— By John Manning —
Owners and developers have great intentions when beginning construction projects, but sometimes life happens and those projects get delayed or even get stuck, coming to a screeching halt for unforeseeable reasons. In 2020 other outside challenges have made troubled projects more commonplace such as the economic impact of Coronavirus.
John Manning, KMI International
If you find your construction project stalled, stuck or otherwise troubled, don’t let time go by idly. Begin what we call the triage process. A properly implemented triage process is key to a successful project turnaround
First and foremost, you’ll need to hire a turnaround project manager (TPM). Ideally, this is an owner’s representative with experience in effective turnaround project management. Next, hire expert legal counsel, because unfortunately, many troubled projects end up in litigation, whether they are settled in or out of court.
Once this small team is assembled, it is important to address the following questions together.
- Find out the owner’s priorities. It’s important to find out if cost or schedule is more important or if they are equally important.
- What contracts has the owner entered into on the project?
- What is the status of those contracts? How much has been paid? How does that compare to what has been completed?
- What permits have been issued for the project? Have code violations been issued? Also, have any safety code violations or incidents been reported?
- Where does the project stand regarding cost? What was the original project budget was and compare it with the contract balance, and unresolved issues affecting cost now and in the future.
- Where does the project stand regarding the schedule? What was the last schedule update provided by the contractor? Also, what are the key target dates the owner must meet and decide if these dates are feasible today?
- Where does the project stand regarding the quality of the work in place? A detailed on-site assessment should be performed to assess the quality of the work in place.
- What risk management strategy has been employed for the project? This boils down to an insurance audit. Which parties involved have their own insurance and what do the policies cover?
The TPM should pull together what has been found into a triage report for you and the legal counsel to plan a path forward. This isn’t the end of your journey. On the contrary, it is likely the beginning. However, this triage process is the best way to get back on track.
— John Manning is the CEO of KMI International, global program management and construction consulting firm. He can be reached at https://www.kmiintl.com/.