By Donald Ardiel, OAA, MRAIC
This discussion on project management service providers (PMSP) has been adapted from an unpublished work created by a multi-organization task group initiated and supported by the Canadian Construction Association in 2017 and 2018. It has been adapted with the permission of the Canadian Construction Association.
Preamble
This appendix is intended to provide the reader with an overview of the architect’s role when acting as project management service provider (PMSP) for design/construction projects. It will discuss how project management service is integrated into the project organization and compare several project organizational structures. The appendix does not compare the use of an in-house project manager with engaging a PMSP. For this introduction, it is assumed that the client has assessed the benefits and drawbacks of the in-house versus outsourced project manager function and a decision has been made to engage a PMSP.
The term “project” is used in this appendix to refer to the entirety of the client’s capital planning, design, construction, commissioning, and operating endeavour. However, this “project” is actually a “program” comprised of many distinct but interrelated projects and operations, managed as a coordinated undertaking. It is this coordinated undertaking that the PMSP is responsible for managing, not merely the business case/feasibility project, the design project, or the construction project.
This introduction is neither a minimum nor a comprehensive description of project management services and is not intended to be specific or limiting. Neither is it a guide to project management knowledge nor a replacement for policies and procedures of project delivery. In a market-driven environment, each client may require different services and each provider organization may present different services to differentiate their value proposition in the marketplace. As well, each provider organization may offer a different basket of services for project management depending on their professional licensure and expertise. Clients and PMSPs are advised to develop project-specific requirements that reflect the scope of services required for each unique project.
In offering project management services, the architect is advised to consult with their provincial or territorial regulator to discuss issues, including conflict of interest and scope of practice.
Definitions
Adaptive Project Management: An approach to managing projects, driven by rapid change, that is iterative and incremental, allowing for improved outcomes and decision making.
Agent: A person or organization providing project management services to a client as a consultant without contractual relationships with a design consultant(s) or constructor.
Hybrid Project Management: A project management method that combines both adaptive and predictive project management approaches.
Predictive Project Management: An approach to managing projects that relies on determining the project outcomes, scope, quality, cost and schedule, and developing a plan to achieve those outcomes. Predictive project management then focuses on adjusting the work to align with the project plan and/or revising the plan.
Primary: A person or organization providing project management services who retains the services of and enters into contractual relationships with a design consultant(s) and/or constructor on behalf of the owner.
Program: Related subsidiary programs, projects and operations, managed in a coordinated manner.
Project: A temporary endeavour intended to create a unique outcome.
Note: The definition of a project must be placed within the greater context of operational management. Whereas projects have a defined end and create a changed state, such as a new building, operations do not. A manufacturing assembly line produces a consistent product repeatedly. It neither produces a unique outcome nor has a defined end.
Stakeholders: Any person or group that may impact or may be impacted by project outcomes.
Introduction
Every project must be managed, and the role of the project manager is pivotal to the project’s success. In-house staff or outsourced organizations can provide project management services. This appendix describes the role and responsibilities of the project manager from an outsourced organization, their relationship to sector stakeholders including owners, consultants and contractors, and the process of project management service delivery.
The scope of projects has become more complex in Canada as demands have increased for shorter delivery time frames, reduced costs, increased performance and risk realignment. The field of project management has realized tremendous growth, resulting in a recognized need for project management services. Many owners have embedded structured project management approaches within their organization’s operations, including both predictive and adaptive methods, and require that their design and construction teams engaged in capital projects implement similar full-scope, structured management approaches. This has resulted in owners seeking expert support for their project endeavours.
Projects, Project Management and the Project Manager
For owners, a project can be defined as an endeavour to deliver a new facility or space that achieves the project objectives and requirements. In this context, the project is more than just design or construction, but a larger program that involves the services or work of business case and feasibility analysts, realtors, developers, planners, consultants, contractors and regulatory authorities. Each of these parties is working on its own deliverables within the scope of the project. The project manager’s role is to bring together these deliverables to create a successful project.
Project management is the application of knowledge, skills, processes, tools and techniques to this program, to bring together these program elements in a timely and cohesive manner to achieve the project’s objectives.
Managing a project with a detailed strategy, pre-determined tactics, and appropriate resource allocation is paramount to its successful delivery. In the case of a project to which adequate management resources have not been assigned, often decisions are made in an ad-hoc fashion, resulting in changing objectives throughout the project and oftentimes delays, cost overruns and unmet quality expectations. While success is not a certainty through a well-managed project, it is a much greater probability.
Key Players and Definitions
The list of terms below describes the key players in ownership, design, construction, project management, and use of buildings and infrastructure. It also provides context in which each player operates. The terms are provided to build a bridge between traditional definitions used in the design-construction industry, and definitions used in contemporary project management.
The challenge of discussing and defining the players in the design/construction industry is that each player views the others in a different way. To the contractor, “consultants” refers to the architects and engineers, while the project management service provider is an “advisor.” To the architects and engineers, anyone who provides advice to the owner and does not make decisions on the owner’s behalf is a “consultant.” To the owner, particularly in public sector procurement, everyone hired by the owner is a “contractor.” PMSPs do not consider themselves consultants nor contractors but, if they make decisions for the owner, they are the “primary.”If they are advisors, they consider themselves the “agent” even though they do not have agency. The definitions below attempt to bridge the gaps between understandings.
Owners and Clients
The term “owner” refers to the owner of the project’s ultimate outcome and someone who has the authority to make decisions and delegate project decision-making, including the hiring of the consultants and contractors.
The term “client” has two definitions that are differentiated in context. In the first definition, the term “client” refers to a person or organization that pays for and receives services. In a capital design and construction program, there will be multiple “clients” just as there are multiple contracts. The owner of a facility is the “client” in any agreement that they may have with those delivering services to the project. In the case where a project management service provider (PMSP) hires the consultants and contractor, the PMSP is the “client.” The second definition reflects the traditional project delivery where the term “client” is synonymous with “owner.”
The term “owner representative” refers to an entity that is primarily responsible for communication between the owner and all other stakeholders. The owner representative may be an employee of the owner, a contracted individual, or the project manager. In government projects, the owner representative is often another government department tasked with delivering the project to a “client” department or directly to the federal, provincial or municipal governments themselves. The level of authority of the owner representative may vary as delegated by the owner.
The term “stakeholders” refers to all parties that have an interest and/or can influence the project. This includes the owner, architect, engineers, constructor, authorities having jurisdiction, community, building users, etc. The term “user stakeholders” refers to a subgroup of stakeholders who define project requirements and may ultimately be the end users of a new facility.
Consultants
The common term “consultant” can refer to anyone involved in the project retained to fill a consultative role. There may be many consultants within a project’s organizational structure, and their roles and responsibilities vary widely. The consulting design team of provincially or territorially regulated architects and engineers is responsible for the design of the building and site, and for confirming that the built outcome is consistent with the design and applicable building regulations. Other regulated consultants include land surveyors, geotechnical engineers or scientists, and hydrology engineers. Both regulated and non-regulated consultants may offer a range of services such as functional programming or interior design. The prime consultant is an architecture or engineering firm that takes responsibility for coordinating the design and construction review work of the project.
Both regulated and non-regulated consultants may provide project management services. When project management services are provided by an architecture or engineering firm, design services and project management services may be offered together or separately.
Construction Forces
The term “contractor” refers to an entity that is responsible for performing construction work and related services. A “general contractor” is an entity that coordinates the work of multiple construction trades hired by the general contractor and accepts the transfer of the financial risk from the client in return for financial reward.
The term “construction manager” refers to an entity that is responsible for providing advisory services (e.g., scheduling, budgeting, constructability, and health and safety) to the owner during the pre-construction phase. The construction manager’s roles may vary during construction phase. Most often, the construction manager remains engaged with the project through to project completion by assembling and managing the design and construction team. See Chapter 4.1 – Types of Design-Construction Program Delivery.
Project Management and the Project Manager
The term “project manager” refers to a person who is responsible for project planning, executing, and monitoring and controlling to achieve project outcomes. Complicating the situation, a project may have many project managers, each one within their own firm or organization. For the purposes of this introduction, the project manager is the individual designated by the owner to oversee the project on the owner’s behalf. In the context of this discussion, the project manager may be the owner, an employee designated by the owner, a person contracted individually, or a designated individual within a project management service provider’s (PMSP) organization. PMSP refers to any entities, either regulated or non-regulated, that provide project initiation, project planning, plan execution, monitoring and controlling of the plan, and closing services to the owner. The PMSP’s relationship with the owner may vary:
- In a consultative or agent relationship, the owner engages the project manager as an advisor with limited authority as defined by the owner for each project.
- In a principal relationship, the owner engages the PMSP for advisory service and construction work. The PMSP enters a contract with the owner. The PMSP then hires and enters into contracts with the prime consultant and possibly other design professionals, the general contractor and/or trades, and takes full responsibility for the delivery of the project.
The PMSP may take on other roles and responsibilities depending on the project delivery method.
Note: The PMSP cannot assume the legal responsibilities for design services or make design decisions if it is not also a regulated professional, such as an architect, in the jurisdiction of the place of the work. A clear definition of role and responsibilities for the PMSP will avoid gaps in service delivery or overlaps with the prime consultant or the contractor. All stakeholders should be aware of the limitations of the PMSP’s role and responsibilities. A PMSP’s scope of service should be carefully integrated with that of the contracts of the prime consultant architect and the contractor.
The Project Organization
The term “project organization” refers to the temporary organizational structure of individuals and firms brought together to undertake the project endeavour. The project organizational chart is like a traditional organizational chart except it describes the authority, reporting and communications relationships across organizational boundaries.
There are several structures that may be used when an owner employs a PMSP. Project organizational structures will vary with project delivery method. Project delivery methods will vary for design-build, various forms of construction management, and alternative funding projects. For the following illustrations when an owner employs a PMSP, the project delivery method is assumed to be design-bid-build.
Owner-Managed
In the owner-managed project organizational structure, the owner retains control of the project, thereby assuming both the risks and opportunities associated with ownership. This traditional approach is most commonly used in the following conditions:
- when the project’s scope or requirements are simple and well understood;
- when the owner is sophisticated with in-house project management staff.
FIGURE 1 Owner-managed project organizational structure
The owner-managed project organizational structure includes the owner, prime consultant and contractor. The prime consultant and contractor communicate directly with the owner representative. Managing the user stakeholders is the responsibility of the owner representative. The owner must be able to communicate across departmental boundaries within the organization.
PMSP – Advisor Relationship
In the PMSP – advisor relationship project organizational structure, the decision-making authority of the PMSP is typically limited to altering the project plan to maintain schedule and costs, accommodate risk, monitor and control project activities and outcomes, and manage communications. The PMSP will not make decisions on behalf of the owner regarding requirements, scope and quality. If the PMSP is also acting in the role of the owner representative, the project manager will manage the communications within the owner organization, manage stakeholder engagement, and monitor all aspects of project progress. The PMSP may participate in the procurement of the consultant and the contractor on behalf of the owner. However, the owner will be the one contracting respectively with the consultant and the contractor.
The function of the PMSP – advisor relationship project organizational structure is to support the owner with expert resources in integrating the project endeavour and to reduce project risk by providing planning, monitoring and control functions. This approach is often taken when the owner organization does not have internal capital project management resources in-house but wants to retain a measure of project control.
PMSP – Principal Relationship
In the PMSP – principal relationship project organizational structure, the PMSP may engage the prime consultant and contractor directly. The owner does not have any contractual relationship with the prime consultant or contractor. The PMSP’s role is to make decisions on behalf of the owner and assume the opportunities and challenges associated with ownership.
FIGURE 3 PMSP having decision-making authority acting in principal relationship in the project organizational structure
The function of this organizational structure is to allow the owner to focus on their core business and transfer a maximum amount of project risk to the PMSP. The PMSP assumes the financial risk of project ownership.
Owner Responsibilities in the Project Organization
Whether an owner uses in-house or contracted resources for project management, the owner remains as the beneficiary of the project’s outcome. They may, therefore, enjoy the benefits of ownership but must also assume the risks. The owner has a responsibility to sustain engagement over the project life cycle and should not assume that they can be divested of all project risk by retaining a PMSP.
Project Management Service Provider
The service offered by a PMSP covers activities from project inception to completion. The fundamental service includes but is not limited to:
- defining project requirements and establishing the management plans, including project’s scope, schedule, milestones, cost, quality requirements, procurement and risk;
- building or advising on the project organizational structure;
- developing the integrated project plan for all project life cycle phases;
- implementing the project plan through defining the scope and orchestrating the work of the prime consultant, regulated and non-regulated consultants hired directly by the owner or PMSP, and contractors using an established set of policies and procedures;
- developing and implementing a system for monitoring and controlling the work;
- gathering and analyzing project performance data and reporting on project performance;
- managing project communication;
- managing project risk and making changes to the project plan to accommodate uncertainty;
- performing scope validation and quality control to ensure project requirements are met.
Depending on the scope of service, the resources the owner brings to the project, the make-up of the project organizational structure, and the project delivery method, the PMSP may also be responsible for:
- structuring the pre-design, design, construction and commissioning programs into manageable project phases or sub-projects;
- advising on construction costs and constructability;
- identifying and analyzing alternatives, and making recommendations to the owner;
- analyzing the impact of changes to the project and making recommendations to the owner;
- assisting in securing financial resources;
- supporting the owner in the procurement of the prime consultant and their subconsultants, and the contractor, or procuring them directly;
- advising the owner of assumptions, limitations and constraints of the project;
- advising the owner of legal and liability concerns including zoning, approval processes and insurance, and securing counsel to advise the owner when required.
Project management is not the execution of a series of mechanical steps. Although the effective application of processes, tools and techniques is a foundation of project management, the ability to influence stakeholders to commit to project objectives without the use of direct authority is paramount to a project manager’s success. Key steps to managing stakeholder engagement in the project may include:
- gather, analyze and validate stakeholder requirements;
- negotiate project requirements among conflicted stakeholder groups;
- build commitment toward project objectives in all project stakeholder groups;
- navigate project approvals through negotiations with authorities having jurisdiction.
Responsibility, Liability and Risk – Keeping Relationships Clear
The provision of project management services may be undertaken by a PMSP in an advisor or principal relationship with the owner.
In an advisor relationship (see “PMSP – Advisor Relationship” above), the PMSP advises the owner and oversees project activities. Their level of authority in making decisions on behalf of the owner will be as defined by the owner. The owner will contract respectively with the prime consultant, other regulated and non-regulated consultants, and the contractor. The integration of the project management activities provided by the PMSP into the owner’s operations is negotiated based on the project scope and complexity of requirements.
In a principal relationship (refer to “PMSP – Principal Relationship” above), the PMSP has management and decision-making responsibilities for the project. This relationship is for owners who desire to transfer substantive risk for project outcomes or who have no capability or desire to be involved in project management. The PMSP will contract respectively with the prime consultant, other regulated and non-regulated consultants, and the contractor.
It is important to differentiate the responsibilities of the PMSP from those of the owner, the prime consultant, the subconsultants, and the contractor. At a minimum, the owner must provide the financial resources, and own the business case for the project and the project requirements. The PMSP oversees the organization of the project effort. The responsibility and legal liability for the design services remain with the regulated consultants, and construction work remains with the contractor. Not all risks can be transferred from one party to another through a contractual relationship. An insurance and liability framework must be established for a fair and balanced distribution of risk. Architects may be restricted from assuming certain liabilities and risks through regulation or insurability. A successful project will be one in which the responsibilities of each party are respected, and the party in the best position to manage project uncertainty assumes that risk.
Qualifications of the Project Management Service Provider and Project Manager
Project managers should be selected based on their experience, knowledge, expertise and accountability. The experience is gained through working with the owner, user stakeholders, consultants and contractors. Knowledge and expertise are gained through education, skillset affinities and experience.
Project management is within the scope of the practice of both architects and engineers. Certification may be offered by for-profit or not-for-profit organizations and is not equivalent to licensure granted by a legislated regulating body. If services are not delivered by a regulated consultant, there are no regulatory requirements for the qualification of the project manager or the PMSPs. A supplemental certification is a demonstration that the project manager has achieved a level of competency in the field and maintains that competence through continuous learning. Certifications in project management are offered by several organizations, including the Canadian Construction Association’s Gold Seal Certification program and the Project Management Institute’s Project Management Professional certification program. Certification may be specific to the construction industry or signify general knowledge in project management. Advanced programs of post-secondary studies offer degrees, diplomas and certificates in project management and construction project management. Those interested in obtaining certification and owners interested in procuring project management service should investigate the credibility of the certificate with industry stakeholders.
References
Fewings, P. Construction Project Management: An Integrated Approach, 2nd Edition. London: Routledge, 2013.
Project Management Institute. Government Extension to the PMBOK® Guide, 6th Edition. Newtown Square, PA: Project Management Institute, 2017.
Trentim, M. H. Managing Stakeholders as Clients: Sponsorship, Partnership, Leadership, and Citizenship. Newtown Square, PA: Project Management Institute, 2013.