It's rare for projects to run exactly as planned, and changes are bound to happen. Unfortunately, these changes often result in increased time and money spent on the project. The later these changes occur in the project process, the more costly they become, leading to project delays and cost overruns. This is a common problem in construction, and many in the industry see it as out of control.
The best way to control project cost overruns is through front-end project controls, which are applied during the design phase. While not all changes can be controlled, identifying and managing controllable changes can mitigate their impact and prevent them from causing project overruns and schedule delays.
It's important to note that changes in scope are different from other types of changes, as they are discretionary and controllable. Scope changes involve adding or removing original work, rather than clarifications, errors, omissions, or varying site conditions.
This article focuses on one key aspect of front-end project controls and highlights the potential cost benefits for large, complex capital improvement programs where change is inevitable.
Have you ever experienced your design team putting off essential tasks, like reviewing crucial documents or addressing coordination issues, until it's too late? Have you also had to pay additional fees for bid documents and then pay the designer again during construction to fix mistakes and clarify issues?
These are all common problems stemming from poor quality bid documents. Such documents can result in project delays and increased costs, as RFIs (requests for information) pile up and lead to change orders at a premium price.
However, by investing more time and effort into producing complete and high-quality bid documents during the design phase, many errors can be eliminated and change orders reduced. Effective project control processes can also help manage project overruns during design, including third-party quality checks, coordinating between design disciplines and sites, and monitoring design progress.
The Pareto Principle
The Pareto Principle was created by Vilfredo Pareto, an Italian from the 19th century. He noted that in Italy during his time, 20% of the population controlled 80% of the wealth. Today, this principle has been applied to other areas beyond wealth distribution.
This principle can also be used in project management to determine the final cost and schedule. The longer the project continues, the less influence one has over the final cost. However, it has been observed that approximately 80% of the project costs are established during the first 20% of the project life, as shown in Figure 1. Therefore, to make a positive impact on project costs, project controls should be implemented during the design phase.
Let's Review Some Basics
`Design Revisions` refer to changes made to the design documents by the designer after they have been issued for bid. On the other hand, `Errors and Omissions` refer to changes made to the design documents after they have been issued for bid, usually due to requests for information (RFIs). `Varying Site Conditions` refer to changes made as a result of site conditions that were found to be different from what was implied in the bid documents.
Changes to the scope of a project are primarily controlled by the client and end-users. However, it's important to consider the timing of these changes and whether they should be handled later in the process or incorporated into the initial design documents in order to control costs during the design phase. By producing coordinated and complete bid documents, certain change types such as varying site conditions, errors and omissions, and clarifications can be controlled or mitigated. It's important to note that changes made after the construction contract has been awarded can cost up to 50% more than if they had been included in the initial bid documents.
Establishing Design Criteria For Progress Milestones
To ensure a well-coordinated and comprehensive set of bid documents, it is crucial to establish specific deliverable criteria for each design review milestone. Typically, there are four review points: 30% (schematic design), 60% (design development), 90% (construction documents), and issue-for-bid. Each review point presents an opportunity to assess quality, design coordination, and document completeness. At each review point, a set of deliverable criteria must be defined to outline what should be included in the drawings and specifications. By adhering to specific criteria, it ensures that the documents will progress towards completion throughout the design process. The criteria should be quantifiable and identifiable in the documents so that the reviewer can easily match it up with the document content. Below are examples of deliverable criteria for architectural documents in a building project at 30% completion:
- Preliminary building layouts
- Preliminary room sizes based on occupancy
- Building heights and materials identified
- Segment floor plans established
- Overall scaled and dimensioned floor plan(s) identified
- Elevations and structure elements established
- Stair floor plans established
- Architectural theme for exterior and interior of the building identified
- General construction materials for buildings selected
- Roof type selected
- Code classification assigned to each building
The drawing list for the final design of the Architectural Systems is confirmed at 60 percent completion. The specifications list has been developed, and building floor plans and elevations for all buildings have been created. The location of HVAC equipment rooms and HVAC equipment has been selected, and electrical and control rooms have been sized and located. Building and fire code analysis is complete, and structural design concepts for the facilities have been defined. The applicable codes for all buildings/structures have been defined, and a door schedule indicating legend and door numbers has been developed. A finish schedule indicating room name and numbers has also been created. The floor plan of each floor, showing furniture, as well as exterior elevations, transverse and lateral sections through the building, and square footage for each floor plan area have been indicated. Wall sections and wall details have been completed, along with schedules indicating finishes and equipment. A summary of code-related design parameters has been shown. Detail scale plans describing complex areas and a description of materials used for construction have been provided. Additionally, segment floor plans, reflected ceiling plans, roof plans, interior elevations, exterior elevations, completed building sections, stair floor plans, door and window schedules, and a painting/wall finish schedule have been completed. Required details on plans and sections are 50 percent complete.
At 90 percent completion, the final base plan, architectural schedules, segment floor plans, reflected ceiling plans, roof plans, interior elevations, exterior elevations, final stair floor plan, door, hardware, and window schedules, room finish schedule, final building sections, and required details and sections have been completed. The specifications for the final review and editing have also been completed, along with a signage plan.
It is important to note that the deliverable for each review point must be in the design contract language, tied to payment, and enforceable. Additionally, a premium of approximately 50 percent can be expected for each change order. However, by applying proper controls during design to ensure document quality, coordination, and completeness, there will be fewer change orders, mitigating overruns and delays.