WHICH WORKS BETTER, THE STICK OR THE CARROT?In September's column, we focused on the need to motivate project teams to correct systems performance deficiencies in a timely fashion follow-ing unsuccessful FPTs. This month, I'd like to explore the question of why there are unsuccessful FPTs in the first place.
A number of years ago, a contractor confided in me that when his team knew that commissioning testing was to be performed by a third party, they backed off on their own quality control and checkout. The contractors didn't think they needed to spend time finding things that needed to be corrected if someone else would do it for them.
Of course, that's not what commissioning testing is all about, and perhaps we should change the terminology to better describe the purpose of end-of-construction functional performance verification. The intent of commissioning tests is really a "demonstration" that the systems' functional performance criteria have been achieved. Based on the normal project delivery process, contractor quality control checkouts, and periodic commissioning milestones throughout design and construction, the expectation is that the systems will perform as intended.
The failure of systems to perform as expected at the end of construction indicates that the commissioning process is not as successful as it could be. One or more commissioning team members (designers, contractors, owner, commissioning professional, etc.) did not perform as effectively as he should have, and that affected the entire project team in the form of deficiencies that needed to be corrected and demonstrations that needed to be performed a second time.
USING NEGATIVE REINFORCEMENTUnfortunately, the easiest approach for owners to motivate their commissioning team to proactively prepare for successful functional performance demonstration is through negative reinforcement - financial penalties, liquidated damages, etc. This is primarily due to the nature of the traditional project delivery process, which has often included liquidated damages for other critical performance criteria (e.g., on-time completion).
A typical penalty for system functional non-performance at the time of commissioning demonstration is the requirement that the contractors be responsible for paying for the costs associated with re-demonstrating the failed systems. Some owners will accept (and pay for) one round of re-demonstration and then require the contractors to pay for additional demonstrations beyond that. In order to maintain the owner's sanity, I recommend making the general contractor responsible for the re-demonstration costs. This will put the responsibility for assigning individual subcontractor responsibility for failed demonstrations on the general contractor's shoulder and not on the owner's or commissioning professional's shoulders.
I have one facility owner client who has contractually taken the stand that any system re-demonstration costs will be paid by the general contractor (with the exception of equipment warranty-related failures). This solidly puts the responsibility for quality control, system integration coordination, and control system checkout back in the contractors' court. It is not the commissioning professional's responsibility to perform these critical implementation and startup tasks; the commissioning professional is there to facilitate and/or monitor the coordination of commissioning team members and to verify/demonstrate system performance at the end of construction.
SMELLS LIKE TEAM SPIRITThese negative motivation techniques work, but they do not reinforce the team spirit that can make the commissioning process most effective and satisfying for all involved. I'd like to suggest a positive motivation approach that would financially reward contractors for successful systems performance demonstration. This is inspired by, but different from, the award fee program currently underway at the Pentagon renovation.
My scheme would create a commissioning award fee fund, similar to a contingency, in the project budget. Theoretically, it would not increase the total project budget but would shift dollars from the commissioning budget into the award fee fund. For example, if a typical commissioning fee would be 1% of total construction cost, I propose budgeting 0.8% for commissioning professional fees and 0.2% for the award fee fund. On a $20 million project, this represents $40,000 in an award fee for the contractor whose systems perform as expected in their first commissioning demonstration.
This seems to be a better investment of the owner's $40,000 than paying the commissioning professional to document, track, and re-demonstrate failed systems - activities that will often spill into the post-occupancy period where failed systems performance will negatively impact the owner's operations. Of course, the key to the success of this approach will be in the details of how the award fee is managed. I will brainstorm some of the implementation options in my November 2006 column.