Assuring excellencein execution in construction project management
■ CONSTRUCTION PM
Henry J. McCabe, PMP
Construction projects come in various sizes and complexities. They cover such diverse fields as governmental and institutional, industrial, petrochemical, pulp and paper, power generation, civil, and so on. Yet all require a clear and concise set of controls to ensure the project's timely completion, budget control, and adherence to specifications and codes. Among the many difficulties facing any organization engaged in the management and control of all the various activities and information flows associated with construction projects is the establishment of a set of procedures and documents that can be universally applied to each type of project. This means that these documents and procedures must be, at the same time, both flexible enough to adapt to the differences in types of projects and yet strict enough to enable a project manager to come into a project, ascertain its true overall status, and exert just the right degree of control and direction to properly manage the project to a successful completion.
Like most things in life, quality preparation for a task is undoubtedly the single most important and overriding factor in ensuring quality outcome. But the real question is, preparation of what specifically? All projects can be broken down into three separate and distinct time elements: pre-construction, construction and post-construction.
For the purpose of this discussion, we will assume that the project has been designed, at least to the stage where it can be bid, and the bid package or packages have been prepared. Specifications and drawings are available, several bidders have picked up the packages and the project manager has just been assigned.
What's next? To some extent this depends on the size and complexity of the project and the size of the staff that will actually manage the contractors and the project. However, regardless of its complexity, number of packages, or the size of the management's staff, certain documents need to be in place that will allow the staff to fulfill their roles.
Chief among these needed documents are a good set of bid review forms, a detailed submittal register, a work item listing, a schedule of values, and a file system. At the stage described at the start of this discussion the two most important documents to be prepared at this time would be the bid review forms and the submittal register. The reasons for this are simple. Bid packages are currently being prepared by contractors and their arrival will be the next milestone event in the project. The project manager needs to be prepared to make an objective evaluation of the various proposals he or she will receive. A good set of review forms is indispensable for this. The review forms should cover such broadly defined topics as compliance with the RFP, support evaluation, technical evaluation and financial evaluation. If price alone is the only criteria for evaluating a proposal, you will undoubtedly get what you pay for, and in some cases this may be appropriate.
Each of the sections in the bid review form should have a weighted value assigned to it and the contractor/bidder graded on how well they meet the requirements of each section. The total of all the sections’ scores is then the bidder's overall grade. Minimum scores can be assigned to each section so that a bidder may not fail a section and still get the job. A comparison sheet in the form of a linear matrix can then be used to compare all the bidders’ scores for each topic of review, as well as any preset minimums.
Compliance Evaluation. In the compliance section, the question is simple: “Did the bidder supply the documents and information requested?” Not how well was it done, only was it done. If 20 items were requested, how many were submitted and which ones were missing? This often indicates how well the bidder has read the documents and how well instructions will be followed. If requested information was not provided, did the bidder at least mention why not, or somehow acknowledge that it was supposed to have been provided?
Support Evaluation. In the support evaluation section, questions about the contractor's ability to support the project need to be addressed. Questions such as these are typical: Is there adequate warehousing and/or fabrication facilities? What experience level is possessed on similar projects? Is the required professional staffing proposed? What are the qualifications of key personnel? Is there sufficient support equipment in the plan? Who are the proposed subcontractors?
Bid Evaluation Procedure
- Each member of the review committee will fill out a “Payment Schedule Bid Analysis” form (Table 1). This form is used to compare each bidder's cost proposal for each element of the project with the Project Estimate, as well as with each of the bidder's proposals.
- Each member of the review committee next fills out the “Bid Evaluation Form” (Table 2 is an example of a portion of section “C”) for each section of each bidder's proposal.
- An arithmetic mean for each section of each bidder's proposal is then compiled and entered on the “Comparison of Bid Evaluations for Sections” form (Table 3) in order to compare elements of each bidder's proposal.
- The results of each bidder's section scores is next entered onto the “Overall Comparison of Bid Evaluations” (Table 4) for an overall comparison of all sections for all bidders.
Technical Evaluation. This section should cover the bidder's ability to conduct the operation and should address such areas as the overall plan of operations, schedule, labor forecast, site plan, quality control program, safety program, maintenance program, etc.
Financial Evaluation. The financial evaluation should not only address the quoted price and its distribution of costs throughout the project, but look into the overall financial stability of the contractor. This should include a look at the contractor's working capital, net profit to gross revenue, current assets to liabilities ratio, overall net worth, and remaining capacity of bond.
The importance of a properly constructed and organized submittal register cannot be overstated. Its position of importance is equal to that of the construction master schedule, yet it is often either completely overlooked or totally misunderstood. Many projects have the contractor prepare a “submittal register,” the results of which often prove frustrating at best. There is only one way to properly prepare a submittal register: you must completely review each and every specification and every note on every drawing. There is no denying the fact that putting this document together is a chore, but if you wait until after the project is under way it is nearly impossible to do, because of the amount of time necessary to complete this effort. The project manager needs to be the one who sets these priorities, not the contractor.
To begin with, the submittal register should be the one document where every submittal required of the contractor can be found and tracked. It should be:
- Organized into like groupings such as manufacturer's data, shop drawings, samples, test data, and so on;
- Be able to show the source of the requirement for the submittal, i.e., specification number, special conditions, bid instructions;
- Provide a schedule of the submittals’ submission; and
- Reflect the status of those submittals that have been submitted.
Two reports need to be generated from the submittal register. The first would be those submittals past due, for either their first submission or re-submission, from the contractor; and the second would be those submittals that are overdue from the reviewer. The failure to achieve a timely submission, as well as a review of the submittals, is a primary cause of construction delays and claims.
There are undoubtedly many other documents, forms, and procedures that need to be developed and promulgated during this time in order to organize and bring effective control and documentation to the project. The point to be stressed here is that to ensure excellence in the execution of construction project management, management must start at the very beginning of the project. If the controls that ultimately bring quality to the project are not in place before construction starts, it will be very difficult to implement them at a later stage.
Henry J. McCabe, PMP, is the senior construction engineer at Fluor Daniel's Health Sciences Center Project at King Abdul Aziz University in Jeddah, Saudi Arabia. He has over 20 years of experience in institutional, petrochemical, and offshore construction.
PM Network • October 1995