Project Management Institute

The greening of project management

adapting project management practices to deliver cost efficient green building construction

College of Business, Western Carolina University, Cullowhee, NC

Introduction

Green building is in the early stages of making a paradigm shift in American culture, transforming from a temporary trend to a mainstream way of life and doing business. From Al Gore's movie An Inconvenient Truth to the nation's awareness of increasing gas prices, environmental issues are becoming topics of discussion in communities across the country.

According to a survey published in 2007, one third of Americans believe that global warming is the world's most critical environmental problem, nearly double the amount of people who agreed with the same statement in 2006 (Fiaola & Shulman, 2007).

The shift in environmental awareness can be partially attributed to Generation X, the up-and-coming population of 20- and 30-somethings who are more willing to embrace sustainability as part of their social system (Johnson, 2007). But the environmental tipping point does not end with America's younger generation. It has also reached the corporate world, industries, and local governments. In April 2006, when New York City Mayor Michael Bloomberg unveiled PlaNYC, a comprehensive plan to reduce greenhouse gas emissions by 30% by 2030, he stated, “You can no longer deny the science and bury your head in the sand—climate change is real” (Johnson, 2007).

As is evident from the above discussion, the importance of environmental issues has gained momentum. As a consequence, research has focused on how sustainable practices can reverse the impacts of global warming. According to the United Nations Environment Programme (2007), the construction industry has the greatest opportunity to affect environmental issues due to built environment's major share in energy consumption and contribution to global warming. Research shows sustainable building practices can considerably reduce the built environment's role in energy consumption. A survey of 99 green buildings in the U.S. showed they use an average of 30% less energy than conventional buildings (“The rise of the green building,” 2004). Other case studies show that energy-efficient design can reduce a building's energy consumption by as much as 50% (“The rise of the green building,” 2004).

The growing awareness of sustainable construction's potential to positively impact environmental issues is pushing green building to the forefront. As a result, more local governments are adopting green building standards and regulations or providing permitting and financial incentives for sustainable development. Research data shows dramatic increases in the number of development projects seeking environmental certification, indicating that the demand for green construction is also on the rise (U.S. Green Building Council, 2006).

Despite indications of significant growth, green development is not without challenges and barriers, the most common of which is the cost premium associated with going green. Although research varies on sustainable building's incremental costs (with studies purporting a 0–10% green premium over comparable conventional projects), a survey of building industry professionals conducted by McGraw Hill Construction (2006) indicates the perception of higher costs is the most commonly cited barrier to sustainable development. The bottom line is that sustainable strategies must also make financial sense for green projects to be viable.

The increasing demand for green construction, coupled with heightened perceptions of the risks associated with going green, mean that project managers will be responsible for managing tighter budgets with tighter profit margins on green projects. Based on those trends, this paper argues that delivering a cost-effective green building project requires adjustments to the conventional project management methodology. The objective of this paper is to present and justify the most significant adjustments to project management practices necessary for delivering a green construction project within acceptable budgetary parameters. After presenting an overview of green building construction, we provide an extensive review of literature, case studies, and research to prove that cost is the most significant constraint when building green. We then go on to analyze how the risk of inflated costs associated with green building can be contained by modifying traditional project management practices. These results are summarized in a matrix showing where in the PMBOK® Guide project life cycle adjustments must be made in order to deliver a successful green building project. Further, we highlight specific green management practices, with more detailed information for implementation.

Literature Review

Defining Green Building

A variety of terms are used to mean “green” in the construction industry, including green building, sustainable design, high performance building, whole building design, sustainable building and integrated design. Theoretically, this collection of industry terms represents a movement taking place over the last 40 years to change the way we understand building architecture, design, construction, use, and decommission. As Kibert (2005) stated, “buildings are predominant artifacts of modern society…important cultural symbols” that impact vast populations based on their “design, materials, color, location, and function.” With the environmental progress of the ‘70s and the green building movement of the ‘90s, sustainable building practices can be characterized as a broad and far-reaching cultural evolution of society's relationship to the built environment.

There is no single, widely accepted definition for green building, but a survey of definitions reveals many common threads. Table 1 presents an abbreviated comparison of green building definitions from a variety of sources.

Table 1. Green Building Defined

TERM DEFINITION QUOTED SOURCE
Sustainable Design A design philosophy that seeks to maximize the quality of the built environment, while minimizing or eliminating negative impacts to the natural environment. McLennan (2004), The Philosophy of Sustainable Design
Green Buildings Buildings that are designed, constructed, and operated to boost environmental, economic, health, and productivity performance over conventional building. U.S. Green Building Council (2002), Building Momentum
Green Building The careful design, construction, operation, and reuse or removal of the built environment in an environmentally, energy-efficient, and sustainable manner; may be used interchangeably with high performance building, green construction, whole building design, sustainable building, and sustainable design. McGraw Hill Construction (2006), Green Building SmartMarket Report
Green Building The practice of 1) increasing the efficiency with which buildings and their sites use energy, water, and materials, and 2) reducing impacts on human health and the environment through better siting, design, construction, operation, maintenance, and removal—the complete building life cycle. Building Design & Construction (2003), quoting the Office of the Federal Environmental Executive White Paper on Sustainability
Green Building The process of building that incorporates environmental considerations into every phase of the homebuilding process. That means that during the design, construction, and operation of a home, energy and water efficiency, lot development, resource-efficient building design and materials, indoor environmental quality, homeowner maintenance, and the home's overall impact on the environment are all taken into account. National Association of Homebuilders (2006), Model Green Homebuilding Guidelines
Sustainable Construction The goal of sustainable construction is to create and operate a healthy built environment based on resource efficiency and ecological design with an emphasis on 7 core principles across the building's life cycle: reducing resource consumption, reusing resources, using recyclable resources, protecting nature, eliminating toxics, applying life-cycle costing, and focusing on quality. Kibert (2005), quoting the Conseil International du Batiment (CIB), Sustainable Construction: Green Building Delivery & Design

Using the culmination of these resources, we define green building (also referred to as sustainable design, sustainable construction, and other terms previously listed) as a philosophy and associated project and construction management practices that seek to (1) minimize or eliminate impacts on the environment, natural resources, and non-renewable energy sources to promote the sustainability of the built environment; (2) enhance the health, wellbeing and productivity of occupants and whole communities; (3) cultivate economic development and financial returns for developers and whole communities, and; (4) apply life-cycle approaches to community planning and development.

Why Build Green?

The U.S. federal government and other third-party organizations, like the U.S. Green Building Council (USGBC), have commissioned surveys, reports, and analyses to prove the environmental benefits of green building (USGBC, 2006). Their studies show that the built environment has significant impacts on the consumption of natural resources, the generation of pollution and waste, and the productivity and health of people (UNEP, 2007). Although this paper does not rely on the benefits of green construction as a basis for recommended project management life cycle adjustments, it is useful to understand the arguments supporting the expansion of green building.

According to the Department of Energy, there were more than 76 million residential and 5 million commercial buildings in 2002 in the U.S. (USGBC, 2002). The built environment in the U.S. accounts for 30% of greenhouse gas emissions, 12% of potable water consumption, 70% of electricity consumption, and 39% of all energy use (USGBC, 2007). Worldwide, buildings consume 30–40% of all primary energy (UNEP, 2007).

Green buildings also have social impacts on the health and wellbeing of building occupants. Design features that promote sustainability have resulted in lower absenteeism and higher productivity rates among employees. A study conducted after Lockheed Martin completed a green engineering and design facility in Sunnyvale, California showed that absenteeism rates dropped by 15% in the new building (U.S. Green Building Council, 2002). Another California study of test scores from 21,000 students concluded that students in classrooms with more natural light scored 20% higher on math tests and 26% higher on reading tests than students in rooms with less natural light (U.S. Green Building Council, 2002).

In addition to environmental benefits, green building also offers significant opportunity for growth in construction management, product development, and information exchange. The green building industry is poised to experience considerable growth in the next 5 to 10 years. According to McGraw Hill's 2006 Green Building SmartMarket Report, green building is no longer an issue “du jour” but is more accurately characterized as a “quiet revolution.” It is one of the fastest growing market trends.

Membership in the U.S. Green Building Council is 10 times what is was seven years ago, indicating a strong interest in sustainable construction, even from those who are not actively pursuing it in construction projects (USGBC, 2007). In this year alone, the value of green building construction is projected to be more than $12 billion (USGBC, 2007). The National Association of Homebuilders (2007) projected that by the end of 2007 more than half of its membership will incorporate green practices into new home development. Estimates looking forward in the next three years indicate 5 to 10% of all new, non-residential construction valued at up to $20.5 billion will implement green building practices (McGraw Hill, 2006).

Costs and Profitability

While most of the mainstream attention on green building focuses on its positive environmental impacts, research shows a developer's decision to go green remains rooted in its financial viability. A survey of more than 400,000 architects, engineers, and contractors conducted by McGraw Hill Construction (2006) showed that the potential to reduce energy costs was selected by 54% of respondents as the top reason for building green. In this study, only 24% of respondents stated that green building's value to the environment was the driving force behind their involvement in the industry. When asked about the barriers to green building, respondents chose higher initial costs as the greatest obstacle. The Davis Langdon study (2004) found that there are wide variations in costs associated with sustainable projects and conventional projects.

Although initial costs of green construction can be higher than conventional projects, it is widely held that longer-term cost savings in operations and maintenance can help recover those costs. Green buildings are expected to decrease operating costs between 8–9%, increase total building value by about 7.5% and increase occupancy rates by 3.5% (U.S. Green Building Council, 2006). However, the benefits of operational savings can be less important to a speculative developer who has no long-term interest in operating or leasing a building. For this reason, it is important for project managers to develop strategies for containing costs during the initial phases of a project.

A commonly noted challenge to containing costs in conventional construction projects is communication among various technical experts who tend to use their own tools, protocol, and industry standards for making decisions and tracking information (Sappe, 2007). Architects, engineers, and builders tend to be highly specialized and deliver services in technical isolation. This “silo effect” makes it difficult to manage changes, mitigate risks, and contain costs with a holistic view of the project. It also inhibits the project from taking advantage of system optimization, which can save time and money (Reed & Gordon, 2000). These communication issues can be magnified when combined with the unique considerations associated with green technology and project accreditation.

In order to bridge the technology and communication gap that can occur with a green building project, the USGBC launched an accreditation program to train and certify professionals familiar with Leadership in Energy and Environmental Design (LEED) standards. LEED is a third party certification program administered by the United States Green Building Council designed to set standards and measure the sustainability of building construction and operation. LEED focuses on performance in five key areas including sustainable site development, water savings, energy efficiency, materials selection and indoor environmental quality. LEED accredited professionals, called “LEED APs,” must demonstrate a working knowledge of sustainable building practices and the requirements associated with LEED certification. Because the LEED AP has past LEED experience, he or she can guide sustainable building projects more efficiently and at a lower cost (Griffin, 2005).

Incorporating a charrette at the beginning of a construction project is another solution to improving communication and exchanging ideas among a project's stakeholder group. The National Charrette Institute (NCI) (2007) defined a charrette as “a collaborative planning process that harnesses the talents and energies of all interested parties to create and support a buildable Smart Growth plan.” Lennertz (2003) summarized NCI's nine core strategies that define the process:

  1. Working collaboratively
  2. Designing cross-functionally
  3. Using design to achieve a shared vision and solutions
  4. Studying the details and the big picture
  5. Operating under constrained work schedules
  6. Communicating in short feedback loops
  7. Including a multi-day charrette (four to seven days)
  8. Working on site
  9. Producing a feasible plan

Notwithstanding its relevance for managing teams in general, a charrette is uniquely effective in assisting in containing costs in a green construction project.

Literature Review Summary

The research analyzed for this paper shows that a number of factors have prompted a greater awareness of global warming and other environmental issues in the U.S.. As environmental awareness has gained momentum, sustainable building practices have experienced significant growth. The green building trend is projected to continue during the next 10 years, as indicated by the dramatic increase in projects seeking LEED certification. Surveys of industry professionals indicate the single largest consideration for green building is the cost premium over conventional practices. Although the increased cost of green construction can be minimized or eliminated, doing so requires an enhanced level of communication across the project team, an inclusive design charrette process for project stakeholders and careful project planning early in the project life cycle.

Based on the study of references, specific adjustments for the team's creation and subsequent management practices throughout the life of the project are described in Table 2. This table provides a comparison of conventional construction management approaches versus green building project management. The last column describes the justification for adjusting the process for green building.

Table 2. Green Project Management vs. Conventional Building Processes

PROJECT PHASE CONVENTIONAL CONSTRUCTION GREEN CONSTRUCTION
Stage I. Feasibility
Project need assessment Define need based on market conditions, physical needs, or other narrow scopes. Need definition includes environmental goal, LEED certification level, as well as the amount of capital investment toward green initiatives.
Project manager selection Select an in-house manager or hire one to serve as the project manager. Selection may or may not happen this early in the project. Hire an experienced green building consultant/project manager who is familiar with the product type and market and has exposure to all phases of sustainable construction; a LEED accredited professional is optimal and strongly recommended.
Preliminary site analysis and plan Develop a preliminary budget estimate based on past or benchmarked traditional projects; unit costs are applied to a preliminary scope of work. Finalize economic and ecological goals based on cost/benefit analysis. Consider site characteristics and weigh building needs against ecological issues. The preliminary budget is aligned with the project's unique goals, and is often accomplished by creating a cost model that aligns resources with program goals to ensure project priorities are not mismatched to resources (Matthiessen & Morris, 2004). A LEED checklist and documenting system is developed for the remaining portion of the feasibility stage.
Design charrette Charrettes may or may not be implemented during a conventional project. They are often perceived as economic waste or schedule inhibitors. Must include all key external stakeholders, including surrounding property owners and other community representatives. Diverse representation from the project team functions (design, architecture, building contractor, environmental engineer, real estate consultant, etc.) is optimal. The final report serves as one of the guiding documents for the design and construction process (Kibert, 2005).
Final site selection Select site based on traditional proforma with little stakeholder involvement. Select site based on stakeholder involvement including community input, At this point, the construction team is in place (the owner, the project manager, the architect and the contractor), and all parties have a stake in site selection.
Stage II. Design
Initial budget and schedule Budgets are typically developed by an architect based on a formula or unit costs, which can vary as much as 15% from actual costs. They are often created and expended with little consideration of future operating and maintenance costs (Griffin, 2005). Complete preconstruction estimates with input from the builder, project manager, architect and real estate consultant. Estimating costs associated with specialized areas like green building products requires experiece. The budget may also include an emphasis on life-cycle costing, shifting focus from short-term ROI to long-term gains from operational savings.
Zoning approval At this point in the project, this is often the first time regulatory agencies have seen design concepts or site plans. This can sometimes cause rework in the planning and feasibility stages if the concepts do not fit zoning ordinances or local land use goals. The zoning approval process can often go more smoothly after an inclusive charrette process has been completed because the project will be less likely to face community resistance. The Charettte process also encourages feedback from local government planners and other regulatory agencies in the early stages so that zoning considerations are factored into the site plan well in advance.
Design team selection Select the architect or general contractor depending on the type of contract. All consultants report to the architect or general contractor. Usually, the core design team has already been selected by this point. Additional experts for technical systems may be interviewed and selected.
Construction document development Although the design is finalized by this time, often green initiatives are considered, causing rework. Because the integrated team has participated in the planning and design process, construction documents can be developed more efficiently and with little design modifications.
Government permitting review Plans are often reviewed for the first time for engineering compliance (grading, erosion control, and storm water standards), building codes, water and sewer systems, etc. Government stakeholders are involved at earlier stages to ensure compliance with local, state and federal guidelines. The regulation of these important environment systems like wastewater and erosion control are significantly connected to LEED requirements.
Project bidding “Hard bid” methods are most common, where the lowest bid cost is awarded and subcontracts are negotiated by the contractor on a closed-book basis. Reed and Gordon (2000) recommend an “overhead/fee bid with an open-book subcontracting process” for green projects. Stipulations for minimum number of bids and cost savings allocations can also be included. “Open book” subcontracting allows the owner to have access to the estimates and pricing submitted by subcontractors.
Stage III. Implementation
Contracting Traditional contracts like cost-plus-percentage or cost-plus-fixed fee are applied. Sometimes work is further divided into multiple contracts, depending on uncertainty surrounding the project (Bockrath, 2000). The less confident the builder feels about the project, the higher the fee or risk premium will be. Integrated development requires a different kind of client/architect and client/contractor contract (Reed & Gordon, 2000). Contracts should include performance agreements, incentives, and bonuses for implementing sustainable practices and exceeding sustainability goals (Penn State University, 2004). Contracts should also include specific provisions for LEED points, Energy Star requirements, the use of recyclable materials, on-site recycling requirements, and agreements to return unused materials to vendors, among others.
Construction Weekly site inspections are typically reported by architect or builder. There is little cross-communication among the site workforce, including subcontractors. Launch construction with kickoff meeting that includes a sustainable education component for on-site construction personnel; monthly on-site meetings are required by entire site workforce and include periodic education and training sessions on green building. Sustainability requirements are reviewed with each subcontractor prior to commencing work (Penn State University, 2004).
Inspections Field changes caused by fragmentation in the owner-architect-builder relationship can require additional government inspections, which create cost and schedule inefficiencies. At this point, government regulators are working as a partner in the project, as opposed to an outside influence. Less rework and field adjustments decrease the chances of having to request re-inspections.
LEED certification Typically not applicable. If the project is seeking certification, documentation can be difficult to assemble from multiple sources. The ongoing efforts of the project manager, coupled with the benefits of an integrated team and specialized technology, can make compiling and submitting documentation more efficient for the project's schedule and budget.
Stage IV. Turnover & Close Out
Occupancy and operations Minimal testing is performed before the building is turned over for operations. Building commissioning is an essential step in ensuring the building systems function as intended and set forth in the project criteria. The commissioning authority has been hired from the onset and understands the owner's goals and investments.

Analysis and Discussion

Green building projects are inherently different from their conventional counterparts. They require the use of special materials and building practices to achieve sustainability. They can also require extensive documentation and reporting if environmental certification is a project goal. The unique characteristics of green construction require adjustments to traditional management practices to minimize risks and improve the chances of delivering the project within acceptable costs. The majority of these adjustments reflect an increased need for cross-discipline coordination on site selection, construction techniques and building systems and subsystems early in project life cycle.

Traditional construction management methodologies, which are often described as linear and fragmented processes, can cause extensive rework later in the project, specifically in green construction projects. It is less expensive to address green issues early in the project life cycle than to work them in during project implementation. In fact, the timing of those decisions can significantly impact the rates of return on short-term construction costs and operating costs in the long-term.

Adjustments made early in the project life cycle culminate in the creation of an integrated design and construction team that works together throughout the project to ensure that green building goals are met in every phase of the project.

Beginning With the End in Mind

It is safe to say the most important steps toward achieving a sustainable building project within established cost constraints are performed during the project's feasibility and design stages. Conventional construction projects show that change orders for design or construction modifications create cost inefficiencies. By defining priorities for sustainable construction at the earliest project phase, all other phases of the project will be planned and positioned to accomplish those goals from the onset.

While it is ideal to assemble the entire team early in the process (manager, architect, contractor), doing so is not always cost-effective. Instead, hiring a “generalist” with exposure to all areas of green development can have the same results at a portion of the cost. This is the first step in overcoming the silo effect in the construction industry, where professionals are splintered by functional areas (Reed & Gordon, 2000). However, the optimal arrangement is to have nominal contracts with a selected architect and builder for planning and design phase work.

In order to deliver a green project within acceptable financial parameters, the owner and project manager must set sustainability goals before design and construction are initiated. Setting sustainable priorities during the project feasibility phase will establish the framework in which all future project decisions are made, thereby reducing the chance that significant design modifications or change orders will be needed later in the process. Table 3 presents a list of key questions that can be used as decisions-making guidelines for establishing project goals (Kibert, 2005).

Table 3. Questions for Setting Sustainable Development Goals

AREA QUESTION(S) JUSTIFICATION
Environmental certification Will the project seek LEED or other certification, and to what level? What is the cost/benefit of seeking certification? How will certification be used to market the project? The degree to which certification is sought can dictate critical elements of the project, including site selection, design, costs, schedule, and documentation.
Design criteria If the project is not seeking LEED certification, what design criteria will be used as requirements? Establishing design criteria will help communicate the project's goals and priorities to the project team in a measurable, technical form.
Personnel criteria What level of green building experience will be required from the project team? Since hiring decisions are made much earlier in green construction, personnel criteria must be established early and align with the project's goals.
Initial investment capacity Is the owner willing to make an upfront investment in sustainable construction that exceeds what would be required in a comparable conventional project? If so, to what level? An integrated project team may require greater upfront investment; the owner's willingness to make such investment will impact the timing and quality of hires. This may also apply to costs associated with initial feasibility studies, site work, and design.
Return on investment Is the owner willing to accept a life-cycle cost analysis including lower operational costs as the return on a higher front-end investment? Terms for measuring ROI must be established before pro-forma are developed.
Unique or other environmental considerations Are there climatic or other environmental issues unique to the project's geographical location (e.g., arid climates with water-short characteristics, unique storm water considerations, etc.) that the project must address? Environmental features unique to the region or a specific community should be defined and considered as part of the project's priorities.

Building green requires the owner to make decisions and set project goals prior to selecting a site and initiating design. The green project requires more upfront planning and decision-making than the traditional project. This is essential, because early programming decisions impact the project's implementation costs, particularly if an appropriate site is not acquired (Bogenstätter, 2000). The traditional unit cost approach does not provide enough flexibility to account for life-cycle costing or assembling an integrated design team. Depending on the developer's goals and the type of project, an integrated design team will include different combinations of professionals to accommodate the project's specific skills and service needs (Matthiessen & Morris, 2004).

Integrating the Project Team

Once the owner has established the project's goals and priorities, it is time to begin putting together the project team. In conventional construction practices, a single point of contact responsible for managing the project (either an architect, real estate broker or other single-discipline technical expert) is put in place after the project's feasibility stage is complete and a site has been selected; the project's remaining consultants are subsequently hired in chronological phases. This traditional hiring model delays the selection of key team members, such as the building contractor, until all planning and design phases are closed out. Subcontractors may never even meet other members of the project team, because they are incorporated later in the implementation phase. These common practices create impediments to delivering a green construction project on time and on budget.

The most significant challenge to delivering a financially successful green project is communication and coordination across a multi-disciplinary team. Green building projects, particularly those seeking LEED certification, can be more complex than conventional projects, increasing the need for cross-team interaction and communication. Green buildings also require more interdisciplinary coordination, due to the interconnectedness of green systems design. To ensure the delivery of sustainable targets, architects, builders, and engineers often have to work together during the project's feasibility and programming stage to (1) get a clear understanding of the project's goals and (2) to implement the practices necessary to achieve those goals at all subsequent project phases (Bogenstätter, 2000). If design professionals and other members of the project team can be involved at the onset of the project, they have the ability to maximize sustainable practices at the most efficient cost.

For example, “sustainable sites” is one of the six key areas for LEED certification of new construction. Credits are awarded in the sustainable sites section for site selection, density, and community connectivity, minimizing the building's footprint, maximizing open space, reducing light pollution, providing storm water management systems, and designing parking and building features to accommodate alternative forms of transportation (USGBC, 2007). Using traditional construction practices, the site is typically selected, analyzed, and laid out before any design professionals or the builder are brought into the project team. Because their involvement comes later in the process, they are precluded from including or enhancing most of the LEED sustainable site line items in the project. Alternative transportation opportunities, community connectivity, the building's orientation, and other site components are diminished by the time the architect and builder are hired (Reed & Gordon, 2000).

So, how does an owner avoid the pitfalls of a splintered project team? The owner must commit to using an integrated approach that includes representatives from design and construction backgrounds much earlier in the project life cycle. Although this approach requires more people and upfront investment, the initial cost is made up in later savings through a decrease in the coordination necessary to follow up on problems, less design and field rework, and higher efficiency in building operations (Reed & Gordon, 2000).

A 2006 case study of Fossil Ridge High School, a Silver LEED-NC certified project, compared its costs of construction to other school projects in the region and concluded that the project achieved its LEED status at no additional cost (USGBC, 2006). The Poudre School District attributed its success to two key elements: expanding the project team and involving stakeholders early in the process. The project team included teachers and school maintenance staff. The case study goes on to say that working to achieve support for the project's environmental goals from the onset minimized future delays and helped the project come in at no additional cost (USGBC, 2006). Even within the constraints of a limited school district budget, Fossil Ridge High School achieved its financial and environmental goals.

The first step in implementing the integrated project team is to select an experienced green building consultant/project manager during the project's feasibility stage. A project manager who is familiar with the product type and market and has exposure to all phases of sustainable construction should be considered. If the project is seeking LEED certification, a LEED AP is strongly recommended. The green project manager can also assist with pricing and developing cost saving strategies in areas that are lower priorities.

As soon as the project manager is hired, the owner initiates the next step of creating an integrated team by interviewing architects, building contractors, commissioning authorities and any other key consultants who may be needed to address unique project considerations. By initiating the project team earlier in the process, the team has more influence on some of the most significant and important project decisions: site selection, strategic planning, and preliminary design concepts. Without their early involvement, the architect and builder are at a disadvantage, particularly when it comes to integrating the owner's goals into the project's early design and preliminary budget and schedule estimates (Bogenstätter, 2000).

Although the benefits of having an integrated team at the onset of the project may be great, it is not uncommon for a traditional owner or developer to perceive this practice as cost-prohibitive. However, an early relationship with a building contractor can be established for a nominal fee to cover planning and design services. In fact, many builders will participate in this phase of work at no additional cost, due to the promise of a forthcoming construction contract. Even if a fee is required for the builder's early involvement, the benefits of such an investment can outweigh the costs. For example, a builder can help with cost-effective materials selection, more accurate initial cost estimates, the design of indoor air quality systems, and other key decisions throughout the project.

If the owner is still unwilling or unable to establish the integrated team by securing the services of a contractor this early in the project, hiring a “generalist” project manager with exposure to all areas of green development can provide similar benefits at a lower of the cost. This would be a first step in overcoming the silo effect in the construction industry, where professionals are splintered by functional areas (Reed & Gordon, 2000).

Once the integrated project team is in place, the owner and the project manager are responsible for conducting planning and strategy meetings so that all team members have a clear understanding of the project's goals. These kickoff meetings will also lay the groundwork for establishing a collaborative team environment. To that end, the project manager should lead a team process establish clear guidelines for communications and ground rules for teamwork. The project manager should also consider procuring specialized project management software designed for sustainable projects to enhance team communications and document sharing. If such software is used, team members may require initial training.

Just as members of the project team are incorporated into the project earlier in the life cycle, it is recommended that project stakeholders be included in the process during the feasibility and planning stages. Buildings, particularly green buildings, not only affect their immediate users but also impact a broad range of other people (Kibert, 2005). They impact the greater land use and building patterns of a neighborhood and community. Communicating with stakeholders early in the project life cycle assures that key groups understand and support the project's green goals. Additionally, stakeholder input can help shape the project in its early stages to accommodate specific user, regulatory, or community needs. Stakeholder partnerships also foster buy-in, which is essential for a green building project that cannot afford to absorb changes or significant delays later in the process.

The project manager should cast the widest possible net when inviting stakeholders to the table. Although specific stakeholders will vary depending on the project, common external groups include building users, building operations and maintenance staff, local government and regulatory agencies, surrounding neighborhoods, nearby business owners, community leaders, and environmental agencies, among others. It is also essential to treat the project team and all consultants, subcontractors, and others expected to work on the site as part of the stakeholder group so that the team can work in true partnership, internally and externally.

The most effective way to gather input from a broad range of stakeholders is to incorporate a charrette at the beginning of the project. Charrettes, particularly those that follow the National Charrette Institute's guidelines, have the ability to cultivate long-term support for a project, which can translate into a more cohesive project team, more engaged and supportive stakeholders and a more collaborative design and building approach. Successful charrettes often result in stakeholders feeling included and listened to, even if they do not agree with every aspect of the end product; they also bring team members together from various technical disciplines in a way that promotes synergy (NCI, 2007). The cumulative impact of these benefits is a higher quality project that requires less rework and is less likely to encounter opposition later in the process.

The project manager has a responsibility to maintain the stakeholder momentum and ownership after the charrette is complete. This means a green project may require a more detailed communications analysis and plan to keep stakeholders informed throughout the project. Tools like electronic newsletters, a publicly accessible project Web site, regularly recurring stakeholder meetings, and the use of mini-charrettes to help solve any future project issues can be effective in maintaining communications with broad stakeholder groups.

Designing With the Whole Team Approach

It is the project manager's responsibility to maintain the momentum of the charrette and include the whole team in developing the project's final design, cost estimates, and construction documents. After the charrette process is complete, the project team enters the design phase with a feasible plan upon which architectural drawings and other design documents can be based. At the same time, the project manager can begin formulating an initial project budget and schedule. Because the integrated project team has already been put in place, these steps can be completed more efficiently and at a better level of quality than a traditional construction project.

The project manager can rely on the contractor to improve the accuracy of cost estimates and reliability of selected products. Given the relative youth of the green building industry, sustainable building products are also a relatively immature market. According to McGraw Hill Construction (2006), no single leader stands out in the green building materials, and no third-party entity validates such products. As a result, green building products can inflate a project's cost without delivering the expected performance or quality.

The continuity of the working relationship between the architect and the builder along with engineering consultants and other professionals, also improves the delivery time and accuracy of construction documents. Once these documents are complete, changes in the project's design or implementation can become expensive, confusing, and difficult to implement. By using the charrette document as a guideline and continuing to solicit the involvement of the entire project team, the project can avoid added costs and have a higher quality of construction documents.

Benefits from the charrette also carry over into the project's local government permitting phase. The zoning approval process can often go more smoothly after an inclusive charrette process has been completed because the project will be less likely to face community resistance. The charettte process encourages feedback from local government planners and other regulatory agencies in the early stages so that zoning considerations are factored into the site plan well in advance. The same is true for the permitting phase. With local government stakeholders involved in the charrette, the project's initial design is more likely to comply with local, state, and federal development regulations. Involving local officials early in planning and design phases also provides opportunities to take advantage of incentive opportunities that may be available for green building (permit rebates, expedited review periods, etc.).

Using Bonuses and Rewards in Project Contracting

The building contractor is usually hired for conventional construction projects after the construction documents are completed and put out for bid. The most common form of bidding with traditional construction is the “hard bid” method, where the lowest bid cost is awarded the job and subcontracts are negotiated solely by the contractor. While hard bidding typically results in the lowest possible price, it has several disadvantages, including questions about the quality of subcontractors, how contract savings are used, and fragmentation of accountability. When using the hard bid method for sustainable construction, contractors will often add premiums to cost estimates to cover perceived risks, especially if LEED certification is mandated or if the contractor does not have green experience (Griffin, 2005).

For these reasons, the integrated project team is superior for a green project. The integrated project team already has a contractor in the mix that understands the owner's vision, has participated in the design and cost estimating processes and can begin work as soon as the construction documents are complete. Having said that, the builder's contract for project implementation will still need to be negotiated with assurances to protect both the owner's and the contractor's interests. For green projects, a cost-plus-fee arrangement with requirements for an open-book subcontracting process, a minimum number of bids for subcontracts, and specific clauses about how any project cost savings will be used is recommended (Reed & Gordon, 2000). Open-book subcontracting allows the owner to have access to the estimates and pricing submitted by subcontractors. Open-book contracting can decrease the time required for the bid and negotiation phase, decrease the occurrence of change orders, and increase the chances of attracting higher-quality, experienced builders to the project

Contracts should include performance agreements, incentives and bonuses for implementing sustainable practices and exceeding sustainability goals (Penn State University, 2004). Bonuses and training create a system of rewards rather than penalties for achieving green standards, which helps decrease the contractor's need to add a “green risk premium” to the contract.

Providing Ongoing Training and Communications

Continual communications and training are essential during the construction phase to ensure implementation of green project goals. To set the tone, the project manager should launch construction with a kickoff meeting that includes a sustainable education component for on-site construction personnel. Prior to commencing work, the project manager will conduct a similar kickoff meeting with all incoming subcontractors. In addition, the entire site workforce should be invited to attend monthly on-site meetings that include periodic education and training sessions on green building as well as rewards and recognition for work groups that complete work ahead of schedule, within cost constraints, or at the desired level of green standards.

Technology may be used to help facilitate ongoing communications. Teleconferences, conference calls and online training sessions can be valuable tools, especially when dealing with a complex project that includes numerous subcontractors. A project management software system is a must. Such a system can be critical when tracking documentation for LEED certification and allows for paperless tracking of the budget, schedule, project personnel, and so forth (Penn State University, 2004).

Conclusions and Future Directions

Greening project management practices can significantly improve the ability of a sustainable construction project to be delivered within acceptable cost constraints. A matrix presenting specific adjustments to traditional project management practices based on the PMBOK® Guide project cycle has been presented. The basis of the matrix revolves around the premise that a green project improves it chances for financial success if a cross-discipline team is involved at the earliest stages and throughout the project. In addition, the following guidelines should be adopted when pursuing a green construction project:

  1. Begin with the end in mind: Set specific sustainability goals and project priorities for green building features before initiating design and construction.
  2. Integrate the project team: Hire the project manager and the key members of the project team early in the project's feasibility stage to ensure collaboration. Host a charrette early in the process.
  3. Design with the whole team approach: All members of the project team should continue to participate in the formal design phase, initial price estimating, and construction document development.
  4. Use bonuses and rewards in project contracting: Use cost-plus-fee arrangement with special clauses to promote efficiency and incorporate incentives and bonuses for implementing sustainable practices and exceeding sustainability goals.
  5. Provide for training and communications throughout construction: Conduct kickoff and monthly meetings with the entire site workforce, including a sustainable education component in sessions.

The benefits of the integrated design process are essential for the successful delivery of a cost-efficient green construction project. The integrated approach is successful in overcoming a challenge that has impacted development and construction for many years: splintered functional experts who struggle with communicating and collaborating as a team.

Suggested future research interests are many. First, while there are many existing case studies about the performance and cost of sustainable projects, there are few case studies about the project management processes and integrated team approaches applied on such projects. Second, there is limited information about the greening of the building supply chain. This may be attributed to the lack of a green product manufacturing leader who produces or distributes a wide array of green building supplies (McGraw Hill Construction, 2006). Instead, the green building supply industry tends to be more specialized and fragmented, which can cause increased costs when procuring green products. Additionally, the lack of a certifying entity for green building supplies has led to a perception of “green-washing,” or the proliferation of unsubstantiated claims about green products, by professionals in the development industry (McGraw Hill Construction, 2006). These supply challenges can have a substantial impact on the future of green project management and warrant further research. Finally, further research is needed in this area to determine if the recommendations for green project management could benefit traditional construction projects.

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© 2008 Project Management Institute

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