Poor project planning: Why do we do this to ourselves?

Poor project planning:
Why do we do this to ourselves?

by CLARK DAVIS, FAIA, LEED AP  | March 27, 2015

The AEC industry news lately has been dominated by stories of dramatic project delivery failures. We all know about the public hospital budgeted at $600 million but likely to cost much more than $1 billion after punishing delays and disputes. There are too many project disasters, most of which are small enough to avoid this kind of notoriety.

Beyond the impact on those directly involved, these stories reflect badly on the entire design and construction industry. We look like the gang that can't shoot straight. Our successes don’t always make headlines. How do these things happen? 

We often just fail to plan for the uncertainties that we all know are present in complex capital projects. Our expectations for scope, cost, and schedule are out of alignment from the start. In a talk at a recent Construction Users Roundtable (CURT) conference, Ed Merrow, President and CEO of Independent Project Analysis, Inc., said that challenged project teams usually know they’re in trouble on day one. Sometimes owners have fundamentally unrealistic expectations, reinforced by inexperience, fear, or heroic personal ambition. Sometimes, owners get bad advice.

“Challenged project teams usually know they’re in trouble on day one.”

— Ed Merrow, Independent Project Analysis

Design and construction teams often see this misalignment when it exists, but they probably won't bring it up when they’re competing to get the job. Privately, they plan defensive moves to protect themselves later in the delivery process – just when we really need everyone to think and act like one team.

I’ve seen this challenge as an owner – as board chair of organizations with their own capital projects – and as an AEC firm principal responsible for project design and construction. In my experience, one thing is certain: these problems don’t go away or get better with age.

start the conversations early

A recent research project I’ve had the privilege to lead for the AIA Large Firm Roundtable and other industry sponsors found that more than 75% of project owners have no consistent method for assessing project risks and setting budget contingencies. Many owners don’t engage their designers and builders in thinking about project contingencies, ensuring that the owners maintain control but lose the insights and experiences of their team members.

This study – Managing Uncertainty and Expectations in Building Design and Construction – was published by McGraw Hill Construction (now Dodge Data & Analytics) in September 2014. It’s available without charge through this link.

We can do better – as owners, designers, and builders – by being smarter and more creative in project planning. As Steve Jones of Dodge has said, we should be able to “handicap” every capital project based on its unique circumstances and risks. We’re thinking about new tools that could assist project teams in this process.

Budget and schedule contingencies should be established within authorized budget limits to provide for questions like these:

PROGRAM: Are the project’s size and technical requirements totally defined? Are there likely to be changes in building users and their technologies? Do we know how the owner will make decisions, and how “final” they will ever be?

COMPLEXITY: Will this project be simple or complicated in terms of building forms and systems? Are there unusual architectural or engineering design aspirations that will create additional risk? Has this been done before?

EXISTING CONDITIONS: Do we really know what’s underground, or how this project will connect with existing buildings? Do we know the full extent of site, utility, or building modifications that may be required?

PROJECT TEAM: Has this project team ever worked together before? Will builders be part of the team during the design phases? Could the owner’s project team change during the process, leading to new requirements and preferences?

PLANNING & PERMIT APPROVALS: Does the project have full planning and zoning approval before final design begins? Are code requirements clear and fairly administered? Are there special regulations that could complicate the process?

CONSTRUCTION DELIVERY ISSUES: Are construction material and labor prices predictable? Will there be adequate competition among qualified contractors and subcontractors when we need it? Is the delivery process a familiar one? Are there accelerated schedule demands?

We’re smart enough to estimate potential costs and probabilities associated with each of these factors – and to determine overall project contingencies that are appropriate for a given project. These contingencies can then be reduced or re-allocated as major milestones, and potential risks are passed.

These uncertainties are present in every project delivery method, from design-bid-build to design/build to integrated project delivery. The alternative methods manage these risks differently and require more or less of an owner’s attention in dealing with them – but the potential risks themselves are fundamental.

Ultimately, it takes confident leadership to address project uncertainties at the right time and in the right way – as owners, architects, engineers, builders, and consultants.

Help is available. It can be done. 

Based in St. Louis, the author is a principal consultant with Cameron Macallister Group. Prior to 2014, he had served 12 years as Vice Chairman of HOK and was managing principal of its St. Louis headquarters. He is a Fellow in the American Institute of Architects and a Senior Fellow with the Design Futures Council. Feedback? Please share your ideas with him at davis@cameronmacallister.com.