PURPOSE
The purpose of this chapter is to discuss how Project Managers, Project Engineers and Construction Managers can control “scope creep” during a project.
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RESPONSIBILITIES
Program Manager: The Program Manager must obtain approval from the approving authority, usually an Oversight Committee, for all requested changes in scope, budget, and/or schedule.
Project Manager (PM): The PM is responsible for setting and monitoring the project budget, scope and schedule. The PM must also assure that the project costs and budget are updated at appropriate points during the design process. The PM must review these updates to ensure that scope creep is not occurring. As the client agency contact, the PM is also responsible for managing the design process so that additional client requests/requirements outside the project scope are minimized once the project budget and scope have been established. There are times when a scope revision is essential. For example, a change in scope may be necessary to comply with a code requirement or a regulatory permit requirement. In the case of an essential scope revision, the PM is responsible to (1) notify the Program Manager if the project’s budget, scope, or schedule are being compromised; (2) work with the Project Engineer to identify work that can be deleted from the original scope to maintain the approved budget and schedule; (3) work with the Program Manager to obtain either additional funding or approval for scope reduction to achieve the budget; and (4) adjust the project scope, schedule, and budget based on the revisions approved by the Oversight Committee.
Project Engineer (PE): The PE is responsible for designing the project in accordance with the approved scope but within the limits imposed by the project budget. If scope creep occurs that is not within the PE’s ability to control, or if the schedule and budget are at risk for any other reason, the PE is responsible to notify the PM at the earliest possible moment.
Construction Manager (CM): The CM is responsible to monitor project costs during construction, minimize change orders to the extent possible, and avoid any unnecessary change orders. In particular, the CM must monitor changes related to scope or owner initiated changes. The CM must update the change order information in UPRS on a regular basis. The CM is also responsible to notify the PM whenever a change is requested that appears to be unnecessary or not within the original project scope.
Oversight Committee: Most capital programs have an Oversight Committee that has the authority and responsibility to approve a project’s scope, budget, schedule, and any changes thereto. In such cases, the Oversight Committee is the approving authority.
PROCEDURE
Background
Designing projects to the approved budget and schedule is a critical factor in the successful delivery of a project. Scope creep is a process where additional work is added to the project after the scope has been established. Scope creep manifests itself in different ways. It can occur through small numerous changes or it can occur through a fundamental change in approach to the design. No matter how it occurs, scope creep is detrimental to the overall project budget and schedule. It results in additional design charges due to extra design work and construction cost and schedule overruns due to increased construction scope.
To minimize scope creep, at the beginning of the project stage, clearly identify the scope for the project and establish a clear, agree upon scope. Dedicate time to have all stakeholders understand what happens during each phase of the project and provide a clear, complete estimate.
Managing scope creep emphasizes capturing as many proposed changes as possible so that a determination can be made as to the scope/cost/schedule impact of the changes. Once identified and the impacts determined, proposed changes will be approved or denied by the approving authority. Depending on the program, the latter may be an Oversight Committee or a Program Manager. In either case, approval must be accompanied by identification of the source of additional funds. In the case of programs with Oversight Committees, scope, budget and schedule changes must also be approved by these committees.
Yet another type of scope creep can occur with its origins in the design phase. A PE always faces difficult problems during design. Instead of solving the particular problem during design, there is always the temptation to pass the problem onto the contractor by simply writing, “the contractor shall be responsible for..." With a simple sentence, the PE attempts to transfer the problem to someone else and, thereby, remove him/herself from responsibility. Unfortunately, all too often the responsibility cannot be transferred to the contractor. Suppose, for example, that the PE writes that the contractor shall be responsible for all subsurface unknowns. These are easy words to write, but the transfer of this responsibility is not clear because the contractor has no ability to bid to such a requirement during the short bid period. In all likelihood, the scope and cost of construction will creep as the CM and the contractor attempt to deal with the PE’s failure to resolve the issue during design.
A similar problem can occur if the PE designs a project but pays little attention to whether it can actually be constructed. For example, suppose a trench is to be constructed for a sewer through ground laced with cobbles and large boulders. Suppose the PE specifies that solid sheeting is to be used to support the side walls of the trench. Unfortunately, it is difficult at best to actually construct such a system in this type of geology. Again, the problem was not really solved during design and the CM and contractor will have to deal with it in construction, probably by a cost increasing change order.
At the end of the Project Design stage, plans and specification should be reviewed for constructability and any ambiguity and conflicts in the project plans shall be addressed prior to finalizing the project plans. Also, measures should be taken during design stage to reduce unforeseen conditions. Geotechnical and utility investigations shall be performed to survey of known or suspected structures to reduce the “unknown” elements.
The Oversight Committee
As noted above, many programs have an Oversight Committee or similar structure that is responsible for approving a project’s scope, budget, and schedule. Such committees have proven to be a useful tool for controlling a client department’s requests for grander and bolder scopes. It should be recognized that not all scope increase can be blamed on a client department. Designers can also be the source of scope change, such as by specifying exotic materials when lesser grade materials would suffice. Also, change is not always bad and may be necessary in many cases. It is important to keep long-term economics in mind and to work toward delivering a project with the lowest life-cycle cost, one that considers both the initial capital cost and the costs of long-term ownership and maintenance. For example, the added cost of providing improved insulation, skylights, or LEED certification in a building may be offset by reduced energy costs over the life of the facility. It is important to note that in most cases the Oversight Committee is the approval authority for scope, budget, schedules, and any changes thereto.
Establishing Scope During Pre-Design
Concept and/or Pre-Design reports present the proposed project in a manner that allows both the client and management to gain a thorough understanding of what is proposed within a project. A project budget is presented in each report. In the case of a concept report, the project budget may be at the “opinion of cost” level, sometimes called a Class O estimate. However, by the time pre-design work is finished, the project budget should rise to the level of a Class C estimate. In each case the project budget must include the construction cost for the project, any right-of-way costs, build-out or commissioning costs, and of course the project delivery costs for engineering, administration, project management, construction management and inspection. The PM must check that this delivery budget includes sufficient funding for all necessary design support divisions to complete their design work. The Concept and Pre-Design reports should also contain a project schedule. Once a project’s scope has been set, the approving authority must approve all unfunded requests for change, from the client department, and requests that would increase the project budget or delay the schedule. The approving authority may delegate some level of its authority to the City Engineer or their designee.
The reason for highlighting the Concept and Pre-Design reports is that most scope creep occurs as a result of poor planning and poor communication at the very beginning of a project. Projects that are completed with minimal scope changes are characterized by good upfront planning, good communication of scope between all members of the project team and the client, and commitment to the scope by the client. It is important that client approval occur at a level sufficient to commit the client’s organization. Approval at the lowest level of the client’s organization may not mean that client management has bought into the project scope.
Controlling Scope During Design
The process of periodic budget updates continues as the project moves through the implementation process. For example, on larger projects at about 50% design completion, the budget should be revised to a Class B estimate. On smaller projects with a shorter design schedule, an official Class B estimate may not be prepared. Nevertheless, the PM must watch the budget and prepare such an estimate if deemed necessary. After reviewing and revising the estimate to Class B, it should be used as the budget for the project. This process continues to the 100% design phase when the Class A estimate is prepared. Even during construction, the process should continue. An estimate to complete should be prepared periodically by the CM and compared with the project budget.
As the design phase progresses, the PM must routinely check design progress to be certain that the design phase and total project budgets are not projected to be exceeded. The PM should meet with the PE to review design progress and should use UPRS reports to check that design expenditures are consistent with design progress. As design proceeds, it is difficult to design to a budget if the client is requesting changes and additions. For most programs, oversight committees are useful in controlling this type of scope creep. Oversight committees normally must approve any change to a project’s budget. If scope creep is jeopardizing a project budget, the PM should report this to the Oversight Committee. In such cases, the PM must clearly present the requested changes and their associated costs. The PM may choose to have the client present their arguments on the need for the scope increase. If the Oversight Committee approves the change, then they should also approve the increased budget that results. Otherwise, the project cannot proceed with the changed scope.
In all fairness, scope creep can also have its origins within the design office itself. One often hears that the “contractor will already be out there, so let’s take care of this other work as well.” Although well intended, the PE should not make such decisions on their own. The PE’s responsibility is to design to the approved scope and request approval of changes when they are necessary. The PE is never authorized to make unnecessary changes to a project scope.
The PE should also conduct routine estimate reviews during the design of the project to ensure that project budget scope creep is not occurring. Depending on the project size, up to four estimates (Class O, C, B, and A) may be prepared during the course of concept/pre-design/design. If changes occur and the cost of the project exceeds the approved budget, then the client should work with the PM to either increase the budget for their project or have the PE make adjustments in the design to meet the project approved budget. Upon completion of the project pre-design, situations will invariably occur that will require changes to be made to the original scope agreement. Understanding what constitutes a change may be best addressed by fully understanding the originally approved scope and analyzing requested changes against this “target” or original scope.
Schedule changes during the design of a project are often necessary, and a proper response to changes as they occur is very important for project success. Requests for schedule changes can take many forms (e.g., funding, external reviews, client requests, etc.). A timely and measured reaction and response to the changes will mitigate the majority of the impact of the change. In planning the project, potential schedule overruns should be explored and a potential solution and contingency plan developed.
Controlling Scope During Construction
The problem of scope increase does not end with award of the construction contract. For example, the owner can request changes as the facility is constructed. Visualization of the actual three-dimensional (3D) facility from two-dimensional (2D) drawings is difficult even for engineers, let alone those less experienced with plans. Owners rarely read the specifications which accompany a project. But it is the specifications that determine the quality of the final product. It is not surprising; therefore, that “owner initiated changes” are a common cause of change orders during construction.
It is unrealistic to expect that “owner initiated changes” can be eliminated entirely. However, they can be reduced and mitigated but this requires special care during the design phase. For example, 3D CADD imaging has proven to be an effective tool for visualizing the three-dimensional aspects of a project. 3D CADD imaging is a standard protocol in some programs, such as the Treatment Plant Program within the Wastewater Program, where it has significantly reduced change orders related to both unforeseen conditions (a piece of equipment that can’t be accessed for maintenance), design errors (pipes running into beams), and owner initiated changes (because the owner has a better visualization of the final product). A realistic goal is to limit owner initiated changes to 1% or less of the construction value.
Encountering unforeseen conditions is another major cause of scope creep during construction. Many “unforeseens” occur because of unexpected conditions below the ground surface. Examples include contaminated soil, unidentified substructures, different geology, or just “changed conditions.” All reasonable measures should be taken during design to reduce unforeseen conditions. The extent of geotechnical investigations is a major decision that must be made during design. For example, a tunneling project requires extensive knowledge of the underground conditions, particularly the presence of cobbles and boulders. The latter cannot be identified or quantified by normal core drilling. A larger excavation is usually required and the appropriate scope must be established by the PM/PE and the Geotechnical Engineering Group.
Some programs, such as the Wastewater Program, emphasize the use of potholing to identify substructures during the design phase, core drilling to determine the extent of sewer corrosion, and surveying of known or suspected structures to reduce the “unknown” elements. Again, this should be done during the design phase. The PM shall review the project plans for constructability and address any ambiguity and conflicts from the project plans.
The CM is responsible to minimize change orders to the extent possible and avoid any unnecessary change orders. However, it must be recognized that success in holding down change order costs depends almost entirely on good planning, design quality, and design clarity. If these things are achieved, construction usually proceeds with minimal problems. On the other hand, if design quality and clarity are lacking, or the project was not built on a good planning foundation, then the CM struggles to make the best of a bad situation.
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