An overview of the regulatory process

Project Management Institute

Northern California Chapter

Regulatory Agency Committee

R. J. Eveld


W. T. Buhrig D. R. Mitchell M. A. Sanossian
L. Craton M. M. Muller C. J. Seneker, II
A. S. Harvey E. C. Paul J. D. Spaulding
P. T. Hackley A. Rantz Z. A. Stacho
J. F. Igoe L. A. Roe E. J. Watson
T. L. Kardos M. L. Roth L. Winters

Implementation of industrial construction projects, in this day and age, imposes different requirements on the project manager than existed a few years ago. It is imperative that the project manager become aware of the potential problems facing him when he takes over the management of a program. Usually the managment, technical, staffing, and other traditional problems are well known to him; but the requirements which relate to obtaining permits and complying with other regulatory agency requirements may be unfamiliar.


This overview refers to the requirements and activities imposed by various regulatory agencies as “the regulatory process.” The regulatory process includes, at a minimum, the development of environmental impact reports or statements, permit applications, public hearings, and permit issuance. It also includes compliance with other miscellaneous requirements of agencies having jurisdiction over the siting, engineering, construction, startup, and operation of a new facility.

It has been assumed in the past that the regulatory process applied only to large complex projects. However, projects of all kinds, small or large, have regulatory process requirements. Small projects are receiving a great deal of attention by agencies. Additionally, for the owner, his project is always important regardless of its size.


It is important to recognize that the regulatory process starts at the inception of any project. From the owner’s viewpoint it is in his best interest to get the professional involved early, even before site selection. Both the real and emotional problems connected with the project have to be considered. The best way to consider these is through brainstorming sessions. If the owner does not have the qualified staff, he should consider obtaining staff assistance by retaining expert consultants for these services. The project manager should pay particular attention to requirements of the regulatory process during proposal preparation. The proposal should include allocations of resources for regulatory process activities. After the consultant has been selected for performing the work, the initial planning should further elaborate on the details necessary for these activities. The owner may not be aware of the requirements. Consequently, the project manager should take special care to advise the owner of these problems, especially if the project has a tight schedule. The time delays and added requirements inherent in the implementation of the regulatory process may become more critical than the execution of other work.

The planning for the regulatory process should begin with the identification of the cognizant agencies which administer permit requirements. What federal, state, and local regulatory agencies have jurisdiction and in what particular areas? What permits are required and do any interrelationships exist between the various permits? In addition to governmental jurisdictions, certain special interest groups and news media may have interests in the project. These elements should be further identified if possible. Be aware that special interest groups may remain unidentified for a long period of time and become visible only after the project is deeply committed. They may be local or may be backed by national organizations. In any case, as soon as they become known, a specific strategy should be developed to deal with the issue that they will raise. After having identified the cognizant agencies and requisite permits, the owner, consultant, and architect/engineer should jointly define the role which each will play in obtaining the permits. For effective implementation, a clear division of responsibility should be established.

The requirements for the Environmental Impact Report or Statement development, and permit applications must be established. Study and know the laws and regulations applicable to the project, including which courts may get involved in case of litigation. Make early contact with staff representatives of the appropriate agencies to determine and verify their agency’s requirements; if possible, discern whether the attitude of the agency toward the proposed project is favorable, unfavorable, or undecided.

Recognize the changing attitudes and even the changing jurisdictions of the groups and public bodies which will be affected by the project. The requirements of regulatory agencies may be interpreted differently by different people. During the life of the project the attitude of the regulatory agencies may also change. It is very important to be cognizant at all times of the legislators, the regulatory agency personnel, local agency representatives, and changing legislation and regulations.

On all government levels, federal, state, and local, the administration and the people may change during the life of the project. Change of governments is important because one administration may approve certain elements while the succeeding administration may reverse or alter the commitments already made. Consequently, attempts should be made to check on the status of pending applications if such a change should occur. All agreements should be properly documented. This may help eliminate the possible reversal or change of commitments.

The preparation of the permit list and the requirements for obtaining permits require experts in many areas. A schedule must be established for preparing and submitting applications. The schedule should include an analysis of both optimistic and pessimistic dates of approval. One guideline for performing this activity is to involve personnel who understand the permitting process, know the regulatory agencies involved, and have direct access organizationally to the project manager. Assigned personnel should be responsible for the entire effort throughout the various stages of the program. Where prudent, contingency plans should parallel the primary plan in order to maintain maximum flexibility. Watch for traps! Local permits may not be persuasive with Federal or State Agencies.

Controlling the implementation of the regulatory process within the project manager’s organization must be accomplished.

Other than special permits unique to certain locations or facilities (i.e., coastal commissions, nuclear regulatory commission, etc.) the most important activity concerning the regulatory process is the preparation of the Environmental Impact Report and Environmental Impact Statement. In order to accomplish this requirement, the project manager and his staff should be intimately familiar with the National Environmental Policy Act and other state and local environmental regulations. These requirements should be considered in preparing any technical documentation on the project. A list must be prepared for all elements which must be included and covered in the Environmental Impact Report or Statement. It should be noted that editing of adverse comments, as a result of a review process, could lead to a complete lack of credibility. It could also result in a much greater negative impact to the proposed project than if the problems, which may exist, were faced squarely.

The emphasis during the design and construction phases should be on implementing the previously planned process and eliminating conflicts between various agencies and requirements.

The public is involved. When public hearings are required, it must be recognized that the public, in general, is not technically oriented. The meetings should have a great number of visual aids (models, renderings, charts, etc.) to explain the project in layman’s terms. The preparation for these meetings should include dry runs attended by the entire staff. Frequent meetings for small audiences (as opposed to large mass hearings) are less likely to result in bad publicity or mass reactions such as demonstrations. It is very important to select the proper personnel to attend these meetings. Maximum emphasis should be given to having people who are recognized in their particular field as experts but yet have the ability to listen intelligently and sympathetically to the public.

Some Useful Tips:

Some generally useful tips include: limiting meetings to persons in the locality of the project; having appropriate project team members at all public hearings; and submitting technical/legal ideas and details in writing rather than presenting them orally.

The project manager should learn as much as possible about the laws, regulations, policies, and precedents applicable to the project since the opposition groups are usually well informed on such matters. If the project manager is not prepared to answer questions which the opposition groups will raise, his credibility will be in serious jeopardy. Opposition groups frequently use the regulatory agencies as an umbrella to stop or delay programs. In other words, they may use certain procedures and permit requirements to thwart the program.

In addition to general public involvement, proper communication between the affected communities, public agencies, the owner and the project manager and his firm must be established. The paramount question is how this communication should be handled effectively. The approach may vary from project-to-project, so procedural requirements should be established on a case-by-case basis. Is a low visibility or a high visibility approach more appropriate? In some instances it has been found that a low-key approach to the project (without intentionally hiding facts) is better than publicizing everything. High visibility may also create highly visible criticism. The communication process should continue throughout each phase of the program.

It is desirable to develop internal procedures once the approach and methods of communication are established. These procedures should include the distribution of information, coordination work, and the focal point for making statements outside the organization. The staff should also recognize that the regulatory process as well as engineering, design and construction, is an integral part of the program implementation.

Official positions and reactions to questions, opponents’ tactics, and program progress should be developed on a coordinated basis and publicized only through designated program personnel. This will help to avoid embarrassing and potentially detrimental situations that can occur when off-the-cuff or other improperly prepared, ill-conceived statements are made by program personnel. Regulatory agencies feel that they have the final say in their area of jurisdiction and in the method of operation. The project manager has to be aware that the agencies’ position is not necessarily final. There are usually ways to appeal decisions and to negotiate procedural matters. These avenues should be explored so that they may be used if necessary.

Once a permit has been issued, a close review will generally find it is subject to the applicant fulfilling a specific set of special conditions. It is imperative the project team fulfill these special conditions during execution of the construction program or the regulatory agency may find the applicant in violation and issue a costly “stop work” order. As the project requirements dictate, it might be considered prudent to initiate an environmental-type monitoring program to administer fulfillment of the commitments and coordinate special inspections as they are performed by the cognizant regulatory agencies.

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