Four construction trends we’ll see in 2021 for a more resilient industry. By Allison Scott

We’ve seen dramatic changes in the construction industry over the last year. Although the challenges are immense, the evolution is incredible. In 2020, we saw a renaissance of new workflows, partnerships and mindsets – all making the industry stronger together.

Still, we have a long road ahead.
According to FMI, construction traditionally lags 12 to 18 months behind general recessions. ‘Resiliency’ will be an operative word for the industry to continue moving and excelling in the year ahead and beyond. The year 2021 has the potential to be transformative for the industry - but only if firms and workers continue to build their resiliency muscles to future-proof their businesses and strengthen the industry overall.

Here are four leading trends that will drive industry-wide resiliency in the years ahead:

Rising investment in sustainability
First, there will be a renewed focus on environmental resiliency, focusing on how energy sources, infrastructure and the built environment play a part in combating climate change. There is now well-documented evidence of how communities across the globe are being impacted by environmental events, the need for reliable energy sources and more. Being creative in our approach to these challenges is an AEC industry call-to-action. Firms that are already exploring next-generation net-zero construction, creative material use/re-use, intelligent infrastructure projects and renewable energy projects will be well-positioned to take advantage of the rise of ‘resilient’ projects that encourage sustainability.

Similarly, digital infrastructure projects like data centers are also poised to grow as the rise of digitization has accelerated due to remote working brought on by the pandemic. Since mission critical facilities use tremendous amounts of Trendsenergy, more and more digital infrastructure projects will seek to lower their environmental footprint by improving their facilities with heating/cooling efficiency, as well as exploring renewable energy sources.

Driving innovation with culture
Second, construction firms will continue to increase their focus on building a resilient workforce. As the pandemic showed, firms that readied teams with connected technology, remote working solutions and cultivated a culture of empathy, trust and flexibility have been able to weather the ups and downs of the last year. However, this roller coaster ride also stretched teams to their limits. We’ve all been dealing with the blurred lines of home and work life. The ability to adjust strategy and process has been impressive, but culture ultimately trumps strategy in the long term.

I’m optimistic that leading construction firms will take the challenges of the last year as an opportunity to revisit a number of their human resources and culture initiatives such as improving training of construction technology to include a broader set of roles both on and off the site; widening the talent pool by developing new roles for digital natives and a more diverse population; developing unique and fast-growth career paths that encourage folks to stay in the industry; increasing health and wellness benefits to include things like mental health, stress management and family-friendly care options; and increasing employee engagement tactics to improve a sense of community and build a culture of trust among distributed teams.

Reinventing business models
Third, many leading construction firms have taken on new technology over the last few years and increased their attention towards things like digitization as central to their work. However, most construction firms’ business models have not provided the right amount of resources and flexibility to support true innovation that will create exponential growth. Simply adding new tools to the stack doesn’t solve the root challenge of stagnant or out-of-date workflows, nor does it create lasting differentiation.

As construction firms take on the challenge of future proofing beyond 2021, leaders have an opportunity to drive an innovation mindset and rethink their technology investment and adoption strategy. Examples may include formalizing an internal cross-functional innovation council within their companies that are also responsible for change management and program management; exploring innovation R&D tax incentives; and applying a culture-driven approach to technology adoption that balances performance incentives with behavior change.

Reimagining technology & data
Over the last few years, many leading construction firms have taken on new technology and increased their attention towards digitization as being central to their work. Covid-19 has only accelerated the use of technology and digital workflows in the industry. For 2021 and beyond, this opens the doors to even more opportunities for businesses to reimagine how they utilize technology and data to build resiliency, including virtual collaboration, AI and machine learning.

Businesses have more data than ever before; we will see a significant increase in firms taking advantage of this new information and creating more core competencies around data, analytics and business intelligence. Examples include standardizing and formalizing data plans and strategies company-wide, expanding the use of connected and integrated technology solutions to reduce data silos and disconnects, and the growing utilization of dashboarding and analytics tools to inform project and business-level decisions.

We are at an important and exciting liminal moment for construction – a sea change, if you will – that is poised to unlock increased resiliency for people, process and technology. While we don’t know exactly what 2021 will bring, we do know that our industry’s advancement hinges on our ability to successfully reinvent, adapt and push boundaries.

Allison Scott is Director, Construction Thought Leadership & Customer Marketing at Autodesk. Autodesk Construction Cloud is a powerful portfolio of construction management software that combines advanced technology, a unique builders network and predictive insights to connect people and data across the entire building lifecycle, from design through to operations.
construction.autodesk.com

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Rene Morkos takes a look at the use of artificial intelligence and how it can help to revolutionise the construction sector

Construction has been a growing industry since humans first realized the need for shelter. Still, the building boom of today is unlike anything the world has seen.

According to recent research published by McKinsey & Company, more than seven per cent of the world’s labor force and over $10 trillion per year is devoted to construction-related activity. But while productivity and cost-efficiency in other industries have been dramatically improved by digitization, a reluctance to embrace new technologies has left the construction industry lagging behind.

In today’s environment, that attitude is swiftly changing. The need to improve productivity, minimize downtime, and reduce the overall cost of construction is critical - and driving new interest in the adoption of artificial intelligence (AI) and machine learning. Early adopters have proven that model-based scheduling tools and solutions can streamline development, optimize operations, and help identify time and savings costs for both design and construction - often, with dramatic increase in productivity and profitability.

Artificial Intelligence - a revolutionary tool
Artificial Intelligence (AI) is a term used to describe programs which mimic human thinking to solve problems. AI makes it possible for computers to learn from historical data, adjust quickly to new information, and perform human-like tasks at incredible speed.

At ALICE Technologies, we chose to leverage the computational power of AI to create a one-of-a kind platform that is able to run millions of construction simulations in minutes, and generate schedules that are optimized for project duration, cost, and many other objectives. Our reasoning was simple - while the introduction and adoption of digital tools and softwares such as CAD and parametric design have revolutionized portions of the design and engineering processes, no similar tools were available for addressing the highly complex challenges of construction scheduling and management.

How does it improve construction?
Today’s planning and scheduling functions are detailed and complex - and as the level of complexity rises, so does the exposure to risk. In fact, McKinsey estimates that 98 per cent of projects exceeding $1B in cost are (on average) 80 per AIcent over budget - and 20 months behind schedule.

It’s not really a surprising statistic to most industry players. Assembling a construction schedule is still a time-intensive manual process, one that relies heavily on the gut-sense and personal knowledge of experienced builders. It often takes weeks of continuous back-and-forth between the architect, owner, developer, and general contractor to account for even a small change to a single timeline. This means that even a simple delay can disrupt an entire schedule.

While a team of skilful, experienced people may be capable of effectively managing the complicated scheduling and oversight of smaller construction projects, the additional complexity and longer timelines of large-scale projects are far more difficult to master. This complexity makes manual estimating and management both burdensome and ineffective. A delay or shortage can require extensive reconfigurations - and without the assistance of technology, even minor issues can snowball to impact the entire timeline and project cost.

There is no substitute for human intuition and experience - but when hundreds of millions of dollars are at stake, detailed precision and accurate insight are critical. Most technologies and solutions designed for construction simply streamline execution by digitizing antiquated manual processes. Though this can be helpful for improving organization and managerial oversight, you can’t fix a bad plan. ALICE is capable of taking these efforts further, leveraging powerful AI to help you start a project with the best plan in place.

Designed to integrate with the tools and software solutions already used by construction contractors and developers worldwide, ALICE’s powerful AI acts as a force multiplier, leveraging intelligent optimization to generate a multitude of possible scenarios and potential solutions. This means human users can input and solve complex challenges on high-value construction projects with incredible ease and accuracy, in mere minutes.

ALICE boosts productivity and cost-efficiency dramatically, analyzing and exploring scenarios to help you identify potential issues before they arise. ALICE can quickly assess millions of options and solutions, proposing alternative approaches which empower your team. When challenges arise mid-project, whether they be permitting issues, supply delays, or labor shortages, teams can use ALICE to immediately explore alternative solutions that minimize the impact on their project and get it back on track.

AI in Action: ALICE and 5M
The benefits of AI are obvious when applied to projects such as 5M, Build Group’s principal application of ALICE Technologies. Scheduled to open in 2021, 5M is a highly-complex project which prioritizes the preservation and revitalization of historic buildings. Designed to incorporate a 24-level, 640,000 sq.ft. office tower, and 302 apartments (including 91 affordable housing units), the project also replaces former vacant land with the 26,000 sq.ft. Mary Court public park (which includes both a children’s playground and dog run). 5M has created over 1200 jobs in San Francisco, and is forecasted to create an additional 4100 permanent jobs in the city upon completion.

With ALICE’s help, Build Group can easily demonstrate how their project will come together in a timely and cost-effective manner. This transparency helps build trust with the client. On average, ALICE-driven projects finish 17 per cent faster than conventionally planned, while cutting project labor and heavy equipment costs by 14 per cent and 12 per cent, respectively.

As 5M Project Director Michael MacBean stated, “Traditionally, we would have involved multiple parties from our construction team - from precon, to superintendents, to project managers - to evaluate complicated projects. We’d use models, pictographs, Microsoft Project, P6 schedules, and different hand-drawn iterations to figure out best solutions, best crane placement locations, best sequence cycles, manpower, working hours for a project - all very time consulting to evaluate in a more manual fashion. With ALICE, we are able to upload some basic parameters in terms of recipes and time constraints and productivity constraints, and have it quickly generate millions of different solutions.”

A force-multiplying solution
Following in the footsteps of Build Group, modern construction companies are realizing the benefits of leveraging AI to create and assess what-if scenarios and contingency plans - and McKinsey’s study cited growing adoption of AI for overcoming challenges related to cost, scheduling, and safety.

Potential use cases for leveraging AI are still being explored, but today’s tools already offer significant advantage when applied to construction. Early adopters (such as Build Group) benefit most from prioritizing technology which addresses their greatest challenges: streamlining construction scheduling and ensuring timely completion.

To put it simply, tools such as ALICE aren’t simply a step towards greater productivity and efficiency - they’re incredible insurance against the impact of the unexpected. When unforeseen circumstances arise - which we all know they will - those leading with AI will find their crews equipped to move forward in confidence, without drastic impact to the bottom line.

Rene Morkos is founder and CEO of ALICE Technologies, the world’s first AI-powered construction simulation platform. ALICE enables contractors and owners to plan, bid, and build more effectively, reducing construction times and labor costs by $30 million for a typical $500 million construction project. ALICE recently announced a round of financing with FUTURE Ventures, headed by Steve Juvetson (early backer of Tesla and the BORING company).
www.alicetechnologies.com

Improving tunneling safety and productivity with remote-controlled machines. By Mike Martin and Keith Armishaw

The tunneling industry, like construction overall, is constantly evolving with new innovations to improve speed, safety and quality of work. From advancements in tunneling equipment to new methods of completing old processes, it’s in a contractor’s best interest to stay informed of potentially profit-boosting developments.

Many contractors have found success with remote-controlled machines in a number of underground applications. These machines offer significant safety and productivity benefits over traditional methods — often removing the need for four to five person crews with hand tools — and allowing contractors to better utilize their workforce. A range of attachments and overall versatility also increase growth potential for owners, enabling them to tackle excavation, cleaning and more in tunnels and pipes from five to 30 feet in diameter.

Here’s how.

Remote-controlled demolition robots
Remote-controlled demolition machines bring heightened worker safety and efficiency to the jobsite. The machine’s compact size combined with a powerful three-part arm translates to a high power-to-weight ratio — much greater than any excavator in the same weight class. An operator remotely directs the equipment from a safe distance, away from falling debris and other hazards.

Contractors use the robots in developing tunnels or expanding existing tunnels. One consistent tunnel application is the development of cross passages between parallel tunnels. Here, the robotic three-part boom allows for less overhead Tunnellingclearance and provides a far more productive solution. Traditionally, a standard excavator couldn’t get to these tight spaces or, if it could, took up a lot of valuable work space, restricting movement and access. This led contractors to rely on more manual methods, such as laborers with handheld tools. The compact size of remote-controlled machines, however, provides a hard-hitting mechanical solution that results in significant time savings. A tunneling contractor working on a massive Sound Transit Link Light Rail expansion project saw this in 2017, completing multiple cross passages a week faster than they would have with handheld tools and mini excavators.

Additionally, the remote-controlled machines excel at multiple tasks during the cross passage construction process, increasing versatility and productivity. Contractors use a variety of optional tools to excavate the cross passage while keeping workers out of harm’s way. In addition to buckets, breakers and drum cutters, this can include using a rock drill attachment to drill holes for well points, spiles or for ground freezing. Then, an operator uses the machine with a breaker attachment to bust through the tunnel’s concrete wall. Once through, contractors use the machine to excavate the cross passage, with the benefit of keeping workers away from the unsecured cross passage face.

Hydrodemolition robots
Hydrodemolition robots are another remote-controlled type of equipment that offers improved results during tunneling projects. Often used in rehabilitation applications, the robots use high pressure water from 15,000 to 40,000 psi to remove loose or deteriorated concrete from tunnel walls, later to be replaced with fresh, strong material. Additionally, contractors use the machines for light material removal or surface preparation.

The robots are valuable for use in tunnel cleaning or maintenance work. This includes road, train, subway, pedestrian, utility, water, wastewater tunnels and penstocks, where crews typically use the equipment to remove old, damaged concrete or liners in order to prepare the surface for repair. Robots are also used for mining applications, such repairing the shaft for the elevator.

Depending on the application, contractors may optimize the robots further by pairing them with tunneling-specific attachments to improve consistency and quality. One type of accessory provides operators the ability to remove 360 degrees of concrete from a tunnel’s inner wall. Contractors attach the robot’s cutting head to the end of the attachment, which rotates and moves the water jets along the circumference of the wall. The robot then moves forward to the next section of concrete to repeat the process. Unlike traditional methods, such as handheld breakers or hand lances, the cutting head of the Hydrodemolition robot stays an even distance away from the surface, allowing for an even depth of material removal throughout the process, even in uneven- or oval-shaped tunnels.

Tunneling innovations
Taking a new approach to tunnel development, tunnel expansion, cross passage excavation or tunnel wall concrete removal can be beneficial to contractors looking to improve project speed and quality while also reducing risk to their workers. Remote-controlled equipment doesn’t remove the worker from the equation, but it goes a long way toward ensuring they go home safely after completing a job

Mike Martin is vice president of operations for Brokk Inc, in Monroe, Washington. Brokk has been the world’s leading manufacturer of remote-controlled demolition machines and attachments for more than 40 years.
www.brokk.com

Keith Armishaw is the Aquajet business development manager in North America through Brokk Inc. Aquajet is known as the industry leader in hydrodemolition machines and solutions, both in terms of quality and volume.
www.aquajet.se

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Seth Snyder asks: Why aren’t construction auditors part of your team?

Today, many owners are realizing the benefits of having an auditor review their construction projects. Validating contract and cost compliance is an important step in the life cycle of any construction project. On any given day, one can find current news articles about an owner being defrauded by an unscrupulous contractor or large budget overruns on public projects. Beyond the risk of fraud, most construction contracts are complex and have ambiguous terms which increase the risk of billing errors. To make matters worse, the person completing the billing process may do the billing for several jobs — each having different contractual requirements. A construction audit can help detect and deter billing errors and fraud and, ultimately, give some peace of mind to stakeholders.

The problem with post completion audits
Simply having an auditor review project costs for contract compliance at the end of the project isn’t always enough. There are several problems with these reviews, including:

1. Recovery is more difficult after the payment has been made
Often auditors are not involved until the project is nearly complete. At this point, it’s significantly more difficult to recover money than to have kept it from going out in error initially. Once overbillings are identified, there is usually a settlement process that often does not even fully recover all the overbillings identified. This can be complicated even more if the contractor and owner do not have an ongoing relationship to incentivize the contractor to respond promptly.

2. Auditors have limited resources and knowledge of the project
Typically, an auditor will have anywhere from two to four weeks to get up to speed about the project, conduct testing and issue a report. Auditors can only dedicate so many resources to getting enough audit coverage to provide reasonable assurance. While auditors are very skilled in working in this type of environment, things can be missed for a myriad of reasons. The auditor may not be fully familiar with the background, the issue may not be common or the issue requires significant detailed review to discover. Audits are only meant to provide reasonable, not absolute, assurance that the processes operated as intended and costs are materially in compliance.

3. Problems identified with the process can no longer be corrected
AuditIf the project has already been finished when an audit is performed, its already too late to make any meaningful changes unless the owner has several projects that are still ongoing or planned in which to adopt the changes.

What can an owner do?
The real problem with post-completion audits is they are reactive. The owner hopes the audit reveals no significant issues exist and the project is successful. What about when major issues are found? Will an owner feel the project is successful even if those issues result in funds recovered? A solid control structure should help prevent this scenario. Money is saved by strengthening contract protections to the owner, limiting the types of costs to be passed through and by putting strong controls in place. Owners can check all these boxes by involving a construction auditor during planning.

What can my auditor do besides verify cost compliance?
Auditors are process and control experts. When completing an internal audit, the auditor determines if the controls are adequate and effective. If auditors can be included during planning, the auditor’s thought process can be integrated into project planning. The auditor can learn the project background and risks, engage in assessing the controls and, ultimately, use their experience to address potential issues before they manifest. In some cases, auditors can even be involved in performing independent, real-time verification of the controls.

How auditors can be involved:
1. Assess the reasonability of budget variables — Auditors are not necessarily construction experts. However, they can validate factors that drive construction cost and provide independent verification that all relevant variables and best practices have been considered. Often when projects go significantly over budget, construction auditors consider these variables to determine what went wrong. One area of concern, particularly on very large or publicly funded projects, is whether the estimates of material costs, labor productivity rates and/or the contingency methodology used in developing the budget were reasonable. Having construction auditors do this validation during planning can give owners more confidence in their construction budgets.

2. Bid process — Auditors can assess whether the bid opening procedures are adequate and aligned with best practices as well as validate that the process is executed objectively. If there are single or sole source justifications, auditors can validate the justifications are properly supported and appear reasonable. In some cases, it may even be beneficial to have an independent auditor involved in the bid opening and scoring process to help ensure objectivity.

3. Contracting — Most construction auditors spend a great deal of time understanding the key terms and conditions of construction contracts in order to assess risk, prepare work plans and execute testing. Auditors can use this experience and knowledge of construction contracts to provide valuable recommendations to better protect the owner from contracting pitfalls. Some key areas where auditors provide valuable feedback may include documentation and data requirements, allowable vs. unallowable costs, how overtime or double-time labor is billed, defining labor burden, proper limits are set for mark-ups and fees, how contingency is used and controlled, if equipment should be purchased or rented, etc.

4. Change orders — Construction auditors also spend a lot of time reviewing change orders during audits. Using the auditor’s knowledge to provide independent, real-time verification that change orders are reasonable, supported and in compliance with the contract can be invaluable. Additionally, construction auditors can also assess the procedures for review and approval of change orders, including emergency change orders.

5. Payment application — Payment application and cost report review is where auditors spend the most time during construction audits since cost compliance is typically of greatest concern to owners. Auditors can assess the procedures used by the general contractor or construction manager to generate a payment application and the review procedures used by the owner’s project management team to approve it. Similar to change orders, auditors can also be involved from a contract administration standpoint to perform real time review and validation of payment applications for accuracy and compliance before approving payment.

These are just a handful of ways construction auditors can add value to a project without ever performing an ‘audit’ that will better protect an owner from the pitfalls of invalid, erroneous or potentially fraudulent billings prior to any cash ever leaving the owner’s hands. However, despite having an auditor involved early in the project, a close out audit should still be completed as a final point of validation and completeness check. The point is to put effective processes and controls in place to stop issues before they arise or catch them in real time when they do. Having the construction auditor involved early on helps the owner check all these boxes proactively. Since it is significantly easier to control costs by ensuring that payments for non-compliant costs never go out the door than it is to recover them after the fact, why not make the auditor thought process part of the construction planning process and the construction auditor part of the construction team?

Seth Snyder is Advisory Services Director at Grant Thornton LLP. Founded in Chicago in 1924, Grant Thornton LLP (Grant Thornton) is the U.S. member firm of Grant Thornton International Ltd, one of the world’s leading organizations of independent audit, tax and advisory firms. Grant Thornton, which has revenues of $1.92 billion and operates more than 50 offices, works with a broad range of dynamic publicly and privately held companies, government agencies, financial institutions, and civic and religious organizations.
www.grantthornton.com

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