With the rush that often comes with getting a new project under way, we often see situations where there has not been a great deal of consultation between the Principal and the Project Manager.
A Project Manager can play an important role and the early involvement of a good Project Manager will make a valuable contribution to a project. Early involvement allows for the Principal and Project Manager to discuss the services that the Project Manager will perform and accurately document those services. It also give the Project Manager input into (and a sense of ownership over) the Construction Contract.
Once the project gets off the ground, following ‘best practice’ project management leads to a smooth project and ensures that the Principal’s rights are protected.
Remember these tips next time in the lead up to a new project, and put them on your site office wall as a reminder to follow ‘best practice’.
1. Early Engagement of Project Manager to ensure ownership & support of key decisions
- A good PM will make a valuable contribution at the project planning stage with respect to matters such as the appropriate project procurement method to be used (construct only, design and construct etc), design development, consultant engagement, development approval and identifying critical matters which may affect time and price.
- Early engagement of the PM ensures the PM’s ‘ownership’ and buy in to these critical decisions.
2. Contract Preparation & Selection
- Resolution of project procurement method and preparation of Construction Contract, prior to tender (and ensuring part of tender package). This includes decisions on the appropriate risk profile for project, including identification of project specific risks.
- Ensuring PM is familiar with, and has administered the form of Construction Contract, which is proposed to be used.
- We can alter any standard form to meet the Principal’s desired risk allocation, but a Construction Contract is only as good as the PM being aware of it and the PM’s ability to administer it. It is better to start from a standard form which the PM is familiar with.
3. Defining the Management System and measuring performance against that system
- The actual project management services to be performed need to be clearly set out and documented (ie, the Brief and description of services in the Project Management Agreement).
- There needs to be a clear delineation of roles of the parties, including proper appointment of PM and scope of authority (including whether appointed as agent or has some independent function in the administration of the Construction Contract).
- Does PM’s services include co-ordination of Consultant’s services?
- Proactive, not reactive management skills and practices.
- Clear processes for the issuing of directions / instructions to Contractor.
4. Following and applying the Construction Contract
- Avoid the attraction of ‘putting the contract’ in the drawer once signed. This encourages Contractor to raise defences of waiver etc.
- Once agreed, establishing a contract rights / obligation matrix so the PM is aware of the rights and obligations under the Contract and so can apply them. (This sometimes includes preparation by the lawyers of a summary, or a training session to those who will be involved in administering the Construction Contract).
5. PCG / Site meeting management
- Regularity of both PCG and Site meetings (monthly moving to weekly closer to project completion).
- Follow set agenda (which includes outstanding RFIs, directions, EOT and variation issues).
- Superintendent / PM chair and minute PCG & Site meetings (not contractor).
- Review and respond to any issues raised by Contractor on minutes in a timely manner.
- Good record keeping and communications (including maintaining communications and records in an accessible form).
- Maintain updated monthly reporting regarding the status of works and the project budget, including revised work programs and budget forecasts.
6. Claims / Notice Management
- Access to suite of template notices (prepared by lawyer / drafter of Construction Contract) which comply with the requirements of the Construction Contract, for ease of issue of notices and responses which comply the Construction Contract (ie for payment claims, extension of time, variations, instructions etc). This streamlines the process and makes it more likely PM will issue the required notices.
- Timely management of claims (noting time limits apply in the Construction Contract).
- Timely response to RFIs and allegations that directions constitute a variation request etc.
- Maintain up to date EOT registers, RFI registers, variation registers, claims registers, defect & incomplete works registers, etc to be included in the monthly reporting.
7. Template Payment Schedule & Security of Payment
- Knowledge of timing and other obligations under the applicable Security of Payment Legislation.
- Having access to template monthly payment schedule to be completed on a monthly basis (including a checklist of a complying payment claim).
- Assessing and certifying any ‘Principal’s entitlements’ in payment schedule (for example rights to liquidated damages, or assessing and prescribing a value to defective work).
- Ensuring Payment Schedules / Payment Certificates clearly value the works completed and identify the valued claimed, and the valued assessed of work and making it clear how these have been assessed.
- Providing an alternative value to disputed variations / delay claims (to be used in the alternative by the Adjudicator if the entitlement is established), rather than just valuing it at zero. This gives the Adjudicator an alternative value to apply.
8. Proactive dispute management
- Being proactive in recognising potential areas for dispute, and likelihood that Contractor will seek to enforce rights under applicable Security of Payment legislation.
- Engagement of lawyers and/or experts at early time in anticipation of future dispute.
9. Ensuring total Client Group co-ordination
- Access to consultants throughout construction phase to deal with RFIs etc.
- PM’s management (and authority) regarding Consultant liaison and directions.
- Communication of issues back to Client.
10. Continuous measurement of key outcomes
- Time, Cost & Quality.
- Monitoring of Contractor performance against key drivers of whether project will be on time, on cost and to the quality required by the Contract documents.