The Changing Environment of the Construction Industry and

The Changing Environment of the Construction Industry and Suggested Action Plans History of CM in Japan and CMAJ Prepared for CMAK April, 2008 Presented by T. Miyazaki Member of the Board of Directors, CMAJ

The Changing Environment of the Construction Industry • History of CM in Japan – 70 s and 80 s – 90 s – 2000 s 2

HISTORY of CM in JAPAN - 70 s and 80 s – Many studies for US CM system were conducted, but no realistic trends in domestic market. – JPs engineering contractors in international markets got used to CM system, but limited number of projects or cases. – In late 80 s under "Bubble" economy, many Mega. Projects arose, and GCs are tried to utilize CM in their construction projects. 3

HISTORY of CM in JAPAN - 90 s – After the "Bubble" economy gone, construction investments are shrank, and CM trends were no more needed. At same time, many corruptions or scandals were revealed related to construction industry. GOJ restructured public procurement system for construction projects. 4

HISTORY of CM in JAPAN - 90 s (Continued) – On the other hand, US required GOJ to open its market for US companies through bilateral treaty, and promoted CM system to GOJ. Although those CM trends, public market did not utilize CM. – During 90 s, property market went down, and foreign investors increased their interests in Japan's property market, and those clients started to use CM provider as their consultant. 5

HISTORY of CM in JAPAN - 2000 s – GOJ has recognized that the market needs more diversity, and is trying to promote CM and other innovative procurement methodologies through public and private construction markets. 6

HISTORY of CM in JAPAN - 2000 s (Continued) – GOJ conducted several studies in early 2000, and established "The Guide Line for CM" in 2002, and published "Manual for local government for CM procurement" in 2003. CMAJ directly supported those studies and researches. – GOJ continues to promote CM in public sectors, and set the budget to supports local government's effort to expand CM projects in 2007. This effort is still on going. 7

Changing Environment – Based on recent efforts of GOJ, and also private construction market including foreign investments, CM is widely recognized as a alternative to conservative Lump-Sum General Construction Contract. Now Environment is Changing!! 8

Suggested Action Plans • CMAJ – Association supports CM trend – History, Goals and Missions, Code of Ethics, Organization, Recent Efforts • Recent Projects – Recent Trends – Public Projects – Private Projects 9

HISTORY of CMAJ 2001 - 2005 • April 2001, Established • June 2002, Code of Ethics • April 2003, Provisional CCMJ Certified • October 2004, CM Guide Book Published • March 2005, First CCMJ/ACCMJ Exam conducted. CCMJ/ACCMJ Certified 10

HISTORY of CMAJ 2006 - 2008 • November 2007, CPD (Continuing Professional Development) program started • November 2007, CM Contract Terms and Condition/Scope of Works published • January 2008, CM Liability Insurance started • April 2008, CM School started 11

GOALS and MISSIONS • GOALS – To reconstruct the construction project delivery system – To develop responsible professionals with ethics 12

GOALS and MISSIONS (Continued) • MISSIONS – Enhance understanding of CM – Expanding CM practice in the Japanese industry – Development of the CM to service the public and engineers. – Investigation and research of CM – Education and training for Construction Managers – Alliance with global and Japanese 13 communities

CODE OF ETHICS Established June, 2002 • Integrity/Dignity • Neutral judgment • Rational justification • Continuous improvement • Discipline • Compliance • Relationship with Owners • Relationship with CMAJ members and non-members • Project stake holders 14

ORGANIZATION • Fourteen committees and five district branches have been organized. • All activities are carried out under the management of the board of Directors. • Board Meeting is held monthly. 15

RECENT ACHIEVEMENTS • CM GUIDE BOOK • EXAM/CERTIFICATION • CPD • STANDARD CONTRACT • CM INSURANCE • CM SCHOOL 2004 2005 2007 2008 16

CM GUIDE BOOK • • • Published in 2004 Sold approx 3, 000 copies to date First Practical Textbook for CMr More than 360 pages Over 70 Authors of Professional CMr • One Stop textbook of CM, covering History, Delivery Methods, Doctrines, and Technical knowledge. 17

EXAM/CERTIFICATION • First Exam conducted 2005 • 411 CCMJ have been certified to date • First CCMJ/ACCMJ certified 2005 • Next EXAM scheduled August 2008 • Three EXAM have been conducted to date 18

CPD (Continuing Professional Development) • Tied with CCMJ Certification • 5 years program to earn 150 points • Proactive involvement is required to maintain CM qualification • Activities are evaluated by CMAJ CPD sub-committee 19

STANDARD CM CONTRACT TERMS AND CONDITIONS • Established in 2007 • First standard contract form for CM services • Focused on Pure CM • Lawyers and over 40 professional CMr including members of board worked over 3 years • Standard Terms and Scope of Services are mutually dependent 20

CM INSURANCE • Established in 2008 • Successfully started from April 2008 • First of its kind to cover Liability of CM • CMAJ and Tokyo Marine Nichido Insurance jointly hold • Dedicated for CMAJ members 21

CM SCHOOL • Started April 2008 • One year program • Three category of lectures – Basic course • One course for CM basic knowledge – Practical courses • 8 courses for detailed aspect of CM delivery method – Special Lectures • 8 special lectures tied with each practical course 22

Recent Projects • RECENT TRENDS – GOJ supports • Ministry of Land Infrastructure and Transport to provide assistance for local governments regarding CM deployment = CM Advisor Support • RECNET PROJECTS – Public Projects – Infrastructure / Building • Central Government • Local Government – Private Projects – Developments and Buildings • International Clients • Domestic Clients 23

CM Advisor Support - MLIT • SUPPORTS TO CM PROJECT – Projects specified, CM advisor assigned • Kamikoani Village – Bovis Lend Lease • Minami Soma City – Mitsubishi Jisho Sekkei CM Dept • Adachi Ward – Gen Architectural Management • Daisen City – NTT Facilities CM Dept • Takahama City – Yamashita PM Consultants 24

CM Advisor Support – MLIT (Continued) • SUPPORTS TO CM PROMOTION – Local government to hold lectures to its employees • Iwate Prefecture – TAK Realty • Nagano Prefecture – JR East Sekkei • Osaka Prefecture – Overseas Bechtel, Inc. • Saitama Prefecture – Kajima Corp. 25

Public Projects • Infrastructures – Central Government • Shinano River Banking Project CM – Local Government • Chimi Yoka Route Tunnel Project CM • Buildings – Central Government • Okinawa Institute of Science and Technology CM – Local Government • Minami Soma City Library Construction CM 26

Shinano River Banking Project CM • CM; Maeda Construction • Client; MLIT • Purpose of the Project; To construct super bank on both side of Shinano River • Total 30 km river bank construction to prevent flood • Over 26 contractors working at same time • Scope; To assist MLIT for coordination of over 40 contractors for over 30 km length • Completion; Mar 2009 (Plan) 27

Chimi Yoka Road Construction Project CM • CM; OYO Corporation • Client; City of Toyooka and Yofu Town • Purpose of the Project; To connect two districts by viaduct to boost local economy and cultural communication of the area • Including 1, 500 m NATM Tunnel • Scope; To assist two local government jointly construct large scale road, Client organization had no resources to complete the project • Completion; Mar 2007 28

Okinawa Institute of Science and Technology (OIST) Project CM • CM; Bovis Lend Lease Japan • Client; OIST organization of Cabinet Office • Purpose of the Project; To Construct state of the art Research Center for Science and Technology • Total Site Area; 70 ha + 7 ha • Scope; To assist OIST from Master Planning to Procurement Coordination • Completion; Mar 2009 (Plan) 29

Minami Soma City New Library Construction Project CM • CM; NTT Facilities CM Dept. • CM Advisor assigned by MLIT; Mitsubishi Jisho Sekkei CM Dept. • Client; City of Minami Soma • Purpose of the Project; To construct brand new public library • Scope; CMr to manage architect and contractors and give client advices • Total Floor area; 6, 700 sqm • Completion; Mar 2010 (Plan) 30

Private Projects • Projects by CM provider – Mitsubishi Jisho Sekkei CM Dept. • Insurance Company HQ, New High School CM, Office Building Complex CM, Job Training Facility CM – Bovis Lend Lease Japan • Nihonbashi Hotel Project – Overseas Bechtel, Incorporated • Shiba A-2 Block Project – IBM FM Dept. • Mabuchi Motor HQ Redevelopment 31

Mitsubishi Jisho Sekkei CM Dept. Insurance Company HQ Refurbishment Project / Construction Management Location : Seoul Project Completion : 2010(Plan) Purpose of the building : Office and Retails Structure : Steel Total Floor Area : 95, 000 sqm CM Partner : Hanmi Parsons 32

Mitsubishi Jisho Sekkei CM Dept. New High School Construction Project / Construction Management Location : Kochi Prefecture Facility Completion : 2009(Plan) Purpose of the building : High School Structure : Steel, RC, with Seismic Isolation Total Floor Area　：　17, 745 sqm 33

Mitsubishi Jisho Sekkei CM Dept. Office Building Complex / Construction Management Location : Tokyo Facility Completion : 2006 Purpose of the building : Office Building and Retails Structure : Steel, SRC Total Floor Area : 97, 592 sqm PM Consultant : Mitsubishi Estate 34

Mitsubishi Jisho Sekkei CM Dept. Job Training Center / Construction Management Location : Chiba Facility Completion : 2006 Purpose of the building : Job Training Facility Structure : SRC, Steel Total Floor Area : 33, 548 sqm 35

Bovis Lend Lease Japan • Nihonbashi Hotel Project – Client; Foreign Insurance Company – Total Floor Area; 7, 943 sqm – Completion; Aug. 2005 – Architect/Contractor; Takenaka Corporation – TIC; Not disclosed – Scope; Project Management 36

Overseas Bechtel, Incorporated • Shiba A-2 Block Project – Client; Domestic Developer – Total Floor Area; 61, 170 sqm – Structure; S/SRC, 17 F-2 B-2 P – Office, Hotel Complex – Completion; Apr. 2002 – Architect; Nihon Sekkei – Main Contractor; Kajima – Scope; Construction management, Procurement, Design Management 37

IBM FM Dept. / Mabuchi Motor HQ Redevelopment 1. New HQ building(19, 000 sqm) 3. Refurbishments / Landscaping 2. Demolition of Existing Buildings コンプレッサー室 受変電設備／非常発電機 約３５ｍ 発電機 ＭＤＣ ０ｍ 約２７ 旧部品 場 プレス棟 約１１０ｍ Interior /HVAC Refurbished グランド 約３００ｍ 約１８０ｍ New HQ Construction ＭＴＣ 場 棟 Parking Area Ｎ Old HQ Seismic Improvement Exhibition Room キュービクル 中水用ポンプ 井水揚水ポンプ Total Redeveloped Area ： 42, 000 sqm 38

IBM FM Dept. / Mabuchi Motor Completion of New HQ Sep 2004 Grand Opening Aug 2005 39