Managing Construction Projects: Concept of Management of a Project

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October 04, 2018
Author: Mark Rice
Organization: McNeil, Silveira, Rice & Wiley

Whether a construction project, a NASA launch, a restaurant’s plan of the day, or a high school reunion, once there is more than one person involved, there is management. Management being, broadly speaking, harnessing for efficiency in cost, time and quality (including safety and aesthetic goals), the human and other resources to deliver the project as intended; to achieve the goals of the project and satisfy both internal and external clients (customers, employees, bonding companies, insurers, regulators, end users, neighbors, project participants in terms of payment, business relationship, avoidance of injury, and the like). To do it right, and get paid. In fact, even a one person project involves “management” though simpler. Time and money need to be budgeted, attainable goals within resources defined, and metrics established within milestones to evaluate if the project is “on time, on budget” and achieving the quality and aesthetic goals sought.

This course applies project management principles, techniques and “red flags” to help our conference attendees maximize their own success and of those around them. While “legal concepts” such as contract privity, terms and conditions, indemnity, warranty, insurance and legal relationships are important, this booklet focuses as much on “recipes for success” rather than who bears the contract risk when things go wrong on a project. This in part is due to the fact lawyers and courts do not build projects, and inevitably, when there is a problem project that enters into litigation, the legal and factual disputes abound; that is, whatever clear cut risk allocation is intended by the contract drafter, in practice is more diffused once forensic risk managers take a look at it post-profit; meaning, attorneys, insurance adjusters and coverage counsel, construction experts, mediators, Dispute Resolution Boards, judges and appellate judges. If the language always could take care of risk, then the secondary project – the litigation – would be over quick, and that has not been the California litigation experience. Therefore, it is submitted that the best recipe to avoid the uncertainty and high cost of later litigation is not clear contracts alone but good management practices over risk so at the end of the project, no one wants to litigate but instead believe the risk arbitrage of the contract was close enough to fair to justify closing the books on the job, and calling it a win. Everyone wants to move onto the next project, not sit in depositions replaying the project, its bid, its design, its schedule, its challenges, and human factors.

This course is tailored to management techniques and principles typically applicable to the Owner, Project Manager, Design Team and Prime Contractor. However, the principles and techniques apply more broadly. Any project team member can be, and will be, a project manager within the assigned scope of work. An owner will manage the design team, to some extent, contract expectations, turn over to and end user if a commercial or public owner, and manage the flow of money to the contractor, and dealings with the contractor, and quality expectations. A design team member or traditional construction manager hired by the owner will oversee the contractor and see to it that the design, construction, time and cost budgets are met or contingencies dealt with efficiency, such as differing site conditions, change orders, safety issues, defective or suspect work, payment issues, and close out. Subcontractors and the prime contractor will address labor pool, labor and safety compliance, schedule, schedule of values, selection of key personnel and equipment, and customer satisfaction. Lenders will manage cash flow disbursements, inspections to ensure work is proceeding apace and front loading does not occur, of payments ahead of work, and track lien releases to be sure all potential lien claimants are paid to avoid end of project lien and stop notice claims. Regulators, building inspectors, OSHA and the like will interface with the project to ensure public and employee safety, compliance with storm water and permitting requirements, traffic control, licensing, and the like. Pivot Points or Risk Points. We will focus in particular on A) project “pivot points” where decisional focus is key and risk to project success is more critical – predesign, selection of project delivery system; selection of team and building team chemistry; design and design implementation; contract documents and bidding; schedule, coordination planning and budget; changes and change recognition; close out, commissioning, warranty; dispute resolutions (claims and claim prevention); and new trends in construction and project delivery methods, including Integrated Project Management, Digital Fabrication, Building Information Modeling or BIM, and Internationalization of Large Project Construction delivery for Mega-Projects such as the San Francisco – Oakland Bay Bridge.

Some basic principles or guideposts as we begin:
• No project manages itself.
• All projects have management; some, it’s managed ad hoc, or chaotically, reactively, even destructively.
• Project managers must before the start a project, define the management paradigms they believe will best achieve project success.
• To do that project managers must also define what they mean by project success.
• Defining Project success in turn requires the manager and project team while in its infancy – concept stage – define the “driver(s)” of the project – what matters most, what sort of matters, and what secondary goals give way in tension to the key or prioritized goals. This way, “false idol” goals or metrics are isolated and do not lead to bad decisions.
• Measurement yardsticks of Metrics need to be identified to evaluate midstream if the goals are being met, and whether the goals or techniques, or team, need to be changed. Such traditional metrics include, cost and budget, time and schedule, partnering and labor harmony (no strikes), cash flow/financing and lack of claims, profit on delivery (including resale value, disclosures, etc.), safety and avoidance of insurance losses or injuries; and aesthetic and functioning goals – does the building work, and is it architecturally stunning, or jumbled.
• Particular care needs to be attended to the abrasive and transitory nature of construction projects. Construction projects are by definition, temporary and mobile work factories, assembling networked teams usually in contractual linkages, to work together then disband at end of project. Such projects therefore have a beginning, middle and end, and are often outdoors, with “shop” set up on site to saw, cut, measure, nail and fabricate much of the project.
• The nature, frequency and formality of project communications, and contract chains of command, must be examined early and often for functioning or dysfunction. Partnering meetings, electronic contract documents, BIM, meeting minutes, RFI’s, claims notice provisions, dispute resolution board mechanisms, should be carefully considered, monitored, and adjusted.
• Early and regular buy in, plus a climate of listening and non-adversarial communication must be engendered typically, but not always. Some projects can be done by folks that know their job and do not need to get along; just ask Billy Martin’s World Series’ Yankees. Friendly, even unfriendly competition can be productive if defined with care. “Lip service” “partnering” might be worse than no partnering, if all the participants secretly or not so secretly act as if it’s just a check off, before the fighting takes place. Then, folks might not speak their mind to avoid rupturing the false sense of comradery that was insincere from the get go.
• To highlight a silly example of project management, “Mike Mulligan and the Steam Shovel is a children’s book about first, how the zeal of a competitive excavation project but unplanned left Mike and his steam-shovel achieving one goal – winning the hearts of the community and digging the hole faster than others – but neglecting an access route to get the steam shovel back out of the school basement’s excavation. On the opposite side of silly, “Burning Man” while not a project, is an amorphous set up of a temporary camp and temporary art show, fireworks and clean up, without defined organization, and yet, it has developed a defined mantra. Meaning, even without formal planning, management will fill a void to carry out and deliver basic goals to achieve the project end. Woodstock was an example of an under planned, spontaneous rock concert that created havoc and fit a cultural theme. Military engagements are typically hyper planned and mocked up, and “in the field”, and like construction projects, have planning phases, team and goal defining phases, ramp up, start, middle and end, as well as along the way re-assessments. The “Donner Party” tragedy would be an example of the worst project management; a split off to try a shorter but untried route, into dead of winter; unexpected harsh weather; friction within the team; lack of resources; lack of contingency planning; inadequate communication network, and so on.
• The message of the movie “Apollo 13” – work the problem – is a fair lesson to virtually all management situations. Ignoring problems tends to make them bigger rather than go away.
• Building in antidotes for group think. Two examples. NASA’s decision room bears a sign, “None of Us is as Dumb as All of Us”. Meaning, in group discussions or management by committee, a “go along” principle can subliminally take hold and good ideas are discarded for group consensus even if wrong. In another example, a recent book addressing the 2008 collapse of Lehman Brothers and other elements of the financial implosion, commented that the lack of a diverse workforce in the financial sector – same gender, same schooling, same teaching, same social network and backgrounds – tended to reinforce ingrained common views. A more diverse collective might see dark clouds, or bright new opportunities – see what is happening with the high tech and internet world and new workforce paradigms.
• Has construction caught up, does it have labor planning to attract the best and brightest, and harness new approaches to construction challenges? We think so, but make sure you team chemistry and recruitment efforts make it so. This “watch list” could go on much longer. We hope it triggers other issues specific to your project, role, company and vision.

Most folks working in construction enjoy the team building and physical process of seeing raw materials and design vision become a building or structure through human ingenuity and talent. That is a wellspring resource to utilize – the inner motivation of project participants, to do the right thing, and what to build it right and stand back and be proud once done. Gambling is fun, but losing your money, time, or worse, a safety risk or bad end project are not worth it. Plan for success. And keep at it.

Over-learning, Feedback loops, false idols. Good plan execution generally involves over-learning – “practice, practice, practice.” A football team over learns its plans and “situations” to be game ready on Sunday. So too, does the military, performing detailed “exercises” and mock ups, even building mock up buildings to simulate the later battle conditions, so all contingencies are known, tested, and variable solutions applied. A good example of this was the raid on Osama Bid Laden’s compound in Pakistan, where even though a helicopter was lost on landing, the team had so over learned the mission that the general in charge could calmly announce “we are amending the mission” without a hitch, knowing the remaining chopper could transport all Navy Team 6 members and the war criminal’s body away.

Construction projects pose challenges to over-learning, One, is the overall team is assembled once and disassembled, and may or may not have the same set of practice or business habits. Two, time typically prevents practice rounds, and cost prevents most mock ups beyond the architect’s renderings and small scale model. It’s do or die, one time, real time. Still, each first day on a new task is a form of practice, of overlearning, and there is a known learning curve on projects, which resemble temporary factories – there is set up, there is development of a site specific set of production approaches and quality controls, and ramp up, where once quality systems seem secure, more speed is applied until an optimal balance of speed, cost and quality is discerned and then applied.

Much of this part of construction management – process technology, learning curve dynamics, are understudied, and have fallen onto lead foreman and superintendents with years of human factor know how and street smarts to “get r’ done.” As construction work is less driven by legacy relationships, of a child following in a parent’s footsteps, some of the process technology and second nature learning curves applied from long family or company experience may be challenged. Many contractors complain that the labor pool knows less about construction, its methods, its risks, its tricks of the trade, creating safety risks and quality risks.

At the same time, more and more, lateral entries into leadership roles brings in seasoned leaders from education, engineering, or other disciplines who are good teachers and leaders even if less savvy about construction details. Seniority is no longer a guarantee of promotion, and merit and ability to lead others, paramount.

In terms of managing a project, project leaders should be keen to first efforts, as they offer glimpses of unanticipated challenges, likely pace, and opportunities to finesse issues and reduce problems. Take advantage of the learning curve.

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