‘The Man in the Middle’

CIArb SCL Seminar

Buro Four

14 June 2013

Introduction

• Buro Four

• David Offord

• Russell Doughty

Summary

• Who is the Project Manager (PM) and what does he do?

• Does everyone have the same understanding?

• Progress: early warnings; execution; ‘broker’

• Pressures (up and down)

• Inside or outside the contract

• How many hats?

The Project Manager’s Role

What is project management?

Project management focuses on controlling the introduction of the desired change. This involves:

• Understanding the needs of stakeholders• Planning what needs to be done, when, by whom, and to what

standards• Building and motivating the team• Coordinating the work of different people• Monitoring work being done• Managing any changes to the plan• Delivering successful results.

‘At its most fundamental, project management is about people getting things done,’ Dr Martin Barnes, APM President 2003-2012

The Project Manager’s Role

• Over-riding obligation to represent the client

• Initiation – very few disputes at this stage 

• Design stage – part of the design team or not ?

• Procurement – does the best deal for the client always mean the same thing to the Client, PM, Design Team

• Construction – as EA (or CA) decider, as PM the ‘broker’ – sometimes both

Pressures

• Client believes you are ONLY there to represent them

• The Design Team think you should be sticking up for them – ‘top cover’

• Contractors think you must ‘surely understand’ and be ‘the voice of reason’ to the CA and Client

• Obligations clearly written down and defined by contract 

• CA – strict impartiality

• EA – a bit more latitude

• PM - ‘get it done’ – BUT …..

What do you know and how ?

• Can you use it?

• Is it reliable?

• PM often has the widest view

• CA – limited to what you have been ‘told’

• EA – more latitude – but still not inviting the claim – may have additional assistance / input

• PM – pushing for resolution - can point out the strengths and weaknesses to both sides to encourage agreement

What do you know, how do you use it?

• We often know where the claims and defence may come from beyond:

− the classic ‘we have a claim but haven’t told you what it is letter’

− the highly specific ‘this is a claim about one window frame detail in week 27 day 3 letter’ – which you know you are now going to get a lot of ! 

• The importance of trust

− in the decision maker− in the ‘broker’

• Tread carefully and make sure that everyone is happy with  how you intend to proceed .

Example 1 : Background

• Architect as CA

• Large mixed use scheme  ( £100m plus)

• Delay – on part of contractor and employer

• Substantial  provisional sums left unresolved and a ‘CM style’ procurement of the remainder ( contrary to contract )

• CA required to make decisions that may leave his own practice exposed

• Very strong client – seeking to ‘test’ the CA’s decision to give him the best opportunity to make the ‘right ‘ decision

• Our part – has a robust process been followed; is the basic information right ?

Example 1 : Resolution

• Limited instructions for specific matters – excluding contentious matters

• Client instructions to overcome their own delay

• Written undertakings as to how matters will be addressed in the future

• Substantial  provisional sums left unresolved and a ‘CM style’ procurement of the remainder ( contrary to contract )

• Workshops to address perceived underlying issues

• Individuals often more important than company

Example 1 : Issues

• Mistrust of the CA decisions from the Contractor

• Very strong client – seeking to ‘test’ the CA’s decision to give him the best opportunity to make the ‘right ‘ decision

• Contractor seeking to write ‘ independent arbitrator’ into certain sections

• Escalation – bigger and bigger actions e.g. Principals Meetings, ‘Star Chamber’ – but without recognising that none of these bodies have authority !

• Willingness to settle – misjudged by PM and Contractor as Client hadn’t disclosed his full position – course of action being pursued by PM because he believed it to be  in the project and the clients best interests  

• Has a robust process been followed; is the basic information right ?

Example 2 : Background

• Small backlog maintenance contract

• PM also acting as CA (not EA)

• Contractor was late in placing orders etc. and was in delay

• Employer was obliged to issue variations toward end of contract (employer change – spec issues)

• Employer wished to instruct additional scope

Example 2 : Resolution

• As CA the PM advised the contractor did not foresee issuing EoT beyond (date) which was prior to likely PC date – due to the contributory effect of the contractors late orders - excepting additional scope

• PM advised the employer that he would be liable for some EoT costs but not as much as the contractor was seeking – if he instructed the additional scope then he could be liable for some costs, should the contractor pursue the spec change vigorously and all should he wish to instruct the additional scope

• PM agreed with both that if he was able to agree between them a suitable compromise then he would find as CA a method to formally record this – contract mechanism was a quote for a variation

• Both parties got what they wanted without a dispute arising

Example 2 : Issues

• Is the PM acting as PM or CA?

• Concerns over impartiality overcome by establishing trust on  both sides

• Need to have clarity on what you would revert to under the contract

• PM is using his knowledge of were the contractor would go next (matters not yet formally advised) and what the employer would like to achieve (matters not yet instructed) to reach an agreement beneficial to both sides

Dispute resolution as a PM

• Never forget your obligations (and to whom) under the appointment or contract

• Keep everyone advised of when you are speaking to them as the PM and when you are speaking to them as the EA

• If you think that a commercial settlement is the better option to resolve a dispute check everyone else agrees and only then proceed

• Always have the strict interpretation of the contract (in your view!) in mind and let everyone else know what it will be if they can’t agree

Dispute resolution as a PM

• Protracted disputes or disagreements are rarely productive – take every opportunity to avoid without compromising the intentions of the parties (as long as they are honourable)

• Don’t be afraid to implement the contract mechanisms at the right time in parallel with the above – certificates of Non Completion are a good example

• If things stall have a fallback plan – most often an instruction

• Use your support network to sense check your decisions

Monitoring

• Principals meetings, if conducted appropriately are often a good way to gauge the temperature of the water

• Ineffective decision making tends to manifest itself in:

− excessive correspondence− reports very heavy on why things couldn’t be done− reluctance to proceed without costs agreed in advance

(contract dependent)− delay− confusion

Quality control

• Predominately by peer review - as per the list above.

• Has the decision maker:

− Understood the ‘rules’ – as amended not just from their last job

− Set out ( and documented) their position clearly− Agreed where a divergence from the strict process is to be

followed− Got the parties buy in − Got a good enough relationship with the parties to carry it

through?

Conclusions

• Manage up and down

• Separate when acting as PM and when as CA or EA

• Relationships

• Maintain progress

• Non contractual  vs. contractual basis

• Professional judgement  - can you justify your actions?

• If the answer is yes – proceed!