For large construction projects, I tend to organize them this way:
-I hire a GC, general contractor, on a fixed price, GMP (Gross Maximum Price) contract so after we negotiate their fee, they “sit” on the same side of the table as the owner; ie, their interests are now aligned
-I do the same with the architect as well as engineers (soils, structural, mechanical, electrical, servicing etc)
-I set up incentives for early completion and cost savings (that don’t compromise quality) shared amongst all parties
-I also include a contingency allowance that I expect will be spent to assure quality, and deal with change orders and problems and surprises that inevitably crop up during construction.
But to manage the whole process, nothing beats a good project manager who not only is the owners’ eyes and ears on the project, they are the person who can somehow corral all the disparate moving pieces and force them to work together as a cohesive team.
How do you select a project manager?
One client of mine recently asked me this:
Good afternoon Dr Bruce,
I hope all is well on this fine Canadian winter day.
As we are in the process of calling some potential candidates for the Project Manager’s position, I was wondering if you have a template for this?
~Behavior Based interviewing questions; and
~Contract with salary range with this type of project.
We would appreciate any insight or materiel that you may have on this specific position.
Rather than give them a long list of specs and questions, I answered this way–
I think the key things are—
1. Does the candidate know how to create, monitor and keep to a critical path schedule?
2. Does the candidate know how to deal with change orders and keep those from blowing up both the budget and schedule?
3. Does the candidate have sufficient know-how to ensure that the project gets delivered with the fewest possible construction deficiencies?
These are the three biggest risks in any construction project—delays, being over budget and having a zillion deficiencies at the end that bedevil the owners.
For example, if something goes wrong with your HVAC system, the mechanical installation contractor says, “Hey, my systems are working fine—it’s the electrical contractor’s fault.”
The electrical contractor says the same thing only in reverse, “Hey, my systems are working fine—it’s the mechanical contractor’s fault.”
You, the owner, have no clue.
So your project manager has to know and fix it without coming to you the owners and saying, “Sorry, I need an extra few million to make these systems work properly.”
This is no joke. It happens all the time and ownership gets stuck because what is a building worth with a non-functional HVAC system for example?
NOTHING. IT MIGHT EVEN BE A NEGATIVE NUMBER…
You need to be sure about this person and the way to be sure? Ask a lot of questions about specific projects then talk to the people the candidate worked with—owners, architects, contractors and especially sub-trades. The sub-trades will know a phony from a million miles away…
Bruce M Firestone, B Eng (civil), M Eng-Sci, PhD, Ottawa Senators founder, Real Estate Investment and Business coach, ROYAL LePAGE Performance Realty broker, 1-613-762-8884 firstname.lastname@example.org twitter.com/ProfBruce profbruce.tumblr.com/archive brucemfirestone.com
MAKING IMPOSSIBLE POSSIBLE
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