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Suggested Citation:"Front Matter." National Research Council. 2002. Proceedings of Government/Industry Forum: The Owner's Role in Project Management and Preproject Planning. Washington, DC: The National Academies Press. doi: 10.17226/10343.
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PROCEEDINGS OF GOVERNMENT/INDUSTRY FORUM

The Owner’s Role in Project Management and Preproject Planning

Committee for Oversight and Assessment of U.S. Department of Energy Project Management

Board on Infrastructure and the Constructed Environment

Division on Engineering and Physical Sciences

National Research Council

NATIONAL ACADEMY PRESS
Washington, D.C.

Suggested Citation:"Front Matter." National Research Council. 2002. Proceedings of Government/Industry Forum: The Owner's Role in Project Management and Preproject Planning. Washington, DC: The National Academies Press. doi: 10.17226/10343.
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NATIONAL ACADEMY PRESS
2101 Constitution Avenue, N.W. Washington, DC 20418

NOTICE: The forum that is the subject of this report is part of a project that was approved by the Governing Board of the National Research Council, whose members are drawn from the councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The members of the committee responsible for the forum proceedings were chosen for their special competences and with regard for appropriate balance.

This study was funded by the U.S. Department of Energy, Contract Number DE-AM01-99PO8006. All opinions, findings, conclusions, and recommendations expressed herein are those of the forum presenters and do not necessarily reflect the views of the National Research Council or the Department of Energy.

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Copyright 2002 by the National Academy of Sciences. All rights reserved.

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Suggested Citation:"Front Matter." National Research Council. 2002. Proceedings of Government/Industry Forum: The Owner's Role in Project Management and Preproject Planning. Washington, DC: The National Academies Press. doi: 10.17226/10343.
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THE NATIONAL ACADEMIES

National Academy of Sciences

National Academy of Engineering

Institute of Medicine

National Research Council

The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished scholars engaged in scientific and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare. Upon the authority of the charter granted to it by the Congress in 1863, the Academy has a mandate that requires it to advise the federal government on scientific and technical matters. Dr. Bruce M. Alberts is president of the National Academy of Sciences.

The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achievements of engineers. Dr. Wm. A. Wulf is president of the National Academy of Engineering.

The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examination of policy matters pertaining to the health of the public. The Institute acts under the responsibility given to the National Academy of Sciences by its congressional charter to be an adviser to the federal government and, upon its own initiative, to identify issues of medical care, research, and education. Dr. Kenneth I. Shine is president of the Institute of Medicine.

The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academy’s purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Academy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Council is administered jointly by both Academies and the Institute of Medicine. Dr. Bruce M. Alberts and Dr. Wm. A. Wulf are chairman and vice chairman, respectively, of the National Research Council.

Suggested Citation:"Front Matter." National Research Council. 2002. Proceedings of Government/Industry Forum: The Owner's Role in Project Management and Preproject Planning. Washington, DC: The National Academies Press. doi: 10.17226/10343.
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COMMITTEE FOR OVERSIGHT AND ASSESSMENT OF U.S. DEPARTMENT OF ENERGY PROJECT MANAGEMENT

KENNETH F. REINSCHMIDT, Chair,

Texas A&M University, College Station

DON JEFFREY BOSTOCK,

Lockheed Martin Energy Systems (retired), Oak Ridge, Tennessee

DONALD A. BRAND,

Pacific Gas and Electric Company (retired), Novato, California

ALLAN V. BURMAN,

Jefferson Solutions, Washington, D.C.

LLOYD A. DUSCHA,

U.S. Army Corps of Engineers (retired), Reston, Virginia

G. BRIAN ESTES, Consulting Engineer,

Williamsburg, Virginia

DAVID N. FORD,

Texas A&M University, College Station

G. EDWARD GIBSON,

University of Texas, Austin

PAUL H. GILBERT,

Parsons Brinckerhoff International, Inc., Seattle, Washington

THEODORE C. KENNEDY,

BE&K, Inc., Birmingham, Alabama

MICHAEL A. PRICE,

Project Management Institute, Newtown Square, Pennsylvania

Staff

RICHARD G. LITTLE, Director,

Board on Infrastructure and the Constructed Environment

MICHAEL D. COHN, Project Officer

KIMBERLY GOLDBERG, Financial Associate

NICOLE E. LONGSHORE, Project Assistant

Suggested Citation:"Front Matter." National Research Council. 2002. Proceedings of Government/Industry Forum: The Owner's Role in Project Management and Preproject Planning. Washington, DC: The National Academies Press. doi: 10.17226/10343.
×

BOARD ON INFRASTRUCTURE AND THE CONSTRUCTED ENVIRONMENT

RICHARD WRIGHT, Chair,

National Institute of Standards and Technology (retired), Gaithersburg, Maryland

MASOUD AMIN,

Electric Power Research Institute, Palo Alto, California

GREGORY BAECHER,

University of Maryland, College Park

JONATHAN BARNETT,

Planning Consultant, Washington, D.C.

MAX BOND,

Davis, Brody, Bond, LLP, New York, New York

MARY COMERIO,

University of California, Berkeley

CLAIRE FELBINGER,

American University, Washington, D.C.

PAUL GILBERT,

Parsons, Brinckerhoff, Quade, and Douglas, Seattle, Washington

YACOV HAIMES,

University of Virginia, Charlottesville

HENRY HATCH,

U.S. Army Corps of Engineers (retired), Oakton, Virginia

JEREMY ISENBERG,

Weidlinger Associates, New York, New York

SUE McNEIL,

University of Illinois, Chicago

DOUGLAS SARNO,

The Perspectives Group, Inc., Alexandria, Virginia

WILL SECRE,

Masterbuilders, Inc., Cleveland, Ohio

DAVID SKIVEN,

General Motors Corporation, Detroit, Michigan

DEAN STEPHAN,

Charles Pankow Builders (retired), Laguna Beach, California

ERIC TEICHOLZ,

Graphic Systems, Inc., Cambridge, Massachusetts

ZOFIA ZAGER,

County of Fairfax, Fairfax, Virginia

CRAIG ZIMMERING,

Georgia Institute of Technology, Atlanta

Staff

RICHARD LITTLE, Director,

Board on Infrastructure and the Constructed Environment

LYNDA STANLEY, Executive Director,

Federal Facilities Council

MICHAEL COHN, Project Officer

JASON DRIESBACH, Research Associate

KIMBERLY GOLDBERG, Financial Associate

NICOLE LONGSHORE, Project Assistant

Suggested Citation:"Front Matter." National Research Council. 2002. Proceedings of Government/Industry Forum: The Owner's Role in Project Management and Preproject Planning. Washington, DC: The National Academies Press. doi: 10.17226/10343.
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Suggested Citation:"Front Matter." National Research Council. 2002. Proceedings of Government/Industry Forum: The Owner's Role in Project Management and Preproject Planning. Washington, DC: The National Academies Press. doi: 10.17226/10343.
×

Preface

Recurrent problems with project performance in the U.S. Department of Energy (DOE) in the 1990s raised questions in Congress about the practices and processes used by the department to manage projects. The 105th Committee of Conference on Energy and Water Resources directed DOE to investigate establishing a project review process. DOE requested the assistance of the National Research Council (NRC), which resulted in the publication of the report Assessing the Need for Independent Project Reviews in the Department of Energy.1 Congress subsequently directed DOE to undertake a review and assessment of its overall management structure and process for identifying, managing, designing, and constructing facilities, and the DOE asked the NRC to conduct an independent review and to develop recommendations to improve DOE’s management of projects. The NRC published the report Improving Project Management in the Department of Energy,2 which provided a set of findings and recommendations for improving project management and noted that improvement would require a program of reform for the entire project management process. These issues were followed up and expanded in the subsequent reports, Characteristics of Successful Megaprojects,3Improving Project Management in the Department of

1  

NRC (National Research Council), 1998, Assessing the Need for Independent Project Reviews in the Department of Energy, Washington, D.C.: National Academy Press.

2  

NRC, 1999, Improving Project Management in the Department of Energy, Washington, D.C.: National Academy Press.

3  

NRC, 2000, Characteristics of Successful Megaprojects, Washington, D.C.: National Academy Press.

Page viii Cite
Suggested Citation:"Front Matter." National Research Council. 2002. Proceedings of Government/Industry Forum: The Owner's Role in Project Management and Preproject Planning. Washington, DC: The National Academies Press. doi: 10.17226/10343.
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Energy,4 and Progress in Improving Project Management at the Department of Energy: 2001 Assessment.5

Many of the findings and recommendations in this series of reports identified the need for improved planning in the early project stages (front-end planning) to get the project off to the right start, and the continuous monitoring of projects by senior management to make sure the project stays on course. These reports also stressed the need for DOE to act as an owner, not a contractor, and to train its personnel to function not as traditional project managers but as knowledgeable owner’s representatives in dealing with projects and contractors.

The NRC Committee for Oversight and Assessment of Department of Energy Project Management determined that it would be helpful for DOE to sponsor a forum in which representatives from DOE and from leading corporations with large, successful construction programs would discuss how the owner’s role is conducted in government and in industry. In so doing, the committee does not claim that all industrial firms are better at project management than the DOE. Far from it—the case studies represented at this forum were selected specifically because these firms were perceived by the committee to be exemplars of the very best practices in project management. Nor is it implied that reaching this level is easy; the industry speakers themselves show that excellence in project management is difficult to achieve and perhaps even more difficult to maintain. Nevertheless, they have been successful in doing so, through constant attention by senior management.

Through this forum, the committee hoped to reinforce some of the other general points made in the above-cited earlier reports. The points include the following:

  • Successful project management requires the institution of a project management discipline that encompasses all projects. It is not sufficient to do some projects well; what is needed is consistency. All the firms represented in the forum have well-defined, disciplined project processes, with buy-in and active participation by senior management.

  • There is an absolute requirement for emphasis on project justification and identification of business or (in the case of DOE) mission need early in every project, even before a project is formalized. Senior corporate (agency) management must be closely involved in this process, as it is their responsibility to identify and interpret business or mission needs.

4  

NRC, 2001, Improved Project Management in the Department of Energy, Letter report, Washington, D.C.: National Academy Press.

5  

NRC, 2001, Progress in Improving Project Management at the Department of Energy: 2001 Assessment, Washington, D.C.: National Academy Press.

Suggested Citation:"Front Matter." National Research Council. 2002. Proceedings of Government/Industry Forum: The Owner's Role in Project Management and Preproject Planning. Washington, DC: The National Academies Press. doi: 10.17226/10343.
×
  • Decision points with options for project approval, go-ahead, change, rework, or termination must be clearly identified. These decisions must be made by appropriate senior managers. The view that the need for senior management decisions slows down good projects is explicitly rejected. A good decision process actually expedites projects, in that it assures that they have the necessary resources, support, and direction to go to successful completion and operation— not merely to the next phase.

  • Accountability and responsibility for project performance must be made clear and well defined across the enterprise. For the enterprise to succeed, all elements must succeed.

  • A corporate organizational structure for project management must be established and maintained.

  • • There must be continual, formal project reviews by responsible management.

  • Expectations, products, and metrics must be clearly defined for the entire process.

  • There is no substitute for thorough front-end planning. This is true even (better, especially) for first-of-a-kind and one-of-a-kind projects.

  • A successful project-management improvement process requires a cultural change, and cultural change is driven from the top.

The speakers covered all these points, and more.

The committee expresses its great appreciation to all the speakers at the forum who generously provided their time and candidly shared their experience and hard-won knowledge about project management:

  • Robert G. Card, Undersecretary, DOE,

  • Bruce Carnes, Chief Financial Officer, DOE,

  • Joseph Gregory, Projects Coordinator, ChevronTexaco Project Resources Company.

  • Steven Harker, Project Benchmarking Manager, Weyerhaeuser Corporation,

  • Edward Merrow, President, Independent Project Analysis, Inc., and

  • James B. Porter, Jr., Vice President, Engineering and Operations, E.I. du Pont de Nemours and Company,

Special recognition is also due to Theodore Kennedy, Chairman, BE&K, Inc., who initiated, organized, and conducted the forum, and to the NRC Board on Infrastructure and the Constructed Environment, which supported it.

The Government/Industry Forum on the Owner’s Role in Project Management and Preproject Planning, held on November 13, 2001, served as a venue for

Suggested Citation:"Front Matter." National Research Council. 2002. Proceedings of Government/Industry Forum: The Owner's Role in Project Management and Preproject Planning. Washington, DC: The National Academies Press. doi: 10.17226/10343.
×

exchanging lessons learned in successful project management between major industrial corporations and the DOE. The committee offers this publication in the hope that these lessons learned may be useful to a wider audience.

Kenneth F. Reinschmidt, Chair

Committee for Oversight and Assessment of U.S.

Department of Energy Project Management

Suggested Citation:"Front Matter." National Research Council. 2002. Proceedings of Government/Industry Forum: The Owner's Role in Project Management and Preproject Planning. Washington, DC: The National Academies Press. doi: 10.17226/10343.
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Suggested Citation:"Front Matter." National Research Council. 2002. Proceedings of Government/Industry Forum: The Owner's Role in Project Management and Preproject Planning. Washington, DC: The National Academies Press. doi: 10.17226/10343.
×
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Recurrent problems with project performance in the U.S. Department of Energy (DOE) in the 1990s raised questions in Congress about the practices and processes used by the department to manage projects. The 105th Committee of Conference on Energy and Water Resources directed DOE to investigate establishing a project review process. Many of the findings and recommendations in this series of reports identified the need for improved planning in the early project stages (front-end planning) to get the project off to the right start, and the continuous monitoring of projects by senior management to make sure the project stays on course. These reports also stressed the need for DOE to act as an owner, not a contractor, and to train its personnel to function not as traditional project managers but as knowledgeable owner's representatives in dealing with projects and contractors.

The NRC Committee for Oversight and Assessment of Department of Energy Project Management determined that it would be helpful for DOE to sponsor a forum in which representatives from DOE and from leading corporations with large, successful construction programs would discuss how the owner's role is conducted in government and in industry. In so doing, the committee does not claim that all industrial firms are better at project management than the DOE. Far from it-the case studies represented at this forum were selected specifically because these firms were perceived by the committee to be exemplars of the very best practices in project management. Nor is it implied that reaching this level is easy; the industry speakers themselves show that excellence in project management is difficult to achieve and perhaps even more difficult to maintain. Nevertheless, they have been successful in doing so, through constant attention by senior management.

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