EPCM or E-P-CM? – Strategies for Optimizing Project Execution

September 19, 2013

OLYMPUS DIGITAL CAMERAEngineering, Procurement, and Construction Management (EPCM) firms have been the main execution tool for resource projects for some time, and do provide some compelling features.  They provide a single point of contact and responsibility, large resource (employee) pool to handle mega projects, and relative cost certainty (if the envelope is pushed further towards turnkey EPC – Engineer Procure and Construct – contracts) that can be attractive.  There is, however, a growing trend with mid-tier and major producers alike to utilize third party Project or Construction Managers (PM or CM’s).

Why use a third party CM/PM?  The answer varies by owner and project, but generally amounts to a desire for greater direct control over the project while limiting the expense of the owner’s team. A dedicated PM/CM firm effectively expands the owner’s resources to manage the project, creating a skilled and experienced owner’s team that can ensure a focus on project success – uniting the design, procurement, and contractor groups toward a common goal.  A team with extensive project experience to complement an owner’s operations experience can improve project outcomes from stage-gate approvals through commissioning and turnover.

Utilizing a small independent team to monitor and review the design as it is being completed can allow greater involvement through constructability and operability input.  Constructability and operability considerations are far less costly to implement during design, and an integrated owner’s team may be better able to present these opportunities to the design team.  The timely use of value engineering studies with input from construction, operations, and design can not only reduce cost, but also improve the quality of the final product.

The independent team can also provide transparency through the monitoring of design progress, milestone accomplishments, and discipline integration of the project components.  In some cases, projects can become schedule critical through slippages in the engineering and/or procurement deliverables that aren’t identified as critical or required until construction begins.  Having a construction driven focus during the design phase can help to identify and mitigate such potential schedule impacts, as the focus is placed upon what is required for construction rather than focusing on design completion specific goals. Managing and identifying these unknowns or unrecognized items during design is far more schedule and cost effective then identifying and reacting to them during construction.

Diavik AerialDuring execution, a specialized construction management team can provide significant benefit. Often resource companies wish to utilize local contractors to the extent possible as a part of their social licence.  If required, a strong CM team can help to mentor these contractors in order to develop an advanced safety culture and broaden their project controls skills. CM firms often specialize in developing contracting strategies that best match the project goals – the use of fixed price, target price, unit rate, or time and material contracts (or a combination thereof) may be appropriate based on design completeness and risk tolerance to schedule, price, and quality.

Safety is the single most important factor for any project, and developing or reinforcing a positive safety culture within those working on site is the most effective way to keep a project safe.  Many construction management firms are experts in gaining adoption of behaviour based “zero harm” cultures, not through strong policing by dedicated safety personnel, but rather by providing safety leadership with every interaction that every member of the CM team has in the field.

CM firms also often provide additional “value added” services in addition to the standard construction management roles of contractor supervision, issue resolution, and progress, cost and schedule management. These can include CAD modelling and survey management for heavy civil projects (either to verify installed quantities or to allow for placement of materials by owner forces), procurement support, estimating support, stage gate proposal preparation, and feasibility study capex reviews.

A Construction or Project Management firm can be integrated into a project in a number of roles. As an integrated Owner-PM/CM team, they will monitor and support engineering (schedule, value engineering studies, constructability input), optimize contracting (ability to utilize smaller, local contractors through mentoring or to tightly manage a large general contractor) and function as construction manager throughout construction and commissioning. Their work will conclude with a handover to operations.  In this model individual positions can be filled by either the owner or the CM firm, creating a truly hybrid project team across organizational boundaries.

In the role of an independent on-site CM team the owner may have an internal PM team or an Engineering and Procurement (EP) group as the project manager.  CM services provided support either the owner or EP group, and can include value engineering, constructability, and execution as the construction management team throughout construction and commissioning, including the handover to operations.

029The CM firm may also act as the owner’s representative in support of an EPCM group to provide constructability, value engineering, and schedule management.  In this scenario the owner draws upon the construction manager’s depth of project experience to support their internal operations experience.

Ultimately, the key to successful project execution is people; having people with the right skills and experience available when required.  An effective PM/CM team should include a combination of engineering, technical and trades skill sets – all with primarily major project experience – that can be utilized for the project duration. Working with a dedicated Construction Management firm ensures that the right skills and experience are available to the project without the burdens of recruiting and retention for the owner.   Ideal teams utilize a mixture of trades, technologists, and construction experienced engineers in order to ensure the strengths of each background are available.

Praetorian Construction Management provides professional construction management services for the Canadian mining industry – including both open pit and underground operations. We serve as our clients’ frontline interface for the development and construction of projects at both new and existing mines. As an independent project manager without ties to engineering or contracting firms, Praetorian provides clients with an unbiased approach to completing projects.  We excel in delivering projects that are executed safely, on schedule and within budget.  Given our teams’ unique construction management skills, Praetorian offers a complete portfolio of services from reviewing a project’s feasibility through to mine operations. We have both the experience and tools for establishing project control systems, contract management, purchasing services and construction management.

For more information please see our website at www.praetoriancm.com

By Greg Topinka, P.Eng.

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