AEC Tech News #128 (Sept. 16, 2004)

14 Sep, 2004 By: Michael Dakan

A report released in August by NIST (National Institute of Standards and Technology) attempts to quantify the costs associated with inadequate interoperability in the AEC industry and facilities operations in the United States -- and the conclusion is a staggering $15.8 billion annually.

The report was commissioned by the Building and Fire Research Laboratory and the Advanced Technology Program at NIST (National Institute of Standards and Technology) and prepared by RTI International (Research Triangle Park, North Carolina) and the Logistics Management Institute (McLean, Virginia). The costs — which are a conservative estimate — affect owners and operators of capital facilities; design, construction, operation and maintenance, and other providers of professional services in the capital facilities industry; and public- and private-sector research organizations that develop interoperability solutions.

Those of us who are design professionals or contractors in this market have long known that the construction industry often relies on antiquated systems and methods, and that it is very slow to adopt new processes — especially those made possible by technology. Many legitimate reasons exist for this; however, other industries have faced comparable challenges to change and have overcome them much more readily. The magnitude of the estimated $15.8 billion is almost beyond comprehension for most of us — but needless to say, the construction industry?s resistance to change is costing it tremendous amounts of money and opportunity.

Costs of All Kinds
The study identifies costs associated with inadequate interoperability in three areas.

Avoidance costs: These accrue when companies try to foresee and avoid areas where problems can occur.

Mitigation costs: These are associated with correcting a problem that has occurred.

Delay costs: These accrue because of delays in putting a facility in use or not having full use of a facility because problems exist.

Costs due to inadequate interoperability can accrue in facility operation and maintenance when companies duplicate procedures and systems, have to log the same information into systems more than once, have to recreate data sources, and so on.

Most of the identified costs — approximately two-thirds — accrue to building owners and operators, initially and throughout the building?s lifecycle. No doubt this accounts for the fact that most of the technology improvements and changes in the industry are driven by client demand. Many building owners and operators are experts in another primary industry, such as manufacturing, automotive, or computer technology, and have seen the kinds of advancements and improved performance that result from using information technology in their own industries.

Solid Data
The study results are based on comparing actual current costs of conducting various processes in the business vs. a hypothetical scenario that eliminates system redundancies and inefficiencies and uses a seamless flow of information throughout the lifecycle of a building. The results are only an estimate of these costs, which of course can be subject to challenges of the assumptions and details of the hypothetical scenario. However, the study used rigorous data-gathering methodologies and multiple sources for those assumptions, and it attempts to provide more than just opinions and guesses.

Study data such as the total amount of square footage of U.S. facilities, as well as the amount added each year, is impressive. The base year for the square footage added and other study information is 2002, so the data set is very current. The general information in the study would be relevant in many other contexts beyond the scope of this report.

Wealth of Information
The study is more than 200 pages, and much of it reads like a typical contracted government report, but I found it very interesting overall and worthwhile to browse. I found it while wading through the NIST Web site, which was an eye-opening experience in itself. I wasn?t aware of all the research being conducted under the auspices of NIST. I always thought NIST was simply the keeper of standards, such as the nation?s official measures (ounce, pound, inch, foot) and the official time. It?s much more, and the research it sponsors seems very useful and timely, a good use of taxpayer dollars.

The full report, NIST GCR 04-867, is available at:

NIST Web site:


Michael Dakan is an author and independent CAD and information technology consultant. E-mail him at


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