Technical Program Abstracts

(OWN) Owner Issues

(OWN-2418) High Performance Owner Project Team: Creating a Competitive Advantage

Authors: Joshua P. Rowan, CCP; Sarah E. Love

Abstract: The record of capital project performance is poor and, in-part, symptomatic of ineffective owner project teams.  Much scholarly research has been focused on the appropriate size of the owner organization given a project’s cost, complexity, and other relevant factors.  What is perhaps missing from a purely statistical debate is the consideration for having a cohesive team that has a meaningful purpose, robust processes, and a rewarding culture.  This essay leverages a term and concept, High Performance Organization, coined by Dr. Andre A. De Waal.  This concept has proved elusive so a practical guide is needed to outline strategies and tactics to improve the performance of the owner project team.  Research and practical application of the Team Elevation Model will create a sustainable change that improves the financial bottom line of asset-intensive organizations.  Applying the four elements of the model will create a competitively advantaged owner project team.

 

(OWN-2422) Cost Benchmarking of a Joint Venture Project

Authors: Johnson Olugbelenke Awoyomi, CCP CEP

Abstract: Capital cost is a key driver of investment decision making metrics. Without benchmarking or similar validation, the cost can be biased or have other quality issues that the owner and its venture partners may not be aware of. This paper will share a National Oil Company's (NOC) experience on how a Joint Venture project was implemented in Africa without cost benchmarking or empirically valid risk quantification, the consequences of such negligence, and issues and challenges that confronted the project (catastrophic cost overruns/schedule slippage). Many NOCs like the one in this paper require project benchmarking as part of their internal processes for continuous improvement of capital project efficiency/performance. The colossal waste of resources would have been reduced if the project cost and schedule were benchmarked and risks had been realistically quantified early in project scope development and prior to sanctioning. NOCs in particular need benchmarking as a tool to identify and address systemic issues in their capital project systems. Finally, the paper shares the lessons learnt for the benefit of other NOCs and the industry in general.

 

(OWN-2433) Strategic Budget Allocation for Deferred Maintenance

Authors: Soojin Yoon; Makarand Hastak

Abstract: Over the past several decades, many universities in the United States have been challenged by the lack of funding for maintenance, rehabilitation, and repair (MR&R), especially including deferred maintenance (DM). The DM backlog has been caused by budget limitations and inappropriate MR&R strategies for facility management. As a result, facilities have prematurely reached unacceptable conditions that require renovation or demolition. This research proposes a systematic procedure for optimal budget allocation for DM for universities that can also be used by private companies and federal/state/local government agencies. The specific objectives of this research are to (1) classify emerging DM issues and budget models, (2) evaluate budget leveling for a multiyear period, (3) establish total packaged prioritization, and (4) optimize DM budget allocation(s). The proposed strategic decision-making process for DM budget allocation would help multi-asset facility administrators establish long-term budgetary goals and enhance the asset value of their campus facilities. This paper illustrates the procedure and the results obtained.

 

(OWN-2458) Effective Project Planning and Scheduling: The Panacea for Capital Projects Abandonments in Nigeria

Authors: Dr. Joshua O. Olorunkiya

Abstract: The significance of capital projects development to nation’s growth and development cannot be over-emphasized. Transport-related facilities, water and wastewater treatment facilities, telecommunications, and energy generation, transmission and distribution are some of the basic infrastructures lack facing Nigeria in the 21st century as an independent nation. With a population of approximately 180million people, the country infrastructure deficits is conservatively estimated at USD$2trillion to meet the growing population needs, support productivity and overall economic development. In spite of these huge deficits, latest record shows there are over 56,000 government funded abandoned capital projects across the country six geo-political zones.  While underestimation of project cost, corruption, lack of continuity in government are often cited the causes for the rising stock of abandoned capital projects all over the country, this paper seeks to underscore lack of effective project planning and scheduling as the fundamental root cause of the unpalatable occurrence. To change the trend, proper, effective project planning and scheduling are considered indispensable tools for successful capital projects delivery in Nigeria.

 

(OWN-2474) Incentivizing Construction Contracts to Enhance Sustainability in Construction Projects

Authors: Dr. Douglas Gransberg, PE CCP; Dr. Carla Lopez del Puerto, CCP; Jose J. Fontan Pagan

Abstract: In recent years, there has been an increased awareness about the impact of construction projects on the environment. In order to mitigate the impact of these projects, integrating sustainability has been a goal for many public and private owners. Current green rating systems, such as LEED, place emphasis in the design phase of a project with little consideration of practices that enhance sustainability during the construction phase beyond what is specified in the design documents. In order to increase sustainability during the construction phase beyond the requirements in the design documents, owners need to provide simple and easy to implement mechanisms to incentivize contractors to use sustainable construction means and methods. An example would be providing incentives to encourage the use of fuel efficient construction equipment. This paper discusses several mechanisms to incentivize contractors to incorporate green construction practices and increase overall project sustainability. It uses a real illustrative example to highlight mechanisms to include sustainability after design completion as part of the evaluation criteria in best-value procurement.

 

(OWN-2475) Streamlining Government Change Order Processes – Can It Be Done?

Authors: James G. Zack, Jr. CFCC FAACE

Abstract: Change is the norm on construction projects.  Change is beneficial in that owners can modify the project after contract award while contractors can increase the scope of work and project profitability without needing to compete for additional work.  At the same time change can be detrimental for both owners and contractors.  Change often causes projects to complete later than planned and over budget.  And, owner change order processes are often lengthy detrimentally impacting contractor cash flows.  As a result slow processing of change order requests by public project owners coupled with slow payment for changed work are major problems threatening project success and contractor viability.  Efforts have been initiated by various governmental entities to “streamline” change order processes.  The purpose of this paper is to explore current streamlining efforts.  The paper also discusses difficulties in speeding up such processes and why such efforts are quite often doomed to fail – due mainly to a misunderstanding when does a change start and when does the change order process commence?

 

(OWN-2509) Program Level Scheduling - Enterprise Alignment for Programmatic and CPM Schedules

Authors: John Blodgett; Brian Criss, PSP

Abstract: As organizations seek to perform more projects during annual budget cycles, the practice of Program Level Scheduling becomes increasingly important.  The Program environment poses a unique set of challenges that may not be typically encountered when scheduling for a single project.  Aligning project information with organizational goals, ensuring adequate resource availability, navigating the enterprise landscape, and development of meaningful reports for executives are all essential objectives of Program Level Scheduling. In order to achieve these objectives, a further challenge is how to best to develop program level schedules that align both complex projects requiring Critical Path Method (CPM) analysis along with lesser projects and programmatic work.  Programmatic work is usually low-complexity, unit-based production work, such as gas service or power pole replacement, but still requires shared resources with larger project work that is traditionally managed in Oracle® Primavera P6™ (Primavera P6). This leads to additional challenges in managing all projects and programmatic work with “one view of the work”, while not adding undue administrative burden, and maintaining tight data quality with thousands of jobs on a massive scale.

This presentation will provide recommendations and lessons learned from years of experience in managing programs within Primavera P6 and what key information is essential in the development of Program Level Scheduling best practices.

 

(OWN-2540) (Panel Discussion) Implementing a Lessons Learned Approach Can Make a Difference

Authors: Stephen Cabano; Paul Williams; Scott Gordon; Martin Champagne; Matteo Giovinazzi; Arno Jansen

Abstract: This panel discussion will provide a road map for successful implementation of a Lessons Learned system. Topics presented will demonstrate how a Lessons Learned approach supports project planning, scheduling, and estimating, as well as project execution. Examples of Lessons Learned system structures, project delivery process touch points, organizational requirements and also funding required to support an effective Lessons Learned approach will be provided. The Business Case of establishing and supporting a Lesson Learned system will also be examined in the context of several project execution environments. 

It is crucial in todays project environment that this type of process be integrated into the day-to-day planning and execution of capital projects. The industry is in the midst of the great crew change, and we need to capture the knowledge/experience of the exiting talent base before it is lost. Both Owners and Contractors need to address this issue today, as this is no longer a distant possibility or future issue, it is upon us and impacts us daily.

 

(OWN-2547) Public Procurement:  Uncovering Hidden Costs & Capturing Missed Opportunities

Authors: Bryan Payne, PE CCP CFCC Esq.

Abstract: Public agency procurement is almost universally perceived as onerous, lengthy, Byzantine, and painful.  This is generally correct; however, judicious use of Federal procurement principles and thinking outside the standard public procurement model can realize substantial savings of time and funds.  Total cost of procurement as well as tender duration can be reduced through measures explored in this paper.  This paper first probes the hidden cost of procurement to both owners and contractors, and then examines specific measures to combat these costs, including bundling of procurements, use of multiple award contracts for professional services and small construction, and control of tender period through proactive management.  Standard engineer-procure-construct as well as alternate delivery methods will be addressed.  Some measures examined are entirely conventional while others are more forward-looking.  All measures presented have saved public agencies time and scarce funds and may help your agency as well.  The ultimate goal of this paper is to encourage a frank discussion of cost saving measures that are applicable across multiple jurisdictions.

 

(OWN-2565) Data-Driven Management for Digital Capital Projects

Authors: Margaret Lucey; Jesse Lund, CCP PSP; Avi Schwartz; Samarth Shah

Abstract: Construction projects and budgets are under scrutiny – requiring an increase in transparency, accountability, and accessibility to information. Combined with an influx of data from emerging technologies, the challenge for executives is to transform this information into insight, promoting data-driven decisions as they balance increased demands with limited resources. The typical implementation of project management solutions within capital programs often leads to redundant tracking from multiple systems and decreased data quality from disconnected systems. The various data sources hinder managers from prioritizing, understanding, and reporting project performance. Analytical and data visualization solutions tailored to the construction industry can help summarize performance, provide deeper insights, and highlight previously unknown risks – critical in managing complex construction portfolios. Maintaining access to construction analytics based on readily available data sets provides owners with rapid and reliable snapshots of project performance along with predictive indicators. This allows business owners to more effectively monitor their projects and more easily identify risks.

 

(OWN-2657) Managing Capital Cost Overrun Risks in the Mining Industry

Authors: Tin Lwin, P.Eng.; Jose Lazo

Abstract: Large capital cost overruns have been endemic in the mining industry, particularly during the commodity super cycle. As a financial institution with a significant mining portfolio facing the consequences of the overruns, there was a need to assess the significance and mitigation of such events. Consequently, internal studies were conducted to characterize attributes of the projects that experienced capital cost overruns and sought to identify factors that could potentially be used as leading indicators to capital cost performance of mining projects.  The paper also discusses how the findings of these studies have come to influence a lender’s perspective in addressing capital cost overruns in mining projects.

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