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CONSTRUCTION KNOWLEDGE BLOG

September 21, 2012

Shale Gas in PA, Half Million Workers?
Filed under: Energy — Tags: — nedpelger

As the debate about the safety of fracking continues, so does the industrial buildup for Marcellus Shale extraction in PA. Gov Tom Corbett spoke at the Shale Gas Insight yesterday in Philadelphia. He warned the industry to take the long economic view, which will maximize the benefits for all involved. He recalled the oil boomtowns in the 1800s that went bust and disappeared.

Most fascinating to me was Community and Economic Development Secretary C. Alan Walker’s statement that the shale gas industry in PA could employ 500,000 workers by 2020. That would be a tenth of the PA workforce. The refineries and processing plants planned near Philadelphia and Pittsburgh would be major construction projects and long term employers.

If you’re of a mind to learn more about this huge shift in PA, the Wikipedia Marcellus Formation article has a great shale gas explanation. I particularly like this graph.

If you live in this region, or if you are looking for work and could get to this region, you should take some time to understand the Marcellus Shale phenomena. Don’t be that guy that misses the fascinating history being made (and opportunities to prosper) because he’s too busy watching TV.

CONSTRUCTION KNOWLEDGE BLOG

September 19, 2012

Sharing Project Info on the Cloud
Filed under: Cloud Construction — Tags: — nedpelger

It’s always a challenge to keep the current drawings and sketches in everyone’s hands on the job site. It seems virtually all owners change their minds during construction. That makes sense, since good design really is an iterative process and it doesn’t stop just because construction starts.

So how do we make sure the folks on the job site actually have the most current information? I’m proposing a cloud computing solution that will help in several ways.

First, use Box.net to keep the most current documents for the project. You will probably want to keep older design and bid sets on Box.net as well, so I propose having a Dead files and a Current files section for each project. Then only give access to all project stake-holders to the Current files section.

By keeping a Current files section, all project stake-holders can bookmark that page and not have to change their bookmark as drawings change. When sending out the Box.net link, include an instruction like:

You may want to bookmark this link in your internet browser for future reference. If you create a bookmark category for “Projects” and keep all your Box.net bookmarks there, you will easily be able to find all the current project information any time you have internet availability. I will strive to keep only current project information on this link. I will remove old files and put new approved files at this link. I will try to include design, schedule, meeting minutes and other current project information.

The PM must manage that Current files section, then, to move out old info and keep it current. This procedure should help assure that subcontractors don’t pull old drawings out to print that are no longer current. It also gives an internet link for all current info for a quick check to determine what’s out of date and what’s current.

Box.net gives a free personal account with a 5GB limit. The do restrict the ability to upload and download in file groups with the free account, but it works fairly well. Many contractors could simply use the free accounts.

The Box.net paid personal account costs $10 US/month and gives 25GB of storage with a max 1 GB file size. This is the option I use. With all my projects, I’m only up to less than 2 GB of storage. I never have a problem with the 1 GB max file size.

The Box.net business solution costs $15US/user/month and allows 1000 GB of storage and a max file size of 2 GB. It seems a firm would need to be quite large to need this option.

This simple procedure to keep project info current on Box.net and shared with all project stake-holders can help you operate at the highest level of project efficiency. Few big construction firms get this important step right. If you do, you’ll have a big advantage.

CONSTRUCTION KNOWLEDGE BLOG

September 18, 2012

Architect Sues School District for $41M
Filed under: Design — Tags: — nedpelger

Claiming racial discrimination, Tony Udeagbala of Machisa Design Services filed a $41M suit claiming he was fired from a $26M Ohio school renovation project because he was black and from Nigeria. The project has been cancelled.

The suit claims Columbus’ facilities chief, Carole Olshavsky, “sabotaged Machisa at every opportunity” and was “meddlesome” and that the board changed the scope of work on the school-building project “at a whim.”

Gee, a meddlesome owner that changes design on a whim…I thought that was their job.

While I certainly don’t know the facts on this case, a perusal of the Machisa Design Services website surely doesn’t show an impressive firm. The fact that they were already paid $680,000 before the contract was terminated and were not the lead architect tells me the District spent a fortune on design fees.

What’s the takeaway? Be careful with professional design service procurement. Between copyright violations and wrongful terminations, it’s tricky to change architects in midstream.

CONSTRUCTION KNOWLEDGE BLOG

September 14, 2012

The Beauty of Risks and Rewards
Filed under: Cool Projects — Tags: — nedpelger

This month’s American Society of Civil Engineering magazine has a great article about a new skyscraper being built in Kuwait. The Al Hamra Firdous Tower has spiraling hyperbolic parabaloid concrete walls which will reach about 100 stories high.

The fascinating aspect, though, is that the local developer and general contractor team that own and are building the tower began the project with the intent of a 50 story project. Then the Kuwait authorities changed the zoning building height limit from 200 meters to 400 meters.

The risk of building a simple 50 story project pales next to developing a 100 story unique sculpted tower. Just look at the beauty of that form.

And the way it fits but enhances the city skyline.

Finally, I just loved the streetscape view.

So a local developer and GC team up to do a project, then respond to the conditions and up the ante. Great things can happen when we leave the comfort of our normal and venture into the stretched zone.

I hope you take some time this weekend to relax and think deeply. Think about what you do every day…your normal. Then think about what you could do…your best. Move toward your stretched zone.

CONSTRUCTION KNOWLEDGE BLOG

September 12, 2012

Paperless Invoices and Job Costing
Filed under: Computers in Construction — Tags: — nedpelger

If you’re old enough to remember the introduction of computers to business in the 1980s, you also may recall the many promises for a paperless society. Of course, as computer use exploded, we used more paper than anyone ever imagined. Since more things could be tracked and charted, they were…and printed on paper.

With the recent and almost universal acceptance of the Portable Document File (PDF) from Adobe, we are now actually getting to a place where paperless could work. I look at the reams of paper I use each month (and then have to store forever) and think I could do better.

So I’ve begun. Starting in August, I’ve stored all the project invoices that get emailed to me in separate project computer files as soon as they arrive. I stopped printing out hard copies. I will mark up the invoices with Adobe Acrobat using:

  1. Dynamic Stamp tool (to indicate my approval to pay and the date)
  2. Cloud tool (to clarify the amount to pay)
  3. Text Box (to note any special circumstances or issues on the invoice)

I’ll also begin asking the contractors and vendors I work with to email me their invoices instead of mailing or faxing. I’ll agree to send back a response to every received invoice to let the sender know it’s in my system (which is more info than they would have had under the old system).

If folks still want to mail their invoices out of habit or concern that I get them, that will be fine too. I’ll just match the mailed invoice to the PDF, then throw away the paper copy.

I’m planning other technology improvements that I’ll be sharing with the contractors that I work with most often. Together we can get more efficient and improve our bottomlines.

CONSTRUCTION KNOWLEDGE BLOG

September 10, 2012

Make Your Small Construction Co More Profitable and Efficient
Filed under: Computers in Construction,Construction — Tags: — nedpelger

I’m going to slightly change the direction of this blog. When I started writing over four years ago (wow, sure seems longer than that), I wrote for an intended audience of Construction Supervisors. I thought there was a real need for Construction Supervisors to learn, communicate with each other and grow. I still do, but found that few Construction Supervisors ever found their way to my musings. And if they did, they didn’t return.

What I did get, though, was a growing audience of folks involved in different aspects of the construction industry. I get about 5,000 unique visitors a month to the blog, but since so few leave comments, I’m not sure who does what.

I do know, though, that lots of my readers run small construction companies. Since I work with small construction companies everyday (concreters, masons, drywallers, plumbers, etc) I have a sense of what they need to do to survive and improve. With today’s construction related economy, many firms struggle to survive.

The current standard, I think, has small firms with much less overhead cost than large competitors, but also lacking in effective management processes. For example, few small construction companies do effective job costing, knowing how the costs are working during the project. Most simply wait till the end of the project and hope they didn’t lose money.

Most small firms don’t effectively manage contracts, change orders, submittals or keeping the drawings current to the field staff. Each of these items carries a substantial risk when managed poorly and reward when done well.

We live in fascinating times. With the smart phone and tablet computers, small construction companies could become better managed than large firms without increasing overhead. The time to embrace these possible efficiencies is now. The time to grow market share and profits is now.

So I’m going to write more about how to those things. I’m going to work with several of the small construction companies that I often use on my projects and see if we can increase our management efficiency (which gives the best information to the person in the field that’s doing the actual work).

CONSTRUCTION KNOWLEDGE BLOG

September 6, 2012

Missing Great Buildings
Filed under: Cool Projects — Tags: — nedpelger

I’ve been to Sedona, AR twice and enjoyed Slide Rock State Park and all the red rock beauty that is Sedona. The kids and I bumped and floated our way down the 1/4 mile long natural creek water slide. The photo below gives an indication. Dave Dieterly, an estimator friend, told me it was his kid’s favorite stop on a West vacation. Our kids felt the same way as did many others to whom I’ve recommended it.

But when I recently came across photos of the Chapel of the Holy Cross in Sedona, I wondered how I could have missed visiting this great building. I’ve had time in Sedona and missed this marvelous facility.  Look at the lines on this structure

and how it fits so perfectly into the surroundings.

This would certainly be worth the trip to explore and experience. I love this last photo that just gives a sense of being there.

Being in Sedona and not knowing about the Chapel makes me wonder how many other buildings and sites I’ve went right by without knowing. On a trip this summer, we stopped by Doune Castle in Scotland completely by happenstance. It was a fantastic tour that we easily could have missed.

Is there a website that lists great buildings and bridges to visit? I couldn’t find one. That would be a good idea for someone other than me to develop. Do any of the existing travel sites have a function that would accomplish the desired result?

CONSTRUCTION KNOWLEDGE BLOG

September 4, 2012

US DOT Finds Half Billion Dollar Slush Fund
Filed under: Industry outlook — Tags: — nedpelger

“The rich are different from you and me, Ernest,” said F. Scott Fitzgerald.

“I know,” Hemingway replied, “They have more money.”

As I read this ENR story about DOT Secretary Ray LaHood instituting a $473M US program for funding construction on highway, transit, passenger rail or port work, I contemplated how different government is from business. Like the rich are different than the rest of us.

The $473M was actually funds appropriated between 2003 and 2006 that never got spent due to projects not proceeding. So staffers at DOT went through the files and found 671 idle earmarks, that could have the funds re-directed to some new project. States must apply to re-allocate their funds by October 1, 2012.

The substantial politics aside, imagine looking back in your business records 6 to 9 years and finding some plans that went differently, then pretending that money was available from that change. Your banker would have an issue with that thinking rather quickly.

Governments, though, don’t have to fiddle around (at least in the short term) with where the money comes from. The funds were approved and will be spent soon.

As I get older, I’m getting more comfortable with the large gulf between the way things should be and the way things are. Unhappy fanatics tend to live in “The way things should be” land. While I think we should all continue to strive to make things better, it’s reasonable to play by the current rules.

In fact, I’m currently working on a couple projects and pursuing some public-private partnerships. As I run the numbers, I’m amazed to see how some public funding leverage can help create hundreds of millions of dollars of private economic activity. So I’m not sure where I stand in my politics, but I seem to be living in “The way things are” land.

CONSTRUCTION KNOWLEDGE BLOG

August 31, 2012

Get Behind the Mule in the Morning and Plow
Filed under: People Skills — Tags: — nedpelger

I was visiting with a friend last night who spent 15  of the last 16 years in prison. We spoke about working and making a difference in life. We just laughed and relaxed and agreed to strive to live in the moment. The past and the future don’t really matter too much, the present does.

That sentiment reminded me of one of my favorite Tom Waits songs, Get Behind the Mule in the Morning and Plow.

httpv://www.youtube.com/watch?v=ORSMACaVPYY

Here are the last lyric lines:

Pin your ear to the wisdom post
Pin your eye to the line
Never let the weeds get higher than the garden(12)
Always keep a sapphire in your mind
Always keep a diamond in your mind

You got to get behind the mule in the morning and plow
Got to get behind the mule in the morning and plow
Got to get behind the mule in the morning and plow
Got to get behind the mule in the morning and plow

So try to let go of the anxiety, the worry, the perfectionism or just the blahs and do that thing that the moment calls for.

CONSTRUCTION KNOWLEDGE BLOG

August 30, 2012

The Weird Economies of Solar Power
Filed under: Energy — Tags: — nedpelger

Solar panel makers in China face huge market hurdles as global sales slump and a price war heats up. The major solar panel manufacturers have accumulated $17.5B US in debt, creating a likely need for rescue funds from the Chinese Government. To make it worse, 25 European panel makers are trying to invoke anti-dumping measures against the Chinese solar industry.

How did the market get so skewed? How did the manufacturers, in China, Europe and the US, get so far in over their wallets?

A look at the true economies clarifies. I was working on a solar panel project last year to place solar arrays in parking lots at an apartment complex for one of our customers. It was about a $10M project that produced about 2MW of power. That was a respectable rate of $4.80/watt.

Without all the government programs, though, the cost for power was extremely high. Using a low 4% cost of money, the kw hr cost came in at $0.22/kwhr. Which is more than 5 times the wholesale cost of electricity. We never built the project.

Can you imagine the government saying, “Hey, we should all switch to X fuel for our cars, don’t worry that it costs $17/gallon, we’re sure the price will drop at some point…and it’s just the right thing to do.”

Be wary when the numbers just don’t make sense. If you want to bet on the next big winner in energy, I think it may be spelled F-R-A-C-K-I-N-G.

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