A contribution for improvement of project planning in public agencies in Brazil

Introduction

Practical Problem

Public construction projects answer for a significant part of the public investments in Brazil. According to IBGE (2000), the Brazilian Institute of Geography and Statistics, the public construction projects represented in average 2% of the country's GDP and 60% of total public-sector investments of the public sector from 1991 to 1998. However, despite this significant share in total public investments, the public construction projects are characterized by inefficiency in the use of the public money resources, with constant time and cost overruns. Such problems harm important government program implementations that may have an enormous impact on people, as extended traffic interruptions due to road constructions delays, lack of medical service due to hospital construction delays, floods due to drainage works delays, epidemic outbreaks due to sanitation works delays, and so on.

Possible Causes

Among the possible causes of the problem described above, planning is considered a key process, as can be seen in researches conducted in USA, Nigeria, Saudi Arabia, Thailand, Hong Kong, and Indonesia (Black 1996; Mansfield et al. 1994; Alkass et al. 1996; Ogunlana et al. 1996; Chan et al. 1997; Kaming et al. 1997; Yogeswaran et al. 1998; Al-Khalil et al. 1999). In addition, Cleland (1994) emphasizes that the owner's participation in the planning process is basic for project success. In the context of public construction projects in Brazil, some advances have been achieved in project planning in a macro level, such as the management process implemented by Federal Government in its most recent nationwide strategic programs, known as “Brasil em Ação” and “Avança Brasil.” Both programs are a mixed list of social and infrastructure projects in which modern concepts of project management were introduced. However, narrowing the practical problem only to the State of São Paulo, by far the most developed and populated state in Brazil, and observing the public agencies that hire construction projects in a micro level, i.e., small or medium buildings, including prisons, jailhouses, schools and offices, it can be noticed that very few advances have been made to improve planning of these projects.

Research Problem

In fact, how public agencies planning processes affect the performance of their construction projects is a question still not very well clarified. Searching answers for this question would allow flaws identification and possible improvements in the planning process execution that could minimize the practical problem of frequent time and cost overruns in public construction projects. In sum, such answers could improve efficiency in the use of the public financial resources.

Objective

This paper discusses how the public agencies planning processes affect time and cost of the construction projects.

Methodology

This research results were based on the planning processes of CPOS, a state-owned company of the State of São Paulo in Brazil, which manages public construction projects. Reasons for this unity of analysis are the following:

• Representation: this company managed 398 construction projects from 1992 to 1999

• Easy access to data and knowledge of the processes by the researcher.

Data have been gotten through direct process observations by the researcher from 1995 to 1999, through unstructured interviews with engineers and project managers, and also through consultation to the company database and documents.

Public Construction Projects

In public construction projects, the government usually plays the role of owner and span a wide range of constructions, including bridges, viaducts, buildings, subways, roads, sewage systems, etc. This paper is focused mainly on buildings constructions, such as prisons, police stations, hospitals, schools, and public offices. Under owners’ perspective, a public construction project is not restricted only to the manufacturing phase. A construction project involves a broader view including other phases that characterize a construction project life cycle. Based in the models suggested by Cleland (1994), Kerzner (1998) and Morris (1981) and the PMBOK® Guide (1996), a possible life cycle for a public construction project would be:

  • Concept
  • Design
  • Contract
  • Manufacture
  • Conclusion.

Along the life cycle of a public construction project there are an ample universe of stakeholders. According to Cleland (1994), these stakeholders include, besides project team, people or entities in economic, social, legal, political and technological environment that surround the project. Concerning public organizations, Baldry (1998) also comments that such organizations are usually subjected to a wider stakeholders range because their product or service are considered public domain, consequently prone to influences and expectations of diverse interested parties, located internally or externally to the organization.

In the State of São Paulo, the public agencies that hire construction projects are composed by 86 organizations. Each one has different degrees of autonomy according their hierarchic position in the whole public organization structure. Therefore, this system is characterized by decentralization. Each agency has autonomy to make investments in construction since it has its investment budget approved by Treasury Secretary. Management of each project is made directly per each agency. Despite the mission and objectives of public agencies are not developing construction projects, the high demand for infrastructure investments and the absence of a regulatory agency lead these organizations to manage projects and functional activities simultaneously. However those activities are conflicting, demanding different management approach for each one of them, creating difficulties to set priorities inside those organizations.

Planning Processes

In a broad sense, according to Ackoff (1981), planning is an evaluation and interrelated decision-making process before some action happens, a situation in which it is believed that unless something is made, a desired state in the future probably will not occur; and if adequate action is taken, the probability of a favorable result can be magnified. According to Cleland (1994), planning is a vision of the future and the establishment of actions to reach this future state. It involves an interaction between considering alternatives in the future and structuring actions to reach the desired future. Laufer (1992) appraises planning as a set of components: decision-making process, integration processes, hierarchy processes, data-gathering process, analysis and development of alternatives, development of procedures, presentations in form of plans, and implementation. Therefore, the identification of the project planning processes is the first step that the public agencies should do to create better plans for their construction projects. According to Laufer (1992), despite the recognition of the importance project planning, still little is known about its process. According Meredith et al. (1995), the set of planning processes, in spite of some variations, is basically the same for all the areas that work with project management. This paper used the project planning process included on PMBOK® Guide (1996) as a guideline for data gathering and analysis in the CPOS processes project planning is a set of 19 processes, classified as core and facilitating processes.

Planning Execution at CPOS

CPOS

The research approach was to observe how the planning processes execution affect CPOS’ construction projects time and cost. CPOS is a state owned company of State of São Paulo government. The company inaugurated in 1991, succeeding the Department of Public Works, an extinct state agency. Company focus is on management of small-medium construction projects, especially prisons, schools, office buildings, and hospitals for other public agencies. The company managed 398 construction projects from 1992 to 1999, a total investment near US$ 500 million. CPOS has a macro-operations flowchart template of its construction project management operations, which show the life cycle standard. This cycle is divided in four phases:

  • Conceptualization
  • Resolution
  • Execution
  • Conclusion

Each one of these phases is detailed in the Manual of the Quality of the company. However operations within each phase are not sorted according the management groups suggested by the PMBOK® Guide (1996), i.e., planning, control, execution and closing.

Based on this flowchart, each one of the operations was compared to PMBOK® Guide planning processes, trying to find equivalent contents between them. Furthermore, analysis focused on how the execution of those processes affected the time and cost of each project managed by CPOS. Results achieved are described as follows.

Results

Planning execution at CPOS affects the results of its construction project through:

  • Poor WBS definition
  • Poor time and cost estimates
  • Poor statement-of-works and contracting rules
  • Lack of integration between scheduling and budgeting
  • Poor organizational and communication planning
  • Quality planning focused primarily on product
  • Lack of risk planning.

Conclusion

This paper tried to elucidate, under a public agency perspective, how project planning execution affects construction project time and cost. Data were collected from CPOS’ planning process from 1991 to 1999, through direct observation and participation by the researcher, through unstructured interviews, and through retrieving data from company's database. Clearing and better understanding of planning execution allowed to identify weak points for improvement in the processes at CPOS that can be extended to other public agencies inside the Brazilian public industry in order to reduce time and cost overruns that can jeopardize a neighborhood, a city or even an entire country. However, it must be highlighted that time and cost overruns causes may involve other variable that had not been approached in depth in this paper, such as ethics and politics. As suggestion for further studies, it could be developed ways to put into action the flaws in planning pointed by this paper, or comparative studies about other possible causes of delays and cost overruns in the context the public construction projects in Brazil.

References

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Ackoff, Russel Lincoln. 1981. Creating the Corporate Future. John Wiley.

Alkass, Sabah, Mazerolle, Mark, and Harris, Frank. 1996. Construction Delay Analysis Techniques. Journal of Construction Management and Economics, 14, 375–394.

Al-Khalil, M.I., and Al-Ghafly, M.A. 1999, April. Delay in Public Utility Projects in Saudi Arabia. International Journal of Project Management, 17 (2).

Baldry, David. 1998. The Evaluation of Risk Management in Public Sector Capital Projects. International Journal of Project Management, 16 (1), 35–41.

Black, Ken. 1996, Nov. Causes of Project Failure: A Survey of Professional Engineers. PM Network, 21–24.

Chan, Daniel W.M., and Kumaraswamy, Mohan M. 1997. A Comparative Study of Causes of Time Overruns in Hong Kong Construction Projects. International Journal of Project Management, 15 (1), 55–63.

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Kaming, Peter F., Olomolaiye, and Holt, Gary D. 1997. Factors Influencing Construction Time and Cost Overruns on High-Rise Projects in Indonesia. Construction Management and Economics, 15, 83–94.

Kerzner, Harold. 1998. Project Management: A Systems Approach to Planning, Scheduling and Controlling, 6th edition. John Wiley & Sons.

Laufer, Alexander. 1992. A Micro View of the Project Planning Process. Journal of Construction Management and Economics, 10,31–43.

Lei N. 8666. 1993. Normas Licitações e Contratos da Administração Pública, June 21st 1993, Brazil.

Mansfield, N.R., Ugwu, O.O., and Doran, T. 1994. Causes of Delay and Cost Overruns in Nigerian Construction Projects. International Journal of Project Management, 12 (4).

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Ogunlana, Stephen O., Promkuntong, Krit, and Jearkjirm, Vithool. 1996. Construction Delays in a Fast-Growing Economy: Comparing Thailand With Other Economies. International Journal of Project Management, 14 (1), 37–45.

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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 or any listed author.

Proceedings of the Project Management Institute Annual Seminars & Symposium
November 1–10, 2001 • Nashville, Tenn., USA

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