Understanding the Role of the Project Manager
By MICHAL JAWORSKI and SAMANTHA IP, Clark Wilson LLP 

Managing any construction project requires talent in the art of building and maintaining strong relationships and the specialized skills that can only be gained from experience. With money and reputation on the line, it is important for every player in the construction industry to ensure that all the pieces are in place to carry out a project on time and on budget, and to meet or even exceed the expectations of quality and participant satisfaction.

For this reason, many owners are turning to professional project managers to ensure that project goals are met. This article briefly introduces the project manager as a potential key player in the construction industry and address some issues facing owners, contractors and design professionals when dealing with a project manager.

 

So Why Should An Owner Hire A Project Manager?

In every construction project, there is a risk of schedule and cost overruns. An effective project manager can help owners manage that risk. Experienced project managers can help you:

• Avoid expensive claims;
• Evaluate and control risk; and
• Ensure you are receiving value for your investment.

A project manager can ensure that your facility meets time, quality and cost objectives by providing the following:

• A clear statement of project objectives and limitations;
• Careful monitoring during design for adherence to project requirements; and
• Independent reviews during design and prior to tender: value engineering, construct-ability and bid document reviews.

 

Is A Project Manager An Agent Of The Owner?

Not necessarily. Within the meaning typically assigned to "project manager," we are concerned with a person or firm that provides project management services to the owner. We are not concerned with what has been termed a "construction manager": a person or organization that acts as an advisor to the owner at the pre-construction phase, and then becomes the agent for the owner, directly entering into contractual relationships with design professionals and the general contractor during the construction phase.

 

What Exactly Does A Project Manager Do On A Construction Project?

A project manager may provide services to an owner at every stage of the construction process, depending on the needs of the owner and the qualifications of the particular project manager.

Generally speaking, the functions of project management include the following:

(1)   At the planning stage: specifying project objectives and plans including defining the scope, budget, schedule, performance requirements, and selecting project participants. In addition, a project manager should provide strategic advice on issues that may affect the project and ways to minimize the impact of outside factors. Examples include advice regarding:

(a)    scheduling the project and bid closing dates to avoid peak bidding and building periods;

(b)   compressing the pre-construction phase while ensuring that timelines are achievable;

(c)    pre-purchasing key, price-sensitive materials;

(d)   retaining the professional expertise of quantity surveyors or contractors for budget input, and conducting value analysis;

(e)    creating a funding contingency plan; and

(f)     taking proactive steps to minimize the risk of owner-caused delays such as obtaining adequate geo-technical investigations and addressing regulatory approvals.

(2)   At the procurement stage: maximizing efficient resource utilization through procurement of labour, materials and equipment according to the prescribed schedule and plan. Project managers may provide advice regarding the reputation and suitability of design professionals and contractors, and may be called upon to administer the bidding processes.

(3)   At the construction phase: services that may be provided once the project breaks ground, include:

(a)    implementing and administering the project plan by proper co-ordination and on-going oversight of planning, design and quality;

(b)   administering the budget and cost controls and provide project accounting services as well as maintain the project records;

(c)    developing communications mechanisms for streamlined decision making;

(d)   resolving conflicts among the various participants; and

(e)    monitoring the schedule and dealing proactively with delays.

(4)   At project completion: reviewing the project to ensure orderly and timely completion, including development of punch-lists, monitoring implementation, training and warranty periods, resolution of outstanding issues, reviewing claims or disputed issues.

 

Where Do Project Managers Fit In On A Construction Project?

Generally speaking, project management is necessary in every project, whether it is a new construction or renovation. In many cases, the owner has the resources to manage the project without outside assistance. As a project becomes more complicated, the benefit realized by employing a project manager increases.

Professional project management is not suitable in all situations. The procurement method an owner chooses will determine the appropriateness of hiring a project manager. Though it is possible to find a place for a project manager in all situations, the following are the most common procurement methods in which the services of a project manager are engaged.

 

Traditional Design/Bid/Build

The traditional Design/Bid/Build procurement model, where the owner contracts directly with the architect and the general contractor, is perhaps the most common scenario in which a project manager may be retained.

Though the owner is in a direct contractual relationship with the designer and general contractor, it may be advantageous for the owner to engage a project manager if the owner does not have the in-house resources or experience necessary to effectively plan in advance of and administer the construction.

One concern about the introduction of a project manager into any process is that the introduction of an additional party into an already crowded operation. Between the owner, architect, various engineers, and the general contractor (not to mention the subcontractors), some may say that a project manager may serve to confuse matters if the parties are not clear as to whom or on what basis they are to deal with one another. However, where the relationships are set out clearly, and a coherent communication structure is put in place, the project manager will be an invaluable part of the project, providing careful monitoring of costs and schedule, and continuous oversight that will ensure that the project is managed effectively.

 

Design/Build

In design/build arrangements, the owner contracts with a design/builder, or construction manager, who then contracts with and oversees the design professionals and the general contractor. In this case, the design/builder has a very prominent role wedged in between the owner and the parties actually designing and performing the construction work.

When using this procurement method, it is often thought necessary to engage an independent third party professional advisor because of the perceived conflict of interest that arises when a single entity, the design/builder, is responsible for the total package of design and construction on behalf of the owner, with no one to protect the owner's best interests.

As a result, many owners find it useful to engage a project manager as their independent third party professional advisor for the purpose of advising on the design at the pre-contract state and to supervise construction to ensure compliance with the owner's requirements, among other services.

The concerns relating to project management in this context are similar to those expressed elsewhere, namely that the introduction of a project manager will serve to complicate relationships and introduce another level of bureaucracy. Once again, clearly setting out relationships and processes, and ensuring that contractual relationships are created with the project manager's role in mind may neutralize this criticism.

 

Conclusion

Project management is a service that owners must be aware of in order to ensure that they are achieving their project goals in the best and most cost effective way. The professional advice and services received are of particular importance for owners lacking the in house staffing levels, expertise or depth of experience necessary to design and carry out high level planning, coordination and implementation strategies.

It is important to thoroughly investigate the background of any project manager to determine their level of skill and reputation in the construction community. No matter how beneficial a project manager may be for a project, those benefits are only achieved in the context of a project manager capable of performing this role.

When considering employing a project manager in your construction project, it is important to ensure that relationships between the owner, design professionals and the general contractor are thoroughly set out and incorporated into all contracts and documentation. Standard contracts provided by associations such as the Canadian Construction Association and the Canadian Construction Documents Committee may not make adequate provision for the role that a project manager is to play in your project and amendments may have to be made accordingly.

- Material supplied by Clark Wilson LLP. If you have any questions or require any assistance in the preparation of your contract documents, please contact Samantha Ip, or any member of the Construction Group.