National macroeconomic data research shows a strong correlation between excessive cost escalation and growth of negotiated first tier (CM, IPD, etc.) contracting. A recent, deeper, microeconomic data research of 35 hospitals shows an even stronger correlation between the surging hospital costs and negotiated second tier (trade and prefabrication) contracting. These articles present a case for misaligned incentives and the lack of impartial market intelligence (aka objective knowledge) as the central causes.

World renown quality and process improvement pioneer, W. Edwards Deming, developed the System of Profound Knowledge. Construction as a System enables the full implementation of Deming’s system to drive out waste in planning, design, and construction operations. It provides the means through an intelligent automation system, and the motivation though a win-win, value-based contracting system.

Stages 1 and 2 focus on program efficiency and construction (hard) cost effectiveness by removing the top layers of waste. These stages also serve to shift focus toward measurable value and process improvement and excellence in execution. Stages 3, 4, and 5 will naturally development to toward continuous improvement to eliminate deeper layers of waste to further reduce construction cost, total project costs, and total cost of ownership.