Renovation, repair and maintenance projects represent the bulk of a facility’s management budget at any given hospital. These projects span everything from new curbing and sidewalks to internal renovations and HVAC systems. For facilities managers, getting these projects completed is an endless design-bid-build process that can take up to 255 days on average. And that’s just to get a contractor in place.

Facilities managers, like everyone else in health care, are being asked to do more with less. What makes that even more challenging is the general lack of price transparency and cost control leverage in these types of construction projects.

“When it comes to construction projects, we saw that facilities managers were challenged to meet the demand of more efficiently delivering construction projects, but without the right tools,” said Rebecca Gayden, senior director, contract services for Vizient. “It’s impossible to manage overall cost when you have no insight into the actual cost of the labor and materials that are required for a project. What they needed were tools that provided data on labor and material costs with an ability to benchmark to ensure they were getting the best price from contractors.”

That realization set in motion an 18-month quest to develop a program for members that would help solve this problem.

Accelerated Construction Procurement Program
In September 2015, Vizient entered into a strategic partnership with Gordian, the leading provider of construction data, software and expertise in job order contracting (JOC), to establish Vizient’s Accelerated Construction Procurement Program. This partnership brings an accelerated process for facility construction, repair and alteration services to Vizient members and is unique in the health care industry.

“Job order contracting for repair, renovation and maintenance projects has a long track record for success with government agencies, school districts and municipalities but it hasn’t yet been widely adopted by facilities managers in hospitals. We are excited to be the only GPO offering this type of service to our members,” said Gayden.

Cost savings is one of the cornerstones of JOC solutions. “We know our members are extremely resource strapped when it comes to renovation projects. Based on industry averages, we believe this program will deliver not just a time savings, but a 10 to 15 percent cost savings as well,” said Gayden. “Another big benefit is that it’s risk-free for members. They don’t have to commit to a program. They can pick and choose individual projects—stick their toe in the water—and see if they like the results.”

Through a JOC program, hospital facilities managers basically have an on-call pool of approved contractors. This means construction work can start 75 to 85 percent faster because it eliminates the traditional design-bid-build process. The program also provides:

  • Standard pricing and specification utilizing a published unit price book, resulting in efficient and effective estimating, design and fixed-price construction
  • Guaranteed compliance with all legal requirements and local procurement laws
  • A transparent, auditable and streamlined process
  • Higher construction quality through facility owner and contractor collaboration
  • A Gordian advisor to assist the Vizient member during the entire project lifecycle

Hospitals must continue to look to cut costs any way they can. Historically, construction projects have been more about getting the project done and done on time than squeezing costs out and coming in under budget.

“The truth is there is still a lot of waste in construction projects because facilities managers haven’t had the data and transparency they needed to really manage costs,” said Gayden. “I think we are on the front end of a real shift in approach. The Accelerated Construction Procurement Program fills a gap in service to members that no other GPO is able to provide.”

To learn more about the Vizient Accelerated Construction Procurement Program, contact Tyler Speakman.

Published: September 20, 2016