry. Specialties include 3D laser scanning, drone photogrammetry, robotic station point layout, BIM modeling and coordination and 4D pursuit videos. Kelar Pacific is a Gold Partner for Autodesk and Bluebeam products. Additional products and consulting include Primavera, Sage, Procore, BIMTrack, Strucsoft, and Fuzor (VR). For more information visit www.kelarpacific.com or call 800-578-2457.

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F E AT U R E Mastering Material Takeoffs Using Digital Methods There Are Many Advantages When Using Software over Manual Takeoff Tools

by Lindsay Powers, VP of Marketing, STACK Construction Technologies

Construction takeoffs, commonly referred to as material takeoffs, are an integral part of the cost estimating process. They can help you accurately assess the total costs of an entire project by providing you with an exhaustive list of materials and labor. Without a complete takeoff, it’s almost impossible to

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provide a total list of what’s needed to complete a job, which can result in project delays, insufficient materials, and cost overages.

Traditional construction takeoffs, when using manual methods involving pen and paper, can be extremely time-consuming.

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time you spend putting them together can significantly increase the time you spend bidding on more work!

More often than not, a construction takeoff is completed by an estimator, but subcontractors and suppliers are increasingly finding themselves filling this role. While the concept of a takeoff is relatively straightforward,

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creating one can be difficult depending on the complexity of the project. Different contractors will have different material requirements (i.e. roofing versus concrete) but the principles of a takeoff are generally the same.

Different Types of Takeoff Measurements When creating a new takeoff, there are a few key types of measurements required: Area—A measurement of surface area (typically in square footage).

Probably the simplest, and most commonly used measurement. The most critical element to successfully completing an area takeoff is to make sure your scale is correct. Scale can quickly be calibrated using a known distance or using a standard scale using a digital platform. Otherwise, you’re at the mercy of the architect (e.g., floor, ceiling, drywall, sloped roof, etc.).

Linear—A measurement of length, width, and depth (typically in linear footage). Creating a linear measurement sometimes involves accounting for drops, particularly with measuring wires or circuits.

It’s extremely easy to standardize or customize a drop distance using software but if performing a manual takeoff you will need a special tool (such as an electronic scale wheel) which requires you to reset the distance each time (e.g., baseboard, wire, or PVC).

Count—A measurement of the total number of an individual item (typically a whole number).

Counting symbols on a plan set can be automated using digital takeoff methods and software or done manually using a handheld tally counter. Ensuring accuracy using the manual method can be tedious as it is suggested that you mark each

symbol to signify an item has been accounted for (e.g., electrical outlets, fire alarms, or doors).

Volume—A measurement of a 2- or 3-dimensional space (typically in cubic yardage). Calculating volume is especially helpful for site and civil work. Contractors that commonly work in concrete or paving use this when they need to account for material in cubic units (e.g., concrete slab, wall, footer, asphalt, etc.).

Manual vs Digital Construction Takeoffs The construction industry typically has been slow to adopt technology, which has led to a drastic decrease in productivity. Despite the growing need to be more effective and efficient, many professionals are still using traditional paper blueprints and plan sets. While it’s possible to complete an accurate takeoff using manual methods, it presents a lot of uncertainty and inefficiencies.

Performing a manual takeoff requires that the estimator, or other construction professional, can accurately read the plan set.

Different variations can occur with different scales being used on every page or copying and re-printing pages using reduced sizes. This can drastically increase the chance of miscalculations and other errors.

Additionally, working with paper plans requires some way of being able to distinguish between all of the different items and material types being measured. Using tools, such as colorful pens or pencils and plastic overlays, adds another layer of complexity and is difficult to keep track of. Given all of these challenges and with paper plans being expensive to produce and print, a lot of innovative construction professionals are going digital and adopting new technologies.

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Digital takeoff methods have many advantages over manual. They can increase your estimate accuracy, decrease the time it takes to produce a takeoff and estimate, and have a lower expertise requirement.

Construction software, in general, has cut down on the complexity of the pre-construction process and the chance for error on your calculations. While the digital and manual processes are extremely similar, the key difference is that software has automated a lot of the more complex, tedious processes.

To cut down on printing costs (which is a huge savings on its own) a lot of companies are producing digital plans. This empowers estimators to leverage software to simplify and partially automate their takeoff process. STACK, a web-based takeoff and estimating platform, is helping contractors easily create accurate takeoffs and ensure the profitability of their projects every day! STACK serves a diverse range of trade specialties, so constructional professionals can rest assured that they’ll have all the tools they need to measure any number of materials.

STACK software enables estimators and other construction professionals to produce takeoff and cost estimates within the same program. Once your takeoff is complete, you can easily put your measurements into an effective and professional looking quote using the STACK Project Cost Calculator.

When adjustments need to be made, it’s as simple as changing the numbers in a few fields.

Lindsay Powers is VP of Marketing at STACK Construction Technologies.

STACK provides industry leading takeoff and estimating software for professional construction contractors. Visit stackct.com for more information and creating a free account.

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F E AT U R E Propelling Risk Management Success through Pilot Programs

by Dave Galbraith, MS, AIM, CSP—Amerisure AVP of Risk Management, Risk Management Technical Lead Rapidly growing technology in risk management and loss reduction solutions is creating tremendous opportunities for business owners. As insurance carriers attempt to identify valuable loss-reducing technology, numerous pilot programs are being offered to their policyholders.

Pilot programs, otherwise known as proof of concept programs, offer opportunities to gain operational knowledge in areas such as: • Augmented and virtual reality • Building information management • Drones • Machine learning • Sensor technology • Telematics • Visual learning Defining pilot programs Pilot programs are defined as smallscale experimental programs designed to manage risk, validate benefits, and introduce change associated with emerging risk management technologies. Insurance carriers either share the cost of the program with participants, or support it in full. The experimental programs strive to: • Evaluate feasibility in real-world applications • Determine administration and management requirements • Identify cost of use • Contrast actual performance and stated performance • Validate loss reduction potential • Establish scalability potential

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Feedback from policyholders who participate in pilot programs is vital in determining the feasibility of a largescale project. Large-scale projects are implemented only if they can be designed to ensure the desired benefits are realized by everyone in the commercial insurance chain.

Often, pilot programs are necessary to uncover details in the full design and implementation of a project.

Benefits of participation Numerous benefits can be participating companies for little to no cost.

Participants gain knowledge of leading technologies that can enhance future business decisions. Prior to participation in a pilot program, groups are often defined as lagging indicators.

The pilot program experience enhances the understanding of proactive risk management solutions, which changes the culture of the organization to proactive-based risk management.

Policyholders participating in proof of concept programs have a deeper understanding of current and future technology. Their skills using an existing technology may improve, or they can acquire new skills using a technology they were previously unaware of. Implementing new technology into policyholders’ work also provides firsthand knowledge of the technology’s capabilities, operational experiences, operations expenses, worker acceptance rate, and potential loss reduction.

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Deciding if a pilot program is right for you As the policyholder’s trusted advisor, the risk management consultant is crucial in guiding the customer through the decision of whether to participate in a pilot program. Several critical characteristics must be considered in the decision.

The most important factors impacting the success of a pilot program is management commitment and desire to support it. With proper support, the inherent obstacles of emerging technologies can be overcome. Without it, the project is almost destined to fail. In addition, the policyholder should have a specific problem that the program technology will solve. A solution without a problem generally loses support quickly.

Finally, management must be willing to recognize the technology may fail to perform as advertised. Advise clients that a pilot program can be successful despite the failure of technology.

These successes include business operation insights, worker adaptability to technology, or a shift in workplace culture.

Dave Galbraith is AVP of Risk Management, Risk Management Technical Lead at Amerisure. Their customized risk management plans and industry-leading claims service have made them the preferred choice for construction firms. For more information, please visit www.amerisure.com

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Applications are now being accepted for many of the awards offered by ASA. Certificate of Excellence in Ethics This award recognizes subcontractors for their commitment to ASA values, such as quality construction and a safe and healthy work environment. Each applicant is required to respond to questions concerning the firm’s corporate ethics policies and procedures, its construction practices, and its general business practices. Each applicant also is required to submit detailed documentation, including sealed letters of recommendation from a customer, a competitor, and a supplier.

National Construction Best Practices Award This award recognizes prime contractors that exemplify the values of subcontractors, treat subcontractors fairly through use of levelplaying-field contract terms, and consider subcontractors part of their core project teams. The program’s rigorous criteria include the use of a standard subcontract whose provisions substantially reflect the best practices incorporated into the ASA-endorsed ConsensusDocs 750 Standard Agreement Between Constructor and Subcontractor, as well as highly favorable evaluations from three specialty trade contractors, based on 20 project management factors.

There are many more awards available through ASA, and more information about all of them can be found by clicking here. All award winners will be recognized during the 2020 SUBExcel conference on March 4-7, 2020, in Las Vegas, Nevada. We highly encourage all ASA members to get involved in our awards program. These valuable recognition opportunities are only available to ASA members.

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Coming Up

Complimentary Webinars

in the July 2019 Issue of ASA’s

Tuesday, July 9, 2019

Emerging Technologies—Smart Tools, UAVs and Others—and How They Relate to the Internet of Things Presenter: Michael McLin, Maxim Consulting Group Savvy construction industry professionals confess that acceptance of technology is the future. A good number resist committing their time and resources while hoping to see results by using tech for sake of tech. Tech innovations are sweeping the industry to the point that even the standard issue hard hat is changing, in addition to new advances that benefit every area of the industry—for those that embrace the future.

In this webinar, Michael McLin, Maxim Consulting Group, will examine some of the new technologies that are driving a more connected future. Register online by clicking here.

Trade Strategies – Attracting and Building a Workforce for the Future Presenter: Mike Brewer, CEO Brewer Companies, President of the ASA of Arizona Hear what is going on in the Phoenix market to address the number one challenge the trades face – lack of a workforce.

Mike Brewer, CEO of the Brewer Companies, Arizona’s largest residential plumbing contractor will share how the industry, both commercial and residential have come together to help solve this issue, their attempt at attracting the next generation of talent and what his company is doing to train the future talent for his organization. Mike has been in the plumbing business for over 40 years and has experienced many up and down business cycles over those many years. He has never experienced the lack of workforce that exists today and disagrees with the common narrative that the young people of this nation “don’t want these jobs”. Hear his personal story about where this started three plus years ago and where they are today. Register online by clicking here.

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How to Get the Best Customers • BD Outreach: Expanding Your Sphere of Influence • How to Spot an Ideal Customer • Pre-Qualification of Construction Managers—An Essential Ingredient for a Successful Project • When a Duck isn’t a Duck— A brief look at root cause analysis to common issues in the construction industry firms

12 p.m. to 1:30 p.m. Eastern / 9 a.m. Pacific

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• Cultivating the Best Customers

Tuesday, August 13, 2019

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Look for your issue in July.

To access past issues of The Contractor’s Compass, please click here.

For questions about subscribing, please contact: communications@asa-hq.com

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