An organizational maturity model is a relatively new (1990s) tool to evaluate whether or not a human organization can reliably and predictably accomplish its' objectives. Models typically have 3 to 5 levels of maturity. As with humans, age is not closely tied to maturity level.
Successful management of projects is difficult, especially with lots of parties involved and more things to do than you can keep together in your mind, or even in your day-planner. A Project Management system is the closest thing we have to a guarantee of success. The OMMA-Goodness!™ Project Management Framework is a simple process that distills the fundamentals of effectively bringing people together to accomplish a project objective. You will not only succeed in accomplishing your objective, the people you work with will say “OMMA-Goodness!™, what a great project manager!”
“OMMA-Goodness!™” is a memory aid (mnemonic device) that stands for Objective, Method, Milestones and Actions. The OMMA-Goodness!™ Project Management Framework begins with a clearly stated objective and a one-minute summary, which are used to orient the team and help maintain focus. We step through a proven method in a project planning meeting to refine our project plan in multiple passes, keeping our critical data organized in the milestones section, and clarifying the scope with a Work Break-Down Structure. We then identify actions required to complete the milestones. From there we estimate duration and decide when and by whom actions will be performed, which gives us budget and schedule data. At the end of the project planning meeting we set the date and time for the first of our regular project status meetings where we compare progress to plan, which creates a natural feedback loop that leads toward success without relying solely on hope, the force genius, or on natural organizational skill. The method naturally lends itself to a built-in quality control mechanism using hold-points.
Read straight through the steps. Return after reading the Example, referring to definitions of the Project Management Terms as you go.
Select a Project Manager (or Coordinator) who will accept full responsibility for management and execution of the Plan. Print, open or draw a Project Plan form.
Write your Objective; then “One Minute Summary” the basic project info.
Select a Method or use 7-W’s: Who, What, When, Where, Why, How, and How Much.
Make a first-pass brainstorm of Milestones and Deliverables.
Quickly list Actions to complete the known Milestones; don’t linger in details yet.
Convene a Project Planning Meeting. Begin with the One Minute Summary. Update the Objective. Brainstorm more Milestones and Actions. Refine the Scope into a Work Break-Down Structure. Brainstorm the Schedule and Budget. Finalize Milestones, assign Actions and estimate durations. Set the Project Status Meeting date.
Following the planning meeting, update the Project Plan; refine the Objective, use the Method check-list to ensure the Plan is complete, update Milestones including Hold-Points, complete the list of Actions and assign “Priority, Who, When, Duration and Cost” for each.
Organize, lead, direct and manage execution of the Actions.
Compare progress to the Scope, Budget and Schedule in an Earned Value Analysis.
Conduct a Project Status Meeting; compare performance to plan; update the Plan.
Repeat steps 8-10 as necessary. The last “Project Status” is a “Project Close”.
Carl’s Construction is planning their next Project, called Otto’s Outhouse, using their Project Management Framework. Pepe is a new Project Manager. To avoid the distraction of struggling with a technology-based solution, Pepe will use a new spiral notebook, which will also serve as his project diary, instead of a Project Plan form. He formatted the Plan on two opposing pages; Objective, Method and Milestones on the left, Actions on the right including columns for Description, Priority, Who, When, Duration and Cost.
Pepe modified the standard company Objective: “We will complete the Otto Outhouse as promised, within budget and schedule. We will earn referrals from the client and the planned profits.” (See attached Project Plan form)
Pepe’s used the 7-W’s Method. He summarized his project using each line in the method: (1.) Who: Owner = Otto. GC = Carl’s Construction. Roofer = Ron’s Roofing. (2.) What: New outhouse 4 feet square, 8 feet tall. (3.) When: Next Week. (4.) Where: 100 feet from existing residence. (5.) Why: Old one blew over. (6.) How: Two doors and one interior seat. Wood frame, wood siding, wood shingle sloped roof. (7.) How Much: Fixed price contract for $4,693.95.
Pepe’s first-pass brainstorm of Milestones and Deliverables was easy since he composed the estimate, Carl already signed the contract with the Owners, and the company always begins with a Scope, Budget and Schedule on the list. Estimate categories included: Grading & Excavation, Framing, Roofing, and Final Clean-Up so Pepe added these as Milestones. He also knew they needed to get a permit and have a final inspection.
Pepe listed Actions to complete the known Milestones, but didn’t linger in details yet.
Pepe and Carl met for a Project Planning Meeting and began with the One Minute Summary. They updated the Objective and brainstormed more Milestones and Actions, including adding the Estimate and Contract with the Owner both marked as DONE, as well as the contract with the Roofer that was not yet complete. They decided to use the list of Milestones as the Work Break-Down Structure which would serve as their Scope summary for what they agreed to in the Contract with the Owner. Pepe used the WBS as the outline for a Budget and Schedule. They set a date and time for the first Project Status Meeting which Carl insisted happen before construction started, so the meeting became a Hold-Point.
After the Planning Meeting, Pepe updated the Plan, refined the Objective, used the Method as a check-list to ensure the Plan was complete, updated the Milestones, and completed the list of Actions, assigning “Priority, Who, When, Duration and Cost” for each item.
Pepe organized and managed execution of the Actions, marking those completed as DONE.
Pepe completed all pre-construction activities, updated the Plan, Scope, Budget and Schedule, and prepared an Earned Value Analysis. He prepared an Agenda for his meeting with Carl.
As planned, Pepe met with Carl to compare his progress to plan in a Project Status Meeting. Carl was thrilled! They walked through the agenda and composed and prioritized a list of actions to move through construction, including: a Project Kick-Off Meeting, beginning and inspecting grading & excavation, beginning and inspecting framing, Project Status Meeting #2, beginning and inspecting roofing, final sign-off of the permit, final clean-up, Project Status (Close) Meeting #3 and sending all project documents to storage.
Example Project Plan
“We will complete Otto’s Outhouse as promised, within budget and schedule. We will earn referrals from the client and the planned profits.”
What: New outhouse 4 feet square, 8 feet tall.
Who: Owner = Otto. GC = Carl’s Construction. Roofer = Ron’s Roofing.
When: Next Week.
Where: 100 feet from existing residence.
Why: Old one blew over.
How: Two doors and one interior seat. Wood frame, wood siding, wood shingle sloped roof.
How Much: Fixed price contract for $4,693.95.
Milestones & Deliverables
Contract with Owner, including the Scope
Permit: Get it.
Contract with Roofer
Agenda for Project Kick-Off Meeting
HOLD-POINT: Project Status Meeting #1
Milestone: Project Kick-Off Meeting
Grading & Excavation
Project Status Meeting #2
Permit: Final Sign-Off
Application for Payment
Project Status (Close) Meeting #3
Project Management Terms
Project: A temporary endeavor, that includes a beginning and an end, to create a product or service.
Project Management: The discipline of organizing and managing resources to deliver a defined outcome (Objective / Scope), within the constraints of the Budget and Schedule.
Project Manager (or Coordinator): A PM (or PC) is a professional responsible for planning, budgeting, scheduling and managing all project resources, including personnel, to deliver the project Objective; one who executes and follows-up on the Project Plan and reports Project Status.
Project Plan: A document that defines the project Objective, Method, Milestones, and Actions; contains a list of documents that define 100% of the Scope, Budget and Schedule.
Scope: The Scope of Work is the sum total (100%) of all a project’s products and their requirements or features, including all labor, materials and equipment required to complete it; a Scope document is the written representation (100%-summary) of the scope, often best depicted in a Work Break-Down Structure.
Budget: An itemized list of expected costs or available funds for a project or specified Scope, often based on the Work Break-Down Structure. A control mechanism to compare to actual expenses.
Schedule: A list or graphic of activities and associated dates, often based on a Work Break-Down Structure; may include who is responsible and how activities relate to each other. Common forms are the Bar (Gantt) Chart or Critical Path Method.
Objective: A concisely written goal of specific, measurable outcomes including a 100%-summary of the Scope, Budget and Schedule.
Milestone: An event that marks the completion of a Deliverable, a Hold-Point on a schedule, or a flag in the Project Plan to highlight completed work; often used to ensure project progress.
Deliverable: A measurable, tangible item produced during project execution. Some are external and subject to approval, but some are internal only.
Action: A discrete, specific, measurable task, often performed by an individual, usually between 1/10-hour and 8-hours and rarely more than 80-hours.
Hold-Point: Milestone or critical stage in a project for verifying conformance with plan or quality standards.
Problem-Solving: A learning situation involving more than one alternative from which a selection is made in order to attain a specific goal (Objective); usually to move the situation from where it is to the best available alternative. One METHOD: (1.) Define the Problem (2.) Identify Options (3.) Identify the Best Solution (4.) Plan How to Achieve the Best Solution (5.) Evaluate Results.
One Minute Summary: An A to Z, 100%-summary “restatement of the obvious” to describe “who, what, when, where, why, how and how much” (7-W’s), in 250 words or less to orient everyone to the bigpicture before emersion into the details.
OMMA-Goodness!™ Project Planning Form: Planning form with sections for writing the Objective, Method, Milestones & Deliverables, and Actions for a project. For use in Project Planning, Project Planning Meetings and Project Status Meetings.
Method: A problem-solving framework or check-list that we apply the specific facts of our project to, as an aid in Project Planning. Some Methods have a check-list or “Menu of Deliverables”. EXAMPLES: Scientific Method, AA’s 12 Steps, Deming’s 14-Points, PMI’s 9 Categories and even the 5-W’s.
Menu of Deliverables (or Milestones): A list of common Deliverables (or Milestones) associated with a specific problem-solving method or project type, used as a check-list during project planning.
Project Planning Meeting: A meeting to perform a structured Problem-Solving session. AGENDA: 1. One Minute Summary, 2. Plan Review, 3. Review Scope, Budget & Schedule, 4. Method and Menu, 5. Brainstorming and Update Plan, 6. Update Actions, 7. Arrange Status Meeting. PM (or PC) deliver complete Project Plan following meeting.
Work Break-Down Structure (WBS): A project management technique for defining and organizing the total Scope using a hierarchical tree structure. The first two levels (the root node and Level 2) define a set of planned outcomes that collectively and exclusively represent a 100%-summary of the project Scope. At each subsequent level, the children of a parent node collectively and exclusively represent 100% of the scope of their parent node.
Earned Value Analysis (EVA): Technique for measuring progress which combines measurement of actual performance of Scope, Schedule, and Budget, organized using a Work Break-Down Structure, and compares them to plan in an integrated methodology.
Project Status Meeting: A meeting for a structured review of project progress compared to plan. AGENDA: 1. One Minute Summary, 2. Plan Review, 3. Review Scope, Budget & Schedule, 4. Old Business, 5. Method and Menu, 5. Performance Analysis, 6. New Business, 7. Brainstorming and Update Plan, 7. Update Actions, 8. Arrange Next Meeting. PM (or PC) deliver complete Project Plan following meeting.
Brainstorming: An activity used to generate many creative ideas that have no right or wrong answers and are accepted without criticism.
Copyright 2008, Pete Fowler
Last week, we opened doors in a new branch in Corona, California. Michael Villalba will be our lead consultant in this area as we better serve our clients within the Inland Empire.
There have been numerous leaks in the copper domestic hot and cold water piping, resulting in property damage.
The soldered joints in the copper water piping were over fluxed. This has caused flux corrosion and leaks.
The copper water piping was not reamed at the tubing ends. This can cause internal erosion of the tubing and fittings.
The water heaters have no drain pan, as per manufacturer's installation instructions. This will likely cause water damage to property in garage.
The shut-off valves for the water supply are corroded and leaked and caused damage. The valves were not properly selected by the contractor for this service and are dezincing.
Certain high-efficiency water heater PVC flue vents are not insulated, as per manufacturer's installation instructions.
There is no insulation on the hydronic hot water supply and return piping that provides hot water heating to certain fan coils. California Title 24 requires this piping to be insulated.
Certain laundry washing machine indirect drains are not readily accessible and the water valves are not accessible. They are located behind the stacked washer/dryer.
Certain 3" PVC water heater flue vent penetrations are not properly fire rated through the all in violation of the building code. This occurs through certain units and in the electrical rooms.
Hot water takes over a minute to warm up in the bathrooms. One minute was used at the criteria even though most reasonable homeowners expect hot water in less than 30 seconds.
The unit sub panel enclosure is setback and has gaps in the drywall greater than the code allowance.
The A/C unit disconnects have inadequate working clearance.
The cables are insufficiently supported as required by code.
The cables within 6 feet of the attic access are not protected from damage.
The recessed lights fixture sockets have been over sprayed with paint/or drywall texture.
The electrical device boxes are setback and have gaps in the drywall greater than code allowances.
The boxes installed in rated walls are improperly installed.
The conduits and/or cables are insufficiently supported as required by code in the electrical closets.
The exterior exposed light fixtures are not sealed to prevent water intrusion.
Quality of Workmanship.
Certain flexible A/C ducts are not supported or installed properly, and are kinked.
The A/C condensate drain piping was not installed properly. Based upon the installation instructions, it does not contain proper traps, and is not vented or supported properly. This has caused premature flow to secondary drains causing damage.
The condensing units are not identified with the unit address as is required by the mechanical code.
Clearance around the outdoor condensing units is not adequate and does not comply with the manufactures requirements.
The condensing units are not level as required by the unit manufacturer.
The refrigeration tubing insulation at the outdoor condensing units was not rated for exterior application and is deteriorating from exposure to ultra violet light.
The refrigeration tubing penetrations of the exterior walls are not sealed as required by building code and energy code.
The flexible dryer vents are kinked in the laundry closets. This causes poor dryer performances and creates a fire hazard.
There are no check valves on the hot water recirculation fan coil heating loop. The check valves should be located at the recirculation pump discharge.
The laundry closets were not provided with an exhaust fan. This is a code violation.
Mechanical Construction Defects is for anyone who needs to know about risk management, claims, and litigation related to Mechanical (heating and air conditioning), Electrical or Plumbing (MEP) systems.
Habitability Claims appear to becoming more and more common, and, although there is no concise, statutory definition of the term, there are LOTS of regulations mandating the minimum performance requirements of residential property being rented by owners to tenants. We’re providing a FREE, one-hour webinar on investigation and evaluating Habitability Claims from the construction expert’s perspective.
To make sense of our research on “A Comparison of Construction Claims Handling Practices in the U.S. and the E.U.” we must understand the litigation processes in both the E.U. and U.S. There are similarities and differences to both approaches.
What is a Lawsuit?
A civil lawsuit or a legal action is a method of dispute resolution. Two or more parties have some kind of dispute which they are unable resolve it amongst themselves. Sometimes parties may have used some kind of alternative dispute resolution process like negotiation, mediation (where a neutral third party tries to help the parties reach a resolution) or arbitration (arbitrators are hired to act as judges in a private version of a trial) instead of a complaint being filed in the appropriate court.
If the parties leave it up to the legal system to work out their differences then to certain extent they give up control of the outcome and are left to advocate for their interests, providing facts, witness testimony, evidence and legal arguments in the hope they’ll prevail.
There’s virtually no limit to the types of parties who could be involved in a civil action, from individuals to multi-national corporations, government entities to non-profit organizations. Courts can handle disputes that are in the hundreds of dollars to potentially limitless amounts of money. The outcome of a civil lawsuit may just impact parties living next to each other or countries in different parts of the globe.
What are the Key steps in a Civil Lawsuit in the U.S.?
Generally, litigation in the U.S. goes through a number of steps or proceedings, which can vary from jurisdiction to jurisdiction, including,
To start the litigation process the plaintiff files a complaint. It lays out the basic facts of the dispute, states the legal theories for recovery and what’s sought to resolve the matter (which could be a sum of money or specific action by the defendant, the party against whom the complaint is filed). The defendant responds to the allegations with an answer, states possible defenses and may make counter-claims against the plaintiff.
The defendant may ask the court to dismiss the complaint in whole or part, either because what’s being claimed doesn’t amount to breaking the law (a motion to dismiss), or, with the filing of affidavits, claim since there are no material, disputed facts in the case the defendant is entitled to judgment as a matter of law (motion for summary judgment). Normally if a complaint is dismissed, in whole or part, the plaintiff has an opportunity to amend or re-file the complaint.
Discovery is a critical part of the civil lawsuit process. Through it both parties should have all the relevant facts of the dispute. With the benefit of these facts the complaint may be amended or could be withdrawn. With newly acquired information a defendant may file a motion for summary judgement. The parties may also have a greater understanding of the strengths and weakness of the case and choose not to risk a negative outcome at trial and negotiate a settlement.
Discovery allows the parties to submit written questions to each other, ask for copies of documents or evidence and ask each other to admit or deny statements of fact. During depositions parties and witnesses are asked questions under oath by attorneys for both sides. Not only can depositions produce facts that the opposing party didn’t know before but both sides see first-hand how well both sides’ witnesses may perform during a trial. How well or poorly a party’s witnesses do may be critical to the decision to proceed to trial or settle the case.
Discovery can be simple and straightforward or drawn out and complex. Parties can object to questions and requests and seek protective orders to limit release of information. One party may seek court help to obtain information, evidence or to depose an individual. Because of the importance of discovery parties may be very aggressive in seeking information or trying to prevent the other party from obtaining it.
Trial – the Third Step
Most civil lawsuits are resolved prior to trial because it can be very expensive, consume a lot of time and energy and depending on the nature of the dispute, emotionally draining or painful. Without a resolution agreed to by the parties it will be decided at trial. Disputed facts and verdicts can be decided by a judge or jury.
Armed with what they learned during discovery the parties tell their stories through documentary evidence, evidence in the form of objects, graphs or charts, testimony of parties and witnesses. Both sides try to simplify the issues and create sympathetic narratives they hope will win the day. Attorneys on both sides try to show the opposing side’s witnesses aren’t credible and their arguments don’t make sense while at the same time bolstering and polishing their version of events.
Trials start with opening arguments and end with closing arguments by the attorneys. Attorneys can ask the judge to rule on evidentiary and legal issues during the trial and object to submission of evidence and of questions to their witnesses. The plaintiff has the burden of showing, in most cases, it’s more likely than not its version of the truth is more credible, the law was broken in some way and the plaintiff is owed an amount of money and/or some action by the defendant for it to be made whole.
The judge or jury makes its decision which may be a dismissal for the defendant or a total or partial victory for the plaintiff. The plaintiff should be awarded the relief sought if the legal claims are successful, though it may get much more or less than it sought.
The appeal is a process by which rulings by judges and the outcome of trials may be reviewed by panels of judges. The appeal process isn’t an opportunity to re-try a case, though an appeal can be based on a claim that a verdict wasn’t based on the evidence used at trial. This is a difficult and usually unsuccessful approach. Generally, a party that feels aggrieved by a decision because it violated the law or a rule of procedure can ask the issue go back to the trial court so the decision can be corrected or at least reviewed again by the judge.
After both sides submit briefs containing their arguments why a decision should be overturned or upheld attorneys have an opportunity to make legal arguments before the appellate court judges. They can ask questions of the attorneys and seek additional briefs on particular topics of interest. Eventually the appellate court issues a decision to uphold or overturn the lower court decision. If it’s overturned often lower courts will be issued directions on what to do next. The decision need not be unanimous. The majority opinion is the final decision.
What are the Key steps in a Civil Lawsuit in the EU?
In most E.U. countries the civil lawsuit process is defined by the civil procedures of each of its 28 countries. Generally, the civil lawsuit process in the E.U. breaks down to,
Production of Evidence (Discovery)
In the pre-trial pleadings phase the parties, without the involvement of the court, try to resolve the disputes between them. The parties make various requests, with letters or notices sent between them, where the parties attempt to substantiate their positions on the merits of the case. If the parties fail to reach a resolution the civil lawsuit process continues.
The aggrieved party submits the complaint, with documentary evidence, to first instance court in accordance with the country’s applicable procedural laws, starting the legal action. The party receiving the complaint typically answers the complaint and produces all available evidence to support its arguments that the complaint be dismissed.
Production of Evidence (Discovery)
In E.U. countries the burden of production of evidence (discovery) rests on the claimant/plaintiff, the party seeking the remedy.
The plaintiff has the burden of proof., however the plaintiff does not have the discovery rights similar to the legal system established in the U.S. To further substantiate then any evidence required has to be requested to the court. The court further assesses the necessity for it and if deemed necessary then requests the opposing party to provide it in accordance with the law. If the dispute wasn’t settled and goes to trial, the judge presumably will have looked over all evidence and paperwork submitted to the court and will guide the parties through the trial. The parties call witnesses and produce more evidence, which is relevant or important to the case at hand. The judge generally acts in an investigatory role, seeking out the truth of the situation then applies the law.
Appeal - the Fifth Step
The appeal is a second stage litigation process, because in almost all cases, the case at hand, an appeal will be submitted to the Court of Appeal (the procedure on how that’s done will vary from country to country). The Court of Appeal consists of two general directions first is an ordinary appeal and second is cassation. An ordinary appeal, when a case is appealed every aspect of it is reconsidered and a new examination of the facts may take place if necessary. However, a court of cassation has limited freedom, especially where the facts are concerned. In cassation it is required by law to base its deliberations on the facts as established by the lower court and cassation would mean quashing a judicial decision on a point of law, including procedural law.
Major Differences Between U.S. and E.U. Civil Litigation Process
Production of Evidence (Discovery)
Discovery is much more limited in the E.U. There are no requests for production of documents, interrogatories or depositions. Documentary evidence is produced by the parties during the course of the litigation.
There are no motions to dismiss or for summary judgement in the E.U., which can be critical tools by defendants in the U.S. system to end a legal claim early in the process or at least narrow its scope. This can greatly reduce the cost for a defendant and the outcome of these motions is an important factor in whether a case will settle and if so, for how much.
No European civil procedural system uses juries, except the court of Great Britain/United Kingdom. Litigation costs in the E.U. are generally much lower than in the U.S. While in the U.S. the majority of civil cases will settle before a trial verdict, the opposite is true in E.U. where most civil cases are decided by the judge and most of those decisions are appealed.
Roles of Experts/Expert Testimony
This is one of the most important differences. Both regions use expert testimonies differently.
In U.S. civil cases the use of experts is common, especially in more complex cases. In the E.U. it’s rare for a civil case to include use of expert witnesses. If there is such a witness he or she will be named by the judge to help determine the facts, not by a party to help put its case in a favorable light, nevertheless parties may provide their experts as well.
The Roles of Judges and Lawyers
In the U.S. judges are more of a director who must consider court procedure and prior court decisions. The judge is neutral and normally doesn’t intervene in fact-finding except to interpret and enforce rules of evidence.
In the E.U. litigation system a judge is more a referee and the trial is a more investigative process. E.U. judges are also not strictly bound by case precedent, except the courts of Great Britain/United Kingdom, however high authority, even though formally not binding, is possessed for the pronouncements of the Highest or Constitutional Courts. Case law is more informative than dispositive. Greater sources of law for judges and lawyers are legislative statutes and codes.
E.U. lawyers need to demonstrate that statutory law applies in the case for a particular fact so their role is more to advise, inform and point the judge in the right direction, and the procedure largely is in writing. U.S. lawyers engage in more debate, oppose what the other party seeks and are more active, use much more case law, and try to convince the jury and/or judge to believe their client’s side of the story.
In both systems, judges and lawyers interact with each other and depend on each other.
The Scope of the Appellate Process
The difference in this area is at least formally significant. In the civil systems, an appellate court has plenary authority to review an inferior court's judgment, not only as to issues of law but also as to issues of fact.
The underlying theory is that the civil codes determine the substantive basis of the case and the higher court judges have a more authoritative understanding of the code's provisions. The underlying civil-law theory regarding issues of fact traditionally has been that evidence is a legal science and that the strength of an item of evidence is governed by a set of rules. Note
In most civil case appeals in the U.S. the evidence on record is accepted as the fact finder (judge or jury) accepted them. That deference doesn’t happen in the E.U. In common law systems the appellate court reviews for “error” in jury-tried cases and “abuse of discretion” in most judge-tried cases. Note
The E.U. appellate process in civil cases may look more appealing to lawyers and their clients, because they see the first instance courts as a preliminary run or try-out of the case.
It’s worth noting the differences for each type of litigation process: jury trials, the roles of judges and lawyers, the scope of appellate process/review, the role of experts and production of
evidence. These differences significantly impact each litigation processes within each region. They do so by impacting the length and cost of litigation process.
When approaching it from a legal theory point of view, both systems have defined their litigation processes based on their own values concerning justice, fairness and equality.
Articles in This Series
Comparison of Common Law (U.S.) vs. Civil Litigation (E.U.) Practices (THIS ARTICLE)
Top Issues in Construction Projects in US vs. EU (COMING SOON)
Construction Risk Management in the US vs. EU (COMING SOON)
Construction Claims Management in the US vs. EU (COMING SOON)
In this article I am going to review construction project management practices across the Atlantic. The topic is related to the construction management process which is often the main area of concern for successful construction project implementation. The client expects that effective project management will enable the project’s completion, by the time when it is wanted, of a standard and quality that is required, and at a price that is competitive. Our goal in the series of articles is to help the owners minimize adverse impact on their business from failures in project delivery and increasing construction disputes and claims, focusing on the role of risk management as a proactive approach to project planning in order to make timely and informed decisions towards reducing negative effects to project goals.
What is Construction Management and what it is not?
Project management was introduced to construction projects in the late 1950s. Much of the earlier codification of the principles and practices of project management was developed in the United States and in the United Kingdom.
The Construction Management Association of America (CMAA) is the leading professional association serving the construction industry in the US.
CMAA definition: “Construction management is a professional service that uses specialized project management techniques to the planning, design, and construction of a project.”
The Chartered Institute of Building (CIOB), UK is the world’s largest and most influential professional body for construction management, with nearly 50,000 members in more than 100 countries.
CIOB definition of project management: “The overall planning, coordination and control of a project from inception to completion aimed at meeting a client’s requirements in order to produce a functionally viable and sustainable project that will be completed safely, on time, within authorized cost and to the required quality standards”
There are four types of construction projects:
Heavy industrial construction
Commercial and institutional construction
Civil engineering construction
Essentially, a construction manager is project manager with a specific area of knowledge in built environment. Construction management is compatible with all project delivery systems including design-bid-build, design-build, design-build-operate and construction management at-risk.
For all types and scale of projects (large, small, vertical, horizontal, domestic, or international) a construction manager is the person who ensures the scope of work is skillfully adhered to and the project is successfully delivered. At its core a project involves three main parties, excluding the construction manager,
The owner, who commissions and funds the project
The architect or primary designer, who designs the project
The general contractor, who oversees day-to-day construction operations and manages specialized subcontractors
An owner’s project manager is controlling and monitoring the full scope of project from inception to close-out. A construction manager works as the owner’s representative, and this role often is limited to the construction phase of project. Construction managers involvement in planning, pre-design and hiring of architect, designer, and general contractors can assist owner to make informed decisions at the earlier stages of construction project.
Project management is the professional discipline which separates the management function of a project from the design and execution functions. Professional construction managers are not GC’s nor are they constructors. They typically do not perform the actual construction tasks, but act as advisors, assuring the project progresses according to plan and that it achieves the owner’s business objectives.
Construction Management in the U.S. vs EU
American construction management and leadership thinking historically comes from the United Kingdom (UK), which is the also the home of the European construction management certification system widely validated in the construction industry globally.
There is a great migration of engineers and construction managers in the construction sector due to the different states of economic development of different countries worldwide. For this reason, it is extremely important that construction managers’ qualification and skills are recognized and certified in a comparable way.
Construction has taken on an increasingly global character. US based firms are providing services to international clients just as international firms have become more active in the Americas. Owners in major markets all over the world insist on high performance in every aspect of construction project management: the planning, execution and operation of their capital assets.
In recent years owner priorities are shifting emphasis from initial construction costs to “triple bottom line”, including an asset’s lifecycle performance, environmental and social impacts. Traditional project constrains in terms of cost, time, quality extends for function and sustainability.
Are there differences between the Old World and North America?
The main differences in the approach to construction project management were discovered during this research are in the structure all involved parties and specialists bring their knowledge and experience into the project team and contribute to decision making at every stage of projects.
In construction projects, there are too many specialists involved for it to be practical to bring them all together at every stage.
The different stages of the project lifecycle across the industry in the US and EU have been summarized below. In the UK Code of Practice has defined eight project stages while CMAA have established five phases of main project management activities.
CMAA Construction Management Standards of Practice define 10 core responsibility areas of a construction managerI:
Building information modeling
CBOI suggested project managers duties is an extensive list of responsibilities that may be modified depending of client’s needs and nature of project. All duties can be eventually summarized under similar core areas of responsibilities as provided by CMAA.
Key aspects of Success
Success of project can be measured in terms of the actual time, budget and quality of the completed work against the planned goals. The following are key aspects in the CM discipline before and during the project execution that are considered essential by most of construction industry professionals (including developers, owners, GC’s, insurance specialists), both in the US and Europe:
Clearly defined goal and objectives
Defined plan and responsibilities
Informed, timely decision making
Proven risk management system
Effective communication system
Complete and accurate project documentation
Quality control system
Construction management competencies usually are built around these key factors:
Competencies = the ability to meet goals by drawing on and mobilizing resources and capabilities on personal and organizational levels
Resources = physical assets, human resources, and organizational capital
Capabilities = operational activities that are practiced and honed over time until they are mastered, they contribute to the company’s competitive advantage and profit potential
Risk Management As A Core Competency of Project Management
A capability or resource is valuable when it allows the company to capitalize on opportunities or defend against external threats. In theory both opportunities and threats are considered risks. Construction risk management competencies are essential to build and protect competitive advantage in the volatile construction industry, both in the US and EU.
Competitive advantage can be maintained in the construction industry if efficient risk management decisions are made in the earlier phases of construction project management.
Depending on a construction business’ scale, project portfolio risk management competencies vary from entirely informal (ad-hoc) to fully integrated and formal (optimized) risk management systems. More optimized risk management use feedback from the lessons learned for continuous improvement, the advancing and complex global construction industry demands more efficient management systems.
Using proven construction management practices is essential in the inherently risky and volatile construction industry. Many companies still rely on individuals’ expertise and experience when it comes to identification, assessment, mitigation and monitoring construction project risks. Sadly, there are growing number of construction claims and disputes which increase both the costs of the projects, as well as cause headaches for construction professionals. Most of the claims resulting from failures in project delivery can be related to failures in risk management in the earlier phases of construction project management, including making sure there is adequate construction project management expertise among project stakeholders
In my further articles I will offer some findings how construction management processes can benefit using past construction claims and litigation data and improve risk related decision making at each phase of construction project management.
Articles in This Series
Construction Management Process in the US vs. EU (THIS ARTICLE)
Top Issues in Construction Projects in US vs. EU (COMING SOON)
Construction Risk Management in the US vs. EU (COMING SOON)
Construction Claims Management in the US vs. EU (COMING SOON)
This is another edition in our “How To Save Your Community A Million Bucks” series.
This project was a 132-unit multifamily community in the Pacific Northwest, constructed in 1977 as apartments and converted to condominiums in 1981. There are six 16-unit buildings, one 24-unit building, one 8-unit building, one 4-unit building, and one clubhouse. The 4-unit building and the clubhouse are single story, the remaining are two-story, and all are wood-framed structures on slab foundations. All upper floor units have wood-framed decks and landings with wood stair treads at the entries. All buildings were clad with Masonite siding and painted wood trim. Sliding glass doors and windows were a mix of flanged aluminum and unflanged vinyl (replacement windows). The units are designed in a back-to-back style so the front and back elevations are similar.
The exterior cladding of the project was in terrible condition. In 2014 the HOA and Previous Community Manager hired a building consultant who proposed a design they budgeted at $3.8 to $4.3 million in repair and improvements. In 2015 a second building consultant / engineering firm was hired to refine the scope of work in hope that the bids would be less expensive; but they came in at $3.6 to $5.7 million. For projects like this, based on similar projects in the region, the Owners would need to add for design (10-15%), construction management (5-15%), and change orders (10-25%) for a minimum of 25% over bid price. Up to 55% over the bid price would not be unheard of, and even more if the project did not run smoothly. The 25-55% would take the lowest bid of $3.6 million to a total of $4.5 to $5.6 million in total project cost. But the HOA only had $600,000 in reserve and limited capacity to borrow for the project. At this point, the HOA decided to hire a New Community Manager.
In the Fall of 2016 PFCS was contacted by the New Community Manager to (1.) review and reduce existing scope of work, prepare a new budget, oversee the bid process; and (2.) act as Owner's Representative / Construction Manager (CM). By the end PFCS had managed the scope, budget, schedule, and quality for a complete rehabilitation of the exterior building walls for $3.0 million; a savings of $1.5 to $2.6 million, that is savings of at more than 33% in total project cost.
9/2016 PFCS Proposal
11/2016 Updated PFCS Proposal and attend HOA Meeting
1/2017 Delivered Scope Comparison and Options Summary report with a Project Summary Memo
3/2017 Delivered Bid Analysis and Recommendations
9/2017 Executed a contract between Architect and HOA
11/2017 Architect submitted plans to City and PFCS Delivered RFP to 3 contractors
1/2018 Contract between General Contractor and HOA.
1/2018 Revised Drawings submitted for Permits.
2/2018 Project Kick-Off Meeting and works begins
2/2018 Railing Contract between trade contractor and HOA
3/2018 to 11/2018 Inspections, Change Management and Payment Application Approvals
11/2018 Project Completion and Closeout Memo
Final Project Costs
$25,000 Architectural Design
$2.6 million Original Contract Price with General Contractor
$240,000 Deductive Change with General Contractor
$190,000 Contracted Directly with a Subcontractor (saving $50,000)
$260,000 Change Orders (+/- 10%) which included improvements not included in the original scope of work
$210,000 Construction Consulting & Management (less than 8% of construction cost)
$3.0 million Total Cost
$1.5 to $2.6 million Total Savings
Introduction to Our Research Project
So you’ve been introduced to our Latvian Interns Anete and Helmuts. Now it’s time for me to introduce our research project. Since Anete is an engineer and construction manager, Helmuts is a construction lawyer, and PFCS is in the business of building inspection, construction management, and building claims & litigation, it seemed natural to investigate and summarize best construction risk & claim management practices from both sides of the Atlantic.
As I often do at the beginning of an investigative endeavor, I used our "Proving the Obvious Using Google" method to begin this research. I searched the terms "Construction Risk Management" and "Construction Claim Management." The full results are below in the respective sections and at the bottom of this article in the "Research" section. The point is that construction risk & claim management are topics deeply considered by professionals at the top of the construction industry all around the world, and there is a lot to learn and consider for our projects.
A Map of the World
For those new to construction risk management and/or construction claim management, we want to create "a map of the world" so that anyone interested can understand the big picture, and more quickly learn to recognize important landmarks along the trail. One of the many things that makes construction an interesting business is that no two projects are exactly alike. Of course, this also creates difficulty, since construction projects are generally expensive and complex, which creates risks. And sometimes these risks turn into claims.
Construction risk management happens primarily before and during construction, and construction claim management takes place mostly during and after construction. Professional risk and claim management are deeply integrated. In the most sophisticated organizations, claims that arise downstream were considered early in the project, and processes were outlined for what to do, first to avoid them, and second to mitigate the harm they can cause.
The Size of the Global Construction Industry
The global construction industry generated an estimated total revenue of $8.6 trillion in 2016, representing a compound annual growth rate (CAGR) of 7.1% between 2012 and 2016. According a to report by ResearchMoz ("Global Construction Industry Guide 2017…") growth is forecast to accelerate and reach a value of more than $13 trillion by the end of 2021.
In the U.S. the construction industry has more than 650,000 employers with over 6 million employees and creates nearly $1 trillion worth of structures each year. Construction is one of the largest customers for manufacturing, mining and a variety of services. A study performed for AGC by Professor Stephen Fuller of George Mason University found that an extra $1 billion in nonresidential construction spending adds about $3.4 billion to Gross Domestic Product (GDP), about $1.1 billion to personal earnings, and creates or sustains 28,500 jobs.
The European construction industry as a whole is worth more than $1 trillion. With 3 million enterprises and a total direct workforce of 18 million people, the construction sector contributes at around 9% to the GDP of the European Union. 99.9% of the European construction sector is composed of small and medium-sized enterprises (fewer than 250 employee). In the EU, the average size of construction enterprises is of 4 workers (employees or not). Small and medium businesses produce 80% of the construction industry's output. Small enterprises (less than 50 employees) are responsible for 60% of the production and employ 70% of the sector's working population.
Construction Risk Management
When you search "Construction Risk Management" in Google you get "Risk management in construction is designed to plan, monitor and control those measures needed to prevent exposure to risk. To do this it is necessary to identify the hazard, assess the extent of the risk, provide measures to control the risk and manage any residual risks."
Our top-level framework, we call the ABCs of Risk Management, includes:
Avoid potentially dangerous situations
Be really good at what you do
Cover your assets
In the following articles we will examine sophisticated strategies for identifying risks and the steps professionals take to mitigate them. The point of all this is to identify (inventory) potential risks, then analyze and control them. Common strategies include transferring risks through contracts and insurance, and reducing them through process management and quality control.
Common Construction Project Risk Management Activities Before and During Construction
Composing or adopting and customizing a Risk Management Plan
Composing or adopting and customizing a Quality Management Plan
Making sure all key team members are adequately skilled, experienced, and capitalized
Insurance requirements that are appropriate for all applicable team members
Contract terms that distribute risks to the appropriate parties
Building in quality control check points and verification mechanisms
Documenting the quality of the processes and work, sometimes by independent third parties
Identification of potential claims and addressing them prior to their becoming a dispute
Construction Claim Management
We have been working on construction claims since the 1990's, and writing and presenting on the subject for almost 20 years now. As with risk management, there is a spectrum of professional practice that runs from "close to criminal incompetence" at one end, to "so much management that you might as well pay your opposition whatever they have asked for." We want to teach people to avoid either of the extremes.
After more than a decade in the business of dealing with claims (in 2010), we outlined our "Claims Management Strategies" continuum:
Head-In-Sand: Delegation outside the organization = Abdication
Hope and Prayer: Hope is a strategy. But a bad one.
Cowboy / Caveman / Swashbuckler: Yee Haw!! Usually O.P.M.
Project “Piles”: Most common.
Force of Genius: Closely related to Project Piles, only better.
Project Files: We’re getting there :-)
Project Level Data Structure & Analysis: Yea Baby!!
Portfolio Level Analysis & Analysis: The Promised Land.
Common Construction Claim Management Activities During and After Construction
Understanding the contract documents, especially as they relate to the scope of work, and change management
A professional file (document) management process discipline, so that all relevant files can be easily and quickly retrieved (this is WAY harder than it seems like it should be)
A mechanism that verifies files and project documentation are being managed consistent with the plan (inspect what we expect)
Structured training for construction managers in documenting changes in the scope, budget, and schedule for the purposes of assigning responsibility for these variations from plan (or contract)
Third-party verification of conformance with plans and contracts compared to actual scope (including quality), budget, and schedule
Regular (monthly) reports to management regarding potential claims or quality problems
A team “First Responders” is identified prior to or immediately upon notice of a potential claim: Lawyer(s). Expert(s) (internal and third-party)
A written Claim Management Plan
A Claim Management Budget (best, probable, and worst case scenarios) that considers the cost of lawyers, experts, expenses, time, and settlement or verdict
A structure for regularly updating the Claim Management Plan and Budget to reflect current realities
We always make a preliminary review of the existing literature.
Then we have meeting and conduct interviews with the smartest people we know. In this research, this will include:
Mediators / Arbitrators
From there, we will publish our findings via this blog, eventually more formally in printed articles, and maybe even presentation at a construction risk and claim conference.
Articles in This Series
(THIS ARTICLE) Construction Risk & Claims Management in the US vs. EU
Top Issues in Construction Projects in US vs. EU (COMING SOON)
Construction Risk Management in the US vs. EU (COMING SOON)
Construction Claims Management in the US vs. EU (COMING SOON)
Google "Construction Risk Management"
Construction Claim Management
The project was a 3 bedroom, 5 bath, 4,500 square foot custom single family residence in an expensive neighborhood overlooking downtown Los Angeles. The residence was originally built in 1961 and recently completely redesigned, renovated, and modernized, including a wine cellar, an infinity pool, and a basement gym below the pool.
The Owner of the residence was a single purpose limited liability company (LLC) owned 100% by the Previous Owner of the property, who was the individual that transferred the property into the LLC. The 2015 lease with the Tenant was made with the Previous Owner, prior to the property's transfer in ownership to the LLC.
In mid-2017 the Owner sued the Tenant for back rent and in return the Tenant sued the Owner and Previous Owner for uninhabitable conditions and alleged defective conditions such as flooding, black mold, failing air conditioning, pool, electrical, and AV systems defects. The cross-complaint from the Tenant contained an extensive list of defects and documentation of leakage and mold issues dating to early 2016.
PFCS was hired in January 2018 to represent the Owner of the residence (the LLC) and the Previous Owner. Counsel for the Owners asked PFCS to perform a general habitability inspection prior to the Owner starting repairs.
PFCS investigated the allegations using our standard Building Performance Analysis Process that virtually always includes collecting, organizing, indexing, and summarizing key project documents and information, conducting meetings and interviews with key players, organizing key building information into a players list, timeline, and issues list, and preparing to conduct on-site investigation by creating an inspection checklist. We conducted an exhaustive inspection, documenting observations with hundreds of photos, field notes, and diagrams, including sketches of the site, floor plans, and a roof plan so that we could easily compare exterior observations to the interior manifestation of leakage. Repairs were taking place during our inspection, so this documentation was similar to conducting an invasive investigation (testing). At the conclusion of the inspection, we immediately uploaded the photographs and notes to our cloud-based, password protected, Client Access system because our clients, who did not attend the inspection, were anxious to review the documentation.
Then, in the quiet of our office, we analyzed all of the data and developed working hypotheses for each of the discrete issues and presented our thoughts to our clients in a telephone conference. We observed interior damage related to leakage caused by construction defects in 4 locations including from the roof, plumbing, a door, and the swimming pool. We believed that the issues were complex and would have been difficult to diagnose, so some delay in solving the building problems would be reasonable, even for the most professional and competent property manager, but that ultimately the outcome of the case would probably be related to how the Owner handled the issues with the Tenant.
After further document analysis and numerous consultations with the Owner's counsel, they were able to settle the claims equitably. And although no one on the Owner’s side was excited to hear that there were construction defects leading to property damage that could be legitimately used in a Habitability Claim, the Owner’s counsel was pleased to have this information soon after our investigation was conducted.
The main image above is not the actual home (although it’s quite similar). The images below are all actual project images.
The project was a 23 unit multi-family building located in the San Fernando Valley area of Los Angeles county, constructed in 1983. All units were two bedrooms and two bath and were rented to individual tenants as apartments. The project was purchased by our client, the New Owner, in 2006 with the intention of converting the units to condominiums.
Upon initiating the eviction of the tenants, to begin the conversion of the apartments to condos, six tenants filed suit claiming "habitability" issues including building leaks and flooding, unannounced water shut-offs for 3 days, construction that was unannounced and disruptive to the tenants, vermin (rats and cockroaches) caused by poor housekeeping of the construction crews, and parking problems related to safety and handicap access. The tenants were mostly over 65 years of age, the majority of whom are retired, had limited financial resources, and were foreign born. Some tenants were disabled and difficult to relocate due to limited mobility. The initial question from our client included answering whether or not as-built configuration of the building egress conformed with current condominium code?
PFCS investigated the allegations using our standard Building Performance Analysis Process:
1. Document & Information Management included collecting a large volume of source documentation including the history of building maintenance and improvements, some of which was the subject of the Tenant's complaints.
2. Meetings and Interviews with Key People included long discussions with the insured's attorneys as well as the insured. We also analyzed more than 10 deposition transcripts.
3. Building Information Management, including making a discrete list of all the known issues (allegations) from their complaint and other sources including sworn declarations. We also made lists of all the units and building areas with issues, project players, timeline of events, and performed a forensic audit of the construction invoices.
4. Inspection occurred over two days where we collected hundreds of photographs, drew diagrams, and filled out checklists. The information collected with detailed enough that it allowed us to map and reference photo documentation for every allegation at every location.
5. Analysis: In sorting through all of the who, what, when, where, how, how much, and how many, we realized that three of the units had real issues that required repair, and three did not. The egress was configured in a way that was acceptable for the time of original construction so no repairs were required.
6. Testing (Only as Necessary): None was required.
7. Estimate: We composed an estimate to repair the problems, using Civil Code §1941.1 and Health and Safety Code §17920.3 as the criteria, for a total of just under $70,000 in three of six units. There were zero repairs in the other three units.
8. Report: We were set to deliver sworn testimony 4 years after we had delivered all of our analytical work, and the matter was finally settled; favorably for the three units where we called for zero repair... less favorably where violations of the standards and repairs were clearly required.
Photographs from the Project
Exterior Wall Problems
Interior Damage from Leaks
Damaged Interior Finishes
What it is and how to get it
The ability to define precisely a 100% complete scope of work for a construction project, to budget and schedule that work, to professionally contract for that work at the prime level (directly between the Owner and Contractor), to break that 100% scope-budget-schedule into manageable chunks by trade or subcontractor, to contract for each of those individual trade or subcontract scopes of work with a corresponding budget and schedule, to coordinate all of those scope-budget-schedules in executing the construction, to manage changes to the scope-budget-schedule at the prime and sub levels, and to verify with precision that each of those scope-budget-schedule packages is being executed in conformance with the plans, specifications, trade standards, budget, schedule, and contracts.
Date: Wednesday, Dec. 18
Time: 10 a.m. PT
Duration: 60 minutes
Pete Fowler Construction does three things: building inspection & testing of many types; construction management, specifically estimating and building maintenance and rehabilitation management for owners; and building claims and litigation consulting related to everything imaginable that could make someone sad about real estate. We have refined processes, technology, and staff who are experts in building performance analysis, building economics, and construction management.
Since so many of our technical staff are "forensic consultants" who testify as expert witnesses, we have to create plain English definitions of what otherwise could have stayed techno-speak in the Nerdville that exists in the engineering and construction management departments of universities. We have to do this so that the non-technical people we work for can make informed and smart decisions, And this exercise has helped us to improve our own construction management practices and processes. As we have written in our internal training documents: (1.) Define what awesome work looks like, and (2.) train to mastery.
Professional Construction Contracting Discipline
Level 1 Work Breakdown Structure (WBS)
The ability to define a 100% complete scope of work for a construction project,
to budget and
schedule that work,
to professionally contract for that work at the prime level (directly between the Owner and Contractor),
to break that 100% scope-budget-schedule into manageable chunks by trade or subcontractor,
to contract for each of those individual trade or subcontract scopes of work with a corresponding budget and schedule,
to coordinate all of those scope-budget-schedules in executing the construction,
to manage changes to the scope-budget-schedule at the prime and sub levels, and
to verify with precision that each of those scope-budget-schedule packages is being executed in conformance with the plans, specifications, trade standards, budget, schedule, and contracts.
Professional Construction Contracting Discipline
Level 2 WBS with discussion and key deliverables
1. The ability to define a 100% complete scope of work for a construction project,
A. WBS (Basis of Schedule of Values)
B. Estimate Details with trade/sub scopes broken down (No Prices)
C. RFIs / RFI Log
2. to budget and
A. Budget (Worksheet - Basis of Schedule of Values)
B. Estimate Details with Labor, Material, Equipment, and Trade Contractor Prices
C. Budget to Actual Comparison
3. schedule that work,
A. Progress Schedule
B. Progress Schedule Updates / Comparison of Plan to Actual
4. to professionally contract for that work at the prime level (directly between the Owner and Contractor),
A. Prime Contract
B. Insurance Requirements
D. Other Addenda
5. to break that 100% scope-budget-schedule into manageable chunks by trade or subcontractor,
A. Trade/Sub Scopes of Work
B. Trade/Sub Budget
C. Trade/Sub Progress Schedule (Integrated with the Project (Master) Progress Schedule)
6. to contract for each of those individual trade or subcontract scopes of work with a corresponding budget and schedule,
C. Contractor Solicitation & Pre-Qualification
7. to coordinate all of those scope-budget-schedules in executing the construction,
A. Project Kickoff
B. Meeting Management
C. Trade/Sub Progress Payment Application Processing
8. to manage changes to the scope-budget-schedule at the prime and sub levels, and
A. Prime Contract Change Order Processing
B. Trade/Sub Change Order Processing
C. Change Order Log
9. to verify with precision that each of those scope-budget-schedule packages is being executed in conformance with the plans, specifications, trade standards, budget, schedule, and contracts.
A. Progress Schedule QC Hold Points
B. Inspection Checklist(s)
C. Managing Construction Quality
E. Issues Management, Followup, and Closure
F. Punch List
G. Payment Application Approval memos
H. Report to Management (As GC this is prior to Payment Application. As CM this is between receipt and approval of payments.)
In the summer of 2017 a friend of mine, who had moved to Eastern Europe, reached out and asked something like "I know that you know a lot of lawyers.
Introduction to Green Building Projects
Building Systems, Techniques & Strategies
Claims & Litigation Case Studies
Codes & Standards
Research & Links
1. Introduction to Green Building Projects
This is a brief introduction to the design, construction, maintenance, and management of Green Building projects, which are sometimes also referred to as “sustainable”, “high-performance”, or “passive.”
“Green Building (also known as green construction or sustainable building) refers to both a structure and the application of processes that are environmentally responsible and resource-efficient throughout a building's life-cycle: from planning to design, construction, operation, maintenance, renovation, and demolition.” (Wikipedia)
The intention of Green Building is to reduce the environmental impact of building projects by:
Lowering energy and water use;
Using environmentally preferable materials;
Increasing durability, which allows buildings to last longer before requiring rehabilitation or replacement, which saves resources over the building lifecycle;
Reducing waste during construction and operation & maintenance;
Improving the indoor environment for occupants, including air quality (IAQ); and
Creating neighborhoods designed to lower environmental impact and improve human health.
The point is that buildings consume something like 40% of the energy we use, and making buildings more resource-consumption-efficient in every way, including during constructing, using, repurposing, and even decommissioning, is a good thing.
Green Building is about more than design and construction. Maintenance and management of Green Building projects is, arguably, more important than the design and construction process since the total cost of ownership (TCO) of building projects and facilities over time is always many times the cost of design and construction. The Green Building movement recognizes that facility and property managers require extensive training in making the investments in Green Building design and construction worth any additional expense on the front end.
There are many available Green, Sustainable, High-Performance, or passive building certifications. The most popular in the U.S. is from U.S. Green Building Council (USGBC) called Leadership in Energy and Environmental Design, commonly referred to as LEED.
2. LEED Certification
“Leadership in Energy and Environmental Design (LEED) is a set of rating systems for the design, construction, operation, and maintenance of Green Buildings which was Developed by the U.S. Green Building Council." (Wikipedia)
The LEED rating system is owned by U.S. Green Building Council (USGBC), which began in 1993 and is now an organization with more than $60 million in annual revenue, 200,000 LEED certified individuals, 92,000 total projects, 39,000 certified projects, 1.6 million registered or certified homes, 6,000 certified schools, 2,900 certified local government buildings, and 1,000 certified state government buildings. A division of USGBC is Green Business Certification Inc. (GBCI), which administers LEED, performing third-party technical reviews and verification of LEED-registered projects including technical reviews to ensure the building certification process meets the highest levels of quality and integrity.
LEED Professional Accreditations
LEED Green Associate requires the candidate to study and take a test.
LEED AP (Accredited Professional) requires the candidate to study and take a harder test.
LEED Fellow requires the candidate to show at least 10 years of exemplary impact with LEED, be nominated by a LEED professional, and have a team of endorsers who will write about the candidate’s contributions.
LEED Certification Levels for Building Projects
Certified: 40-49 points.
Silver: 50-59 points.
Gold: 60-79 points.
3. Building Systems, Techniques & Strategies
LEED Certification Prerequisites
Sustainable Sites: Construction Activity Pollution Prevention
Outdoor Water Use Reduction
Indoor Water Use Reduction
Building-Level Water Metering
Energy and Atmosphere
Fundamental Commissioning and Verification: USGBC and the LEED certification materials use the term “Commissioning” (Cx) to describe a quality assurance (QA) process, to ensure the plan for mechanical, electrical, plumbing, and renewable energy systems and assemblies that is submitted to USGBC for certification is executed in the field.
Minimum Energy Performance: There are multiple paths to ensuring the energy performance designs will meet current standards from ASHRAE and other specified standards.
Building-Level Energy Metering
Fundamental Refrigerant Management: Don’t use chlorofluorocarbon (CFC)-based refrigerants… Phase-out existing use.
Materials and Resources
Storage and Collection of Recyclables
Construction and Demolition Waste Management Planning
Indoor Environmental Quality
Minimum Indoor Air Quality Performance: Meet minimum requirements for ventilation and monitoring.
Environmental Tobacco Smoke Control: Prohibit smoking in or within 25 feet of the building.
LEED Certification Points for Building Projects (110 points total)
The outline here is from the LEED v4 Checklist
Integrative Process (1 point) Think hard and analyze the energy and water-related systems from the earliest phase of design, including to inform the owner’s project requirements (OPR) and basis of design (BOD).
Location and Transportation / Neighborhood Development (16 points) “To avoid development on inappropriate sites. To reduce vehicle distance traveled. To enhance livability and improve human health by encouraging daily physical activity.” Points are given for promoting aspects of the objective.
Sustainable Sites (10 points) Assess the site before the design using a structured process and consider strategies including: Protect or Restore Habitat, Open Space, Rainwater Management, Heat Island Reduction (i.e. avoid giant, uncovered asphalt parking lots), and Light Pollution Reduction.
Water Efficiency (11 points) While indoor and outdoor water use reduction and metering are prerequisites, points can be earned for low or zero irrigation designs, calculated savings of indoor water use from 25-50%, and management of cooling tower (HVAC system) water use.
Energy and Atmosphere (33 points)
In addition to having the longest list of prerequisites (see above), this category has the most point-value. The section mixes both energy savings with quality control (“Commissioning”); surely due to haw closely connected the two are.
“Enhanced Commissioning”, a more complete and intensive QA / QC process, must be performed by a third party Commissioning Authority (CxA), and to receive maximum points the building envelope must be part of the commissioning plan and process, in addition to the mechanical, electrical, plumbing, and renewable energy systems and assemblies required in the prerequisites.
Energy related points can be earned for Optimizing Energy Performance even further than the minimum standards, Advanced Energy Metering, Demand Response through load shedding or shifting, Renewable Energy Production (like solar), Enhanced Refrigerant Management and Green Power and Carbon Offsets where 50-100% of energy use comes from a green source.
Materials and Resources (13 points) In addition to the prerequisites, consideration should be given to Building Life-Cycle Impact Reduction (reuse of existing buildings or materials), Building Product Disclosure and Optimization - Environmental Product Declarations including the Sourcing of Raw Materials and Material Ingredients, and Construction and Demolition Waste Management.
Indoor Environmental Quality (16 points) In addition to the prerequisites, design consideration should be given to Enhanced Indoor Air Quality Strategies (like enhanced ventilation and contamination prevention), Low-Emitting Materials, composition and execution of a Construction Indoor Air Quality Management Plan, Indoor Air Quality Assessment, Thermal Comfort considerations, Interior Lighting strategies to promote comfort and well being by offering controls throughout, Daylight, Quality Views, and Acoustic Performance to limit noise.
Innovation (6 points) Points can be earned for Innovation using a strategy not addressed in the LEED system or exemplary measurable performance in a addressed area. There is also one credit available for having at least one LEED Accredited Professional on the team.
Regional Priority (4 points) Specific credit can be earned for issues important to the project’s region as identified by the USGBC regional councils and chapters and articulated in database of Regional Priority credits and their geographic applicability.
So the “accounting” on the costs of LEED Certification are either very high level or fuzzy. And as I mention in the Deep Thoughts section below, the costs are commonly downplayed and the calculable benefits are sometimes exaggerated. The science here appears to remain very soft. And few of the studies I have found appear to be by disinterested professionals with expertise in building economics.
Sources claim a range of additional costs for LEED Certification between 0-30%. The claim of zero additional cost seems, at first blush entirely absurd; the cost of registration and compliance alone is well above zero. The more common figures suggest a range between 2.5-8.5%, depending on the level of certification. I remain skeptical. In one of my case studies, the “additional cost” of the project over a reasonable square foot cost made the project 80% more expensive than a more common facility of identical size. And if you include the cost to make the repairs, then the project cost was 155% above the cost of a common facility (not +55%, +155%!). Granted, this was also a more beautiful building project than a more common facility; and much of the cost for a building that looked the same, would have been incurred even if the Green Building design & construction techniques and requirements were removed.
I acknowledge that the rigorous process that LEED Certification imposes, to think the project through at a painstaking level of detail, can lead to innovative design that could contribute to a net savings. I look forward to additional research into the economics of Green Building. Check back for more in the months and years to come.
A TIGHT, "GREEN" BUILDING ENVELOPE
Energy efficiency is great! But it has its risks. The tighter building envelopes required by Green Building standards remind me of the "Sauna Exercise Suit" I remember my grandmother wearing around the house when I was a small child. She would vacuum and dust and sweat like crazy, thinking it was helping her to get more fit. She lived a long happy life, so it appears to have done her no harm, but buildings constructed of moisture sensitive materials, like engineered wood (including oriented strand board or OSB) often don't fare as well.
The risks of building problems increases for Green Construction projects due to:
More complex building envelope
Use of new material technologies
High performance and more complex mechanical systems
Additional warranty requirements
Increased performance targets
Problems That Could Be Caused by LEED Certification
LEED standards can end up forcing a dramatic increase in building system complexity.
These standards are being built as we go along and they are changing the built environment faster than our understanding.
In some cases these requirements are adding costs, which causes stress to the economic viability of projects.
These LEED Certification requirements do not address the costs compared to the potential benefits.
From a Zurich document outlining the risks of Green Building, 5 categories of risk include…
Financial risks: The additional costs of Green Buildings may affect completing projects on time and on budget, but must be weighed against the cost of not going green.
Standard of Care/Legal: Mandates regarding LEED certification bring an increased risk of legal liability for Green Building design and construction professionals.
Performance: Project owners/developers are starting to require additional contract provisions and warranties regarding the energy efficiency of Green Buildings, causing increased exposure to potential liability for breach of contract or warranty.
Consultants/Subconsultants and Subcontractors: Lack of experience by these parties in green construction can lead to problems obtaining LEED certification, delays and improper material specifications.
Regulatory: New building codes and mandates associated with green construction can mean an increased liability to everyone involved in the green construction process.
The Construction Defect Litigation Business Model
It seems to me that “the construction defect litigation business model” came about because (1.) construction is complex, (2.) no construction project is perfect, (3.) most construction contracts have indemnity agreements, (4.) common commercial general liability (CGL) insurance policies have a duty to defend the insured when sued, and (5.) plaintiff attorneys are very clever and assertive. So considering this, I have said things similar to the following, many times, related to new advances in technology: If I were unscrupulous and did not love the construction industry, I would put together a team of plaintiff-oriented attorneys and experts, I would comb through the LEED Certification Database, I would plan and execute a marketing campaign to find every project that had even the most mildly disgruntled LEED project Owners, and I would encourage them to get involved in construction defect litigation using our team. It seems to me that the LEED certification database is the best marketing list possible for sophisticated plaintiff construction defect lawyers.
Also see The Good, The Bad, and The Ugly in the Deep Thoughts section below.
6. Claims & Litigation Case Studies
A “Net Zero” Educational Facility Gets A Big Repair: Defects introduced during construction, plus operational problems lead to repairs totaling more than 40% of construction cost.
Leak Investigation Involving Solar Panel Installation: A national solar system manufacturer / installer litigated with a homeowner who had multiple leak sources.
A Hygrothermal Study Leads to Pre-Litigation Resolution: An elegant solution to a divisive and expensive issue, allegedly related to condensation, is resolved using building science, which then leads to resolution of all remaining construction defect allegations, prior to filing of a lawsuit.
Litigation From Around the Country
Chesapeake Bay Foundation, Inc. et al. v. Weyerhaeuser Company:
Southern Builders v. Shaw Development:
Gidumal v. Site 16/17 Development LLC:
Flincto Pacific Inc. v. City of Palo Alto (2014)
Burchick Construction Company, Inc. v. Pennsylvania State System of Higher Education
Hampton Technologies, Inc. v. Department of General Services (2011)
7. Deep Thoughts
My experience and research lead me to the following conclusions.
1. The hard-thinking that is forced by Green Building principles generally, and LEED certification specifically, during the design phase, is wonderful in many ways: Environmental protection, lower energy use, human health and well-being, and on and on.
2. The potential for the process to transform the built environment through the integrative approach, rather than the more traditional focus primarily on esthetics and economics or return-on-investment (ROI), is exciting.
3. The requirement for “Fundamental Commissioning” is something that every building owner should require as a minimum quality control function.
4. Enhanced Commissioning should be a model for a superior level of quality control throughout the building industry.
5. LEED certification can cause an explosion of building system complexity during design & construction as well as operation & maintenance.
6. Increased complexity in building systems increases costs.
7. Increased complexity in building systems increases risk of building system failure.
8. There is no built-in cost-benefit analysis mechanism, and surely no requirement therefore, built into most of the Green Building standards, including LEED.
9. The costs of Green Building and LEED are commonly down-played.
10. The quantifiable benefits of Green Building and LEED are commonly exaggerated.
11. Case studies of Green Building project failures are limited.
12. Costs for operation & maintenance (O&M) for the more complex mechanical systems appear to not have been closely studied.
13. Ultimately, additional costs of Green Building and LEED Certification are being passed to the people who can least afford it (low-income individuals and families).
8. Codes & Standards
IBC International Building Code
IgBC International Green Building Code
CBC California Building Code
LEED / USGBC
ASHRAE Guideline 0–2005
ASHRAE Guideline 1.1–2007
CA 2008 Long Term Energy Efficiency Strategic Plan
CA 2019 Building Energy Efficiency Standards
U.S. Department of Energy
9. Research & Links
We have a not-so-scientific research method that generally yields some amazing results. It's called PFCS Proving The Obvious Using Google Method. I began by searching "Green Building Summary" and received these results.
Search Results "Green Building Summary"
Search Results "Costs of LEED Certification"
OTHER INTERESTING RESOURCES
PFCS Case Study: Plumbing Leaks in High-Rise Condo. Complex investigations require development and testing of hypotheses. This is an example.
California Becomes First State to Order Solar on New Homes (Bloomberg): In May 2018 the California Energy Commission decided that most new homes and and multifamily units under 4-stories built after 2019 will be required to include solar systems. They estimated the systems and complying with energy-efficiency measures will add $9,500 to the cost of a new home, which would be offset by $19,000 in energy and maintenance savings over 30 years. California is already the nation’s largest solar market and Governor Jerry Brown’s has an effort underway to slash carbon emissions by 40 percent by 2030. This will exacerbate the issue of high housing costs, seen as a drag on the economy and contributes to rising social tensions. The state only adds about 80,000 new homes a year, and the state issued permits for fewer than 480,000 new residential units in the last 5 years, yet California’s economy added 2.3 million jobs over the same period, which is about one home for every five additional workers.
Hidden Risks of Green Buildings from RCI's Interface Magazine
The project was a 13,500 square foot educational facility in the Pacific Northwest designed as a "Net Zero" building, meaning it generates as much energy as it consumes. It was certified LEED Platinum (the highest level) and won numerous design awards. The walls and roof were built using structural insulated panels (SIPs), which consist of an insulating foam core sandwiched between two structural facings, typically (and in this case) oriented strand board (OSB). The exterior envelope was dominated by storefront windows and doors, metal panels, aluminum curtain wall, brick, built-up roofing, and standing seam metal roof. The original project cost $7.2 million ($533/SF which is about double the national average) and was completed in 2011.
Due to excessive moisture in, and damage to, the SIP system at the roof, the Owner, replaced the entire assembly in 2015 at a cost of $3 million (another $222/SF). Unfortunately for all involved, the operation and maintenance personnel warned everyone involved that they believed use of the SIPs was going to end in a tragedy similar to what ultimately came to be.
PFCS represented the trade contractor who installed the membrane roofing system in the area that was damaged and being replaced. PFCS prepared a preliminary report in January 2017 and a final report in May 2017. We concluded that the damage was caused by a handful of primary failures including:
(1.) The SIPs were mishandled during construction, allowing them to get wet during storage on-site and during the wet winter installation. In addition to other materials in the assembly, the SIPs then had peel & stick membrane applied over the top surface, which inhibited drying potential of the engineered and sawn wood material, that was wet from construction. This combination alone may have been enough to cause the damage that ultimately manifest.
(2.) The installation of the SIPs was defective and did not allow the joints to be properly sealed, as required by the manufacturer. These joints became a location of damage on the top side of the SIPs, where warm moist air from the conditioned space below was able to migrate from the interior through the system and condense on the underside of the cold membrane roof system, installed by our client.
(3.) The relative humidity inside the facility was too high, contributing to the volume of moisture in the warm, wet air that migrated through the roof system and condensed on the underside of the cold, membrane roof system. PFCS argued successfully that none of the causes and none of the damage was, in any way related to the membrane roofing installer, and they were dismissed from the litigation.
Evaluating the performance of aging building elements is not one of the hard sciences; and in the case of electrical, HVAC, plumbing, foundations, below grade waterproofing, and more, it is complicated by the fact they are partially or entirely hidden. This program is for those tasked with helping people make long-term decisions about their building systems and Pete Fowler Construction Services’ approach to applying the scientific method to building rehabilitation decisions.
End of (Service) Life Care: Evaluating Aging Building Infrastructure" begins with a discussion of the importance of this subject, because most people spend 20-50% of their income on housing. Then we get into the details of who should be on the team and exactly what should be done to professionally evaluate the discrete building elements and apply professional judgement about what work should be done and when. We will have a high-level discussion about professional construction contracting discipline and how a broad lack of this in the building rehabilitation industry is causing harm to the most fragile property owners. Finally, we will wrap with a discussion of how to plan for the inevitable future.
End of Life Care
"Don’t ask the barber whether you need a haircut."
There is an alternative to the terrible way that aging properties are typically assessed and rehabilitated.
Who is on the team in evaluating aging infrastructure is VERY important.
Building performance analysis is about 80% science that should be performed according to industry standards, and 20% art or professional judgement.
Professional construction contracting discipline is 95% science.
We Know Buildings
This Might Sound Salesey
2. End of Life Care
Lifecycle Cost Analysis
Think Holistic Medicine
Major Building Elements
PFCS Resources: Inspection & Testing
PFCS Resources: Construction Management
PFCS Resources: Construction Defects
PFCS Resources: Building Lifecycle Management
The Lord’s Work
3. "Don’t ask the barber whether you need a haircut."
Case Study: Soil Subsidence Repair
Who? The Most Important Q
The Building Doctor
Who Is In Charge of What?
Who is on the Team?
Fee for Service
RFP Sample for Hiring Professionals
Firing an Engineer
An Army of Sheep
4. Playing Doctor
Building Performance Analysis
Document & File Management
Meetings/Interviews with Key People
Building Information Management
Property Condition Assessment
Case Study: CM with Major Savings by Minimizing COs Using Estimating Skill
The Traditional Approach
Professional Construction Contracting Discipline
The DBSKCV Construction Management Method
Prescribe: RFP Contents
The Golden Rule
Don't Sign That contract!
Start with One Building or a Small Sample
6. Retirement Planning
Comparison of Plan to Actual: Construction Costs & Schedule
As-Builts or PCA Update
Standardized Maintenance & Repair Scopes of Work, and RFPs
The Most Powerful Force in the Universe
Comparison of Plan to Actual: Reserve Study
Program Introduction Revisited
This program was originally presented at the Reserve Analysts (APRA) Symposium 2018 in Nashville, TN.