The current construction market may not be the pause that refreshes for contractors and design firms, but it definitely has many private sector owners reassessing their processes and searching for new ways to make their capital programs more cost effective. And, as they assess their construction processes, many are not entirely happy with their contractor and designer partners' progress on such issues as productivity and technology.

Construction executives at major corporations are facing increasing pressure from the boardroom to keep shareholders happy and are becoming more hard-nosed about business practices. "We are accountable to our internal customers and are not just building projects for the sake of building projects," says William J. Tibbitt, executive director of worldwide engineering services for Johnson & Johnson. "Owners are beginning to apply good business practices to construction that we had not thought of before. We are beginning to speak a different language," he says. Although contractors and designers must identify with the business mission of the owner, "I sense a disconnect at times," Tibbitt says.

Tibbitt is not alone in his concern over whether contractors and designers are keeping up. The failure to align business goals and specific project goals due to poor preproject planning was cited by 83% of owners as a major industry challenge, according to a survey conducted by FMI Corp., a Raleigh, N.C.-based consultant, for the Construction Management Association of America, McLean, Va. "Capital spending is off and owners are spending this period to reexamine their processes," says Gretchen McComb, managing director of FMI's owner services group, which advises owners on the assessment of their construction programs. "Owners are showing more willingness to make changes in their processes than in the past," she says.

Productivity in construction may be the most puzzling and frustrating issue for owners. "Just look at the technological advancements in manufacturing," says G. Wayne Burchette, director of worldwide engineering & construction for Eastman Chemical Co. "Technology doubles every couple years. But go to a construction site today and it is virtually indistinguishable from a similar site 10 or 20 years ago," he says. "If you can build robots to assemble cars, why can't you build one to lay bricks?"

Productivity concerns are nearly universal among owners. Productivity today seems to be down at the craft labor level in the view of Joseph Brewer, director of project engineering at Dow Chemical Co. "U.S. labor is capable, but the tools have not kept up," he says. "We need better tools if we want to continue to be frontrunners. But do contractors have a passion for improvement?"

Owners are working hard on their own to measure and improve productivity, particularly through owner associations. One interesting development is a cooperation agreement signed in June between two big owner groups–the Construction Industry Institute, Austin, Texas, and the Construction Users Roundtable, Cincinnati. "CURT does not do as much pure research as we do, but when they come up with an idea we haven't pursued, we are happy to help," says Kenneth Eickmann, CII's executive director. "We don't need a 'not invented here' attitude," he says.

The CURT-CII agreement is not unique. "We try to be the voice of the owner, but that doesn't guarantee that anyone will listen," says Greg Sizemore, CURT's executive vice president. CURT, formed from the Business Roundtable's construction committee that was disbanded two years ago, has been building relationships with industry associations to encourage people to listen. Sizemore notes that the CII agreement is just one example of growing cooperation in the industry.

But some owners feel that the industry is ignoring tools that are available. "I don't sense that the contracting and owner community have taken enough advantage of the best practices validated by CII," says William W. Brubaker, director of facilities engineering and operations at the Smithsonian Institution, Washington, D.C. "We've found that those practices could stretch the capital dollar by 10-15%," he says.

One of the top issues for owners is making better use of technology. "Information and knowledge management is one of the top priorities for our members," says Eickmann. "There's a lot of information available on a project, but owners want to be able to extract the usable knowledge from this available information to make informed decisions," he says.

Many owners say contractors and designers should take more initiative in using technology to get the pertinent information to the owner. "You have to be able to give me the information I need to be able to make decisions, 24/7," says Tom Weise, corporate director of facilities, materials and services for Intel Corp. "I don't care what programs, hardware or processes you use as long as it talks to my server."

Weise is particularly frustrated at the lack of cooperation between the parties in the construction process. "The last thing we want to do is baby-sit contractors and labor. The progressive teams will knock down the traditional silos between owners, designers, contractors and labor, and take a serious look at how to improve efficiency and productivity together," he says.

But many contractors are not in the ballgame. "The subcontractor community needs to understand that computers exist and that the Internet can go far to enhance productivity," says Tibbitt. "But there are many out there that don't want to get into the boat," he says. Those subs who do not get up to speed will be left behind at bidding time, he says.

That does not mean that the industry is standing still. "The up-front scoping process of the job is becoming more efficient," says Burchette. "We aren't jumping in the car and taking off before we map out the route anymore," he says. But Burchette laments that progress in field execution has been limited. Brubaker agrees. "It's a fundamental paradox when you juxtapose the progress we've made in management best practices against the trowel and mortar work at the site."

To encourage productivity, the large owners increasingly are willing to share rewards, as well as risks, on a project. "We try to not to be in the business of risk-shifting as much as risk sharing," says Les Sturgeon, vice president of corporate project and facilities engineering at Abbott Laboratories. This includes sharing the savings on a project. But Sturgeon says that limiting rewards to the construction manager or general contractor alone may not be the best approach. "We believe that people will be encouraged to do better if everyone is in the same pool," he says. "We try to make sure everyone is impacted by the success of a project, where everyone shares in the reward."

Burchette of Eastman Chemical says that his company also is considering an incentive system that rewards all parties. "If you put money on the table, they will chase it," he says. "Financial incentives are great motivators."

Many major owners like the idea of contractor-designer partnerships to help break down walls and foster dialogue between the parties. But they are more interested in results than in management theory. "You can call them partnerships, alliances, joint ventures–call them what you want, as long as they break down the walls between the parties," says Weise.

Many of the top corporate construction managers say that they ultimately are responsible to corporate management and balk at the loss of control that design-build often implies. "I've been a practitioner in the industry for 37 years and there's one thing I've found: Owners that abdicate their role in the process simply invite a poor project," says Weise. Tibbitt agrees. "You must keep the project's leadership in the owner's hands."

While owners are funding major programs to enhance industry productivity and technology, most say that contractors and design firms bear the ultimate burden to meet owners' needs. Enhancing productivity "is the engineer's or contractor's responsibility," says Irv Kieback, associate director of corporate engineering, capital management, for Proctor & Gamble. "Our consumers aren't willing to pay more for Crest [toothpaste] to help us make it better," he says. So don't expect owners to carry the load of research and development for contractors and design firms, he says.