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Executive Summary Each year federal government agencies contract with private-sector firms for the design, construction, and renovation of facilities with a total project value in excess of $21 billion. A basis must be developed for each project prior to awarding the design contract to a private-sector firm. This basis is developed through a process called preproject planning, which includes all activities from project initiation up to but not including detailed design. These activities include organizing the planning team, evaluating and selecting options, defining the scope of the project itself (i.e., the type of facility the agency wants to build or renovate, its proposed cost, schedule, and quality), and making a decision about whether to proceed with the project. A project scope of work, also called a project definition package, is the product of a preproject planning process. If the project does proceed, a scope of work for design is then developed to serve as the basis for advertising and awarding a contract for detailed design. The scope of work for design consists of two major parts the contractual requirements (i.e., the services to be provided by the contractor firm, such as deliverables, format, submission deadlines) and the project scope of work developed through preproject planning. Although most federal facilities projects are successfully completed (i.e., they reasonably meet the agency's requirements and expectations), the perception is that development of the scope of work for design for these projects is challenging and in some cases poorly performed. Based on this perception, a study was commissioned by the Federal Facilities Council (FFC) of the National Research Council to identify the elements that should be included in a scope of work for design to help ensure that the resulting facility is one that supports the fulfillment of a federal agency's program or mission. Its objectives also included identifying key practices for developing effective scopes of work for design involving new construc- tion or major renovation projects and identifying key practices for matching the scope of work with the acquisition strategy, given a range of project delivery systems and contract methods. The FFC Standing Committee on Organizational Performance and Management, in collaboration with other federal personnel and FFC staff, provided direction and oversight for this study. G. Edward Gibson, Jr. and Michael Pappas of the University of Texas were tasked with interviewing 25 individuals familiar with facility projects from 13 federal agencies and developing a set of findings based on a large body of related literature, the interviews, and their own experience. Industry practitioners recognize poor definition of project scope as one of the leading reasons that projects fail to meet owners' objectives and expectations and the contractual requirements related to project cost, schedule, and operational performance. Conversely, thorough preproject planning and project scope definition provide the basis

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2 STARTING SMART: KEY PRACTICES FOR DEVELOPING SCOPES OF WORK FOR FACILITY PROJECTS for developing a comprehensive and effective scope of work for design. In the course of their interviews, the study authors found that the same is true for federal agencies. CONCLUSION AND FINDINGS In the course of this study, the authors concluded that the key practice for developing an effective scope of workfor design is to conduct a structured, consistent, and thorough preproject planning process andfully develop a project scope of work. A series of findings that relate to this conclusion are summarized below. Preproject planning and the development of an effective project scope of work are a process that must be managed by all organizations that build facilities. Findings related to this process include the following: Finding 1: "Pockets of excellence" for the planning of federal facilities projects exist within the agencies inter- viewed. However, few mechanisms are in place to widely and systematically share preproject planning lessons learned and successful processes within and between agencies. Finding 2: Different levels of effort and participant skill sets are required for different types of projects. Preproject planning efforts need to be tailored to the specific project type and its complexity. Finding 3: The first key element of an effective preproject planning process is to ensure that the agency is pursuing the "right" project. Preproject planning should begin with good leadership, effective and appropriate involvement of key stakeholders, and a detailed determination of project requirements. Finding 4: To adequately develop a project scope of work, significant design effort by architects, engineers, and consultants is needed to translate project requirements into a basis for detailed design. In effect, a project' s scope of work provides a bridge between the operational and business needs that the facility will meet and the technical aspects of project execution. Finding 5: Project scope verification with key stakeholders is critical. Some agencies use innovative methods to verify the project scope of work, such as planning charrettes, detailed planning checklists, and consensus scope reviews when the project design is 30- to 35-percent complete. Finding 6: One element of an effective crenrolect Planning Process is the structured identification and mana~e- 1 1 J 1 ~7 1 ~7 ~ am, ^^ , , ^^ , , ~ ~ , ~~ ~ .. ~ I - . ~ ~ . ~ . . - ment of risk. This ellort is most ellective when performed prior to "locking ink facility budgets and committing funds for detailed design and construction. Finding 7: Only five of the agencies interviewed use a risk quantification tool prior to requesting detailed design funds. It appears that in many cases project scopes and budgets are locked in prior to significant efforts to define project scope. Finding 8: Six agencies measure their performance on selected individual projects with respect to preproject planning practice usage, and nine measure project performance. However, none of the agencies interviewed indicated that they measure preproject planning, including project scope definition and team alignment practices, across their project management programs. Finding 9: Although preproject planning appears to be done thoroughly on some federal projects, the overall planning effort is inconsistent. Most of the agencies interviewed limit their crenrolect Planning efforts. esneciallv relatively costly activities, to major projects. In order for a preproject planning process to be effective, adequate resources (people, time, and money) must

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EXECUTIVE SUMMARY 3 be applied. The availability of resources was a recurring theme throughout almost every interview, and the following findings relate to resources: Finding 10: Private industry experience indicates that approximately 2 to 5 percent of a project's total cost will fund a cost-effective preproject planning effort (i.e., one that results in a facility project that is on time and within budget). Only three agencies reported this level of investment. Finding 11: Some agencies have "fenced" their preproject planning funds, whereas others use operational funds. To ensure that planning efforts do not compete with operational priorities, dedicating funds to projects and/or preproject planning appears to be a better approach than using operational funds. Finding 12: The length of the federal budget cycle adversely affects the preproject planning process for facilities. With planning horizons of four to seven years, preproject planning requirements are often not taken seriously enough by participants because the project is not an immediate concern, and many believe that the needs will likely change over time. Finding 13: Few agencies adequately train their staffs about industry- and organization-specific preproject plan- ning processes. With some exceptions, federal agencies rely on experience as the main source of preproject planning expertise and provide few training programs related to planning processes. Finding 14: The loss of preproject planning expertise continues in federal agencies as large numbers of profes- sionals retire or leave for other reasons. Many more retirements are imminent. The situation is especially problematic for agencies that rely almost exclusively on experience, rather than structured processes, to develop project scopes of work. Finding 15: The project manager is a key stakeholder and should be involved in the project scope development. In some cases, a project manager is assigned to a project after planning is complete. This can create serious problems with alignment of the team and the loss of project-specific knowledge. Senior managers in the affected agencies need to be involved in addressing the issues outlined in many of these findings. Senior managers are in a position to provide leadership in supporting and implementing the following actions for improving preproject planning efforts and development of project scopes of work: Develop and implement a standardized preproject planning process using experienced, technically profi- cient personnel and provide them with adequate resources (people, time, and money). The owner organization (the federal agency) should lead the planning effort, although some tasks can be outsourced to contractors. Measure the level of effort expended in preproject planning, so that the outcomes of the process can be continuously improved over time. Develop an effective acquisition strategy and set realistic and effective project control baselines in the preproject planning process to ensure a smooth transition into the execution phase and overall project success. Without an effective execution approach, the project will likely flounder and require significant management involvement. Institute a standardized project scope of work communication process, including contract requirements and transition meetings, based on the agency's available project management resources, mission, and expertise. Ensure that the agency pursues the right projects for its strategic direction through appropriate stakeholder involvement and team alignment. Project participants' understanding of the driving factors and priorities for a project is essential if the project scope of work is to reflect critical needs. Effective preproject planning is not a process that can be consistently incorporated throughout an entire organization in a short time frame. Full implementation of these activities requires cultural and process changes

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4 STARTING SMART: KEY PRACTICES FOR DEVELOPING SCOPES OF WORK FOR FACILITY PROJECTS that may take several years to achieve, but it will improve project team formation and cohesiveness, alignment of goals, and project scope definition. The outcomes will be an improved capacity to develop accurate project scopes of work, the ability to predict cost and schedule performance with greater accuracy, and, consequently, an improved capacity to develop effective contractual requirements for scopes of work for design. Ultimately, taking such actions should result in lower costs and shorter schedules for the execution of facility projects. DEFINITIONS Project management terminology varies widely. Several technical terms are used extensively throughout this report and are defined as follows: Acquisition strategy the process of evaluating and selecting a delivery system (e.g., design-bid-build, design- build, construction manager-at-risk, etc.) for a particular project. Alignment "the condition where appropriate project participants are working within acceptable tolerances to develop and meet a uniformly defined and understood set of project objectives" (Construction Industry Institute, 1997). Approval gate a step in the project development process where owner approval is required before proceeding to the next step. Synonymous with critical decision or decision point. Conceptual planning the American Institute of Architects (1987) calls this phase "conceptual design" and defines it as "the start of the facility design process...includes preliminary project estimate, site analysis, and conceptual architectural drawings." Conceptual planning also includes the investigation and selection of alterna- tives regarding site and technology options. Detailed design the final design effort, based on a detailed definition of project scope and the production of construction documents. Feasibility analysis begins with project initiation and includes high-level evaluations of the mission and busi- ness needs. Preproject planning "the process of developing sufficient strategic information for owners to address risk and decide to commit resources to maximize the chance for a successful project" (Construction Industry Institute, 1995~. Includes all activities from initiation of a project to the start of detailed design. These activities include organizing the preproject planning team, evaluating and selecting alternatives, defining the scope of the project, and making a decision on whether to proceed with the project. Project scope of work a description of the project that supports development of the project schedule and project cost estimate. Scope definition the description and development of the requirements and characteristics of a proposed project. Scope of work for design document that serves as the basis for advertising and awarding a contract for detailed design. It details the services to be provided by the designer (deliverables, format, submission deadlines) and the project scope of work. Stakeholders key individuals from functional parts of the organization who will be affected by, or have to live with, the project.