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Why owners are so accepting

The following letters is in response to Rebecca Ellis’ December 2012 “Commissioning” column titled, “When Substantial Com-pletion Is Unsubstantial,” page 19.

March 11, 2013
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I would not recommend changing your position of commissioning as a prerequisite for substantial completion. I can think of several reasons why owners are accepting facilities before they are substantially complete. They are:

  • Cost savings which compromises project management / construction management
  • I have observed real cost pressures on project management / construction management (PM/CM). Owners are more and more resistant to fully funding the management of design and construction, if they fund it at all. Five to 10 years ago, the range of cost for design phase and construction phase PM/CM was in the 3% to 5% range of total project value. Today, that range is more likely to be 2% to 3%. Very frequently, owners are opting to use their property management or facilities group to perform “PM/CM” with their current staff. The quotation marks are included to convey the point that these groups tend to believe they are performing PM/CM when, in fact, they are contributing to the very problem your article discusses.
  • When PM/CM isn’t performed or not performed well, the most typical outcome is that the design takes longer to complete. The other end of weak or poor design management is excessive changes during construction, which also adds time to the construction duration. All of this occurs with a fixed schedule end point which, according to the owner, cannot move.
  • Economic pressures on owners to show a return on investment.
  • This pressure tends to convince owners not to spend the extra dollars on PM/CM.
  • The market pressures to complete a facility, put it into production, get it rented, etc., continue to increase as the interest rates stay low — money in the bank isn’t earning anything. So investment in facilities moves up the priority list to generate return. The quicker a facility is finished, the sooner the payback starts.
  • A fundamental lack of insight on the part of owners about how they are compromising their new facility.
  • Owners just don’t understand how MEP systems function. They are just taken for granted. I wonder if owners think about changing the air filter in their home, whether the septic tank should be pumped, etc. I suspect they don’t.
  • Owners are not interested in details, they just want results. This is unfortunate, but a reality.

 I’m sure there are other reasons. These are the ones that come to mind. I think your position is a valuable “standard of practice” and should be retained.

 

Jim Mallon, CCM, PMP, LEED AP

Parsons

Pasadena, CA

 

Ellis responds:

Thank you so much for your insightful comments. They ring true, are well-articulated, and are much appreciated input from a PM/CM professional.

The connection between poor design phase management and end-of-construction woes is excellent. We’ve been able to see lots of trees in that forest in our project experience but haven’t stepped back far enough to see the direct connection between one and the other.

Also, your comment about owners simply not understanding the process and their building systems is consistent with what I have been hearing from other readers — including owners themselves.

I will definitely explore these ideas in future columns.

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