Code of Practice for Project Management for Construction and Development

Introduction

Project management

Project management has come a long way since its modern introduction to construction projects in the late 1950s. Now, as an established discipline which executively manages the full development process, from the client’s idea to funding co-ordination and acquirement of planning and statutory controls approval, sustainability, design delivery, through to the selection and procurement of the project team, construction, commissioning, handover, review, to facilities management co-ordination.

This Code of Practice positions the project manager as the client’s representative, although the responsibilities may vary from project to project, consequently project management may be defined as ‘the overall planning, co-ordination and control of a project from inception to completion aimed at meeting a client’s requirements in order to produce a functionally and financially viable project that will be completed safely, on time, within authorised cost and to the required quality standards’.

The fourth edition of this Code is the authoritative guide and reference to the principles and practice of project management in construction and development. It will be of value to clients, project management practices and educational establishments and students, and to the construction and development industries. Much of the information contained in the Code will also be relevant to project management operating in other commercial spheres.

Raising standards

Project management principles of strategic planning, detailed programming and monitoring, resource allocation and effective risk management are widely used on projects of all sizes and complexity. Nevertheless, many projects do not meet their required performance standards or are delivered late and/or over budget and are sometimes not even ‘fit for purpose’. These issues can be addressed directly by raising the standards of project management within the construction and development industries and, more specifically, by improving the skills of project managers in managing the balance of the key constraints of time, quality, cost along with function (end-user requirements) and the important, overriding requirements for sustainability within the built environment ().

The three areas of sustainability, economic, social and environmental, have become a core focus for today’s projects as the need for greater consideration for the world’s climate places an increasing responsibility on all clients and project team members to realise the need for carbon reduction and meaningful, sustainable development.

Past reports such as those by Egan (1998, 2002) and those from cross-industry representative bodies such as the Construction Industry Council (CIC), Construction Industry Research and Information Association (CIRIA), Construction Industry Best Practice Programme (CBPP) and Strategic Forum for Construction (SFC), have collectively made an impact along with similarly focused EU Directives. However, reporting the sustainability message is just the start, informing, training or educating all stakeholders up to the highest level is what is necessary. Effective project management can co-ordinate, broadcast, advise and implement the changes needed, but the raising of this awareness throughout the supply chain and with the client, must come first.

Project managers, as the executive leaders of the project teams, have a responsibility to prepare themselves for this major shift in project thinking, where cost is balanced with the need to conserve energy, minimise emissions, reduce waste, recycle and to construct flexible buildings or facilities with longer life cycles through adaptation and intelligent conversion.

The informed project manager and project teams can encourage the use of modern materials and methods, reduced transportation and greater option appraisals in respect of:

material choices

methods of construction

current account reduction through the use of more efficient equipment

better insulation materials

greater recycling of materials.

Continuing professional development or life-long learning is not just about keeping abreast of events; professionals, suppliers, workforce operatives and end users, all need to upgrade their skills and knowledge if we are collectively to achieve the raising of standards needed to meet the new challenges which our industry and environment require.

Key project constraints.

Adding value

The raising of standards should lead significantly to the adding of value. Greater awareness can result in better design, improved methods and processes, new material choices, less waste, decreases in transportation costs and ultimately more efficient buildings, all of which can bring added value to the whole development process.

The task of project management

Construction and development projects involve the co-ordinated actions of many different professionals and specialists to achieve defined objectives. The task of project management is to bring the professionals and specialists into the project team at the right time to enable them to make their best possible contribution, efficiently.

Professionals and specialists bring knowledge and experience that contributes to decisions, which are embodied in the project information. The different bodies of knowledge and experience all have the potential to make important contributions to decisions at every stage of projects. In construction and development projects there are far too many professionals and specialists involved for it to be practical to bring them all together at every stage. This creates a dilemma because ignoring key bodies of knowledge and experience at any stage may lead to major problems and additional costs for everyone.

The practical way to resolve this dilemma is to carefully structure the way the professionals and specialists bring their knowledge and experience into the project team. The most effective general structure is formed by the eight project stages used in this Code’s description of project management.

The different stages of project lifecycle as identified by common terminologies as prevalent across the industry have been summarised and compared in Figure .

In many projects there will be a body of knowledge and experience in the client organisation which has to be tapped into at the right time and combined with the professional and specialists’ expertise.

Each stage in the project process is dominated by the broad body of knowledge and experience that is reflected in the stage name. As described above, essential features of that knowledge and experience need to be taken into account in earlier stages if the best overall outcome should be achieved. The way the professionals and specialists who own that knowledge and experience are brought into the project team at these earlier stages is one issue that needs to be decided during the strategy stage.

The results of each stage influence later stages and it may be necessary to involve the professionals and specialists who undertook earlier stages to explain or review their decisions. Again, the way the professionals and specialists are employed should be decided in principle during the strategy stage.

Each stage relates to specific key decisions. Consequently, many project teams hold a key decision meeting at the end of each stage to confirm that the necessary actions and decisions have been taken and the project can therefore begin the next stage. There is a virtue in producing a consolidated document at the end of each stage that is approved by the client before proceeding to the next stage. This acts as a reference mark as well as acting as a vehicle for widespread ownership of the steps that have been taken.

Project lifecycle.

Having considered the social, economic and environmental issues, projects begin with the inception stage which starts with the business decisions by the client that suggest a new construction or development project may be required. Essentially, the inception stage consists of commissioning a project manager to undertake the next stage which is to test the feasibility of the project. The feasibility stage is a crucial stage in which all kinds of professionals and specialists may be required to bring many kinds of knowledge and experience into a broad ranging evaluation of feasibility. It establishes the broad objectives, and an approach to sustainability for the project and so exerts an influence throughout subsequent stages.

The next stage is the strategy stage which begins when the project manager is commissioned to lead the project team to undertake the project. This stage requires the project’s objectives, an overall strategy and procedures in place to manage the sustainability and environmental issues, and the selection of key team members to be considered in a highly interactive manner. It draws on many different bodies of knowledge and experience and is crucial in determining the success of the project. In addition to selecting an overall strategy and key team members to achieve the project’s objectives, it determines the overall procurement approach and sets up the control systems that guide the project through to the final post-completion review and project close-out report stage. In particular the strategy stage establishes the objectives for the control systems. These deal with much more than quality, time and cost. They provide agreed means of controlling value from the client’s point of view, monitoring time and financial models that influence the project’s success, managing risk, making decisions, holding meetings, maintaining the project’s information systems, and all the other control systems necessary for the project to be undertaken efficiently.

At the completion of the strategy stage, everything is in place for the pre-construction stage. This is when the design is developed and the principal decisions are made concerning time, quality and cost management. This stage also includes statutory approvals and consents, considering utility provisions such as water and electricity, monitoring of the environmental performance targets, and bringing manufacturers, contractors and their supply chains into the project team. Like the earlier stages, the pre-construction stage often requires many different professionals and specialists working in creative and highly interactive ways. It is therefore important that this stage is carefully managed using the control systems established during the strategy stage to provide everyone involved with relevant, timely and accurate feedback about their decisions. Completion of this stage provides all the information needed for construction to begin.

The construction stage is when the actual building or other facility that the client needs is produced. In modern practice this is a rapid and efficient assembly process delivering high-quality facilities. It makes considerable demands on the control systems, especially those concerned with time and quality. The complex nature of modern buildings and other facilities and their unique interaction with a specific site means that problems will arise and have to be resolved rapidly. Information systems are tested to the full, design changes have to be managed, construction and fitting out teams have to be brought into the team and empowered to work efficiently. Costs and time have to be controlled within the parameters of project objectives and the product delivered to the quality and specification as set previously.

The construction stage leads seamlessly into a key stage in modern construction and development projects: the engineering services commissioning stage. The complexity and sophistication of modern engineering services makes it essential that time is set aside to test and fine tune each system. Any environmental performance targets such as Building Research Establishment Environmental Assessment Method (BREEAM) certification will be finalised as a measure of the project’s performance. Therefore, these activities form a distinct and separate stage which should predominantly be complete before beginning the completion, handover and occupation stage which is when the client takes over the practically completed building or other facility. In some instances there may also be some post-occupation commissioning and testing.

The client’s occupational commissioning needs to be managed as carefully as all the other stages because it can have a decisive influence on the project’s overall success and environmental performance. New users always have much to learn about what a new building or other facility provides. They need training and help in making best use of their new building or other facility. It is good practice for their interests and concerns to be considered during the earlier stages and preparation for their move into the new facility at the right time so there are no surprises when the client’s organisation takes occupation.

The final stage is the post-completion review and project close-out report stage. This provides the opportunity for the project team to consider how well the project’s objectives have been met and what lessons should be taken from the project. A formal report describing these matters provides a potentially important contribution to knowledge. For clients who have regular programmes of projects and for project teams that stay together over several projects, such reports provide directly relevant feedback. Even where this is not the case, everyone involved in a project team, including the client, is likely to learn from looking back at their joint performance in a careful objective review.

Chapter 1: Inception stage

Introduction

Complex capital projects require significant management skills, co-ordination of a wide range of people with different expertise and ensuring completion within the parameters of time, cost and quality specifications. The inception stage of any construction and development project requires the decision from the client that a potential project represents the best way of meeting a defined need.

In assessing the need for construction, key questions should include:

Why is the project needed?

How to incorporate sustainability and is the client’s corporate responsibility defined?

How best is the need be fulfilled? (For example, a new building, or refurbishment, or extension of existing structure, etc.)

What is a reasonable budget cost?

What is a reasonable time from inception to completion?

What are the investment and funding options?

What risks related to the development can be foreseen at this stage?

What benefits are expected as a result of the project?

Client’s objectives

The main objective at this stage for the client is to make the decision to invest in a construction or development project. The client should have prepared a business case (capital expenditure programme) involving careful analysis of its business, organisation, present facilities and future needs. Experienced clients may have the necessary expertise to prepare their business case themselves. Less experienced clients may need help. Many project managers are able to contribute to this process. This process will result in a project-specific statement of need. The client’s objective will be to obtain a totally functional facility, which satisfies this need and must not be confused with the project objectives, which will be developed later from the statement of need.

A sound business case prepared at this stage will:

be driven by needs

be based on sound information and reasonable estimation

contain rational processes

be aware of the risks associated

contain flexibility

maximise the scope of obtaining best value from resources

utilise previous experience

incorporate sustainability cost-effectively.

Client’s internal team

Investment decision-maker: this is typically a corporate team of senior managers and/or directors who review the potential project and monitors the progress. However, the team seldom is involved directly in the project process.

Project sponsor: typically a senior person in the client’s organisation, acting as the focal point for key decisions about progress and variations. The project sponsor has to possess the skills to lead and manage the client role, have the authority to take day-to-day decisions and have access to people who are making key decisions.

Client’s advisor: the project sponsor can appoint an independent client advisor (also referred to as construction advisor or project advisor or independent client advisor) who will provide professional advice in determining the necessity of construction and means or procurement, if necessary. If advice is taken from a consultant or a contractor, those organisations have a vested interest not only in confirming the client’s need, but also in selling their services and products.

The client advisor can assist with:

business case development (further guidance on this has been provided in Appendix 30)

investment appraisal

designing and planning for sustainability

understanding the need for a project

deciding the type of project that meets the need

generating and appraising options (when appropriate)

selecting an appropriate option (when available)

risk assessment (when appropriate)

advising the client on the choice of procurement route

selecting and appointing the project team

measuring and monitoring performance (when appropriate).

The client advisor should understand the objectives and requirements of the client but should remain independent and objective in providing advice directly to the client. Other areas where the client may sought independent advice include: chartered accounting, tax and legal aspects, market research, town planning, chartered surveying and investment banking.

Project manager

Project managers can come from a variety of backgrounds, but all will need to have the necessary skills and competencies to manage all aspects of a project from inception to occupation. This role may be fulfilled by a member of the client’s organisation or be an external appointment.

Project manager’s objectives

The project manager, both acting on behalf of, and representing the client has the duty of ‘providing a cost-effective and independent service, selecting, correlating, integrating and managing different disciplines and expertise, to satisfy the objectives and provisions of the project brief from inception to completion. The service provided must be to the client’s satisfaction, safeguard his interests at all times, and, where possible, give consideration to the needs of the eventual user of the facility’.

The key role of the project manager is to motivate, manage, co-ordinate and maintain the morale of the whole project team. This leadership function is essentially about managing people and its importance cannot be overstated. A familiarity with all the other tools and techniques of project management will not compensate for shortcomings in this vital area. Further guidance on the leadership aspect of the project manager’s role has been provided in Appendix 21.

In dealing with the project team the project manager has an obligation to recognise and respect the professional codes of the other disciplines and, in particular, the responsibilities of all disciplines to society, the environment and each other. There are differences in the levels of responsibility, authority and job title of the individual responsible for the project, and the terms project manager, project coordinator and project administrator are all widely used.

It is essential, in order to ensure an effective and cost-effective service, that the project should be under the direction and control of a competent practitioner with a proven project management track record developed from a construction industry-related professional discipline. This person is designated the project manager and is to be appointed by the client with full responsibility for the project. Having delegated powers at inception, the project manager may exercise, in the closest association with the project team, an executive role throughout the project with appropriate input from the client.

Project manager’s duties

The duties of a project manager will vary depending on the client’s expertise and requirements, the nature of the project, the timing of the appointment and similar factors. If the client is inexperienced in construction, the project manager may be required to develop his own brief. Whatever the project manager’s specific duties in relation to the various stages of a project, there is the continuous duty of exercising control of project time, cost and performance. Such control is achieved through forward thinking and the provision of good information as the basis for decisions for both the project manager and the client. A matrix correlating suggested project management duties and client’s requirements is given in .

Duties of project manager

^* Duties vary by project, and relevant responsibility and authority.

Symbols: (•) = suggested duties; (+) = possible additional duties.

An example of typical terms of engagement for a project manager is given in Appendix 1. It will be subject to modifications to reflect the client’s objectives, the nature of the project and contractual requirements.

The term ‘project co-ordinator’ is applied where the responsibility and authority embrace only part of the project, e.g. pre-construction, construction and handover/migration stages. (For professional indemnity insurance purposes a distinction is made between project management and project co-ordination. When the project manager appoints other consultants the service is defined as project management and when the client appoints other consultants the service is defined as project co-ordination.)

Appointment of project manager

It is advisable to appoint the project manager at the inception stage, so that the project manager can advise and become involved in the option appraisal process. This should ensure professional, competent management co-ordination, monitoring and controlling of the project to its satisfactory completion, in accordance with the client’s brief. However, depending on the nature and type of the project and the client’s in-house expertise, the project manager could be appointed as late as the start of the strategy stage, but this could deprive him or her of important background information and is therefore not generally recommended.

Project manager and contract administrator

A contract administrator (sometimes also referred to as the employer’s agent or supervising officer, depending on the specific contract used) may be appointed for the construction and subsequent stages of the project. This post will have a direct contractual responsibility to the client. The roles of project manager and contract administrator are quite different. The role of project manager is comprehensively described in this Code and is very clearly defined in the various conditions of engagement and covers all stages from inception to occupation and project closeout. The role, however, may include elements of administration during perhaps all stages of the project; the extent depending on the particular terms of his/her appointment. The function of the contract administrator is a specific appointment in many forms of building contract and therefore relates specifically to the construction, commissioning and completion stages. The function has remained constant for at least 200 years although the title may change to suit the fashion of the times. While the roles of project manager and contract administrator may be kept separate, they may also be (and often are) combined.

Managing people

Project management, although strongly associated with change management and systems, is above all about managing people. It is about the issues of motivating the project team, middle management and the workforce in order to secure compliance with standards of performance and of gaining their commitment to success. It is also about achieving an effective form of relationship, which will facilitate an atmosphere of mutual trust and co-operation.

People: the most important resource

Although it is important to exploit new technology, computers and software can only do what they are told to do, it is the human resource that will make the difference and ultimately create the competitive advantage. Even computer-based systems are only as good as their designers and operators. People are the industry’s most important resource. It requires special skills to be successful at organising, motivating and negotiating with people. Although some people have a greater natural talent for this than others, everyone can improve their natural ability through appropriate education and training.

The skills the project manager will need to consider when assessing an individual may include the following:

What a person can do: skills, competencies.

What a person can achieve: output, performance.

How a person behaves: personality, attitudes, intellect.

What a person knows: knowledge, experience.

The skills the project manager will use during the course of a project will include:

Communication: using all means, the foremost skill.

Organising: using systems and good management techniques.

Planning: via accurate forecasting and programming.

Co-ordination: by liaising, harmonising and understanding.

Controlling: via monitoring and response techniques.

Leadership: by example.

Delegation: through trust.

Negotiation: by reason.

Motivation: through appropriate incentives.

Initiative: by performance.

Judgement: through experience and intellect.

Establishing objectives

The recognition that members of the project team have differing and sometimes conflicting objectives is the first step in ensuring that the team operates as an effective unit. With the client’s project strategy in sharp focus, attention is directed towards overcoming any conflict in the aims of team members. Presentation of objectives, team selection, choice of working environment, definition of levels of responsibility, authority and communication procedures; are all important in ensuring that team members meet their personal ambitions as part of the successful execution of the project.

The project manager should aim to create an environment in which the client and all his team members can achieve their personal, as well as project, goals. There is no doubt that team performance is optimised when members are encouraged to identify and tackle problems early in the process. Promotion of an open, ‘blamefree’ culture, where the project manager leads by example, will also help in breaking down communication barriers.

Thinking sustainably

The sustainability of the development and the client’s corporate responsibility have already been touched on earlier in this chapter. It is important at this early stage of the development process that the message concerning the triple bottom line – environment (planet), economy (profit) and society (people) – is considered seriously.

Projects need to be financed and designed from the very beginning with sustainability high on the agenda, for it is at this stage when plans can be formulated holistically, and where the greatest cost benefits can be derived. It is here where ideas are made to not just achieve minimum environmental and social standards, but to advance them so that maximum capital and whole-life costs can be achieved.

Although the project has not yet reached feasibility, ideas should be formulating for their introduction at the feasibility stage:

What kind of energy sources?

What kind of mechanical and electrical systems and which manufacturers are achieving the highest efficiencies?

How much can be obtained locally to minimise transport (carbon) consumption?

What are the standards not only likely to be needed now, but in the foreseeable future?

This may be just the ‘idea’ stage of a project, but thinking sustainably now is the way to build in lower costs and increase value.

All participants will eventually need to be informed and invited to participate in helping to achieve the project’s aims, procedures and targets for reducing emissions as soon as they enter the site. Information leaflets and induction classes will need to be made available at the same time as the presentations are made for health and safety.

Measures identifying how energy is to be conserved and recorded during each activity on and off site can be identified and considered, so that carbon and cost consumptions can be monitored and the effects of new methods of conservation determined. These processes for monitoring all energy consumed, both fossil sourced and renewable, directly and indirectly, can be incorporated into a site energy plan and carbon register so that the minimum emissions from the project can be achieved. Concepts such as these can be considered here, although details will not be finalised until a later stage.

Fourth Working Group for the Revision of the Code of Practice for Project Management
Saleem Akram BSc Eng (Civil) MSc (CM) PE MASCE MAPM FIE FCIOB	– Director, Construction Innovation and Development, CIOB
Alan Crane CBE CEng FICE FCIOB FCMI	– Chair, Working Group, Vice President CIOB
Roger Waterhouse MSc FRICS FCIOB FAPM	– Vice Chair; Working Group, Royal Institution of Chartered Surveyors Association for Project Management
Neil Powling DipBE FRICS DipProjMan(RICS)	– Royal Institution of Chartered Surveyors
Gavin Maxwell-Hart BSc CEng FICE FIHT MCIArb FCIOB	– Institution of Civil Engineers
John Campbell BSc (Hons), ARCH DIP AA RIBA	– Royal Institute of British Architects
Martyn Best BA Dip Arch RIBA MAPM	– Royal Institute of British Architects
Richard Biggs MSc FCIOB MAPM MCMI	– Construction Industry Council
Paul Nash MSc MCIOB	– Trustee of CIOB
Ian Caldwell BSc BARch RIBA ARIAS MCMI MIOD
Professor James Somerville FCIOB MRICS MAPM MCMI PhD
Professor John Bennett DSc FRICS
David Woolven FCIOB
Artin Hovsepian BSc (Hons) MCIOB MASI
Eric Stokes MCIOB FHEA MRIN
Dr Milan Radosavljevic UDIG PhD MIZS-CEng ICIOB
Arnab Mukherjee BEng(Hons) MSc (CM) MBA MAPM MCIOB	– Technical editor
The following also contributed in development of the fourth edition of the Code of Practice for Project Management
Keith Pickavance	– Past President, CIOB
Howard Prosser	CMIOSH MCIOB – Chair, Health & Safety Group, CIOB
Sarah Peace	BA (Hons) MSc PhD – Research Manager, CIOB
Mark Russell BSc (Hons) MCIOB – Co-ordinator, Time Management Group, CIOB
Andrzej Minasowicz	DSc PhD Eng FCIOB PSMB SIDiR – Vice Director of Construction Affairs, Institute of Construction Engineering and Management, Civil Engineering Faculty, Warsaw University of Technology
John Douglas	FIDM FRSA – Englemere Ltd
Dr Paul Sayer	– Publisher, Wiley-Blackwell, John Wiley & Sons Ltd, Oxford