The Business of Construction Project
is a multi-discipline effort to engage university students in various
aspects of the business elements of construction, from accounting
to XML in cooperation with the private sector in a pubic/private
partnership. One component of that effort is the Surety Connection
Project which entails developing an understanding of the evolving
internet based data resources that are becoming available to the
businesses that participate in the construction process, and to
strive to make that new data available in a manner that promotes
efficiency, profitability and most importantly utilizes that data
for the benefit of the public interest by advocating the use of
open standards.
To achieve this objective an inter-agency agreement between public agencies
and interested universities would be arranged where students help develop
the capability for the surety and insurance industry to work with basic
project bid data in a manner that uses open standards and may ultimately
result in an efficient delivery of an electronic surety transaction.
While the final resolution to how such an electronic transaction will
be transacted is yet to be formalized; the basic essential of having
the project data in a manageable digital format is universal to any final
solution, and will in fact help that process. Students will be working
with the surety industry to explore such concepts, and the inter-agency
relationship will not only foster a consensus outcome, but produce the
graduates that all public agencies, as well as all the other industry
participants who work in the broader construction community, could rely
with confidence that they had the proficiency required to contribute
towards the demands modern construction practices will require.
The first element of the project, Bid List Connection, is to work with
public agencies and the surety industry to identify the basic data set
for a project out to bid that can be used by the surety industry, using
already defined industry adopted XML, and create a downloadable file
format to compliment the other files that can be downloaded on any particular
project. While that file may only need a limited number of fields, the
data would form the basis of any initial processing of the project by
the surety industry and the necessary information to ultimately produce
an electronic surety bond.
A second element of our project, Project Status Connection, is to provide
the surety companies with an efficient monitoring ability for those projects,
or contractors the surety is associated with.
Traditionally surety companies have limited knowledge of actual project
information, except for a paper status inquiry that is seldom returned,
to base an underwriting decision. Where many public agencies have taken
a lead in providing internet based information on their projects to the
public, including the surety companies, specific information can be like
finding a needle in a haystack considering the numerous other clients,
projects and various public agencies each surety must contend with.
Credit providers rely on the ability to monitor credit information through
the use of aggregating data warehouses that can efficiently convey individually
tailored information via a credit report that pulls from multiple databases.
That ability to secure relevant, timely data is a significant factor
in the ability of credit providers to extend credit to those who are
qualified to receive it. Without the ability to monitor that credit information,
the ability to secure credit would be an obstacle for many borrowers.
The same principles apply to the providers of surety credit. Given the
surety industry’s severe losses these last few years there are
a number of qualified construction companies that may be unable to secure
the surety credit they deserve. That hurts the contractor, the public
agency that could have received their bid, and the community at large
as opportunities are denied to qualified individuals and companies.
The co-development effort will be in conjunction with North Coast Surety
Technologies with an objective to create an environment that supports
open standards and promotes competition. Therefore there is no exclusivity,
or proprietary constraints on the project, and any vendor that wishes
to work with any public agency and/or provide their services to the surety
industry is not only encouraged to do so, but can do so based on established
open standards. Companies that compete with North Coast Surety Technologies
will even be able to hire the very talent that created the models with
every graduation ceremony.
The Business of Construction Project
Overview
There are a number of aspects public and private owners perform
in the construction process that require a unique skill set, and just
as various public agencies work closely with a number of universities
for qualified graduates in their respective specialties, we are looking
to expand those partnerships through this project for new and evolving
skill sets. From public planning and budgeting to finance and risk management
we are looking to work together to identify those areas a university
can collaborate with to assure the future needs of all pubic agencies,
along as those who work with them, is met with the skill set of future
graduates. Our first example of this is with information technology and
the Surety Connection Project.
Objective:
Identify areas of “business” and “technology’ related
expertise public agencies require so the participating universities can
develop specific classes or projects that promote an educational opportunity
to develop an understanding of that particular aspect.
Public Agency Role
Work with the university to identify those areas to cultivate and
assist in preparing a strategy to develop course outlines, on and off
campus speaker series, and internships.
University Role
Have a faculty member being willing to assume oversight of the project
on behalf of the university
Surety Connection Project - Bid List Connection
Overview
A number of public agencies currently post information on their
web site for projects out to bid that could be expanded to include
a simple downloadable file that the surety industry could use
in its processing of contractor bid requests. There are a number
of various applications that administer the data management of
the bid process that could all benefit if an open standard were
adopted that would allow any program to import the data. Participating
universities would work with public agencies, and those various
applications in concert with the technology committee of the
Surety Association of America, to develop the broadest participation
and involvement. As part of the effort, each participating university
would develop a student managed bid management application, Bid
List Connection, which could perform the basic elements of bid
data retrieval, collaborative communication, bid process management,
and data forwarding. While the application will be co-developed
with North Coast Surety Technologies, its processing and functionality
aspects are not copyrighted, and the students are not constrained
by any confidentially or proprietary information restrictions.
The Bid List Connection application is also a fund raising mechanism
that helps underwrite the costs of the project, and possibly
even provide a significant source of sustainable income for the
university.
Objective
To have students develop a cost effective and efficient open standards
internet based data transfer model that can streamline the processing
of bid information by the businesses that serve the construction community,
particularly the surety industry.
To engage students in the challenge of developing a supply chain management
model.
To engage students in the business aspect of processing data for analytical
decision making and creating electronic transactions.
To develop a public/private partnership that promotes interaction between
students and prospective employers, and encourages on campus recruiting
with those prospective employers.
Public Agency Role
Provide a downloadable file for projects out to bid that contains
the data set required by the surety.
University Role
A faculty member willing to assume oversight of the project on
behalf of the university. One member of the faculty must be knowledgeable
in the programming structure of Bid List Connection (Any IT person
would qualify).
Enter into the revenue sharing grant program with North Coast Surety.
Offer Bid List Connection subscriptions to its alumni as a fund raiser
for the university effort.
Provide students with information about the opportunity to participate
and provide structure and direction to the effort. From a class project,
a club project to a dedicated special topics course, there is no pre-defined
method.
Develop an internship outreach effort to the participating public agencies
and private companies.
Surety Role
Work with the students to define the fields that are desired, and
adopt the surety industry adopted XML language and format for importing
the data that Bid List Connection generates.
Surety Management Application Role
Work with students to define the fields that are desired, and adopt
the surety industry adopted XML language and format for importing the
data that the public agencies provide.
North Coast Surety Role
To provide the Bid List Connection application, code included, to the
students so that they may work on the application itself.
To provide the grant program to allow the universities the financial
income to support and justify the effort.
To act as chief facilitator of the effort.
Surety Connection Project – Project Status
Connection
Overview
Just as retailers and suppliers rely on financial markets to
provide the necessary credit to facilitate their customer purchases,
the pubic works arena rely on the surety markets to facilitate
contractors’ participation. It is inevitable that the practices
used in the credit industry to monitor its exposure will migrate
to the surety industry. The question is not if, but when and
how. It is in the educational process of developing the “how” answer
that will engage university students in an incredibly valuable
and rewarding challenge. Valuable because it will immerse the
students in the underlying process of business decisions based
on information, how that information is utilized for analytical
purposes, and more importantly how that raw data was generated.
Understanding the source of raw data, how to collect it, mange
it, and process it are all vital skill sets that future employers
will need.
Rewarding because the effort will help qualified contractors secure
the surety credit they deserve, and public agencies will have a more
inclusive bidding process, but an improved communication system that
will encourage the surety on troubled projects to participate more, and
earlier because they were more aware of a deteriorating situation.
Public agencies with advanced internet based project management systems
in place are clearly the best imitator in making individual project data
available to the surety, but it remains a needle in a haystack when considered
in the broader context. Participating with the Project Status Connection
project simply provides each surety with the “needle” they
were looking for, and establishes the initial open standards based prototype
for other agencies to participate. The more participation from various
public agencies along open standards, the more the surety industry, as
well as any number of other construction related industries, can improve
their monitoring capabilities, which in turn will translate to easier
access to surety credit for all contractors.
Rewarding also because it is inevitable that project data will ultimately
be collected and distributed to the surety industry, and to help steer
that process along open standards to foster the cost effectiveness competition
will generate will have a great impact on whether the process is proprietary
and restricted or public and accessible.
Public Agency role
To work with the students to develop an internal “dashboard” that
will make project data available to be aggregated and distributed to
the surety industry, or other subscribers.
To have that internal “dashboard” feed the aggregating application,
Project Status Connection, the students help develop, as well as any
other application or direct inquiry, using open standards along non-proprietary
methods.
University role
To assist in the development of an internal “dashboard” for
participating public agencies that can serve as data feeds to Project
Status Connection, or any other application, using open standards.
To work on the Project Status Connection application so that it can
receive the data feeds from various dashboards, aggregate the data, and
make that data available to participating surety company and other subscribers.
Surety role
To subscribe to Project Status Connection and help create a prototype
that meets their needs, and produces an output that establishes an open
standard protocol.
North Coast Surety Role
To provide the Project Status Connection application, code included,
to the students so that they may work on the application itself.
To provide the grant program to allow the universities the financial
income to support and justify the effort.
To act as chief facilitator of the effort.
Summary
What we seek from public agencies is simply a slight shift from what
most already are doing, from making basic project data available over
the internet to harnessing and distributing that data more efficiently.
This minor adjustment will have profound positive implications on the
direction of open standards as it is applied to how data is managed in
the future, and a profound impact on the type and range of education
a wide cross section of students will receive. The public will be better
served by the improvements to collaborative communication, and employers
will be better served by graduates better prepared to meet the challenges
the digital world will require of them.
The ability to share data project data horizontally will provide
the foundation for the surety industry to process the initial bond
request with the necessary data for analysis, but also for monitoring
the project once it has commenced.
For every individual surety company to find and integrate with each
project database would be unwieldy for both the surety company and the
project owner. Instead, much like the credit bureaus do, a data warehousing
facility needs to be established that can aggregate the databases and
provide filtered reporting. By establishing such a facility the industry
will have a cost effective means to find the “needle in a hay stack” they
need, and the project owners will likewise have an effective method to
get the information to multiple surety companies with just one link.
The Surety Connection Project, in cooperation with participating universities,
will develop Project Status Connection as a data warehousing application
that public agencies can share their public data with. In turn each surety
can pull their respective data either in real time dashboard, or an archival
history by project or contractor. While this application will be proprietary,
and owned by North Coast Surety Technologies, the basis of its development
will be along open XML standards that any other firm may compete with.
By creating this initial risk management tool as a public endeavor,
with students that will be entering the workforce every semester, the
goal is to create a foundation so that future providers of the data archiving
and distribution systems will follow the open standards protocol with
data sets that were defined cooperatively among many industry participants.
It is often said that knowledge is power. As the ability of Project
Status Connection grows so too does the ability of the surety to monitor
its bonded obligations. Not only the first tier information on the prime
contract, but the secondary level of subcontractor performance can also
be monitored. Therefore a surety on a major project can not only be aware
of overall performance, but can be expanded to monitor individual subcontractor
situations that may manifest themselves into an eventual problem.
The goal of the project is to foster the flow of data using open standards.
