Over the course of the last week I posed the following question on LinkedIn; ‘Why don’t many construction projects meet owners’ expectations?’ This article included a link to a KPMG Global Construction Survey which reported that 53% of owners suffered an under-performing project in the previous year. (Read more on the KPMG survey.)
Many readers read and liked my questions but few added their comments, which was disappointing.
Over the course of the next 2 weeks I’ll discuss my thoughts on why some construction projects aren't entirely successful and how their outcomes can be improved.
What defines a project as under-performing?
The KPMG report defined under-performance as:
1. Projects completed late.
2. Projects completed over budget.
In addition, I believe the following should also be added to the criteria:
1. Has the project achieved the desired outcomes – for instance if the outcome was to build a facility that produces 1000 units a day, and the facility doesn’t achieve this target then the outcome wasn’t achieved?
2. Has the project met the required specifications and quality standards?
3. Has the project been executed safely with minimal damage to the environment?
4. Has the project achieved the best use and value of the owner’s resources?
Some projects are expensive ‘white-elephants’ or aren’t ‘fit-for-purpose’. These certainly cannot count as successful even if they came in under budget ahead of time.
The project life-cycle
Many focus on the construction of a project as purely being the construction process. But the construction phase is only one part of the overall project which consists of; inception, planning, design, construction, completion, handover and operation which includes maintenance and, in some cases, should also include the end of facility life. Unfortunately many of the errors we encounter during the construction phase could have been avoided if the earlier phases were completed correctly.
What can be done to make construction projects more successful?
When projects go wrong it is inevitably the contractor that gets the blame and the bad press. When it can’t be the contractor the fall-back position is the designers. However, in many cases the problem is because of the client. In today’s article I want to discuss the client’s role in the success of construction projects.
How can clients ensure the success of their project?
1. At project inception the client must ensure the right project is built in the right location, at the right time. Unfortunately some projects are ill conceived, are constructed to serve personal or political gain, with little thought to what’s the best use of money and resources and whether an alternative project, or, the project in another location, could have achieved a better outcome.
2. The project scope must be defined correctly, meaning the facility that is designed and built will meet the client’s expectations.
3. The client must have sufficient finance for the facility. This means preparing an accurate budget which includes all the costs and when they will be incurred, as well as the source and timing of the finance. Many projects fail because of insufficient funds.
4. They should have realistic expectations of what they can expect for their budget.
5. Clients need an understanding of the project life-cycle, including operational requirements and costs, including maintenance, the life of the facility and its equipment.
6. They should engage a competent design team, and where necessary project manager, who have experience with similar projects.
7. The designers, project manager and all contractors must be appointed using a contract that has a clear scope of work, clearly articulates what each party is responsible for, and has conditions which are fair, unambiguous, and legally enforceable and which allocates risks to the parties best suited to mitigate them.
8. The client must ensure they timeously procure all the required permissions and permits in compliance with national, state, local and industry requirements. Many projects are delayed or disrupted when permits such as environmental aren’t procured in time. These permits can have a major influence on the size and location of the facility as well as the final process and design, all of which can impact the cost and schedule.
9. Clients must ensure full site investigations are undertaken, especially ground conditions, since some founding conditions can result in major cost and time impacts.
10. A competent contractor should be selected to construct the project who has suitable resources available and that has executed similar projects. Contractors should not be chosen on price alone.
11. All finance must be in place and all contractors should be paid on time in accordance with the contract conditions.
12. The client must ensure that the project is managed properly. This management includes monitoring safety, budgets, variations, quality and schedule.
13. There should be an agreed project schedule which is achievable and allows for normal weather interruptions, takes into account the availability of information, long lead items, approval processes, impacts due to the client’s operations, third party interactions and available access. This schedule needs to be regularly updated and monitored.
14. The client must ensure that services required to construct and run the facility are available in sufficient quantities in time, so the project isn’t delayed. These could include, water, electricity, transport networks and sewer.
15. At the end of the construction phase the client must have suitably trained staff to manage and operate the facility. They must ensure all project documentation, including warranties and operating manuals are handed over, and all connections and commissioning is completed.
16. Successful project delivery demands teamwork and cooperation. If one of the parties fails the project will almost certainly not be successful.
Conclusion
Clients need to become more educated in project delivery, use the knowledge of experts, ensure there projects are managed properly through all phases and appoint a competent team based on factors that aren’t just driven by price alone.
Next week I will look at the role of designers and contractors on ensuring projects are a success and meet the desired outcomes.
Thank you for reading this article. If you found it useful please like or share it.
Please add your comments so we can all learn from your experiences.
Other useful articles by the author:
What does it take to manage a construction project?
Why should we take construction safety seriously?
Did you make a difference on your construction project today?
(Written by Paul Netscher the author of the acclaimed books ‘Successful Construction Project Management: The Practical Guide’ and ‘Building a Successful Construction Company: The Practical Guide’ (see reviews). Both books are available in paperback and e-book from Amazon and other retail outlets. This article includes information from a third book which will be published later this year. See how Paul can help you)
© 2015 This article is not to be reproduced for commercial purposes without written permission from the author.
Many readers read and liked my questions but few added their comments, which was disappointing.
Over the course of the next 2 weeks I’ll discuss my thoughts on why some construction projects aren't entirely successful and how their outcomes can be improved.
What defines a project as under-performing?
The KPMG report defined under-performance as:
1. Projects completed late.
2. Projects completed over budget.
In addition, I believe the following should also be added to the criteria:
1. Has the project achieved the desired outcomes – for instance if the outcome was to build a facility that produces 1000 units a day, and the facility doesn’t achieve this target then the outcome wasn’t achieved?
2. Has the project met the required specifications and quality standards?
3. Has the project been executed safely with minimal damage to the environment?
4. Has the project achieved the best use and value of the owner’s resources?
Some projects are expensive ‘white-elephants’ or aren’t ‘fit-for-purpose’. These certainly cannot count as successful even if they came in under budget ahead of time.
The project life-cycle
Many focus on the construction of a project as purely being the construction process. But the construction phase is only one part of the overall project which consists of; inception, planning, design, construction, completion, handover and operation which includes maintenance and, in some cases, should also include the end of facility life. Unfortunately many of the errors we encounter during the construction phase could have been avoided if the earlier phases were completed correctly.
What can be done to make construction projects more successful?
When projects go wrong it is inevitably the contractor that gets the blame and the bad press. When it can’t be the contractor the fall-back position is the designers. However, in many cases the problem is because of the client. In today’s article I want to discuss the client’s role in the success of construction projects.
How can clients ensure the success of their project?
1. At project inception the client must ensure the right project is built in the right location, at the right time. Unfortunately some projects are ill conceived, are constructed to serve personal or political gain, with little thought to what’s the best use of money and resources and whether an alternative project, or, the project in another location, could have achieved a better outcome.
2. The project scope must be defined correctly, meaning the facility that is designed and built will meet the client’s expectations.
3. The client must have sufficient finance for the facility. This means preparing an accurate budget which includes all the costs and when they will be incurred, as well as the source and timing of the finance. Many projects fail because of insufficient funds.
4. They should have realistic expectations of what they can expect for their budget.
5. Clients need an understanding of the project life-cycle, including operational requirements and costs, including maintenance, the life of the facility and its equipment.
6. They should engage a competent design team, and where necessary project manager, who have experience with similar projects.
7. The designers, project manager and all contractors must be appointed using a contract that has a clear scope of work, clearly articulates what each party is responsible for, and has conditions which are fair, unambiguous, and legally enforceable and which allocates risks to the parties best suited to mitigate them.
8. The client must ensure they timeously procure all the required permissions and permits in compliance with national, state, local and industry requirements. Many projects are delayed or disrupted when permits such as environmental aren’t procured in time. These permits can have a major influence on the size and location of the facility as well as the final process and design, all of which can impact the cost and schedule.
9. Clients must ensure full site investigations are undertaken, especially ground conditions, since some founding conditions can result in major cost and time impacts.
10. A competent contractor should be selected to construct the project who has suitable resources available and that has executed similar projects. Contractors should not be chosen on price alone.
11. All finance must be in place and all contractors should be paid on time in accordance with the contract conditions.
12. The client must ensure that the project is managed properly. This management includes monitoring safety, budgets, variations, quality and schedule.
13. There should be an agreed project schedule which is achievable and allows for normal weather interruptions, takes into account the availability of information, long lead items, approval processes, impacts due to the client’s operations, third party interactions and available access. This schedule needs to be regularly updated and monitored.
14. The client must ensure that services required to construct and run the facility are available in sufficient quantities in time, so the project isn’t delayed. These could include, water, electricity, transport networks and sewer.
15. At the end of the construction phase the client must have suitably trained staff to manage and operate the facility. They must ensure all project documentation, including warranties and operating manuals are handed over, and all connections and commissioning is completed.
16. Successful project delivery demands teamwork and cooperation. If one of the parties fails the project will almost certainly not be successful.
Conclusion
Clients need to become more educated in project delivery, use the knowledge of experts, ensure there projects are managed properly through all phases and appoint a competent team based on factors that aren’t just driven by price alone.
Next week I will look at the role of designers and contractors on ensuring projects are a success and meet the desired outcomes.
Thank you for reading this article. If you found it useful please like or share it.
Please add your comments so we can all learn from your experiences.
Other useful articles by the author:
What does it take to manage a construction project?
Why should we take construction safety seriously?
Did you make a difference on your construction project today?
(Written by Paul Netscher the author of the acclaimed books ‘Successful Construction Project Management: The Practical Guide’ and ‘Building a Successful Construction Company: The Practical Guide’ (see reviews). Both books are available in paperback and e-book from Amazon and other retail outlets. This article includes information from a third book which will be published later this year. See how Paul can help you)
© 2015 This article is not to be reproduced for commercial purposes without written permission from the author.
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