Holding the Option: For Facilities

In the world of finance, investors are always hunting for ways to grow their wealth without taking on excessive risk. An effective approach is the use of options. Holding an option can unlock new opportunities for building investor wealth.

Similarly, In the world of construction project delivery owners are always hunting for ways to improve their project's quality without taking on excessive risk. Here too, holding the option can unlock new opportunities for project success.

In a prior post (Possibilities vs. Price: The Flip) we discussed how "The Flip" from competing price to competing outcome presents the owner an opportunity to compare various outcomes, i.e. options. In a performance-based delivery approach, the competing design-builders present their option aimed at solving the the owner's problem (defined in the RFP). As there a 3 competing design-builders, all working the problem that best delivers the 'solution', the owner is presented options to solve the problem (at a fixed price) and not merely a chase to the lowest price.

Most importantly, the owner is presented such options in the language of design: that is to say, the owner can consider how their unique problem will be solved by having it discussed and presented via alternative designs. It is an opportunity to measure approach and innovation in the context of what the owner values as detailed in their problem statement, i.e. their Request for Proposal (RFP). Done correctly, this procurement process (fixed price-variable scope) allows a deeper dive into the problem for which the owner seeks a solution within the constraints of resources such as price and schedule.

This "flip" tactic, along with others provide a more antifragile approach to project acquisition. At the heart of this antifragile approach is the 3PQ Acquisition Management System. 3PQ is designed to be antifragile with specific attributes for project definition, collaboration, price control, and quality of outcome.