Who benefits from B team’s data? Part 2: Clients

Feb 28, 2024 | News

Part 2: Clients

Mac Turberville

Editor’s Note: This blog is Part 2 in a series.

A New Way of Looking at the Client-Builder Relationship

B Team’s goal is to make our clients’ projects as predictable and smooth as possible. Striking architectural flourishes and innovative construction methods are the only unexpected occurrences welcome on our jobs. The first blog post in this series detailed how we transparently accumulate data from our subcontractor partners, how we share that data and its accompanying analysis with them free of charge, and how all of that ultimately benefits all parties. This post focuses on our clients and examines how we use proprietary algorithms to provide a suite of services containing a unique blend of industry, subcontractor, and internal data. Whether it’s forecasting, managing, or consulting, B Team ensures projects finish on time and within budget while avoiding the headaches that come with the traditional construction model.

The Relationship Starts in Preconstruction

When a developer solicits estimates on a project, they receive pricing that varies, and often by a wide margin. Why? All the bidders are working off the same drawings, with the same finite number of materials and a nearly homogeneous labor pool. The truth is most GCs couldn’t tell you because they’re winning their work by lottery. A significant advantage we bring to our clients is that we’re not trying to always be the lowest priced bidder, but rather the most “correctly inexpensive”. To illustrate the difference, let’s imagine an extremely simple project.

A request for pricing goes out for a project that is one cubic yard of concrete: a 3’ x 3’ x 3’ block. The distributors’ material costs will vary by a couple of dollars. The concrete subs will price their labor differently, despite drawing from the same labor pool. The GC’s will take some combination of these diverging inputs, calculate general conditions and requirements based off varying schedules, plug some money in their own proprietary hiding spots, stick a fee on top, hand it over to the client, and “wait to see how our number was”.

Now extrapolate this across hundreds or thousands of yards of concrete and myriad other trades. It quickly becomes clear how the same blueprints are priced with such widely ranging results. It’s no wonder that owners aren’t sure what the correct price is, the contractors don’t know themselves!

When the proposals are compared, one GC may be an outlier on the low side, causing them to fret about what the estimator may have overlooked, or alternatively, if they “left money on the table”. In the midrange, GCs with similar prices are elated to be “in the dance”. For the highest bidders there will be theories of what the others missed and predictions of their failure to deliver at the promised price. The reality is all of this is speculation. No one knows what the actual price is because they have scoffed at the idea that data science is applicable to construction .

Once a bid has been chosen, the owner and architect sit down in a conference room and congratulate the selected contractor. Everyone is smiling and cordial. This is the high point of the relationship, because everyone in the room knows that regardless of how many footings the engineer calculated, how many metal panels the architect drew, how many pieces of drywall the contractor estimated, or how many units the owner needs to meet his profit forecast, there is a real number of each of these things that will actually be built, and someone has to pay for them. Instead of being value chain participants all rowing in the same direction, they are competitors who each want to be responsible for the least cost and most profit. Then, construction begins.

This is the business model that has created a 98 to 99.5% failure rate for general contractors. (1,2)

How a Relationship with B Team Is Different

B Team believes that there is a straightforward solution: face the facts. There is real data that yields real material costs, production rates, and project schedules, and B Team is collecting and utilizing that data on every project. We share these facts transparently and work collaboratively with our customer and architect partners. We want to create a symbiotic relationship where everyone is striving towards the same goal, and no one is concealing or conspiring in a futile effort to meet an imaginary number.

Project Services

Transparency is a foundational value of B Team. There are no profits or contingencies hidden in our budgets. Our fee is what we expect to earn on a project and any additional monies realized through other means are returned to our clients. We don’t try to hide our mistakes or use financial engineering to recover losses. In this spirit, no one is incentivized to assign blame, the walls come down, and a true partnership can emerge. This allows for an environment where all stakeholders can speak freely to help one another maintain accountability and professionalism.

B Team’s data science innovations benefit our clients in many ways. Our scheduling algorithm has been tested and refined on nearly a billion dollars’ worth of projects. The result is a proven forecasting model that guarantees jobs finish on or under time and budget. Our algorithm predicts scheduling position 30, 60, 90, and 120 days out (margin of error +/- 1% at 90 days, +/- 2% at 120 days). This gives us a delay realization and response window of daily/weekly while the verified industry range is monthly or even yearly.

Our Subcontractor Tracking program further reduces our window to an even more granular level. For more information on how we identify and address subcontractor production issues before they even affect the schedule or budget (check out Part 1 of this blog series).

Platform Services

Whether or not we are the General Contractor for your project, we provide standalone versions of many of our Project Services – along with several supplemental offerings – to help augment your construction operation. These include the Schedule and Subcontractor Forecasting detailed above as well as providing our decades of experience with complicated submittals and change orders, consultation on corporate construction practices, reference class forecast analysis of design and drawings, budget-design compatibility tracking, consultation in GC selection and contracting, and more. We think of this internally as playing “Moneyball” on behalf of our clients. Click here to learn more.

Clients who implement one or more of our services have learned not only that their projects cost less and finish on time, but that they also have cascading effects throughout their organizations. Predictable finish times on current jobs allow clients to schedule future projects with confidence. Reducing stress and confrontation creates a healthier, more desirable workplace with less burden on human capital. The net effect is that everyone wins!

Changing the Status Quo

Today, construction projects with budget and/or time overruns are the rule rather than the exception. That should not be the case – where else in society is this level of failure so widely accepted? Data science allows us to fully utilize our cognitive labor while decreasing the impact on physical labor. When clients utilize B Team as a either contractor or consultant, drawings stay within budget, projects remain on schedule, and uncertainty is tangibly reduced. Clients, builders, and architects are free to act as three collegial columns supporting the shared project. Clients’ teams and organizations are relieved of the stress of constantly playing catch-up, while future projects gain from the security and knowledge of a predictable calendar. This is how B Team builds equity for the industry and its participants, and this is our vision for the status quo of the future!

[1] “Identifying the Global Performance of the Construction Industry” Rivera, Le, Kashiwagi, Kashiwagi, 2016

[2] “How Big Things Get Done” Flyvbjerg, Gardner, 2023