James T. Dixon | Construction Executive
The burden of project planning falls first and foremost upon a project owner. Owners have varying levels of sophistication, and the smart ones fill weak spots on their staff by engaging project managers, construction managers and owner’s representatives.
Typically, the owner then delegates the largest part of the project’s plan to the contractor in terms of creation and execution of a critical path method schedule during the construction phase. Before accepting that burden, a wise contractor will evaluate the project to determine if it is on a path to success or disaster. It is guaranteed that an owner’s problems will become the contractor’s problems in one way or another.
There are legendary projects that were also legendary planning failures. The iconic Sydney Opera House is one. The design competition began in 1955. After selecting the architect, the owner implemented a team that involved that architect, a structural engineer and an executive committee of inexperienced politicians. The original plan included a budget of $7 million (Australian) and a completion schedule spread over four years. That executive committee forced the project to start before designs were complete, doubled the number of theaters and then put a strangle-hold on the payment process, eventually causing the architect to quit and return to Europe with the construction drawings. The Opera House opened for its first performance in 1973—14 years late and $98 million over budget.
Contractors can evaluate the owner’s project planning by focusing on its three primary components—the people, the process and the technical. The best planning incorporates the input of stakeholders from each phase early in the process. It also obtains the buy-in of those team members and creates an environment where that investment is contagious. The chosen project delivery method drives the timing of team assembly and can set the stage for success or failure. From a contractor’s perspective, one key facet to observe, especially in times of volatility like today, is how far ahead pricing decisions must be made.
On many projects, the best delivery method is one that has the contractor buying out its subcontractors closer to the date of project commencement. From the legal perspective, the delivery method drives the contracting structure and risk allocation.
Successful projects are also built on processes that are familiar, that provide feedback and that comprehend and are repeated through all project phases. Key processes involve budgeting, scheduling and progress reporting. As for the schedule, all participants should:
- validate the work breakdown structure;
- use the same scheduling software; and
- evaluate and approve the baseline schedule.
Progress reporting includes an effective meeting schedule at appropriate frequencies and involves key stakeholders. Such is the import of feedback that one owner was known to provide incentives not for early completion, but instead for prompt delivery of bad news.
Finally, a good plan is supported by technical features that support, in particular, the scheduling and progress reporting processes. Not incidentally, those technical features can prove to be invaluable if a dispute arises. The contractor most often has control of these features, and through that control the contractor can ensure project success. Keys to success can include:
- an integrated planning session at least a month before commencement;
- early development of the work breakdown structure;
- early agreement on appropriate schedule detail;
- successful development of a logical critical path; and
- appropriate development of schedule contingency.
Construction executives can evaluate potential projects to ensure that an owner’s planning failures do not become the contractor’s problems. That evaluation can focus on the three primary components of planning—the personnel, the processes and the technical features. Fortunately, the contractor can control significant aspects of project success, particularly when involved in the project’s early stages. Proper execution on the contractor’s part can ensure project success while also creating key evidence if disputes arise.