Disaster Evaluation, Mitigation, and Recovery Resources

It’s Crazy Out There!

I started this week (4/6/2020) in Las Vegas and it was wild to see The Strip empty. I am now (4/10/2020) in San Diego, and it's been Noah's-Ark-like raining for 24-hours. So I looked at The Weather Channel this morning, and all the news is about the storms in the Southeast!

I realized that I had never made a compilation of disaster evaluation, mitigation, and recovery resources from our mountain of information, even though it’s a big part of what we do. So here goes. I will get more gathered here as time goes on.

Recorded Webinars

• Building Leakage Evaluation (Per ASTM E2128)

• Mold Management

• Fire, Flood and Landslide Claims 

• General Liability Claims 

• Understanding & Evaluating Construction Estimates

Articles & Blog Posts

• What To Do When You Have A Building Leak

• Who Needs a Contractors License? Everyone, It Appears... Well, not quite.

• PFCS Building Rehabilitation Process

Case Studies

1. Case Study: A Custom Home in an Upscale Neighborhood with Water Intrusion and Habitability Claims

2. Case Study: Plumbing Leaks in High-Rise Condo

3. Case Study: Leak Investigation Involving Solar Panel Installation

4. Case Study: Construction Cost Estimate for Water Damage in Condo

Our Services

We are like a “Solutions Factory” for building problems. You dump your problem at our front door, our professionals run it through our engineered systems and processes, and we deliver you a packaged solution that includes a plain English translation. It’s really that easy.

Broadly, our services include:

1. Building Inspection & Testing

2. Estimating, Quality & Construction Management including a specialty in Building Repair & Rehabilitation

3. Building Related Claims & Litigation of all types including Construction Defects, Property & Injury, and Construction Contract Claims.

For Further Assistance

By Telephone: 866-706-7327

By Email: info@petefowler.com

Construction Quality Management Resource Guide

Construction Quality Management Resource Guide by Pete Fowler, with contributions from George Cesarini and Matt Kupiec, was published through Chubb in March of 2020. This document references Pete Fowler's Exterior Building Wall Components and Details Checklist.

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Table of Contents

1. Introduction

A. Why We Are Here
B. The New World
C. Common Construction Defects
D. The Definition of Quality
E. Managing Project Quality

2. Managing Construction Project Quality

A. Introduction
B. Definitions
C. Project Definitions
D. Roles & Responsibilities
E. The Project Quality Management Plan - Summary
F. Before Construction
G. During Construction
H. After Construction

3. Quality-Focused Organizational Maturity

A. Introduction
B. Levels of Maturity
C. Aspects of Maturity
D. Maturity Audit

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1. Introduction

A. Why We Are Here

This guide is intended to serve people and organizations that work on building projects and those who intend to improve the quality of the projects and their organizations. It outlines a quality management process for all players in the building lifecycle: owners, developers, investors, insurers, designers, general contractors, material manufacturers, prime trade contractors (roofers, painters, electricians, etc.), subcontractors, and more.

A high quality or mature organization is required to reliably deliver quality projects. Most people in the building business know that project problems often lead to claims and litigation. Organizations like developers, insurers, and general contractors can attempt to influence or even mandate that trades and suppliers use quality management systems on their projects. Regardless of where your organization is in this process, it will benefit from improving project quality and organizational maturity.

B. The New World

Construction professionals are living in a new world. Consumers expect quality increases and price decreases in all products, they are more conscious of building- related health issues than ever before, they are more litigious, and there is a proliferation of attorneys.

Hiring good, experienced people and expecting them to get it all right is no longer enough. The world of business generally, and building projects specifically, are far too complex. We need a system of checks and balances, to “inspect what we expect.” For anything resembling a guarantee of success we need to use defined processes to ensure defects don’t run downstream.

C. Common Construction Defects

Historically, builders and occupants were most concerned with structural stability, so soils and structural systems were the prime focus of the problems we faced. Over the last 30+ years, we have seen fewer of these claims, and those we see are less catastrophic.

More stringent energy requirements in the 1970s resulted in buildings becoming tighter and less fault tolerant. The most common defects have been related to building enclosures like roofs, walls, and waterproofing. High-risk failure points including elements like showers and plumbing systems began to emerge. As building envelopes continued to tighten, less fault-tolerant materials came into use, and the decline of training in the construction trades began to take effect. Now, as buildings have become more complex due to green building, “smart building” features, and other dynamics, the plumbing, mechanical, and electrical systems are emerging as defective conditions more frequently.

High-Risk Building Elements

• Foundations: Although building foundations are failing less frequently than ever, vigilance must be maintained in executing construction which conforms with the design requirements. And although “non-structural” concrete cracking rarely drives a project into litigation, it’s often added to the list of complaints when it’s even slightly more pronounced than “normal.”

• Sub-grade Waterproofing: The tolerance for imperfection is low and moisture intrusion into basement level interiors, including parking garages, is one of the most commonly litigated issues.

• Exterior Enclosure elements including stucco/plaster, masonry, and siding & trim: Large areas like exterior building walls are rarely defective, unless there is excessive stucco cracking, because these areas are simple and uniform. The devil is in the details. Exterior walls usually fail at interface conditions like roof to wall, fenestration openings, product transitions, or penetrations. See the Sample Checklist for Exterior Building Wall Components and Details and use it as a checklist in making sure you are ready to build and coordinate trades.

• Exterior Glazing, Curtain Walls, and Fenestration including windows, storefronts, and exterior doors: These elements are uniquely susceptible to problems because “the devil is in the details,” and these elements add complexity to the exterior building walls, which are intended to durably separate the interior from the exterior elements. Regardless of whether water is coming through or around these elements, the people involved in manufacturing, coordinating, and installing them are going to get the call. As discussed later in this article, some building elements have mock-ups built and tested even before being brought to the project site. Another option to build one element, or a set of representative elements, on-site and test before moving into full- blown production. The former is generally “safer” but more expensive; the latter is often more cost effective. Both are good practices for high-exposure elements like curtain walls, windows, storefronts, and exterior doors. Some municipalities, owners, and insurance companies require third-party peer review and/or quality control consultants for these elements, which is also, often, a worthwhile practice. See the Sample Checklist for Exterior Building Wall Components and Details and use it as a checklist to ensure that you are ready to build and coordinate trades.

• Exterior Coatings (Paint): Similar to joint sealants, but even more so, exterior coatings have changed a lot in the last 40 years; but some in construction seem to think it’s an unskilled trade and that paying close attention to the manufacturer’s application instructions are not worth the time and money. Coating failures are common. More common are coatings that could have lasted for more than double their lifespan, if they were applied properly, on properly prepared surfaces. It’s wise to build in quality control hold-points, where third party coatings professionals or the manufacturer inspect and verify the quality of the preparation and application.

• Roofing: Roofs have traditionally been a focus for claims and for quality management because the risk is high due to the exposure to the elements and the cost of failures, including damage to interiors that require relocation of occupants.

• Green Roofs/Rooftop Gardens: What could go wrong!? Of course there are advantages to green roofs. But if you take all of the potential costs and problems associated with roofs, and add them to all of the potential costs and problems associated with waterproof decks, you will have approximated the costs and risks associated with green roofs. There is so much water, and there are so many interface conditions, and many of those interface conditions end up covered with living matter and walking surfaces, that we create a level of complexity and maintenance burden that will inevitably lead to problems on a significant number of projects, over time. As with all of the high-risk elements described here, success is possible through disciplined application of the principles laid out in this guide.

• Waterproof Decks (Horizontal Waterproofing): From simple and inexpensive liquid applied membranes, to complex and expensive pedestal systems, decks are tough to get right. Most decks have a large number of complex intersections and interactions with numerous adjacent trades, including the structure (concrete or framing), guard walls and rails, sheet metal, cladding, doors, sealants, plumbing, walking surface, penetrations, and more. The highest level of care and planning needs to be applied to design, drainage, and quality of construction.

• Joint Sealants are, by definition, an interface condition; and interface conditions are where problems most often begin. The science of joint sealant design and the craft of installation are well documented. There remain segments of the industry, especially low-rise residential construction, that are completely ignorant of this knowledge. On some projects the sealant work is contracted to an unrelated trade, as if the knowledge and skill required for success were that of a clean-up crew. We recommend against this strategy.

• Tile & Stone Assemblies (Including Showers): Tile assemblies in showers and baths are often subjected to more water than roofs, and have been the subject of many multi-million dollar lawsuits from leaks and damage. Even if it’s not a wet assembly, integration of rigid tile into more flexible building assemblies, including wood or light gauge steel framing, often leads to failures like excessive cracking. These assemblies require attention to proper specification, quality of installation, and verification that they will remain water tight over time.

• Plumbing Supplies & Drains; Sprinklers & Standpipes: Accidentally introducing large volumes of water via plumbing leaks into a modern, tightly constructed building with modern “engineered” materials like OSB, paper faced gypsum, or fiberboard trim, leads to disasters and insurance claims every day. These new materials deteriorate and grow mold remarkably fast. We rarely get a leak mid-run in a pipe of any type, unless someone physically damages it; it’s the field installed “interface conditions” that are the most common culprits as failure points. We often see failures at fittings like couplings, elbows, tees, plugs, caps, bushings, reducers, etc., or at transitions into fixtures or equipment. The quality of these connections is critical. Unfortunately, we often don’t have the level of discipline that we need to “inspect what we expect”. Therefore, proper specification, hiring of contractors with skilled workers, and inspecting for quality, is, arguably, more critical for these building elements than for any others. Plumbing systems should have a generic checklist, similar to our Sample Checklist for Exterior Building Wall Components and Details, so that project and element specific checklists can be composed to ensure that you are ready to build and coordinate trades. Some municipalities, owners, and insurance companies require testing of a representative number of randomly selected components after installation, to verify quality. Even if it’s not imposed, consider building in hold points to “inspect what we expect”. Destructive testing can be used to examine and test the quality of these connections, to ensure poor workmanship is not going to lead to catastrophe.

• Heating, Ventilating & Air-conditioning (HVAC): We believe we are seeing more HVAC claims because buildings are now tighter and more complex. In some cases, “Green Buildings” are built so tight, and their materials so lacking in fault-tolerance (like OSB that deteriorates rapidly when there is moisture and little drying potential), the HVAC system designers, installers, and operators are being blamed for allowing warm interior air to get too humid, which can then migrate toward colder exterior surfaces and condense into water inside wall cavities. This creates a difficult quality management situation for non-expert contractors, who need to create quality checks during the construction process; this sometimes requires third-party specialty experts.

• Building Automation: Increased complexity is being introduced into the built environment through building automation or “smart building” systems and technologies, including the rise of “the internet of things” where individual components are connected to and managed via the internet in real time without human intervention. And this complexity creates far greater potential for error. These are systems that occupants interact with daily and have been promised significant benefit, including energy cost savings, from their use. So ensuring quality by proper design and execution is time well spent.

• Fountains & Swimming Pools: Fundamentally, these are not complex assemblies. Humans have been building them for hundreds of years. Unfortunately, that much water often causes problems; especially in expensive projects with high profile water features and above-grade pools. Peer review of the designs are recommended due to the geotechnical and structural work supporting these incredibly heavy structures and the interface conditions where water might escape. Quality management hold points to verify conformance with the design are also advised.

• Fine Grading & Drainage: As discussed above, it’s hard to get subgrade waterproofing perfect. The first line of defense is to keep the water away from the building. It’s surprising how many times we have found a roof drain connected to a perforated pipe in a “French Drain” style system, thereby injecting water into a subgrade adjacent a foundation. We have to ensure all “bulk water” is moved away from the building by design, and that the construction conforms with that smart design.

D. The Definition of Quality

In our search for a definitive definition of “quality,” we found that a single definition is impossible. Even the dictionary has 14 definitions! The definition depends on who you are and what you’re talking about.

Our Working Definitions of Quality, a Quality Project, and a Quality System

Quality is fitness for use (Juran 1974), including meeting or exceeding needs, now and in the future, reliably, durably, with limited variation, and virtually defect free; and it helps if joy is sparked in those who recognize excellence.

A Quality Product meets or exceeds the customers needs, now and in the future. Aspects of a Quality Product include it being: (1.) fit for its intended use, (2.) cost effective, (3.) delivered on time, (4.) reliable, (5.) durable, (6.) with limited variation, (7.) virtually defect free; and (8.) it helps if joy is sparked in people who are able to recognize excellence.

To deliver a Quality Product, a Quality System, with the objective of delivering a Quality Product, must be employed. Components of the system should include definition of: (A.) the customer needs, (B.) the product itself and acceptable variation, (C.) the budget/costs, (D.) the time of delivery, (E.) the process for creating the product, (F.) the process for verifying the parties are capable of doing the right things right, every time (i.e. “Organizational Maturity”), (G.) the process for verifying the parties involved are actually doing the right things right, every time, during creation of the product, (H.) and the process for verifying that the right things were done right, at the time of delivery.

E. Managing Project Quality

As we will elaborate below, to manage project quality there are activities that need to be undertaken before and during construction. In order to document the good work, to ease that transition from construction to the building operations team, to capture lessons learned, and to ensure future projects benefit from those lessons because we have all learned that feedback is the breakfast of champions, there are activities after construction that should take place.

Planning backward from a successful end requires we define clearly what good performance (high quality work) looks like. This definition can be shared with the project players, and then we “inspect what we expect.” Sometimes the inspecting is by third parties like the building official or deputy inspectors working on behalf of the governing authority. Sometimes this quality inspection is by specialty consultants with deep expertise in systems like waterproofing, building walls, roofs, etc. However, the f irst line of quality inspection should always be by trained workers themselves and their immediate supervisors. Then, the company doing the work should have a verification mechanism internally to make sure that defects don’t run downstream.

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2. Managing Construction Project Quality

A. Introduction

The major objectives of quality management are to (1.) minimize the defects on asset delivery or handover, and (2.) identify and solve defects and issues before your customers do — safeguarding your reputation. The additional benefits of a well-planned and executed quality management process include increases in speed of activity through the system, professionalism, and predictability. Decreases in confusion, friction, re-work, costs, and drama.

As Albert Einstein said: “Everything should be made as simple as possible, but no simpler.” Therefore, we recommend a simple, written Before-During-After (B-D-A) Plan:

• Before: Define what good performance looks like.

• During: Verify by inspecting what we expect.

• After: Memorialize and learn

See the details below, but in short: During the pre-construction (“Before”) phase, we will make sure our design hypothesis (project definition) is reasonable by having someone with experience in building performance issues review, comment, and recommend improvements. We make sure the plans, specifications, standards, and contracts are all consistent in describing to the contractors, those who will actually install the specified materials, “what good performance looks like.” We will establish a procedure to “verify” at specified hold points during construction; we will “inspect what we expect” to verify conformance with the project definition (plans, specifications, standards, and contracts). After the initial assemblies are installed, we might even test them to verify performance, or build a separate mock-up and test it (whichever is more cost effective).

B. Definitions

• Plans and Details: Graphic representations of construction.

• Specifications: Specs are the written representation of construction, which usually include a greater level of detail regarding products and materials, installation or application process, quality management, and performance.

• Construction Contract: Agreement between two or more parties for the delivery of construction; plans and specifications are used as the definition of what is being bought and sold.

• Standards: Documents, with graphic and written information, referenced by plans, specifications and construction contracts, which specify performance criteria and/or methods in greater detail than typical plans or specifications. Standards are created by standards-setting bodies like ASTM, product manufacturers, and industry trade groups.

• Scope of Work: The written definition of what is being bought and sold. Usually articulated in writing by making a list or description of responsibilities and specific exclusions (work that is NOT included), with references to plans, specifications (prescriptive or performance based), and industry standards. We strongly prefer when the scope can be summarized in a 5-15 point list, or conform to the fundamentals of a 2 or 3 level “Work Breakdown Structure,” collectively representing 100% of the project scope.

• Hold Point: Critical time in the construction process where construction should stop for verification of conformance with plans, specifications, standards and contracts. Verification can include inspection, testing, recording, and reporting.

C. Project Definition

We need to make sure the “project definition” is crystal clear. Many projects that have “gone bad” stem from the following issues:

• Unclear designs, where the plans say one thing (or are silent) and details conflict with one another

• Specifications in conflict with details

• Contracts that make vague reference to the “plans & specs”

• Sparse and confusing RFIs

• Change orders that are unclear

• Project players that agreed verbally to do work in a way that no one ever bothered to write

  down

• Lack of communication with the architect or engineers about said work

In today’s complex world, we need to avoid anyone onsite thinking “That’s how we always do it” as an acceptable mode of operating. It’s not. If we ever hear “Don’t tell me how to do my job! I’ve been doing this for 30 years!!” then we should know then that we have not laid the proper foundation for managing construction quality. Everyone’s scope of work should be well known and written in adequate detail to verify conformance in a way that everyone can agree when the work is done acceptably. Getting a clear, specific and detailed project scope of work is a critical step in the construction project management process, and it is where a project’s “quality” should be established.

Plans and specifications are a hypothesis that if the builders construct in conformance, then the result will be a quality project. Therefore, we need to make sure we understand the plans and specifications, and we need to take action to validate the hypothesis at various points in the process. We should consider peer review and constructability analysis prior to planning for the construction. Then we need to plan the construction by breaking the work into sensible work packages by trade, and identify quality control hold points where we will stop and evaluate the work in process. Either before or during the initial stages of construction, we can test the building assemblies to ensure they are performing to the level of expectation.

D. Roles & Responsibilities

Third-Party Quality Management Consultants and the Cost of Quality

The old adage “We offer three kinds of service: Good, cheap, and fast. But you can only pick two.” is no longer true in most aspects of the modern economy; Good, cheap, and fast have actually become a consumer expectation. That’s because application of modern quality tools like organizational maturity, Lean, Six Sigma, and others, genuinely make products (including construction) better — cheaper — faster.

So in the end “Quality” should be free; and maybe even increase profitability. But realistically, in the beginning, quality improvement is an investment. So far, we have only touched briefly on third party consultants versus project players self-managing quality. The use of third parties, in addition to those mandated by the governing authorities like building departments, varies greatly. This guide recognizes that at the pinnacle of organizational maturity, most of the quality management is by the company performing the work itself. But the building business is a long way from universal self-policing for quality. Also, the business is inherently risky, and use of third-party inspectors is an often employed risk management activity. Most of the players in the process have a profit motive to get the project completed as quickly and inexpensively as possible, so it sometimes takes an outsider, who’s job it is, to have the courage to ring a bell that slows (or even stops) progress if quality standards are not being met.

Therefore, third party quality consultants should be hired and managed the same way we are describing the use of any contractor. That is, the work should be defined and specified clearly, and there should be built-in mechanisms to “inspect what we expect” at specified intervals. This entire guide should be consistent in communicating this process, regardless of whether it’s a third party consultant reporting to an Owner’s Representative, a subcontractor reporting to a general contractor, or an employee reporting to a manager; the discipline must be exercised to “inspect what we expect” and deliver consequences. The consequences for excellent performance should be praise and payment.

If parties in the process can not or will not conform with the required standards, then we must be willing to administer consequences. You will get resistance. If a contractor has signed a contract to perform consistent with a specified standard, it will sometimes take a strong will to make some of them perform. Always be fair; but also be firm.

Key Project Players

• Owner/Developer: Homeowners, custom/spec builders, home builders, private or public companies or developers, state or federal governments, municipalities, school districts, etc.

• Owner’s Representative/Construction Manager: A company that specializes in construction management that is responsible to advocate for the owner’s best interests by overseeing the construction process, including scheduling, change management, and progress payment application processing.

• Designers: Architect, engineers, and specialty designers like waterproofing, roofing, and interiors.

• General Contractor: A contractor with a prime contract with the owner who performs and/or supervises the work of multiple trades.

• Subcontractors: A contractor that contracts with a general contractor, not directly with the owner.

• Prime Trade Contractors: Trade contractors who contract directly with the owner.

Quality Professionals

• Company Quality Executive (Champion): This is the corporate executive who promotes quality throughout the company.

• Project Quality Team: This is the team responsible for preparing and executing the quality plan for a specific project.

• Project Quality Executive: This is a management-level leader, with supervisory responsibility, who fosters the culture of trust and accountability. The most important accountability function is to ensure that the Project Quality Team has a written Project Quality Management Plan, and executes that plan conforming with the company’s high standards or with the third-party consultant contract.

• Project Quality Expert/Technical Consultant: This is the person who knows the details of the Project Quality Management Plan and whether or not the construction work is conforming with the project definition. This individual may not self-perform all of the work of the Plan, but is responsible for the completeness and excellence of the work. This role reports to the Project Quality Executive.

• Project Quality Manager: This role is responsible for the supervision and/or execution of all the activity of the Project Quality Management Plan. Generally, the majority of the coordination work is performed by the Project Quality Coordinator, but the Manager is ultimately responsible for the project’s success from an administrative and managerial perspective. This role reports to the Project Quality Executive.

• Other (Possible) Team Members:

  • Quality Inspector: This is a skilled building professional capable of understanding the

    project definition, comparing the work in place to that definition, documenting conformance or lack of, and reporting clearly and professionally. This role reports to the Project Quality Expert/ Technical Consultant.

  • Specialty Experts: Structural, waterproofing, windows, roofs, mechanical systems, etc.

  • Project Quality Coordinator: This is a role that may do most of the day to day work of making sure the details of the quality plan are performed, including scheduling, meeting and task management, organization and analysis of the project documents, etc. This role reports to the Project Quality Manager.

  • Project Quality Assistant: This role reports to the Project Quality Manager and assists the Manager and Coordinator in accomplishing the day-to-day work of the quality plan execution. In a third party quality consultancy, the client would expect to pay less for this individual’s time than the Manager or Coordinator.

E. The Project Quality Management Plan - Summary

Quality Assurance Sample Checklist

Before Construction/Pre-Construction Phase

□ 1. Initial Quality Team Project Planning Meeting with executive (or client).

□ 2. Detailed Scope of Work, Budget, and Schedule for Project Quality Management Plan.

□ 3. Quality Team Project Status Meeting.

□ 4. Plan Constructability Review and Report(s) (to create Inspection Checklists).

□ A. Decide on building elements and interface conditions that will be the subject of the plan.

□ B. Plan Review: architectural, structural, and specialty designs.

□ C. Specification review.

□ D. Referenced standards review.

□ 5. Inspection Checklists.

□ 6. Testing Plan: Mock-up of assemblies and testing (Optional).

□ 7. Hold Point Inspection & Testing Schedule. Be prepared to stop the project if acceptable performance cannot be achieved.

□ 8. Quality Team Project Status Meeting(s).

□ 9. Project Status Meeting(s) with Executive (Client).

□ 10. Requests for Information (RFIs).

□ 11. Project Budget Review against Design and Scopes of Work. Project Budget and Quality Management Plan Budget updates as necessary throughout the process. Make active decisions about “how much insurance to buy.”

□ 12. Trade Contract Scope of Work Reviews and Updates (including performance standards and tolerances). Trade/Subcontracts: connect the Plans, Specifications, and Standards, Quality Management Plan, including Hold Points, to the Contract and Scope of Work documents so that Quality does not “cost extra” (in change orders) during construction.

□ 13. Bid Process.

□ 14. Submittals.

During Construction Deliverables/Construction Phase (Quality Control)

□ 15. Project File and Document Management Control Plan

A. Plans
B. Specifications
C. Transmittals
D. RFIs
E. Daily Logs
F. Inspection Documentation (Daily/Weekly)
G. Punch List Reports (Daily/Weekly)
H. Incident Reports (As Needed/Daily/Weekly)
I. Interim Reports (Weekly/Monthly)
J. Etc.

□ 16. Project Kickoff Meeting(s). Make sure prime and trade contractors know the standards they will be held to during the construction.

□ 17. Coordinate actions at Hold Points in the construction schedule to verify quality of installations.

□ 18. Inspection and Documentation (Daily or at Hold Points). Verify conformance with project definition (plans, specs, standards and contract scope of work documents) and to evaluate any onsite changes (Optional).

□ 19. Testing at Hold Points to verify performance (Optional).

□ 20. New Punch List Items (Non-Conforming Work) Report(s) (Daily/Weekly).

□ 21. Punch List (Non-Conforming Work) Status (Master List).

□ 22. Interim Report(s) (Monthly) to Management/Project Quality Executive/Client (This is extremely important; similar to a contractor’s monthly payment application).

After Construction/Operation & Maintenance Phase

□ 23. Start-up Documentation & Commissioning.

□ 24. Warranty Documentation, Maintenance Plan & Records.

□ 25. Final (Project Close) Report. Quality control process, design summary, evaluation process, inspection summary, testing summary and ongoing maintenance recommendations (Optional).

□ 26. Project Close Meeting [with Executive and/or Client].

□ 27. Project File Compiled and delivered and/or archived.

□ 28. Project Debrief.

□ 29. Follow up Annual Property Condition Assessments.

F. Before Construction

Planning backward from a successful, virtually “zero defect” project is hard.

Early in the process we need to decide the level of energy (time, money, talent, etc.) that we can and will dedicate to the quality management plan. To decide on the level of energy, begin with the Explanation of Service Levels below. Then apply your decision to the Project Quality Management Plan — Summary activities, above. This way you can estimate the time and cost for your Plan. Remember, the quality management activities do not include doing the actual design. At a minimum, this is making sure the project definition is (close to) complete, and verify proper installation and integration of the assemblies that will lead to appropriate performance. Further work can ensure a connection between the plans, specifications, standards and contract scope of work documents.

Explaination of Service Levels

1. No Inspection

2. Limited Visual Inspection

3. Limited Visual, Limited Testing

4. Periodic Inspection, Limited Testing

5. Extensive Inspection, Limited Testing

6. Extensive Inspection, Extensive Testing

Document Review Levels

• (A.) Plans and Specifications only

• (B.) Plans, Specifications, and Standards

• (C.) Plans, Specifications, Standards and Contracts

Keys to Success in the "Before Construction" Phase

Creating Sensible Lists: One of the necessary skills is making sense of the million moving parts of a construction project. With help from psychologists, the project management profession figured out the best way to make sensible lists that are easy for humans to understand. It’s called a “work breakdown structure” (WBS) where each level of the outline has between 5-9 items. In construction we sometimes get away with as many as 15-25 items, but more than that number and people lose the ability to see the “big picture”. The table of contents of this guide is what we call a 2-level WBS.

Meeting Management: Building projects have lots of people involved. And to get lots of people rowing in the same direction is like cat herding; it’s not easy. Meeting management may be the most studied subject in business. The point is, make a written sensible list of things you need to accomplish before any meeting, and share it. Then make a SMART (Specific, Measurable, Assertive, Realistic, and Timed) set of action steps that people agreed to during the meeting. Then return to the next meeting with the list of action steps from the previous meeting, and use it to hold people accountable.

Knowing how the project is going to be built: Not everyone on the team needs to have deep expertise in knowing how things get built; much of the work requires surprisingly little. But there MUST be a deep, nuts and bolts level understanding for real success.

Key Deliverables

• Meeting Minutes & Action Steps

• Detailed Scope of Work, Budget, and Schedule for Project Quality Management Plan

• Building Plan & Specification Constructability Review and Report(s)

• Inspection Checklists

• Testing Plan

• Hold Point Inspection & Testing Schedule

• Trade Contract Scopes of Work

To create Inspection Checklists and a Hold Point Inspection & Testing Schedule, see the list of High-Risk Building Elements in the introduction, and begin creating and identifying the critical components of each major building element that will need verification of conformance, during construction.

Sample Checklists for Exterior Building Wall Components and Details
(Level 2 WBS)

Similar checklists should be considered for all of the High-Risk Building Elements listed in the introduction. From here, your Inspection Checklists can be composed based on the specifics of the design including plans, specifications, manufacturers instructions, trade standards, etc.

G. During Construction

Some important thoughts:

• Obviously, the “During Construction” actions are the most visible part of the system, but we can’t emphasize enough how critical the “Before Construction” actions are to prepare for success in this phase.

• It’s critical that the Project Quality Team’s Project File be in order. Holding people accountable is much easier, more effective, and less time consuming (therefore less expensive) if all of the building information is readily accessible. Maintaining a “single source of truth” for 100% (not 99; not 101) of the project definition is hard. By the time construction begins this “single source of truth” for 100% of the project definition includes all the current plans, specifications, and referenced standards from all of the designers. It also includes generally applicable standards, contracts, change orders, RFIs, RFI Responses, Change Orders, Construction Change Directives, and more.

• A Project Kickoff Meeting (or meetings) help(s) to ensure that the project players know the standards they will be held to during the construction. It’s worth getting human-to-human buy-in.

• Projects that are chaotically run without a schedule are more likely to have quality problems, because as the old saying goes, “how you do anything is how you do everything.” At best a construction project is a little chaotic and messy. But the best contractors run the least chaotic projects. We should strive for order. With all of that said, we should try to coordinate quality management inspections at hold points in the construction schedule to verify quality of installations.

• Inspection documentation should tell the story of a professional investigation, and someone who was not present should be able to understand what was accomplished. The photographs and notes should verify conformance with project definition (plans, specifications, standards, and contract scope of work documents) or clearly prove a variation from the project definition. There should be measurements and liberal quantification. Photos should be taken from large to small for orientation. Notes should be clear and complete. Diagrams should be included. Photos of the plans, details, specifications, and standards should be included when applicable. All defects must be re-inspected and additional photographs and reports published to show corrected actions and compliance.

• The old saying that “one test is worth a thousand expert opinions” is often true.

• Maintaining a sensible Punch List of “Non-Conforming Work” is not as easy as it sounds.

• Composing a periodic report (Daily/Weekly) explaining what the list means is also not easy, but taking the time to translate technical information into plain English is important and helpful.

• Composing a thoughtful Interim Report, usually monthly, to the Project Quality Executive or Client is really important; similar to a contractor’s monthly payment application.

• If your project is an interior fit out or tenant improvement only, all of this material still applies. And if the property will be occupied during the work, then this planning, communicating the plan to all the applicable players in writing, inspecting what you inspect, and holding players accountable, can be the difference between project success and a protracted litigation. With occupied spaces it’s all too easy to cause or contribute to an injury. And a common property damage incident to an on-going business can turn into a legitimate loss of use claim that FAR exceeds the cost to repair the physical damage. So plan backward from success and think about protecting the ongoing building operations carefully.

H. After Conclusion

The After Construction activities require organizational discipline and dedication. This is where the Project Quality Executive is crucial. People are ready to move on at the end of a project, but this is where the best separate themselves from the rest. Closing the loop is a professional discipline that embeds the lessons learned like nothing else. As the organizational and sports psychologists say: Feedback is the breakfast of champions.

Some of this work is a necessary part of the transition to the owner/operations team, including equipment and other building element start-up documentation, commissioning activities, and warranty documentation. A maintenance plan and preliminary records may be part of the hand off.

If the quality management is by a third party, then a Final (Project Close) Report should be included in the original scope of work for that professional. The quality management process, design review, evaluation process, inspection summary, and testing summary should be covered. In addition, the third- party might have expertise that is worth contracting for, related to ongoing maintenance recommendations. If this quality management is entirely internal, these final activities may be less formal, but they are every bit as important, and maybe even more so. They can be summarized in the agenda and minutes of a Project Close and/or Project Debrief Meeting with the Project Quality Executive and/or Clients.

The Project File should be compiled and delivered or archived permanently. Finally, a smart risk management activity would be to schedule or encourage follow up annual Property Condition Assessments to monitor the performance of the construction over time.

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3. Quality Focused Organizational Maturity

A. Introduction

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.

Level 1 relies mostly on individual, sometimes heroic, effort to accomplish objectives or good results; that is, success is not an integrated, systematic, repeatable, organizational process. This level goes by many names including initial, immature, ad hoc, or chaos. Many small and medium size businesses have aspects in level one, even some surprisingly large and profitable enterprises are run using this “genius with helpers” model. The trouble is when the genius goes missing or the business grows too large for the genius to quality check everything.

Level 5 is a mature, world-class, optimized, self-optimizing, and continuously improving system, capable of accomplishing the organization’s objectives every time, virtually defect free. The Level 5 organization has healthy leadership at all levels, and a culture of trust and accountability. They measure, manage, and quality check all key processes and outputs, never letting defects run downstream. Their processes are well -documented and continuously improved, and their tools and technology are advanced, fully- integrated, and accelerate performance. Their training is such that they are often considered “university organizations,” a disproportionate number of leaders in their industry once worked in this organization, and their results are superior, often achieving greater than two times the profit or effect per unit of input.

Levels 2 to 4 are the stages on the journey from friction, confusion, and underperformance, to world class.

The assessable and (usually) measurable “aspects of maturity” include (1.) leadership, (2.) a culture of trust and accountability, (3.) measurement, (4.) process orientation (this is where Lean Six Sigma and other Quality tools come in), (5.) tools & technology, (6.) training, and (7.) results. A Maturity Model can be applied to any human organization, at any level including large corporations, business units, departments, charitable or non-profit organizations, governmental organizations, etc.

At some point early in a project quality management endeavor, we will run into an organizational maturity issue. It’s pretty straightforward (although not easy) to define what good performance looks like from a physical construction perspective, and then inspect to compare the actual work to that standard. But many of the people in virtually every organization have a natural resistance to change and accountability. It makes most people sad or mad when they receive feedback that their work is not meeting the minimum requirements for quality. Getting anywhere close to zero defects takes tremendous energy and resolve.

B. Levels of Maturity

• Level 1 - Heroes: Few processes. Ad hoc. Tribal knowledge. Friction, confusion, and underperformance.

• Level 2 — Defined: Key processes are defined but not applied by 100% of the people 100% of the time. Less friction.

• Level 3 — Managed: People are enthusiastic and proud. Processes are defined and managed. Performance is good.

• Level 4 — Quantitatively Managed: All processes have KPIs (Key Performance Indicators). All units have scoreboards.

• Level 5 — World Class: Zero defects. Continuous improvement. Agile. Fewer people, doing more, paid highest in the industry. Greater than 2X industry average performance.
  
  

C. Aspects of Maturity

1. Leadership

• Level 1: No process orientation. Often the #1 hero making results happen by the force of genius rather than process and effective delegation to a competent team of dedicated team members.

• Level 2: Leaders know they need to increase process orientation, but have only taken initial steps in the direction of increased process orientation. Leaders realize that the culture and health of the management team is closely related to a healthy company culture.

• Level 3: Top leaders are fully invested and dedicated to increasing process orientation throughout the organization. They are getting their direct reports excited about increasing the effectiveness of the processes, increasing quality, and decreasing drama. These leaders are in sync with and supportive of the other members of the management team.

• Level 4: Leaders feel like they work for the people “below” them in the organization. The leaders feel like it’s their job to serve the direct reports and make their ability to do excellent work easier and easier over time.

• Level 5: Leaders are evangelists for the organization and how awesome their people are. They give all the credit to the people doing the work and to the managers who support the people doing the great work of the organization.

2. A Culture of Trust and Accountability

• Level 1: Drama, blame, finger-pointing; resigned to the idea that they work in a messy place.

• Level 2: Less drama; some are excited about the new processes; a divide between process oriented and the “old guard” emerges.

• Level 3: Low drama; staff are enthusiastic; teamwork; victories are often celebrated; everyone knows the organizations objectives; unaccountable people leave.

• Level 4: Virtually zero drama; the staff love the work and each other; everyone knows exactly why their job is important in accomplishing the organizational objectives; they recommend that their smartest friends join the team.

• Level 5: SEAL Team; 100% trust; 100% accountable; fewer people doing more and better work for the highest pay in the industry.

3. Measurement Maturity

• Level 1: Feedback only comes from complaints. Financial and other reporting does not exist, is inaccurate, not shared, or so delayed that it does not aid in decision making.

• Level 2: Basic financial measures are available after close of periods: P&L, balance sheet, cash flow.

• Level 3: KPIs exist for all operational units and aid in decision making. Clients are surveyed periodically.

• Level 4: Leading KPIs are connected to organizational success and roll up from bottom to top. All individuals have a dashboard. All units have scoreboards. Clients are surveyed often.

• Level 5: Industry leading. Everyone knows how they are contributing every day. Everyone enjoys contributing to the organization’s success.

4. Process Orientation Maturity

• Level 1: Tribal knowledge.

• Level 2: Key processes are documented. Less than 100% adherence. Limited management.

• Level 3: All processes are documented and managed.

• Level 4: All processes quantitatively managed with measures of quality and quantity. Continuous improvement.

• Level 5: Industry leading. Staff are industry leading experts. Were, will be, or could be specialty

  consultants in process management.

5. Tools and Technology Maturity

• Level 1: Ad hoc. Cobbled together.

• Level 2: Basic functionality. 5S Method (i.e. Sort, Straighten, Shine, Standardize and Sustain).

• Level 3: Lean. Advanced functionality. Good integration.

• Level 4: Six Sigma. Fully integrated and continuously improving.

• Level 5: Industry leading, proprietary “technology accelerators”.

6. Training Maturity

• Level 1: Basic on-the-job training (OTJ). Inconsistent.

• Level 2: Basic functional training. Inconsistent. Skills verification is limited.

• Level 3: Documented, delivered professionally, and skills mastery is verified.

• Level 4: Continuously improving.

• Level 5: “University Organization”.

7. Results Orientation Maturity

• Level 1: Friction, confusion, and under performance.

• Level 2: Below average.

• Level 3: Good

• Level 4: Great

• Level 5: Awesome. Greater than 2X industry average.

D. Maturity Audit

To evaluate any organization, (A.) begin with the Organizational Maturity Matrix (B.) Use three colored highlighters to fill in all 35 boxes associated with the 7 aspects and 5 Levels of maturity:

• Green: Nailed it. No need to work on this, because the organization is past this level of maturity.

• Yellow: The organization is in the process of maturing in this aspect, but not yet past this level. Some energy and attention in this aspect is warranted.

• Red or Orange: The organization is immature in this aspect, at this level, and for this aspect, will require significant energy and attention to pass this level of maturity.

(C.) Unless you are confident that the organization you’re evaluating is world class in every way, you can begin by coloring all 7 boxes under Level 5 red/orange. This should make using the red/orange pen easier. Confronting the facts of the matter as honestly as possible is helpful. The only shame should be in not working to improve.

(D.) Then begin at Leadership Maturity and Level 1 in the upper left corner and evaluate the aspects of maturity of the organization at hand. Unless you’re in a one-person organization, then all of the boxes at Level 1 can be colored green. Most organizations in the world will have at least some boxes that are red/orange in Level 2, and most will have most of the boxes in Level 3 colored red/orange. An organization with ANY green boxes in Level 3 or 4 has reason to be proud.

(E.) We believe the book The Goal correctly observes and explains that there is always one bottleneck in any system; when the one bottleneck is removed, automatically some other aspect of the organization becomes the bottleneck, so working on anything other than the one current bottleneck is silly. So, (E.) find the lowest maturity level(s) that are colored yellow or red/orange, and make an improvement plan. There are likely yellow or red/orange in aspects of Level 2. For example, under Process Orientation Level 2 is “Key processes are documented. Less than 100% adherence. Limited management.” If you colored this yellow, meaning you are here, but have not moved beyond, then you could easily make a plan to put together a team to make sure you have a 100% list of key processes, that all of these processes have at minimum, rudimentary documentation that everyone agrees is correct.

Maturity Model

Maturity Matrix

Trials: Tribulations, Triumphs, or Both - Making Smart Decisions About Taking Cases to Trial

Trials: Tribulations, Triumphs, or Both - Making Smart Decisions About Taking Cases to Trial by Pete Fowler. Published 12/2019 in CLM’s Construction Claims Magazine.

Taking a construction-related case to trial should not be “rolling the dice.” Regardless of whether you are defending or pursuing a claim, the decision to take a case to trial should, theoretically, be simple once you have realistically analyzed the value of the claim, plus or minus the cost of a trial. The cases that proceed to trial are usually complicated by something, or a hundred somethings.

This article should help you to create a decision-making framework for deciding who is on your trial team, analyzing and evaluating individual claims, planning and managing the process, making sure the team is in sync and communicating in a simple and compelling way, and thinking through what winning and losing look like, before making an expensive decision to proceed.

The Team

“Who is on the team?” is the most important question, because we all know that the only reasonable predictor of future per- formance is past performance. I once listened to a motivational speaker ask, “What comes out when you squeeze an orange? Juice, of course! And why is that? Because that’s what’s inside!” What comes out of the people on your team when they get squeezed? Is it confidence, professionalism, kindness, strength, and determination for the cause?” Because trials are stressful, and some people, when put under stress, fold like a lawn chair.

The stars in a trial are the attorneys and those offering testimony, including expert witnesses. So evaluating these folks, as well as the support teams that will help them prepare, is critical. Is there sufficient evidence, from past performance, to bet that they will not flounder when push comes to shove?

In short: Define what good performance looks like, make sure the prospect has on-topic experience in successfully doing what you need done, and verify that experience with calls to references. The discipline to perform due diligence is often the difference between success and failure.

The Math

Making smart decisions about taking construction claims to trial is a combination of math and professional judgment. First, do some math.

There are lots of things humans do well, and some things not so well. Humans are great pattern-recognition machines. We readily spot things that are contrary to the pattern. We are not as good at decision-making when facts are a jumbled mess. So the more structure, sense, and consistency that we bring to complex decision-making, the better.

Here is a simple ABC=D decision-making framework you can apply:

A. The first variable is a realistic assessment of the value of the claim.

B. Then determine a realistic budget through trial, including attorneys, experts, and any other costs and fees.

C. Then apply some value judgment about what should be added (or subtracted) for the risk of uncertainty.

D. If you are defending a claim, and you ignore the complication of recuperating attorney fees and costs, then A + B + C = D, where D is your theoretical maximum settlement value. If we are pursuing a claim, it’s simply A - B - C = D.

If we are defending a claim that has been:

A. Thoughtfully evaluated at $100,000.

B. The total trial budget is $50,000.

C. We decided to add 20 percent ($150,000 x .2 = $30,000).

D. The baseline, then, is $100,000 + $50,000 + $30,000 = $180,000. If the other side won’t settle for less, then trial should be considered.

If we are pursuing that same claim:

A. $100,000 claim value from a defendant or cross defendant.

B. Subtract the $50,000 in costs.

C. Subtract 20 percent of the investment ($50,000 x .2 = $10,000)

D. Sadly, the baseline is down to $40,000 (= $100,000 - $50,000 - $10,000). This is a tough business decision to have to make, and possibly a key reason we do not see more insurance companies subrogating claims against smaller players that refuse to pay their fair share, even when they are clearly responsible.

Professional Judgement

Of course, the math gets complicated when we factor in all of the real-life messiness that every case has, including attorneys’ fees and costs. Our experience with fee and cost awards is very mixed, even for the best of lawyers with which we have done business. For the sake of brevity, we won’t address it further, but you’ll need to consider it.

A detailed discussion of calculating the $100,000 claim value in our example is beyond the scope of this article. Typically, you have to evaluate the property, and then design, contract for, and execute a repair. We consider all costs from A to Z. If we have done this analysis well, it is exactly what we present in trial.

It’s our experience that easy cases almost never go to trial. For the cases that do go to trial, sometimes you are trying to set a precedent, like standing up to bullies who will sue you again if you overpay this time. The national homebuilders, and many others, face these decisions every day. You need to consider the worth and the potential downside. Sometimes, not giving a bully your lunch money hurts in the short term, but is worth it in the long run.

Ultimately, you need to apply some philosophy to your decision-making. I like the idea of being kind and strong: We pay when we should pay, but we don’t get bullied. You’ll have to apply whatever philosophy you see fit. After all of this thinking, you might need to reconsider the math.

Planning and Cost Control

Like the decision to have a child, going to trial is fun to conceive, but the delivery can be very painful. To manage, you must measure. You should plan your work in quantifiable chunks; estimate the costs to accomplish those milestones, in writing; and then compare performance to plan, also in writing, throughout the journey. My experience is that many attorneys, even great ones, are not great managers. Many struggle at realistic budgeting. Let this serve as a framework for your plans and controls.

We have never seen an opposing attorney, in response to a compelling argument from us, say, “OK, you’re right. Let’s just do whatever you think.” So change, and sometimes dramatic change, is the rule in litigation, and your planning tools must accommodate.

It helps to create a simple budget spreadsheet, like a construction contractor’s schedule of values. Columns would include line number, description, original budget, current budget, spent dollars to date, and cost to complete. Rows could include mediation, discovery, trial preparation, trial, and post-trial. Each row entry would have the following subsections: attorneys, experts, and fees and costs. For example, for “mediation,” values could be entered for attorneys, experts, and fees and costs as they relate to the original budget, the current budget, how much has been spent to date, and the cost to complete. This process would then be repeated for each row item.

Remember the Ken Blanchard quote: “Feedback is the breakfast of champions.” If you arrange to have this budget updat- ed monthly (or quarterly, at least) and meet with the team, using the budget as the primary agenda, then you’ll see where you stand and be able to course-correct if necessary. If you add to this budget update a narrative memo, discussing the case status and plans going forward, you’ll create a thoughtful feedback loop that will keep the team on track.

Explain it to My Mom

In our office, when a technical expert is not explaining himself well, we often say “I don’t think my mom would understand what you’re saying.” It is code for, “If you can’t explain it simply, then you don’t understand it well enough,” which is often attributed to Einstein.

My mom is a smart, but non-technical person; she knows nothing about construction or cost estimating other than the painting and decorating she has done to her homes and businesses. We know that someone like her is going to have to use the information we give them to make a smart, informed decision. This is also what juries need to do. In the case of a jury, it is even more extreme. We really need to work hard to explain ourselves.

The famed 60 Minutes producer Don Hewitt would say to the best journalists in the world, “Tell me a story.” We need to explain, in story form, what the case is about and why we are right. A firm grasp of the case’s theme is a must.

It’s not easy to communicate simply and concisely. It takes time and hard work. Our trial communication should be thoughtfully considered and practiced. Recognize that the general public’s learning styles are widely varied, and attorneys’ learning styles are much less varied. Multimedia is best: visual, auditory; kinesthetic. When we think about communicating in this varied way, it brings the facts to life in a more interesting presentation for the judge, jury, or arbitrator. Don’t commit the “Death by PowerPoint” sin—just because you have created a presentation does not mean it is going to be interesting. Consider having witnesses get up and explain complex subjects to the jury using a flip chart or physical samples.

Naturally, the communication styles we use for a jury are going to be different if it is a bench trial, or to a highly technical arbitrator. A jury requires a story with bells and whistles due to limited attention spans and boring material, so a “sexy” story keeps their attention (making drywall sexy is not an easy task). For a bench trial, where the judge is deciding, you should focus more on the legal issues. In arbitration, the rules of evidence are looser, and they are often very technical, so we can go deeper into the weeds in a way that would lose most jurors.

No current discussion of trial-communication strategy these days is complete without considering the reptile brain strategy that is so widely discussed in legal circles. CLM has handled the subject so well elsewhere, we will not consider it here, but you should seek out those resources.

When Winning is Losing

“The only thing I’m addicted to right now is winning.”—Charlie Sheen.

Sometimes you can “win” and still lose. Sometimes you can “lose” and still win.

We recently “won but lost” on a case of a commercial building that was purchased from a city and leased back to that same city for 10 years. The city had a contractual obligation to maintain the property, but failed to do so and refused to make or pay for repairs at the termination of the lease. My client was the owner who “won,” but was only awarded $40,000 after we asked the jury for $250,000. It was a bummer, but the amount was above a statutory offer to compromise and there was an attorneys’-fee clause, so we assumed the client would be made whole for the cost of pursuing the matter through trial. But the judge, in violation of any prece- dent, awarded no fees or costs. The case remains on appeal. Therefore, this was a terrible economic loss for my client.

We worked on another case where a simple private school building was constructed using a slab-on-grade and site-cast concrete tilt-up walls (just like a “big box” store). I worked for the concrete subcontractor. It was a typical construction-defect litigation, so there were lots of claims against the general contractor and other trade contractors related to poor-quality construction. Our client sub-subcontracted the sealant work to another contractor and that work was defective, leading to leakage and property damage. The sealant sub-subcontractor would not participate in the settlement, so my client settled the claim with the owner and general contractor, and sued the sub sub, ultimately winning 100 percent of the settlement, plus attorneys’ fees and costs for the trial. Obviously, our side was happy with the results. I have come to know the defense attorney who was brought in late in the game and who “lost” at trial. He assures me that his insurance-company client expected the result, was entirely pleased with his work, and continues to send him new cases.

Being willing and able to go to trial is an important factor in being able to negotiate from a position of strength. Remember that, as with most of life, who is on the team is the most important thing. The math is pretty simple, but the judgment calls often are not. Good planning and cost controls are not inherently difficult to structure, but the discipline to regularly re-direct the entire team back to the plan for a comparison to actual performance can be. Success is worth it. In trial, you have to explain things simply, and that takes elbow grease. And finally, sometimes you might win but still lose, and other times you can lose but still win.

This article was inspired and informed by a 2019 CLM Webinar, “Trial and Arbitration Strategies for Winning Your Construction Case.”

Pete Fowler is the founder of Pete Fowler Construction Services, Inc. pf@petefowler.com

OMMA-Goodness!™ Project Management Framework: In Brief

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.

Planning Steps

Read straight through the steps. Return after reading the Example, referring to definitions of the Project Management Terms as you go.

1. 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.

2. Write your Objective; then “One Minute Summary” the basic project info.

3. Select a Method or use 7-W’s: Who, What, When, Where, Why, How, and How Much.

4. Make a first-pass brainstorm of Milestones and Deliverables.

5. Quickly list Actions to complete the known Milestones; don’t linger in details yet.

6. 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.

7. 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.

8. Organize, lead, direct and manage execution of the Actions.

9. Compare progress to the Scope, Budget and Schedule in an Earned Value Analysis.

10. Conduct a Project Status Meeting; compare performance to plan; update the Plan.

11. Repeat steps 8-10 as necessary. The last “Project Status” is a “Project Close”.

Example

1. 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.

2. 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)

3. 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.

4. 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.

5. Pepe listed Actions to complete the known Milestones, but didn’t linger in details yet.

6. 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.

7. 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.

8. Pepe organized and managed execution of the Actions, marking those completed as DONE.

9. 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.

10. 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

Objective

“We will complete Otto’s Outhouse as promised, within budget and schedule. We will earn referrals from the client and the planned profits.”

Method

• 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

1. Pre-Construction

   • Estimate

   • Contract with Owner, including the Scope

   • Budget

   • Schedule

   • Permit: Get it.

   • Contract with Roofer

   • Agenda for Project Kick-Off Meeting

   • HOLD-POINT: Project Status Meeting #1

2. Construction

   • Milestone: Project Kick-Off Meeting

   • Grading & Excavation

   • Framing

   • Project Status Meeting #2

   • Roofing

   • Final Clean-Up

Project Close

• Permit: Final Sign-Off

• Application for Payment

• Project Status (Close) Meeting #3

Actions

Project Management Terms

1. Project: A temporary endeavor, that includes a beginning and an end, to create a product or service.

2. Project Management: The discipline of organizing and managing resources to deliver a defined outcome (Objective / Scope), within the constraints of the Budget and Schedule.

3. 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.

4. 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.

5. 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.

6. 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.

7. 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.

8. Objective: A concisely written goal of specific, measurable outcomes including a 100%-summary of the Scope, Budget and Schedule.

9. 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.

10. Deliverable: A measurable, tangible item produced during project execution. Some are external and subject to approval, but some are internal only.

11. 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.

12. Hold-Point: Milestone or critical stage in a project for verifying conformance with plan or quality standards.

13. 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.

OMMA-Goodness!™ Components

1. 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.

2. 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.

3. 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.

4. 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.

5. 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.

6. 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.

7. 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.

8. 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.

9. 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

Common Plumbing Construction Defects

1. There have been numerous leaks in the copper domestic hot and cold water piping, resulting in property damage. 

2. The soldered joints in the copper water piping were over fluxed. This has caused flux corrosion and leaks. 

3. The copper water piping was not reamed at the tubing ends. This can cause internal erosion of the tubing and fittings. 

4. The water heaters have no drain pan, as per manufacturer's installation instructions. This will likely cause water damage to property in garage. 

5. 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. 

6. Certain high-efficiency water heater PVC flue vents are not insulated, as per manufacturer's installation instructions. 

7. 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. 

8. 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. 

9. 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. 

10. 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.

Common Electrical Construction Defects

1. The unit sub panel enclosure is setback and has gaps in the drywall greater than the code allowance. 

2. The A/C unit disconnects have inadequate working clearance. 

3. The cables are insufficiently supported as required by code. 

4. The cables within 6 feet of the attic access are not protected from damage. 

5. The recessed lights fixture sockets have been over sprayed with paint/or drywall texture. 

6. The electrical device boxes are setback and have gaps in the drywall greater than code allowances. 

7. The boxes installed in rated walls are improperly installed. 

8. The conduits and/or cables are insufficiently supported as required by code in the electrical closets. 

9. The exterior exposed light fixtures are not sealed to prevent water intrusion.

10. Quality of Workmanship.

Common Mechanical Construction Defects

1. Certain flexible A/C ducts are not supported or installed properly, and are kinked.

2. 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.

3. The condensing units are not identified with the unit address as is required by the mechanical code.

4. Clearance around the outdoor condensing units is not adequate and does not comply with the manufactures requirements.

5. The condensing units are not level as required by the unit manufacturer.

6. The refrigeration tubing insulation at the outdoor condensing units was not rated for exterior application and is deteriorating from exposure to ultra violet light.

7. The refrigeration tubing penetrations of the exterior walls are not sealed as required by building code and energy code.

8. The flexible dryer vents are kinked in the laundry closets. This causes poor dryer performances and creates a fire hazard.

9. 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.

10. The laundry closets were not provided with an exhaust fan. This is a code violation.

Comparison of Common Law (US) and Civil (EU) Litigation Practice

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,

• Pleadings

• Discovery

• Trial

• Appeal

Pleadings

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

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.

Appeal

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,

• Pre-trial pleadings

• Pleadings

• Production of Evidence (Discovery)

• Trial

• Appeal

Pre-trial Pleadings

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.

Pleadings

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.

Trial

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.

Pre-trial Pleadings

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.

Trials

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.

Conclusion

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

1. Introducing Our Latvian Interns

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

3. Construction Management Process in the US vs. EU

4. Comparison of Common Law (U.S.) vs. Civil Litigation (E.U.) Practices (THIS ARTICLE)

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. Civil Procedure Rules for European Courts by Geoffrey C. Hazard Jr

2. Civil Lawsuit – The Civil Litigation Process Explained In Steps by TorHoerman Law, LLC

3. Major Differences When Litigating Under Common Law or Civil Law by Howard Colman (Partner at Colman Coyle Solicitors )

4. Common Law And Civil Law: A Brief Comparison by Legal Language Services

Construction Project Management in the US vs. EU

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.

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

Construction Risk & Claim Management in the US vs. EU

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.

• Click here for more Insightful Construction & Construction Industry Statistics

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:

1. Head-In-Sand: Delegation outside the organization = Abdication

2. Hope and Prayer: Hope is a strategy. But a bad one.

3. Cowboy / Caveman / Swashbuckler: Yee Haw!! Usually O.P.M.

4. Project “Piles”: Most common.

5. Force of Genius: Closely related to Project Piles, only better.

6. Project Files: We’re getting there :-)

7. Project Level Data Structure & Analysis: Yea Baby!!

8. 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

Our Method

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:

• Contractors

• Risk Managers

• Insurance Brokers

• Lawyers

• 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

1. Introducing Our Latvian Interns

2. (THIS ARTICLE) Construction Risk & Claims Management in the US vs. EU

3. Construction Management Process in the US vs. EU

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)

Research

1. Google "Construction Risk Management"

   1. Construction Risk Management by IRMI

   2. https://constructionexec.com/article/the-basics-of-risk-management-in-construction-contracts

   3. https://blog.capterra.com/the-ultimate-guide-to-construction-risk-management/

   4. https://www.stakeholdermap.com/risk/risk-management-construction.html

   5. https://cdn.intechopen.com/pdfs/38973/InTechRisk_management_in_construction_projects.pdf

   6. https://www.fminet.com/fmi-quarterly/article/2016/06/a-blueprint-for-risk-management-in-construction/

   7. https://www.spireconsultinggroup.com/en/professional-services/risk-management/

   8. https://geniebelt.com/blog/risk-management-plan-in-construction-guide

   9. http://www.cbre.us/real-estate-services/investor/construction-risk-management

   10. https://www.constructconnect.com/blog/operating-insights/identifying-managing-construction-project-risks/

2. Construction Claim Management

   1. https://www.pmi.org/learning/library/construction-project-claim-management-7582

   2. https://www.sciencedirect.com/science/article/pii/S2212567115003275

   3. https://constructionexec.com/article/claims-management-a-problem-solving-approach

   4. https://www.hillintl.com/PDFs/How%20to%20avoid%20CC,%20and%20what%20to%20do%20about%20them%20if%20they%20occur-MGriffin.pdf

   5. https://www.researchgate.net/publication/215908277_Contractors'_Construction_Claims_and_Claim_Management_Process

   6. https://www.managementconcepts.com/Course/id/1020

   7. https://www.xperagroup.com/services/construction-claims-management-process

   8. https://www.petefowler.com/construction-claims-management/

   9. https://www.projectcubicle.com/claim-management-in-construction/

Professional Construction Contracting Discipline

What it is and how to get it

Definition

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. 

Webinar

This program was last presented on December 18th, 2018.

Discussion

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.

Presenters

Pete Fowler
President

Pete Patterson
Technical Consultant

Michael Villalba
Technical Consultant

Details

Professional Construction Contracting Discipline

Level 1 Work Breakdown Structure (WBS)

1. The ability to define a 100% complete scope of work for a construction project, 

2. to budget and 

3. schedule that work, 

4. to professionally contract for that work at the prime level (directly between the Owner and Contractor),

5. to break that 100% scope-budget-schedule into manageable chunks by trade or subcontractor, 

6. to contract for each of those individual trade or subcontract scopes of work with a corresponding budget and schedule, 

7. to coordinate all of those scope-budget-schedules in executing the construction, 

8. to manage changes to the scope-budget-schedule at the prime and sub levels, and 

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. 

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

• C. RFP

• 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,

• A. Subcontracts

• B. RFP

• 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

• D. Inspection

• 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.)

Project Team

• Construction Manager

• Project Coordinator

• Project Executive(s)

• Other

Meeting Rhythm

• Project Kickoff

• Daily

• Weekly

• Monthly

• Project Close