5

PROJECT SCOPE MANAGEMENT

The Project Scope Management section of the PMBOK® Guide is applicable to construction projects. This section of the Construction Extension presents additional considerations for planning, monitoring, and controlling scope on construction projects.

Scope can be managed in various ways depending on the construction project requirements and the performing organization (owner, contractor, construction manager, etc.). Early scope development creates a starting point for an owner, and scope development evolves as the design requirements are created. For a contractor, the scope of work most often comes from a contract and a set of design drawings and specifications.

In construction, scope planning, scope definition, and work breakdown structure (WBS) set the early tone for the project framework, while scope verification and control provide a mechanism to monitor and control project scope in order to deliver a project within budget and on schedule.

The following PMBOK® Guide Process Groups are addressed in this Knowledge Area:

• Planning, and
• Monitoring and Controlling.

5.1 Project Scope Management in Construction

In the construction industry, contract documents, specifications, and design drawings define the scope. The primary scope document in construction is the contract—whether it is a construction contract between the owner and the contractor or a design contract between the owner and the architect/engineer. Secondary documents include drawings and specifications. Design drawings for constructing a facility (e.g., a residential condominium development, a hydroelectric dam, or a petrochemical facility) identify the scope of work, level of quality, tolerances, preferences for materials and equipment, and testing and inspection requirements.

Tender or contract documents and drawings typically define the scope and should be managed in order to deliver the right solution for the owner in an efficient and cost-effective manner. Scope management processes ensure that the construction project includes all the work required—and only the work required—so that the deliverables align with the owner's requirements. This prevents scope creep and the potential risk for claims.

Early scope definition is critical in controlling project costs. Changes on a construction project, when resolved mutually and amicably, generally result in change orders. Claims occur when the appropriate parties cannot agree upon the changes. Additional information on claims is provided in Annex A1.

Large projects may involve multiple contractors and subcontractors. Particular attention should be paid to battery limits. A battery limit is a physical location where the scope ends. For example, when constructing new industrial plants it is common to assign determined units to different contractors, and have one contractor building the off sites (e.g., interconnecting racks, ways, and other structures). In this example, the piping battery limit between a unit and the interconnecting rack is located typically at a valve near the interconnection point, but there should be a clear definition of which contractor is responsible for supplying, installing, and testing the valve. Another challenge in this situation is to ensure a particular portion of work is not duplicated in contractors’ or subcontractors’ scopes. Construction scope management and battery limits are also related to division of responsibilities. A common example is identifying which party is responsible for providing energy and water, and at which point the energy and water will be provided.

5.2 Project Scope Management Planning

Project scope management planning in construction projects is based on the contract, product scope, and division of responsibilities. A make-or-buy decision to subcontract portions of work creates new interfaces and increases the probability of issues related to battery limits and division of responsibilities, all of which pose additional challenges to scope management. Thus, scope management planning and make-or-buy decisions should be performed in tandem for best results. Practitioners should be mindful that while outsourcing decisions transfer part of the scope to third parties, they create additional management activities to consider when planning for scope management.

5.2.1Define Scope

The following aspects should be kept in mind when defining project scope:

• Statutory requirements. Construction projects often require a statutory permit prior to commencing construction. The permit may specify requirements that may impact the project scope. The government establishes minimum safety and health requirements to protect the construction workers, the general public, and the environment. As a condition to obtain a statutory permit, owners usually perform social and environmental impact assessments (SIA and EIA, respectively). Remedial or improvement actions resulting from those assessments are included as part of the project scope and should be planned accordingly.
• Stakeholder requirements. In addition to the processes related to stakeholder management, as discussed in Section 13, stakeholder requirements may influence scope planning. The requirements should be identified and analyzed early to ensure they are properly addressed. For example, traffic in highly populated areas may restrict the delivery of construction materials.
• Contract. Together, the specifications, drawings, legal terms and conditions, and various other technical and administrative project requirements describe the scope. The contract obligates contracting parties to adhere to all contract requirements.
• Design specifications and drawings. Specifications identify the scope of work, level of quality, tolerances, testing and inspection requirements, etc. Industry associations often create and maintain the standards and formats for specifications, which should be considered when producing design drawings and other engineering documentation. Typically, the project management team is responsible for ensuring the drawings are delivered to the project team and the relevant supply chain; therefore, this interface should be clearly defined among the various teams in construction projects. The handling of these responsibilities may be part of the contractor's organization if the project is carried out under a design (e.g., build or EPC contract). Because of the iterative nature of engineering design, there are several stages of progression from preliminary drawings in an early conceptual stage to detailed drawings later in the design phase with the appropriate level of detail to construct a facility. Although scope planning may start with preliminary drawings, construction should not start before the issued for construction (IFC) drawings are issued.
• Life cycle costing, value engineering, and constructability analysis. These three techniques are applied during scope planning, in order to compare different execution alternatives. Constructability analysis involves integrating construction input in early phases of a project so that engineering solutions can take those lessons learned into account and maximize benefits. Life cycle costing and value engineering, as explained in the PMBOK® Guide, help identify which set of alternatives reaches the project objectives and requirements with the greatest safety for all stakeholders, the least social and environmental impact, and the least time and cost. The analysis should encompass all project aspects, including logistics and transportation, availability of machinery and materials, manpower loading, and others.
• Project management aspects. Scope management planning should consider and/or determine aspects such as critical milestones, project budget, deliverables, acceptance criteria, scope exclusions, constraints, assumptions, and results from risk assessment, which together reveal how the project should be constructed.

5.2.2Create WBS

The PMBOK® Guide and the Practice Standard for Work Breakdown Structures [3] provide details on creating a WBS.

Some construction projects in the residential, commercial, and institutional sectors may not include an official WBS, but may follow the format of specifications. These specifications utilize a unique numbering system (called a division) depending on the discipline of the construction trade. In the WBS, these may be divided into construction work packages (CWPs) to aid in scope control. Some owners provide the contractors with a predefined WBS for the project. Working with an unfamiliar WBS may create an added challenge for a contractor.

It is not uncommon in the construction industry to create a WBS with a breakdown of deliverables that directly compose the facility to be built. Deliverables related to project management, such as performance reports, invoices, etc., may be left out of the WBS in those cases. This does not mean that such deliverables have become exclusions; they just do not appear in that particular representation of the project scope.

5.3 Project Scope Monitoring and Control

Project scope monitoring and controlling is critical to delivering a project on budget and schedule. Scope creep, as described in Section 5.3.2, can derail a project. Controlling project scope ensures all requested changes and recommended corrective or preventive actions are processed through integrated change control process.

On unit price contracts, scope monitoring and control may involve actual measuring of quantities. For example, total cubic meters/feet/yards of poured concrete can be measured and compared against the baseline to check for any deviation. In some reimbursable contracts where scope is loosely defined, reviewing performance reports aids in determining whether scope reduction or scope addition is needed depending on if the project is under or over budget.

Managing scope changes is of the utmost importance in construction projects. From the outset, scope control processes should be initiated to determine the factors that lead to project scope changes in order to control their impact on the project objectives. These processes ensure all change requests and proposed actions are evaluated.

5.3.1Scope Validation/Verification

Scope validation is the process of formalizing acceptance of the completed project deliverables. Construction projects have clearly defined phases and required verification steps. The first phase is at the end of the concept phase when the project is approved. The construction contractor may or may not be involved in this process, but it results in a preliminary scope and a contract that generally outlines what is to be constructed. The next phase is a definition phase, where sufficient plans and specifications are developed to provide a baseline criteria, budget, and schedule. The final phase, the acceptance of the project, should be properly completed in accordance with the contract. Completion of each of these phases should be marked by a formal verification process before proceeding to the next phase.

In construction projects, quantity measurements are typically performed to verify installed quantities of materials. The bill of materials (BOM) and material take-offs (MTOs) are material quantity measurements from the drawings. For example, the number of piles installed can be compared against the number of piles within the scope as shown on construction drawings.

On projects involving multiple subcontractors, the bids should be invariably analyzed and adjusted for scope comparison purposes. This is due to subcontractors including or excluding part of the required scope in their bids.

A few examples of milestones signifying the completion of a construction project or the delivery of completed functional parts of the project to the owner for beneficial occupancy are:

• Substantial completion,
• Final completion, and
• Suitability for occupancy.

Inspections aid in verifying completion of these milestones. Generally, a punch list is created to show outstanding items that need to be completed before a particular milestone is considered complete.

Many construction contracts contain a retainage clause where monies are withheld by the owner until it is verified that a contractor has satisfactorily completed the scope of work. Alternatively, owners may request contractors to present performance bonds to guarantee fulfillment of contract obligations. Scope verification, which may include a third-party inspection, is used to ascertain whether the scope is complete. In certain cases, even after the acceptance of the deliverables, there is a warranty period during which bank guarantees or appropriate insurance policies are provided to ensure the functionality of the deliverables during that period.

5.3.1.1Request for Information (RFI)

It is common on construction projects to use a request for information (RFI) document as the basis for scope clarification and change control. Contemporary research has demonstrated that the use of BIM reduces RFIs significantly. RFIs may help identify if there is a need for change orders. The use of the RFI plays an important role in monitoring and controlling not only the scope of the project but also the effective communication of potential scope discrepancies and conflicts.

5.3.2Scope Creep and Change Management

Change is an aspect of every project and may be beneficial; scope creep is not. Scope creep can occur in many ways. Some common examples are design errors/omissions, unclear battery limits, and unrecognized/uncontrolled accumulation of changes by the owner. Scope creep changes may come from project stakeholders (additional recognized needs, incomplete design work, incomplete project documentation, contractor's change requests, etc.), from project conditions (lack of materials, labor issues, new legislation, regulations, etc.), and from project constraints (financing issues, societal issues, environmental issues, etc.). Therefore, construction projects require robust change management processes. The contract documents should be referenced because they specify the scope baseline. Section 4 on Project Integration Management provides additional details on integrated change control management. If not managed effectively, changes stemming from the management of the contractual scope requirements can often lead to disputes.