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Understanding Uncertainty for Performance Improvement

The challenge

Every project is subject to uncertainty. It might be simple estimate uncertainty or much more complicated threats that may alter the planned progression of work. Uncertainty is an inevitable aspect of most projects, especially those with more complex programmes, and even the most experience managers have difficulty handling it. They use decision milestones to anticipate outcomes and risk management to prevent disasters and make sure everyone is making the desired product. However, in most cases the project still ends up with an overrun schedule, overflowing budget and compromised specifications.

How can the design-construction gap be mitigated to improve project performance? How can we resolve some of the most critical types of uncertainty, such as unforeseen site conditions, design errors and omissions in final construction documents, owner-driven programme or design changes, among others?


 The idea

Start early, integrate quickly and work together as a whole.

Several solutions and building methods have been tested to reduce uncertainties on projects, and in most cases, it has been possible to achieve a successful balance when collaboration and communication among team members are improved, especially in projects with highly complex programmes.

Also, on projects of high complexity, it is no longer sufficient to merely know the project cost, the owner must know how the project will be paid for and integrate that knowledge into the scope of work, due to the direct impact on the project design, and speed with which the project can be delivered, especially on the public sector, since the public in nowadays wants greater accountability in how we spend their money.

Summarizing, the idea is to implement new mechanisms, and fine-tune existing ones, to mitigate the top-drivers that cause major uncertainty in most projects, such as:

  • Clearer direction from owners
  • More active leadership by owners
  • More integration between design and build parties during design and construction
  • Clearer definition of deliverables between parties during the design process
  • Team selection criteria not based primarily on low fee
  • Use of construction manager (CM) as contractor
  • Use of integrated project delivery (IPD) contracts
  • Use of BIM and other online virtual design tools by the entire project team
  • Budget contingency in the owner’s budget to accommodate design errors and omissions, to reduce uncertainty


The impact

Construction is not an exact science.

More integration and better communication are key factors, and the most effective mitigating factors against overall uncertainty. For instance, a design-bid-build method, by engaging trade contractors in a design assist role, is where we can find highest success rates in reducing uncertainty.

One of the top-divers of uncertainty-related problems, are owner-driven changes and unclear direction, as well as design errors and omissions. Therefore, more integration between all parties is highly advisable.

It is unrealistic to expect that on high complex projects, all owners fully understand design and construction processes well enough to provide accurate guidance and perfect leadership. Design and construction teams need to make an effort to understand the final end user requirements, and provide a better-informed design to the owner stakeholders, which will generate less disruptive stakeholder changes. Also, design and construction teams need to realize that their clients are often dealing with a range of internal stakeholders, which causes huge disruptions, and frequently leads to a scope, budget and schedule changes during the project life cycle.

On design-bid-build projects, by engaging trade contractors in design early stages, has proved to be successful for some owners, and to the project quality, due to intensive collaboration between all parties to avoid unanticipated problems in the field, and it also provides to the owner, especially the public one, the knowledge and technical support to better define scope, budget and schedule.

As an exampe, when Saraiva + Associados, a leading architectural firm, designed the new Loures Central Hospital in Lisbon, following a public competition conducted by the Ministry of Health, in a Design-Bid-Build-Operate process, due to the complex programme of such a building, the entire clinical operation, design and construction team worked together as a whole with all owner-stakeholders from the most initial stages of the project. This enabled a full scope review, to allow those requirements to be incorporated into the design during th eprogramming and concept design phase. Also, virtual coordination was used, by using Acconex platform and BIM, which was very effective to mitigate uncertainty, increase Communication, Collaboration and Integration, to improve project performance. This enabled a 70,000 m2 and 420-bed hospital to fully open to public in January 2012 when the design started in June 2009.

During the programming, design and construction process of Loures Central Hospital, four major mitigating elements were used:

  • Documents: Detailed construction drawings with no significant errors or omissions
  • Early Collaboration: A collaborative approach with involvement by operator, contractor and the entire project team in early design
  • Issue Resolution: Clear process for project team members for dealing with issues that arise during design and construction
  • Shared Liability: A collaborative approach with shared liability across the project team, contractor and building operator

Also, with such a complex project, the owner was forced to set the budget at a very early stage and then literally develop the detailed scope of work within the constraints set by available financing, with the support of the winning consortium. Thus, in these specific cases and complex programmes, financing drives the project scope.


The barriers to innovation – and the solutions

A problem anticipated is a problem half solved.

 It is clear that to improve project performance and reduce uncertainty, the owner must have at his disposal the ability and means to assemble and engage a proper team, in the early stages. However, projects financed with public funds, unless some of the local and international legislation is changed and adapted, public owners will continue to face serious challenges to develop and provide perfect information at the outset.

It is also clear that, the use of BIM by the design and construction teams is very effective in mitigating uncertainty through virtual coordination and digital fabrication, and will also help to decrease communication between all parties. However, technology doesn’t improve communication on a human level between members of the project team, since frequently they tend to avoid difficult conversations about potential conflicts, causing high rates of change.

The whole way of thinking and acting has to be changed, by integrating new technologies at our disposal in a more efficient way, as well as the current legislation has to be amended and adapted to enable better communication via technology to help deucing costs of change.


The way forward

An informed and active owner solves a lot of problems in the project.

Overall the tries to provide empirical insight into the actual use of uncertainty and risk management approaches that are currently being used by owners, project managers and the design team.

Only a minority of owners and their project managers, implement uncertainty and risk management approaches and processes since the early design stages, even some of the most complex projects.

Therefore, on the basis of past experience, on projects perceived as complex some of the following key areas need to be improved:

  • Stakeholder/ client/ customer/ sponsor involvement, with more integration and better communication management processes
  • Better risk identification, assessment and planning needs to be done prior at the outset of the project
  • Focused uncertainty and risk management training and education from the owner side
  • Engage and Use of appropriate expertise
  • The development of a lessons learned database and industry specific guidelines

Uncertainty and risk are fundamental aspects in the management of projects for performance improvement. It is critical to overcome some of the barriers that have been blocking the ability of the owner, in particular the public one, to implement uncertainty and risk management key approaches, as well as improving communication lines. Unless some of these barriers are overcome, risk management planning, identification, assessment, response planning and monitoring will not be truly effective.

Also, changes to socio-legal factors are crucial, to enable the owner to engage appropriate expertise, essential in managing uncertainty on projects.