Project Management Institute

The U.S.A. building package--Q.E.D.

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by

Tom Ridley

Editor’s Note: Scotland’s AWJ member, Tom Ridley, spent the summer of 1971 doing a study of some major building projects in the Untied States. AMJ had the pleasure of hosting him during part of his stay in the Delaware Valley. We thought his report would be of interest to a number of fellow members and Tom has granted us this opportunity to see what he found during his visit.

WHY U.S.A.?

I have Just returned from a three month study of the problems facing Clients, Designers and Contractors In U.S.A. on major building projects. My recent experience with similar projects in Scotland has convinced me that we urgently need new ways of working to enjoy any future practice in architecture and engineering. There are many signs that in U.S.A. major projects are tackled much more effectively and with results which are quite outstanding in quality and personal satisfaction.

THE BUILDING PACKAGE?

I have found that the point has now been reached in USA where radical change is taking place towards a new style of practice which attempts to unify the processes of Initiation with the processes of design and construction. Clients, Designers and Contractors skills are being merged together to undertake the work on major projects as a professional ‘building package’. My study has examined the way this change is being experienced on such projects as The World Trade Centre in New York, Louisiana Stadium in New Orleans, The Sears Roebuck Tower in Chicago, The Boston City Hospital, The University of Massachusetts. Operation Breakthrough etc.

Q.E.D.?

The name of the game is Q.E.D. where:-

Q - achieves the Quality

E - provides the Energy

D - supplies the Dollars

- the three basic ingredients of the building package!

My purpose has been to discover if there are any basic principles which underly U.S.A. experience which can be used to Identify how improvements can be made in the major project work. Q.E.D.

Q.E.D. neatly sums up the main three areas where I found that definite steps had been taken to change traditional practice. In the sense used Quality means quality of need, of service, of skills and of building. Energy means the direction of effort, choice of objectives, cycle of events and management system used. Dollars means the method of finance, cost estimating, cost escalation control and the price paid for buildings.

Q achieves the Quality

Everywhere there is a positive awareness of the speed at which changes in the way of life are taking place. The problem this poses in the definition of building needs is now acute. The reason for this change is found in the great demand for technological advance. So fast is the rate of change that traditional experience is of little value as a basis of Judgement for future needs. The virtue of permanence in buildings has been removed due to the increased mobility of people and functions. A concept of “planning for change” requires Clients to make much greater efforts to understand their quality of need before reaching the stage of design. The use of the computer for this purpose has brought forward a host of new attitudes to the true meaning of defining the ‘brief’ for a building.

In this new approach the promoters of buildings are looking for a new quality of service to help them with their problems. Much to the agony of many traditional services in architecture and engineering it is generally considered by Clients that existing services are no longer suitable. The Client is himself having to strengthen his own service to a major project as he is becoming aware that the risk of success or failure is in his own hands. Architects are in confusion between pure design services and increasing business Interests to meet the challenge of the times. A new breed of professionals are in vogue who offer expert knowledge in ’systems analysis’ which the present situation demands. The use of scientific and engineering techniques as a basis for solving building problems is leading to many new style technological industries embarking into the building process and offering the best opportunities to talented people.

In answer to this challenge many of the best designers and traditional consultants are Joining forces to offer an ‘agency’ type design team approach. The composition of this team is very wide and is a fundamental departure from the idea of an “architectural” single design agency, which has been the normal USA practice before.

Indeed, so bad is the image of the average architect that many new agencies are calling themselves a “management” rather than a “design” service. The management skill is defined as that needed to obtain successful team working during the design process by the employment of the total design skills collected together for each project in different ways to suit particular requirements. This leaves the design skills free to get on with achieving the quality in building without becoming diverted by non-design problems.

E provides the ENERGY

The main motivations behind the direction of effort on major building projects spring from a conviction that there are serious weaknesses in traditional contract procedures for design and construction. The Clients lack sufficient skills to properly direct the energies needed; the Designers appear to be incapable of taking charge of the building process and the Contractors fail miserably to achieve production of effect control over cost escalation. At this stare the Client is absorbing into his own organisation a much greater attempt at ‘project manager’ skills which become the prime agent for the success of the project.

A serious attempt is made to examine in detail the objectives for the project from the point of view of management, design and construction. This study Is presented in the form of a ‘master plan’ which covers the whole range of problems associated with the quality, time and cost objectives of the work. Once the ‘master plan’ objectives have been agreed there is a definite ‘cycle of events’ established for the project. This cycle is akin to the thermodynamic principle of energy cycles where controlled use of power can give maximum efficiency. The very large number of skilled people involved on a major project (sometimes up to 400) calls for leadership of a very high order. This Is usually provided by the Client backed by good project management.

The management system used has to provide considerable day-to-day control over the work of a project. This leads to the general use of management skills which are additional to those needed for design and construction. To provide the overall management of the building process a new style “construction management” service has emerged. The advantages of construction management are found to be In the Improvement of time and cost objectives for a major project when compared to traditional procedures. The service given is direct to the Client’s project manager. Duties are defined by a professional appointment based on skills being available to Influence the design and control the construction. The opportunity to influence the design (by working closely with the Architect) and control the construction (by direct supervision of the building contracts) has been seen to achieve dramatic Improvement in the major projects which were visited. Contract procedures used in this way included scope methods, phased contracts, fast-track scheduling, united team action programme, turnkey etc. all providing for design and construction to proceed in parallel working.

D supplies the DOLLARS

Probably the most significant factor which influences the work on major projects Is the method of obtaining the large sums of money needed to finance the work. Government funding in USA is being overhauled to avoid the difficulty of appropriation of project finance by seqential annual budget estimates. The use of private finance for public works is often adopted through the issue of bonds for public agency work such as educational and health facilities projects. For recreational schemes such fund raising procedures as real estate have created new concepts of Investment in community facilities. In private building development the cost of borrowed finance causes most project work to have very speedy programmes. There are also examples of professional teams taking the Initiative for development work by becoming part of the promoting body, and thus creating the financial method.

The most important feature of cost estimating is the method of dealing with the relationship between time and cost. These two project ingredients are so related that they are considered as one problem and dealt with as part of the “construction management” service. Cost estimates are thus Included in a combined data system which presents cost and time schedules In one presentation. The system is tied to the forecasting of construction method and resources as the basic technique for advising designers of project viability. The use of a professional construction management service which controls the cost and time objectives of a project gives a great degree of confidence to Clients and designers in progressing their work. Contract work is bid using drawings and performance specifications, which gives great flexibility of approach in cost-estimating techniques.

The escalation of building costs runs at 12.6% per annum in 1971 and this means that there is a great effort made to reduce the overall time to complete major projects. It is recognised that there are virtually no contractors willing to undertake major projects with fixed contracts for cost and time. The reason for this lies in the great difficulty in dealing with organised labour unions and the fear of many sub-contractors of becoming involved in a project under the direction of inefficient general contractors. Study of public works confirms that the use of construction management has provided time savings of up to 60% with full competition still used in bidding contracts. In private work nomination of contractors has achieved even greater savings of time.

One of the most interesting techniques adopted to provide a greater management control on major projects is the use of multi-contract work. The construction management service provides for the project to be divided up into a number of self-contained contracts each let directly to the Client. In this way contracts are let as soon as possible after design work starts and under the supervision of the construction management service all the contracts are coordinated to achieve the objectives of time and cost. This relieves the designers of all supervision except quality standards. The pressure on each organisation to achieve a high performance is very intensive and the response obtained is invariably good. The designers appear to have no difficulty in retaining their contact with construction and seem happy to be free from the management problems.

CONCLUSION

It appears to me that the Q.E.D. principles which have been stated provide a basic framework to give us positive guidance on the way to use USA experience for our future practice on major projects. Many of the ideas behind these principles have already been considered by us before. I am sure that this has been done without due regard to the full implications they contain. With more effective ways of working in the future it may be that we can still experience the satisfaction of project work well done. This is surely what we are all striving to achieve during the next few years, but agreement is needed on how to make the necessary changes to allow this to happen.

QUOD ERAT DEMONSTRANDUM

Tom Ridley

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI.

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