CFPP 2007 - 02 Oct 07 Linda Newton, PhD, PMP Manager, Realty Asset Support Quality Garbage is Still Garbage.

CFPP 2007 - 02 Oct 07

Linda Newton, PhD, PMPManager, Realty Asset Support

Quality Garbage is Still GarbageQuality Garbage is Still Garbage

CFPP 2007 - 02 Oct 07

OverviewOverview

• Infrastructure Management Cycle

• Case Study on Impact of Quality

• Way Ahead

• WIFUS (What’s in it for us?)

CFPP 2007 - 02 Oct 07

Infrastructure Management CycleInfrastructure Management Cycle

PlanAcquire

Use

Dispose

CFPP 2007 - 02 Oct 07

CFPP 2007 - 02 Oct 07

Life Cycle ManagementLife Cycle Management

PlanAcquire

Use Dispose$

Time

CFPP 2007 - 02 Oct 07

Ability to Influence Life Cycle CostsAbility to Influence Life Cycle Costs

Time

Lev

el o

f I n

f lue

nce

ConstructionDesign

Operate &Maintain

100%

0%

50%

CFPP 2007 - 02 Oct 07

What is Quality?What is Quality?• “Degree of excellence” (Oxford Dictionary, 1992))

• Conformance to requirements (Crosby, 1979)

• “Satisfaction Guaranteed or your money refunded” (T. Eaton Company)

• “Totality of characteristics of an entity that bear on its ability to satisfy stated and implied needs” (American Society for Quality)

CFPP 2007 - 02 Oct 07

Dimensions of QualityDimensions of Quality

• Performance

• Reliability

• Durability

• Serviceability

• Aesthetics

• Conformance

• Perceived quality

Defining the Requirement

Process

Product

CFPP 2007 - 02 Oct 07

Impact of QualityImpact of Quality

• DND Case Study

• Quality Myths: fact or fiction– #1 Save now pay later– #2 We don’t build ‘em like we used to– #3 Perception is everything

• Impact

CFPP 2007 - 02 Oct 07

DND StudyDND Study• Five categories of buildings

– administration, residential, operations, institutional (lecture/training), hangars

• Common design • Constructed after 1950

• Older >41 years of age• Middle-aged 26-41 years of age• Newer <26 years of age

• Focus on costs in first 20 years of building life

CFPP 2007 - 02 Oct 07

CFPP 2007 - 02 Oct 07

CFPP 2007 - 02 Oct 07

CFPP 2007 - 02 Oct 07

CFPP 2007 - 02 Oct 07

100 90 80 70 60 50

20

15

10

5

Annual equivalent construction costs(1999$/m2/yr)

An

nu

al e

quiv

alen

t 2

0 y

rM

&R

cos

ts (

19

99

$/m

2/y

r)

Myth #1: Save Now, Pay LaterMyth #1: Save Now, Pay Later

Comparison of Maintenance/Rehabilitation Costs & Construction Costs

CFPP 2007 - 02 Oct 07

Myth #2: We Don’t Build ‘em Like We Used ToMyth #2: We Don’t Build ‘em Like We Used To

• Construction costs generally lower for newer buildings

• Building services costs comparable

• M&R* costs highest for newer buildings:• Newer 1999$ 11/m2/yr

• Middle-aged 1999$ 10/m2/yr

• Older 1999$ 7/m2/yr

• CMHC study showed higher repair costs for post 1980 bldgs

CFPP 2007 - 02 Oct 07

Myth #3: Perception is EverythingMyth #3: Perception is Everything

E - washrooms

I - adequate/appropriate

lighting

J - timely repairs

Q - mechanical ventilation

R – heating

**********************

PQ – Perceived Quality

DQ – Design Quality

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

I J E Q R

Quality factor - All buildings

Per

cen

t m

et

DQ

PQ

CFPP 2007 - 02 Oct 07

Impact of Design Quality on CostsImpact of Design Quality on Costs

0.6 0.7 0.8

0

10

20

Design Quality (max score = 1.0)

20 y

r A

EC

M&

R c

osts

(19

99$/

m2/

yr)

Comparison of Maintenance/Rehabilitation Costs & Design Quality

CFPP 2007 - 02 Oct 07

Way AheadWay Ahead

• Focus on ensuring quality in design– Requirements, requirements, requirements– Communicate & collaborate– Mitigation vs litigation

• Whole life/life cycle cost approach

• Examine how we procure design and construction services

CFPP 2007 - 02 Oct 07

What’s in it for US?What’s in it for US?

As consultants AND owners:• WE define the design requirement• WE have the greatest opportunity to affect

end-user satisfaction• WE have the greatest influence on the life

cycle costs of what you designAs procurement professionals:• YOU have control over how WE do this

CFPP 2007 - 02 Oct 07

Collectively WE can make:Collectively WE can make:

Thank YouThank You

Linda Newton

Manager, Realty Asset Support

[email protected]