Best approach to meeting client expectations for construction budgets – carefully
monitor the relationship between scope, quality, and cost as a design is being
developed
When a conflict, sit with the client and review and adjust one or more of the project
parameters of quality, time, and cost before proceeding to the next step in the design
process
To stay on top of issue, budget compliance & adjustment problems added to mtg
agendas and discussed regularly w client and proj team
Challenges of managing consultants that PM must allot time and resources for –
Consultant coordination
- Reaching finish line at the same time and avoiding disruption when docs are issued
- Making sure all parties using same versions of plan backgrounds
- Uncovering and coordinating conflicts bet work of diff disciplines
Quality management responsibilities of PM – PM to manage and control project’s
quality level
Must be a daily concern
Redlines
Helping w specs and dwgs
Most of all, know the status of work at all times
Oversee and direct quality management controls as they are performed
PM responsibilities for Document Reviews – Doc reviews as opportunity to find uncover
mistakes before they create problems during construction
Schedule time/resources for internal reviews of CDs before bidding
Reviewer could be PM, leader from another proj, or spec writer
External reviews also helpful and should be welcomed (engineers, consultants, owners,
constractors, agencies that give permits.)
Managing expectations of client tips – Help client set expectations
Have frank discussion of potentially tough issues
Use technique of creative conflict (process of engaging in debate to be able to recall
issues later on to gain concensus. Do this when change is requested, not after. Even is
architect overruled, owner will remember concerns were expressed)
Dont use jargon that is “undefined” or absolute by client or might be setting unreslistic
expectations (“our docs are %100 complete)
Suitable alternative for
“We look forward to designing a first-class new school for you.”
“100% Complete Construction Documents”
“50% Schematic Design Set”
The masonry walls have been completed.” – We look forward to designing your new
school project.
Issued for Construction”
“Interim Schematic Review Set”
“The masonry walls appear complete.”
Explaining consequences as a responsibility of PM – For example, if a client decides to
eliminate waterproofing on the basement walls, it is not enough for the architect to
simply disagree with the decision. The project manager should go a step further and
explain that the decision could result in water leaking into the basement, causing
damaged finishes and expensive repair costs. While such consequences may seem
obvious to the experienced project manager, they might not be so obvious to the owner.
Client wanting to save money on building system. Architect to explain increase of cost
of building maintenance
Monitoring tips for PM – Most projects require a montly evaluation
Monitoring terms – Net service revenue
Planned cost
Job-to-date
Estimate-to-complete
Estimate-at-completion
Planned estimate at completion
Percent complete
Multipliers (break even, overhead, effective multiplier, target, planned multiplier,
estimate at completion multiplier)
Billed/invoiced amounts
Earned revenue amounts
Billed-not-earned
Earned-not-billed
Net service revenue – Net fee determined by subtracting consultant fees from the
gross fee for the project
Planned cost: – Labor hours and dollar amounts planned at project initiation
Job-to-date (JTD): – Labor hours and dollar amounts spent as of current date
Estimate-to-complete (ETC): – Labor hours and dollar amounts estimated from current
date to project completion
Estimate-at-completion (EAC): – JTD plus ETC labor hours and dollar amounts
estimated at project completion
Planned estimate at completion: – Over/under calculation indicating labor hours and
dollar amounts at project completion relative to planned estimates
Percent complete: – Current work in place for the project, phase, or task, expressed as
a subjective percent complete and not based on the percentage of labor hours or dollar
amounts spent
Break-even: – (direct labor + overhead)/direct labor
Overhead: – overhead/direct labor
Effective multiplier: – current, subjective percent complete/direct labor
Target: – firm-wide standard target multiplier, including profit target
Planned multiplier: – net service revenue or compensation/planned cost
1,025,000/334,778= 3.06
Estimate-at-completion (EAC) multiplier: – Total NSR/EAC labor dollars
Single most important factor used in project tracking and monitoring; it must be done
honestly, accurately, and regularly to achieve project success. – Estimate-to-complete
Billed/invoiced amounts: – Amounts billed to clients based on contract compensation
amounts and percent complete
Earned revenue amounts: – Revenue recognized in the accrual accounting system
based on subjective percent complete times net service revenue
Billed-not-earned (BNE): – Amounts billed to the client but not recognized as earned
revenue in the accrual accounting system
Earned-not-billed (ENB): – Amounts recognized as earned revenue in the accrual
accounting system but not billed to the client
The simplest and quickest means to see where the project is now, where it is projected
to be at the end of the project, and what needs to be adjusted to bring the project back
within budget. – The effective multiplier and EAC multiplier