The contract management cost data was tied into the accounting system of the building owner, and the information proved more accurate and up-to-date than what the owners’ accountants had generated independently. In fact, the client ended up using the same financial reports for stakeholders and used contract management data to track invoices. “We could show the owners’ project accountants costs that were accurate up to the minute, where their data was a month out-of-date,” says Pressley. “We could show them documentation of change orders so that we knew what was coming for engineering, design, and so on. It saved the client time and hassle because they didn’t have to go out and produce new reports.”
The immediacy and centralization of the information also greatly improved efficiency in certain processes. Take, for example, RFIs—queries that contractors make when they need a particular issue clarified before moving forward. An RFI is traditionally delivered on paper and then routed to the project manager, who reads it and forwards it to the proper person—say, a design consultant—who then responds with the proper changes. With a paper-based RFI process, a simple question can take two weeks to resolve.
With Hill’s integrated contract management solution, the RFI is submitted electronically to the project manager, who can then route it immediately to the correct person. The design specifications are electronically tied to the RFI, which not only reduces latency but also eliminates the risk of mistakes with the design specs.
Meanwhile, the integrated Primavera P6 and risk analysis applications picked up on any changes generated by the contract management application and adjusted the schedule to reflect change orders or schedule delays.
Pressley and his team also used risk analysis to make sure charges and costs were accurate and that contractors were not padding their invoices. For example, the owner made late changes that delayed fabrication of the structural steel for the restaurant, resulting in a US$5 million change order submitted by the contractor. But risk analysis enabled Pressley’s team to assess the new charge and identify costs that were included but not directly related to the steel change. This gave a clearer view of the change and saved the client money. “We were able to say, ‘Hey, these are the issues related to the delay in steel fabrication,’ and cut the change order by [US]$4 million,” says Pressley.
Total Insight All of this data then rolled up into one easy-to-read dashboard that was available to major stakeholders—from the clients to Hill senior management. By looking at detailed cost information from contracts, requisitions, changes, and proposals, the solution gave the team a real-time grasp of total project costs.
In the final analysis, the Comcast Center came in on schedule and on budget. “Well, actually we lost about 25 cents in calculating payments to contractors,” laughs Pressley. “It was due to rounding. Their accountants had a [US]$2 million discrepancy in the books, and when all was said and done, we overpaid by 25 cents. I had to pay them a quarter that day.”
To put that in context, Sappé points out that 60 to 90 percent of projects go over budget industrywide. “To get the reconciliation on a project of this magnitude down to a quarter is unheard of,” he says.
The accuracy and efficiency the company brought to the Comcast Center project is precisely the value that Hill executives view as a competitive advantage. “Our job is to lower risk and claims on our clients’ projects and to make things go smoothly,” says Pressley. “Saving a client [US]$10,000 once on a [US]$2 million project may not be a lot, but when we do that 10 times or so that number starts to look good, and it makes us worth the money.”