Earlier this year, I successfully completed a project where I managed the design and construction for a start-up’s new headquarters in Silicon Valley. Here are ten lessons learned from that project that apply to most facility projects.
1. Manage both design and construction, never construction without design
This is such an important part of every project, that to be responsible for only design or only construction means that you cannot be responsible for the project. If you don’t have the ability to lead not just the design and construction by how the project team will decide on the design and construction resources than you essentially become an order taker, not a project leader.
For this project, the brokers and landlord were telling the client (and initially me too) to hire an architect and complete the design, then obtain bids from general contractors. Instead, I developed and RFP for design-build services, which saved time and money. I could do this because I utilized my design skills to develop good conceptual preliminary designs (I did this for years when I worked directly for technology companies) that I could use in the RFP.
2. Don’t waste time and money on extra tenant improvements – spend the money for the employees and workers
If you need a clean room or extra power for your R&D or manufacturing operation, then by all means spend the money to either lease or build spaces that have the extra infrastructure that you need. For office space, don’t waste your time or money on fancy soffits, hard-ceilings, imported lighting fixtures or anything else that your employees cannot directly use, like furniture and equipment. The money that you save (and it could be 10 to 50%) you can spend on things that your employees can actually use relocate if they need to move prior to a lease expiration.
In this project, it made a lot more sense going the design-build route where the money saved in architectural design could be (and was) spent on furniture and equipment for employees.
3. Understand your client’s project team’s strengths and weaknesses early in the project
In order to effectively manage your project and your client’s expectations, you need to understand your client, including their priorities, strengths and weaknesses. For example, what is more important to your client: time (getting into the new space or minimizing costs? Do they have realistic expectations about the schedule and budget?
When I was first brought into this project, I was told that meeting and aggressive move in date was critical, yet I was hired only to manage the design and construction, which I went about expediting via an RFP for Design-Build. Turns out, the client’s project team had never been through a project like this and both the furniture selection and fiber installation (managed by the client) took longer than they expected (even though I kept communicating that both were critical path items) and caused the move to happen several weeks later than my initial target date. In this case, the client seemed happy with the delayed move date, but I found it challenging dealing with mixed direction and only being able to control a portion of the project. I should have questioned the client’s I.T. staff that was placed in charge of the fiber installation and pushed for a more experienced I.T. project manager.
4. Establish a Preliminary Budget early
A successful project manager sets expectations with his client early in the project. Of course, only an experience project manager will have sufficient knowledge through experience to understand and confidently communicate preliminary and realistic budgets and schedules. Once you have put together your preliminary budget, share it decision makers (the ones who control the project money) and obtain approval before commencing with hiring design or other contractors.
When I was brought into this project, the lease had not been signed, but the client was anxious to commence. When I asked about the budget, the CFO told me that he had none, but wanted to keep his costs around his tenant improvement allowance. After a couple of weeks of gathering project information I was able to prepare and present a project budget that was accepted by the client. Needless to say, I was able to keep the design and construction costs well below the budget while the costs of other parts of the budget that I did not manage, such as furniture and audio-visual exceeded the preliminary budget. In part, because I was able to spend less for design and construction and the tenant was able to use their tenant improvement allowance for other items, they essentially spent their savings on FFE that would benefit their employees.
5. Fire Alarm systems and fiber connectivity – two items that frequently lead to schedule delays
Usually if any part of a project is going to cause schedule delays it will be Fire Alarm system changes and fiber connectivity to the space and both happened on this project.
The problem with the fire alarm occurred when the General Contractor finally got a quote from the landlord recommended alarm company – it was four times higher than expected. To keep the project on-budget, the landlord supplied another qualified contractor whose cost, while much lower than the first contractor was still about twice what we budgeted. To avoid delaying the project, the GC hired the second company only to have the company go silent and not get the work completed until the GC’s principal got involved and paying several thousands of dollars for special inspections during the weekend prior to move-in.
Like fire alarm companies who act like they are sole-source providers, most fiber communication companies are indeed single source providers. When I started the project, the I.T. did not seem concerned about fiber network connectivity even though all their servers are in the Cloud. With a targeted move-in date of less than 90 days when I was brought on-board, I knew this long-lead item could cause schedule problems. Sure enough, the client was late ordering the lines (despite my repeated reminders to get this completed) and AT&T slipped on their completion date, requiring the client to move in a day after all other construction and installation were complete. They had moved their contents the prior Friday, but their fiber connection was not complete until the following Tuesday.
6. Meet your Plan Checkers and fire department inspectors early
Having an established relationship with you city’s plan checker and fire inspectors can prevent misunderstandings during the project that could cause delays.
For this project, we were able to obtain most of the permits over the counter and faced no issues until the aforementioned fire alarm inspection required that the GC pay several thousand dollars extra for final system inspections on a weekend.
On more complicated projects where you are dealing with hazardous materials or exterior changes that require planning approval, meeting with your inspectors early and understanding both the process and requirements can save you a lot of time and money down the road.
7. Regular communication with client, brokers, landlord and project team
Weekly project meetings, including generating and distributing meeting minutes with Actions Required is an important way of keeping stakeholders informed of status, risks / issues and what to expect (by whom).
From the first project team meeting until move-in, I led the weekly project meetings, including covering items that were beyond my role and responsibility. I also updated and distributed the project meeting minutes prior to each meeting to allow each person to have updates for the next meeting. This is also a useful means to record and escalate when team members are not meeting commitments.
8. Generate, update and distribute project schedules regularly
Regular weekly schedule updates that include items that you don’t directly manage but are important to the project’s success should be distributed to all stakeholders. Many stakeholders are not able to attend every weekly project review meeting, so a current schedule keeps all stakeholders informed of the project’s progress, challenges and expectations.
I created my own simple schedule from the beginning of the project, using colors to differentiate that different phases of the projects as well as aspects of the project that were outside of my scope of responsibility. This simple graph could be quickly scanned by stakeholders who could easily see past accomplishments, future milestone dates and potential risk activities. Even after the GC was hired by the client and they produced their own schedule for activities that they were directly responsible for, I continued to update and distribute my schedule because it showed a comprehensive view of the project.
By maintaining and distributing my own overall project schedule I was able to minimize confusion of project dates and most importantly, keep the project team focused on meeting the accelerated project dates. In the end, the client move-in date did slip a few weeks from the initial projected date, but this was due to the client’s delayed decisions on furniture and fiber connectivity, which were both beyond the scope of my direct management and by client choice.
9. Be flexible
While directed from the beginning to deliver the space to the client at a very aggressive date, about two months after lease execution, I strived to complete the project as quickly as possible, greatly streamlining the construction via Design-Build. However, during the project, I quickly noticed that the client really wasn’t motivated to meet the aggressive deadline and delayed important decisions that resulted in the project completion about a month after the initial desired deadline was given.
I found it somewhat frustrating that the client was asking for one thing while their actions indicated the opposite. I regularly communicated my concern to my client representatives and other project stakeholders during the project. The client’s brokers were very helpful as they had direct access to the client leadership team and were able to assure me that my efforts were greatly appreciated and to continue to manage the project to completion as quickly as possible despite my client’s delays. In the end, my client was very happy with their space and my service and by being flexible, giving the client the time that they needed to take to make decisions resulted in a very success project.
10. Change Orders happen – but only if you want them to
Change Orders are a sore spot for every project manager. There are two types of change orders: client requests that are beyond the agreed upon scope and unforeseen items that appear, usually during construction, permitting or inspection. The client driven requests are usually unavoidable as often times that client just hasn’t spent the time to think through how they will use the space or changes in their business require that changes be made. The other change orders can and should be minimized by hiring a good design and construction team that is current on codes, understands how the local planning and inspectors work and think, has a good understanding of the facility and fully understands the client scope, usually by working with a good project manager.
For the project, the client did make a few changes, mostly adding electrical drops that resulted in cost increase that was less than 10% of the approved design and construction budget. The real success of the project occurred when both the fire alarm and electrical costs came in higher than what the GC had committed to when we established a Guaranteed Maximum Price (GMP) budget for the project, thus avoiding change orders that would have cost the client several more thousands of dollars.