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An integrated approach to building

June 1, 2007
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The right team and correct early decisions guide successful projects

Whether you are renovating an existing senior environment, repositioning a campus, or building a new continuing care retirement community (CCRC), the earliest decisions can have a substantial effect on the timing, cost, and outcome of construction projects. Similarly, property entitlement issues, property assessments, or facility conditions can greatly dictate success or pitfalls with any renovation and/or new building projects. Consequently, how wisely an eldercare provider organization chooses its development team and how well that team plans ahead will have a significant effect on the long-term success of any construction project.

The trend toward identifying a Program Manager, or Owner's Representative, to lead the construction project team is becoming a vital factor in accomplishing an integrated approach to the building process. Outsourcing can fulfill this role if in-house resources with expertise in senior developments are not available. A typical team includes the Owner, Program Manager, Designer, and Builder. Defining the right team enables project personnel to make early decisions that guide the building from vision to occupancy.

The Process

Begin with the definition of roles and responsibilities for project participants. The Program Manager will need to establish a design and construction delivery method. Traditionally, design-bid-build was done; now other delivery methods such as fast-track, design/build, and construction management are being considered more frequently. A common method today is a Guaranteed Maximum Price (GMP) agreement whereby a General Contractor provides preconstruction services and a contract is negotiated.

In a design-bid-build, or traditional method, full construction documents are competitively bid to multiple contractors and a lump sum for construction is chosen. In a fast-track scenario, multiple bid packages are issued so that construction phases can overlap and reduce the overall duration of building. With a construction manager, an agreement is negotiated for time and materials, with subcontractors bidding. There is no right or wrong way; selecting the methodology that suits your project requirements is the key.

Whatever the method, early involvement of various team members is crucial in completing a building project timely and effectively. A well-qualified Program Manager must understand senior environments, be skilled at zoning processes, have solid experience with the construction type being undertaken, and communicate well with project participants. In this capacity, whoever is functioning as the Owner's Representative should understand where the most common problems occur and be ready to offer solutions. An outsourced Program Manager, if used, should be proficient in construction cost estimation and establishing overall project budgets for senior developments.


Planning for projects should include property assessment or a facility conditions analysis. As an Owner's building program is defined, it is measured against whether construction is to occur on an existing campus or a proposed site. The delivery of the construction project in a timely and cost-effective manner is a key issue in building.

Team Roles

The project team begins achieving its goals by entitling the property for the proposed use. Various team members will assist in securing local municipal approvals. The Owner is in the best position to voice the project's parameters; the Designer's plans respectfully respond to community wishes; the Builder communicates how construction will be handled to minimize disruption; and the Program Manager coordinates all of these efforts.

The Owner will complete market studies, an operational impact analysis, and a financial feasibility determination. A Designer who has a broad range of experience in the proposed type of project will be selected. The Builder will be involved early in the process, knowing local constructability issues and codes, including health department regulations for licensed programs. The Program Manager will run cost estimates to define the project budget and develop the master schedule.

The development timeline identifies milestones of planning and later implementation; it is a road map that guides the process. Team members coordinate efforts throughout the process, with communication being the most important critical success factor.

Every building project prioritizes three factors: schedule, cost, and quality. Effective management moves a project along in a timely fashion. Total project costs are managed through programming, reviewed with value engineering, and then adjusted according to Potential Change Orders (PCOs).

The Building Process

No building process is without its imperfections; PCOs are inevitable. If the planning process has accounted for appropriate contingencies, a PCO is not necessarily a bad thing. A change order can be used to add enhancements to a project. A good schedule also allows for time to address a PCO in order to get the project back on track.

When a PCO comes up during a building project, the building team must know the right questions to ask and have a process in place to evaluate the answers. Review the sidebar (“Potential Change Orders,” p. 19) defining the common types of PCOs. If a building team understands how the project might be affected by change orders, it can anticipate alternatives and work the necessary contingencies into the budget and schedule.