The Project Plan
Establishing a conceptual project plan in terms of scope, quality, time and
cost in the earliest phase of the project may sound simple. But even if it is,
the subsequent monitoring of the development phase against the plan may be anything
but simple. The problem arises because the way a project feasibility (financial
viability) is put together is not the way the building is built and consequent
hard costs collected.
For example, a pro forma analysis may well be established on the basis of a
cost per square meter or other similar parametric units. Examples includeas the
number of suites in an apartment, number of rooms in a hotel, beds in a hospital,
and so on. These parametric units are based on experienced and data collected
on previous similar building projects. The construction costs on the other hand,
and the forward estimating of these costs during the development stage for budgeting
purposes will generally follow trade practices, as set out in the Canadian Masterformat
or UCI coding systems.
The preparation of drawings and sketches during the development phase in effect
converts concept unit costs into trade category costs by establishing form and
choice of materials. Such matters as foundations, structure and finishes are selected
from such alternatives as concrete, steel, aluminum, wood, glass, block, drywall,
etc. Indeed, a number of materials and their respective installation trades may
be used together to form a "system" such as the building "envelope." Certainly,
the electrical and mechanical services designs will directly or indirectly affect
a majority of the trades on the project and vice-versa.
Thus, the original budget in concept or pro forma terms must be converted into
a corresponding working budget. This must be conducted through the design process,
yet without losing control over the original project objectives. This essential
aspect of the development stage is made the more difficult because the building
industry is fragmented into various specialty trades. While each has a good understanding
of its own technical processes, and vested interests, often they have less than
complete understanding of the management process as a whole.
For example: the primary players
The owner as sponsor may have difficulty in understanding the length of time
required to detail a preliminary design into working drawings, including meeting
the necessary regulatory standards and approvals.
The owner as operator may have difficulty in understanding the importance of
knowing in detail what he is getting as the design develops and the extra difficulty
and costs involved in making changes and additions later on if he doesn't.
The designer is concerned with technical and professional excellence which
impacts on the performance cost relationship and may conflict with cost effectiveness.
Generally, neither the most expensive nor the cheapest ranks highest from a return
on investment standpoint. The designer is understandably concerned with maintaining
the profit from his fee by holding down the cost of design and supervision, as
well as potential liability, This may well act as a brake on innovation. On the
other hand, an increase in design scope may be promoted for an increase in fee,
to the detriment of budgetary control.
The contractor may have difficulty in understanding the designer's problems
and is probably never given the owner's objectives. He considers that these are
not his concern. His concern is with productivity and costs on a fixed price contract
and because contracting is a high risk business, his incentive is powerful. Other
team members do not always appreciate just how powerful this incentive is, and
the effect on the contract if this effort is frustrated by them, or the effect
on the budget if the incentive is removed. The contractor, too, will be interested
in genuine increases in scope of work since this will increase his opportunity
to increase profit, although a myriad of small changes is almost always counter
productive through reduced productivity.
There are others who are closely involved in the development process who may
also have limited understanding.
For example: the secondary players
The financial accountant being generally unfamiliar with either the development
or construction process has difficulty in understanding why the budget cannot
be fixed from the beginning and hence is suspicious of any adjustments. He tends
to be unsympathetic toward human error and oversight, not withstanding the highly
complex nature of building design coordination and the construction execution
of a modern building. Moreover, genuine savings between "actual" and "what might
have been," receive scant attention because such numbers are "soft" and do not
show up on a balance sheet.
The lawyer too, is often in a similar position and provides advice from the
limited perspective of his professional calling. Indeed, there are all too few
lawyers practicing in this specialized field with a knowledge of what it really
takes to achieve a successful project,. Many contracts in use on building projects
still consist of obscure legal language or legal niceties designed to protect
one party against the other - perhaps unfairly. "Time is of the essence" and breach
of contract are good examples of two such thorny issues.
Such contracts actually reduce the chances of success and increase the chance
of conflict because of the difficulty the parties have in understanding their
respective obligations. The situation is further exacerbated by the apparent absence
of indications of good will and cooperative effort to mutual benefit. A contract
can be so one sided as to be self defeating.
Misuse of standard contract documents
On the other hand, good contract documents prepared by standard documents committees,
but applied without legal advice, may be used "off the shelf" without understanding
the real intent conveyed between the parties. Attempts to modify such documents
in order to change the underlying philosophy of the division of responsibilities
between the several parties involved in the design and construction processes,
even with using legal advice, should be avoided. This can lead to a legal maze
and the raising of fundamental issues.
The very approach of Development Project Management is a good case in point.
There are still no well-established and well-understood project contract documents
and agreements in this area. Documents which reflect the requirements of the knowledgeable
owner who wishes to manage the project process himself or manage it through a
project manager as his independent agent have not been well established.
The project manager is himself constrained by the often conflicting goals of
scope, quality, time and cost. He may not appreciate that upon their successful
attainment, the accolade so richly deserved by the team fades like a mirage as
the serious business of start up and revenue earning gets under way. In fact,
there are other objectives which in retrospect are often seen as of greater importance
and should not be lost sight of. These include client satisfaction, follow on
work, and business development spin-off for the project manager's own company
or division. A tightrope walk indeed.