Environmental Project Management

Cristina Cosma, Francis Hopcroft

• Publisher: Momentum Press
• Year: 2018
• ISBN:
  9781947083516
• Topic: Technology & Engineering
• Subtopic: Project Management in Engineering
• Index: Technology & Engineering

This book describes the various aspects and considerations required in effective project management and the tools that can be used by a nonprofessional project manager to appropriately evaluate how well the professional is doing or effectively manage smaller projects without the need for a professional project manager.

Project management is an evolving profession. Originally considered part and parcel of the design function, the practice of project management has evolved into a separate classification of professional practice. Professional project managers of today use sophisticated computer programs to achieve in seconds what took days to accomplish and evaluate in the past.

Cost estimating and project scheduling have become key elements in assuring on-budget and on-time delivery of final projects. Key to those is how well the project manager addresses environmental issues that arise. Those issues need to be considered from the planning stages of a project to the end-of-life stages of the project and the disposal of the remnants of the project decades in the future.

CHAPTER 1

INTRODUCTION

1.1 INTRODUCTION

When the last tree is cut down, the last fish eaten, and the last stream poisoned, we will realize that we cannot eat money.

—Paraphrased from Obomsawin, 1972

Environmental project management can be described as nothing more than regular project management, but with an environmental twist. In one sense that simplicity is good, but in another, it misses the whole point of the concept. A distinction is also often made between the general management of an environmental project and the environmental management of a general project. The difference is not entirely semantic, but is sufficiently close to being so that the rules and concepts applicable to the first are equally applicable to the second.

In this book, the discussion is focused on the environmental management of any project and any project that directly impacts the environment requires effective environmental management. The environment includes the physical space around, under, over, and adjacent to the project footprint. It is not only endangered species of flora and fauna that may be impacted, positively or negatively, but also the social (community infrastructure, resources, and recreation areas) and human (health, financial, and similar) environments impacted by the project. Shading and shadows cast over large areas by tall structures can create temperature islands within the shadow zones. Tall towers of open grid design can become homes for raptors, or traps for migrating birds. Marine structures can vibrate in the wind at frequencies not heard by people, but incredibly disruptive to marine life for miles around the site. And pathways of movement used by various migrating land animals can be so severely disrupted by a single road that a species is eliminated from a local environment, and sometimes, from the world.

In short, all projects impact environments of one kind or another in some way, most often negatively. Effective environmental management of a project can mitigate or eliminate negative environmental impacts, and in some cases, provide positive impacts that can help to offset decades of negative impacts from prior projects.

1.2 TYPES OF PROJECTS AND PROJECT LIFE CYCLE

There are many ways to classify project types. For purposes of discussion within this book, there are two types of projects: those that are environmental and those that are not. Environmental projects involve direct attempts to alter, control, or disrupt an existing environmental condition. Examples include, among many others, the rerouting of a stream or river; the construction of flood control structures; the construction of created wetlands for pollution control; the elimination of pollutant discharges to land, water, or air; the construction or removal of dams on rivers and streams; and the re-creation of fish passage along historic stream beds.

Regardless of the type of project, however, no project lasts forever. To be sure, there are examples of projects built in antiquity that have survived for centuries, and may even still be in regular use today. The vast majority of projects, however, have a much shorter and more finite life. At some point, they cease to function as designed and are either destroyed to make room for new projects or allowed to degrade and disintegrate into the local environment. If left alone long enough, all man-made structures and artifacts would eventually degrade to their elemental forms and return to the earth from which they arose. The time it takes for that to happen, the life cycle of the structure or artifact, can be highly variable but inevitable.

When considering the impacts of an anthropogenic project, the expected life cycle needs to be considered. The importance of that concept is that various materials used, or potentially used, in any construction project, will have different life cycles. Various types of wood, for example, will rot in different climates at different rates. Concrete is not a universal material, and it will decompose at rates that can vary widely depending on the local environment, the initial design strength of the concrete, the structural loads placed on it, and the effects of local flora on the integrity of the concrete element. Similar degradation rates can be defined for earthworks, such as dams and levees, bricks, stone, glass, plastics, and most other material used in construction. What that degradation will look like, how it will be managed, and how the degraded materials can be effectively handled at the end of their life cycle are all important considerations in the environmental management of projects.

1.3 CONTRACTUAL AGREEMENTS

Almost every project of significant size or scope involves a contract between the owner (the person or entity paying for the work) and the designer, and a separate contract between the owner and the builder of the project. There is also often an owner’s project manager (OPM) involved to act in the stead of the owner during design and construction. Those contracts require coordination between the three or four parties so that the owner ends up with a product as designed by the designer. Subcontractors may also be involved, with contracts directly between the general contractor and the subcontractor. Material suppliers may have contracts directly with any of the parties, depending on the terms of the various construction contracts, but those contracts are usually between the contractor and the vendor or the subcontractor and the vendor. Service contracts, such as for material testing, may be between the laboratory and either the owner, the owner’s project manager, the designer, or the contractor.

On very large or complex projects, such as remediation of a military base with several areas of contamination involving solvents, fuels, ordinance, and other materials, there may be a project management firm retained to coordinate all the general contractors and subcontractors working at various locations on different aspects of the remediation work at the same time.

1.3.1 DESIGN/BID/BUILD
ARRANGEMENTS (DBB CONTRACTS)

Most projects, public and private, have for many years traditionally been built using the design/bid/build, or DBB, process. Under this process, a project is fully designed before it is put out to bid, and the contractors bidding on the process are all bidding on exactly the same scope of work. The lowest bidder will earn that distinction by finding ways to do the construction project most efficiently or by finding a source of materials that reduces his costs significantly. Once the bidding process is complete, a contract is signed and the contractor builds the project essentially as designed. This is a clean, simple process that is fully transparent from the beginning; which is why it is usually favored for most, but not all, public projects. It can also be time consuming, and in many cases, more expensive that optional procedures.

1.3.2 DESIGN/BUILD ARRANGEMENTS (DB CONTRACTS)

On very large projects, with very tight timelines, it is common to use a variation of the DBB process called the design/build, or DB, process. With a DB project, the design and construction are usually carried out by a single integrated entity with both capabilities. The owner designates a project outcome, and the designers sketch out the basic concepts. Immediately following the conceptual design phase, the foundations are designed and the contractor begins construction on that piece of the project before the superstructure is designed. As construction progresses with the foundation work, the first floors of the superstructure are designed to mate with the new foundation and construction continues with those elements as the upper sections of the superstructure are designed. The process is intended to function such that the design work stays just one step ahead of the construction work, and the final project is completed in much less time than it would take to do the project as a DBB project.

There are some risks associated with this type of project that should not be overlooked. Specifically, foundations and lower stories of tall structures are often overdesigned to make sure that whatever happens above will be supported. That can lead to excessive construction costs. In addition, the upper stories are often constrained in design by the work done previously. That can lead to frustration on the part of the owner, or excessive costs and delays to redo some of the previous work to accommodate owner changes in design.

1.3.3 PROJECT MANAGER AT RISK ARRANGEMENTS (PMAR CONTRACTS)

Project manager at risk (PMAR) contracts, sometimes called construction manager at risk (CMAR) contracts, are a unique way of stabilizing costs for an owner. The owner develops the project and then retains a project management (PM) firm to oversee and manage the design and construction phases. The owner may retain a designer to design the project with the assistance of the PM to avoid future clashes between the PM and the designer, but that is not universal. In many cases, the PMAR retains the designer directly.

With a PMAR contract, the project manager (PM) is different from an owner’s project manager (OPM). Part of that difference is in who hires the PM firm. If the owner does that directly, it is a true PMAR arrangement. If the designer hires the PM, it may still be a PMAR arrangement, but the duty of the PM is to the designer and that of the designer to the owner. Similarly, if the PMAR is retained by the owner and the PMAR retains the designer, the duty of the designer is to the PMAR and that of the PMAR is to the owner. In all cases, the terms PM, OPM and PMAR generally refer to a firm, rather than to a specific individual, although that firm may consist of only one person on small projects. Once the PMAR concept is accepted for use, the terms PM and PMAR become interchangeable for that contract.

Once the final design documents are finished, but before the project is bid, the PM or PMAR and the owner negotiate a guaranteed maximum price (GMP) that the project will cost to build. That price includes a detailed cost estimate prepared by the PM plus a reasonable contingency factor. If the project then costs more than that GMP, the PM is responsible for paying the overage. There are also often incentives built in to help reduce costs, but those have inherent risks associated with them due to reductions in quality of materials to save dollars of initial cost that later result in higher maintenance or more frequent replacement costs.

It is also commonly misunderstood that the GMP cannot be exceeded with the owner being responsible for the overages. All projects end up with change orders. Having the PMAR select the designer and manage the design process helps minimize future change orders, and those change orders that then result from foreseeable design errors or oversights are the responsibility of the PMAR. However, if the owner makes an adjustment to the design that results in higher costs, the owner is responsible for those costs, regardless of who hired the designer.

This type of contract can reduce the burden of oversight for the design and construction phases and limit the overall cost of a project. It can also create problems for the owner who does not understand the overall risk that the ultimate design may be different from what was originally intended, and change orders resulting from design changes can increase the owner’s costs beyond what was expected.

1.3.4 INTEGRATED PROJECT DELIVERY ARRANGEMENTS (IPD CONTRACTS)

Integrated project delivery (IPD) is a project design and construction concept that integrates the needs, the project objectives, and the way the various professionals involved work into a single, team-based effort. It is often realized through a multiparty contract that spells out the roles and responsibilities of each of the parties involved to get the end product delivered as quickly and effectively as possible. The primary team members would include the owner, the designer, the engineers or architects, the contractor, and the major subcontractors, all working together to get to the final solution. The idea is to eliminate the silo effect of independent contractors working on a project and to increase the efficiency and productivity of the team members.

Some common forms of these multiparty agreements include (a) simple project alliances, which create a project structure in which the owner guarantees to pay the direct costs of nonowner parties, but payment of profit, overhead, and bonuses depends on project outcome; (b) the creation of a temporary (for the duration of a single project), single purpose entity, typically a corporation of some form, which is a formal, legal corporate structure created to deliver a specific project; or (c) a form of project alliance that is virtual in nature, created from the individual entities, but differs in the way the parties are compensated, share risks, and share decision making.

One of the key issues with this approach has been difficulty in dealing with information transfer technology. Large files and variability in software types have created some concerns in the past. Newer software packages have been developed over the past decade or so to minimize these difficulties, but older firms, or those using older software packages with which the architects and engineers are comfortable, but which are not mutually compatible, may have continuing problems with this approach. When developed and used properly, it can save significant time and improve overall team productivity, particularly on large or complex projects with multiple stakeholders and participants.

1.3.5 DESIGN/BUILD/FINANCE/OPERATE/MAINTAIN ARRANGEMENTS (DBFOM CONTRACTS)

The design/build/finance/operate/maintain (DBFOM) concept is a relatively new refinement of the P3 concepts (see Section 1.3.6.4). It involves a municipality or other governmental agency contracting with a consortium of designers, builders, and contract facility operators to design the new or additional facilities and to finance the design, construction, and long-term (life cycle or set period of time) operation and maintenance of the facility.

A recent example in Saskatchewan, Canada, exemplifies the way the concept can work. As reported by Jay Landers in the December 2017 edition of Civil Engineering magazine (pp. 54–59), the city of Regina, Saskatchewan, was faced with a failing and very old wastewater treatment facility. Estimates of cost to replace the facility in 2014, while keeping the existing facility operating, were in the order of CAD$224.3 million and a 30-year project life cycle cost of CAD$471.8 million. Neither the community nor the local residents could afford those costs. Grant funding from the Canadian government could reduce the operating costs by about 9 percent or 10 percent, but the capital costs would still be an issue.

By contracting with a consortium of engineers, designers, contractors, and contract operations companies, the facility was reconstructed at a cost savings of approximately 19 percent in capital cost and 29 percent (after grant funding) in life cycle costs, while maintaining full service from the existing facility, for which the consortium also agreed to take over operational control at the outset. By combining the DBFOM concept with an incentive/disincentive rider, the community was able to get the new project on line about two weeks ahead of schedule and under budget. To minimize the overall costs to the community, and to provide appropriate cash flow planning for both the community and the consortium, the consortium financed the entire project, with the community making a CAD$30 million payment during construction at an agreed upon milestone, and an additional CAD$49...