Newsletter
Planning a Project – KEEP IT REAL
Others expectations, pressures, and desires can cloud, taint and obscure the reality of project planning. Once the seeds are planted, it can become increasingly complex and difficult to keep it REAL for Project Managers challenged with meeting the hopes and dreams of those that surround them. The question is – Can it really be done?
Everyone likes to provide information to superiors, customers and peers that they would like to hear; however, providing disinformation, although meant with the best of intentions, always becomes grounded in cold hard reality.
“Not so easy when the static plan almost always become this dynamic living organism fraught with changes, challenges and continued adaptation.”
Project constraints, limitations and challenges are part of the routine; however, adding roll-over inspections (no-shows by building inspectors rolling over the scheduled inspection to the next day), slow or poor execution of subcontractor/vendors, and the toughest of them all; changes by the Owner that causes deviations from a well thought out plan and strategy make project planning seem all but impossible at times.
The reality – every project starts out in a static form with a logical progression like the numbers one through ten. Start with one and work your way to ten. Right? Not so easy when the static plan almost always become this dynamic living organism fraught with changes, challenges and continued adaptation.
The contorting and changing shape sometimes make the original plan of action look like an Amoeba that constantly changes shape. Having the ability to take control, adapt, overcome and conquer project planning challenges is what the art of good Project Management and effective project planning is all about. Taking charge and keeping all stakeholders informed is paramount even when the news is not always favorable. The project team, collectively, can use the cooperative synergy of the group to help overcome project planning obstacles. Good Project Managers take control, keep it honest and adapt to project planning challenges since almost all projects are dynamic in nature.
Good project planning and delivery is an art and science that when based in REALITY can be done well. The quality of the team is everything, so when you consider the low bid; stop and take a look at the team you will be working with and ask – Is price the best gauge of a projects outcome?
Keep it real, make good decisions and great results await.
Inspect What you Expect – Do Not Assume
In today’s fast paced workplace the intensity of everyone’s jobs seems to be increasing with new and increasing pressures, demands and greater levels of expectations. Increased pace has the appearance of efficiency but when analyzed, after the fact, many times that efficiency is no more than a mental illusion and hopeful outcome. Efficiency gains can be a great thing as long as the balance is maintained in such a way as to maintain an adequate level of quality.
The cost-quality paradigm is, and always will be, a challenge given the drive for profit. There are limits to efficiency gains and trade-offs regarding quality. There is a balance. Balancing things like:
- The Companies “Standard of Quality”
- The Customers “Standard of Quality”
- Your individual “Standard of Quality”
- The Industry “Standard of Quality”
For some, just getting past an inspector is good enough; this is typical for the successful low bidder in competitive bidding situations. The price drives the level of quality. This is an interesting dynamic especially when Owners are looking for a set level of quality at the lowest possible price. This situation is wrought with conflict in theory and in practice.
Good construction companies still take pride in what they do and do not sacrifice quality or the Companies reputation by producing inferior levels of quality or providing inadequate quality of products used in the construction process. It takes dedication, commitment and discipline to standby good quality standards along with good management and supervisory processes to insure quality is consistently delivered.
When Project Managers and Superintendents are stretched by managing multiple projects with varying levels of difficulty, with Projects located at opposite ends of the valley the opportunity is created for these “Managers of Quality” to trust the word of others like, tradesman, subcontractors and, even, laborers. Instead of taking that final drive across town at the end of a 10 hour day through rush hour traffic, a PM or Superintendent will call someone on the job for a status update and, even worse, believe them. It is exactly at this point things begin to decline. That is why, many years ago, I coined the phrase – Inspect what you Expect – Do Not Assume!
A simple mantra that, when followed, and properly balanced provides good results.
It takes balance, discipline and dedication of the Management Team to maintain standards of quality. You can take this to the bank:
The level of quality is ultimately determined by the weakest link in the Project Management chain. Watch for weak links….
Remember – INSPECT WHAT YOU EXPECT AND NEVER ASSUME!
Tenant Improvement 101 Guide
Almost every tenant of a commercial tenant space (TI) will need to make some changes or improvements for it to work for them. The extent of improvements will vary depending on whether the space was previously occupied, how old the existing improvements are and if the prior uses and the new contemplated uses are the same. Previously unoccupied buildings may have bare concrete floors, no drop ceilings and no distribution of mechanical, electrical or plumbing systems and may require extensive improvements. Conversely, a previously occupied space occasionally may only require few changes and may only require new paint, carpet cleaning and minor touch-ups and repairs.
Typically, there are two major questions to be addressed: “Who is doing what?” and “Who is paying for what?”
Who is doing what?
In a “turnkey build-out,” it is implied that the landlord is doing all the work needed by the tenant to occupy and use the space – that the tenant can “turn the key,” open the door and start working. Realistically, it is rare that a space is ever a “turnkey” project since some portion of the improvements, namely installation of furniture, phone and data cabling and communication and computer systems become the tenant’s responsibility. Another variation of tenant improvement (TI) is known as a “vanilla shell“, intended to describe a space that has finished floors, ceiling and walls, lighting and heat/air conditioning; and a “gray shell“, which is a demised space without air conditioning or heat, light or finishes.
To provide clarity detailed specifications need to be outlined identifying the parties’ scope of work, this benefits both the landlord and the tenant. The landlord needs to know what it is obligated to deliver and the tenant needs to know that the landlord will deliver the space as described. Many leases include a “plan” showing the layout of the proposed TI’s and provides that the landlord will perform those improvements using “Building Standard” materials and finishes. The parties should clearly describe the “Building Standard” materials and finishes to outline the quality of the materials to be installed.
The tenant also needs to know that the work performed by the landlord will be done by the time the tenant needs the new space. Delays in completion equals lost time and lost revenue; therefore, completion dates can be critical and may have very negative impacts. An example of this is if the lease term is expiring, tenants could find themselves in a “lease holdover” position in which the tenant could be liable for increased rental rates and could be subject to quick eviction. A new lease should provide remedies to address the failure to complete the tenant improvements on time.
If the tenant is performing the TI work, the landlord usually agrees to provide a set period of time to complete the work before the tenant is obligated to start making regular payments of rent. To avoid this result, the tenant should engage Design and Construction professionals early in the lease process to determine a realistic timeline for TI work and to ensure that the work will be completed on time. All too often the Design and Construction professionals are not brought into the project early enough to complete a quality project within a reasonable time.
Often, both the landlord and the tenant are responsible for some portion of the TI work required by the tenant for its anticipated use and occupancy. In this situation, it is critical for the parties to cooperate and provide for efficient coordination and the timely delivery of a completed project. It is not uncommon for the landlord to perform certain base building improvements for a space, such as the construction of structural components and the installation of the building systems, before the space is turned over to the tenant to install its TI’s. In this case, the tenants TI work should not commence until the landlord has completed the work they are required to perform, or at least the portion needed to be completed in order to allow the tenant to commence its work.
Penalties may arise out of a delay. For example, if the tenant is causing a delay preventing the landlord from completing its work on time, then the tenant should expect to be responsible for the lost rents that might arise from such delay. Likewise, if the landlord delays the tenant’s completion of its work, then the landlord may be liable for tenant’s holdover rent arising out of its delay in vacating its existing premises or may be required to provide the tenant some free rent once the new lease term commences.
Who is paying for the cost of the tenant improvements?
The cost of the TI is considered by the landlord in agreeing to a rental rate. If the landlord is funding the cost of the TI, a portion of the rent being paid by the tenant will reimburse the landlord for those costs. If the landlord is performing the work on a “turnkey” basis it will need to know exactly what work it has to perform for the reasons stated above, but also because the landlord needs to make sure that it knows how much the required work is going to cost.
If the plans are not complete and approved by both parties at the time of lease signing, the landlord may agree to provide an improvement allowance, a sum of money usually stated on a per-square-foot basis, to be used to pay for the cost of the tenant improvement work. This allows the landlord to calculate the rent based upon the known TI allowance. If the cost of the work exceeds the agreed amount of the improvement allowance, the tenant is usually required to pay the excess costs. However, in some cases, the landlord will agree to incur the excess costs (subject to a cap amount) and increase the rent accordingly.
If the tenant is performing the TI work with an improvement allowance being provided by the landlord, then the process of bidding and construction is controlled by the tenant and the tenant takes all of the risk that the cost of the work exceeds the given improvement allowance. The key here is for the tenant to be comfortable with the estimated costs of the improvements before a lease is executed because, as discussed above, the tenant’s obligation to commence regular payment of rent will usually start on a given date irrespective of the status of the build-out process. If, for example, the tenant decides to re-design the TI to reduce the anticipated costs, the tenant’s work could be sufficiently delayed and the tenant could find itself paying rent on space before it can move in.
Leasing and constructing TI’s can be complicated and difficult; therefore, it is critical to consult experts in Commercial Real Estate and experts in Design and Construction to make sure your dream and vision becomes reality. Always get the Design and Construction experts involved early in the process to avoid delays, penalties and added cost.
Design-Build – What is it?
Design-Build
is a project delivery method in which the owner holds a single contract with the contractor (creating a single point of responsibility) for both the design and construction of a project. It is Owner driven and has been proven to reduce delivery time, costs, and change orders by providing for a cooperative relationship between the General Contractor, Design Professionals and Owner. The art and science of taking a project from conception to completion is an intricate process requiring constant supervision and expert coordination between the Design Team.
The Design Team is comprised of the General Contractor (Design Team leader), architect, engineers, consultants, subcontractors and the client. By building a professional and competent “Design Team” the collaborative expertise provides a synergy that is unmatched by pervious design and construction systems.
The benefits of using the Design-Build Construction Method are:
- Maximizes Owner creative input in all phases of the process.
- Reduces errors.
- Saves time.
- Provides a single point of contact from conception to completion and minimizes change orders
- Provides a more cost-effective and efficient method of construction
- Elicits a cooperative team approach
- Provides a single point of responsibility for quality, communication, budget overages and conflict resolution.
The benefits of Design–Build project delivery have been demonstrated repeatedly. “Researches on Selecting Project Delivery Systems” by Victor Sanvido and Mark Konchar of Pennsylvania State University; found that Design–Build projects are delivered 33.5% faster than projects that are designed and built under separate contracts (Design-Bid-Build). Sanvido and Konchar also showed that Design–Build projects are constructed 12% faster and have a unit cost that is 6.1% lower than Design-Bid-Build projects.
In conclusion, the Design-Build method has proven to be a superior construction method and drastically reduces the burden and hassle of the process to the Owner. The General Contractor uses strong leadership, management skills and expertise to streamline the archaic Design-Bid-Build process by providing improved results.
We (AJB General Contractor) have been practicing Design-Build for many years and find it to be a wonderful and preferred method.
Tech – What a Ride it has been
Today, to be competitive, everyone on an effective project team has to embrace change, new methods and give in to constant evolving technology. Why? Change or be left behind. Change and evolution are the operative words.
“Brick and mortar is going the way of the mule.”
It was’t long ago the fax machine was impressive. Then the beeper – oh my gosh what a wonderful tool that use to be. The Motorola radio was fantastic years ago. Then the cellular – as an in the car major installation, then the briefcase model and the famous “Brick”. How things have changed.
The invent of the World Wide Web will, likely, be “the game changer” in my lifetime.
“Consumers are smarter, more demanding and know what they want. My advice – change to meet you customers expectations or, like the mule, your product and/or service will become irrelevant in todays world.”
Knowing how to use the Dewey Decimal system was a pre-request to tapping the vast knowledge base held within the large and expensive buildings – the library. Today, well you know. Brick and mortar is going the way of the mule. It will be interesting to see how retail evolves since the path of progress continues to expand into shop, click and buy. All from the comfort of your own home. Shopping when you want, how you want with unlimited resources to research, compare and make more informed decisions.
Consumers are smarter, more demanding and know what they want. My advice – change to meet you customers expectations or, like the mule, your product and/or service will become irrelevant in todays world.
AJB has been embracing Tech and; although, difficult for those of us with gray hair, we are trying and, “by gosh”, we are getting it. What an exciting and amazing journey it has become.
Best of luck keeping up with Tech evolution.