New Industry Research Seeks Better Ways to Handle Project Uncertainties
No one in the design and construction industry would disagree that complex construction projects have a wide variety of inherent uncertainties and risks. Those can affect the cost, schedule and quality of a project and the performance of the project team.
However, new research by McGraw Hill Construction, published in the "Managing Uncertainty and Expectations in Building Design and Construction SmartMarket Report," shows that owners, architects and contractors have different views about expectations of perfect performance, causes of uncertainty and the best means to mitigate their impact on projects.
The research demonstrates that all players need to better understand challenges faced by each other in project delivery. That could shift the conversation from who is responsible for unexpected problems to collaborative, proactive ways to manage the issues.
The findings reveal a critical divide between contractors and owners on key issues. Those include the degree of satisfaction owners have with the quality, schedule and cost of their projects. Adding to the disparity, large contracting companies—in this study defined as those with $50 million or more in project value in 2013—report a notably different perspective about uncertainty than smaller companies.
Perfect Performance
Respondents were asked if they believe that perfection is possible: meaning error-free construction documents from the design team and no coordination-related errors or contractor-caused errors or delays by the construction team. Only a small percentage of owners (10%), large contractors (9%) and smaller contractors (13%) believe a perfect set of construction documents is possible, but 21% of owners feel it is reasonable to expect it. However, higher percentages of owners (23%), large contractors (22%) and especially small-to-medium contractors (47%) believe that perfect construction performance is possible, and the majority of owners (73%) believe it is a reasonable expectation. These findings suggest that large contractors who typically do complex projects are more aligned with owners on the difficulty of achieving perfection, yet also that owners may hold contractors to a higher standard of performance expectation than design teams.
Owner Satisfaction
Given the higher percentage of small-to-medium contractors who believe that perfect construction performance is possible, it is not surprising that a higher percentage of them also believe they are always meeting owner expectations for quality, schedule and cost compared with large contractors. Since all respondents were required to have worked on complex projects to qualify for the survey, it's possible that smaller firms may be more specialized and therefore more likely to think of themselves as always meeting client needs.
However, the largest disparity is between the percentage of owners who say their expectations are always met and the percentage of contractors who believe they always meet owners' expectations. The far lower response by the owners demonstrates a fundamental lack of communication that contractors should address to improve client relationships.
Causes of Uncertainty
The study asked respondents to rate the impact of seven factors that cause uncertainty on projects. Large and small contractors mostly agreed on four of those: unforeseen site or construction issues, design omissions, accelerated schedules and task coordination.
However, there was a significant difference in the findings for the three factors represented in the chart. Large contractors point to factors controlled by other players as being most disruptive—such as owner program or design changes and design errors. On the other hand, nearly half (47%) of small-to-medium size companies look inward and say that contractor-caused delays are the most highly disruptive causes—nearly twice the percentage of large contractors.
This finding, when considered with others in the study, may suggest that smaller contracting firms are more insular about their own performance. They have higher expectations of their ability to achieve perfect performance, and they are more conscious of the impact of their own actions on projects rather than the impact of other players on the project team. In contrast, large firms seem to be more focused on how the interaction with and responsibilities of other players influence the uncertainty they experience on projects.
Mitigating Uncertainty
The difference between large contractors and smaller ones is revealed most clearly in their evaluation of factors for mitigating uncertainty. The chart represents the percentage who find these factors have a high impact on mitigating uncertainty. It demonstrates a clear tendency for large contractors to find all of these factors to be more disruptive than do smaller contractors. However, only three differences are statistically significant:
• More integration between design-and-build parties during design and construction.
• More time for design teams to participate in coordination.
• Use of BIM and other virtual design tools by the entire project team.
The high degree of difference in the response to these factors demonstrates that, while smaller contractors are less likely to point the finger for uncertainty at other project team members, they are also less likely to find solutions through better collaboration and coordination. Clearly, large contractors place more weight on design firms as partners in mitigating uncertainty.
The more frequent use of virtual design tools may be credited in part to the wider adoption level of building information modeling by large construction companies. However, it may also reflect a greater interest in collaboration by larger firms, since BIM is increasingly seen as a tool that supports stronger collaboration and integration among project team members.
The findings suggest that it is not enough for the construction industry to tout the move toward greater collaboration. Developing an awareness of the importance of other project players is essential. But the findings also suggest a fallback position. Firms that more often work with others also interpret their project problems in light of interactions with team members.
The industry needs a new paradigm to tackle uncertainty on projects. Extensive integration and better communication can create more reasonable expectations about imperfections within the team as a whole.
Steve Jones is senior director for McGraw Hill Construction. He focuses on how emerging economic and technology trends are transforming the construction industry.
