By Steve Jones and Donna Laquidara-Carr, Industry Insights Research, Dodge Data & Analytics
How can project teams work with owners to identify, plan for and mitigate the risks and problems that so often impact performance, quality and satisfaction on building projects? A new practical project planning guide provides essential tools to better understand the uncertainties faced on projects and improve outcomes for everyone.
Research by Dodge Data & Analytics has consistently demonstrated that owners find that their projects are frequently delivered over budget and late. A Dodge study on the factors that contribute to the issues that cause cost overruns and delays— published in the Managing Uncertainty and Expectations in Building Design and Construction SmartMarket Report—identified several causes of uncertainty and the factors that can help mitigate them. An informed and engaged owner team is one of the top means identified, and most respondents believed that owner leadership on a project would make a material difference in addressing uncertainty. That study also revealed that most owners do not have a good process for determining the contingencies necessary on their projects.
The findings of that study revealed that design firms and contractors need to work more closely with owners during early stages of their projects to review and discuss the various risks that could eventually impact project delivery and performance. To facilitate that process, the AIA Large Firm Roundtable has led a coalition of construction industry organizations in the creation of the Project Planning Guide for Owners and Project Teams. This guide will help project teams work with their owners to anticipate the major causes of uncertainty in building projects and provides best practices to manage and potentially mitigate those risks. Partners in this effort include AGC (Associated General Contractors of America), AIA (American Institute of Architects), COAA (Construction Owners Association of America), DBIA (Design-Build Institute of America), Graphisoft and LCI (Lean Construction Institute).
The guide is intended to be appropriate for all owners, regardless of their experience with construction projects. Therefore, it begins with a review of the fundamental sources of uncertainty on projects, followed by straightforward recommendations of ways in which other owner organizations have managed to mitigate these types of uncertainty on their projects. The guide includes clear instructions that owners can consider from the onset of projects about ways that they can provide leadership that will make their projects more successful.
In addition, the guide also provides a link to a contingency calculator that directs a process to identify the appropriate amount of contingency needed in each phase of a project based on the specific risks that are likely to be encountered. The process of using this contingency calculator is valuable as a way to initiate a productive and realistic conversation about uncertainty and risks among the owner and key project team members early in the project. Since the results will only be as good as the inputs, the calculator facilitates a careful review across all stakeholders of each of the potentially risk-generating factors, such as project complexity or innovation, schedule acceleration, owner/user changes, unusual existing conditions, design imperfection, construction errors, coordination problems, and any regulatory issues. Because there is no simple formula for these that can be applied to all projects, a careful consideration of and planning for the likelihood and impact of all relevant possible issues can create a strong foundation on which project success can be more achievable, through open, informed communication and greater joint understanding of the challenges faced by the entire project team. It will also ultimately provide a plan, not just in how much contingency needs to be set aside for various issues at the beginning of the project, but also a clear path for releasing contingency as the project advances and certain risks diminish.
The Project Planning Guide for Owners and Project Teams is available for free download at www.construction.com/toolkit/reports.
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Cailey Henderson | 104 West Partners | firstname.lastname@example.org
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