Changes in Project

Management –

to improve cost-

effectiveness.David Adamson

University of Cambridge5 Nov 2015.

“HERE is Edward Bear, coming downstairs now, bump, bump, bump, on the back of his head, behind Christopher Robin. It is, as far as he knows, the only way of coming downstairs, but sometimes he feels that there really is another way, if only he could stop bumping for a moment to think about it. And then he feels that perhaps there isn't. Anyhow, here he is at the bottom.”

Winnie-The-Pooh by A.A. Milne

Need for better management in UK.

• Public sector projects:

-- 1990’s- 10% of projects were at least 90% over original budget;

90% were at least 10% over budget.

--in 2000, 55% on budget and 63% on time;

so, still much room for improvement.

Need for better management in UK.

Since those national reviews of construction project management, great improvements through new project management systems.

All major capital projects are subject to a gateway approval

processProject registration

Gateway 1: Approval of concept and initial development costs

Gateway 2: Approval to invest, target budget approved (INCLUDES 25 YEAR BUSINESS PLAN)

Final budgetGateway 3: Readiness for service

Identify investment opportunity

Step 1

Develop concept

Step 2

Develop proposals & ‘Full Case’

Step 3

Implement

Step 4

Evaluate benefits (PCR & POE)

Step 5

Main Issues in UK Capital Procurement

• Need for clients to be better-informed and more pro-active.

• The need for more team-work between the main players in procurement.

‘Develop and Construct’ Procurement.

• Previous alternatives were:

--- Full design then tender for construction.

--- Write specification then go to tender.

--- ‘Develop and ‘Construct’;

Take design to full outline design, with contractors as part of the team, get authorisation to build, then go to construction contract.

Designer/constructor appointments

• Cost/quality balance….

Agree and clearly promulgate in advance

% balance between cost and quality—

typically 30/70 for designers,

60/40 to 80/20 for constructors.

Designer/constructor appointments

• Cost/quality balance….

Agree and clearly promulgate in advance

% balance between cost and quality—

typically 30/70 for designers,

60/40 to 80/20 for constructors.

Be prepared after selection to set out the marking, to satisfy EU/national legal requirements, and to improve future performance.

Main Issues in UK Capital Procurement

• Need for clients to be better-informed and more pro-active.

• The need for more team-work between the main players in procurement.

• More emphasis on the benefits of openness and longer-term business relationships.

• Resolution of disputes by less formal methods—use of adjudication, and the concept of ‘fairness’.

Adjudication

• Dispute has to be notified to an adjudicator within 28 days.

• Adjudicator takes 2 rounds of evidence over next 28 days.

• Adjudicator hears the case with 2 involved people on each side.

• Decision is binding till end of contract, then can go to court—very few do, and few of those over-turn adjudication.

Main Issues in UK Procurement Reviews—Overview.

• More emphasis on metrics, including more use of key performance indicators.

“If you treasure it, measure it.”

“Optimism Bias”

Type of project:

Time: upper

Time: lower

Cost: upper

Cost: lower

Standard buildings

4% 1% 24% 2%

Non-std buildings

39% 2% 51% 4%

Standard civil engr

20% 1% 44% 3%

Non-std civ engr

25% 3% 66% 6%

Equipment 54% 10% 200% 10%

Budget-driven tendering.

• Switch from “this is what I want; what’s your best price to do that?”

to……

“this is the amount of money I have for this project, and this is what I want to get; how much of what I want can you provide for that much money?”

Key Performance Indicators(KPI)

• ‘Target Zero’ (health & safety)

Health and Safety.

. Deaths on UK construction sites:

1974……….160

1984…...….100

1994………52

2004……..50

2014…….42.

Key performance Indicators

• Target Zero (health & safety)• Design Quality Indicator (DQI)• Construction Quality• Community relations• Social sustainability• Environmental

Current Influence of Climate Change

Balance between spend on limiting climate change, and on building to protect against its effects.

Sustainability in Construction

• 49% of CO2 in UK comes from infrastructure.

£2-3 costs of running premises

£0.10 design costs

£1 of building costs

Key performance Indicators

• Target Zero (health & safety)• Design Quality Indicator (DQI)• Construction Quality• Community relations• Social sustainability• Environmental

Project team review of kpi monthly.

Main Issues in UK Procurement Reviews—Overview.

• Recommendations for longer-term relationships by way of ‘frameworks’.

• Emphasis on learning from experience and spreading ‘best practice’ inside and beyond the company.

The primary objective is that users get infrastructure that actually

works optimally.• ‘Soft landing’ initiative in place for all

projects over £1M.• Seeks greater interaction between

users, designers, constructors and maintenance in the design and post-completion phases.

• Particular focus on M&E services and its impact on building performance.

• Starts the process of reconciling actual running costs with user requirements and with designers’ assessments during design.

• Generally improves relations between clients, designers and contractors.

Soft Landings

1. Keep a designer and contractor working in the building/infrastructure after hand-over for at least a couple of months.

2. Found to be no more expensive than dragging back designers/contractors as problems arise.

3. SL should be agreed at the time of appointment.

4. Great for professional development.

UK Construction Waste Reduction..

• Main source of waste now is during operation; all major public-sector projects in UK are required to use Soft Landings procedure.

• Waste on UK construction sites in mid-1990’s was typically 30%; now 2-15%.

Communications –learning lessons.

• Balance of capacity to learn and improve, versus concern about exposure of failure.

----communication during design and construction eg via BIM level 2 or above,

----post-completion reports,----post-occupancy evaluations 2-3 years on,----feed-back through the company, and to

professional institutions, universities and training schools.

Post Completion Reports

--produced 3-6 months after completion by and for the client (the owner).

--includes the main lessons coming out of ‘Soft Landings’.

--for internal use, and for advice to other members of the procurement team as appropriate.

--confidential and not generally available in the public area.

--‘Probe’ system as a good model.

Post Occupancy Evaluation(poe)

--Poe’s produced 2 - 3 years after completion, includes lessons from SL.

--Widely used since 2000.

--UK Government requires all public sector (‘tax funded’) projects to widen and deepen ‘Best Practice’ (and ‘Worst Practice’) learning, and UK-wide cost data-basis as part of ‘big-data’.

Obstacles to poe

• people with ’vested interests’ oppose change….

Vested interests

Obstacles to poe

• Cost: the benefits pay for the time, but not in the very short term.

• Concern about reputation, even in good practices/companies; you can agree to certain aspects being confidential.

and….benefits > > downside

POE Formats

• --Can design your own; or benefit from commonality.

• --One example: Cambridge University— 4 half-day sessions for: 1. Client, planners, rep user (RU), local reps, 2. Client, RU, design team, constructors, 3. Client, constructors, designers, 4. Client, RU, maintenance and services,

. accountants.

Post Occupancy Evaluations

• “Who performed better?”

• “Why were they better?”

• “What actions do we need to take in order to improve our performance?”

Example—civil engineering: Crossrail.

• £18bn 118 km rail project through London.

• Framework of designers. 24 design contracts--total £350M.

• Works contracts all by 2-stage procurement with Early Contractor Involvement; packages typically £400M, --quality-price balance in appointments, --management-style contract form (written in English, not ‘lawyer’).

“Never Give Up”

•

• “Never Give Up”

Changes in Project

Management –

to improve cost-

effectiveness.David Adamson

University of Cambridge5 Nov 2015.