Against the Clock: How Extended Planning Improves Projects

Infrastructure projects are complex undertakings that require meticulous planning and coordination. Mid-sized projects (up to $50Million), often overlooked for their larger counterparts, face unique challenges that can result in costly overruns and delays. When these project form part of a larger investment program small overrun and delays accumulate, eroding both funding and goodwill for the program, which reduces benefits delivered to the public. In this blog post, we dissect the pitfalls of inadequate planning and propose a strategic approach to improve project outcomes.

Less Time, Same Scope

In our experience delivering mid-sized Design and Construct (D&C) projects in Australia, we have continued to see a reduction in the specified contract periods. It is common for projects being expected to turn a scoping design into a shovel ready construction plan in as little as 6 months. Contractors and consultants know there is not enough time, but requests for extended contract periods ignored by Project Owners.

In our experience the factors contributing to the continued compression of project delivery timeframes include:

• Delays in obtaining planning approvals.
• Delays in development of procurement
• Optimism bias overlooking the near 100% certainty that the project will experience delay events.
• Unyielding completion dates tied to ministerial commitments – usually linked to state elections.

The compression of design and build time is increasing design conservatism and pushing risk down to the delivering contractor and consultants. At the project level the reduction in overheads looks like shrewd contract management on the part of the Project Owner. However, it inevitably inflates contract prices across the industry with Contractors and Consultants unescapably building the risk into their pricing for future projects.

The Problems of Rushed Planning

The reduction of both available contract period leads the appointed Contractor to insist on starting construction as soon as practicable. This in turn compresses the design phase – often to as little as 6 months – putting the team under immense pressure to deliver. This leads to:

• Inadequate Option and Value Assessments: Clients yearn for comprehensive evaluations, but the breathless timelines force teams to default to “good enough” solutions instead of pursuing value enhancing outcomes.
• Concurrent Engineering and Architecture Design Development: This juggling act results in rework and conservative engineering to accommodate a wider range of architectural possibilities.
• Insufficient Investigation Time: Essential activities like surveys, geotechnical studies, and community consultations occur concurrently with design development. This increases the design team’s reliance on assumptions and therefore design risk.
• Insufficient Time for Coordination: Agile-style sprints in design leave little room for cross-discipline collaboration, pushing unresolved issues to construction teams.

The Domino Effect of Inadequate Design Phase

The repercussions of these compressed timelines present itself in ever-escalating projects costs and the ever constant, but avoidable construction phase delays. These include:

• Increased Construction Costs – Due conservative design assumptions aimed at reducing design rework.
• Diminished Project Benefits – Due to superficial design reviews and value management.
• Delays in Completion – Due to design coordination issues impacting construction.

To illustrate a single design coordination issue on the critical path can easily cost upwards of $200,000 in contractor overheads alone.

A Strategic Solution: Extending the Planning Phase

To combat the problem, we propose a blend of Strategic Realignment and Tactical Adjustment.

Strategic Realignment – Benchmarking

Project owners must align contractual periods with realistic benchmarks drawn from comparable projects, factoring in overruns and key delay events. The benchmarking analysis should look at the following:

• % Overrun Time & Costs – Planned vs Actual Contract.
• % Overrun Time – Planned vs Actual Design Period.
• Key Delay Events – When, What, Why, Cost.

In our experience delivering mid-sized transport infrastructure projects in NSW the overrun in contract period is likely to be between 33-50%. This is anecdotal and any decision of strategic realignment should be based on sound statistical analysis.

Tactical Adjustment – Design Only Phase

Extending to typical D&C contract period by 33-50% on its own will be insufficient to deliver improved outcomes. Project Owner’s must be more explicit in its expectations of the design stage. For the example of a D&C contract extended from 18 to 24-months, this would include:

• 10-12-Month Design & Planning Phase: The contract should explicitly require a dedicated design and planning phase. This will remove the pressure to start construction off the planning and design team and provide adequate time for documenting a thorough plan for construction.
• Structured Design Review Phases: The contract should require fixed periods optioneering, value management and design review throughout the planning phase. During these periods design development work should be limited. These measures aim to provide greater time for thinking and collaboration with reduced risk of design churn. With the overall objective being a reduction in conservatism, increase in quality of design solutions and greater resolution of design details.
• Incentivised Milestones: Encouraging early design (and construction) completion with performance-based bonus payments tied to Key Performance Indicators (KPIs), such as minimal RFIs (Requests for Information), NCRs (Non-Conformance Reports), or construction delays due to design issues.
• Active Management of Typical Project Delay: The Project Owner’s project manager must make the management of frequent causes of delay a priority through the D&C contract period. The Project Owner has data from a wider range of project’s than the appointed Contractor, and so must use this information to actively manage typical causes of delay.

Conclusion

In conclusion, mid-sized infrastructure projects can benefit significantly from a more deliberate and extended planning and design phase. By recognising the true costs of rushed planning and embracing a more thoughtful approach, project owners can achieve long-term savings and enhanced project outcomes. The aim is a predictable and successful project execution that not only serves the community effectively but also raises the bar for the industry at large. We invite project managers and stakeholders to consider these recommendations and share their experiences in implementing these strategies. For more insights and resources on optimising project planning, visit our insights page.