By Phyllis Kulkarni, IPA Regional Director of North America
Governments around the world, from the local to the federal level, spend billions of dollars investing in infrastructure through capital projects. These efforts can range from routine expansions of transportation routes to megaprojects, such as new airports. As in the private sector, meeting capital budgets and delivering value to the customer are key goals. Over the years, Independent Project Analysis, Inc. (IPA) has examined a number of government-run capital projects. IPA understands the challenges that these projects face. Compared to the private sector, government capital projects may have added constraints—such as the contracting strategy that can be used, required contingency levels, and authorization timing—that can impede good planning. They also frequently have multiple stakeholders, including not only the government and private developers but also landowners and constituents. That said, the same project Best Practices that are beneficial to the development and execution of private sector projects are applicable in the government sector. Below are six examples of IPA’s work with government departments around the world:
A defense organization commissioned IPA to benchmark a broad sample of its projects, as well as conduct a study of other civil projects in IPA’s database, to determine the use and benefit of contracting incentives in civil projects. Incentives could include additional money for meeting certain productivity metrics, such as hours per drawing or accepted welds per 100.
IPA examined over 100 civil projects that cost between US$1 million and US$100 million, including laboratories, office buildings, and warehouses. The study quantified how contracting incentives are used, and where they show some benefit. The study documented an array of practices that help civil projects achieve better cost and schedule performance, beyond incentives. The end result was a checklist that the organization could use to determine whether or not to apply incentives.
A government finance department hired IPA to establish quantitative productivity metrics that it could use to better assess contractor project cost and schedule estimates. IPA created a framework for the department to assess productivity at different points in a project’s life. We also analyzed the department’s past projects to understand root causes of better or worse performance. IPA provided the department with recommendations it used to improve site representative participation early on in the project and to standardize and improve its own cost estimating methods to better assess contractor estimates. For example, some projects did not accurately split material and labor costs, which limited the organization’s ability to determine whether procurement or construction required improvement.
An airport was planning an infrastructure expansion to keep up with airline passenger growth. The expansion project was the largest capital investment in the airport since it opened. The client sought to understand its owner team needs for a program of this size, as well as the optimal contracting strategies for design and execution. IPA used its database of project teams to recommend a specific team structure, reporting relationships, and headcount for the program, along with recommendations to effectively use a project manager consultant (PMC).
In this work, IPA compared the defense agency’s schedule durations for typical projects against industry norms, and assessed whether recent measures, such as establishing a central Project Management Office (PMO) and centralized procurement, had improved schedule durations and predictability.
In a multi-year effort, IPA conducted a deep assessment of the department’s capabilities around commercializing new technologies. IPA provided an independent assessment of proposals provided from public and private companies to develop the required new technologies. This helped the department identify the proposals that were most likely to be successful, and opportunities to further mitigate risk. After the accepted proposals were executed, IPA conducted a lessons learned evaluation of the projects.
With an annual project portfolio of about US$5 billion, this rapid transit client needed more comprehensive, standardized investment processes for its project delivery system. IPA conducted an “as-is” assessment to document the current state of its investment processes, developed a “should-be” plan, and is currently identifying solutions to maintain the strengths and close the gaps. IPA was also asked to assist in the implementation of the recommended changes.
For more information on how IPA can help government projects, please contact Phyllis Kulkarni, IPA Regional Director of North America.