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Delivering Healthcare Capital Projects
Sidney J Sanders, Senior Vice President, Construction, Facilities Design and Real Estate, Houston Methodist
Owners with significant Capital Construction Programs face a myriad of challenges. Healthcare facilities in particular are challenging Capital Programs to execute as they are some of the most complex and costly buildings to build. They are full of expensive equipment, require elaborate infrastructure and take years to design and construct. This is also a time of tremendous pressure on the healthcare industry as a rapidly evolving model for delivering services requires nimbleness, speed and flexibility. These facilities require long term flexibility, very high quality building systems, materials and components and often accelerated schedules.
Construction Procurement Strategy
In order to meet these program goals and challenges, many Healthcare Owners adopt a procurement strategy of Construction Manager at Risk (CMR). The CMR is typically selected immediately after the selection of the design team and includes the leadership of the design team in the selection process. The purpose of early, collaborative selection of the CMR, is to allow the project team to move efficiently in rapidly exploring project alternatives, balancing different scenarios of project scope, schedule, and budget.
This project delivery strategy works reasonable well up to a point. As buildings become ever more complex and Owners continue to attempt to make better and more informed project decisions, the limitations of the CMR delivery process become more apparent. Too many critical decisions are made with inadequate information since the real specialist in those areas (subcontractors and manufactures) are simply not yet on the project early enough to be available to lend their expertise.
With CMR, as with most project delivery methods, a significant amount of time and professional labor by all parties is spent just managing risk transfer. This results in duplicative and wasted effort. Much of the effort put into construction documents, request for information, supplemental documents, submittals and shop drawings is redundant and ultimately discarded which causes projects to take longer and cost more. The goal then becomes removing non-value added effort that is done primarily or solely to assign responsibility and therefore transfer or manage risk among project participants.
In order to speed up the procurement process, develop better scope and allow for better project decisions, it is essential to include the early selection of key subcontractors and manufactures on a Design-Assist basis.
This is also a time of tremendous pressure on the healthcare industry as a rapidly evolving model for delivering services requires nimbleness, speed and flexibility
Typically project teams have identified the following subcontractors for early selection as Design Assist agents: vertical conveyances, glazing and curtain-wall, fire protection, pneumatic -tube, HVAC, electrical and plumbing.
Risk Sharing and Cascading Commitments
To optimally execute a complex project, (minimizing cost and schedule, while optimizing the best Owner decisions), requires creating a project environment that fosters accountability but does not punish reasonable risk taking. It requires the development of a project culture where the various participants can count on the daily commitments from the other participants without needing to excessively document those commitments.
All projects have dozens if not hundreds of participants producing information or services needed for the project to progress. These participants include architects, engineers, cost estimators, masons, steel fabricators, tile setters, surveyors, and many, many more individuals and companies throughout the design and construction of a typical building. In almost every situation the service or information they produce is delivered to another participant who then adds additional content or value. Often this enhanced package of information is then delivered to yet another participant whose contribution depends on the combined deliverable from all the previous participants.
We now have a set of cascading commitments. For the CM to “honor” his commitment to deliver the project on schedule he needs all the participants to honor their commitments to partner participants. If any of these participants fail to honor their part in this set of cascading commitments, the project is delayed. Building projects are filled with hundreds or even thousands of these cascading commitments.
Creating a Collaborative Culture
How can a project manager develop and maintain a project culture of honoring commitments? This can be accomplished by building collaborative teams and holding weekly project meetings with all the key participants on the project. This creates a transparency allowing all key participants to understand the project goals and challenges. Conducting these weekly meetings in a respectful manner is essential. Without respectful interaction will participants never make the full commitment to accomplishing the Project goals?
The Owner needs to set the project culture by clearly outlining the essential goals needed for project success. However it is in the Owner’s ultimate interest to accept some level of risk by creating a risk-tolerant environment where all participants are focused on the overarching project goals and are not punished when unexpected issues arise.
The delivery process must still retain accountability. When project team members are carefully selected and properly managed this integrated project delivery method strikes a careful balance that maintains accountability without resorting to excessive documentation and efforts just to manage risk transfer.
We believe this Integrated Project Delivery method using early selection of a CMR coupled with best-value selection of key Design Assist subcontractors and led with a consistent project culture of collaboration, yields the greatest opportunity to rapidly deliver large complex projects with greater flexibility and price control.