Project Delivery Systems

Program Management
Program Management
• Program Management is sometimes referred
to as a Delivery Method.
• Many owners and developers, particularly in
the public sector, now favor Program
Management.
• Where they lack sufficient expertise or
resources to manage various elements of
construction.
Program Management
• Program Management has emerged as useful
tool when outside resources are required
• Program Managers are typically involved in all
five phases of the construction process, or at
least most of them
• Often they provide services on multiple
structures or multiple building site
undertakings
Program Management
• The multifaceted scope of work is what most
distinguishes Program Management from
other project management methods.
• Program Managers assume many
responsibilities traditionally undertaken by
owners using in-house resources.
.
Program Management
• A fundamental challenge in defining Program
Management is determining where is a
delivery method or management method
• Project Delivery Systems has been used to
describe both a delivery method and a
management method.
Five Phases of Every Project
Construction Phase Model
Every construction undertaking comprises five
basic phases:
• Real state – Locating and Purchasing real property (land),
identifying its real use, arranging for zoning, permitting,
and environmental compliance
• Financing – Process of obtaining funds to pay for and
develop real property
• Design – Includes architectural and engineering work
• Construction – Improvements are made to real property
• Occupancy – Finished construction product is leased or
sold, Operations and maintenance are setup
Five Phases of Every Project
Construction Phase Model
• Owners often select a management method based
on their comfort level with respect to the various
phases of project development and available in-
house resources to manage those phases
effectively
• For example, most commercial developers and
public owners are confident in their ability to
manage the real state, financing and occupancy
phases
Five Phases of Every Project
Construction Phase Model
• It is a fundamental principal that someone need to
take overall responsibility for each phase of the
construction process
• Many owners retain independent sources to
manage design and construction phase work
Five Phases of Every Project
Construction Phase Model
– Program Managers are typically used in situations
where
• Owner lacks resources
• Program manager is desired to provide overall leadership
in the overall construction process
• Owner believes Program Management is the most
effective way to contain program costs
• Program Management is the owner’s traditional
management method
Delivery or Management Method

• A Management Method is the mechanics by

which construction is administered and
supervised
• A Delivery Method is assigning responsibility and
risk for the delivery of design and construction
services
• Management Method has broader implications
• Delivery Method is typically focused on the
process of how a project is designed and
constructed
Delivery or Management Method

• CM at Risk, DB, DBB are typical examples of

Delivery Method
• Agency CM is a Management Method
• Theoretically, any Management Method maybe
used with any Delivery Method
• It is important to choose a method that best
allocates the responsibility and accountability
for all five phases with minimum duplication of
effort.
Delivery or Management Method

• It is also important to assign responsibility to the

party that is in the best position to manage
potential risks
• It is advisable to select a Management Method
before locking into a Delivery Method
Program Management VS Project Management

• It is often difficult to distinguish a program

manager from a project manager because they
perform many of the same functions and offer
many of same services
• The common use of acronym “PM” for both causes
confusion
• On a fundamental level, Project Managers and
Program Managers are similar because they are
both owner representatives
Program Management VS Project Management

• Both entities have a direct contract with owner

• Both are expected to be owner’s representative
• On a practical level, they have similar
responsibilities in design and construction phases
• Both are required to have similar skills
• Should be familiar with building codes, regulations,
permits etc
Program Management VS Project Management

• Should be able to do constructability reviews,

drawings coordination’s, estimating and scheduling
knowledge
• There is also an overlap sometime in the services
provided by program manager and project
manager during construction phase
• Both are frequently involved in buyout process
• Both are involved in monitoring, cost, time, quality
and safety
Program Management VS Project Management

• Both are responsible for post construction services

that includes commissioning, maintenance,
trainings etc
• It is common for both to be involved in
administrative functions such as processing
requisitions, evaluating and negotiating change
orders and assisting in claims management
Distinguishing between Program Management
and Project Management
• Despite the overlap between Program
Management and Project Management, there are
distinctions
• A Program Manager is responsible for a larger
scope of the construction phase than a Project
Manager
• This scope of responsibility for the building effort is
the key line
Distinguishing Characteristics - Program Management

• Program Managers typically oversee the

construction of multiple structures on the same
site or multiple locations under multiple contracts
• For example: corporate or academic campuses,
office parks, or military bases
• Program Manager also oversee the construction of
various structures for a single owner in multiple
locations such as retail centers, commercial office
buildings, and certain types of public works
projects
Distinguishing Characteristics - Program Management

• Program Management is used to define a situation

in which a single entity has responsibilities of all
five phases
• Using this definition, an entity that manages one or
more project phases beyond the Design and
Construction phases also can be considered as
Program Manager
• Single point contact for most participants
Distinguishing Characteristics - Program Management

• Program Manager often controls the design and

construction and is accountable to the owner for
the project’s financial controls and overall
profitability
• A Program Manager maybe responsible for locating
suitable project sites, obtaining financing, and
arranging for end-use of the finished building
• Program Manager may negotiate contracts on
owners behalf with architects, contractors,
construction managers, project managers etc
Distinguishing Characteristics - Project Management

• Scope of responsibility is more limited

• Oversees a single phase project or is
responsible for overseeing the construction
phase of a multiple building project
• Defined responsibilities
Distinguishing Characteristics - Project Management

• As a general rule, when a project manager’s

level of responsibility moves beyond
construction on a single project, the manager
becomes a Program manager
• Overall financial success of a project is
generally more limited
• Typically required to control construction
costs, participate in value engineering
Distinguishing Characteristics - Project Management

• Sometimes develop an overall budget for

design and construction
• Don’t get involved in locating suitable project
sites and finances
• Don’t get involved in leasing, sales, or
operations and maintenance
Developer as Program Manager

• Three entities that fall under the generic label

“Developer” are:
1. Developer – Entity that develops real property and
maintains an ownership interest in a project or multiple
projects
2. Fee Developer/ Development Manager – An entity that
develops real property in which it has no ownership or
equity interest
3. Fee Developer at Risk – An entity that develops real
property in which it has no ownership or equity interests,
but holds contracts with, and financially responsible to
architect/ engineers, GC, or trade contractors.