Virtual Plan Room off to a fast start

Generals slower than subs, suppliers to buy in
After only a few weeks of selling subscriptions, Associated General Contractors (AGC) chapters in Wisconsin have sold about 30 memberships in a virtual plan room – an application service provider (ASP) system allowing contractors to bid together on projects across the public Internet.
The Web-based initiative, which allows contractors to search an on-line database of projects and use automated functions to bid on jobs, has caught on more quickly with subcontractors and suppliers than with generals. To date, no general contractor has bought into the project.
The Virtual Plan Room includes a special section – the Construction Office — where generals can administer bidding, estimating and project management functions. Private on-line plan rooms are available for use for negotiated projects.
AGC of Wisconsin and AGC of Greater Milwaukee created the plan room with the iSqFt ASP system from Construction Software Technologies, Inc., of Cincinnati, Ohio. An ASP system like iSqFt allows users to access software and data located on a remote server. In this case, iSqFt houses its data on servers in Cincinnati. This means the individual users do not need to invest in the servers necessary to run powerful database applications. However, it also means that access to data necessary for essential business functions is dependent on reliable Internet connectivity and maintenance of system user fees.
The program has been adopted by a growing number of AGC chapters from around the nation, according to Mark Pursell, executive director of business development at AGC’s national offices.
“We did a lot of survey work with our members,” Pursell said. “And we asked them – ‘what do you want the Internet to do for you?’ What we found was that 60% of them wanted the Internet to help them find work. About 60% of them also said they wanted the Internet to help them manage projects. And 60% of those surveyed said they expected AGC to help them get the Internet to do that.”
Pursell said data he had seen suggested that 85% to 90% of contractors in the United States are connected to the Internet.
“Construction is not an early adaptor of information technology,” Pursell said. “They see it as overhead.”
But Pursell pointed to apparent successes in states like Iowa, Georgia, Alabama and North Carolina.
The AGC chapters are charging for the service based on geography. The state is broken into four zones — Southeast Wisconsin, the Madison Area, Northeast and Northwest. Participation in either the Madison or Milwaukee areas will cost $1,900 annually, according to Fabishak, while participation in either the Northeast or Northwest will cost $700 each. Contractors can access and use project information in the whole state for $2,400, according to Fabishak.
“We are trying to tie people into the whole state,” Fabishak said. “Obviously there are other subcontractors or suppliers who might want to operate in just a specific geographic area.”
Fabishak said the system will also include portions of Iowa, northern Illinois, Minnesota and the Upper Peninsula of Michigan.
Generals key, but subs leading charge
Subs and suppliers have bought into the system faster than general contractors. One of the first to sign on was Vyron Corp., a manufacturer’s representative for heating, ventilating and air conditioning products used in commercial and industrial applications. The company has locations in Milwaukee, Madison, Green Bay and Wisconsin Rapids.
“We signed up for it right away,” Susan Reddy of Vyron said. “The biggest thing is that it has saved me a great deal of time going to the plan room (at AGC offices near Mayfair Mall) – I can do almost everything from my desk. I used to go to the plan room every day – and now I go once a week. It has saved me between three and four hours a week out of the office. It is more efficient as far as having everything at our fingertips. If we have a question about what is on a particular plan or a question on a spec, it is all right there in the computer.”
AGC of Greater Milwaukee Executive Vice President Mike Fabishak said attracting generals to the system was critical to the project’s ultimate success in the state.
According to Fabishak, once major general contractors start using the system, the subcontractors will follow suit in order to be in on the online bidding process.
“The generals will more or less compel the subs to participate,” he said.
Participation of generals will help the two AGC chapters meet their goal of 200 subscribers in 2002.
But while contractors may be able to “push subs,” subs can also “pull” contractors.
“The sub base is not real large and needs to be expanded,” Nate Keller, project manager with the Bentley Company, Milwaukee, said. “That is really what iSqFt’s main goal is. It does go both ways, but in order for it to work for generals, the subs need to be in there.”
Keller said iSqFt is smart to offer subcontractors a complimentary pass for their initial bids on the system. The initial use would then trigger a follow-up call to secure a subscription.
Keller also said it would be important to involve project owners, particularly those with ongoing construction projects and knowledgeable facilities and project management teams.
Interest among general contractors will also likely increase as the number of plans loaded into the system increases.
“We did not bring on anything that had a bid date before Jan. 7,” Fabishak said. “As that content grows, the interest of prospective participants grows as well.
The slowdown in the economy could also help the project, according to Fabishak.
“Construction activity has slowed,” Fabishak said. “The ability to access additional plans becomes more important.”
Useful beyond bid process
Apart from linking contractors and subs, iSqFt provides an efficient format for bit-mapped construction drawings along with elegant data management for take-offs. While it is not a full-function project manager, it does offer some utility after the bidding process is successfully completed.
“We provide opportunities to the contracting community to view on-line drawings and specifications related to projects that are in the bidding state,” Mark Welker of iSqFt said. “We have technology that allows us to compress and display them in a manner that is easy to view and easy to navigate through the Internet. We also offer a proprietary piece of estimating software that allows you to do take-offs online. There are searchable capabilities that allow the contractor to find the work that fits their expertise.”
While Welker said that its application does not compete with project management programs like Primavera and e-builder, AGC has asked them to work with Primavera, its recommended application for project-specific Web sites, project management and collaboration, to integrate their applications.
But Welker said iSqFt’s usefulness does not end once the project is bid and won.
“There are post-bid document management functions,” Welker said. “There is a real use for our tool – like addenda to projects. We post addenda within the same day they are issued, so through the life of a project the contractor is notified by the software that the addenda is issued.”
Connectivity may be an issue
While Welker said the system had features to make iSqFt accessible to those using dial-up connections, some contractors expressed concern over not only the speed but the security of their Internet connections.
“We built the product for two specific users — the ideal situation is to be on a high-speed connection — DSL, ISDN or T1 have a pretty significant speed which enables them to view the projects and drawings and specs in a pretty rapid environment,” Welker said. “For contractors with connections of 56 kbps or less, we knew we would need to work with them to use the product in a fashion to fit the speed with which they connect to the Internet. We have a download application that allows a contractors to quickly download plans in a compressed file and do the take-offs on their desktop at desktop speeds rather than over the Web at Web speeds.”
The extent to which users on dial-up connections will find the application practical remains to be seen.
“I have talked to one sub – a rather large electrical contractor – and he said he thought the downloading was fairly slow,” Keller said. “The hard part is that if you have 100 drawings, that is a substantial amount of files to download.”
But despite this, Keller remains optimistic.
“I would especially see this program – which comes with a basic software estimating tool — as an advantage to electrical, flooring and painting contractors who can use it to do take-offs,” Welker said. “For other subs, it would be advantageous because they can go to the Web and order plans. From our standpoint, it would help if Bentley would not have to distribute the plans and correspondence to all the subs.”
One information technology professional with a Racine contracting firm involved in projects nationwide has some reservations about connectivity and security.
“With such short time-lines to work with, and the myriad of technologically challenged subcontractors out there who do not even have access to the Internet or e-mail yet, this would not justify the return on investment for such a subscription,” Tony Conte, director of Information and Business Systems for Horizon Retail Construction in Racine said. “I also cannot glean whether or not there have been any successes with this approach on a national level, on which we mainly operate.”
Conte also said he had concerns about security of data transmitted over the public Internet.
“On an Internet security note, there is nothing today that is accessed via the Internet that is secured or private, except maybe bank transactions, or secure credit card processing,” Conte said. “Even they are suspect at times. Their claim to private rooms is unfounded, and unproven by today’s security standards. Our business relies on the clients’ privacy, our company practices and procedures privacy, and the information exchange between us to be as secure as possible.”
March 1, 2002 Small Business Times, Milwaukee