Project management in the public sector

a case study: the Tennessee prison construction program


Project Management In The Public Sector

A Case Study: The Tennessee Prison Construction Program

by Russell W. Darnall and Terry W. Towle Fluor Daniel, Inc.


Tennessee, like many other states, embarked on a prison construction program that represented the largest building construction program in the state's history. Because of the size and complexity of the program, the Governor of Tennessee established a Capital Projects Management team to manage the design and construction of the $210 million statewide prison system upgrade. This team utilized the latest project management techniques to meet court ordered time frames and document a savings of $52 million while projecting a completion date one to two years ahead of the State's normal construction time frames. Key project management techniques applied by the project included:

  • Executive Sponsorship: The Capital Projects Management team had the horsepower to get things done even in areas outside the control of the team because of the Governor's active support.
  • Team Approach: The project was organized around a team of state and contract employees that managed a variety of tasks and whose composition altered as the needs of the project evolved.
  • Cost Control and Value Engineering: A new system of tracking costs and evaluating designs for cost effectiveness saved the program the funds needed to build an additional $30 million prison.
  • Scheduling: The overall program was scheduled as well as the individual construction projects, a process which assisted the decision makers in shortening the duration of the program, bringing the prisons on-line early.

The intent of this article is to document the development of the Capital Projects Management team, to explore the philosophy and approach of the program director and to describe the systems and methods used to accomplish the project's goals.


Currently, the federal courts are governing the operation of at least one prison in 38 states and eight states have their entire prison systems under court supervision. Tennessee is experiencing problems typical to many of those states. On August 11, 1982, the Chief Judge of the United States District Court for the Middle District of Tennessee, held that certain conditions of confinement and practices in Tennessee's adult penal institutions amounted to cruel and unusual punishment. The court order forbade double-celling at specific institutions and prohibited the confinement of various classifications of inmates at some facilities. It further required increased health, medical and security services at particular facilities.

By the summer of 1983, the state's prison population had grown from approximately 7000 inmates to approximately 8300 inmates without any substantial increase in housing. Idleness and violence were becoming a major problem within the system. A court order was implemented which set the state's prison population at 7956 inmates. It required a reduction of 50 inmates per month until the capacity allowances for each facility were met. Another court order established an evaluator process. These experts were to survey the Tennessee prison system and make recommendations in their areas of expertise on how the system could be improved.

The state struggled to meet the court ordered population requirements. Additional court orders were imposed which limited inmate numbers at specific facilities and severely restricted the intake of new inmates. Deadlines were set which the state found impossible to meet under its present correctional system. The court evaluator's plan included over 1500 recommendations for improvements. State leaders realized a concentrated effort would be required to arrest the mounting problem with their correctional system.

The General Assembly of the State of Tennessee met in Extraordinary Session from November 5,1985 to December 5, 1985. Their mission was to solve the overcrowding problem and upgrade the management of the Tennessee prison system. The laws passed included:

  • A “safety valve” procedure permitting the Governor to release inmates to supervised parole.
  • Subsidies to counties housing felony prisoners.
  • Reduction of eligibility dates for certain types of offenders.
  • Creation of a Sentencing Commission to revise the penal code.
  • Enactment of a sentence credit system for good behavior.
  • Funding for alternative programs.

The General Assembly also appropriated $188 million for corrections related to capital improvements, while forming a Select Oversight Committee on Corrections to review programs, functions and activities of the Department of Correction.


Newly elected Governor Ned McWherter took office in January 1987. He established a special office in March 1987 called the Capital Projects Management (CPM) Team. This team reports directly to his office and is designed to watchdog capital expenditures and manage the design and construction of the correctional system improvements.

Why The CPM Team

The State of Tennessee has a history of problems when managing large and complex construction projects. Delay claims, lawsuits, numerous change orders, and building completions behind schedule have troubled Tennessee's construction projects in recent years. The Governor established the CPM Team because of the size and intensity of the program along with the potential for problems and delays. This is the largest building construction program attempt ever undertaken by the state and along with the court ordered time frames—the most difficult.

This map represents major projects that had third-party observation

This map represents major projects that had third-party observation

The CPM Team functions as an Inter-Agency task force composed of people from the various state agencies needed to expedite the program. A project administrator from the private sector was also contracted with to provide additional construction management. Tennessee doesn't normally contract for outside management expertise. Their decision was based on the relatively short duration of the intense program. When the program ends in May 1990, the state will not have to find other positions within state government for the additional staff. The project administrator allows Tennessee the option of fluctuating manpower to meet workload peaks without long-term commitments. Fluor Daniel, Irvine, CA, was chosen as the administrator of the program.

The concept of bringing the people necessary to expedite the program into the CPM Team allows the team to become a nerve center, which answers all questions and processes all paperwork. The concept is working according to Governor McWherter. The eight-month timetable from initial planning to bidding for a 608 cell, $30.6 million prison in Nashville was the fastest in state history for a major facility. Those involved with the program expect to shave one to two years off the time normally needed for a program of this scope.

The size of the initial program the CPM Team is successfully managing is impressive by state standards:

  • Correction program funding of $210 million.
  • 100 separate construction contracts including three new maximum/medium security facilities.
  • Time frame of approximately 3 years.

Yearly construction funding for all Tennessee departments prior to this program averaged $114.5 million per year, with only 20% of the projects in excess of $1 million.

The initial program has recently been expanded through added funding to include two additional $30 million prisons. These prisons will be based on the prototype design developed and improved during design and construction of the first three facilities. The design documents for the prototypes are also being computerized to allow the state to accelerate and improve the process of designing new facilities.

Executive Sponsorship

The CPM office reports directly to the Governor's office. This commitment by Governor McWherter provided direct benefits to the prison construction program, which were the commitment of personnel and resources needed by the CPM Team from other agencies and a method for quickly resolving disputes.

The success of the prison construction program depended on the commitment of resources from several state agencies which had other goals as their primary mission. Because of the Governor's direct involvement, the success of the prison construction program was viewed as a success by all involved agencies. The inability of an agency to cooperate or complete its responsibility to the program would be resolved by the Governor's office.

Occasionally, decisions which had long-term effects on the budget and disagreements over major issues were referred to the Governor for quick resolution. This process prevented issues from becoming stumbling blocks to the program.

The Team Approach

A generic problem with any short term project is the interface with the permanently established bureaucracy. The CPM Team must coordinate with numerous organizations and state departments. They include the courts, fire marshal, private utilities and local governments. Coordination with the Department of Correction (DOC) includes dealing with their educational, security and industry branches. The successful function of the CPM Team also involves working with the Attorney General, State Building Commission and Department of Finance & Administration (F&A). Each have their own concerns and interests which made the successful interface difficult.

The CPM Team program director recognized this problem. Three elements made the interface successful. First, the team had the strong backing of the Governor. This gave them the strength required to make necessary changes when other methods failed. Second, the correctional upgrade program was presented as a joint problem to the various organizations. This was a team effort and everyone was in this together, each responsible for solutions to make it work. Third, the program director selected special people. Members of the team had to be able to not only perform their assignments, but cooperate with a variety of people with differing interests.

The DOC has its own staff of facility engineers. Their role has previously been to take a strong part in the management of the design and construction contracts for correctional projects. The CPM Team took over many functions that would normally be handled by the DOC. The team manages the design and construction contracts, inspects the construction, and processes all the related paperwork. Designs are reviewed to ensure consistency with other facilities. Costs are cut where the function or use of the designs would not be compromised. Estimates are reviewed in detail to maintain project budgets. This level of effort was not normally available on prior projects.

Construction meetings are attended by the CPM Team. The major projects have Fluor Daniel full-time construction observers and third-party schedulers assigned to them. All pay applications and change orders are reviewed and approved by the team. The level of attention applied to the correction program's projects have given the state control it hasn't had with other programs.

The DOC is still kept informed every step of the way by maintaining the facility engineer's involvement. Having someone involved through design and construction will be a tremendous benefit once the prison is operating. The engineer functions as a conduit between the DOC and the CPM Team. The DOC should never be surprised by an event or change on a project because they have a single source responsible for being up-to-date. This makes the task of keeping the DOC informed uncomplicated for the CPM Team.








    Project Observation    
0 = No Observation
1 = Full Observation
2 = Part -Time Observation

    Project Scheduling    
0 = Not Scheduled
1 = Scheduled

    Project Types    
1 = New Bldgs.
2 = Bldg. Renovations
3 = Other Improvements
4 = New Facility
    Project Costs    
1 = $0 to $5 Mill
2 = $5 to $15 Mill
3 = Greater than $15 Mill
Facility        Project
  1 Brushy Mountain State Prison 1 1 1,2,3 2
  2 Chattanooga Community Service Center 0 0 2,3 1
  3 Carter County Work Camp 0 0 1,2 1
  4 Deberry Correctional Institute 0 0 2 1
  5 East Tenn. Medium Security Facility 1 1 4 3
  6 Fort Pillow Prison & Farm 2 0 1,2,3 2
  7 Knoxville Community Service Ctr. 0 0 2 1
  8 Lake Co. Regional Correction Instit. 2 1 1,2,3 1
  9 Middle Tenn. Maximum Security Facility 1 1 4 3
10 Morgan Co. Regional Correctional Instit. 1 1 1,2,3 2
11 Middle Tenn. Reception Center 2 0 1,2,3 1
12 Nashville Community Service Center 0 0 2 1
13 Southeast Tenn. Regional Correctional 1 1 1,2,3 2
14 Tennessee Correction Academy 0 0 2 1
15 Tennessee Prison For Women 2 0 1,2,3 1
16 Tennessee State Prison 2 0 2,3 1
17 Turney Center 1 1 1,2,3 3
18 Wayne Co. Work Camp 0 0 2 1
19 West Tenn. Reception Center 0 0 2,3 1
20 West Tenn. Multi-Purpose Facility 1 1 4 3
21 Spencer Youth Center 0 0 2,3 1
22 Taft Youth Center 0 0 2,3 1
23 Tennessee Youth Center 0 0 2 1
24 Wilder Youth Center 0 0 2,3 1

The structure of the team changed as the program entered different phases to best utilize the available people. Initially, the CPM Team consisted of a program director, secretary, project administrator and project manager. The program director was responsible for the team and reported directly to the Governor's office. The project administrator, contracted from the private sector, and the state's project manager each had separate functions. The project administrator implemented a program schedule and project tracking tools. The administrator also attended programming and design meetings as an impartial voice, with his main responsibility to review architect estimates and designs from a contractor's viewpoint. The state project manager attended design meetings to monitor project scope, ensure state policies were followed and to coordinate information between various state departments.

The first major structure change took place because of the intensity of the program. Fluor Daniel brought in a technical support person to free the project administrator and a state architect was assigned to the team. The program had entered the design phase on the majority of the program's projects. The CPM Team divided into four groups. The first group, containing members from the CPM Team and the DOC, was responsible for the management and administration of all groups. The program was then divided among the remaining three groups.

The three remaining groups expedited and managed the projects that affected the 24 targeted facilities through the planning, design, construction and close-out phases. Each of these three groups had a state member from the CPM Team who understood government policy and procedures and the DOC engineer associated with the facility. The third member of the group was from the project administrator's people, who provided construction and cost expertise to the group.

This team approach worked very well in expediting the work. It was a method to bring together the people from the different organizations and give them a common goal to work towards. It divided the program into more manageable segments and made people responsible for their portion. Progress was attributed to the individual groups and this fostered a spirit of accomplishment.

The second major structure change occurred when the program shifted heavily into the construction phase. The CPM Team again changed its organizational structure to match this change. The state expanded Fluor Daniel's contract to include two third-party schedulers and four full-time construction monitors for eight of the larger projects. An additional Fluor Daniel person was brought into the office to assist the project administrator in managing the observers. He sorted information from the field, bringing important items to the program director's attention and managed the paper flow.

The CPM Team divided into two groups this time: the state architect overseeing the projects still in design and the state project manager, along with Fluor Daniel personnel, managing the projects in construction. Fluor Daniel is still responsible for design reviews, estimate validation and value engineering. This organizational structure makes better use of the team members' experience and will remain in place until the program ends in May 1990.

Cost Control And Value Engineering

The CPM Team established cost control systems which were not used by other state departments managing construction programs in Tennessee. The goal was to have accurate cost information concerning the program immediately available. The normal response time of the State's typical tracking reports was far too slow for a program such as this. Tennessee's cost tracking systems also did not handle project savings for a program very easily. Past history indicated that all money funded for a project was usually spent in one way or another. This correction program could not afford that luxury. Any identified savings could be removed from projects and used to build much needed additional bed space. This was extremely important to the state because lawsuits from numerous counties forcing acceptance of prisoners from county jails were aggravating the overcrowding situation.

A cost matrix was established which compared the original estimate, funding, projected targets and savings for 54 elements of the new construction program. These elements included items such as security fence, warehouse, guard tower, high mast lights, electric locks, fence detection and CCTV. This enabled the team to instantly see variances from original estimates, as well as variances between the different facilities with similar construction. This proved invaluable when dealing with 100 separate contracts and estimates by allowing the team to question items when they varied from the norm. Each project in the matrix was updated three times: at both design detail phases requiring estimates and when the projects bid.

Erection of precast modular cell units at West Tennessee Multi-Purpose Facility

Erection of precast modular cell units at West Tennessee Multi-Purpose Facility

When the program moved into the construction phase, additional information was required to effectively manage the program. A spreadsheet to track change order costs against project contingency was implemented. This tool tracked actual contingencies, contingency targets and change order commitments for all projects. Similar systems were established to track expenditures for moveable equipment and force account work. These systems allowed, for the first time, a department managing a construction program in Tennessee to immediately answer questions on total funding, projections and savings for their program. The cost control systems projected a savings of $52 million from the original program funding. Access to this information allowed the state to plan for the addition of a third prison and special needs facility far earlier than they normally would have been able to.

One major source of program savings was the monitoring of project scope. The state has a history of spending all money funded for their projects. There are numerous examples of changes to the contracts after substantial completion has been established. The CPM Team closely monitors the scope of the projects. Changes are reviewed looking at the entire program. For example, is extra security fencing at one facility more important than additional bed space at a possible new facility.

The CPM Team reviewed all design phases and implemented a value engineering program. Value engineering suggestions accepted during the review of the first two maximum/medium security facilities resulted in documented savings of $5.2million. Typical changes included changing from security windows to security openings, changing the interior precast thickness, lowering elevated dayrooms and lowering the elevated water storage tank to ground. The changes made at these two facilities were implemented on other projects, multiplying the savings.

There was mixed designer reaction to value engineering. At first, the designers did not see themselves as part of a program and were not receptive to ideas from other places. They took the suggestions as criticism. There was as much trouble in state as well. The warden's did not care what was being done at other facilities. They were interested only in what they perceived as their needs. These attitudes changed when designers understood they were part of a bigger picture and the suggestions did save money.

The CPM Team reviewed all change orders for scope and cost. This was the first time a detailed review of change order costs were done by the state. Having a construction expert as part of the group gave the team this option. The team's reviews did not relieve the designer of his review or recommendation responsibility.

The reviews saved money and did not increase approval times. As soon as a designer received pricing for a proposed change, a copy was sent by fax to the CPM office. A notice to proceed was not given to the contractor until both the CPM and design teams concurred with pricing. In the beginning of the program, the majority of pricing was rejected or returned for explanation. As the program continued, fewer change orders were rejected by the team. Contractor's realized that their prices were under intense scrutiny. They did not want to go through the process of documenting costs when pricing for changes were rejected. Designer's also increased the effort of their reviews to avoid being shown discrepancies they had previously missed.


The prison construction program was scheduled on two levels. A milestone schedule was developed for the entire program which tracked eight separate items for each project. Detailed individual construction schedules were developed for major projects. When appropriate, schedules were developed for smaller components of the CPM program, such as scheduling delivery of owner furnished equipment, staffing and training of new personnel.

Project scheduling represents one of the major services provided by the Project Administrator, Fluor Daniel. Ten percent of the construction projects were selected for scheduling but these projects represented 50 percent of the construction dollars. Projects were selected based on size, complexity and urgency of completion.

Middle Tennessee Maximum Security Housing unit at 90% completion

Middle Tennessee Maximum Security Housing unit at 90% completion

Project scheduling assisted the Capital Projects Management Team in achieving two of the program's three project major goals of reducing costs, early project completion and preventing inappropriate legal action.

Preventing legal action was one of the major contributions of the scheduling aspects of the project. The most common reason for legal action originates with delay claims. The critical path method schedule, produced by the scheduling consultants, provides the tool necessary to monitor the effect of actions by all project participants. This information allows the CPM Team to make decisions and take actions to prevent delays. The critical path method schedule also provides the necessary documentation for defending the State of Tennessee from inappropriate legal action.

Early project completion was the second goal. The scheduling consultant develops a cpm network with the various project contractors. During this process the consultants offer suggestions to the contractors toward developing a schedule that completes the project within the earliest possible time frame and holds all parties accountable to do their part in keeping the job on schedule.

The scheduling consultants also progress these schedules every other week, providing all interested parties with up-to-date information on the progress of the job. Each party is expected to expedite activities that affect the progress of the job. After each meeting the scheduling consultant submits a summary report to each of the meeting participants and the State of Tennessee. This report provides a summary of the job progress to date, identifies ongoing or potential problems and reports the scheduling impact of future plans. Accompanying the report is a bar chart reflecting the progress of activities currently scheduled plus a six week “look ahead” of activities that are scheduled to start.

The types of schedules produced by this process vary greatly from project to project for a number of reasons. The experience of the contractor in scheduling varies greatly as do the size and complexity of the project. A third factor affecting the quality of the schedule involved the attitude of the parties providing information to be included in the schedule. Attitudes range from grateful acceptance of assistance to open resistance. The attitudes seem to depend on the participants' past experience with third party scheduling and apprehension of how the schedule could be misused to restrict the contractor's options in construction methods.


The Capital Project Management Team recognized the potential for resistance from various participants to third party scheduling and emphasized the group's team approach to administering a project. The scheduling consultant participates as part of the project team and provides information and assistance to all team members, especially the contractor, toward meeting the individual party's goals, as well as the overall project goals. As the projects progressed, resistance from most parties abated.

An additional benefit of third party scheduling was that the up-to-date information on each project assisted the State of Tennessee in the planning for facility takeover. Hiring and training schedules for staff, ordering supplies necessary for operation, and planning for the smooth transfer of inmates are added products of good scheduling. A supplemental funding request was submitted to the Tennessee legislature when the Department of Correction was informed that the first new prison would be ready to come on-line five months ahead of schedule. Tennessee was also able to provide the Court system with up-to-date information on the effectiveness of the Capital Projects Management Program for reducing the prison population problem.

Project Observation

A major component of the CPM management approach is project observation. The defined role of the project observers is to be the eyes and ears of the State of Tennessee on the job site. This role entails providing daily records of significant happenings on the job site to the Capital Projects Management office in Nashville. These reports provide a record of the day-to-day activities of the job site. During the progress of the prison construction program the observers role grew. Observers were expected to expedite issues that might have an adverse impact on the job and observers began noting and indirectly improving the quality of work performed.

The observers keep a series of logs which produce a complete historical record of the project. The types of logs the observers maintain include:

Medium SecurityHousing Unit at Middle Tennessee Maximum Security Facility

Medium SecurityHousing Unit at Middle Tennessee Maximum Security Facility

  • A request for engineering information log which records information requests from the contractor, noting the type of information needed and the date the information was needed.
  • A second log records the responses by the architect and the date responded, as well as other information provided to the contractor by the architect.
  • When a change in the work affects the contractor's price, the architect submits a RFP to the contractor and the observers again keep a log of these requests and responses.
  • An action item log keeps a record of all information that needs tracking that does not easily fit into one of the other categories.
  • Other reports include the numbers of workers from each subcontractor and the type of work performed, the weather conditions, and other conditions that may affect the work. They record concerns or problems the observer might have noted that would be of interest to the State of Tennessee.

When information is not provided or when action does not take place when scheduled, the observers contact the responsible party requesting additional information. In most cases a new action date is established. In critical cases where prompt action is not forthcoming, the observer contacts the Capital Projects Management Team in Nashville for assistance. This action enables the CPM Team to intercede before the problem begins impacting the job. The observer especially expedites those items that are the responsibility of the State of Tennessee, preventing the State from delaying the project.

The observer's role was not designed to change the traditional role of the Owner, Architect, and Contractor. The Architect is the owner representative on the job, and the observer is to provide independent information for the owner. The architect retains responsibility for quality control. If, in the performance of his duties, an observer notices materials or work practices not meeting specifications, he contacts the architect and, in most cases, takes photographs of the work. As a courtesy, the observer informs the job superintendent of his observations which usually corrects the problem. The observer also notes exceptional work performance. This aspect of the observer's role increased both the contractors concern for quality control and heightened the architect's awareness of the State's interest in quality.

The observers provide information that the CPM Team needs to manage the various projects and expedite critical decisions and actions. The observer's precise record keeping combined with the third party schedules provide a complete record of the project and documents the efforts of the State of Tennessee to keep the project on track. The total record also provides a chronology of the work and the impact of decisions made by the various parties involved in the project.


The State of Tennessee's prison construction program was a learning experience for both the State and Fluor Daniel. The program went surprisingly smooth, without any major disasters. There are two items that will be changed should the opportunity arise again. First, a design professional such as the state architect will be assigned to the construction site to provide an expanded viewpoint and expertise. Second, the construction documents will be thoroughly reviewed to prevent focusing in on a specific construction material or method. For example, on the first prisons precast concrete was specified. The initial supplier had a tremendous advantage when bidding successive prisons. A cast-in-place option, added later in the program, made it more competitive and didn't lock the contractors into one supplier.

There are numerous techniques and methods that should definitely be repeated given a similar program. Executive sponsorship, private sector expertise, third-party construction scheduling and observation along with establishing responsive cost control systems were all crucial to the success of the program. It is expected the State of Tennessee's correctional system will come out from under court control in June 1992.


Russell W. Darnall earned his bachelor of science degree from West Virginia Wesleyan College in 1972 and a Masters of Project Management degree from Western Carolina University.

Employed by Fluor Daniel, Inc., Russ is assigned to the Tennessee Department of Correction, Capital Project Management Group as a Scheduling Consultant. Russ is a member of the Project Management Institute and presently teaches Construction Management at Tennessee State University.


Terry W. Towle has a Civil Engineering Degree from the University of Maine and is a member of ASCE. He is employed by Fluor Daniel and was assigned to the Tennessee Department of Correction, Capital Projects Management Group as the Manager of Construction Observers. He is currently assigned to the CPM Group as Project Administrator of the Tennessee State University upgrade program.


We were indeed fortunate to have the inside story on one of the really outstanding technological achievements of this century in the May PM NETwork Showcase Project, The Voyager 2 Neptune Encounter. It is appropriate to offer our congratulations to the entire team of individuals and organizations which made that mission a success. Seldom do project teams put their work before the public of the world in so dramatic a fashion. Apparently all elements performed in conformance with or exceeded specifications. What an excellent example of Quality in project management.

Congratulations to all who made it happen and a special thanks to the authors of the May Showcase Project from

The PM NETwork and all PMI members

THE PROGRAM DIRECTOR'S ROLE: An Interview With Jerry Preston

Jerry Wayne Preston

Jerry Wayne Preston

Governor Ned McWherter appointed Jerry Wayne Preston in April 1987 to administer the Capital Projects Management Team, reporting directly to his special assistant. Mr. Preston's task was to successfully manage the largest building construction program ever attempted by the State of Tennessee. Jerry Preston graduated from the University of Tennessee with a Bachelor of Architecture. After eight years with private architectural firms, Jerry entered government service as a staff architect and in 1984 was made Director of Design and Construction Services for the Department of Finance and Administration, State of Tennessee. Mr. Preston is an active member of the Construction Specification Institute and served as the President of the Nashville Chapter, Director of the Gulf States Region and advanced to Fellowship in 1987. The Tennessee State Legislature passed a resolution expressing appreciation to Jerry Preston for an outstanding job in developing the design and program manuals for the State. Jerry lives in Hendersonville with his wife and two children.

Performance cannot be forced, but comes from understanding and identification with the project goals.

The following interview was conducted by the authors. Questions are prefaced by (PMI) and answers by Mr. Preston are noted by (JWP).

PMI: Could you describe the decision-making process that resulted in your selection as program director for the Tennessee Prison Construction Program?

JWP: In 1985, the Tennessee Legislature established an Oversight Committee to oversee the Prison Expansion and Improvement Program. The committee hired two management consultants to assist them in their work, and based on the recommendations of the consultants, a design team was contracted to develop Program Guidelines. The March 1987 report reviewing these guidelines, was the catalyst for the newly elected Governor, Ned McWherter, to create a policy committee. This committee made two early decisions that moved the program in the right direction. The first decision established the Capital Projects Group under the office of the Governor. It was at this point in the process that I was selected to manage the program. The second decision was to contract the additional expertise and services the Capital Projects Management Team (CPM) needed, rather than increase state staff.

PMI: How was this decision made?

JWP: The Department of Correction advocated construction management during the early stages because the ex-pertise to manage a $210 million program was not available in-house. This was the first time Tennessee has undertaken a program this large. Construction Management (CM) seemed a less attractive approach to me for three reasons:

1. CM receives mixed reviews. Some states like CM, others were committed to other strategies.

2. The fee seemed high to me. A six to seven percent fee for larger projects and ten percent and higher for smaller projects represents a larger portion of the total dollars than seemed appropriate.

3. I also believed that CM does not fit well with our work. Tennessee does not do well with multiple contracts. Multiple contracts tend to produce a larger percentage of legal actions for us.

The Governor decided to hire a firm to help manage the program for a cost of less than one percent of the total program. A Request for Proposal (RFP) was developed representing the services we needed and wanted. The State would manage the project by contracting certain construction expertise and services.

PMI: What expertise and services did the State of Tennessee contract?

JWP: Basically four types of services. The first two services, technical support and program administration, supplement the state management staff. Technical support set up a computer system to track program costs and progress the entire program. Technical support also reviews and evaluates change orders and requests for payment. In summary, technical support provides CPM with the information it needs to make informed decisions.

The project administrator of the contracted services also provides program administration. First and foremost the project administrator must understand the direction and needs of the CPM Program and manage the contract personnel toward providing those services. Additionally, the project administrator does value analysis in the design phase, provides estimates of costs, and represents an independent voice in the policy committee. This last role is an important one because the policy committee receives an unbiased cost/benefit analysis. He can say, “this is what you're getting and this is what it will cost” and then provides a recommendation.

The third and fourth types of contract service guide the construction effort on our larger contracts through construction observation and scheduling. Site observation and third party scheduling are good ways to manage State work without changing the traditional role of Owner, Architect and Contractor, and I have had success using this method of management.

PMI: How did you locate the services you wanted to contract?

JWP: A Request For Proposal was submitted to construction companies who have managed projects greater than $200 million and had experience in prison construction. The evaluation team reviewed and met with the three firms on the short list. All the firms had the construction expertise we wanted. The deciding factor was the right chemistry. We wanted people who could work with State employees and designers to develop a management team.

PMI: Who makes up the policy committee, and what role does it play in the program management?

JWP: The policy committee has a lot of players who change according to the needs of the program at any given time. Members include representatives of the Governor's office, Department of Correction, the legislative committee consultants and the various State departments that affect the construction or program efforts.

Early in the process, the Policy Committee focused on decisions that provided overall direction of the design effort. For example, unit management became the primary organizational structure for the prisons. This and similar decisions had significant design ramifications. If a major issue did not receive consensus or if the decision had major budgetary impact, the issue was taken to the Governor for resolution. Later in the process, the Policy Committee resolved issues that might hold up progress. The primary function of the committee evolved into keeping the program on track and on schedule by resolving these issues quickly.

PMI: What were your goals for the project and can you describe your philosophical approach for achieving those goals?

JWP: The Policy Committee established three goals; 1) save dollars, 2) save time and 3) prevent legal action as a result of the construction efforts. Presently, we have documented savings of $52 million and we are seven months ahead of schedule and expect to complete one to two years ahead of the conventional duration for large construction projects. Because of the savings, an additional prison is currently in design.

Concerning the third goal, I don't believe the law suit issue is as large as perceived. If you look at the number of projects the State undertakes and the resulting law suits, the numbers just don't justify the concern.

My approach is to evaluate, reevaluate, and reevaluate. It's the little things, the small savings added up, that total a successful project. The little things are much easier to impact than the big. For example after the bids are opened, traditionally a memo is mailed with the contract to the designer, the designer sends the contract to the contractor, then a preconstruction conference is established with the Notice To Proceed following about a week later. We Express Mail the contract to the designer and contractor at the same time with the pre-construction meeting and Notice To Proceed dates established. We reduced the process from six weeks to one week. We can't do everything this way, but we can do enough to make a difference.

The State system for constructing projects is a good system and it works reasonably well. Most of the contractors know the system and are comfortable with it. The CPM Team did not replace the State system of doing business, but streamlined and intensified it. The State system is process oriented. The system is designed to make the process flow smoothly. The CPM Team which is product oriented streamlines or alters the process to produce the best product at the lowest cost and in the shortest time.

PMI: Describe your organizational approach to accomplishing the goals of the program.

JWP: You need three things to make a program like this work; good people, good communication and flexibility. This is a State run program, and you need state employees on staff who know how to make the state system work. Contract employees not only need construction expertise, but they also need to be able to work as part of the overall project team. All the team members not only must be competent in their job but also understand and identify with the projects goals. Performance cannot be forced, but comes from understanding and identification with the project goals.

Communication is a two way process. Team members must keep me informed about the individual jobs in which they're involved. They must not only communicate the progress and cost of the job, but maybe more importantly, the feel of the job. Those things that are not easily translated in a report but may create problems later in the project. It is this communication that helps me keep my fingers on the pulse of the program; it helps me allocate resources and energies. A big part of my job is to get the right people at the right task with the right workload. Communication also means keeping team members informed about the goals and objectives of the program. People are better equipped to do their jobs if they understand how their performance affects the overall success of the project.

Flexibility is one of the major keys to the success of a project like this. You can be prepared and deal with the expected. It is the unexpected that determines whether you succeed or fail. Fluid management means making the necessary changes in the way you do business as conditions change. Don't get stuck in a rut. Keep open to better ways of accomplishing tasks.

PMI: What advice would you give someone who was undertaking a similar program within a State system?

JWP: First, you need someone in State Government who can make decisions. In our case we had the policy committee, which represented the decision makers of most if not all the impacted agencies. If the Policy Committee could not come to agreement, the Governor made the decision. Progress was never slowed because of indecision. You may not need the Governor, but you need someone with the power to make decisions. If you don't have the horsepower, stay out of the race.

Second, utilize consultation and advice outside of state government. Get an outside perspective. Even if they're wrong they can spark ideas and better ways of doing things.

Finally, develop a good team. Recognize that the work experience is part of the total quality of life, that individual successes add up to project success and that the project success is shared by the entire team.



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Octobers 1989 pm network