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Original Articles

Process transparency for sustainable building delivery

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Pages 298-307 | Received 07 Oct 2008, Accepted 22 Apr 2009, Published online: 21 May 2009

Abstract

The construction and operation of buildings account for more than one-third of all material and energy flows worldwide. Therefore, a greater market share of buildings that reduce the associated negative impacts is essential to address global issues, including energy and water shortages and the climate crisis. Proven strategies and technologies exist today for more sustainable buildings, but a need to improve their implementation remains. The processes for planning, designing, building and operating, or ‘delivering’, these projects are complex and often unfamiliar to the stakeholders (e.g. owners, designers and constructors) whose collaboration is essential to implementing sustainable solutions. In other industries, process transparency helps facilitate complex, unfamiliar processes by making their status, goals and rules visible to all stakeholders. The objective of this research was to examine whether increased process transparency can reduce costs for sustainable buildings. The delivery processes of two recently completed sustainable building projects are compared to the ‘counterfactual’ delivery of the same projects with complete process transparency. The research results demonstrate that substantial cost savings are possible through improved delivery process transparency on sustainable buildings. Based on these results, strategies to enhance transparency on future projects are discussed along with implications for industry and education.

1. Introduction

Global climate change and shortages of critical resources, including energy and water, are among the most important issues facing humanity at the beginning of the twenty-first century (Smalley Citation2004). Expanding population and continued development necessitates visionary research efforts seeking groundbreaking solutions for future application (e.g. novel sources of clean energy and economically feasible carbon sequestration strategies). In the meantime, proven solutions already exist and their broad application could immediately address these issues in a significant way. For instance, the US could reduce climate change emissions 50% by 2054 by implementing existing strategies and technologies such as energy efficiency, solar and wind power (Pacala and Socolow Citation2004).

Reducing the environmental impacts of buildings is integral to this broad, required response. The construction and operation of buildings account for 40% of all material and energy flows (USEPA Citation2007), which represents more energy usage and climate change emissions than automobiles and planes combined (Worldwatch Institute Citation2007). More sustainable buildings will reduce these impacts and are defined for this research as those seeking to optimise site potential and energy use, protect and conserve water, use environmentally preferable products, enhance indoor environmental quality, minimise volatile organic compound emissions, and optimise operational and maintenance practices (NIBS Citation2006).

1.1 Sustainable building delivery

Planning, design, construction and operation, or ‘delivery’, of a single building involves many stakeholders (e.g. architects, engineers, contractors, construction managers, owners, building occupants, building operators and government agencies) performing many processes (e.g. planning, design, construction and operations). Separation between stakeholders and disconnects in processes mean stakeholders frequently lack understanding of the delivery process outside their specific area of expertise.

For sustainable building delivery, added unfamiliarity and complexity are present. New stakeholders are involved, while traditional stakeholders have new roles. Processes unique to sustainable building delivery, such as energy modelling, also contribute to a delivery process that is unfamiliar to many project stakeholders. Further, effective sustainable project delivery requires an integrated process where intricate, multidisciplinary collaboration between a wide range of stakeholders helps generate sustainable solutions (Vanegas Citation2003).

Successfully negotiating the complexity and unfamiliarity of sustainable building delivery can be rewarding. Exemplary sustainable buildings produce more energy than they consume at minimal first cost premiums, which are quickly offset by energy cost savings (Lewers Citation2008). Buildings are also achieving more modest, but still significant, sustainable objectives with no first cost premiums at all (Matthiesson and Morris Citation2007). Despite these success stories, sustainable buildings make up only a small fraction of the overall construction market.

Improved delivery of sustainable building projects can reduce costs and contribute to their more widespread implementation. Increased integration and participation are recognised as valuable attributes for sustainable projects, and increasingly, these attributes are becoming a focus throughout the delivery process. However, these attributes alone do not fully characterise the sustainable building delivery process. Process transparency, described in detail in Section 2, may also be valuable by helping to facilitate complex, unfamiliar processes and by making situations, including status, goals and rules, visible to all stakeholders.

1.2 Research objective

The objective of this research was to develop theory regarding process transparency for sustainable building delivery. To describe the research, the background for and the specific definition of process transparency are provided in the following section. Then, the research approach is described, which leads to the results and analysis showing the possibility of cost savings through enhanced process transparency. Conclusions and discussion highlight some of the practical applications of the research results, including recommendations for integrating process transparency to improve the delivery of sustainable building projects.

2. Background: process transparency

Other industries have faced similar issues related to complex, unfamiliar processes. Successful companies in these industries have negotiated the complexity to see the big picture, resulting in better processes and consequently, better products. Striving for process ‘transparency’ is one practice applied by these successful companies. Complete transparency is present in a process when ‘situations are visible to everyone; goals and rules are visible to everyone; and each person participates and considers themselves (sic) involved’ (Greif Citation1991).

Transparency is part of Toyota Motor Company's culture, which has helped the company grow from making dinnerware and fish paste immediately following World War II to become the top automaker in the world today (Maynard Citation2008). At Toyota, transparency enables increased participation in manufacturing and product development processes and provides decision-making abilities to more stakeholders. For instance, assembly line workers can see when something is wrong on another part of the line and have the authority to stop the assembly line to fix the problem. With a similar impact on sustainable building delivery, transparency could help stakeholders negotiate the unfamiliarity and complexity of the delivery process to enhance integration among stakeholders and improve the final product. Those studying Toyota's success describe transparency as enabling ‘massive and continuing amounts of problem solving…by teams of employees who historically have not even talked to each other, much less treated each other as equals’ (Womack and Jones Citation2003). This quote also describes the ideal integrated process for delivering a sustainable building (Vanegas Citation2003).

Various examples illustrate the use of transparency in non-building industries (Greif Citation1991, Womack and Jones Citation2003). For example, transparency processes in a factory may include uncluttered workspaces, signs showing production information, clear instructions posted where work activities take place, and tools allowing workers to quickly recognise standards and deviations from them, all of which contribute to making the status of the production process transparent to anyone in this factory (Greif Citation1991). Transparency can also be applied outside of the factory environment. Showing the status of a fundraising campaign using a thermometer poster is one classic application, immediately making the goals and status of the fundraising process visible to potential contributors. Other methods to increase transparency outside of the factory environment include charting processes to make them visible and using measurements to highlight invisible process attributes.

Based on its value in other fields, sustainable building experts hypothesise that process transparency is beneficial during delivery of these buildings (Pearce and Augenbroe Citation1998, Kibert Citation2004). A couple of examples from sustainable building delivery illustrate the logic behind this hypothesised value:

Example 1: Input from building operations at the appropriate point in design. When building operations staff can see the status of the delivery process and designers can see interdependencies (i.e. that they should consult with building operations staff), the building operations staff are more likely to provide timely and helpful input during the design phase. Operations input can provide insight into maintenance costs and the observed performance of different technologies under consideration. This insight holds increased importance for sustainable projects, where unfamiliar technologies, ranging from waterless urinals to the next generation of heating, ventilation and air conditioning (HVAC) control systems, are vital to achieving sustainable goals.

Example 2: Roles and responsibilities surrounding the commissioning process. Commissioning is a fundamental process for sustainable building delivery, helping to ensure that the building operates as designed. Because widespread use of the commissioning process is new to the building industry in many countries, there can be confusion regarding responsibilities and interactions related to commissioning. Greater transparency could help reinforce responsibilities and interactions, making the commissioning process more effective.

The current research project builds on these examples and the expert's hypotheses (Pearce and Augenbroe Citation1998, Kibert Citation2004) with a more detailed exploration of the relationship between transparency and sustainable building delivery. Potential measures of this relationship may consider how transparency affects a building's level of sustainability, schedule and cost. Cost is the focus for this research since lower costs will lead to more widespread implementation of sustainable buildings.

2.1 Process transparency defined

Transparency of information is an important concept in many fields. Applied to government, transparency means that government operations, including decisions, finances and other activities, are open to the public. This type of transparency helps improve the accountability of elected officials and reduces corruption (TI Citation2009). Applied to financial markets, transparency refers to openness in economic policymaking and the availability of data on financial developments. This type of transparency helps financial markets function efficiently, thereby minimising the chance of shocks (IMF Staff Citation2001). Regardless of the field, the common factor of information transparency is that it enables increased participation among many individuals, providing decision-making authority and abilities to more stakeholders.

Product transparency is one subset of information transparency. For building projects, documentation throughout the project's delivery provides product transparency, which is a different subset of information transparency. For instance, construction drawings and specifications attempt to make designer-provided product information transparent to the builder. Examples of documentation aimed at transparency of the product (the building) include design drawings and specifications, physical and virtual 3D models, budgets and invoices.

While product transparency helps define what a building will be, process transparency helps show how the project stakeholders will deliver the building. As defined for this research, process transparency is the subset of information transparency that specifically provides information about the sequence and organisation of the process itself. Schedules, organisation charts or responsibilities matrices are all efforts to increase process transparency. To distinguish it from other types of transparency and allow for measurement, a rigorous definition of process transparency was required for this research. Process transparency is defined by the degree to which the following elements are present for a process: recognition of status, problems, responsibilities and interdependencies; facilitation of understanding, feedback, communication and improvements; and enabling decision-making. Table lists each attribute of the process transparency definition, an example of the attribute and the primary reference supporting the inclusion of the attribute in this definition.

Table 1 Attributes of the transparency definition.

3. Research approach

The impact of process transparency on sustainable building projects was examined for a school of architecture and landscape architecture (SALA) building and for a Forest Resources building, both on a university campus. These building projects received leadership in energy and environmental design (LEED) Gold and Silver certification, respectively. LEED is the sustainable building rating system used by the US Green Building Council. Buildings can achieve LEED ‘Platinum’, ‘Gold’, ‘Silver’ or ‘Certified’ certification depending on their level of sustainability. To determine the impact of process transparency on sustainable building delivery, the costs associated with each project's actual delivery were compared to the costs associated with a ‘counterfactual’ delivery of the same project with complete process transparency.

3.1 Counterfactual analysis of the SALA and Forest Resources buildings

To study the impact of process transparency on sustainable building projects, the counterfactual analysis research method was applied to the SALA and Forest Resources buildings. Generally, the counterfactual analysis research method compares actual scenarios to rigorously developed ‘counterfactual’ scenarios (Fogel Citation1964). The six-step version of the method applied to this research is influenced by previous applications of counterfactual analysis to construction research and to other, more established research fields, including political science and economics, in which counterfactual analysis was used in Nobel Prize winning research (Fogel Citation1964, Tetlock and Belkin Citation1996, NIST Citation2002).Footnote1 The following steps describe the application of counterfactual analysis to this project:

Step 1: Map the delivery process. Process maps were developed to study the delivery of the SALA and Forest Resources buildings. Mapping the delivery process is fundamental to developing a rigorous counterfactual analysis because the process map(s) allows the researcher to visualise the delivery process. This visualisation assists subsequent steps of the counterfactual analysis, including the location of the antecedent and consequent and the identification of connecting principles (Step 2). Maps showing the delivery process at a macro level provide the requisite detail for this study (Klotz et al. Citation2008).

Step 2: Specify the counterfactual scenario. The counterfactual scenario results directly from the research question: ‘Would greater delivery process transparency impact the cost for delivering sustainable buildings?’ The independent variable, or antecedent, is ‘greater process transparency’, which is based on the process transparency definition in Table . The dependent variable, or consequent, is ‘sustainable project costs’. The antecedent was introduced after capital planning and prior to the programming phase of each building's delivery, while the consequent was measured from the programming through turnover phases (See Figure ).

Figure 1 Location of the antecedent and consequent in the level I process map.

Figure 1 Location of the antecedent and consequent in the level I process map.

Step 3: Define the scope of the counterfactual analysis. For each building, costs were examined from the building owner's perspective. To ensure that the estimated costs were conservative, only costs directly resulting from a lack of process transparency were considered. For instance, excluded from this analysis are costs associated with the decreased productivity of a project stakeholder who is frustrated by a lack of process transparency.

Step 4: Set up the quantitative cost study. Cost records, including meeting minutes, contract changes and letters; were identified through review of applicable project files and through consultation with project stakeholders. A Microsoft Access database was used to filter, classify and prioritise the process transparency costs identified. Filtering of cost data helped ensure researchers did not include costs unrelated to process transparency. Classification of costs; by project phase, cost category and transparency type; helps support the analysis of collected data.

Step 5: Perform the quantitative impact study. The quantitative impact study was performed by calculating and then combining all of the impacts associated with the impact records obtained in Step 4. These combined impacts represent the difference between the counterfactual scenario and the actual scenario. An example from the Forest Resources building illustrates how the quantitative impact study was performed and illustrates one instance where improved process transparency could have reduced sustainable building costs. The Pennsylvania Forest Products Association supplied wood for the Forest Resources building, including over two linear miles of trim, rail and casing and over one-tenth of an acre of panels and ceiling. The wood is a relatively sustainable building material because it is a renewable resource and because the required transportation, and the associated fossil fuel use and emissions, were minimised because the wood was harvested locally. During the construction phase, the timing of the wood products' availability on site was critical to enabling the completion of related work and to maintaining the project schedule. However, the supply of the wood was based on the wood fabricators' production schedules. Materials were delivered to the site based on the fabricator's convenience rather than on when materials were needed by the contractor. The importance of material delivery and sequencing of the construction process was not transparent to the Forest Products Association, and the importance of the production schedule was not transparent to the project team. This situation resulted in approximately $175,000 worth of mitigation costs, which are reflected in change orders related to time extensions and additional labour costs due to out-of-sequence work.

Step 6: Perform the qualitative impact study. Semi-structured interviews were used to collect stakeholders' views of the impact of process transparency on sustainable building costs (Fellows and Liu Citation1997). This format allowed for discussion and clarification of the answers provided by the respondents, while providing an opportunity for interview subjects to reveal costs related to process transparency that were not identified through the quantitative study. Project stakeholders were asked questions to verify cost impacts and to identify any additional relevant information.

4. Results and analysis

Between the SALA and Forest Resources buildings, 285 different impact records showed that cost reductions were possible through improved process transparency (Klotz Citation2008; provides a complete listing of the impact records). Combined, these impact records show possible cost savings through improved process transparency that approach $900,000 for SALA and $500,000 for the Forest Resources building. This represents approximately 3% (SALA) and 1.5% (Forest Resources) of each building's design and construction costs. To provide insight into the most promising ways to increase transparency on future projects, these cost savings were analysed by

project phase,

cost category and

transparency type (project or organisation).

Costs related to a lack of process transparency for the SALA and Forest Resources buildings were organised by project phase, as shown in Figure . For instance, construction phase costs related to a lack of process transparency were nearly $600,000 for the Forest Resources building. Figure shows the phases where avoidance efforts could have eliminated these costs. For example, efforts to enhance process transparency during the design phase could have eliminated nearly $700,000 of costs related to a lack of process transparency for the SALA building. Generally, the majority of costs related to a lack of process transparency appeared during the construction phase or later and efforts were needed during the design phase or earlier to prevent these costs. Consequently, efforts to improve process transparency seem to have greater potential when they target the earlier phases of project delivery.

Figure 2 Cost impacts by project phase.

Figure 2 Cost impacts by project phase.

Figure 3 Phase where avoidance efforts could have eliminated costs.

Figure 3 Phase where avoidance efforts could have eliminated costs.

Costs related to a lack of process transparency were also organised by cost category. Avoidance costs result from activities undertaken to minimise problems before they occur, mitigation costs are associated with activities required to respond to problems, and delay costs result when use of the building by the owner is impeded. If a project has equal percentages of avoidance and mitigation costs, attempts to fix the problem are costing as much as the problem itself. When this is the case, further investments in avoidance will have limited, if any, returns. As shown in Table , avoidance costs associated with efforts to enhance process transparency were a small fraction (2% for SALA and 0% for Forest Resources) of the mitigation and delay costs resulting from a lack of process transparency. This demonstrates the potential to invest in avoidance efforts that can reduce mitigation and delay costs.

Table 2 Cost impacts organised by cost category.

Imperfect process transparency may exist on a project, where multiple organisations are involved. It may also exist within a single organisation. For both the SALA and Forest Resources projects, costs related to imperfect project transparency were more prevalent. However, each project also incurred significant costs (over $250,000 for SALA and $50,000 for Forest Resources) related to lack of organisational transparency. So, while efforts to improve process transparency at the project level have greater potential benefits, applying these efforts within organisations is also worthwhile.

4.1 Conservative cost impacts

The identified possible cost reductions for sustainable buildings related to process transparency are probably understated. Whenever assumptions were required to perform the counterfactual analysis, selection of the conservative option ensured that the resulting cost magnitude was also conservative. The following factors also contribute to the understatement of cost impacts.

Due to a lack of data availability, operations costs are excluded from this study. Many hypothesised benefits related to enhancing process transparency occur in the operations phase of the project. For instance, process transparency can help ensure that user groups understand how to operate their new building.

Initial data collection was performed using existing project files, which provide an incomplete view of costs experienced on the project. For example, inefficiencies resulting from a sub-contractor's failure to report a completed system installation ready for commissioning agent review are not reflected in the project files. One attempt to mitigate this issue involved supplementing data collected from the project files with data collected through interviews with project stakeholders.

Two sustainable building projects, both located on the same university campus, were examined for this research. While the narrow scope may seem to limit the external validity of this study, the hypothetical evidence from the literature reinforces the empirical findings from this research (Pearce and Augenbroe Citation1998, Kibert Citation2004). Further, the project management group that delivered the projects in this study have a successful record of delivering major capital projects. Since significant cost impacts related to lack of process transparency are present for this project management group, these impacts are probably even larger for projects with less sophisticated owners.

5. Conclusions and discussion

This research develops the theory that increasing delivery process transparency can reduce costs for sustainable buildings. Based on this theory, there are several opportunities to enhance process transparency and improve the delivery of future sustainable building projects. Listed below, these opportunities are the primary implications of this research.

Stakeholders delivering sustainable building projects should be aware of the value of process transparency. With this understanding, stakeholders can make conscious efforts to enhance process transparency in their project teams and within their organisations. Consider the example of the designer who ensures that the user group understands that design changes made after a certain date will result in a cost premium. Simply by clarifying this process and the importance of deadlines, the designer is improving the delivery of the sustainable project by adding process transparency.

Investments in enhanced process transparency have the most potential when they target the earlier phases of project delivery, including the design phase. This finding matches the established theory that the level of influence on cost is highest during the early phases of project delivery (Paulson Citation1976). In addition to helping avoid costs during construction, transparency supports the value-generating nature of the design phase in which traditional management techniques, including detailed planning and ‘after-the-fact detection of variances’ are less effective (Ballard Citation2000). Specific suggestions to enhance process transparency during the planning and design phases include the following:

Increased discussion and consideration of process in design meetings.

Use of process maps to communicate key planning and design processes.

Process status correspondence made visible to stakeholders who are unaware of the day-to-day design process (e.g. operations and maintenance staff).

There are many opportunities for project stakeholders to invest in process transparency and realise positive returns on their investments. Owners, in particular, could facilitate transparency-enhancing interactions and avoid significant costs, such as those experienced on the SALA and Forest Resources projects, by devoting more resources to the stakeholders delivering sustainable building projects. For example, it may cost $100 in salary and benefits for a project engineer to spend an hour learning about the overall status of the project indirectly related to her responsibilities. However, the project realises a much greater cost savings if the project engineer's resulting contribution leads to the elimination of a $10,000 change order. In addition to project stakeholders' investment, other funding agencies may also consider supporting efforts that could enhance process transparency.

Efforts to enhance process transparency within an organisation can be fruitful. Achieving organisational transparency seems easier than achieving project transparency because inter-organisational processes are more repetitive and members of an organisation are more familiar with their own processes. Still, the results from the study of the SALA and Forest Resources buildings show significant percentages of costs related to imperfect process transparency within an organisation. This consideration is especially important for large, multi-division organisations.

Greater process transparency can minimise project delays. Delays are a major source of cost impacts in all phases of project delivery. Project teams on university campuses often scramble to complete construction of a building in time for an upcoming semester, authorising more expensive overtime hours and potentially compromising the quality of the final product. On the other hand, lack of process transparency can contribute to month-long delays during planning and design that are seen as less consequential at the time but that inevitably contribute to the construction phase scramble. Ironically, lack of process transparency also prevents these early-phase stakeholders from recognising the impacts their decisions have on the final building product.

5.1 Limitations and validity

Conclusions based on this research should consider several limitations. The counterfactual method and narrow breadth of the study do not support detailed conclusions, such as ‘increasing process transparency by 75% can decrease the costs to deliver a sustainable building by 10%’. This research assumes that, since perfect process transparency leads to lower costs for sustainable buildings, this is also the case, to a lesser degree, for incremental enhancements of transparency. Second, lack of process transparency is one of the many factors contributing to various cost impacts and determining the specific cost impacts associated with each factor is not feasible. This research relies on reasoning that, despite the multiple possible causes of cost impacts, the costs included could have been eliminated with complete process transparency. Finally, the research does not distinguish costs related to process transparency present on sustainable projects from costs present on any project. Separating these costs would be a delicate task, as optimal delivery of sustainable buildings is likely to promote practices beneficial for all building types. Enhanced process transparency probably promotes a greater magnitude of cost decrease for sustainable projects due to their complex, integrated process.

Despite these limitations, major categories of validity are addressed to improve the likelihood that these research conclusions represent real-world facts (USEPA Citation2007). Internal validity requires a causal relationship between the antecedent and consequent. Is it really a change in process transparency that is impacting project costs, or is some other variable responsible? In this study, the antecedent under investigation (transparency) is the only variable that was changed. Construct validity relies on how the antecedent and consequent are defined and operationalised in the counterfactual scenario. Does the counterfactual analysis test the same ‘transparency’ that was part of the original research objective? The rigorous definition of transparency (Table ) increases this study's construct validity. External validity depends on how the results from this research are generalised to other projects, which may include different people, places or times. Will transparency and project costs have the same relationship for other sustainable projects? While future studies will improve the generalisability of these results, the implications discussed here are qualified according to the study of the SALA and Forest Resources buildings.

5.2 Broader impacts and future research

Educators of professionals and students can introduce process transparency as an essential feature of the integrated process that enables sustainable building delivery. For instance, generating sustainable solutions not only requires the inclusion of building operations professionals in the design phase but also requires that these professionals recognise the status of the process. Describing the importance of process transparency can draw out tacit knowledge from industry professionals with firsthand experience delivering sustainable projects. Or, when learners lack this experience, introducing the importance of process transparency will support their effective contributions to the delivery of sustainable projects in the future.

Increased process transparency can also be part of a broad shift in the construction industry. Increased transparency leads to greater separation of information from the hierarchy of ‘order giving’ (Grief Citation1991). With a greater understanding of the big picture, stakeholders gain decision-making abilities that can increase their happiness, productivity and likelihood to positively influence the project. This contribution of process transparency is part of a broad shift in the construction industry's plodding movement from a top-down to a more collaborative method of managing projects (Koskela Citation1992, Ballard Citation2000, Howell Citation2004).

A number of questions for future research were uncovered through this study and the associated findings that reduced costs for sustainable buildings are possible by increasing delivery process transparency. Some of the most promising questions include the following:

Can enhanced process transparency result in better, more sustainable buildings in addition to reducing the costs of these projects? Presumably, the integration between stakeholders that is enabled by increasing process transparency also results in solutions contributing to a more sustainable project. Evidence evaluating this presumption would provide additional important insight into the value of enhancing process transparency for sustainable building projects.

What are the best methods and tools for enhancing process transparency? With a greater understanding of process transparency's importance for sustainable building delivery comes a need to investigate the best methods to enhance process transparency. Some of these potential methods are listed above, and studies have identified process mapping as one method for enhancing process transparency (Klotz et al. Citation2008). In addition, other industries offer helpful suggestions for enhancing process transparency that are worthy of examination in terms of sustainable building delivery. In a manufacturing environment, suggested approaches to improve process transparency include eliminating clutter, making the process directly observable through layout and signage, using measurements to make invisible attributes of the process visible, showing process information in work areas and utilising visual controls so people can recognise standards and deviations from them (Grief Citation1991, Koskela Citation1992).

Are some of the principles valuable for sustainable building delivery, including process transparency, also applicable to the delivery of other types of sustainable projects? Sustainable construction projects other than buildings (e.g. roads, bridges and utilities) and less-similar projects developing sustainable products (e.g. fuel cell automobiles or solar panels) could also benefit from improved process transparency. Like buildings, these other project types are essential to global efforts towards sustainability.

Notes

1. Detailed descriptions of the adaptation and testing of the counterfactual analysis method for sustainable project delivery research are provided in a separate article (Klotz et al. Citation2009)

References

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