Construction Manager-at-Risk Project Delivery for Highway Programs (2010)

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82 INTRODUCTION Barriers to implementing CMR project delivery can occur on several different levels: legislative, organizational, and project. The barriers at each level also take the form of fac- tual barriers and perceptional barriers. Factual barriers are laws, policies, and procedures that do not permit the agency to use CMR. These are easy to identify and their resolution results in a final disposition of the barrier. The agency either can or cannot revise the law. Perceptional barriers are less clear and often are the most difficult to surmount. Perceptional barriers are typically hurdled before the factual ones can be challenged. Changing a system that has been in place for decades requires changing the organization’s procurement culture and that will inevitably encounter resistance from both inter- nal and external stakeholders that are both comfortable with the status quo and believe that change is truly unnecessary (Ellicott 1994). A previous NCHRP Synthesis 376 (Gransberg et al. 2008) measured the magnitude of the impact of percep- tions on the ability to change the procurement paradigm for transportation projects. The procurement change in that study was the shifting of some QA responsibilities to the contractor in DB projects. That study found that in spite of quantitative evidence that the change would not be deleterious to ultimate project quality, 50% of the public officials still believed that the change was dangerous. It also found that 86% of the members of the construction industry who would be directly affected by the procurement system change believed that the change would ultimately be beneficial. The difference in the two groups’ perceptions was both interesting and important. The study showed that the greatest resistance to change came from within the highway agencies that are the ultimate decision makers on procurement system change. Thus, it is important to consider the issue of percep- tional barriers to implementation of CMR project delivery in addition to the factual barriers found in the study. LEGISLATIVE-LEVEL BARRIERS As discussed in chapter three there are legislative barriers to the implementation of CMR. For some states other public agencies are allowed to use CMR, whereas the DOT is not and in other states there is no use of CMR by public agencies. The method to addressing this barrier may differ depending on the state and level of opposition. In addition to changing the regulations regarding project delivery, closely associated legislation and regulations may need to change; these include professional licensing, procurement, funding, permitting, and contracts. The survey identified 22 state DOTs that believed that they had no legal authority to use CMR project delivery. This is a factual legislative barrier. Two of the case study projects (Alaska and Michigan) needed to receive a waiver from their agency procurement regulations to use CMR. The Oregon and Utah DOTs filed SEP-14 applications to receive permission to use CMR project delivery on their federally funded CMR projects. All four cases show a means to overcome a legislative barrier to using CMR for a specific project: requesting an exception to pol- icy or a waiver of law. The contractor interviews included a question about the “single largest barrier to implementation” and revealed one who believed that state and/or local laws were the major barrier. Another selected DOT organizational procurement regulations as the major barrier. One survey response indicated that its state CMR authority capped CMR self-performance at 30% and its industry partners did not want to be constrained by such a low percentage. The survey identified a perception barrier at this level as well. Of the 47 responses, 15 indicated that they did not know what CMR is. Thus, the barrier here is formed by the lack of knowledge. This synthesis is an example of the type of tool that is needed to eliminate this perceptional barrier to CMR. A second perceptional barrier at this level is political opposi- tion. The survey found one DOT that had the authority to use CMR but cited political opposition to its use. The survey also found eight states that indicated industry opposition to CMR would make implementation difficult. There were also seven states that were unsure of support from the construction and design industries. These perceptions are probably a greater barrier than the lack of clear legal authority to use CMR because they will be the most difficult to change. ORGANIZATIONAL-LEVEL BARRIERS Chapter three indicated that some states have the authority to implement CMR but are not using it. There were six states in this category as noted from the survey responses. This may be for several reasons, including organizational barriers. CHAPTER EIGHT BARRIERS TO IMPLEMENTATION

83 “For organizations such as departments of transportation, other public agencies, or private companies, adopting a new approach to procure services for delivery of construction projects requires significant organizational changes; modifi- cations to both their work processes and existing organiza- tional structures may be needed” (Gibson et al. 2007). One such state commented that it did not believe that CMR “is the right tool for linear construction.” Another state echoed this attitude in the following comment: CM-at-Risk works quite well in vertical construction where frequently a very small percentage of the project work is self per- formed by the general contractor and historic sub-contracting packages are well defined and understood. In highway work, the Federal Highway Administration requires that a minimum of 30% of the work be self performed. The surveys were sent to the state construction engineers, and although the responses were anonymous, the potential exists that these perceptions are held by the upper managers that make the project delivery method decisions. The second response clearly demonstrates the power of perception to stifle implementation. Five of the seven highway case study projects were federally funded and approved by the FHWA through SEP-14. Thus, in one state, the only thing stopping it is the erroneous perception that federal requirements cannot be met. In a 2001 study for the TxDOT looking at alternative project delivery systems, primarily DB, the authors suggest some changes within TxDOT to make the change to a new delivery method. These include: • Developing process guidelines and a delivery process; • Assessing the availability of skills required within TxDOT for implementation; • Training members of TxDOT for the delivery system; • Optimizing communication among the parties involved within TxDOT; • Optimizing the pre-project planning process; • Selecting the right projects; • Ensuring selection of qualified contractors; • Developing succinct criteria specifications; • Developing a systematic way to evaluate project results; • Adjusting the policies and procedures that govern the everyday operations; • Changing the administrative, managerial, and operational areas (Walewski et al. 2001); and • Partnering. These recommendations, although made to one DOT for the use of DB, suggest strategies to consider for all DOTs considering using different project delivery systems. One clear benefit to the use of CMR is increased construct- ability. A study of barriers to implementing constructability processes with owners, designers, contractors, and construc- tion managers found seven “problematic barriers to effect construction ability improvement among companies that are claiming to have active constructability programs” (O’Connor and Miller 1994). These barriers are: • Complacency with the status quo, • Reluctance to invest additional money and effort in early project stages, • Limitations of lump-sum competitive contracting, • Inadequate construction experience in design organi- zations, • Designer’s perceptions that “we do it,” • Lack of mutual respect between designers and con- structors, • Construction input requested too late to be of value, and • Belief that there are no proven benefits of constructability (O’Connor and Miller 1994). Another barrier is the desire of DOT design engineers to continue to complete the design with in-house assets. Although there is no technical reason not to do this, there are several issues to be addressed before using CMR with in-house design. First, the in-house designers are not bound to a contract schedule as a consultant would be. Thus, a commitment to follow the CMR’s design schedule would need to be made and honored. UDOT hand picks its in-house design team when it uses internal assets. However, the interview found that design schedule execution is still an issue. Next, the internal design force is used to develop full construction documents. Thus, training for these designers is required to ensure that they understand the appropriate level of design established by the CMR. Finally, using internal design assets will neces- sitate a very thorough partnering immediately after the CMR is selected to develop the level of trust that is necessary for CMR project delivery. Barriers similar to those previously mentioned are not restricted to DOTs or even the highway construction industry. The barriers listed previously in the literature are a combination of factual and perceptional barriers. The Memphis airport case confirmed two of these perceptional barriers: “Designer’s perceptions that ‘we do it’ ” and “lack of mutual respect between designers and constructors.” The solution was to modify the design contract to give the designer an incentive to collaborate with the constructor. Chapter four discussed the issue of timing the selection of the CMR and identified a point of action before significant design decisions are made. This confirms the factual barrier of “construction input requested too late to be of value,” provided by O’Connor and Miller. Additional barriers identified in the concurrent engi- neering research for the process industry that would most likely be similar to the barriers seen in instituting CMR in highway construction include: • Lack of continuity (interruption), • Lack of clear guidance, • Lack of success measures, and • Lack of balance between construction and design (Eldin 1997).

84 Organizational barriers are handled from inside the orga- nization. Thus, an agency planning to change its procurement culture is best served by appointing a champion that can iden- tify and resolve factual and perceptional barriers to imple- mentation. Both the Utah and Oregon DOTs have done this and their CMR projects are testimony to the concept that orga- nizational barriers can be removed. PROJECT-LEVEL BARRIERS One of the organizational changes suggested in the previous section regards the selection of the right project and training personnel. Not all projects and all employees are suitable for all project delivery methods. Chapter three discusses the project criteria that promote the use of CMR. One study’s findings suggest that project representatives institutionalize practices and routines connected to the new approach by adapting to new challenges, rather than ‘overwriting’ previously existing practices. Consequently, the institutionalization of innovative approaches to project delivery happens concurrently with a deinstitutional- ization of the previous approaches. This concurrency produces different effects on the project environment, depending on the mediating action of some emerging practices and the perspective of the involved parties (Gibson et al. 2007). Four of the contractors interviewed stated that internal DOT policies would be the major barrier to implementation. Often this manifests itself as a single project manager who is unwilling or unable to change the way business is done at the project level. “The capability and compatibility of individuals assigned to project management teams can have a significant impact on project results” (Eldin 1997). This synthesis con- cluded that the qualifications and past experience of the CMR’s staff had the greatest impact on quality based on the case study outcomes. This finding is applied to the DOT’s staff as well. Unqualified or inexperienced owner personnel can nullify the benefit of a highly qualified contractor merely by their unwillingness to make decisions in a timely manner. The solu- tion to project-level barriers is to assign the best and brightest personnel to the project on the owner’s, designer’s, and constructor’s teams. Until CMR is institutionalized like DBB, its success will be fundamentally dependent on the quality of the people. CONCLUSIONS There is one conclusion that can be drawn from the previous discussion that meets the protocol established in chapter one. Four sources all essentially point to wide-spread confusion about CMR project delivery as the major barrier to address before its benefits can be made available on a national scale. This is found from two sources intersecting in legislative barriers: 22 survey responses indicating no legal authority and 4 case study projects that obtained waivers. The previously stated source intersection along with the two lines of infor- mation that intersected at the organizational level: perception from the survey that CMR could not be used on federally funded projects and five of seven federally funded highway case studies. Combining the two satisfies the chapter one protocol for at least three intersecting sources to qualify as a conclusion. Surmounting this barrier will require research on the advantages and disadvantages of this process. The research will need to focus on quantifying the performance of CMR projects in terms of cost, time, and quality. The research results can be used to develop education and training pro- grams for agency engineers and decision makers. Once that group truly understands the technical, financial, and con- tracting features of CMR, it will then decide whether or not to seek legal authority to use CMR project delivery where its use is appropriate. This topic does not lend itself to effective practice identi- fication or lessons learned. Therefore, none are offered.