You receive the call over a weekend. Your company’s chief financial officer says that she needs your help to assess the causes of excessive cost-overruns and delays occurring right now on your project in Florida.
The project was to be the crown jewel of the company’s portfolio: a mixed-use retail-office-residential property, two hotels, and the company’s new corporate offices near the dense, urban landscape of a thriving Central Florida city. The contract between the Owner and Contractor was fixed price, with a liquidated damages clause of $15,000.00 per day. The Project budget is $200 million and Opening Day is to occur in six months, in time for the grand opening scheduled for Thanksgiving Day weekend. You have a troubled project!
Now what? The CCA Group triages the project and creates a recovery plan.
The Triage Assessment Process™
“Triage” is a word not ordinarily used in construction management. However, in evaluating a troubled Project, we usually find that the Project is “bleeding money” and late, requiring immediate attention to save it. Webster defines triage as, “the sorting of and allocation of treatment to patients and especially battle and disaster victims according to a system of priorities designed to maximize the number of survivors” or as “the assigning of priority order to Projects on the basis of where funds and other resources can be best used, are most needed, or are most likely to achieve success."
The Triage Assessment Process™ accomplishes the sorting and allocation of Project elements according to expressed, specific priorities designed to maximize the Owner’s goals. The Owner’s goals (budget, schedule, quality) drive the immediate application of capital and resources to those areas most in need in order to achieve short-term successes and, ultimately, to achieve the best possible Project outcome. The Triage Process Phase may also identify issues involving legal or insurance claims that the owner, insurers, counsel, and the CM team may need to address as the baseline process develops.
The Project Assessment and Recovery Plan Report™
Your deliverable for this stage is the Project Assessment and Recovery Plan Report™ (PARP). The PARP is a document which the Triage Team™ authors and compiles to document, evaluate, and analyze the Project budget, Project schedule, and Project workmanship and which details a Project Recovery Plan™.
The PARP Report, delivered in the final stage of Triage, represents a compendium of the data compiled with analysis of the data. The PARP Report presents the Team’s findings and recommendations to the Owner. Within the PARP Report, the Team presents various options involving time, money, liability, design issues, and any other noted Project issues. The PARP Report may also, in some cases, propose changes to the existing Project team, including but not limited to the Contractor, Subcontractors, Designers, and others on the Project. Typically, the PARP Report will include commentary that may reflect legal counsel advice as well as advice from risk management. Sensitive legal advice will be transmitted only to those on a “need to know basis” through other communication channels.
Essentially, the PARP Report becomes the road map for the Team and the Owner to direct implementation of the Re-baseline (reset) and Recovery Plan. The PARP Report also may be used as an outline of the issues that will need further investigation and will ultimately support the Team ‘s recommendation to litigate claims that cannot be resolved through the TRI Process™.
The steps necessary to publish the PARP include:
- Engagement of the “team”, and defining each members role; delegation of each division of work required for a complete Project audit of budget, schedule, and workmanship
- Review of all essential Owner contracts with the designer, prime constructor, and subcontractors, as well as financing agreements, insurance policies, and bonds
- Effective and timely communication of all results to the Owner’s senior management
In my next post, I will go into further detail of each of the necessary steps listed above. To download the full report now, click here.