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Construction Project Management in the US vs. EU

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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:

  • Residential construction

  • 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.

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CMAA Construction Management Standards of Practice define 10 core responsibility areas of a construction managerI:

  • Project management

  • Cost management

  • Time management

  • Quality management

  • Contract administration

  • Safety management

  • Program management

  • Sustainability

  • Risk management

  • 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:

  1. Clearly defined goal and objectives

  2. Defined plan and responsibilities

  3. Informed, timely decision making

  4. Proven risk management system

  5. Effective communication system

  6. Complete and accurate project documentation

  7. 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.

Conclusions

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

  1. Introducing Our Latvian Interns

  2. Construction Risk & Claims Management in the US vs. EU

  3. Construction Management Process in the US vs. EU (THIS ARTICLE)

  4. Comparison of Common Law (US) vs. Civil Litigation (EU) Practices

  5. Top Issues in Construction Projects in US vs. EU (COMING SOON)

  6. Construction Risk Management in the US vs. EU (COMING SOON)

  7. Construction Claims Management in the US vs. EU (COMING SOON)

References

  1. What is Construction Management? by CMAA

  2. Construction Management Evolution of a Profession by CMAA

  3. Construction Management Standards of Practice by CMAA

  4. Code of Practice for Project Management for Construction and Development 5th edition by The Chartered Institute of Building (CIOB)

  5. Redefining Construction Management by CIOB