By Evan Williams, Cambridge Companies
May 31, 2021
Managing Risk for Construction
Working with your design/build team to manage risk to the schedule and budget during the construction process.
There are many inflection points during a project development that can impact the project schedule or budget. Budget risks can develop from early phase design and due diligence gaps to drawing document issues, to owner changes, changes required by the local governing authority, to material cost escalation, and other issues that arise during construction. The schedule can be impacted by longer than anticipated design phase timelines, permitting delays, owner decision delays or changes, and General Contractor and sub-contractor issues. Only through a dedicated and consistent focus on controlling these risks can the project remain on schedule and meet the budget.
Budget Risks by Phase
Early in the project development, it is critical to involve the entire project team to confirm the project scope aligns with the owner’s needs. This can be straightforward, but typically involves weighing several options depending on cost and time to develop. By involving a construction team in the design scoping or preliminary design phase, the owner and design teams benefit from their practical experience to help determine costs as well as constructability reviews.
In addition, the design/build teams perform the due diligence with the owner. This task involves working through all the site and development related items. This involves a detailed survey and geotechnical exploration of the site. This confirms the sites appropriateness for the planned improvements and can also identify onsite risks like unsuitable soils, groundwater, buried waste, as well as utility and access easements, setbacks and other lot encumbrances that can impact the areas on your site that you can use. At this time, the owner and the design teams should engage with the local jurisdiction to confirm zoning and permitting processes and requirements. Often, on solid waste projects, conditional use or similar zoning procedures may be required that can have long timelines before permission to commence construction can be secured. Doing this work up front ensures that it is addressed and included in the project scope and timeline.
When detailed design development starts, there should be regular meetings involving all the project partners (Design, Owner, Construction, etc.) to ensure the design aligns with what was agreed to in the scoping phase, as well as the project budget. Should issues or complications arise during this phase, the construction team will be key to help evaluate options to either increase the budget or identify modifications to offset the cost impacts. It is important that these evaluations occur during design development, as once the design is complete, the changes will be much more time-consuming to complete and will cost more to implement. Another budget risk during design development is related to drawing errors or missing scope. This can happen due to a miscommunication between the drawing disciplines (Architecture, Engineering, Etc.), an error in the drafting or a miss in interpreting the project scoping documents. Regardless of the source, these can be addressed during design development or bidding through detailed drawing reviews by the construction team and the owner. While no drawing set is perfect, by involving as many project partners as possible in their review and evaluation, many issues can be identified and fixed before they have a major cost impact.