Last month, I described the trend of owners accepting projects as substantially complete with much work left to be performed instead of with a punchlist of a few things that need to be redone or touched-up. This plays havoc with the commissioning process. Why is this happening? Why are owners doing this to themselves? The following are some of my ideas as well as those from readers.
Have we reached the limits of the fast-track project approach? Is it possible that there may actually be a physical limit to how quickly a building and all of its systems can be successfully assembled and made functional? Are the project delivery teams focusing on the “assembly” aspect of the project and neglecting the importance of timely functional completion of the systems?
If a new building is advertised to be complete by a certain date, there is huge pressure on the owner’s project manager to deliver on that date or earlier. To be late has significant public image, logistics, and financial implications.
AGREEMENT ON DEFINITION OF SUBSTANTIAL COMPLETION
Most construction has been conducted for decades with essentially the same generic definition of substantial completion, which references the owner’s ability to occupy or utilize the building for its intended purpose. It is a very loose and qualitative criterion.
ENFORCEMENT AND PLANNING
As we all know, no quantity or quality of contract language is meaningful unless someone is actively enforcing its compliance during construction. Many owner’s representatives are intimately familiar with bricks and mortar construction but only peripherally experienced with the intricacies and processes of installing, starting up, and controlling integrated mechanical, electrical, and life safety systems.
As such, we see project schedules built around assembling building components, with the expectation that the dynamic systems will simply fit into those schedules and be complete concurrent with the general construction. A number of project managers believe they can make this happen by pushing and bullying the subcontractors into compliance, not really acknowledging the importance of closely coordinating the dependencies between general construction and systems installation and operation.
Although most large building owners have resources who understand these less visible issues, the people representing the mechanical, electrical, plumbing (MEP) systems do not have a prominent place in the project decision-making process. This is especially true early when scheduling diligence is most effective.
An excellent MEP coordinator, who is respected and heard by the project team makes a huge difference in a project. Unfortunately, this is a rare situation and many general contractors/construction managers depend on their MEP subcontractors to “work things out” amongst themselves.
SOFTENING OWNER RESOLVE
Over the course of a construction project, the owner’s representative responsible for enforcing the contract requirements will often be “softened up.” The owner has promoted a team approach to the project; the contractors share their troubles with the owner; and the contractor and owner’s representative spend many hours together. As the project moves towards completion and the contractors’ troubles result in the schedule slipping or the contractor otherwise not being able to meet all contract requirements, the owner’s representative wants to be accommodating. In addition, at this point in the project, the most important thing to the owner’s representative is finishing the project on time. This leads to a reduced resolve on the owner’s part to actually enforce the substantial completion requirements.
LACK OF SUBSTANTIAL COMPLETION CONFIRMATION
Finally, what is the process for confirming substantial completion? Is the project substantially complete because the substantial completion date has arrived? Does the owner’s representative physically confirm completion of all criteria? Does the owner’s representative rely on feedback from other trusted non-contractor sources for confirmation? Does the owner’s representative accept the contractors’ assertion that substantial completion has been reached? What if the substantial completion date arrives and the owner disagrees with the contractors’ assertion? That’s when the owner’s resolve is at its lowest; the consequences of not agreeing to substantial completion are perceived to be far worse than the consequences of moving forward without contractual compliance.
Next month, I will explore options for changing this situation to benefit building owners over the long term. ES