Smart Project Management: Find experts to help juggle all those balls on a new building project

By Ryan Johnson

Are you juggling multiple balls at the same time? Or do you feel like you’re walking a tightrope and wondering if there is a safety net under you? Company owners and leadership teams have an enormous amount of responsibility and when it’s time to expand or build a new facility, that’s one more major ball thrown into the juggling mix. This can be devastating to a business if not balanced correctly. 

Let’s face it, walking a tightrope without a safety net can be messy. It is unconscionable for a steel erector or exterior skin installer to do their work without the proper tie-offs and safety procedures. While an owner does not face the same physical danger as the contractors working in the field, he does inherit great financial and market risk when he ventures out on a new construction project. Contractors and designers are skilled and knowledgeable in their respective areas. They know how to limit their risks by shifting those risks to someone else as much as possible. Owners are usually not as familiar with how they can control their risks and will often turn their project over to be developed or managed to those that may not have the time, experience or their best interest in mind.

Traditionally, owners will turn their management over to the architect, engineer or contractor. When a project enters that “trouble phase,” it’s usually because a member of the team is not performing. If that “nonperforming” entity is the architect, engineer or contractor, then the owner is in trouble.                         It’s not likely that the owner will get the protection that they’re looking for if the people who are holding the safety net are part of the problem. This is not to say that these entities are unethical or dishonest, but it certainly puts players on your team in an uncomfortable and conflicting situation. It’s important for an owner to provide for their own safety net by having someone whose sole concern is to represent their interest. You don’t want someone dropping their corner of the safety net if they see that they’ll be harmed by protecting you.

A few years ago, a homeowners association ventured out on a worthy project to upgrade its condominiums. The association (owner) hired an architect and a contractor to assist. After much dispute, cost overruns and schedule delays, the owner decided to retain staff that was experienced and able to bring control back to their project. Once the association took back control with management assistance, they were able to successfully finish the work within budget. They were also able to avoid a costly lawsuit.

The following are a few “safety nets” owners need to implement in order to limit risk:

Planning and Programming. “If you fail to plan, you plan to fail.” Getting a trusted advisor on board early in the planning phase will create a winning opportunity and minimize costly dollars and schedule delays down the road.  The cost of change is significantly less in the planning phase.

Design Guidelines. “A doctor can bury his mistakes, but an architect can only advise his clients to plant vines.” - Frank Lloyd Wright.  Often, owners will jump right into design without clear guidelines. While most architects are qualified and experienced, the lack of clear direction can be frustrating to both parties and trigger extensive cost overruns.

Cost Control. Accurate third-party cost estimates with no conflicts of interest. Owners that turn cost estimating over to their design and construction team will often miss critical details that affect their bottom line. The owner needs an objective estimate that’s independent from those who have other interests. 

Schedule Control. Accurate and complete master schedule that covers the owner’s interests. When the owner develops and maintains a critical path schedule, they ensure the schedule incorporates owner issues that becomes a critical tool throughout the process. Too often, the schedule is not used to manage the project but becomes a document that is pretty to look at and tells the owner what they want to hear. Owners need the hard facts so they’re able to participate in the solution instead of inheriting problems that they most likely did not create. Again, the owner needs to retain someone who has the skills to develop and maintain the schedule — whether that be with in-house experienced staff or an outside, objective third- party firm.

Procurement Control. Competitive/qualified procurement and contract development. Owners will often rely on design and construction relationships to buy out their projects. If your representatives are not fostering a competitive procurement process that also includes an objective pre-qualification procedure, then significant dollars and quality are being compromised on your project.

Change Order Control.  Claims management and change order review and control. The owner’s staff needs to dedicate the appropriate resources to review all claims. The traditional approach will often have the design team review costs for approval, which seems appropriate since they are the author of the contract documents. However, the design team typically doesn’t have the time or the fee to spend in reviewing and sometimes negotiating with the contractor regarding costs. Furthermore, the contractor and designer may also be contracted based upon a percent of the final construction cost, which leaves them little motivation to reduce the cost for the owner since they’d also be reducing their fee.

Once more, it’s vital that owners make sure they’re protected with competent personnel who’ll represent their interests. The Construction Management Association of America has the following counsel when it comes to retaining professional help: “A professional construction manager (CM) acts as an extension of the owner and manages the entire project with … management expertise that can assure the best possible project outcome no matter what type of project delivery method used. A construction manager is NOT a general contractor. Few owners maintain the staff resources necessary to pay close, continuing attention to every detail —  yet these details can make or break a project.”

If you are contemplating a new construction project, don’t go down the slippery slope without proper safety nets and controls in place. Ben Franklin said, “An ounce of prevention is worth a pound of cure.” Owners that shore up their staff with expert managers are on stable ground and will amplify their return on investment. Don’t allow your project to be the next casualty in the construction market. The time is now to prevent the project pitfalls and shore up your project management arm by implementing the correct safety nets.

Ryan Johnson is president at Project Control, Inc., a Salt Lake City-based developer, project management and construction consulting firm.