By

Bob Prieto
Senior Vice President
Fluor Corporation

The lessons learned that follow are based on experience in the infrastructure, buildings, government, power and industrial sectors on “mega-projects”. “Mega-projects” are those projects which are complex in nature (technically, logistically, politically, etc.) and have total installed costs in excess of $1,000,000,000. These lessons learned are not intended to be comprehensive in nature but rather represent a compilation of such lessons that the author has, through his various professional and industry experiences, identified as important to the success of “mega-projects”. Many represent nothing more than the fundamentals of good project management, but because scaling effects are non-linear, they take on special importance on “mega-projects”.

The lessons that are described apply across a full spectrum of delivery and contracting approaches and are supplemented by additional observations and considerations for Public-Private-Partnerships (PPP) and Design-Build projects which appear at the end of this Series.

This series will encompass the following subject areas in five parts.

Part 1
Project Management Plan
Finance Plan
Safety
Schedule

Part 2
Cost Estimating
Cost, Schedule, and Status Reporting
Cost Containment
Project Personnel

Part 3
Technical
Continuous Improvement
Procurement
Labor

Part 4
Risk
Document Control
Payments
Public Outreach
Agency Coordination
Audit & Oversight

Part 5
PPP or Public Private Partnerships
PPP Lessons Learned – Government
PPP Lessons Learned – Developer-Contractor
Design Build
Design Build Lessons Learned – Agency

Part 1

Project Management Plan

• developed early
• capture project goals, objectives and scope definition
• identify budget plan….reconfirm reasonableness
• identify constraints, threats and opportunities
• clearly define roles, responsibilities, processes, activities and authority which will result in project success
• integration and interface management are key
• rapid decision making is key (what is a minute in the field worth)
• $1,000,000,000 is about $2,000 per minute for 24/365 construction
• comprehensively linked to contract requirements and provisions
• well developed project management system including project specific plan, general corporate project management manual, supporting procedures fully integrated into standard company approach, fully integrated project and construction management tool set
• change order and claims controls and other cost containment strategies to be used throughout the life of the project clearly defined.
• signed off by highest levels of management
• project scope, budget and schedule are not artificially constrained (wishing does not make it so) and recognize that everything will not go according to plan
• on highly sensitive projects (environmental, burial grounds, native lands etc.), a monitoring team should be established with input and buy-in from involved stakeholders to proactively provide guidance and resolve concerns before they impact the project schedule.
• make sure archeological and historical preservation issues thoroughly addressed early on
• Owner Controlled Insurance Programs (OCIP) should be used
• improves safety performance
• improves risk insurance administration and management
• client’s internal project management oversight is used as a positive management tool, making constructive contributions…not in an adversarial way
• program and construction mangers conduct annual bottoms up review of team’s self performance
• must recognize that mega projects are subject to a higher and more comprehensive auditing standard and must build in the necessary resources and time for such processes
• document control for audit and litigation support is a requirement of large projects and must be adequately staffed and budgeted
• kickoff of each project phase should include a session of all relevant lessons learned
• should emphasize importance of capturing lessons learned contemporaneously
• should involve all key project stakeholders
• soft project objectives such as SB/DBE contracting; technology transfer; local craft training; etc need to be built into plan and schedule at outset of project
• partnering plan provides for periodic sessions
• ensure constraints of right-of-way and property acquisition and access agreements are completely reflected in project schedule, management and work processes, and means and methods
• review clarity of responsibilities and authorities throughout the project to ensure no ambiguity or unintended delegations
• be clear
• establish criteria for ensuring adequate technical capacity and capabilities exist
• provide Security protocols for design and construction (without revealing sensitive areas or vulnerabilities
• ensure schedule reflects impact of access and egress from secure areas
• be clear on any equipment limitations in secure areas or limits on means and methods in those areas
• to change outcomes you need to change strategy

Finance Plan

• credible plan to finance the project must be in place at the start of construction.
• avoid cost growth associated with start and stop construction.
• financial management systems for receiving, approving and paying supplier and subcontractor invoices must be comprehensive on mega-projects and provide for linkage to purchase orders, contracts and proof of receipt of materials or accepted completion of work
• code of accounts and project WBS should map
• have a defined and detailed process for contract final audit and closeout
• revalidate adequacy of financial controls and processes at key points throughout the project

Safety

• safety must be a primary focus
• safe work site more efficient than unsafe one
• perform a safety hazard analysis at the beginning of each milestone phase (preliminary engineering, final design, construction, and commissioning)
• make safety a selection criteria….give it substantial weight
• requalify contractors based on performance
• incentive safe execution in contractor risk/reward program
• start every project meeting with a safety topic (and a value creation topic)
• top management to walk job site daily for a safety check
• safety incentives should extend down to the subcontractor or laborer level
• cultivate a project safety conscience environment through safety workshops, posters of safety procedures, incidents rates, etc
• office safety
• field investigation safety
• frequent “tool box” safety sessions
• health and personnel accident prevention issues addressed
• crane safety requirements are heightened on sites with multiple contractors
• never lower into blind areas
• never assume movement path and laydown areas are safe
• never allow load to be out of control
• clearly identify construction hazard zones

Schedule

• well developed and documented schedule logic, basis, and assumptions
• utilize 4D visualization to review complex construction sequencing operations
• establish a comprehensive schedule network following the WBS
• flexible contractor interfaces to accommodate mitigation of potential delays
• adequate float to accommodate unknowns…float managed as a scarce resource
• continuous trend identification and analysis using earned value techniques
• critical path clearly identified
• incorporate contractor’s detailed schedule in overall site construction schedules for logistically complex projects
• ensure acceptance testing and inspection reflected on schedule
• ongoing schedule risk analysis
• keep schedule revisions current
• utilize integrated project schedules incorporating cost, time and risk contingencies
• integrate schedule constraints that are external to the project control
• identify alternative paths of execution
• rebaseline at well defined milestone phases (i.e. completeness of final design, mid-point of construction, etc.)
• always track against baseline target