Net-Zero Difference Between Winning & Losing

If you are interested in “green” buildings (irrespective of how you define that), and want to change your project’s outcome to achieve your definition of “green”, then you may find this post interesting.

If you are interested in “ugly” buildings (however you may define that), and want to create the world’s most “ugly” building, then you too may find this post interesting.

In other words: if you are interested in (fill in the blank) buildings, and want to create the most (fill in the blank) building in history, then you should definitely find this post interesting.

USGBC+ recently published an article entitled “Mission Accomplished: The future of large-scale net-zero building is already here”, by Judith Nemes. In the article, Nemes laid out how the designers and builders worked with the owner of the Research Support Facility (RSF) project on the DOE/NREL campus in Golden. CO. A project thought by many to be the world’s largest net-zero energy office building.

The ‘fill in the blank’ target from the project’s leadership, according to Nemes, was a “quest for a net-zero energy structure on a scale that hadn’t yet been achieved”: realizing that “they were raising the stakes… they took a dramatically different approach in the criteria for the request for proposal (RFP).”  

Shanti Pless, one of NREL’s project leaders, is quoted in the article: saying, “What we learned is that when energy efficiency is a requirement from the beginning, energy efficacy decisions can be made early on and integrated cost-effectively…that wasn’t really done before. Early energy efficiency goals can inform the design delivery process, rather than extra efficiency measures that are bolted on after the design has been developed.”

The article, I think, is making the point that the design, or ‘solution’ if you will, must integrate essential ‘project goals’ (in the case of the RSF project: net-zero energy operation) from the outset. On the surface this makes sense: one cannot achieve a goal unless one targets said goal. But how is this different from any stated goal, for any project, at the outset of design.

Owners, for the most part, can always recite a set of project goals at the inception of design. They are always requested by the design team and offered by the ownership team. If fact ‘goals’ are the primary ingredient of just about any ‘feasibility study’ that fronts design: what are the goals?

What made the RSF project different, particularly from the “Mission Accomplished” perspective, was not that ‘net-zero’ was identified as a goal to be sought, but that ‘net-zero’ was a contractual obligation (what our grandparents called a ‘promise’) offered by the design-builder in order to win a ‘competition’ and, in turn, secure a contract. The important, and radically different, point concerning energy efficacy and its related target is not that they were listed in the RFP, it’s that their inclusion in the responsive proposal was the basis of winning the competition. The contractual obligation of the winning team was not ‘we’re going to give it the old heave ho’; rather it was ‘we promise to achieve net-zero’.

So now the question becomes how did the targeted goal of net-zero, presented as a ‘golden ring’, become dominant over other, more notably fundamental, project goals? The answer is it did not: in fact, it was not a ‘Mission Critical’ or even a ‘Highly Desirable’ project goal. It was at the bottom of a priority list, within the heading ‘If Possible’. Relative to the RSF’s overarching Project Goals stated in the RFP, net-zero was at the bottom of the list; which made its ultimate inclusion even more unlikely and somewhat amazing.

Again the question: how did the targeted goal of net-zero become dominant over other, more notably fundamental, project goals? Answer: it, in the unpredictable events of a competition between three design-build teams, came into play…all the way down at #22 on the Project Goals Priority Queue: in simple terms it became the difference between winning and losing the competition and subsequent award of the project.

In speaking about the 3PQueue priority list, Phil Macey, the lead architect for the winning Haselden/RNL Design-Build Team stated, “That single page listed in ranked order the ownerships desires for a proposal. And for anyone that has participated in a competition, you can spend a great deal of time trying to understand what an owner wants, and there it was a list of exactly what they wanted.” 

Mr. Macey went on: “So Jeff (Baker of DOE) showed you the list of project objectives, and when this came to us in a competitive procurement, we pretty quickly realized as a team this…list was probably not so much a ‘which ones will you do and which ones won't you do.’ It was ‘if you don't do all of them, don't you think somebody in your competition will try to do every single thing on this list’. So we decided as a team we'd better go after all of them, and probably the biggest move for us was this one right here: net zero energy.”

That 3PQueue priority list (a key component of the 3PQ Strategic Acquisition & ManagementSystem), referred to by Phil Macey, made net-zero energy more than another goal. In the design-builder’s mind, it made it the key to satisfying the owner and winning the competition.

If that same list were given to a designer at the beginning of a traditional design-bid-build project, or even CM@Risk project, the concentration of design would have gone from top down, no surprise. The ‘lines-on-paper’ solution, put out to bid, would also have focused inclusion of elements at the top of the list. But in a completion, were each competing team proposes the ‘performance-obligation’, everyone includes the top of the list: it’s the bottom of the list that counts.

Finally, what makes all this work is that the proposals by the design-build competitors were not open to bidding (throwing dollars at the problem), the proposals had to be offered at a “Fixed Target Price”. There was no opportunity to just include everything and let the price fall were it will. The RSF project was procured on a “Fixed-Price / Variable Scope” model: where the price was set by the owner, and the scope was selected by the proposer from the owner-established 3PQueue (Preferred Price Priority Queue).

The establishment of a Priority Queue for selection of scope and performance, selected by a competing market-place, within a fixed Price, makes for a rewarding acquisition strategy, one in which the wining team filled in the blank with a "Net Zero" difference.  If you are a Construction Project Owner, and are interested in getting the most from Design-Build, you can begin by asking: what is my "Fill In The Blank" goal?