Are You Suffering Transparency & Trust Issues?

From hiring owner’s reps to initiating construction management at risk, airports and other facility owners have put various models in place to create accountability during their construction projects. According to a report by Mckinsey & Co., cost and schedule overruns are the norm in the overall construction sector. It is estimated that overruns in capital expenditures for infrastructure projects average above 130% of original quoted capital, and schedules run 20 months beyond original agreements. As a result, there’s an overwhelming lack of transparency and trust.

What’s going on?

One problem is data silos. It’s not unusual for mega construction projects to involve more than 500 vendors. But even smaller projects have thousands of details and datapoints to manage. Too often, data from owners, architects and contractors is isolated or stored in a way that makes it inaccessible. This creates a lack of transparency, slows down projects, limits communication/collaboration, and decreases the quality and credibility of data.

McKinsey ranks construction as one of the least digitized industries. Knowing that the world will need to spend an estimated $57 trillion on infrastructure by 2030 to keep up with global GDP growth, how will legacy systems for managing construction documentation keep up?

Hiding Mistakes & Miscalculations

Unfortunately, the issue isn’t just the amount of data. It’s about the manipulation of data happening behind the scenes. We’ve seen projects that have:

• missing documentation for schedules and inspection logs;
• meeting minutes and schedules that have been changed without approval; and
• closed documents that were opened and amended.

Contractors regularly change specs behind an owner’s back or without providing essential information. On one project we analyzed, the contractor told the owner it would have to switch to a particular type of glass that was 70 times more expensive than what was originally agreed upon because of a “shortage of glaziers.” There was no shortage, just a contractor who was setting precedents for litigation on the back of this project.

In addition, mistakes are hidden and crucial conversations are avoided. We worked with one government contact that miscalculated the cost of an air-conditioning system. Rather than admit the mistake, the engineer changed the contract without telling the client—upping the bill by $12 million.

Such misdeeds and misinformation create speculation and chaos, not trust. When you don’t have complete and accurate information on a project, it’s impossible to hold anyone accountable. That doesn’t just mess with your budget and schedule; it can affect the safety and integrity of a project.

Dismantling Data Silos

What is needed to help owners, operators and stakeholders mitigate risks, lower costs and prevent schedule overruns? We must solve the data problem.

While just about every large project claims to be “data-driven” and focused on leveraging new technologies like artificial intelligence, building information modeling and machine learning, evidence suggests that few are backing up this talk with real action. In fact, it can be argued that data is often more of a liability than an asset.

One step toward solving the problem is for the key players involved in a construction project to have critical conversations. Owners need to ask better questions, require documentation, audit agendas and meeting minutes, and hold contractors accountable.

Contractors need to own up to their mistakes and proactively address schedule and budget miscalculations so everyone can solve issues together, out in the open.

Finally, owners, operators and stakeholders must mitigate the risks associated with insufficient document oversight. Imagine moving construction into the current digital age with information governance where every detail and communication about a project is recorded and stored for instant retrieval.

If our country’s crumbling roadways, collapsing bridges and aging airports are any sign of the state of the current construction industry, it’s imperative that we put a solid plan in place to create transparency and accountability before the $3 trillion in infrastructure improvements supported by the White House begin.