P3s aren’t just for transportation – here’s how they can help with public buildings too



The University of California, Merced is the newest campus in that state’s higher education system, and yet already it needs to grow: It has an ambitious plan to double its size over the next six years, with a building program that involves some 1.9 million square feet of academic, housing and research uses.

The size and scale of U.C. Merced’s program is emblematic of what is happening on many college campuses. Fueled by the recent surge in attendance, American universities have been expanding and upgrading their footprints and facilities to meet this demand, be more competitive and adapt to changes in technology and academic focus areas.

But what is different about Merced’s 2020 project is how the school plans to fund the expansion – using a public-private partnership, or P3.This is the largest so-called social infrastructure P3 project in the U.S., with a client-estimated value of about $1.2 billion.

In a P3, public money is leveraged with private investment to fast-track critical projects, for which the long-term responsibility to maintain that infrastructure falls to private partners. These performance-based contracts have proven highly effective and valuable in dozens of countries, including Canada, Chile and the U.K., as well as in the U.S. Here, P3s have typically been used to finance and develop large-scale infrastructure projects such as highways and bridges. For example, Virginia’s Elizabeth River Tunnels and Florida’s I-4 Ultimate are two of the biggest such undertakings. To date, 33 states have approved P3 approaches for transportation infrastructure.

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P3s transfer significant risk from the public sector to private sector

Like our roads and bridges, America’s social infrastructure – public buildings, from schools to hospitals – are also in dire need of investment. Lacking the funds to make the needed improvements, government entities – and even such universities as U.C. Merced – are increasingly considering P3 models for their projects. Social P3s have lagged behind transportation projects because until recently, ample capital and low interest rates made it relatively easy for public bodies to get approval to build, said Larry Casey, Skanska senior vice president. But as that capital flow has become scarce, municipalities, universities and state governments have been forced to look elsewhere to fund these projects.

For social infrastructure projects, the funding model that U.C. Merced and a growing number of other facility owners are using is the concession-availability model. Often used for transportation P3s, this approach has the facility owner contracting with a concessionaire – the contract holder – to develop, design, finance, build, operate and maintain the project. California’s Long Beach Courthouse project is the first U.S. social infrastructure project under a concession-availability model. Beyond U.C. Merced, three other major social infrastructure P3s are currently in development: the LaGuardia Airport Central Terminal Building Replacement in New York City, the Indianapolis Justice Complex and the City of Houston Justice Complex.

Demonstrated success

While U.S. social infrastructure P3s are gaining traction in the U.S., internationally these kinds of P3s have been successfully implemented on a broad range of projects. The largest P3 in Sweden is a university hospital: the New Karolinska Solna, a Skanska project and also one of the largest P3 hospitals in the world. In the U.K., our teams are delivering, maintaining and operating the Barts and the London Hospitals P3. This project has transformed two hospitals, the historic St Bartholomew’s and The Royal London, into state-of-the-art healthcare centers. Also in the U.K., we’ve used P3s to redevelop secondary schools in Essex as part of the U.K. government’s former Building Schools for the Future program. The U.S. can learn from these successes.

“Once completed, New Karolinska Solna will be one of the most sustainable hospitals in the world and the first in Europe to reach LEED Gold certification – this is one of many benefits in using P3s,” said Karl Reichelt, Skanska executive vice president. “This method also ensures high safety performance, minimization of long-term lifecycle costs and a high-quality project that is delivered on time and on budget with little risk to the owner.”

P3 advantages

The benefits are clear for using P3s for public buildings. They allow owners to:

Transfer project risks to the private sector:  The private partner takes on the financing risk and risks associated with designing, constructing, maintaining and operating the building. This alternative delivery approach advances projects that would otherwise be stalled due to lack of funding or are of a size that would requires multiple phasing to complete. By utilizing P3s, municipalities can more quickly green light projects that might otherwise take years to begin, creating jobs and boosting local businesses in the process.

Minimize lifecycle costs: Eighty- to 90 percent of a building’s cost over its lifetime comes from operations and maintenance. Yet, when facility owners consider social infrastructure projects, too frequently much of the discussion focuses on up-front costs and selecting the lowest bid. P3s are designed, built and maintained in holistic way that focuses on ensuring a high-performing facility throughout the concession period, and returning the asset in the specified condition at the end of the contract.

“P3 delivery is not privatization but a partnership between public agencies or institutions with private sector businesses,” Casey said. “The approach needs to thought of as ‘responsible’ asset development and management because the intent of P3 is to instill innovative design and operating methods that create value, such as energy savings and healthier work environments, and facilities that maintain their aesthetic characteristics and optimal performance for 25 to 35 or more years.”

Achieve projects on time and on budget, with any overages borne by the private partners: The transfer of project risk and investment means that the private partner is responsible for delivering the project on-time and on-budget regardless of externalities such as weather, construction costs or material availability.

 

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Building green careers

Green building doesn’t only improve the built environment—it betters people too. With green, people stretch their skills in any number of ways to develop the best green solutions, and some—maybe you—are lucky enough to devote their careers to this aspect of sustainability. The U.S. Green Building Council recently shared stories of how some of our professionals are using their green expertise to make a better world for us all.

Check out the full story, here. For more on the future of green building, check out Chief Sustainability Officer Beth Heider’s Greenbuild interview with the USGBC:

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The evolution of airports: Trends in airport construction

In just a few weeks, millions of Americans will hit the road and take to the sky for Thanksgiving and holiday season travel. In some ways, that’s more of the same: at any time of year, American airports are some of the busiest in the world, and the Thanksgiving holiday is perennially one of the busiest travel times of the year. Yet as demand has increased over the years, much of our aviation infrastructure largely has not kept pace – many of our aviation facilities are outdated and in need of major renovations in order to ensure public safety, maximize efficiency and enhance the customer experience.

But that dynamic is starting to change.  Safety, the new economics of flight, and consumer demand are three of the major factors shaping how airlines and airport officials are approaching the need for upgrades and renovations. Post-9/11 security concerns are being addressed in the context of a desire for greater efficiency in passenger traffic flow, prompting airports to rethink how they lay out checkpoints and process passengers.

Trends in aviation like upgauging – the switch to larger, more fuel efficient jets – mean adjusting terminal layouts to accommodate wide-bodied aircrafts and more passengers.  And air carriers and airports are making changes in response to new consumer expectations, undertaking major renovations to airport common areas, with airports adding everything from local restaurants rather than national chains, to replacing their smoking lounges with yoga rooms.  To understand how all these trends are shaping the construction of the airport of the future, check out our aviation infographic:

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MacAdam Glinn

posted by MacAdam Glinn

Skanska USA Vice President - Aviation Center of Excellence National Director

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Awards, milestones and BIM – what we’re reading this week

At Skanska, we’re proud to work on some of the largest, most innovative and iconic building projects in the U.S. These exciting projects challenge us to find new ways to build efficiently, sustainably and safely.  This week’s Weekend Reading features news from two hallmark projects, plus some useful ideas for maximizing the uses of BIM.

An inside look at the 2014 Building Project of the Year

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From the very beginning, our team at Florida Polytechnic University’s Innovation, Science and Technology Building recognized that bringing Santiago Calatrava’s intricate design to life was an once-in-a-lifetime opportunity. As our project leader Chuck Jablon said: “We knew it was something special at the beginning, but when we saw Calatrava’s vision and design actually working, and capturing everybody’s attention, it made it extra special to know that we were the ones delivering it.”  This week, ENR Southeast magazine named this project – with its signature 94 operable rooftop louver arms – as its Building Project of the Year. Read about our team’s collaborative and innovative work to transform Calatrava’s vision from concept to reality, here.

One tunnel element submersed, 10 more to go

Our joint venture team at Virginia’s Elizabeth River Tunnels project reached a major construction milestone this week when the first hollow concrete element for the Midtown Tunnel’s second tube was fully lowered into place under the river. The team completed the 18-hour placement process on Tuesday. What’s next? With ten more tunnel elements to submerse, the team will be placing one tunnel element every five weeks from the Portsmouth side moving across the river to Norfolk. What does the placement process look like? Check out this time lapse video:

Getting the most from BIM

As more facility owners come to recognize the value of building information modeling for design and construction, the next step for designers and builders is helping owners utilize BIM data to improve facilities management and over the building lifecycle. From writing a plan to focusing on the total cost of ownership, Skanska’s Hal Jones, virtual design and construction director, shares six ways for owners to maximize the value of their BIM-enabled design and construction team. Check out our latest blog, here.

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How facility owners can make the most of BIM

More and more facility owners are seeing the benefits that building information modeling can bring to their projects, according to a new McGraw Hill Construction SmartMarket Report, “The Business Value of BIM for Owners.” Those benefits include enhanced team collaboration, streamlined facility maintenance, easier understanding of concepts, improved accuracy and potential cost savings.

Skanska’s Hal Jones, virtual design and construction director, was quoted several times in the report, which also features Skanska’s Connect Plus M25 consortium that is managing and improving one of Europe’s busiest highways. Here, Jones expands upon some of the thoughts he provided to McGraw Hill on how to extract the most value out of a BIM-enabled design and construction team:

Engage the team early and write a plan. First, develop clear guidelines for the use of BIM that reflect the requirements and capabilities of the entire project team. By focusing on what the team can expect to produce and how they should collaborate, the owner is establishing a steady set of ground rules for success. An owner can also minimize duplicate work by engaging a construction manager early in constructability review/coordination and by using trade contractors in design-assist roles.

…and stay involved, yourself. In order to maximize the collaboration amongst the AEC team, the owner should be an active participant in the project. It’s in the owner’s best interest to be accessible and engaged. It promotes both team unity and accountability when the owner is involved in the day to day decision making.

Begin with the end in mind. As early as possible, clearly define how you want to use project data and BIM post-construction so that the AEC team can more readily support your facilities management needs. By establishing this in the beginning, the owner is more empowered to get the information they need in a format that is effective for their life cycle management goals.

Focus on total cost of ownership. It’s important for owners to remember that the value (savings) of BIM on a project is often in the form of money or time not wasted, rather than a quantifiable reduction in total cost or schedule. Likewise, do not focus on the perceived up-front cost of BIM, but rather the total value brought to the project.

Use BIM as the basis for contract documents. Consider generating contract documents from the model and require that the design team maintain and update models through the construction phase. This assures that the model and documents accurately reflect each other throughout the project life cycle, while also allowing the owner to use the model as part of their facilities management program, if desired.

Promote a collaborative environment. Collaboration among the team is paramount. Good BIM-enabled projects cannot be successful without a means to collaborate quickly and easily. By using the model as the vehicle for communication of updates, changes, and so forth, the team can more readily recognize problems and identify solutions together. It is also important to clearly define the platform that will be used for collaboration and file sharing. Tools like Microsoft Sharepoint, Bluebeam, and BIM 360 Glue empower teams to share and cooperate. These tools should be identified and agreed upon early so they can align with the intended use of BIM by the team in addition to the final deliverables.

OwnersBIM

 

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How our Boston team creates an inclusive workplace

An inclusive workplace is one where every person feels as though they can voice their ideas and contribute their expertise.  In today’s intergenerational, diverse offices – where millennials work side by side with baby boomers – it’s especially important to make sure that all team members feel valued, respected and engaged – regardless of their age or work experience.

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As part of Diversity & Inclusion Week, we brought together a group of men and women of various generations from our Boston team to discuss their careers and how inclusion impacts their performance and possibilities.  Here are some highlights from the conversation on how inclusion has made an impact on their work:

- “Inclusion means tapping into ideas from different backgrounds,” said Ali Brathwaite, a CAD engineer who joined Skanska’s BIM team right after graduation in 2014. “You’re a part of it and bring something to the table to help everyone succeed.”  For him, working with (and sitting at a desk nearby) VP of Operations Paul Pedini, has been a formative experience in his young career.  Ali spoke of how meaningful it was to have Paul ask for Ali’s (a self-described transit nerd) take on a new transportation project and how Paul’s emphasis on Injury-Free Environment training had impacted his own perspective on safety. Inclusion means sharing ideas and expertise, regardless of age or position.

- For Steve Lappin, a director of mechanical preconstruction in his first year with the company inclusion, means tapping into the unique skill sets of both older and younger workers. On the preconstruction side, Steve still likes to get hands-on with plans, breaking out the highlighters and Post-its where needed. As a baby boomer, working alongside technologically-fluent Xers and millennials is both a learning and teaching opportunity for him. Steve looks to his younger colleagues to help him utilize the most efficient technology for his projects, yet at the same time he tries to teach his colleagues the importance of face-to-face communications. “You have to talk directly to people. Take that 30 minutes to build a personal relationship.”  Doug Hill, senior graphic design director with 13 years of experience at Skanska, echoed Steve’s comments: “Technology can take away the personal aspect. Someone says ‘I sent him three emails.’ Did you pick up the phone? It’s the personal touch, stepping away from the technology. “

–  On the other side of the tech equation – millennials Emily Pfaffenbach, a project engineer, on the Watermark Seaport project, who has worked for Skanska for a year and Connor Hennessy, a former Skanska intern-turned-field engineer also on our Watermark project, shared how their innate ability with technology has helped make them invaluable to their teams. “I try to help with any computer problem and not judge,” Emily said. “They give me the construction knowledge so it’s a fair trade.”

The group also shared a few key ways to foster inclusion amongst intergenerational teams:

- “It’s about the relationships that you have. When you go around, you listen to what they [team members] say. Listen to their problems, help them along – successes and failures. That’s the secret.” – Sandy MacLeod, director of technical services who has been with Skanska since the 1980s (Traditionalist)

- “It shocks me when subject matter experts scoff at a new idea. Have an open dialogue.” – Doug Hill (Generation X)

- “I appreciated when I started and got thrust right into a project, my team did take time to sit down and chat about exactly what we’re doing. Our more senior members would teach us certain things to do and the best way to do it. When I had a question they dropped what they were doing. Now I am helping a new Latvian team member the same way and I understand why it is so important.” – Ali Braithwaite (Millennial)

- “You have to look at the big picture. Make everyone more efficient. If you don’t pay attention, you’re going to do it all. It’s important so everyone is capable of doing the work.” – Steve Lappin (Baby Boomer)

- “Learn from people. In construction, so much is based on past experiences. Soak in as much as you can.” – Connor Hennessy (Millennial)

- “When you’re working in a group, focusing on your own problems, everyone gets in “the pit.” You have to flip, put things in a different light… I’ve been in the industry for 30 years, and try to focus on the positive. Inclusion gets you out of the pit.” – Cindy O’Brien, a marketing director who has been with the company for a decade (Baby Boomer)

- “When I started my career, just out of college, there were not that many women. Going from jobsite to jobsite as the admin pushed me to have a voice. That experience molded me and helped me grow.” – Laurie Clifford,  Boston office manager who has been with Skanska for three decades (Baby Boomer)

- “At a team building event, we were brainstorming about our expertise. It’s funny how little we know about what skills people have. One of the things we discovered was the need to learn more about our personal skills and industry skills. Things about backgrounds: What did you do? What kinds of projects? The nitty-gritty. It’s really important for team work. “ –Bijou Vilaranda, an executive assistant who’s worked for Skanska for three years (Generation X)

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BOOSTing subcontractors in our communities

Inclusion directly impacts performance, especially when it comes to innovation. Inclusive groups facilitate more ideas, better ideas and different ideas.  On an individual level, performance improves when a person feels included and that has a direct impact on the group. Employees who believe they have more of a “voice” will exert more effort on behalf of the group, going above and beyond the “call of duty.”

But inclusion means more than just engaging internal team members. The more we work to educate and develop diverse talent, the larger the pool of potential employees and businesses we have to draw from. An environment that includes and engages a diverse group of talented people provides a competitive advantage and contributes to superior work.

Consider the case of the Building with an Objective to provide Opportunity through Sustainable Training (BOOST) program, which focuses on educating contractors. “There isn’t a book out there on how to be a sub [contractor],” said Lori Fox, of ML Fox Construction LLC, a BOOST participant. In order to address this educational gap, we created BOOST to help contractors improve their skills and raise the standards of the trade contractor pool in our communities. “The BOOST program is a pretty comprehensive overview of being a subcontractor,” said Fox. “It was really helpful. A lot of the things we had been doing – but maybe didn’t understand the why, and didn’t understand things from the general’s perspective.”  The ten-week program focuses on key construction management topics: everything from contracts and insurance to LEED and safety. By providing these resources to small and disadvantaged businesses, the BOOST program educates the trade contractor community to better understand their work, helping them perform better and deliver better results. “We go after all kinds of work now,” said Fox.

Inclusion works because it is a competitive advantage.

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This network helps women thrive in construction

Building a culture of inclusion opens up new possibilities for personal, company and community growth.

For women, a culture of inclusion in construction can unlock tremendous possibilities. Women hold just three percent of the seven million construction jobs in the U.S. Catalyst, an organization that works to build inclusive workplaces, has found that teams with an equal mix of men and women outperform male-dominated teams in both profits and sales.  Recruiting and hiring more women is an obvious way to increase diversity in the construction industry, but building an inclusive environment in which women can thrive is just as – if not more – important in the long run.

Not only is gender diversity essential for team performance, but diverse leadership has also been shown to boost business performance. In 2007, Catalyst found that companies with the most women board directors outperformed those with the least on three financial measures: return on equity, return on sales, and return on invested capital.

With this in mind, last year we launched the Skanska Women’s Network, an employee resource group focused on retaining and developing women throughout our organization, especially for leadership roles. It provides professional development and a forum in which women can share experiences and influence the company. Groups like the Skanska Women’s Network help women make connections, share ideas and develop the confidence they need to thrive and lead our business.  Unlocking these resources and connections for women creates new possibilities not only for their personal growth, but for Skanska as well.

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Why inclusion is beneficial for people and business

“Inclusion Works” is not only the theme of our Diversity & Inclusion Week, but it’s also a fact. A company may be diverse, but if there is not a culture of inclusion in which  employees are given the power and framework to leverage people’s differences, innovation and growth will suffer.

In order for inclusion to work, it requires strong leadership. Research shows that well-managed, diverse teams outperform both homogeneous teams and teams that are diverse but poorly-managed. Teams with inclusive leadership are more productive and innovative. In Creating Value with Diverse Teams in Global Managementthe writers found that, “Diverse teams are especially well-suited for tasks that require considering an issue from many angles or that depend upon out-of-the-box thinking. “

To fully understand how and why inclusion works, we have illustrated the five key reasons inclusion is beneficial for both people and business:

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How our Community Advisory Teams are building stronger communities

Partnerships are what make inclusion work. Partnerships among people of various backgrounds, experiences and skillsets allow organizations to have a greater reach that transforms lives and increases the productivity of not only themselves but from those with which they partner.

At Skanska, partnership comes in many forms. Hiring a diverse talent pool and fostering a positive environment for all employees, clients and partners is one part of the equation. But partnership is about external collaboration as much as internal efforts. But partnership is about external collaboration as much as internal efforts.  We want to build more than buildings and highways – we want to build communities.

We work to engage a diverse pool of business partners. One example of partnership in action is our Community Advisory Teams (CAT), which aim to connect the under-served communities in which we work with jobs and training opportunities. We currently have CATs established in Washington, D.C., Los Angeles, northern California and Seattle – and others are on the way. In D.C., our CAT brings together a group of local officials, organizers and contractors to address the pipeline of new work in the region and what it means for the community. “What we want to do is invest for our future,” said Project Director, Chris Guthkelch. “We can’t grow unless we have work forces with the skills that we actually require. And indeed to have businesses who are actually able to grow with us.”

From small business, workforce and youth development, our CAT is investing in the D.C. community and building partnerships that will create a more sustainable business environment for all. As Joanne Brooks, VP and General Counsel of the Security & Fidelity Association of America, who is part of our D.C. CAT noted, “When we talk about sustainability, we’re talking about ‘What are the tools you need to be successful long term?’ If we can really build contractors, and build businesses, we’re moving into job creation and then the next thing you know we have sustainable businesses and a flourishing community.”

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