By

Bob Prieto
Senior Vice President
Fluor

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.

This is the fourth part in a series of such lessons learned. This part addresses lessons learned in:

• Risk
• Document Control
• Payments
• Public Outreach
• Agency Coordination
• Audit & Oversight

The first three parts of this series addressed lessons learned with respect to:

• Project Management Plan
• Finance Plan
• Safety
• Schedule
• Cost Estimating
• Cost, Schedule, and Status Reporting
• Cost Containment
• Project Personnel
• Technical
• Continuous Improvement
• Procurement
• Labor

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.

Risk

• establish an integrated risk management program using risk analysis
• use both deterministic and probabilistic applications
• carefully monitor the risk bias that can distort risk elements and mitigation plans to be integrated into the project management constraints process (schedules, cost, scope, etc.)
• risk(s) impacts to be realized in the form of contingencies and reserves
• rebaseline risk profiles on key milestone phases such as preliminary engineering, final engineering, construction mid-point etc.
• focus on common risk issues that characteristically include
• environmental impacts and archeological and historical preservation issues
• property acquisition and land access
• existing conditions (geological) and infrastructure (utilities and structures)
• contract documents allocate risks to the parties who can best control the risk.
• special requirements of underground risk and contracting reflected in contract documents
• high risk events should be the subject of “what if” or scenario planning
• used to track cost saving opportunities
• cost and schedule risk analysis
• clear assignment of staff responsibility for risk mitigation
• quantitative and qualitative risk assessments
• continuous monitoring of risk mitigation
• include WORSE CASE SCENARIOS
• do not try to transfer a risk that is not fully understood by all parties

Document Control

• meetings on document control, e-mail and electronic drawing procedures and the understanding of how these will work as a project communication tool held at outset of project
• field test all document control processes, procedures and tools at the earliest possible stages of the project
• scanned drawings should be saved as .jpeg of .gif formats instead of .tif to facilitate transmission
• email archiving (sent/received) provides foundation for dispute resolution and litigation and audit support
• establish a document control system that can efficiently retrieve information in a timely way
• have the IT support for using as much graphic material as possible….one good picture can replace an engineers thousand words
• QA/QC program includes to include document control
• data base management of documents, revisions, configuration , tracking for who’s “court is the ball in

Payments

• Agencies utilizing federal funding must obtain prior approval on making mobilization or advanced payments
• Agencies utilizing federal funds are required to implement certain requirements when utilizing progress payments.
• ensure payment flow-downs through payment bonds, credit reports, or other available validation
• plan for and maintain a positive cash-flow and expenditure plan
• ensure that all payment and expenditure procedures will support a rigid audit trail
• be very clear about the criteria for retainage, award fees, etc.
• ensure certification of payment transactions

Public Outreach

• comprehensive program….never saw one that did too much
• good identification of issues important to stakeholders
• recognize “buy America” perception requirement on all highly visible government funded projects (higher standard than contract language) KEEP THE PUBLIC INFORMED
• be responsive to public concerns
• demonstrate a proactive public protection of property and person
• facilitate public interaction groups

Agency Coordination

• owner, engineer and construction manager should all be in attendance at agency coordination meetings
• regular meetings should be scheduled as well as issue oriented sessions
• helps bring agencies along in the project evolution process
• creates an engaged stakeholder focused on problem resolution rather than posturing
• improves quality of planning by agency/program or construction manager/ owner

Audit & Oversight

• funding agency should make annual independent cost-to-complete estimates
• differences with CM estimate should be reviewed and reconciled as part of normal management process
• independent audits should be coordinated to facilitate a team approach to auditing
• improves quality of the audit product
• minimizes project disruption
• team approach limits role of “personalities”
• improved auditing checklist evolves minimizing surprises
• successful audit programs focus on priority areas, non-conformances and systemic problems
• audit programs should foster continuous improvement and be based on ongoing risk analyses
• compliance auditing programs similar to those called out in ISO 10011-3-94 produce good results
• financial strength of major contractors is a leading indicator on their ability to execute large, complex programs (if they can’t manage their own business how will they manage the client’s)
• major or high visibility programs will attract IG’s from funding agencies
• project should plan and staff to meet their needs
• timely follow-up on all audit findings