For the second year in a row, the Construction Management Association of America www.cmaanet.org has conducted a survey of owners groups.
Among the findings of the survey:
- 66 percent of respondents use the design-bid-build delivery method most often, but only 23 percent believe that this method offers the best value.
- Between 40 and 50 percent of all construction projects are running behind schedule. This finding is consistent with previous years’ surveys. There is increasing recognition, though, that much of this delay results from inefficiencies built into the way projects are managed.
- Commissioning runs longer than planned 47 percent of the time, in part because many of those surveyed do not have a formal commissioning requirement.
- Timelier decision making by owners is the single most urgent improvement needed in the construction process, a factor cited by 80 percent of all survey respondents.
- “Trust and integrity are required ingredients for improving communications and collaboration,” the survey says, in contrast to the frequently adversarial or “arm’s length” relationships common in the past.
- Only 37 percent of owners use standard contract documents provided by the American Institute of Architects or other groups, while the majority uses their own modified or proprietary contracts.
- More than a third of owners said they felt their project controls were not adequate, citing project management and cost controls as areas most in need of improvement.
- There is a clear trend among government and quasi-public owners to break out of the design-bid-build pattern and explore other options, judging these options on the basis of which best meets the needs of a specific project.
In 2004, South Africa required licensing of Construction Project Managers. Apparently, China is following their lead and Indonesia is also considering this approach.
What might these disparate events mean for the future of other applications of project management as a delivery system? As Construction Project Management is perhaps one of the most mature applications of our practice, having formally been in use since the late 40’s or early 50’s, can we use the “lessons learned” from the evolution of Construction Project Management to predict what is likely to occur in other sectors as well?
Our own experience around the world is indicating at least in the Telecom and International Development Sectors, the Construction Management model is increasingly being applied to these sectors.
What is this model? Construction Management can take two forms. The first is known as Agent Construction Project Management Services. Under this model, the Construction Manager (CM) acts for and on behalf of the owner as his/her AGENT. Essentially, the CM plays the role of a trusted advisor on issues pertaining to Project Management. A key element of the CM’s services is an accurate and timely reporting of project progress, most often using Earned Value Management/Activity Based Costing tools and techniques. Using Agency Construction Project Management, the CM’s billings are based on a percentage of the contract value, ranging anywhere from 1.5% to 6% or more, depending on the scope of services being provided. Under this model, the CM plays a role equal to the Architect and various Design Engineers on the project, but instead of being held responsible for technical matters, the CM is held responsible for coordination, cost estimating/projections and schedule issues, including identification and resolution of claims.
A second approach is known as “CM At Risk”. Under this scenario, the CM is not working as the owner’s agent, but is providing the CM services under fixed or unit price contracting methods. Taking this approach, the CM becomes in effect, a general contractor, but instead of performing the work using his/her own labor force, the CM, using subcontractors and vendors chosen by the owner, bids on the COORDINATION of these disparate and often contentious players. Using the CM@Risk model, the CM’s expertise lies in his/her ability to communicate, identify and resolve conflicts, monitor, control and report project progress, and certify quality.
Living here in SE Asia, we are starting to see early evidence of both the Agency CM and CM@Risk model being implemented in Telecommunications and International Development Project Management. Knowing that Construction Management, as a formal delivery approach has proven itself for over 50 years or more (thousands of years as an informal system) we would suggest that the future of Project Management in most sectors will look very much like the current construction management model. This presents a unique opportunity for those who are entrepreneurial and consider themselves “professional” enough at what they do to be willing to give up the security of a “real job” in exchange for performing Project Management @ Risk. PM@Risk is an idea whose time has come.