From my experience

Residential development Nordic Living – project management by Piotr Mike

Employ a Project Manager before hiring an architect. Introduce at least eight duties into his contract, duties that he should complete for you in the design phase. Managing the construction project and the investment process will be much simpler.

The project manager is the motor of the project.

The creation of project documentation involves the cooperation of many people. It is not true that only the lead architect and his subcontractors are involved in the process. The list includes: government officials, future users, commercialization specialists, law and notary offices, owners of other real estate, other designers and consultants, future supervision inspectors, accountants, marketing investor specialists … who are not connected through direct contracts.

Seems a lot? This is just the beginning.

There are divergent interests, conflicting opinions, different styles and pace of work in this group. Often their work will be accompanied by communication errors or deadlocks due to the lack of someone’s reaction or decision.

Project Manager’s role is to remedy all these opposites so that they don’t cause interruptions. A competent PM as a leader and coordinator of actions and information exchange ensures the smooth progress of work of ALL cooperators.

When an investor assigns at least some of the tasks mentioned above to an architect, he diverts him from his basic task – the creation of an optimal design. If the investor decides to perform this function personally, he will have to devote a lot of time to it.

Is it always a profitable choice?

Not necessarily, given that time is money, and both can be easily lost … if not spent on collaboration with an expert.

The management of a construction project, i.e. coordination from a bird’s eye view

PM’s project schedule and project budget control help him coordinate the project. Isn’t he duplicating the work of the architect in this way? No, because the architect only maintains a schedule of creating project documentation and obtaining permits. Therefore, he has a more limited field of view than the project manager.

Example: the design solution may seem economically beneficial, but requires a derogation from the regulations, which must be approved by the Provincial Sanitary Inspector. Obtaining such consent is often associated with a delay, and it is often unknown how long the delay may be. Project Manager, after consulting the architect and analyzing the schedule and budget of the investment, will have stronger grounds to make or recommend decisions in this matter. They will be based on an analysis of events that go far beyond the design sphere.

Project Manager’s control of the investment schedule allows for commencing preparations for the next stages of the project at the right moment. Personally, I follow the US Navy Seals commando strategy:

Slow is smooth; smooth is fast

Example: still in the deep design phase, I prepare tenders, coordinate the creation of contracts drafts with contractors and buyers / tenants, I recognize the supply chain of equipment and negotiate with the owners of neighbouring properties affected by the construction. These preparations, combined with ongoing coordination, are fundamental for a smooth transition to the next stages and phases of the project.

To sum up, the task of the Project Manager is to control the undertaking from a bird’s eye view and take actions enabling the smooth progress of the investment.

Project program extract – Nordic Living development – project management Piotr Mike

Two ways – about risk and decisions

“I encountered two rads in the woods. 

I chose the less frequent one.. 

And that is what made all the difference.”

– Robert Frost

Another competence of the PM is involved in the management of construction projects and their processes: risk management. Here, I mean the decisions connected to risks associated with:

• design solutions;
• administrative procedures;
• subsequent stages of the undertaking.

Project Manager analyzes these risks, takes actions to avoid them or to minimize their adverse effects.

Example: estimated structure of apartments in the development project, i.e. the number of studios, 2-, 3-, and 4-room apartments to be present in the building. A large number of small apartments generates quick sales, but increases investment costs and hinders the sale of larger – family apartments.

Another example from the management of a development project: high buildings and balconies on the side of an undeveloped neighboring property may encourage the owner of this property to impede obtaining the final building permit.

There are also numerous smaller issues, e.g. do we make surface-mounted or flush-mounted installations in bathrooms? Flush-mounted means inferior sound insulation of walls and complaints from buyers to the developer about poor housing acoustics. The surface-mounted solution is associated with a reduction in the area of bathrooms after furnishing these installations, which can reduce the attractiveness of the apartments.

An experienced investor having time to spare can decide on such matters together with the architect, but he should not leave the latter alone with such problems. If the investor does not want to deal with such issues, he should hire a Project Manager.

Value engineering

A good project is one that gives the investor maximum functionality in exchange for the lowest possible price. In construction, the concept of functionality covers not only the arrangement of the building and its surroundings, but also the degree of complexity of the construction, the availability of materials and defectiveness of design solutions.

What about the price?

The price refers not only to the costs of construction, but also to the duration of the construction, maintenance and repair costs and the cost of energy consumption. A Project Manager co-works with the architect on behalf of the investor on the best possible ratio of functionality and the price of design solutions. The role of the Project Manager is to watch over the priorities of the investor’s investment strategy and, in its context, to conduct analyses, to “challenge” design solutions and to suggest ideas.

Example: the investor creates a development project in the Scandinavian style, the designer borrows design solutions from Sweden, and the Project Manager checks whether some of them could cause problems in the implementation or increase the construction costs too much.

Another example: photovoltaic panels on the roof mean a higher investment cost, translated into the sale / rent price of the property, but also potential savings when it comes to use.

Aside from the strategic context, a Project Manager should also check the drawings of the designer. Do the drawn solutions really generate the highest possible functionality at a stable cost? His experience in the industry plays a key role here. In my career, there have not been projects of hospitals, clinics and laboratories that did not require any corrections. They were an integral part of the discussion with the architect on design solutions, and they contributed to a better and more efficient course of work on the investment. Eventually, they contributed to the better implementation of the building itself.

Project design review – Maternity hospital in Lviv – MIKE management

Technical coordination of project documentation

The architect’s design documentation should be combined with other designs, guidelines and technical conditions from third parties. It is the architect, of course, who does the main work in coordinating his project. The Project Manager should support and supervise this process. He has a greater impact on third parties than the architect because he directly supervises the implementation of their contractual and legal obligations referring to the investor, e.g. by accepting or giving opinions on payments. He also works with the investor’s lawyers.

In this case, third parties may be:

• investor’s industry representatives, e.g. future users (from the operating department),
• other designers working on the investor’s behalf, e.g. the technologist, connection designers, interior and greenery designers, specialized systems and installation designers (e.g. parking, low voltage, etc.);
• technical representatives of the lessor – in the case of investments in rented premises;
• neighboring property owners, who are also planning the investments;
• representatives of public administration bodies;
• utilities managers;
• equipment suppliers.

I am in favour of maximizing the scope of the architect’s responsibilities for the project. In practice, however, the architect’s work often decelerates due to the lack of the so-called “design batch” from third parties. It is the responsibility of the Project Manager to overcome such obstacles. In addition, the architect will not take full responsibility for coordinating with some entities, e.g. owners of neighbouring properties, which often require strong legal and communication support.

Identification of required permits and arrangements

All required permits and arrangements should be included in the investment schedule. The Project Manager represents the investor in these procedures and monitors the situation. The deadlines for administrative proceedings should also be followed during other critical tasks in the schedule.

The architect usually conducts a significant part of these procedures, but I have not yet seen an investment in which he would be responsible for absolutely all permits and arrangements. Let us remember that it is in the interest of the contracting party that all permits and technical conditions are received as soon as possible, but it is not always in the interest of the architect. Most often, he designs more than one investment at the same time and concentrates mostly where he needs to meet the deadlines, and where he has no arguments to postpone the work.

It is the Project Manager’s role to care for the interests of the investor, primarily by:

• making sure that the applications that could be submitted have been made by the investor’s counterparties;
• monitoring ongoing administrative procedures, contacting third parties and the architect;
• making decisions necessary to achieve the progress of procedures;
• submitting applications for decisions, arrangements and technical conditions on behalf of the investor, where it is not the responsibility of the architect.

Determining the supply chain

In turnkey investments, the executive project, which is the last stage of design work, must be integrated with the equipment.

Example: a private medical centre can be equipped with an X-ray system, a system of office occupancy, dental units, a system of confirming a doctor’s appointment, vaccine refrigerators, a lift, a parking entry control system and other, very complex devices and technical solutions.

Although the so-called technological design of a medical centre, prepared in the first stage of design works, contains most of the equipment, it does not specify its details which are relevant from the point of view of construction and financing of the investment. The models and versions of devices are not yet known at that point. Therefore, at the executive design stage, The Project Manager must ensure that technical requirements are available to the designer for a maximum possible number of specific types of products or groups of products constituting the equipment of the investment. And vice versa: The Project Manager must provide suppliers with designer data to optimize the equipment. This is what I call the integration of the project with the equipment.

In addition, technical annexes to contracts with contractors are being prepared. The more details can be determined at the design stage without delaying the architect, the lower the construction costs will be.

And here is the role of the Project Manager – his responsibility and remuneration cover, in similar proportions, both the design and executive period. That is why he will strive to optimize the project from the perspective of the contractor and user, which is in the interest of the investor because the largest costs result from construction works and operational activities in a given facility.

Turnkey fitness club project, equipment supply – client Elford Sp. z o.o. – supervision by MIKE management

The devil is in the detail

I had the opportunity to work with excellent architects, but I have always been able to find errors in design documentation. The Project Manager analyzes the drawings and descriptions of the architect in the light of the investor’s interest:

• compliance with the investor’s or his clients’ guidelines;
• level of detail;
• dimensioning of building elements;
• functionality and cost of design solutions;
• compliance with permits and technical conditions;
• compliance between parts of the project.

The investment preparation phase is the best time to refine the project. Changes and additions to the project during the construction result in an increase in the investment cost.

Preparation of tenders

Project Manager prepares tenders already in the design phase. Cooperation with the architect should result in the issuing of a tender project – an intermediate stage between a construction project and a detailed design. The role of the project manager is to determine the scope, check the quality of the Tender Project and to ensure that it is released at the right time of the investment schedule.

It is important to start the tender at such a time as to start construction as soon as possible after receiving a valid permit, 2 to 4 weeks before the expected building permit. However, the more detailed this project is, the later the tender will start (more details – longer preparation), but we will receive a more accurate valuation. Here, the skills of the Project Manager in the field of value engineering are useful because a false start may result in disqualification.

Remember: the design delay usually costs much less than construction delay. Sometimes I postpone the tender for a better preparation of tender documentation.

In addition, Project Manager’s work in preparing the tender involves:

• investigating the contractor and supplier market;
• complementing tender regulations, investor documents, schedule and guidelines;
• preparing a draft contract with the contractor.

Preparation of the construction site

I always aim to allow for the energetic commencement of construction works. What does it mean? I want to quickly see a developed construction site and a hole dug in the ground. In the development industry, sales increase after the construction rises above the fence of the construction site, and I try to achieve this as soon as possible. This is why a contractor’s activities should focus on the pace and quality of the investment facility under construction, not on completing additional formalities or arranging things with neighbours. As a Project Manager, I try to help with this, like a substitute investor.

Any third-party interference in the works will give the contractor an excuse to explain delays and to show cost claims for the investor. Therefore, I minimize the scope of the contractor in relation to investment-related issues that carry the risk of stopping the expensive construction machine, e.g.

• trees and shrubs removal;
• removal of unnecessary infrastructure, especially of illegally existing facilities at the construction site;
• supply of electricity and water for construction, especially if they must be brought from further distance, or through plots of other owners;
• construction site insurance and construction works insurance (so-called Construction All Risk)
• preliminary evaluation of the development of the construction from the point of view of the investor’s interest, e.g. location of the apartment sales office or advertising signs;
• informing neighbours about the planned date of commencement of construction (it is good to be in constant contact with them all the time).

To minimize the risk of underground “surprises”, the construction site should be scanned (alternatively – open pit underground excavation).

Site prepared, works started – client Nordic Living Sp. z o.o. – MIKE Management

Construction project management by a Project Manager – in short

You have an idea and money, but you have little time – hire a Project Manager. In the design phase, he should fulfill the following obligations for you:

• Project Management, team leadership and coordination of the team’s activities;
• Value engineering;
• Technical coordination of project documentation;
• Identification of required permits and arrangements;
• Determining the supply chain;
• Verifying the project;
• Preparation of tenders and tender contests;
• Preparation of the construction site.

Project Manager can certainly be the right hand of the investor. Can he become his hand… literally? Yes, when he manages a construction project as a substitute investor. But this is a topic for a separate entry.

If you have questions on this matter, if you need a specialist – contact me: piotr@mikemanagement.pl

Piotr Mike