Interoperability Cost Analysis of the U.S. Construction Industry

Principal Investigator:
Robert E. Chapman, Office of Applied Economics, 301-975-2723

Co-Investigators:
Harold E. Marshall, Office of Applied Economics, 301-975-6131
Chi J. Leng, Office of Applied Economics, 301-975-

Sponsor:
Building and Fire Research Laboratory (BFRL)

Objective:
Identify and estimate the efficiency losses in the U.S. construction industry resulting from inadequate interoperability among computer-aided design, engineering, and software systems. Interoperability is defined as the ability to communicate product and project data across different construction-related activities throughout the facility life cycle—design, engineering, procurement and fabrication, construction, commissioning, operations, maintenance, and decommissioning.

Approach:
During FY 2004, economists from OAE will focus their efforts in two areas. The first area is concerned with contract administration. The second area will produce a journal article summarizing the interoperability cost analysis study.

1. The COTR will work in close collaboration with the RTI project team to insure that the final report meets the objective of the study. Specific contract administration tasks include: (a) monitor the contractor’s performance and provide technical advice to the contractor until completion of the study; (b) provide to the contractor technical and editorial assistance; and (c) coordinate reviews of the final report with subject matter experts within ATP and BFRL. During FY 2004, the contractor, RTI International, will complete the contract by delivering a final report that: (a) briefly describes the U.S. capital facilities industry’s structure, technology, and market strategies; (b) describes the technical aspects and documented or hypothesized economic impacts of interoperability, with emphasis on market failure mechanisms; (c) analyzes the barriers to improved interoperability in the capital facilities industry and recommends actions for NIST and others to address these barriers; and (d) presents both quantitative and qualitative findings from the surveys and other sources, and identifies significant opportunities for improvement. Note: The funds to perform the outside contract were committed in FY02.

2. Economists from OAE will prepare a journal article analyzing the impacts of inadequate interoperability on the capital facilities industry and submit it to a suitable journal for publication. The article will build on RTI’s final report. Particular emphasis will be placed on barriers to improved interoperability and how selected private/public partnerships can address them.

Recent Results:
During FY 2002, economists from the Office of Applied Economics (OAE) secured funding from the Advanced Technology Program (ATP) to conduct a competitive procurement, prepared contract documents, and convened a panel of BFRL/ATP subject matter experts to review and evaluate proposals received from potential contractors. Based on the panel’s recommendations, the contract was awarded to RTI International ($420,807). During FY 2003, the COTR worked in close collaboration with the RTI project team to insure that the final report meets the objective of the study. Quarterly meetings with the RTI project team and BFRL/ATP subject matter experts were organized and convened by the COTR. These meetings were used to review progress and to coordinate comments on the interim report. Economists from OAE evaluated and refined the proposed cost estimation methodology, coordinated the review of survey instruments for each of the key industry stakeholder groups, and prepared documentation for the OMB Information Collection Request. Economists from OAE worked in close collaboration with NIST and DoC Directives Management personnel to obtain OMB clearances to conduct the surveys.