Project Management Strategic Issues Construction Essay

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Delays and over budget are inevitable in construction industry irrespective of the type and complexity of the project undertaken which could be contributed due to ineffective project management among other factors.

Project Management is the "The art of directing and coordinating human and material resources throughout the life of the project………… to achieve predetermined objectives of scope, cost, time, quality and participant satisfaction" (PMI). The highlighted key words are the critical factors which determine the success of the project. It has to be kept in mind that too much focus on one factor can lead to compromise on the remaining which can in turn lead to undesirable outcomes. In addition though "Participant satisfaction" mainly implies on client satisfaction, in ideal project management system it is preferable to aim for cooperation from other stakeholders in order for smooth closeout of the project.

The objective of this report is to analyze a project in terms of project manager's role in finding the right balance between these key factors for successful project.

Project Brief

The project was envisioned to provide a commercial /office building in prime location opposite Deira city center. It consists of G+10 building and the requirements were to provide showrooms in the ground floor and offices in the floors above along with necessary underground parking as per the local regulations (estimated and provided in three basements). The key feature of the building was the full 10 storey height atrium flanked by two office blocks on either side. The glass façade of the atrium was to allow full view of the interior of the building with its panoramic lifts catering to the office blocks.

Plot and Project areas

Plot area 3993

Show rooms area 3993

Office area 9024

No. of showrooms/shops 10

No. of offices 71

Total built- up designed is 36,000

Early Cost Estimates

The initial estimate of the project considering three basements was Dhs. 79 million and later was modified Dhs. 91 million when additional basement was added into the design as per client's requirement.

Organisation chart showing related stakeholders

Client Representative



Project Architect/Project Manager

Site Supervision team

Main Contractor

QS Consultant

MEP Consultant

MEP Contractor (Sub- Contractor)

Shoring Contractor (Sub-Contractor)

Aluminium Glazing and Space frame works (Nominated Contractor)

Other Nominated and Sub Contractors /Suppliers

Responsibilities of the Client Representative and Consultant

With reference to RICS 1999 the responsibilities of client representative were identified as follows:

Site selection

Project analysis & feasibility studies

Agency, evaluation & proposal of required funding

Brief and critiquing of design

Attending all meetings and raising their concerns

Cash flow

Construction economics & financial management

Statutory compliance in terms of ownership responsibilities


Consultant Project team was noted to have following issues for which he was responsible for:

Design and quality control

Other consultant appointments

Statutory compliance in terms of design and construction requirements

Contract procedures

Contract Management

It is noted that Client representative role is closely related to the requirements of Project Manager though in this project their main criteria and focus has been on controlling cost. Even though consultant project team responsibilities included contract procedures and contract management client representative reevaluated all of the consultant's recommendations before making any financial decisions. This might have been cost effective method according to client but this only lead to repetitive work, mistrust and frustration among the parties involved. Due to extreme scrutiny on cost, less focus was made towards time and quality management deeming the project a failure on these aspects. Consultant's role was mainly to fulfill the FIDIC regulations based on which the contracts was made.

Project Key events

April 2005 Concept start of the project

June 2005 Concept design sign-off by client with 3 basement parking

September 2005 Client informing that they require additional parking more than the local

Regulation's requirement leading to redesign of the underground structure to increase to 4 basements

November 2005 Tender issue and Local authority approval submission

February 2006 Receipt of Tender bids

April 2006 Receipt of Local authority approval

May 2006 Award of contract to Main contractor by client Construction period

confirmed as 16 months

July 2006 Nomination of Shoring contractor

August 2006 Notification of start of metro works on one side of the plot leading to

redesign in shoring works (a more complex system) and reduction in basement area.

September 2006 Start date of project on site mutually agreed by client and contractor

considering the delays due to metro works.

September 2006 Bursting of water line mains running along the plot during excavation

leading to temporary stop at site issued by authorities until necessary rectifications.

October 2006 Shoring works stopped on side of plot due to metro works

November 2006 Issue of lift tender

January 2007 Issue of Glazing tender

May 2007 Award Of contract to Lift contractor. Client also informing their

requirement of additional lift catering to office building. This would also lead to changes in the shape of the atrium.

June 2007 Award of contract to Aluminium, glazing and space frame works to

Nominated Sub-contractor. Authority approvals received for the lift and atrium changes

September 2007 Building reaching the ground floor.

May 2008 Termination of the site team from the consultant team due to poor

supervision in terms of quality

September 2008 Demolition works in office floors instructed by client as per the

requirements of potential tenant.

March 2009 Re-awarding of contract of glazing and space frame works to 2nd

Nominated contractor due to poor performance of 1st sub-contractor.

Dec 2009 Project building approval received by authorities.

June 2010 Building fit for occupation after major repairs of defective glazing


Time Delays and Cost Overruns

Time Delays

The project incurred various delays mainly due to poor procurement systems and delay in decision making by client for nomination. The following issues can be accounted for the Time delays in the project.

Requirement of additional basement by the client months after design sign-off leading to redesign of the foundations.

Metro works plans begin adjacent to the plot forcing redesign of conventional shoring works to more complex shoring system. Due to incompetency of shoring contractor there was delay in receiving authority approvals and construction.

Damage of the water main line running along the plot during excavation causing flooding into the plot and work stoppage until the lines were repaired and rerouted.

Requirement of additional lift, change in shaft size and redesign of structure core.

Extreme delay in nomination of the Aluminium, glazing and space-frame works by the client representative even after the Tender was released well in advance.

Delay by nominated glazing contractor in submitting relevant shops drawings which also lacked in quality for consultant approval. Nominated contractor did not have local assembling factory making it more difficult for factory inspections. The quality of work at site was also not up to the mark.

Due to poor performance by the glazing contractor there was requirement of stringent supervision from the consultant side in which they failed to do so. This lead to termination of the site team and replaced by more experienced construction managers and safety officers from consultant side. Due to poor supervision many works which were not up to the mark had gone unnoticed and later had to be redone.

As the glazing contractor was unable to produce quality material for the atrium, decision was made to remove atrium from their scope of work and nominate new contractor for this work. Though de-scoping is not as per FIDIC, complete termination of the glazing contractor could not be carried out as per regulation as they were carrying glazing works at the office block. This de-scoping of works if contested by the glazing contractor would have lead to adverse effect and put client at contractual risk. Hesitancy by the consultant to carry out this decision due to this reason further delayed the project duration.

Even after new glazing contractor was appointed, at several occasions they claimed to be unable to carry out the works due to difficulty in design and short construction period allotted to them.

Client had issued instructions for additional scope of work in terms of demolition of walls in the office block as per potential tenant's requirements along with other additional works.

Increased fire fighting requirements as per new authority regulation also lead to increase in scope of work and extended construction period.

Client delay in release of payments to contractors forcing them to slow down their work.

Poor assessment of variations carried out by the QS consultant required re-analysis by Client representative further delaying in the release of payments for work done. This also resulted in contractor to slow down their work.

Due to initial poor site supervision many of cladding works were built outside the plot limit which is against authority regulations and these works had to be rectified.

During final authority inspections there were various design regulations overlooked requiring rectifications and additional work.

Project construction start date was considered as 3rd September 2006 and planned for completion 3rd January 2008 (16 months) but was completed only on 31st December 2009 leading to delay of almost two years. There was delay of further 5 months due to repair works before the building was ready for occupation. Construction of basements alone took 12 months. Overall program of the project including design was 5 years.

Cost Overruns

Though main focus of the client representative was to cut down cost this only lead to delay in time and compromise on quality of building being constructed. Initial estimate of the project was considered as Dhs.91 million, Tender contract price was finalized as Dhs 114 million out of which Dhs.24 million was devoted to Client nominated contractors/suppliers. The final contract value has been estimated to Dhs. 128 million, an increase by 40 % more than the design estimate. This is due to inaccurate estimation of client nominated packages and client having to compensate the Main contractor for delay in project. Nominated contract value had increased by Dhs 9 million. Variations were additional Dhs 3 million and Dhs. 2 million was awarded to contractor against Extension of time and cost claims.

The final contract value does not include the additional fees incurred by the client for additional resources and consultants fees for the delay in project. Also due to delay in project client lost valuable tenant for whom the variations in building were carried out making these re-works redundant.

Relationships Between Project Management and Project Delays and Cost Over Run

Effective Project Management is not only delivering projects within the budget, on time along with acceptable quality but also good client and contractor management.

" In general, cost overrun and time delays are usually a result of

In efficient design: as some of the design features can be very costly and hard to construct.

Tension and adversarial culture: Lack of trust and confidence between the project teams (client, contractor and consultant)

Discontinuity of teams results in the slowdown of the progress of work as it takes time for team members to build trust."

(Kaka 2003)

Lack of well defined roles

There was no clear demarcation between the roles of the Consultant Project Manager and the client representatives. Consultant project manager was also the Project architect hence more focus on design and quality. Time management was not given priority. There was lack of formal project management systems. In this project, "Project Champion" had role of the project manager and "Project Sponsor" made decisions which ideally should have been carried out by the project manager.

Ineffective Project Communication Hierarchy

The Project team hierarchy was fragmented such that client had communication at several instances directly with contractors bypassing project manager. Many decisions were made which the project manager was unaware of creating many difficulties for the Project Manager to control performance of the contractor.

In effective methods of Tender bid and analysis process

Though most of the tender issues were prepared and released on time by the consultant, all tender bids were submitted directly to client representative office and tender analysis was carried out without the involvement of project manager. During price negotiations various compromises were made to the specifications with no written documentation. Supervision was carried based on initial specifications causing major conflict between contractor and consultant with client being completely oblivious to the situation.

Poor Design Management and Sub-contractor Selection

Project Manager failed to select the suitable sub-contractors for two of the crucial and difficult part of the project. In both cases the concept designs were difficult to comprehend for preparation of acceptable detail design and further more due to incompetency of the contractors very poor quality performance was observed. Shoring contractor prequalification was not scrutinized because it was part of Main contractor's in house company despite shoring works being critical activity in the construction programme. The first Glazing contractor in spite of being new to the country was selected through lowest bid process. They were also appointed because of personal connection to client's top management. The competency of the glazing contractor was not questioned by the project manager in spite of several warnings issued by the Main Contractor which showed complete negligence on project manager's and client's part.

Environmental Issues - Metro works

It has been old practice to build shoring outside the plot limits (permissible by authorities) to provide client added advantage of making full use of their plot area for the basements. But due to recent infrastructure developments authorities have been stringent with their regulations " All constructions on private property temporary or permanent have to be within plot limits". This regulation was over looked by project manager during design stage causing requirement for redesign and delays in receiving necessary authority approvals.

In accurate estimation and contractor's Billing Issues

Selection of the QS was made based on the lowest bid and not competence. Design cost estimation was in accurate especially in client nominated packages. Client's obsessive emphasis on cost resulted in too much time spent on assessing the bills and variations submitted resulting in delay of release of payments and contractor protesting this by slowing down their work. Though client achieve tremendously in cutting down cost claims they only managed to slow down the project as the grievances raised among the contractors. Project manager failed to find effective solution to ensure timely payments and accurate variation calculations.

Poor Supervision

As attention was mainly on non-performance of the subcontractors, site team slacked in their work and efforts to improve the construction quality and time management. Their competence was not questioned during project startup and their performance was not monitored. Due to which grave issues such as constructing cladding outside the plot limit which is against regulation was overlooked and had to be rectified after penalty was imposed by the authorities delaying the project by several months. Also though the information of water lines mains running through plot was passed on to the contractor during the start of the project, proper monitoring and safety measures were not taken accordingly.

Design Feasibility

It is essential that building aesthetic features add value to the building and have functional quality. The atrium though added visual enhancement, the functional aspect is questionable especially after considering the effort put into construction of the same. Project management team had failed to carryout design feasibility study to ensure all aspects of the project essentially added value to the project. Also many regulation requirements were overlooked during design stage causing variations during construction.

Analysis of Strategic and Operational PM Actions for Successful Delivery

Project Team Communication Protocol

It is the Project Manager responsibility to establish proper hierarchy of communication in order to ensure that no information bypasses the notice of Project Manager. Instruction should have been made that all tender bids to be analyzed by the project manager and construction manager so that they could advise the client representative for effective nomination of sub-contractors and suppliers. If cost was criteria then project manager should have allowed for monitored value engineering. This way quality is not compromised and there is no conflict between the involved stakeholders.

Design and Procurement Management

In traditional procurement for specialist works, it is normal practice for design consultant to issue concept proposal to specialist contractors during tender. They check the design for buildability before submitting their bid. The tender bid becomes inaccurate with the design requirements is not well defined. It is necessary for Project Manager to ensure that the concept design is easily understandable and specifications are clearly stated by involving specialist designer. This will make sure that Nominated contractors have sufficient information based on which they can give accurate quote and time frame for construction.

Further as the traditional procurement method "Design Bid Construct" has failed for the specialist works, they should have been carried by means of "Management Contractor Procurement method" with Main contractor taking the responsibility of the Management Contractor. In both traditional procurement system and management contracting method the Main contractor is entitled to percentage payment of the specialist work, it is preferable that the specialist contractor is appointed by main contractor rather than client as in this case the Main contractor is responsible to appoint suitable specialist contractor and client shall not require to compensate the main contractor in terms of time and cost if the specialist contractor does not perform. Also Management contractor ensures effective incorporation of specialist programme into the main construction programme. Project Manager should also ensure selection of experienced contractors especially for critical activities.

Appointment of effective Technical and Supervision Team

Project Manager to take strict decisions in ensuring the right resources in terms of design, supervision and health and safety are provided according to complexity of the project. Monitoring of work performance to be carried out by preparation of daily and weekly reports, QA/QC reviews, regular briefing meetings to ensure the site supervision team are aware of the requirements and changes to be carried out at site. Regular safety and quality audits measures would have prevented work slack.

Also employment of QS experienced for the demands of this project should have been carried out in order to avoid errors in analysis of interim bills and variations and repetitive evaluation due to mistrust of the client.

Knowledge about surrounding developments

Investigations of the surrounding development and authority regulations updates if carried in frequent and regular intervals, information regarding commencement of metro works and new rules regarding shoring within plot limits would have been passed on to design team for incorporation into their design during the detail design stage.

Other PM actions

Carrying a detailed Work Breakdown Structure especially for the specialist works in order to identify the difficulties and arrange for solutions from the right expertise.

Carry out regular risk assessment and advise contractor regarding recovery programs or back-up plans.

Contractual management in terms of more strict contract clauses and penalties against poor quality work and delays in order to ensure contractors are kept in check.

Advise client regarding the introduction of variations in advance before the work is carried out to avoid redesign or demolition and reworks, both which have repeatedly occurred in this project.

Stronger specifications and prequalification requirements for nominated contractors to ensure quality performance. If the client required cost cutting, provide value engineering solutions.

Carry out quality and feasibility assessment of the project design before execution for lean design and construction.

Conclusion and Lessons Learnt

Lessons learnt and experience gained is integral part of Project management process to allow for performance measurement. On analyzing this project we can conclude that:

Though the Project Manager role works towards client satisfaction it is also responsibility of the project manager to inform them when their actions are not benefiting the project and even take strict actions if required. Client management is very essential for such scenario.

Experienced Project Manager to be employed to ensure complete and successful management of project from inception stage. Effective application of management and planning tools required to carry out time, cost and quality management and avoid dependency on construction programme alone. This helps to advise the client for quick but prudent decision making in procurements and successful delivery of project.

Stringent control of cost is not necessarily advantageous for the project and perfect balance has to be found between quality, time and cost. Slight increase in budget can easily increase work performance quality and save time.

Involve experts advise for critical activities even if it is seems conflicting with client interests as it will prove beneficial at later stage. Employment of experienced consultants for project and not succumb to lowest bid selection.

Project management should employ effective and suitable procurement system for the project and not automatically adopt methods which have been regularly practiced. Common practice is not always the best practice.

Adopt knowledge capture methods in order to update various changes in environment and authority regulations which might affect the project.

Executing and following proper communication hierarchy protocol. Project Manager to be single point of communication between the main stakeholders as in the organization chart.

Advising the client that regular cash flow is essential for the progress of the project and delay of payments as means of penalty for bad work performance is not best solution to improve the construction performance.