The NATO Headquarters will be in the news this week. For all the wrong reasons.
Most of the project tools we use originate from the military. Critical Path Networking (Nuclear Submarines), Supply Chain Management, Cost Controls, etc.
But it seems that when it comes to using these tools to build a new headquarters the tools weren’t applied.
BUT – any project launched by an organisation of 29 countries to be run by the Belgian Authorities has one foot in the grave and the other on a skateboard.
The project was sanctioned in 1999. The project got underway in 2010.
The original budget was Euro 457.6 Million. A UK company called BAM UK won the contract at Euro 650 million but the Belgian Authority squeezed that down to Euro 240 million.
BAM UK ‘s motto is ‘we deliver what we promised on time and on budget. The final price will be in excess of Euro 1.4 Billion and it’s 4 years late.
The original project duration was 4 years. BAM UK managed to have that increased to 6 years. So, completion in 2016. It’s being opened this week mid-2018.
The NATO Secretary General Jens Stoltenberg said last week ‘that the building met it’s original budget and is only a year late’.
I suspect that the building is far from complete and that all cranes have been taken off site until President Trump goes to hit the white ball. But before he leaves that Euro 1.4 billion is going on Twitter.
A thought. Would your company have taken that project on?
My view? I’d have grabbed that baby with both hands and dived in head first from a very great height.
Because. 1) NATO pay their bills 2) growth couldn’t be anything else but exceptionally high 3) the project would never be cancelled (too political) 4) it’s managed by the Belgian Authorities (Yahooooooo!!!!)
HSE has gotten pretty good over the years. PPE, Tool-Box Talks, Awareness and so on. All great initiatives that have save many lives and prevented uncountable injuries. But there is a macro-risk that goes unnoticed. A risk that can be identified but usually in retrospect.
It’s a risk that can force people on site to take unnecessary risks, seek shortcuts and put people in danger. It’s hard to spot because it doesn’t show up on site, it’s a risk-mechanism that started (perhaps) even before design began,
If the managers on site stick strictly to their procedures they can avoid the danger but when pressure grows there can be a tendency to waive the rules.
So, what is this monster? How can this HSE risk manifest itself in the early phases of the project and yet no-one sought to stamp on it?
Well it’s because the people who created the monster and the people who have to deal with it never meet. They live in two different worlds. And the HSE Department is in neither.
The monster’s name? The Fixed End Date.
Doesn’t sound very scary or unmanageable, does it? But it is.
The Fixed End Date appears around the time the project is sanctioned and funded. The profitability of the venture depends on the date being met. All of the finance revolves around that event. Nobody from HSE is in the loop.
The project players say the date isn’t fixed. It’s variable with a confidence range (+20%/ – 10% is tossed around at that time) BUT when someone senior enough sets a date it hardens quicker than fast-drying cement.
The other factor is that the date may have been chosen to suit a non-project objective. Nothing to do with ROI but could be about a royal opening, prestige, a gong for the company owner. A host of reasons that fix the date in solid stone. And the project manager isn’t selected yet.
Let’s skip to the period in time when the end date looms large. All of the activities are either critical or loaded with negative float. Additional work that has been hidden forces it’s way onto the agenda. The secret life of the project bursts out into the open like an alien out of John Hurt’s chest.
Someone pushes the red button. The people on site take incoming. The monster rears it’s head.
The long lunches at sanction stage, the prevarication/ procrastination/ political infighting – all forgotten. The task now is to get the welders to weld faster. The drive is to flood the worksites with men, machinery and equipment. The bugle calls up a night-shift, a back-shift, a miracle. A window opens and Commonsense throws itself out.
The project enters a fugue state where there is a hunt for the guilty and punishment for the innocent because the Great Fixed Deadline Has Not Been Met!!!!! And nobody told ME.
Of course, a welder cannot weld faster and the only possible outcome from throwing people into the breech is a steep rise in the probability of an accident. All because a group of people in the possession of scant knowledge with only a vague plan set a Fixed End Date for the project a long long time ago.
The only thing the Project Manager can do is to run a copy of all the weekly, monthly and quarterly reports that showed the real and moving end-date as identified by the Critical Path Network from when he started on the project right up till time now.
If Project Managers don’t have that paperwork? Then hell mend then.
The Stockholm Syndrome was spotted after a robbery in Sweden in the 1970 where bank employees were held hostage. It’s a syndrome where hostages bond with their captors. The hostages develop strong emotional ties with the people who intimidate them.
Sound familiar? Well, it’s happening on your construction sites right now. No, no – stop arguing – right now, check it out.
In a work and contractual situation your people are not hostages and your clients are not captors, but your people on site and the client’s people on site form emotional bonds. I first noticed this when I started working offshore. The client, contractors and sub-contractors formed a bond that excluded anyone who did not work on the platform. People up and down the organization who worked onshore (The Beach) were ‘Them’. The people who stopped us offshore tigers from getting on with it.
So, does it matter?
Well in one area of a contractual relationship it matters a great deal and that’s where it comes to changes in the scope of work or in the way the work is done.
Your people on site are doing extra work or working in a non-contractual way and not only are you not going to get paid for it, you’re not going to find out about it.
Here’s some thoughts.
Contractual Changes Not Associated With the Scope of Work
If your guys (this is my unisex description of anybody on a site) work a 10-hour day as proscribed in the contract, and they have an established number of breaks and non-productive activities (gather tools, walk to work, eat lunch, clean site) then the productive time is (say) 6.5 hours a day. That’s what should be in your schedule.
It’s common on site to think that a 30-hour job will be done by one man in 3 days but it’s 5.3 days for 1 man (because the guy only spends 6.5 hours a day digging).
If the client issues the work permits 30 minutes late and collects them 15 minutes early then your productive day is reduced to 5.75 hours per day. But your schedule is still running on a 6.5-hour productive day. That’s approximately an 11.5% reduction in the day.
This means that your remaining duration will be 11.5% longer that your plan shows.
Lesson 1. A change in work practice is a change and should be managed by the Change Control Procedure and after approvals should be translated into Schedule, Cost and Risk. In the above example the job is going to take 11.5% longer, it’s going to cost more and the risk to the Project Completion Date is high.
But that’s not the full problem – the Project Management Team may not know about it because your people and the client’s people are either a) not aware of what’s in the contract or b) not aware of the ‘productive day’ or c) they’re doing a Stockholm. All three may be going on at once.
Contractual Changes to the Scope of Work.
Let’s start with: what’s the difference between extra scope and ‘a favour’? If you’ve ever worked on site you’ll know what a favour is. A small piece of work that would be administratively difficult to get done (let’s say paint a weld on an adjacent line while the scaffolding is up). Favours oil the wheels of co-operation. No big thing.
But extra scope is anything that’s not specified in the contract. And extra scope should be checked by the client’s engineers – because what seems like an insignificant change to the untrained eye can lead to a disaster. Lesson 2. Turning a blind eye isn’t just doing work for ‘free’ it’s enabling illegal modifications to be done.
The Stockholm Syndrome Can Be Very Dangerous.
You’re working away on site and you go to fit a 6-inch valve. But it’s not there, the client has given you an 8-inch valve. The situation should have been spotted a long time ago but the QA and Materials guys in both organisations didn’t want to upset anyone. They’re ‘Stockholm’d’ up to the eyeballs and back.
Normally an event like this would cause a kerfuffle, but not on a Stockholm Syndrome site. Here two extra 8-inch flanges appear along with 2 x 8-inch to 6-inch reducers. The work is done (the night-shift is the usual place to do it) and everybody is happy. No feathers ruffled, all is wonderful.
The puzzling thing is – they can’t get the proper valve but they can get more flanges and reducers?
The next guys into the breach are the QA guys. The extra welds and bigger valve aren’t on the P&IDs or the Isometric drawing. They flag up a non-compliance immediately and cry havoc – not!
No, they show the change on the red-line drawings to have it as-built later.
Lesson 3. All down the line an illegal and potentially disastrous change has been made. No engineering input, no change register note, no nothing. And nobody at HQ knows about it. Guess whose neck will be on the chopping block if something happens?
(Insert your answer to this here)
What can be done? Lots of things but reviews by an independent department who is not in the Stockholm Loop would go a long way to fix it. Corporate QC Department? Project Director overview?
Here’s my favoured ways to spot it.
1) Every project has changes. That’s a fact. On a well organised project changes might be expected to generate 1 x major and 10 x other change requests a month. On a project that is chaotic it could be 10 x major and 100 x minor a month. Start from there, expect changes.
I don’t have any figures for this but an experienced client and/or contractor could produce historical figures that would give the Project Management Team an idea of what volume be expected. Example: a $XXX valued project could expect claims to the value of $YY. Statistics showing the historical value of changes v original contract values would be helpful.
2) The number of change requests from site don’t match up with the volume of Engineering changes going through
3) If no changes emanate from site? Get your boots on and get down there. Something is going wrong.