Organization and Management of Capital Projects

Design Team Selection

The owner’s project manager should be responsible for coordinating the selection of the project’s design consultant. (“Design consultant” refers here to the architect of record and its consulting building engineers.) These duties include developing a list of qualified firms to be considered, coordinating building selection committee meetings, coordinating communications with consultants throughout the interview process, and providing committee members with inside information about potential consultants. This role of providing information about firms can significantly influence the selection process in a positive way and is advised when there is a lay selection committee.

Scope of Services and Fee Negotiation

Another important project management responsibility is preparing the proposed scope of services and negotiating an appropriate fee for the delivery of those services. The proposed scope defines what design services are necessary to achieve the project program and is used as the basis for negotiating the contractual scope and professional services fee.

An excellent method for determining the required scope of services is to analyze the activities needed to complete the project. Working from a detailed list of standard and additional project services will help ensure that a comprehensive proposed scope of services is developed. This goes hand in hand with preparation of the contract, and it is critical that this be considered an important way to clearly communicate between the project manager and the architect. Contracts have evolved to contain a lot of ‘legalese’ which can be intimidating. It is tempting to refer that to the owner’s legal counsel to sort out. But the project manager should use it as a tool to clarify the services that will be required and how they will be provided.

A good example of that is included in AIA Document B101, Standard Form of Agreement Between Owner and Architect. Article 4 of this document provides a matrix of a broad list of services, and a methodology to enumerate which are to be provided, who will provide them, and whether those services are to be provided as part of the architect’s base contract or as additional services.

The developed list of activities can be reviewed and a determination made as to services for which the design firm will be responsible and any services that may be performed more efficiently by in-house personnel. However, caution should be exercised if in-house personnel are to be used. Because of project complexities, schedules, and in-house workloads, staff may not respond in a timely manner to project issues, and apparent efficiencies gained by using in-house staff may evaporate and result in a contract or schedule dispute.

For large scale projects, prior to final interviews and selection of the project’s architect (i.e. design consultant), the owner’s project manager should issue a Request for Proposal (RFP) to the finalists being considered for selection. Ideally, the list of finalists should include three or four firms carefully selected for their match with the particular project under consideration. The owner’s RFP should include (1) a written program statement, (2) an estimate of area with a RANGE of probable construction cost, and (3) a copy of the owner’s standard contract for architectural design services. The RFP should not ask for an exact statement of the architect’s proposed fee; however, requiring an estimate of probable design cost for basic services is appropriate. An estimate of the architect’s fee, based on a range of probable construction cost, should provide the owner with adequate information for a meaningful comparison of probable design costs. Note that the owner will only be comparing estimates, not bids, and these estimates will necessarily be based on the owner’s own estimate of a range of construction costs. Such a comparison should not override more important considerations of designers’ qualifications. The Brooks Act, a U.S. federal law enacted in 1972, requires the U.S. government to select architecture and engineering firms based on competency, qualifications, and experience rather than design cost. Some public institutions may be unwilling or unable to request an estimate of design cost prior to final selection. In any case, the highest priority of the selection process should be to select the most qualified design consultant for the specific capital project under consideration. The value of requesting an estimate of design cost lies mainly in broadening the owner’s and the designers’ understanding of their respective financial expectations prior to final interviews and selection.

The delivery of the best possible final product will depend heavily on the services provided throughout the course of the project and the appropriateness of the fee paid for those services. Therefore, even if a project is managed by a state agency, the project manager representing the institution should influence the scope of services as well as the design fee.

Staff from state agencies may not be sensitive to institution issues and complexities, and the institutional representative will have to ensure that all issues are appropriately addressed. Areas that are sometimes targets for fee reductions include predesign and site analysis services, design team travel, value engineering, building commissioning, and site inspection visits. However, these services are essential for a successful project and should be included in the project scope.

Design Errors

There are several types of design errors. Simple mistakes are confined to a single building element, ambiguities in the contract documents, and details that are unworkable. By definition, simple errors can be corrected relatively easily with little or no cost to the owner, architect, or contractor. Major errors are of significant financial magnitude, such as failure of a building’s exterior masonry envelope owing to incorrectly specified expansion joints mortar mix. Major errors can take years to manifest and are very costly to rectify. The owner’s project manager can best protect the owner’s interests by verifying in the interview stage and confirming throughout the project that the design firm employs a systematic and thorough approach to quality control and coordination among disciplines. By the time design errors become apparent in the course of construction, it may well be too late to avoid a lengthy and costly solution.

The design profession is presently undergoing its most significant transformation in decades. The use of Building Information Modeling (BIM ) has changed how buildings are designed and built in ways that are even more profound than CAD. The advantages of BIM are enormous. A list and examination of these advantages are beyond the scope of this document, but they should be understood by anyone undertaking a large scale capital project. Two advantages are addressed here, as each relates so directly to minimizing errors in design. The early and continuous communication of design ideas in three dimensions is an advantage that can significantly enhance the owner’s, engineers’, and contractors’ understanding of what is being proposed. During later stages of design, using software to highlight conflicts within design documents, i.e. conflict resolution, can significantly increase coordination among all disciplines, particularly architectural, structural and mechanical. Unfortunately, both the development path and the learning curve of much of the software that makes BIM possible are long and steep. Utilizing this software can lead to new types of conflicts and omissions, i.e. design errors, which sometimes are without precedent. Owner’s project managers using BIM should stress the importance of sharing the building model often among all disciplines; moreover, they should require contractors to understand and participate in conflict resolution.

Another type of design “error” occurs when final contract documents conflict with owner expectations with respect to material or system selection and performance. These errors can be minimized or eliminated by the owner’s publishing a clear and concise set of architectural and engineering guidelines, also commonly known as Design Standards. Such guidelines should set forth what elements are essential to making a new or newly renovated building match the owner’s requirements. The guidelines should be as brief as possible and include only requirements which have proven to add value, not recipes for making some department’s ongoing operations simpler. The guidelines should be rigorously reviewed and revised annually or at least biannually.

Disputes

Contract disputes should be prevented if at all possible. Open communication with all parties is the best way to prevent disputes. If a dispute does occur, it should be approached with honesty, integrity, and an earnest desire for settlement.

Owner-architect disputes can arise during the design phase as a result of ineffective management of the program, change in scope of services, project schedule, project budget, or user’s expectations. Complaints during construction may be the result of inadequate contract administration, including construction observation and verification. A clear, thorough, well-managed design contract that specifies a full range of services will help prevent conflict.

Project Review and Approval

Formal project design reviews should be established and delineated on the project schedule. These formal reviews should be required before proceeding to the next design phase. The number and timing of the reviews will be determined by the size and scope of the project. A small project may require review only at the end of preliminary design and at the completion of construction documents, whereas a large project may require extensive review at the completion of three of four phases of design.

It is the project manager’s responsibility to ensure that the appropriate participants take an active role in each review. The list of appropriate participants may vary as the project progresses and may include user group representatives, facilities planning and management personnel, project planning committee members, and architectural or engineering personnel from a state agency. In some instances, it may be advantageous to include local building, zoning, health, fire, or historic preservation officials in some aspect of the review process.

The specific method of review may vary by project, by phase, or in accordance with the time available. To save time, documents should be provided to each participant for simultaneous review. One often successful review technique involves a collaborative review by all members of the project team at the design firm’s offices. This method allows the owner’s review representatives to complete their review without the normal workday interruptions, in a location where the design team has immediate access to all of the project data. This process is also conducive to addressing problems that may arise. However the review is accomplished, all pertinent comments should be meticulously compiled onto two record sets of documents: one for the design team and one for the owner.

For large projects, the services of an independent review consultant may be beneficial. Consultants specializing in independent contract document review can provide a valuable second opinion relative to code compliance, constructability, coordination among contract documents, and legal pitfalls contained in specifications. Similarly, when contract documents are nearing completion, some municipal building code authorities may provide a helpful preliminary plan check for a fee.

Each formal design review should include several areas of focus. The project should be examined for compliance with the required program and space utilization guidelines. It should be reviewed for technical correctness in all areas, including architectural, structural, civil, mechanical, plumbing, electrical, and code compliance areas. Review for compliance with established in-house architectural and engineering guidelines, environmental regulations, zoning requirements, Americans with Disabilities Act requirements, and even reprographics standards should also be performed.

It should be noted that utilizing BIM necessarily compresses traditional phases of design. BIM predisposes the design team and owner to earlier commitment to design iteration. These early commitments must be subject to project review and approval prior to the design team believing it has completed one or more portions of final contract documents. When preparing BIM documentation, members of the design team must understand that even though the level of information of a given portion of design documents may match that of final documents, the design itself is still subject to project review and approval by appropriate parties.

The project review should always include a review of the updated project schedule and projected construction cost. If the design team is being used to help monitor the overall project budget, then the budget should also be examined. Any cost or schedule discrepancies must be addressed, and any change in scope of services should be reviewed.

The final project review must also include an assurance from the design team that the projected construction cost is expected to be within the budget. It may be appropriate to introduce alternates in the bidding process to ensure that the base project is within budget. Care and discipline should be exercised when selecting alternates. The fewer the alternates the better, as an extensive list complicates the bidding and contract award process.

Concise alternates are an effective budget protecting tool. They may be deductive or additive. Additive alternates are usually preferred, as contractors may limit their overhead and profit charged, whereas contractors rarely give overhead and profit credit on deductive alternates. It is also important not to mix additive and deductive alternates in one bid package. Contract awards containing mixed alternates can become very complicated.

The acceptance of alternates out of order can make contract award difficult, particularly if the selection of alternates changes the successful bidder. Therefore, it is recommended that alternates be prioritized before bidding and accepted in the order listed.

Project Management Responsibilities During Construction

Maintaining Continuity

The owner’s project manager provides continuity from the design phase into the construction phase. Project managers can help ensure that the original project intent is enforced if they are involved during the project construction. Without their project knowledge, seemingly innocuous decisions made during construction can drastically change the long-term functionality of the facility. Even though actual daily onsite inspection responsibilities may be delegated to another individual, the project manager either should be directly involved in overseeing project construction or should at least review all project changes. In this capacity, the project manager should also protect the users’ expectations by explaining the construction process and updating the project progress to the users.

Partnering is a structured process that focuses on developing a team of stakeholders united by a common mission and project objectives. The partnering process is designed to assist all parties in preventing disputes and instilling a spirit of cooperation among the owner, consultant, contractor, and subcontractors. Readers interested in knowing more about partnering are referred to the chapter Project Delivery.

Construction Change Orders

Projects are rarely completed without the necessity of making significant changes during the course of construction. It is the project manager’s responsibility to review all change order requests to determine their validity, and possible impact on budget, schedule, and the final product. In reviewing the change order request, the project manager should consider the information provided by the contractor and the interpretation and judgment of the design firm. The project manager is the owner’s representative and should have the authority to approve or deny a change request.

The project manager must maintain an accurate list of the status of all change requests in progress and must not allow any requests to languish. Most standard contract forms require the contractor to obtain an approved change order prior to executing any change in the work. However, many times the change must occur when the need for the change is discovered to avoid further impacts on the project schedule or budget. Therefore, the final approval of many change orders actually follows the completion of the work described in the change order. Such after-the-fact dealings unfairly increase the owner’s leverage in negotiating the cost of a change. Therefore, it is the project manager’s responsibility to maintain the integrity of the owner-contractor relationship by ensuring the timely and fair resolution of all change requests. It’s worth noting that an owner who takes advantage of timing in order to negotiate an unfair price is providing incentive for the contractor to either extend the schedule or find ways to inflate the cost of the next construction change order.