Project Delivery Systems Lecture 3

8/7/2019 Project Delivery Systems Lecture 3

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Project Delivery Systems

Program Management


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Program Management

Program Management is sometimes referred

to as a Delivery Method.

Many owners and developers, particularly in

the public sector, now favor Program

Management.

Where they lack sufficient expertise or

resources to manage various elements of

construction.


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Program Management

Program Management has emerged as useful

tool when outside resources are required

Program Managers are typically involved in all

five phases of the construction process, or at

least most of them

Often they provide services on multiple

structures or multiple building site

undertakings


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Program Management

The multifaceted scope of work is what most

distinguishes Program Management from

other project management methods.

Program Managers assume many

responsibilities traditionally undertaken by

owners using in-house resources.

.


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Program Management

A fundamental challenge in defining Program

Management is determining where is a

delivery method or management method

Project Delivery Systems has been used to

describe both a delivery method and a

management method.


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Five Phases of Every Project

Construction Phase Model

Every construction undertaking comprises fivebasic phases:

Real state Locating and Purchasing real property (land),

identifying its real use, arranging for zoning, permitting,and environmental compliance

Financing Process of obtaining funds to pay for anddevelop real property

Design Includes architectural and engineering work

Construction Improvements are made to real property

Occupancy Finished construction product is leased orsold, Operations and maintenance are setup


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Owners often select a management method based

on their comfort level with respect to the various

phases of project development and available in-

house resources to manage those phaseseffectively

For example, most commercial developers and

public owners are confident in their ability to

manage the real state, financing and occupancyphases


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It is a fundamental principal that someone need to

take overall responsibility for each phase of the

construction process

Many owners retain independent sources tomanage design and construction phase work


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Program Managers are typically used in situations

where

Owner lacks resources

Program manager is desired to provide overall leadershipin the overall construction process

Owner believes Program Management is the most

effective way to contain program costs

Program Management is the owners traditionalmanagement method


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Delivery or Management Method

A Management Method is the mechanics bywhich construction is administered andsupervised

A Delivery Method is assigning responsibility andrisk for the delivery of design and constructionservices

Management Method has broader implications

Delivery Method is typically focused on theprocess of how a project is designed andconstructed


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CM at Risk, DB, DBB are typical examples of

Delivery Method

Agency CM is a Management Method

Theoretically, any Management Method maybeused with any Delivery Method

It is important to choose a method that best

allocates the responsibility and accountabilityfor all five phases with minimum duplication of

effort.


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It is also important to assign responsibility to the

party that is in the best position to manage

potential risks

It is advisable to select a Management Methodbefore locking into a Delivery Method


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Program Management VS Project Management

It is often difficult to distinguish a program

manager from a project manager because they

perform many of the same functions and offer

many of same services The common use of acronym PM for both causes

confusion

On a fundamental level, Project Managers and

Program Managers are similar because they are

both owner representatives


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Both entities have a direct contract with owner

Both are expected to be owners representative

On a practical level, they have similar

responsibilities in design and construction phases

Both are required to have similar skills

Should be familiar with building codes, regulations,

permits etc


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Should be able to do constructability reviews,

drawings coordinations, estimating and scheduling

knowledge

There is also an overlap sometime in the servicesprovided by program manager and project

manager during construction phase

Both are frequently involved in buyout process

Both are involved in monitoring, cost, time, quality

and safety


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Both are responsible for post construction services

that includes commissioning, maintenance,

trainings etc

It is common for both to be involved inadministrative functions such as processing

requisitions, evaluating and negotiating change

orders and assisting in claims management


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Distinguishing between Program Management

and Project Management

Despite the overlap between Program

Management and Project Management, there are

distinctions

A Program Manager is responsible for a largerscope of the construction phase than a Project

Manager

This scope of responsibility for the building effort is

the key line


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Distinguishing Characteristics - Program Management

Program Managers typically oversee theconstruction of multiple structures on the samesite or multiple locations under multiple contracts

For example: corporate or academic campuses,office parks, or military bases

Program Manager also oversee the construction ofvarious structures for a single owner in multiple

locations such as retail centers, commercial officebuildings, and certain types of public worksprojects


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Program Management is used to define a situation

in which a single entity has responsibilities of all

five phases

Using this definition, an entity that manages one ormore project phases beyond the Design and

Construction phases also can be considered as

Program Manager

Single point contact for most participants


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Program Manager often controls the design andconstruction and is accountable to the owner forthe projects financial controls and overall

profitability

A Program Manager maybe responsible for locatingsuitable project sites, obtaining financing, andarranging for end-use of the finished building

Program Manager may negotiate contracts onowners behalf with architects, contractors,construction managers, project managers etc


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Distinguishing Characteristics - Project Management

Scope of responsibility is more limited

Oversees a single phase project or is

responsible for overseeing the construction

phase of a multiple building project

Defined responsibilities


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As a general rule, when a project managers

level of responsibility moves beyond

construction on a single project, the manager

becomes a Program manager

Overall financial success of a project is

generally more limited

Typically required to control construction

costs, participate in value engineering


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Sometimes develop an overall budget for

design and construction

Dont get involved in locating suitable project

sites and finances

Dont get involved in leasing, sales, or

operations and maintenance


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Developer as Program Manager

Three entities that fall under the generic labelDeveloper are:

1. Developer Entity that develops real property andmaintains an ownership interest in a project or multiple

projects2. Fee Developer/ Development Manager An entity that

develops real property in which it has no ownership orequity interest

3. Fee Developer at Risk An entity that develops realproperty in which it has no ownership or equity interests,but holds contracts with, and financially responsible toarchitect/ engineers, GC, or trade contractors.

Project Delivery Systems Lecture 3

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