Record turnout explores collaboration opportunities and obstacles at CMAA National Conference

            The participation record was eclipsed again at CMAA’s just completed National Conference in San Antonio, as 680 construction industry professionals gathered for three days of education, debate and celebration.

            The attendance in San Antonio was about 10 percent higher than last year in Washington, DC, which in turn had surpassed all previous CMAA Conferences. Attendees included Construction and Program Managers from all over the country, as well as project owners from both the private and public sectors.

            Drawing this large and enthusiastic turnout was a program of 38 breakout sessions addressing a wide range of technical and business topics, along with a keynote speaker, owners’ panel, and the annual Industry Recognition Dinner. The program, which took place September 12-14 at the Hyatt Regency Riverwalk, explored the theme “Building on excellence...surpassing expectations.”

Roadblocks to success?

            Collaboration among all of the professionals involved in construction is a key to project and program success, and CMAA showcased a special eight-speaker panel discussion on “Resolving Roadblocks to Collaborative Project Teams.”  The panel brought together experienced professional designers, construction contractors, CMs and project owners.

            Session moderator Robert Hixon, CCM, of the U.S. Capitol Visitors Center, led the panel through comments on about a dozen different points that are often issues in team collaboration.

            “Some owners feel an adversarial relationship among the project team is healthy,” Hixon observed. “They fear that collaborative teams will not protect their interests.”

            Don Russell, CCM, of Vanir Construction Management, agreed that “a collaborative culture is probably best practice, but not really standard practice today.  For an owner to buy in, they have to have a pretty good understanding of what it takes to make a complex project work, and most clients don’t.”

            However, Ralph Johnson of Mason-Johnson LLC noted many project participants are wary of future conflicts and possible litigation right from the beginning.  “It’s especially important for the contractor to be candid,” Johnson said, “although he runs the risks he may be replaced as a result of that candor.”

            Some old habits of mind die hard, as well. At the U.S. General Services Administration, the emphasis in procurement has shifted from a pure low-bid approach to one that seeks “best value,” said Linda Phillips, CCM, but she added that “some people aren’t comfortable with that yet.”

            Other common roadblocks to collaboration include frequent changes in personnel, particularly in the owner’s organization, unclear lines of responsibility and authority, lack of a shared mission, unwillingness to compromise to avoid disputes, negative attitudes among specific individuals, and lack of clarity in what is expected of each participant.

            Often, panelists said, the urge to collaborate and share information freely flies in the face of consistent legal advice the parties receive to protect themselves and establish their blamelessness in the event of disputes.

            “It’s okay for the different parties to have different interests,” said Joe Lawson, CCM, of DMJMH+N. “You go into the project with an acceptance of the different interests of the others.”

Owners working at change

            “Coordination, collaboration, and communication are just words. They have tremendous potential for the construction industry but we have a great way to go.”

            That was one of the comments made by Dennis Doran of FMI Corporation as he introduced CMAA’s annual Owners Panel.  The panel of four leading construction owners discussed the findings of the most recent CMAA Owners survey.

            “If you’re a bad client, good CM can’t help you,” commented James A. McConnell of the Los Angeles Unified School District, who recounted the many difficulties that have complicated the district’s efforts to execute new school projects over the years.

            “We had a reputation for putting contractors out of business,” McConnell said. “Your payment could be in 30, 60, 90 days, or infinity.”

            Today, faster payments and quicker turnaround on decisions are key parts of a top-to-bottom overhaul of the district’s approach to construction. Los Angeles hadn’t built new schools in many years, McConnell said, but now has a program underway that will add 160 new schools and 9,000 renovation projects at a cost of some $15 billion.

            David Casteel, PE of the Texas Department of Transportation noted his agency has tended to focus its in-house CM capabilities on statewide projects and rely on contracted CM services for more local work. The state has doubled its construction program in recent years without increasing its staff, Casteel said, and now does less than 30 percent of its design in-house. “That’s a big change,” Casteel said.

            Texas DOT uses a variety of incentives and disincentives based on user costs resulting from road delays.  The biggest issue on most projects, he added, is utility delays—utility lines found to be in the way of road projects.

            At Marriott International, fewer new hotels are being built from scratch and more are being renovated, according to Senior VP Bill Hoy.  Marriott has established comprehensive renovation schedules for its various hotel brands, he added, and increasingly stresses interaction between designers and constructors. “We try to find a contractor we can deal with on fee and general conditions, and hook them up right away with our architect,” Hoy said.

            The company has developed a select number of specialized contractors with whom it works repeatedly. “They’re smaller firms, and they simply must be paid promptly,” Hoy said.

            Bob Silver, PE, of the U.S. Navy Facilities Engineering Command, noted that “most owners are not engaging the contractor, CM, or operations and maintenance team early in the process, and are missing a significant opportunity” as a result.

            Silver says his agency is seeking to minimize job hand-offs between project participants, and in the process is “accepting more risk” in many projects.  He termed this attitude “a big change for us.” 

            The building commissioning process remains a “significant weakness,” Silver added, noting that such matters as HVAC functioning, energy efficiency, fire safety, and elevator operations are common issues at the completion of projects.

Schedules can mislead

            The most popular job scheduling software can sometimes mislead those who rely on it, and can even be used to distort job progress and create a false impression that troubled jobs are actually on schedule.

            Jeff Lindsey, PE, of Alpha Corporation and William Arnhart, PE of HNTB Corporation demonstrated a wide range of both inadvertent and conscious schedule manipulations at a breakout session entitled “According to the Schedule...”

            Lag times built into schedules, for instance, can be used to sequester project float, and sometimes override the built-in logic of the schedule, Arnhart said. Sometimes, moreover, the “hard logic” of construction sequence doesn’t match the “soft logic” of resource availability, e.g., manpower to meet simultaneous demands.

            The speakers also showed how the definition of a job’s “critical path” can change dramatically depending on whether a job is scheduled to show a minimum of float or according to the longest duration of jobs that must be done in a particular order.

            Schedule updating is also often misused, sometimes leaving more work for the late stages of a project than will be achievable with available resources. “Don’t assume that because the job is shown as finishing on time, you’re on schedule,” Lindsey said.

            To avoid these difficulties, it’s important for Construction Managers and project owners to have access to the electronic files and calculations used by the scheduler, and not just to a hard copy of the schedule, the speakers said.

PM Technology: Vendor/user dialogue

            “Why do new tools have to justify themselves but the status quo does not?” asked Stephen Hagan of the U.S. General Services Administration, expressing a key theme of a “Vendor/User Dialogue about Project Management and Technology.”

            Seven speakers, including contractors, owners and software vendors and users, explored the many issues that can arise in implementing new software solutions for program management.

            “The biggest things are things that can’t be measured,” said Chuck Thomsen, FCMAA of 3D/International. “We pursue Information Technology out of faith and fear: Faith that it will produce for us and fear that someone else will do it first.”

            Many difficulties arise from different understandings of the purpose of program management systems and how success should be measured, speakers said. “Until you know what words mean among the various parties, you won’t have true interoperability,” commented Joel Koppelman, president of Primavera Systems. This is a particular challenge, he added, when software allows users to create custom reports. In these reports, it can be difficult for an outsider to know what terms like “finish date” actually mean.

            Several speakers repeated the view that customer satisfaction should be the focus in evaluating software implementations. Cathleen Kearney of Gilbane Building Company pointed to connectivity issues among dispersed jobsites, and suggested that users must pay more attention to training to enable people to use PM tools effectively.

Legal update

            CMAA General Counsel James D. Hobbs briefed attendees on a dozen recent court cases shaping the legal environment for construction and Construction Management, painting a picture of widely varying state conditions and interpretations often based on minor points in these decisions.

            Many of the cases Hobbs reviewed addressed the duties of CMs and project designers toward other participants in the construction process, including some duties that exist even if they aren’t spelled out in contracts. The duty to abstain from providing false information, for example, has been held to be independent of any contract duty. Similarly, an architect or CM who “assumes” a duty not specified in the contract may find the courts holding him responsible for that duty as though it were explicitly assigned.

            Other issues can arise when a CM, for instance, delivers project services that would otherwise require a state license. Some states may require a contractor’s license in order to perform specific services.

            “Each state has its own statutes and case law,” Hobbs said, “and cases may or may not apply in other states.”  Moreover, he added, “the true meaning of cases can get lost in interpretation,” which is often based on relatively minor comments by judges or on footnotes.

            Many of the cases Hobbs reviewed involved workplace safety.

A surge in program management

            There’s a dramatically increasing demand for professional Program Management services, thanks largely to an increased volume of school construction. But all too often public agencies and other owners hire their Program Managers late in the process and miss important opportunities.

            Those observations were part of a presentation on “Industry Trends in Program Management” by Timothy C. McManus of DMJM+Harris.

            “Too often the owner goes out to hire a Program Management when the construction phase begins,” he said.  “Half of all the labor and energy of the job has already been expended.”

            McManus described four models of Program Management in wide use today, ranging from an “agency” approach in which the PM represents the owner in every aspect of a job, to what McManus termed “PM Lite,” when an owner has strong in-house capabilities but hires a PM as a facilitator for day-to-day operations.

            “Over the last decade or so there has been an extreme expansion of Program Management opportunities,” McManus said. This is largely due to “a spike in the capital development activities of many public agencies, which are often not ready to handle such a large new volume of work.”

            Because of the complexity of these new jobs, owners often turn to a PM for a more extensive menu of services that would be the case in simpler settings, services including financing, bond administration, and management of permitting processes.

OSHA today

            The U.S. Occupational Safety and Health Administration is pursuing a variety of partnerships and alliances designed to promote broad collaboration in creating safer workplaces, OSHA executive Ginger Henry told CMAA conferees.

            One such alliance has been created between OSHA and CMAA, signed in 2002 and renewed in 2004, Henry noted.

            She reviewed current OSHA initiatives in such areas as trenching safety, cranes and derricks, construction work in confined spaces, hearing conservation and power distribution. “OSHA is working aggressively to reduce trench fatalities,” she noted, describing one instance in which government, industry, labor and stakeholders are cooperating effectively.

            In general, OSHA is striving to assure that it enforcement policies are “strong, fair and effective,” Henry said.  Enforcement efforts are being increasingly targeted at “high gravity” cases, in which employers either are exposing workers to particularly serious hazards or are continuing to defy regulations after previous citations.

            Discussing recent successful collaborations in the construction industry, Henry cited major projects in which lives were saved and injury-related lost work time dramatically reduced. She also showed calculations of financial savings resulting from these improvements.

CMs in design-build

            The growing popularity of design-build project delivery is creating important opportunities for Construction Managers who fully understand the complexities of contracting, said Craig H. Unger of the Design-Build Institute of America.

            “Design-build is not just a tweaking of traditional design-bid-construct,” Unger said. In a design-build environment, he added, owners stipulate the performance and results they require and rely on their A/E/C teams to deliver appropriate solutions. This is a change from the traditional system, in which the A/E/C team bids on execution of an owner-specified solution, Unger said.

            Unger reviewed the status of procurement regulations in both federal and state settings, noting that an increasing number of states and localities are now authorizing design-build solutions for public contracts.

            Construction Managers typically are called on to play one of three roles, he noted.  They may have to act as “referee” in a “combat” situation involving the various project participants, or simply as a manager/administrator for a project that’s otherwise proceeding as “business as usual.”

            The best role, though, is as part of a holistic, high performance team, Unger said.  The CM can make major contributions to saving time and money in design-build projects, he added, particularly by taking a broad view of the entire project. Design gaps, for instance, often have cost impacts that go far beyond the actual cost of remedying one small error.  A truly collaborative team approach can avoid many of these impacts.

Project close-out: The hardest part

            CMAA owner surveys routinely report owners dissatisfied with the very last stage of their projects: building completion and move-in. At the National Conference, Richard A. Bernardini, PE, CCM of Hill International outlined a strategy for improving this critical final step.

            “It’s important to plan and budget for close-out operations,” he said, “to define scope and assign real costs.”  Bernardini said an Occupancy Plan should be prepared at the earliest stages of a project, so that the entire project team knows at all times what the owner needs to move into the new facility successfully.

            This plan should not only cover such basics as furnishing and equipment, but also delivery of office supplies, re-direction of mail, cutover of utility services, and adequate parking both for client employees and for construction personnel still on the job.

            Successful close-out also requires attention to maintenance management, including training of maintenance personnel in the new facility, delivery of spare parts and supplies, and provision of all operation and maintenance manuals and other documentation.

            Owners often require a staged move-in, in which part of a facility is occupied while work continues elsewhere, and planning must include assuring that the ongoing work doesn’t disturb the owner’s business functions.

            Bernardini summed up a successful approach: “Don’t just build your projects...complete them.” He added: “The close-out of the project is the client’s memory of your work.”

Avoiding conflicts in CM At-Risk

            The public sector has seen a distinct movement toward the CM At-Risk model in recent years, and this swing challenges CMs to be sure their clients fully understand how this model changes the relationship between CM and owner.

            That was the message of Chuck Kluenker, FCMAA of 3D/International in a session on minimizing the potential for conflict of interest in CM At-Risk arrangements.

            “Every project is a fixed package of risks that have to be dealt with,” Kluenker said.  The assignment and evaluation of these risks can vary widely according to contracting structures and terms, he added.

            “The greater the risk an owner places on a CM, the greater the potential for conflict of interest,” Kluenker said. When a CM becomes, in effect, a general contractor committed to a guaranteed price, he/she must control costs strictly, seek additional revenues through change orders, or try to pass risk and costs off to subcontractors and other parties.

            Among the other dangers that must be addressed is the risk that a guaranteed project price may be based on incomplete drawings and that the real purpose of contingencies built into the project budget may be misunderstood. For example, Kluenker said, owners may not authorize spending of contingency money on items they feel are the CM’s responsibility.

            In conclusion, Kluenker cited CMAA’s commentary on CM At-Risk: “The owner must understand that the CM’s role will change from one of being the Owner’s Agent to one of independent contractor.”

            Kluenker added, “It is the CM’s duty to clearly explain these issues and trade-offs to the owner during the pre-sell, CM procurement and contracting phase.”

            In addition to the general and breakout sessions, the CMAA National Conference featured a keynote presentation by former U.S. Navy Captain D. Michael Abrashoff, author of “It’s Your Ship: Management Techniques from the Best Damn Ship in the Navy,” and a luncheon talk by comedian/writer Ross Shafer.