<![CDATA[<P>66The Military Engineer l November-December l 2009
to public funds, negate due diligence
when real-time, 100 percent oversight
is omitted. With the country immersed
in a volatile economic climate, federal
agencies are being cautioned to achieve
construction goals and limited liabil-
ity without ?nancial repercussions for
stakeholders. Demands for transpar-
ency and unbiased business practices
are heard daily throughout the media
as well as the halls of Congress, the in-
tent being assurance to tax payers that
all monies expended on federal projects
are validated.
Now that more than a decade of les-
sons learned have been collected, the
pros and cons of design-build are serv-
ing as a blueprint for success. Innovative
professionals, through oversight, are as-
sisting agency owners with the manage-
ment of cost, schedule and risk. For ex-
ample, the U.S. Army Corps of Engineers
(USACE) regularly executes complex
projects on behalf of other federal agen-
cies. Responsibly, USACE has repeatedly
incorporated cost engineering teams as
a bridge to ensure the execution of lean
cost practices by contractors.
The Cost Engineering Bridge
Tools that enable owners to achieve
?nancial control of projects include
owners representation; thorough tech-
nical scope development; detailed cost
estimating and budgeting; schedule
development and management; value
analysis and engineering; earned value
management systems; and risk analysis
and management.
According to the USACE Jacksonville
District, the districts cost engineer-
ing branch plays an integral role in the
project delivery team during all project
phases, from planning through com-
pletion of construction. As the second-
largest civil works district in the nation,
this has enabled USACE Jacksonville
District to control time and expense on
multi-million-dollar projects through-
out their region.
The design-build model, while not
perfect, does not have to be abandoned
to cure the issues cited by its many crit-
ics. Although a substantial list of cons
suggests that portions of the model are
inherently ?awed, the many advan-
tages of the process suggest it is still a
viable option. Accordingly, applying
from inception an external, unbiased
cost engineering bridge can eliminate
the oversight de?ciency that most crit-
ics cite as the culprit in unsuccessful
design-build projects.
Cost Engineering
In early 2001, a U.S. industrial project
began to encounter numerous publi-
cized design-build issues. Reportedly,
lack of oversight, fast tracking of con-
struction and defective equipment sup-
plied by the contractor ultimately led to
a $4 billion increase in the project com-
pletion cost estimates. Other factors that
enabled continued cost growth included
a combination of estimate maturation,
project execution performance issues
and unplanned technical scope growth.
USACE, on behalf of the agency
owner, successfully inserted a cost en-
gineering bridge in late 2005. This step
was taken to apply a ?nancial tourni-
quet and needed oversight. Through
the provision of owners representation,
cost-estimating reviews, cost analyses,
support negotiations, cost-risk analy-
ses, value engineering and schedule re-
views, the agency owner obtained data
to control its project and reduce unnec-
essary spending going forward.
Institutionalizing Oversight
The project initially received cost, risk,
schedule and technical scope valida-
tions. The information was derived from
a review of relevant baseline informa-
tion, planning documents, project status
reports, technical documents and pro-
cedures provided by the agency owner
and its contractor. The cost engineering
bridge independently assessed relevant
technical, cost and schedule areas. This
evaluation equipped the agency owner
with pricing accuracy, knowledge of ma-
terial usage and realistic timelines for
execution. An owner with a cost engi-
neering mechanism in place to monitor
each phase of design and construction
protects stakeholders from expenditures
stemming from errors.
Preventing Lifecycle Costs
Con?rmation of equipment durabil-
ity and compatibility is essential. In the
case of the sample project, the absence
of this step led to costly repeat construc-
tion. Having an independent compat-
ibility and quality evaluation of mate-
rials is a preventive measure proven to
yield future and in some cases immedi-
ate cost savings to owners. Contractors
purchasing low-grade materials will,
over time, saddle owners with repetitive
replacement costs due to low product
durability.
Managing Cost Increases
Assessment of the sample project
concluded with a conditional valida-
tion of the baseline. There were 12 ?nd-
ings in the area of risk management,
project controls, design review, project
execution plans and hazard analyses.
Ultimately, 25 observations and more
than 40 speci?c recommendations for
project improvements were reported.
The cost engineering team assisted
with the development of a detailed cor-
rective action plan and oversaw efforts
to resolve many of these ?ndings. How-
ever, the maximum ?nancial bene?t to
this and any owner is realized when a
check and balance process is installed
at a projects inception. A cost engineer-
ing team simultaneously verifying con-
tractor submittals results in:
• independent assurance that proposed
budgets and services are aligned;
• identi?cation and clearance on ma-
terials to be utilized by the contrac-
tor; and
• oversight of designs up to 100 percent
completion, preventing construction
errors and unnecessary expenditures
due to costly corrective work.
Closing the Gap
While there is no perfect project
delivery method, there are processes
and specialized tools available to op-
timize an owners execution choice.
The higher standard of care placed on
federal agencies requires that more be
done to safeguard public funds. From
inception to completion, the most re-
sponsible approach on any government
project begins and ends with an effec-
tive controls system.
Tracy Rookard-Everett is Technical Writer,
Project Time & Cost; 770-444-9799, or tracy.
rookard-everett@ptcinc.com.</p>
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