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INTRODUCTION

Project management and many of its practices originate from construction projects and formed the foundation of the original 1987 document, The Project Management Body of Knowledge. As such, many of the processes and practices within the Guide to the Project Management Body of Knowledge (PMBOK® Guide) [1]¹ are directly applicable to construction projects. The awareness, growth, and recognized value of project management to all kinds of projects and industries has led to a broadening of concepts and an inclusiveness that does not, in some aspects, fully cover current project management practices found in the worldwide construction industry. While the changes may not be substantial, there are sufficient differences from other industries and applications to warrant an extension.

This Construction Extension describes the generally accepted principles for construction projects that are not common to all general project types. The general organization scheme follows the Knowledge Areas from the PMBOK® Guide with the exception of specific processes. While the PMBOK® Guide provides a general foundation for managing projects, this Construction Extension addresses the specific practices found in construction projects. Project management professionals working in the construction industry (architecture, engineering, and construction [AEC]) and other closely related industries should use both documents concurrently in the execution of their responsibilities.

1.1 Projects in Construction

Construction projects should simultaneously address the geography, site conditions, communities, physical environments, existing infrastructure, as well as a wide range of stakeholder requirements. Adding to the complexity is the mix of team specialists and contractors. Construction projects often result in a one-of-a-kind product rather than mass-produced products. While there is generally no opportunity to produce a prototype, a construction project may sometimes be performed in phases in order to provide an opportunity to review and refine the project design and implementation strategy, as well as validate the investment intention.

Inherently, construction projects occur in an ever-changing, complex environment, and often with a high degree of risk. Buildings, highways, residential units, healthcare facilities, utility infrastructures, oil and gas, and other industrial facilities may appear typical, but each project presents its own challenges and risks. Construction projects are not always constructed in the performing organization's principal place of business, but may be constructed in remote, sometimes hostile environments on the open seas, beneath the surface of the earth, and towering high into the sky.

Construction projects often require the integration of engineering disciplines (civil, structural, electrical, mechanical, geotechnical, etc.) as well as interaction with technology and sophisticated equipment that demand unique construction techniques and methods. This can contribute to unique subcontracting arrangements, special financing, risk insurance, compressed schedule timelines, sustainable infrastructure, complex logistics, adaptation to changing governmental regulations, and internal/external constraints, all of which have the potential for significant increases to project and capital costs. The construction industry is almost entirely based on a competitive market environment for project cost, schedule, and performance delivery. Construction projects are becoming increasingly larger, more complex, and more globally competitive, each bearing the potential for an adversarial relationship between the buyers and sellers.

Construction projects typically carry large penalties or damages for projects that are completed late. The risks inherent in construction projects, coupled with these time-related damages, have generated the need for several of the Knowledge Areas to be implemented with enhanced visibility as specialty services. This subset of construction management, referred to as project controls, includes technically advanced disciplines of planning and scheduling, cost management, risk management, document controls, and forensic analysis. Strong project controls services have proven to be a strong component in the success of a project. Generally speaking, construction projects are carried out inside an operational facility, constructed as a new facility (a “green field” project), or constructed in a previously developed or abandoned site (a “brown field” project). Construction projects produce deliverables such as:

• Facilities that make or house the means to make products, such as manufacturing or assembly complexes;
• Public facilities, such as dams, highways, bridges, wastewater and water supply systems, airports, railways, entertainment facilities, museums, and city parks;
• Service facilities, such as medical centers, educational campuses for schools and colleges, seaports, and rail stations;
• High-rise office towers, urban developments, and residential units, communities and their associated infrastructure, including roads, sidewalks, and utilities;
• Specific infrastructures known as utilities that deliver water, electricity, fuel, and telecommunications; and
• Megaprojects such as event-based construction for the Olympics or other superstructures and megacities.

In order to produce these deliverables, construction projects adhere to regulations and jurisdictional (local, global, or industry-specific) requirements where the product will be constructed, for example, civic laws and building codes. In addition, the construction industry is concerned with improving the social, economic, and environmental factors of sustainability, reliability, and the welfare of the affected communities. A multidisciplinary team of financial, insurance, legal, design, safety and engineering specialists; construction teams of various trades; and an efficient supply chain for materials and equipment are needed in order to deliver the project.

A number of factors contribute to the complexity of the construction environment. These include technological advancements and their impact on the application of project management, changes to the building environment through the development of new construction equipment and materials, and the magnitude of stakeholders with varying project expectations (e.g., public taxpayers, regulatory agencies, governments, and environmental or community groups). Complexity may not be immediately apparent when a construction project begins. The development team should carefully analyze the project to determine the complexities of stakeholder impact and potential project ambiguity (e.g., the possibility of emergent issues or situations due to feedback and characteristics of stakeholder interrelationships) before confirming commitments for scope, time, quality, safety, and cost. The analysis should integrate risk management to minimize impacts and improve opportunities for success. Otherwise, a project may result in an uncertain scope of work, an inappropriate methodology for construction execution, and an ambiguous environment, and may fail in timely completion and budget expectation.

Navigating the workflows of a project team within a single organization is challenging in its own right. Navigating workflows across multiple project stakeholders (e.g., owners, developers, designers, engineers, contractors, product vendors, and government agencies) expands the complexity of this challenge. In addition, different organizational systems; interfaces between components; large pieces of equipment in confined work spaces with multiple work crews in close proximity; extensive detail and intricacies of elements; and efficient coordination, control, and monitoring make construction infinitely more complex. Strong evidence from research in the construction industry reveals that one of the factors that cause construction projects to fail stems from decisions made in the front end of the project in the engineering and design phase. Despite their importance, front-end management issues, responsibilities, roles, and actions may not typically garner the required attention. Public and environmental pressures are changing this perspective as more attention is being sought in constructability, sustainability, and reliability of not only the finished product but also the means and methods to get there.

1.2 Purpose and Audience for the Construction Extension

According to the PMBOK® Guide, “Application area extensions are necessary when there are generally accepted knowledge and practices for a category of projects in one application area that are not generally accepted across the full range of project types in most application areas.” Application area extensions reflect:

• Unique or indefinite aspects of the project environment and complexity for which the project management team should be aware in order to manage the project efficiently and effectively;
• Common knowledge and practices, which, if followed, will improve the efficiency and effectiveness of the project (e.g., stakeholder analysis, risk registers, standard work breakdown structures, or cost aggregation for budgets); and
• Familiarity with industry-specific knowledge domains to enable the project manager to manage the project successfully.

This Construction Extension seeks to improve the efficiency and effectiveness of the management of construction projects and includes tools, techniques, procedures, processes, and lessons learned applicable to the construction industry.

The audience for this Construction Extension includes, but is not limited to:

• Construction managers and project managers;
• Contractors;
• Subcontractors;
• Construction specialists, such as estimators, schedulers, cost engineers, project control analysts, and quantity surveyors;
• Architects, designers, and engineers;
• Regulatory agencies and governments;
• Nongovernment organizations (NGO) and private enterprises;
• Environmental groups;
• Community groups;
• Prospective homeowners;
• Risk management specialists;
• Geotechnical and hazardous material experts;
• Real estate developers;
• Construction material and equipment vendors and suppliers, and logistics and transportation specialists;
• Construction consultants and attorneys;
• Insurance, banking, and financial institutions;
• Construction industry trades and professionals; and
• Other stakeholders in the construction process, from land acquisition through design, construction, and occupancy.

1.3 Context and Structure of the Construction Extension

Sections 1 through 3 of this extension describe the framework and specific features that are unique to construction projects and their project life cycles. Sections 4 through 13 correspond to the 10 Knowledge Areas outlined in the PMBOK® Guide with additions or modifications describing attributes specific to the construction industry and emphasizing those activities and practices that are uniquely important in construction.

The Construction Extension introduces two additional Knowledge Areas that are specific to construction projects: Project Health, Safety, Security, and Environmental (HSSE) Management (Section 14) and Project Financial Management (Section 15). In addition, Annex A1 on Managing Claims in Construction provides supplemental information to Section 12, Project Procurement Management.

1.4 Relationships with Project, Program, and Portfolio Management and Other Organizational Considerations for Construction Projects

An organization's role and size often determines whether it will manage its projects within portfolios or programs. Further, each organization will have different criteria to classify projects as small, medium, or large. Many large construction development projects (>US$1 billion) are in fact programs and are sometimes referred to as megaprojects because of substantial impacts on communities, the environment, and investment budgets. Construction projects may be independent from other projects undertaken by the organization. An example would be a small construction contractor that builds a residential house for one owner, while simultaneously building other houses or structures for other unrelated owners in various geographic locations. Some organizations deliver projects in alignment with programs or portfolios, for example, a public agency that executes portions of a major waste water treatment plant expansion one project at a time over a 5- or 10-year time period (see Figure 1-1). These situational environments are often restricted by the funding budget generated by taxpayer revenue or a specific tax assessment for public improvements. Further, tax revenue may fund the budget for governmental departments or a special tax assessment for nutrient removal or energy recovery for a city's municipal services for its population and residents.

From an AEC perspective, entities may describe their portfolios as a specific division, based on expertise, discipline of service, and geographical location. These arrangements can vary widely and are often influenced by the different manner in which an organization generates financial value, supports public welfare, or operates in a geographical location or industrial segment environment. The balancing or prioritization of the projects within these criteria could be a major driver and most likely apply when organizational resources are shared across the organizational structure.

Other organizational considerations involve the strategic planning and projected organizational growth of the performing organization. It is common for an organization to explore growth opportunities by expanding its geographical reach or broadening its construction or design services. One tactic would be the buy-out of subsidiaries that possess similar disciplines or have experience in a certain market or geographic region. This growth may lead the organization to restructure its resources and revenue buckets to more accurately reflect its growth and revenue sources and utilization.

The project management office (PMO) in the construction industry is mainly focused on maintaining internal consistency in the management and execution of projects. Sometimes referred to as maintaining best practices, the following practices supplement the common PMO practices that are especially important in construction:

• Historical project records for cost estimating and bidding;
• Occupational health, safety, security, and environmental management;
• Quality assurance and third-party inspection for quality control;
• Contract administration;
• Subcontractor, vendor, and supplier management; and
• Change order and claims management.

Technology continues to influence the construction industry. With integrated systems for project communications and real-time design and constructability, the construction industry recognizes the need to develop continual growth in the marketplace, strive for management and execution efficiencies, control and manage big projects, and develop competitive strategies.

1.5 The Role of the Project Manager in Construction and Special Areas of Expertise

Understanding and applying the knowledge, skills, tools, and techniques that are generally recognized as good practices is not sufficient for effective construction project management. The role of the project manager in construction requires specialized expertise, as described below.

1.5.1The Role of the Project Manager in Construction

Whether this position resides with the contractor (seller) or owner (buyer), the project manager should have the knowledge, experience, and competence to understand and define the interrelationships among the project management components of the project. Understanding the evolving contractual and human interdependencies in executing, along with team building and stakeholder engagement, are significant skills that address the expectations and needs of each stakeholder. This understanding enhances the construction project manager's ability to monitor and navigate the issues raised by stakeholders.

Lack of planning, poor preconstruction preparation, poor communication and teamwork skills, and weak contract administration are leading causes of problems on a construction project. When coupled with the speed with which information is distributed and decisions are made, a project environment of high complexity and demand is created. To support this environment, the construction project manager is expected to be adaptive and, in some cases, possess a wide knowledge base in construction advancements, such as technology and alternative contracting delivery methods. These changes are shifting the industry to a more holistic and comprehensive approach, which further expands the necessary skills for construction project managers. The urgency and transparency of information often demanded by the owner is now the rule and not the exception. Organizations select project managers based on their experience with similar projects. This gives the organization confidence in the project manager's understanding of construction operations and best practices, and gives the seller the ability to generate expected revenues.

General management skills provide much of the foundation for learning project management and are essential for the project manager, as well as the associated roles in construction. However, these skills go beyond internal organizational skills; they extend to other considerations that influence and interact with the construction project. These considerations are described within the Knowledge Areas and are based on the following interpersonal skills:

• Leading. The construction project manager and the project superintendent are generally expected to be the project leaders. The superintendent is frequently viewed as the site manager responsible for building the project. The project manager mostly interfaces with executive management and assumes common project management responsibilities. Leadership is not limited to these individuals and may be demonstrated by others at different times throughout the project.
• Communicating. Managing the communications and the corresponding documents requires a consistent effort and a communications plan that covers stakeholders’ needs and their levels of understanding. For example, the Request for Information (RFI) seeks clarity and direction regarding construction drawings, specifications, or constructability issues. The flow of information will have different levels and content depending on the recipients and their project responsibility, making this an almost universal tool within construction.
• Negotiating. In construction, negotiating occurs around many issues and most often involves the exchange of money for the performance of services. Estimating the scope and cost of modifications to the contract and negotiating the proposed costs are just a few examples of where this expertise is needed.
• Problem Solving. There is an endless range of situations where this skill is useful. For example, in construction scheduling the proper sequencing of construction activities would also provide a safe and economically controlled series of site operations. A more complex problem may be a labor dispute between trade unions where the distinction between causes and symptoms is integrated and both the corrective and preventive action need resolution in order to solve the problem.

1.5.2Special Areas of Expertise

In construction, expertise is woven throughout the entire project. For example, design development is correlated with value planning, budgeting, scheduling, and risk; procurement of contractor services; job site labor disciplines; constructability techniques; and dispute resolution through final closeout. Other knowledge generally considered essential includes the use of construction industry standards; health, safety, and environmental policies; laws and regulations of the jurisdictional authority and contract administration; and public relations.

Unique socioeconomic influences are found in construction; therefore, it is important to maintain a sensitivity and responsiveness to environmental and community concerns as well as government-mandated regulations and government-sponsored business development programs. Understanding international and local rules and codes, customs, and cultural differences is particularly important for project stakeholders. International code books for construction are available and should be incorporated in organizations operating outside of their home country.

1.6 Public Stakeholders

The construction industry often works under the scrutiny of the public eye and is essentially spending revenue from taxpayers. A public project is subjected to open disclosure, public criticism, and interference from stakeholders who may or may not be directly or indirectly affected by the project. The perceived business value of the general public should be balanced with the public owner's risk along with the project deliverables and expected outcomes. There are also rules and ordinances that govern public projects that, by law, are required to be compliant. Many public owners manage the funding, serve as the sponsor for the project, and take an active role in the planning and execution.

1.7 Explanation for the Use of and Reference to the PMBOK® Guide Processes, Inputs, Tools and Techniques, and Outputs

This Construction Extension reflects the general structure of the PMBOK® Guide. The sections and frameworks for the Knowledge Areas are similar, which enables cross-referencing between the two publications.

Whereas the PMBOK® Guide describes the inputs, tools and techniques, and outputs of each project management process, the Construction Extension only describes the primary Knowledge Area and its alignment with the Process Groups. This alignment is described and illustrated in Section 3. The formatting and arrangement of the Construction Extension is based on principles that generally describe the project management application requirements to deliver the construction project.

1.8 Other Standards

There are thousands of industry consensus standards and model codes propagated by industry associations, just as there are local and governmental codes that management should consider for construction projects. Whether specified or not, many of these documents are required for compliance with building codes and contracts. Only applicable standards as defined by enduser/regulatory authorities should be applied. The enduser (owner) should define and provide a list applicable standards based on the construction project. Project managers in construction should ensure that each trade is sufficiently knowledgeable in its specific trade standards.

Many stakeholders, including those who undertake construction projects, frequently specify standards in their contracts, because the systems developed to comply with these standards can be independently verified and provide stakeholders with additional assurance that the project deliverables are compliant. The primary values of the standards are that they can be used for optimization of designs and used for contractual requirements. It is common for stakeholders to require that the management systems of performing organizations also be standard compliant.

This Construction Extension does not attempt to address all features of the entire range of standards. Rather, it focuses on those that are most commonly associated with construction projects. The International Organization for Standardization (ISO) has developed numerous standards, including those for systems on risk management and communication management. ISO standards also address environmental management, occupational health and safety management, social responsibility, construction, and construction procurement. The References section provides additional sources of information for standards and resources to supplement the various Knowledge Areas.

¹ The numbers in brackets refer to the list of references at the end of this Construction Extension.