A structured approach to collaboration, based on consistency and accountability, can contribute to the success of a multiple-contract project.
Partnering on construction projects promotes improved performance through collaborative business relationships. Openness and trust are keys in making the relationships positive and profitable among all parties, which in turn diminishes the confrontational nature often seen in construction projects.
FMI has been fortunate to work with thousands of projects across a number of industry sectors and has witnessed firsthand the benefits of partnering principles, which include accountability, consistency and total team involvement. Here are two case studies that illustrate what successful partnered projects look like.
CASE STUDY 1: PARTNERING ASSISTS SUCCESSFUL COMPLETION OF LOUDOUN COUNTY’S NEW $180 MILLION WATER RECLAMATION PLANT
The timely completion of the $180 million Broad Run Water Reclamation Facility (BRWRF) is an example of how a fully committed, ongoing partnering effort can assist in consistent teamwork across multiple contracts in the delivery of an exceptional construction program. It is also an excellent demonstration of how overall performance objectives can be achieved while still preserving the contractual and proprietary integrity of the contractors involved. According to Rick Thoesen, deputy general manager for Loudoun Water, “The collaborative process employing goal-setting, problem-solving and structured partnering can create win-win opportunities for all concerned.”
The Loudoun County Sanitation Authority (LCSA) was formed in 1959 and is responsible for providing comprehensive water and sewer services to approximately 58,000 customer accounts comprised of residents and businesses. The new BRWRF (a regional wastewater treatment plant) is intended to supplement the existing 1,000 miles of water and sewer pipelines that predominantly serve the eastern portion of the county. This new greenfield facility provides water reuse opportunities to Loudon County and included the following key components:
- Contract 1 ($86 million): Site, yard work and liquid treatment facilities
- Contract 2 ($43 million): Secondary treatment/membrane treatment facility
- Contract 3 ($27 million): Digesters and solids treatment facility
- Contract 4 ($14 million): Operations complex
- Contract 5 ($10 million): Influent sewage pumping station
The project achieved success in a number of key goal areas, including:
- Safety: The overall program enjoyed a rate of less than 2.0 OSHA Recordable Incidents per 200,000 person-hours, compared to the industry benchmark of 6.9. The Pizzagalli projects completed with zero lost-workday incidents in more than 1,000 days and won the company’s “Safety Project of the Year” in 2006.
- Schedule: A complex treatment plant was completed in just less than four years. Construction started in June 2004, and Loudoun Water met its new discharge goal by discharging treated effluent in May 2008.
- Quality: Treated effluent has met all permit parameters since June 2008. The discharge limits are among the most stringent in the world and meet Virginia’s highest water reuse standards.
- Budget: The program budget met high expectations as measured by the magnitude of change orders. The change order experience of less than 3.0% on the BRWRF program was less than 50% of the industry average.
- Effective Communication and Problem Solving: Heavy emphasis was placed on decision-making at the working levels. Rather than encourage escalation of conflict to higher management, supervisors and superintendents were encouraged to resolve issues at their level of engagement. Such emphasis created pride in the work effort and string ownership in the outcome of the product. According to Rick Thoesen, “Leadership was expected from everyone, not just management, and a project culture was established where face-to-face dialogue or phone calls for the purpose of resolving issues was emphasized. Emails to resolve issues were discouraged. This resulted in avoidance of ‘claim missiles’ and helped to provide empathy and resolution for all parties.” The direct, open dialogue within the weekly submittal/RFI meeting process was key to getting things resolved, as were the supplemental submittal review meetings. Early submission of O&M manual information was vital to the success of the start-up program.
ONGOING PARTNERING PROCESS
During program planning for the Construction Services Organization, Loudoun Water decided to pursue an ongoing formal partnering process as opposed to the typical approach of just a “kickoff” session with “optional” follow-ups as needed. According to Dick Bedard, senior vice president for CH2M Hill, “There had been several large water/wastewater projects in the Mid-Atlantic that had not gone well. We knew there was a better way to get projects done for all parties and set out to create a model for the entire industry.” The process adopted by the team was developed based on the principles of collaboration, accountability and consistency. On a program of this scale, collaboration among all primary stakeholders was accomplished by developing and using a team charter, establishing values and goals, and managing expectations. Accountability was achieved by having a series of ongoing internal customer satisfaction surveys that required all participants to score the team’s ability to reach expectations and to account for the various actions needed by each to progress the project. Consistency in approach involved the use of the same evaluation process for all contracts from all parties between partnering forums.
Elements of the ongoing process included:
Executive-Level Kickoff Session
For each general contractor a smaller group of senior-level personnel from the parties initially met to agree on overall project values and goals, issue escalation process and communication protocol as well as determine the path forward for an ongoing partnering process. Says Dick Bedard, “We employed FBDM (Fact-Based Decision- Making). Everyone has opinions and emotion, but we demanded a full fact base to be developed, which drove good decisions. The notion to utilize formal levels for decision-making was especially relevant; it fostered resolutions at the working levels and avoided micromanagement from the top.” The key piece of this was to establish the value that relationships at the senior levels of the organization were essential to project success. The relationships at the senior level extended beyond the formal partnering sessions, as executives continued to meet in impromptu lunches and on phone conversations during the course of the project.
Project-Level Kickoff Session
In subsequent sessions for each general contractor, the team expanded to include all on-site supervisory personnel and project engineers, where the team charter and issue escalation process were finalized. Additionally, potentially key issues or “rocks in the road” were identified and initial actions defined.
Issue Escalation Process
The backbone of the partnering process was the implementation of five-level, tiered collaborative teams composed of representatives for each business organization at each level of the organization (see Exhibit 1). As potential disputes were identified, the intent was to level the playing field and ensure the issues were dealt with first at the project level and then, if no resolution was reached, escalated equitably upwards as a team to the next level of management. According to Rick Thoesen, “Designing the five levels of decision-making upfront was genius.
Executive management was allowed to influence the outcome and provide conflict resolution at its level of the organization, but the process was largely controlled by project management; executives did not micromanage or second-guess field decisions. Field empowerment resulted in a confident and efficient project without interference from executive egos.”
In fact, for all of the contracts combined, only three issues escalated to the executive level (the 5th Level). Those issues involved:
- Evaluation of blasting operations and the effect of subsurface rock on the predictability of the outcomes when compared to the geotechnical reports provided for construction.
- The effect of the change in building pad elevation and related changes in backfill material to accommodate deeper levels of bedding.
- Concrete cracking controls, due to the acceleration of work by one of the contractors, the effect on project efficiency and extra workers needed to stack trades to match the schedule for move-in and start-up.
Quarterly Executive Sessions
To preserve contractual and proprietary information of the contractors, separate sessions were held on a quarterly basis for each of the two general contractors. At these sessions, project managers for the key organizations for each contract provided a joint project update and then the group would assess team performance against the goals developed in the project charter (see Exhibit 2). The assessment would be based on a 1- to 5-point scale, where “4” was considered “meeting expectations,” “5” was “exceeding expectations” and anything less than a “4” was “less than meeting expectations.” The assessment trend for the project duration is displayed in Exhibit 3. These ratings provided the format for any team member to give input on positive aspects of the work and the success or failure of relationships to date as well as to raise issues of concern or opportunities for improvement. Action items were developed for each key issue. Thirteen of these sessions were held for each general contractor during the course of the project.
In a truly collaborative fashion, competitive engineering firms CH2M Hill and Black & Veatch, involved on three different contracts with Pizzagalli, agreed to meet together at the quarterly sessions.
Team Evaluation Process (Internal Customer Satisfaction Survey)
As a supplement to the executive-level sessions, a separate rating tool, called the Team Evaluation, was administered and compiled by FMI on a quarterly basis for each of the five contracts. Similar to the goal assessment format, this tool asked project and on-site supervisory personnel a different set of questions. Results and comments generated by the surveys were reviewed at the quarterly executive-level session. A graph of the combined results of this evaluation on the major contracts is displayed in Exhibit 4.
Early Commissioning and Start-Up Session
In August 2005, approximately one year after the initial partnering sessions and once all contracts were up and running, the team held an “all projects, all hands” session, attended by all supervisory personnel from all projects. The intent of this session was to generate collective input from the considerable expertise in the room on everything to be considered to properly commission and start up the plant across the five separate contracts. The foresighted project leaders arranged this meeting to occur more than two years before the scheduled completion of the project. The result of this session was the initiation of a Commissioning and Start-up Team, comprised of representatives from all business organizations. The team took the initial input from the August 2005 session, developed an initial strategy and then met on a regular basis for the duration of the project.
This comprehensive partnering effort involved a total of 31 sessions and 24 team evaluation conference calls during three and a half years.
There were a number of factors that contributed to the successful completion of this project. The use of this partnering model demonstrates that a structured approach to collaboration, based on consistency and accountability, can assist a multiple-contract program, especially when the partners demonstrate good character and leadership from all levels. For Loudoun Water customers, it meant a quality facility, built on time and within budgetary constraints, to meet the needs of the surrounding community for many years to come.
CASE STUDY 2: PARTNERING ASSISTS SUCCESSFUL COMPLETION OF NEW JERSEY TRANSIT’S $210 MILLION LIGHT-RAIL EXTENSION IN NEWARK
The timely completion of Newark’s $210 million new light-rail extension in downtown Newark is a further example of how a fully committed, ongoing partnering effort can assist teams on complex urban projects within the hard-bid public works contractual environment. Given the high-profile nature of the project, the team decided to pursue an ongoing partnering process as opposed to the approach of a one-off kickoff session and lip service to a project charter. According to Joe Marcello, director of Capital Project Management, “The consistent sense of urgency and responsiveness … displayed were, without a doubt, key factors in making this construction project a huge success.”
The light-rail extension of Newark’s subway will enable passengers coming from NJT’s suburban lines to reach Newark Penn Station within a few minutes. The line is intended to improve commuting to downtown Newark and its businesses and educational, recreational and cultural facilities. Elements of the project included:
- One-mile direct link between Newark’s Pennsylvania Station and Newark’s Broad Street Station.
- New stations at the New Jersey Performing Arts Center, Bears & Eagles Riverfront Stadium, Broad Street at Washington Park, Newark Public Library and the Newark Museum, and Broad Street business district.
- Additional construction activities of power, rail installation and relocation of utility systems.
- 850 feet of subterranean work, including the construction of a 14.5’ x 18.5’ deep, cut-and-cover tunnel.
- Road improvements along Broad Street and other peripheral streets.
- An 800-foot stretch of “floating” slab versus traditional grade slab to dampen vibrations of light-rail cars that may rattle recording sessions or performers at the nearby Performing Arts Center.
- A Wall of Fame honoring the lives and achievements of extraordinary performing artists from New Jersey.
According to Glenn Sweeney, Conti project manager, “Basically you’re plopping a light-rail line on the middle of a functioning city street.”1 Added Kurt Kaufman, former NJT project manager, “The protection of adjacent structures was our largest challenge in the middle of a built-up business district.”2
The project achieved success in a number of key goal areas, including:
- Schedule: The project came in on time, despite the utility relocation intensive nature of the work in a tight urban setting. Additionally, the team had to meet the milestone of 100% completion of rail infrastructure before beginning training of the operators of the new line. Station prep work continued during the operator-training period to meet the grand opening date.
- Quality: In addition to successful completion of the above elements of the project, the artistic stonework along the Wall of Fame was overseen directly by Conti to ensure top-notch quality. The plaque induction ceremony was the highlight of this portion of the work. According to NJT’s Joe Marcello, “The finished product is a gleaming example of the team’s attention to detail and insistence on excellent workmanship.”
- Budget: The team kept the final project budget amount close to NJT’s expected value, with carefully thought-out value-engineering proposals. These were incorporated without affecting the schedule.
- Community Relations: Through the community outreach program, Conti and DMJM-Harris/STV informed the surrounding stakeholders and residents of upcoming construction activities. A focused effort was made to keep the office building managers informed. Additional coordination was required with the Newark Bears, Newark police and any other events affecting the job-site area. The team adjusted the schedule to assist with the St. John’s parking lot. NJPAC called to thank the team for completing Center Street on schedule.
- Effective Communication and Problem-Solving: The team significantly improved both RFI and submittal processes over time. Partnering also helped the team ensure an improved payment process as well. Pat Hogan, vice president of Project Engineering and Management for Conti, said all of the organizations did a great job of “meeting somewhere around in the middle of the complex, grey area, sticky issues to avoid the ‘no’ answers or perceptions of price unfairness on either side.”
The process adopted by the team was based on the principles of collaboration, accountability and consistency. On a project of this type, collaboration among all primary stakeholders and the surrounding community was essential. Accountability was achieved by having an ongoing series of partnering activities, requiring all parties to account for the various actions needed by each in a regular forum. Consistency in approach involved the use of similar partnering reporting processes from all parties among the partnering forums. Elements of this ongoing process included:
Executive-Level Kickoff Session
A smaller group of senior-level personnel from all parties initially met to agree on overall project goals and issue the escalation process and protocol as well as the path forward for an ongoing partnering process. Pat Hogan noted that at this session, “We set up a very structured process that included notice of proposed change meetings, an escalation chart and an accountability matrix.”
In a subsequent session, the team expanded to include all on-site supervisory personnel, engineers and key subcontractors, where the project charter and issue escalation process were finalized. Additionally, key issues were identified and initial actions outlined by specific task force teams.
Quarterly Executive Sessions
At the continuing sessions, project managers for the key entities provided a joint project update and team goals were rated and reviewed on a 1- to 5-point scale, where “4” was considered “meeting expectations,” “5” was “exceeding expectations,” and anything less than a “4” was “less than expectations.” These goal ratings provided the format for any team member to provide praise about good work or to raise issues of concern. Actions were developed on the key issues. Glenn Sweeney said, “We were able to review the issues in a forum that was different than the regular project meetings. Having a neutral party facilitate the sessions and a set schedule was a big benefit.” Eight of these sessions were held during the course of the project.
Team Evaluation Process
As a supplement to the executive-level sessions, a quarterly team evaluation was administered and compiled by FMI. Similar to the goal-rating format, this tool asked a different set of questions to a different audience, which included project managers and on-site supervisory personnel. Results of the survey were reviewed at the quarterly executive-level session. A graph of the results of this evaluation is in Exhibit 5.
Acceptance and Closeout Session
This session, held in April 2006, focused on ensuring expectations of all parties were clearly understood regarding completion of construction, start-up of the light rail and closeout of all administrative details. Topics covered included train and traffic signal plans, final resource loading for the schedule, resolution of change orders and clarity on definition of turnover to NJT. According to Pat Hogan, this session was one of the key successes of the partnering process.
A number of factors contributed to the successful completion of this project. The use of this partnering model demonstrates that a structured approach to the process, based on consistency and accountability, can assist a project team dealing with the ongoing issues on complex urban projects. For the business and cultural community of Newark, that meant a successful project that came in on time.
Bill Spragins is a principal at FMI Corporation. He can be reached at 303.398.7211 or via email at firstname.lastname@example.org.
1 (New York Construction, May 2005).