Thursday, January 15, 2009

Why failure to plan is at the root of many project failures

Certain key actions can reduce uncertainty in planning and programming of construction projects. By David Goodman, managing director of Brewer Consulting.

Summing upThe issue: The actions that can be undertaken to reduce uncertainty in construction planning and programming. The implication: By embracing, to at least some degree, certain programming and planning actions detail in the article prior to and during a construction project so that the uncertainty often faced can be addressed and hopefully minimised to the benefit of all.

The title to this article may be a well-worn adage but it remains as true as ever, successful projects are usually those that have been well planned and the unsuccessful ones are usually those that have not. With such uncertain times ahead in the industry we need to be able to plan and programme our projects with as much certainty as possible in the hope to avoid costly and unwanted disputes. This article examines the status of programming and planning and details two possible actions that can be taken to reduce such uncertainty.


Why failure to plan is at the root of many project failures


It is true that planning and programming has a greater status in the construction industry then ever before with the client, rightly so, becoming more aware of what can be achieved with the increasingly sophisticated planning software now available. It is not uncommon for a client to request from the contractor a fully resourced, fully logic-linked critical path programme of its proposed project along with monthly updated and look-ahead programmes as the works progress.

But it is also true to say that planning and programming still has a long way to go before its full potential is realised.

Insufficient data

It cannot be denied that on too many occasions a dispute arises between client and contractor due to the disagreement as to what a fair and reasonable extension of time award should be. When these disputes are reviewed by a third party it is often the case that adequate data is not available that details to a sufficient level either the intent of the contractor prior to the commencement of the works or the progress that was achieved during the undertaking of the works. With such limited data available, the true extension of time entitlement may never be fully realised, usually to the dissatisfaction of both parties.

In an attempt to avoid this scenario occurring the industry as a whole needs to agree what the key causes of this problem are and then, if possible, address them in a manner acceptable to all.

First, without doubt, for a construction project the programme, when successfully drafted and implemented, is the most powerful management tool available to all parties. It provides a road map to enable the successful construction of a project, detailing the inter-relationship between design, procurement and construction, as well as being the main tool for planning and managing future works. However, the programme is often driven by the project rather than the project being driven by the programme and thus such a useful tool becomes obsolete before the works even start.

For example, if a client asks for a project to be completed in 18 months, how many contractors actually state that it has looked at every possible time-saving opportunity and that the quickest build time is 22 months? Contractors are concerned that very few clients would accept this view and award the contractor the contract. Most clients will simply accept the bid of the contractor that provides a programme showing the works can be completed in 17 months.

It may be the case that the contractor with the 17-month programme has found an extremely time-efficient method of building the project, but more likely than not it has simply allowed the client's commercial requirement to determine the overall duration of the construction programme in order to win the work with the hope that opportunities may arise to extend the contract period once it has commenced on site.

In conclusion, it may be too idealistic to state that the programme must always drive the project but the other option is always more problematic.

Second, it is often the case that once the works commence on site the recording of as-built data and correctly and regularly progressed programmes become negligible, thus leading to the type of dispute highlighted earlier. It should be generally accepted that it is to the benefit of both the client and contractor that as-built data is regularly recorded and shared, thus minimising a divergence of opinion as to the status of the works at any one point in time.

But taking into account the necessity of the project team to manage the actual construction works on a day-to-day basis, the time required to record and produce such data is not always available and thus the opportunity is lost.

50/50 cost share

In conclusion, it may be far more sensible for a third party to be employed under the contract at a 50/50 cost share to record and agree such data. Perhaps such a role would reduce the difficulties encountered if it is necessary for the contractor to submit an extension of time claim to which the client responds that further substantiation is required.

By embracing, to at least some degree, each of the above points the uncertainty often faced at the beginning and during a construction project can be addressed and hopefully minimised to the benefit of all.

Nashville hotel developers take hit but keep building