The Scottish Parliament Building Project Construction Essay

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This project concerned the construction of the Scottish Parliament building located at the Holyrood site in Edinburgh. The concept of the building commenced at the discussion stage in May 1997 and the building was opened by HM Queen Elizabeth in October 2004. The Government's White Paper on Devolution outlined the requirements for a building to house the Scottish Parliament as follows:

"The building the Scottish Parliament occupies must be of such a quality, durability and civic importance as to reflect the Parliament's status and operational needs; it must be secure but also accessible to all including people with special needs; it must promote modern and efficient ways of working and good environmental practice.

It will be an important symbol for Scotland. It should pay tribute to the country's past achievements and signal its future aspirations. It must be flexible enough to accommodate changes over time in operational requirements. Quality and value for money are also key considerations.

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The accommodation must allow Scottish Parliamentarians and their staff to work efficiently harnessing the best of modern technology. People must be able to see and meet their elected representatives and to watch the Scottish Parliament in operation. Provision needs to be made to permit easy reporting and broadcasting of Parliamentary proceedings so that people throughout Scotland can be aware of its work and decisions."2

However, on completion, the public were outraged over the overly grand, grossly late and overspend that had taken place on this building.

Introduction

The objective of this case study is to develop a Project Plan for this construction venture which will reflect the modern requirements of Project Management (PM).

Although this project was managed by the guidance produced by HM Treasury in 1997, the methodology utilised for this case study will be that of PRINCE2. The reason behind the choice of using PRINCE2 is that the case study is that of a Government project and this system now tends to be the chosen method of PM for Government agencies. The outcome will identify any differences between the two methods and highlight the main shortcomings with the project.

History of the Project

The main milestones of the project are detailed in Appendix A.

Program versus Projects

There are two elements that must be clearly defined and that is 'project' and 'programme'. It should be remembered that a programme is a temporary, but highly flexible organisation brought into being to administer, supervise and direct a number of projects that require to be kept under a single programme umbrella. The Programme Manager controls these various projects in order to deliver a set of outcomes which are related to the organisations' premeditated business plan. Whereas, a project is an organisation, albeit a temporary one, constructed to deliver one part of the overall programme. A programme itself may have a shelf-life of many years, where the project may last only a fraction of that time.

It could be said in the case study that the programme was devolution and the instigation of a Scottish Parliament and the project was the construction of the Parliament building itself. However, in this particular case, the building work overtook the devolution process.

Project Management (PM)

A comprehensive definition of Project Management is:

"... the planning, delegating, monitoring and control of all aspects of the project, and the motivation of those involved, to achieve the project objectives within the expected performance targets for time, cost, quality, scope, benefits and risks."3

The Holyrood project was modelled upon the procurement guidance issued by the HM Treasury and from this, they had adopted the following definition of Project Management from BS 6079 (1996):

"The planning, monitoring and control of all aspects of a project and the motivation of all those involved in it to achieve the project objectives on time and to the specified cost, quality and performance."

Upon close scrutiny of these two definitions, the three common elements are that of Time, cost and quality. There is also very little difference of any detail, therefore, the system adopted by the Government should have resulted in the same outcome as if PRINCE2 was available and utilised.

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Key Principles of Project Management Methodology

All projects require a cohesive organisational structure, requiring at least:

Project Board (not in all cases);

Project Sponsor: High level executive and Board member, provides project direction, ensures budgetary provision, reviews progress, approves documentation, approves any changes and signs off the gate reviews;

Project Manager: responsibility for the delivery of the project within all restrictions, i.e. budget, time, suppliers, etc and coordinates the project teams. Reports to the Project Sponsor; and

Project Team or Teams.

The main key principle is that of control. The three main control measures are project reviews, good robust documentation and the lifecycle phase or phases. The most suitable control or controls are chosen based upon the project size, strategic significance, risk and complexity.

The project lifecycle is the period between the initial start of the project to the full approval of the intended project result. A major part of the lifecycle is the benefits realisation; this is a detailed review process to ensure that the aims and objectives have been met. This process can take up to a year to complete, but it is a very important part of the process.

The methodology of good PM is split into five parts, these being:

The concept: This includes the agreement of the Project Sponsor to proceed with the project and will result in a comprehensive project brief document.

Start-up: This begins with the production of a business case which will produce the scope and organisation of the project itself. This phase can be best described using - Why? the What?, the How? The How much? and the When? The resulting answers to these questions may not be completed in this part, but may be completed in the planning phase and result in the projects baseline, against which the project will be monitored against and controlled. The resulting report will ultimately define the project.

Planning: This will include the project baseline and resulting cost, a full risk analysis will be completed to highlight any potential areas for delay or slippage and a schedule of these works. On completion of this stage the Project Definition Report will be reviewed and perhaps revised.

Implementation: This is where the project and if applicable, sub-phases, are monitored and compared against the plan. Periodic progress reports will be produced.

Closedown: This will include assuring that the project has been completed as agreed, the final cost established and any problems highlighted, documented and disseminated so that lessons can be learnt. The result of this stage will be the production of the Project Completion Report.

The overriding principle of this methodology is that each part is completed in full before proceeding to the next. PRINCE2 defines this as the 'waterfall method', that is, just like a waterfall a project will flow downwards and therefore it cannot go back a phase. Each phase is clearly defined and a 'gate review' completed between phases. This review ensures that the phase has been completed in full, any issues highlighted are then addressed, if appropriate the business case may then undergo review and then a decision to proceed authorised.

PRINCE2

The project methodology selected to study is that of PRINCE2. This system is a non-proprietary (i.e. it is not protected by trademark, patent or copyright) and generic PM method, which is known as one of the globally wide accepted schemes. The flexibility of this system allows it to be appropriate for many organisations over a range of projects, environments, industries, etc and is equally applicable to large and small projects alike. There are fourteen key benefits of this method, these being:

Utilises established and proven best practice and governance;

Can be applied to any project;

Widely used, therefore promotes effective communication;

Project responsibilities are explicitly defined;

Clarity on the project objectives, i.e. what, why, when, by whom, for whom;

Careful design to fulfil the needs of all team members;

'Management by Exception' provides the efficient and economic use of management time;

Focuses the teams on the project viability in relation to the business case, not just the finish line;

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Thorough report structure;

Proper stakeholder representation;

Promotes continual improvement and learning;

Project work consistency;

A diagnostic tool, facilitating assurance, assessment, troubleshooting and auditing; and

Expert support.

Additionally, PRINCE2 is based upon seven guiding principles, these being:

Continued business justification;

Learn from experience;

Defined roles and responsibilities;

Manage by stages;

Manage by exception;

Focus on projects; and

Tailor to suit the project environment.

Furthermore, there are seven linked themes to which if a Project Manager abides by, will allow them to fulfil their role in a professional and competent manner. These themes are:

Business case: Why?

Organisation: Who?

Quality: What?

Plans: How?

How much?

When?

Risk: What if?

Change: What's the impact? and

Progress: Where are we now?

Where are we going?

Should we carry on?

However, it must be noted that these themes can be applied to any project size; nevertheless, they may have to be tailored to prevent the process becoming over bureaucratic, especially with regards smaller projects.

These seven themes are described in more detail in Appendix B.

PRINCE2 Processes

There are seven processes involved in the running of a successful project, these being:

Starting up a project: appointing a Project Board, qualifying the initial idea;

Directing a project: Project Board input to provide sufficient support and direction;

Initiating a project: how the project is qualified to enable it to meet its objectives before the committing of resources;

Controlling a stage: Project Manager's day to day management of the project;

Managing product delivery: management of teams covering work packages, progress reports, work delivery;

Managing a stage boundary: preparing for Project Board reviews; and

Closing a project: closing down the project, follow-on actions, post-project benefit reviews.

A simplified diagram of this process is shown as follows:

Figure : PRINCE2 Process Model7

The Construction Management Procurement System

The system used by the Scottish Office for the Holyrood project was the Construction Management Procurement Route, HM Treasury guidance from their Procurement Group. The main advantage of this system is speed; however, the main disadvantage is that of price uncertainty until the last contract is leased.

This system is based upon three principles, these being:

Scope;

Roles and responsibilities; and

Ability and training.

In addition, the guidance document refers users to a total of twenty-two other guidance documents to assist in the PM process.

Project Organisation

Under the Construction Management system, the project organisation was as follows:

Figure : Traditional Project Organisation8

The main difference between the two is that PRINCE2 has four levels of management and the Treasury model five layers, which may have added to the bureaucracy and lack of control of the project.

Holyrood Project Failures

The two major problems associated with this project were that of the late delivery of some twenty months to the project and overspend of budget.

Budget overspend

With regards the overspend, the cost of this project increased from the original £50 million to the final cost of £431 million. It is difficult to control a budget when the design is not agreed at the onset and changes made throughout the project. In addition, £19 million of the increase was due to inflation and the majority of trade contracts came in at 21% over their estimates. The increases can be categorised as follows:

Inflation - £19 million;

Delays, disruption and continuance - £73 million; and

Design development - £68 million.

Due to the competitive nature of the initial process to award a designer and contracts, this lead to uncertainty which did not assist in the integration of the various contracts to achieve the project within the set parameters.

Increase in Time-Line

A common public misconception was that slippage was due to the Corporate Body which continually changed its requirements, Black (2004). In fact, once stage D design was approved in June 2000, no significant alterations took place. The resultant increase of the construction cost due to the client was that of £600,000, just 0.2% of the construction estimate.

The main reasons for slippage were:

The choice of construction management of as the method of procuring the project - this resulted in the design being incomplete at the commencement of the project and the risks being accepted by the client. However, this method was not implemented fully, which resulted in the risks and challenges not being fully understood by the client and project management.

The various problems experienced as a result of the construction of a very complex and extraordinary design, against a very tight deadline - this was not appreciated early in the project and could be seen as a project management failure.

The original programme did not allow for any slippage.

These reasons made it difficult for the architects and construction contractors to deliver on time, which lead to design variations and late provision of information.

Therefore, the main reason for the slippage experienced was that of poor control by the project management officials.

Management Failings

The underpinning stability of a scheme is that of project management. Good project management is a delicate balance between time, quality and expenditure. In this particular case in order to expedite the project quickly, then quality was lowered or as was the case here, the budget increased.

In this particular case, a project budget was not set which led to the Project Manager not being able to react and either begin to reduce costs and/or obtain additional financial support. A major contributor to the overspend is that until 2003 no regular reports were carried out on the project costs, it seemed that decisions were being made to a 'forecast' and not a budget. This resulted in the project beginning to control the costs, rather than the other way around.

This does indicate a lack of leadership and management within the project. This was due to management and control being divided between a number of different parties. The Project Director should be given the responsibility for the overall control of the project, but in this particular case this was not achieved. In addition, the senior posts were not filled by competent persons, as the Project Owner and Project Director were not construction professionals. In fact the Project Director fulfilled a role more akin to a project administrator. However, the Project Manager was but lacked the authority to make significant decisions.

PRINCE2 Application to Holyrood

Starting up a Project

There are a number of activities that need to be completed before the project can commence. The activity that was not controlled sufficiently at this stage was that of the Project Organisation, design and appointing the Project Management Team. In this case, although the legal client was the Corporate Body itself, this power was delegated to the Clerk, who acted upon the advice from the Progress Group. The Chief Executive of the Parliament was both the Principal Accountable Officer and Project Director and therefore led the Project Team. However, due to a lack of management control a new Project Director was appointed in 2001. In addition, due to tensions between the PM and the architect, the PM resigned at the end of 1998. Although the PM was an experienced individual and competent, there was an apparent lack of flexibility which is a vital leadership skill in this environment. Also, the Project Sponsor, Mrs Doig, was appointed due to her political skills and had no experience of running projects. This appears to have led to a complicated and inefficient management structure which resulted in the majority of the issues.

Directing a Project

Although the PM is in control of the day-to-day management of the project, the Project Board is responsible for overall control and key decision making. A number of issues which also link into this area have already been highlighted in the previous paragraph. Other areas which appear to be deficient were that of the understanding of any potential risks with the project, i.e. the possible escalation of costs and an apparent lack of a quality management strategy. It could be argued that if these issues had been identified and resolved at this stage, then the resulting increase in costs and slippage may have been avoided or minimized. In addition, it could also be identified that a lack of experience at Board level allowed the authorisation of this stage.

Initiating a Project

This process will set the fundamentals for the successful delivery of the project. Important areas include the preparation of the risk management, management, communication (internal and external) and quality management strategies. Although the Project Board understood the primary objective of the project, this project appeared to proceed directly to 'start-up' without undergoing these stages (one of the advantages of the Construction Management System), and then history informs us that significant financial resources were committed without a firm budget in place. One of the major reasons is that the business case was not redefined, which was demonstrated when none of the design bidders managed to submit a design within the set budget.

Controlling a Stage

The main aim of the stage controlling phase is to monitor the progress of the project. This allows any deviation from the plan to be managed to reduce slippage times, control risk and ensure quality is being maintained. This type of control is applied to all work packages, which may result in corrective actions and new work packages issued before the stage authorisation is given. In addition, the PM should be providing the Project Board with stage reports. It was this lack of reporting that Black (2004) highlighted in his report. With the resulting slippage and budget increases it is apparent that stage control was not in place. This is shown by the fact that the design was not officially confirmed until 2000, even though the White Paper was published in 1997 and that construction commenced in early 1999.

Managing Product Delivery

This process is the link between the PM and the project teams and is focused on accepting, executing and delivering the work packages. The lynch-pin of this process is for the team to deliver within the boundaries set by the PM. However, due to the various delays to the construction of the project, a number of these due to complex designs such as the roof in the assembly room; this only led to the added frustration of the original PM and further evidence of a lack of control or leadership.

Managing a Stage Boundary

The main aim of this juncture is to assure the Project Board that all products within the current stage have been completed and approved and to prepare for the next stage. This would then allow them to view the supporting documentation and access the viability of the project and whether to proceed to the next stage. Once again, as the project was allowed to continue it appears that this level of control was not in place.

Closing a Project

The closure of the project was a more controlled process with Lord Fraser of Carmyllie being appointed in June 2003 to lead investigation into cost of the new Parliament building. This resulted in the Holyrood Inquiry Report being published in August 2004 to allow lessons to be learnt.

Conclusion

As Black (2000 and 2004) highlighted, the main problem with this venture was poor management and leadership. The incidental affects of this resulted in the incorrect choice of project management system (construction management), a massive increase in budget (from £50 to £431 million), with an incidental increase in the time line (from 2001 to 2004).

A consequence of this and the lessons highlighted in the subsequent enquiry is that the majority of Governmental agencies now implement the PRINCE2 or other equal, proven industry standard.

However, subsequent projects such as the Wembley Stadium and the Fire Brigade Control Centres, have demonstrated that projects are still over-running both in costs and time. So, even though good practice is used, if it is not managed and controlled effectively, then errors will still continue to occur.

References

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Scotland's Parliament (Cm 3658) Paras 10.2 to 10.4, http://www.parliament.uk/documents/commons/lib/research/rp2004/rp04-012.pdf [Assessed 14 November 2010]

The Stationary Office. (2009). Managing Successful Projects with PRINCE2, 5th Edition. United Kingdom: The Stationary Office, page 4.

Figure 5.3, The Stationary Office. (2009). Managing Successful Projects with PRINCE2, 5th Edition. United Kingdom: The Stationary Office

Figure 6.1, The Stationary Office. (2009). Managing Successful Projects with PRINCE2, 5th Edition. United Kingdom: The Stationary Office

Figure 7.2, The Stationary Office. (2009). Managing Successful Projects with PRINCE2, 5th Edition. United Kingdom: The Stationary Office

http://www.prince2.com/prince2-process-model.asp [Assessed 21 November 2010]

SE/5/368-398 - HM Treasury Guidance No.1: 'Essential Requirements for Construction Procurement', 1997