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When Good Projects go Bad: Case Studies
All too often projects begin with high hopes for success but end up off track and plagued with problems. When this happens, everyone associated with the “bad project” wants only to escape taking neither blame nor credit. On the other hand, everyone claims credit for a great project; even people who have had little to do with the project! Project post mortem discussions usually focus on these issues. I have never been associated with or have known of a project that began “bad” intentionally but many are unfortunately doomed from the start. There are many reasons why a project may be doomed from the start or will go bad along the way, they include:
- Underfunded projects.
- An inexperience project team.
- Unrealistic owner expectations.
- Teams that short cut the process.
- Improper planning.
- Staff that is unable to deal with unplanned events. All are equally viable reasons why a project will end up in the pile of “projects gone bad.” Let’s discuss these reasons in greater detail. Under Funded Projects A project that is underfunded is almost certainly guaranteed to be unsuccessful. Many times an owner has expectations that a project will include particular items and/ or that it will meet a certain outcome. However, when an owner does not listen to his project team’s recommendations regarding a sufficient budget for a desired feature or that the budget is too tight to cover unforeseen circumstances, everyone is being set up for a confrontation down the road. For example, contractors may be squeezed to the point where quality takes a back seat or change orders become a sure thing. In both cases, poor quality or requests for money may cause heated disagreements and the possibility of litigation. Underfunding is not always the owner’s fault. A consultant that fails to design a project that is built within the proposed budget has done a disservice to the owner, project team and the project itself. Also, a consultant that provides poor construction documents sets the owner up for a lot of change orders during the course of the project. Or an unsavory contractor may bid low in order to be awarded the job and then turns around and makes a wind fall on charged extras and errors and omissions caused by a consultant. To avoid the pitfalls of underfunded projects: set a realistic budget, and interview and hire the best consultants and contractors available.
Inexperienced Project Team A project team consists of the owner, consultants and contractors. If one part of this team is inexperienced it may be difficult if not impossible for other team members to compensate. An owner who has little experience with good projects or for that matter projects at all can be a problem. The owner may attempt to manage the project the same way they manage their business process which may have means and methods 180 degrees out of phase with project means and methods. An owner who looks at the consultants and contractors as second class citizens because they are not employed by the owner’s company will never bond with the team and will not earn the good will of the rest of the team. The other team members will still perform based upon a sense of pride in their work but they may not go out of their way to service an owner with a bad attitude. An owner that has little project experience and is eager to learn may not become a problem. In this case a respectable consultant and contractor may fill the void and help the eager owner along. A consultant that is inexperienced or who does not have the owner’s best interest in mind can also present problems to a project. As you will see in the case studies below, an inexperienced consultant may be diasterous to a project possibly leading the project into delays and cost overruns. I would not advise sending design consulting services out to bid because the consultant plays such a huge roll in a successful project. In a low bid situation you may end up with a less qualified consultant, an unscrupulous firm, or a good firm that does not have enough money to spend the time producing good construction documents. Contractors should be researched and evaluated carefully before being added to a bid list. Make sure that references are checked with both owners and consultants. Use contractors that are experienced in your type of project at your value level. Also, no need to hire a small firm for a large project and have them overwhelmed. Another rule of thumb, have your legal team check the courts for lawsuits. A contractor that spends a lot of time suing owners or defending themselves from subcontractor’s claims is a company to avoid A good way to find good contractors to put on your bid list is to ask design consultants to refer contractors with whom they have worked with on successful projects. If the project calls for multi- primes then ask a general prime to give you some names of good M & E contractors and vice-a- versa. If you are selecting a prime contractor talk to sub-contractors who have worked with the general before.. Going to the phone book or putting your project on a public bidding site provides little assurance that you will have found a good contractor especially if your company has a policy to use the lowest bid. I have found it much easier to interview and invite only contractors I would feel comfortable doing business with to be on my bid list versus trying to explain to my boss why I do not want to use the lowest bidder.
An owner who is stuck in the competitive bid process for consultants is headed for trouble. Think about this: Why look for the cheapest talent when you could have the best talent from a group of people who will have the overall biggest impact on your project? Another way of saying this is: If you needed open heart surgery are you going to look for the doctor who is going to do it for the lowest price or the doctor with the most skill? Interview consultants and ask for references. A contractor will follow plans and install what he is told. If the plans suck, so will the outcome of the project. Structural Engineer A project at a data center had been approved for the installation of several large satellite dishes. At this facility there was a roof over the mechanical and electrical rooms that had already been set up for expansion. The foundation, columns and beams that supported the deck were already sized to support a new floor. The actual roof deck was a floor deck including the concrete slab. The structural engineer who designed the building was asked if the dishes could be put on this roof/floor area. His response was “no, there is too much weight.” The dishes were installed on the ground instead of on the roof. Several years later, the center needed to expand and the dishes that were now located on the ground were in the way. The A/E, which included the structural engineer, was performing a site survey and the question came up about where to move the dishes. The structural engineer said “put them over there on that roof" – the roof that was supposed to be used for future expansion. The owner asked him why he had said several years earlier that the roof/floor could not support the dish. The engineer’s response was, “Oh, I thought they were talking about that roof”. “That roof” was the roof over the data center which was not set up for extra loads. This mistake cost the owner over $100,000 to move the dishes. If the owner’s representative had spelled out which roof he was referring to or the engineer had specified which roof he was talking about this problem could have been avoided. On another project, pre-cast concrete panels started pulling away from a building and were in danger of falling. After several days of inspection by many consultants it was determined that although there was expansion designed for the long walls on the structure, there was no consideration given to the expansion of the pre-cast panels along this long wall. When the panels heated up and had nowhere to go they bowed away from the building and the anchors of the panels pulled out. Neither the engineer of record nor the engineer from the pre-cast company considered this problem. More time spent on checking the shop drawings or having a second set of eyes look at the design may have helped to avoid this problem. Architect A large office building was leased for hi-tech office space. It was up to the lessee to make interior changes to the facility. A very well know national architect was hired to provide demolition plans and renovation plans. Everything was going well on this project until the building inspector came to sign off on the certificate of occupancy. The building inspector determined that the company could
not occupy the building because all the fire exits were in the center of the building and not separated by fire walls. The architect failed to recognize that becasue the emergency stairs were in the center of the building they had to be separated by a fire wall giving occupants several safe exits out of the building. Upon further investigation it was discovered that the architect had removed the walls not realizing their function as fire walls. The layout of the offices had to be changed and the client was delayed by over two months until new fire walls could be built. This mistake cost the client well over $150,000. More time spent by the architect and a sit down meeting with the building inspector may have caught this error before construction started. Also, perhaps, a little more time spent reviewing the design documents by the building department may have caught this in time. Although one could say the building department was partially to blame they are not responsible for finding errors on drawings. Mechanical/Electrical Engineer A large operation facility was to be built. The owner’s representative hired a very large engineering firm whose experience was in designing petro-chemical plants not buildings. Since this firm had little current experience with energy efficient HVAC systems they designed a top of the line system that keeps the boiler running year round. If the AC is too cold in a room hot water is sent through the coils in the air duct to bring the room temperature back into the desired range. As you can imagine, the owner is wasting loads of energy by having the two systems fight each other to keep a desired room temperature. Unfortunately the owner’s representative let this go and it was installed as designed. Too many M/E’s design data centers where the level of the electrical systems are extreme 2N while leaving reliability gaps in the mechanical infrastructure. They do not understand enough to realize that cooling is as important as electrical power redundancy. Another problem for too many consultants is that they do not take into account facility operations when designing a data center. Little room is left for the storage of spare parts and tools and systems are so complicated to operate that outages due to human error is common. Errors and Omissions An A/E made an error on the HVAC system for an office area of a data center complex. The error was not discovered until after the client moved in and they found an area that was not being conditioned properly. Being an upstanding A/E, they chose to redesign the system and pay for the rework instead of putting a claim into their insurance company. On another project an error was found in the design of the roofing membrane and coping cover. The A/E decided to submit the claim to their insurance company who took their time in investigating and approving money for the correction. In the meantime the owner had to put up with a defective building with water leaks. The owner and A/E’s relationship soured to a point where the owner decided to go with another design firm on the next phase of the project. On a nuclear power plant project the soil engineer did not correctly define the soil conditions. Before the project was to begin the foundation under the reactor and turbine building began to sink.
the plan and rejected it because the layout of equipment did not allow for proper fire egress. The revised layout cut about 20% utilization out of the facility. At the same facility the AHJ refused to allow computer cables to be placed under the raised floor unless they were in conduit or were Teflon coated to reduce flammability. The owner spent nearly $30,000 dollars fighting the AHJ’s decision with the National Code Official until a compromise was reached. Regular computer cables could be run under the raised floor as long as a system with a double shot of Halon was installed. It was costly but this was the only way out short of moving the project. Cost Over Runs A project was being considered to build a hi-tech programmer space. The owner’s project engineer wanted to gut the interior and start from scratch. The VP of engineering said no; and directed the engineer to keep as much as possible intact including ceiling grid, lights, duct work and fire suppression. The project was estimated to be x dollars and the bids for the project had come in near the estimate. As the project progressed problems arose including bad lights and the layout of sprinkler drops. By the end of the project the costs had grown to 3 X. The building was occupied and within a year there were so many problems that even a new heating system and ceiling grid had to be installed. Since this work had to be done in and around people and at night the cost was twice as much as it would have been if it were completed at the beginning of the project. The end result was that the VP of engineering realized he was wrong and the project engineer said “I told you so.” Too often a proponent of a project or a consultant decides the project has to be fast tracked. There is nothing wrong with doing fast track projects as long as controls are in place and the project is managed effectively. However, when an owner, consultant or contractor do not have the proper controls in place and are poor managers cost can soar. Excuses of time constraints are used and drawings are not properly completed which result in cost over runs. Money is thrown at the project because the thinking goes the more money spent in overtime and rushing the faster the project will progress. Unfortunately, cost sky rockets, quality is poor and by completion it ends no better then if the project would have been hard bid. Change Orders Change orders are not always a positive part of construction projects. When designs are not clearly thought through, construction documents are poor or an owner adds scope change, change orders are inevitable. Many times an owner feels they are being taken advantage of because they believe they are overpaying or paying for work that should have been included in the base contract. A good contractor may feel they are just trying to do their job and be fairly paid for work they are providing beyond the scope of the base contract. Meanwhile, the scrupulous contractor is adding up how many more change orders are needed for him to buy his new boat or luxury car. Many times change orders disrupt the flow of the project because a crew has to stop working on something and come back to it later because they must wait for a change order to be approved.
Change orders are not priced under competitive conditions. Some contractors use change orders to make up for low bids. Because of non-competitive pricing, the owner and the contractors often end up at odds with each other. When it gets so bad claims for extras can end up in court costing everybody money. Change orders can also delay the project due to increased scope, waiting on materials or labor to perform the work. Projects that have a lot of change orders generally do not leave an owner in a good mood when the project is over. Consultants and contractors who perform extras without prior approval and then put in a claim for extras are sure to have a disgruntled owner and may face legal action. Consultants and contractors who do this do not understand the corporate structure that requires expenditures be properly approved prior to the expense being incurred. These guys hurt the reputation of all consultants, contractors and construction people. Schedule Projects without schedules wander and float. A good schedule provides a tool for planning and measuring how the contractor is doing and how the project is progressing. One of the biggest problems with schedules is that many are not realistic. Schedules put together by one party, for example the owner, may not include accurate time allotments for some activities. They may also miss allocating time for the unexpected. A schedule written by the contractor may not take into account the owner’s needs including inattention to priority of task that allows an owner to joint occupy the facility to set up their equipment. Schedules should be written and agreed to by all stake holders. This group should include people who are experienced in how much time is necessary to complete task and what pitfalls may arise. Suppliers should be consulted for long lead item availability, specialist subcontractor availability and AHJ inspection and permit times. Too often owners fall into the trap of expediting a schedule is by offering overtime. They need to keep in mind that production per man-hour drops as the work day is increased. Also in some cases, once overtime is given and then taken away the workers resent it and may slow the project down. Another expediting factor that may bite one in the ass is adding people. Not many people understand manpower density and adding too many men to work in a given area actually impedes production because trades are bumping into each other. In a data center where there is both plenty of work on the floor and overhead it is all too common to see this happen. An examples of this could be pipe fitters installing piping on the floor while another trade is installing work overhead. Very quickly the overhead crews find that their moveable lifts are blocked because a pipe has been installed in their travel path. Coordination of trades and how many people work in a given area at one time is essential. The construction manager needs to watch out for the selfish subcontractor who wants to get in, install his work and get out. Doing this, with no appreciation of others, delays the schedule.
person to spend all his time going through the CPM and questioning the contractor. This needless exercise cost both the owner and contractor while the owner’s rep profited. Contractor coordination drawings and coordination meetings are a must. Only the stupid turn workers loose without planning how work should be staged. Safety A safety program has to come from the top and the owner and managers of the construction company must be involved and should lead by example. If management is not serious the workers will notice. A safety manual for the site should be set up as well as a safety committee including staff from all levels. Materials for tool box meetings must be available and tool box safety meetings must be held. A safety manager should be assigned and it should be his top priority to manage safety. All people must be held accountable for good safety practices. Awards for good safety practices including safety lunches should be a part of the program. Safety should be practiced not just talked about. All incidents must be reported. To hide them to prevent hurting a safety record or prevent fines or increased insurance cost is wrong and it sends the message that management is not serious about safety. One of the best ways to start off with a safe site and keep it safe is to keep the site pristine. A clean site really helps send the message home and also makes the site a safer place to work. Equipment should also be inspected regularly to make sure it is in good working order and thrown out if it is not. The right tools must be used for the right job and they must be in good working shape. Experience is no excuse for short cuts: On one project a crane operator with 25 years of experience was lifting some loads on top of the roof of a building. The loads were not too heavy so the operator did not put out the out riggers and he turned off the automatic warning devices. When the operator extend the boom over the roof the weight became too much and tipped the crane into the building causing damage to crane and building. Some iron workers were installing the last steel for pipe racks. The racks consisted of two 30 foot steel columns and a couple of cross beams connecting each frame. The frame was assembled on the ground then lifted into place and tied off so that the crane could pick up additional steel to connect the frame with the previously erected frames. One day they discovered someone had taken the steel tie down cables used to keep the frame erect until the connector beams were installed. A hemp rope, that was over an inch thick, was found and it was decided that they would use it to tie down the cables.. Unfortunately the rope was old and did not hold the frame in place when it started to lean. The rope broke and two workers fell to their death. On the same project a dump truck driver was excited that he would soon be going home for a two week vacation. After he dumped a load of fill he took off down the road with the truck box up. Going too fast as he drove under a low pipe bridge the raised box hit the pipe bridge stopping the truck in
it’s tracks. The driver was not wearing a seat belt as he was only working on site. The force of the accident drove him into the steering wheel bursting his gut. The man went home via air ambulance and never returned. More inexperienced-worker cases: An inexperienced operator was allowed to operate a crane to lift a man basket filled with four men into the air. The boom was over 500 feet long and fairly erect. Something happened with the crane and the inexperienced man could not stop the lifting of the basket. It hit top of boom and pulled the cable out of the hook dropping the 4 men to their death. The day was partly cloudy with some thunder clouds off in the distant. A painter decided to paint a storage tank not considering his exposure out in the open. A bolt of lightning struck the tank. The man died and his body slid down the hand rail of the tank. An executive came to a site to have a look around. He refused to wear a hard hat commenting that nothing had been “erected yet” so he did not need one. As he was looking around his shoe came untied and he stopped to tie it. Not looking as he rose up, he hit his head on a stack of plywood. He ended up getting a dozen stitches on his forehead. A large concrete basin was being built. Since no one, including management, bothered keeping the site clean or reinforcing safety regulations the mess from used form boards piled up along with trash resulting in all around poor safety attitudes. As forms were being stripped, a worker untied his harness to enable him to get more leverage to free a form so the crane could remove it. The form suddenly let loose causing the man to loose his grip and fall head first onto the concrete 13 feet below.
Materials
Long lead items Long-lead equipment delivery is something that a consultant tries to tell the owner he needs to order in an effort to meet the schedule and even to save money. The owner should approach this strategy with caution. This author, as an owner, has ordered delivery both ways and I am not totally sold on the idea that the owner needs to buy long lead equipment to save money and meet schedule. First schedule- In some cases when a typical product is in such demand that the lead time has stretched out considerably, then it may be advisable for the owner to put the orders in. However, if lead times are normal and delivery will fit into the schedule I advise the contractor to order the equipment. The reason being is that the contractor is responsible for all project coordination.There is the possibility that the owner and a third party will get in the way between the manufactuerer and the contractor. Second Pricing – It is a myth that the owner will save money due to contractor “mark up.” The contractor still has to coordinate and deal with the manufacturer and he must install the equipment. In addition, the contractor may be in a better negotiating position as they are typically repeat
Formal meetings include Weekly Project, Safety, Coordination, and Supervisor Meetings. Special meetings may be set up to cover commissioning or turn over. Written communication such as formal letters takes up valuable time. Unless there is a legal reason to write a letter, communication including verbal and emailing should be as immediate and as informal as possible. One way to speed a project along (that will pay for itself) is to have video conference connection with key players. If the lead consultants, owner and field can be connected via video it removes the time delay of waiting for people to come to meetings. Also seeing a person is much more powerful then just talking to them over the phone. Disputes If a problem arises the faster it is addressed the better chance it has of not turning into a formal dispute. If escalation is the only way, then the contractor, owner and consultant should keep all documents, write down all conversations and take pictures or video. If you ask any construction claims professional they will tell you the group with the most accurate documentation has the best chance of winning. Again the goal should be to work things out and prevent disputes and good communication is part of dispute avoidance. Animosity & Attitudes No matter what, when you throw a group of people together there is usually someone who does not fit. As an owner, or general contractor, they should recognize this and try to deal with it as soon as possible. If resolution is impossible then the person must be removed. Animosity can be avoided if people realize that each person is different. There are several behavioral tests available that will tell a person what their personality type, how the like to work and how they work with others. This type of testing is invaluable and once given and discussed among a group it helps people begin to understand that the way a person may act towards them is not always personal. A lot of animosity can be avoided. I have worked for an owner, consultant and a contractor and one thing that dooms a good relationship is the reliance on typical stereotypes: such as “Engineers think the contractors and operators are stupid and have just a little more knowledge then a caveman.” or “Contractors think Engineers are arrogant, have their head up their butt and do not know how to communicate.” and “ Both the Engineer and the Contractor thinks the owner is clueless and the Owner thinks the Consultants and Contractors are money sucking leaches.” On one project the relationship was so bad that when everybody reported for a weekly project meeting everyone showed up with small tape recorders that were placed in the center of the table. At one meeting I counted over 20 recorders. If the team can break through these attitudes then they have a good chance of working as a real team and completing a successful project. If they don’t the project has a high percentage of failure.
Commissioning The best commissioning starts at the beginning of the job. Owners, consultants and contractors must realize commissioning is not an “add on” commodity but a real advantage for all. One of the best experts on commissioning process is ASHRAE. Following ASHRAE guidelines and leaving enough funds and time to execute it is “ a must” for finishing a project strong. Transition Transition is hard on both the contractor and owner. For the contractor the project is coming to an end and people who they have worked with for a period of time are leaving. Also they have to
accept they are no longer in charge, control the site and must change from operating in
a construction mode to operation mode. Owners have to realize this and must be patient
with requests of the contractor. The contractor is very busy finishing a project and closing
it out and getting things ready for occupation. They also work in a planned mode.
Requests that come in from different groups from the owner may take the contractor
away from his planned day. Also, in order to respond to a request time may be needed
to order materials or get a sub contractor to return.
I have given you many examples and reasons why a project goes bad. But what is a
really good project? Well it is certainly more than coming in within cost and schedule. A
good project will meet nearly all if not all of the OPR’s^2. The owner will go away feeling
they have received value for their money and they will be more educated about the
process. The consultant and contractors will have the satisfaction of working on a team
that provided value to the owner and met his requirements. All will leave the project with
good relationships and memories.
About the case: To be commented in groups, discussing several mini-case-of-study selected by the instructor. After the discussion, each group should present to their classmates the lesson for the mini-cases and relate them to the course and reality in El Salvador. Source: Website: https://www.missioncriticalmagazine.com/ Link: https://www.missioncriticalmagazine.com/ext/resources/whitepapers/Sjogren-When-Bad- Things-Happen-to-Good-Projects.doc (^2) Owners Project Requirements
