My recent columns have been puzzling through the question of why owners are accepting unfinished construction projects as substantially complete. This has a direct impact on the efficiency and success of the commissioning process and long-term operation of the building systems. One reader outlined the economic pressures on building owners as follows:
Project Management/Construction Management Funding
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%.
Recent Economic Climate
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.
These two factors together are a poisonous mixture. The latter point about the recession and resultant interest rates is insightful and helps to explain the continued pressure to design and build faster. However, it seems ridiculous to combine that goal with reducing the cost (effort) put into managing those projects. Delivering a project faster requires more planning, coordination, and oversight of all subcontractors, not less.
WHAT OTHERWISE GOES UNSPOKEN
I suspect that building owners understand it has been a buyer’s market and push hard for the lowest costs they can obtain. Contractors are agreeing to just about anything to win a job. During the bidding and award process, no one is being forthcoming about what it’s really going to take to get the job done. Contractors do not want to talk about it and make commitments about details before the contract is awarded. Even owners don’t really want to engage in that discussion, because they are in a hurry to get started and expect that things will get worked out in their own time (that’s what they are hiring the contractors to do).
Commissioning can help in this situation by asking the tough questions on the owner’s behalf. It is best that questions regarding coordination processes, quality control procedures, schedule details, etc., be formally posed in the bid documents. If the owner wants the project completed by a certain deadline, the bidding contractors should be able to present a detailed management and staffing plan and construction schedule in order to successfully meet that deadline. At the same time, the owner should be prepared to pay a premium for the additional coordination and oversight required to meet aggressive deadlines.
Instead, we are seeing owners blindly believing the “trust us” messages from the contractors and somehow thinking they really can get more for less. Again, I think the recession has led building owners to believe they can do just that, and it has been true to a certain extent. However, when it comes to fast-track, high-performance buildings, the laws of physics still apply and its take a finite amount of time to construct a building and to install and integrate all of the required systems into it.
Supervising across silos
Minimizing that design and construction time requires micro-management of all design and construction team members (and owner decision makers) to do their work as efficiently and in as coordinated a manner as possible. This is not something the individual designers and subcontractors will do on their own; typically, everyone on a project knows what their job is, focuses on completing it, and limits coordination to obtaining information they need from others in order to finish their assigned tasks. Individual project team members are not typically incentivized to optimize the project as a whole. This needs to be done by someone overseeing all project team members and in a position of authority to direct means, methods, and timing.
That person (or people) is the project manager / construction manager (PM/CM). If the PM/CM’s compensation is squeezed by the owner, the owner should expect squeezed resources from the PM/CM. PM/CM’s are delivering projects at reduced fees because of increased competition in this economy. Because of that, those PM/CM’s are not providing the levels of effort and staffing required to meet the owners’ increasingly aggressive schedule goals. Therefore, we arrive at the end of projects with incomplete buildings, systems just barely getting started, and integration left as something hoped-for in the future.
As the owner’s third-party advocate, the commissioning professional can help to bring these realities to the owner’s attention early in a project and help push for realistic, well-coordinated, and detailed schedules. The owner, however, is ultimately in control and needs to believe this is an early project priority and not something to put off until substantial completion is looming just over the horizon. ES