Because they ultimately have to occupy, run and maintain a completed building/facility, the quality of the final product is of great importance to the project owner.
The owner is typically at a disadvantage in their dealings with the other project stakeholders because they have a wide range of responsibilities during the course of a capital project, despite the fact that construction lies outside of their core function. Continuously evolving regulatory landscapes, regulations, best practices and demographics are some of the issues that Owners need to account for when making major capital project decisions. This post outlines the top 3 things every capital project owner needs to know when making complex decisions.
New construction materials mean new financial risk
In today’s construction market, a number of factors - slimming profit margins and the drive towards green building for example - are exerting pressure on builders to experiment with new building materials and new processes. Project owners need to ensure that contractors - as well as the owners themselves – carry out detailed analyses of all new building materials and processes before they are launched on the project site. Even minute changes can dramatically alter the risk metric of a project and project owners need to keep this in mind before signing off on changes.
Vendor Management extends beyond the owner’s choices
Project owners are well aware of the care that must be taken in the selection of a contractor. Failiure on the part of the contractor can delay and/or threaten the delivery of projects. The overall risk metric of a capital project however, extends far beyond the owner’s selections. Project delivery is equally dependent on the performance of second and third tier subcontractors and suppliers. It is therefore extremely important that project owners vet and review the selection procedures of principal contractors and ensure that they meet their own high standards of quality.
Tread carefully during the design phase
It has been estimated that nearly 75% of problems detected on construction projects originate in the design phase. When common errors such as incomplete planning and insufficient design detail show up late on in the project lifecycle, they are far more expensive to fix, in terms of both time and money. To avoid issues rooted in the design phase, owners need to adhere to rigorous consultant pre-qualification procedures, engage independent third party reviewers where possible and finally, ensure that the design phase is allocated as much time as possible on complex projects.
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