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8/7/2019 Project Delivery Systems Lecture 3
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Project Delivery Systems
Program Management
8/7/2019 Project Delivery Systems Lecture 3
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Program Management
Program Management is sometimes referred
to as a Delivery Method.
Many owners and developers, particularly in
the public sector, now favor Program
Management.
Where they lack sufficient expertise or
resources to manage various elements of
construction.
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Program Management
Program Management has emerged as useful
tool when outside resources are required
Program Managers are typically involved in all
five phases of the construction process, or at
least most of them
Often they provide services on multiple
structures or multiple building site
undertakings
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Program Management
The multifaceted scope of work is what most
distinguishes Program Management from
other project management methods.
Program Managers assume many
responsibilities traditionally undertaken by
owners using in-house resources.
.
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Program Management
A fundamental challenge in defining Program
Management is determining where is a
delivery method or management method
Project Delivery Systems has been used to
describe both a delivery method and a
management method.
8/7/2019 Project Delivery Systems Lecture 3
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Five Phases of Every Project
Construction Phase Model
Every construction undertaking comprises fivebasic phases:
Real state Locating and Purchasing real property (land),
identifying its real use, arranging for zoning, permitting,and environmental compliance
Financing Process of obtaining funds to pay for anddevelop real property
Design Includes architectural and engineering work
Construction Improvements are made to real property
Occupancy Finished construction product is leased orsold, Operations and maintenance are setup
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Five Phases of Every Project
Construction Phase Model
Owners often select a management method based
on their comfort level with respect to the various
phases of project development and available in-
house resources to manage those phaseseffectively
For example, most commercial developers and
public owners are confident in their ability to
manage the real state, financing and occupancyphases
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Five Phases of Every Project
Construction Phase Model
It is a fundamental principal that someone need to
take overall responsibility for each phase of the
construction process
Many owners retain independent sources tomanage design and construction phase work
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Five Phases of Every Project
Construction Phase Model
Program Managers are typically used in situations
where
Owner lacks resources
Program manager is desired to provide overall leadershipin the overall construction process
Owner believes Program Management is the most
effective way to contain program costs
Program Management is the owners traditionalmanagement method
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Delivery or Management Method
A Management Method is the mechanics bywhich construction is administered andsupervised
A Delivery Method is assigning responsibility andrisk for the delivery of design and constructionservices
Management Method has broader implications
Delivery Method is typically focused on theprocess of how a project is designed andconstructed
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Delivery or Management Method
CM at Risk, DB, DBB are typical examples of
Delivery Method
Agency CM is a Management Method
Theoretically, any Management Method maybeused with any Delivery Method
It is important to choose a method that best
allocates the responsibility and accountabilityfor all five phases with minimum duplication of
effort.
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Delivery or Management Method
It is also important to assign responsibility to the
party that is in the best position to manage
potential risks
It is advisable to select a Management Methodbefore locking into a Delivery Method
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Program Management VS Project Management
It is often difficult to distinguish a program
manager from a project manager because they
perform many of the same functions and offer
many of same services The common use of acronym PM for both causes
confusion
On a fundamental level, Project Managers and
Program Managers are similar because they are
both owner representatives
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Program Management VS Project Management
Both entities have a direct contract with owner
Both are expected to be owners representative
On a practical level, they have similar
responsibilities in design and construction phases
Both are required to have similar skills
Should be familiar with building codes, regulations,
permits etc
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Program Management VS Project Management
Should be able to do constructability reviews,
drawings coordinations, estimating and scheduling
knowledge
There is also an overlap sometime in the servicesprovided by program manager and project
manager during construction phase
Both are frequently involved in buyout process
Both are involved in monitoring, cost, time, quality
and safety
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Program Management VS Project Management
Both are responsible for post construction services
that includes commissioning, maintenance,
trainings etc
It is common for both to be involved inadministrative functions such as processing
requisitions, evaluating and negotiating change
orders and assisting in claims management
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Distinguishing between Program Management
and Project Management
Despite the overlap between Program
Management and Project Management, there are
distinctions
A Program Manager is responsible for a largerscope of the construction phase than a Project
Manager
This scope of responsibility for the building effort is
the key line
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Distinguishing Characteristics - Program Management
Program Managers typically oversee theconstruction of multiple structures on the samesite or multiple locations under multiple contracts
For example: corporate or academic campuses,office parks, or military bases
Program Manager also oversee the construction ofvarious structures for a single owner in multiple
locations such as retail centers, commercial officebuildings, and certain types of public worksprojects
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Distinguishing Characteristics - Program Management
Program Management is used to define a situation
in which a single entity has responsibilities of all
five phases
Using this definition, an entity that manages one ormore project phases beyond the Design and
Construction phases also can be considered as
Program Manager
Single point contact for most participants
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Distinguishing Characteristics - Program Management
Program Manager often controls the design andconstruction and is accountable to the owner forthe projects financial controls and overall
profitability
A Program Manager maybe responsible for locatingsuitable project sites, obtaining financing, andarranging for end-use of the finished building
Program Manager may negotiate contracts onowners behalf with architects, contractors,construction managers, project managers etc
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Distinguishing Characteristics - Project Management
Scope of responsibility is more limited
Oversees a single phase project or is
responsible for overseeing the construction
phase of a multiple building project
Defined responsibilities
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Distinguishing Characteristics - Project Management
As a general rule, when a project managers
level of responsibility moves beyond
construction on a single project, the manager
becomes a Program manager
Overall financial success of a project is
generally more limited
Typically required to control construction
costs, participate in value engineering
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Distinguishing Characteristics - Project Management
Sometimes develop an overall budget for
design and construction
Dont get involved in locating suitable project
sites and finances
Dont get involved in leasing, sales, or
operations and maintenance
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Developer as Program Manager
Three entities that fall under the generic labelDeveloper are:
1. Developer Entity that develops real property andmaintains an ownership interest in a project or multiple
projects2. Fee Developer/ Development Manager An entity that
develops real property in which it has no ownership orequity interest
3. Fee Developer at Risk An entity that develops realproperty in which it has no ownership or equity interests,but holds contracts with, and financially responsible toarchitect/ engineers, GC, or trade contractors.