Using a Validation Phase to set a project up for success

Background

As part of an Institutional Master Plan for providing healthcare, the Owner committed to developing a replacement hospital on an existing campus in the city.

Obstacle

With work beginning in 2009, the health system could only allocate $250 million to the project despite a strong desire on the part of the City to maximize the healthcare presence in the neighborhood where the project was located.

Approach

Work began by assembling a team of owner project managers, owner business support, designers, engineers, builders, trade partners, and specialty consultants. The Owner typically invests 1-1.5% of the project cost on the validation phase. The team collocated at a Big Room space in the City and began work.

The designers met with user groups to validate the program and immediately began work on block and stack diagrams shared concurrently with the CMGC and trades. This activated a robust continuous estimating process marked by frequent (daily) updates to the current working estimate. Engineers and trades worked to develop building systems narratives prepared concurrently and in alignment with the evolving block and stack.

A key aspect of the effort involved owner business support teammates who maintained a live pro forma. They provided scenarios of key drivers that changed the program, led to a revised block and stack, adjusted the schedule and budget, and produced a capital cost that then changed the ROI in the pro forma.In one notable example, the CAO of the hospital advised the team that she was purchasing an orthopedic group. She asked the team to increase surgery capacity from four to five ORs.

The team ran through a cycle of block and stack, updated schedule and budget, and found that the ROI in the pro forma improved by 18 months. The team then tested six ORs, but the owner declined the alternative as it pushed adjacent program space to another floor. Of note, the team produced these results over the course of only a day and a half of work.

Result

With an initial cost estimate of over $300 million, the project team removed more than $30 million in cost during Validation and teed up the project team for a further savings of $22 million during the course of design and preconstruction. Following a subsequent redesign to increase the number of beds from 80 to 120, the hospital was delivered on budget and five months ahead of schedule.

Lessons Learned

The goal of validation is to work in small, iterative cycles of work that move from pro forma to program and block & stack to schedule and budget and back to pro forma.

Include trade partners to make the work real. Bringing in major trades (structural, MEP, metal stud framing) allows for true evaluation of supply chain, means and methods, procurement, etc. – beyond what the best CMGC estimator can provide.

Recommendation: Pair design assist trades with engineering to develop durable scope, schedule, and budget.

It is a mistake to try to cram months of design work into a shorter time period. Teams often fall into the trap of trying to cram as much design as possible into a validation process. This leads to rushed work, hasty decisions, and unreliable outcomes, resulting in rework and added cost and delay down stream.

RECOMMENDATION: Find other ways than drawing to arrive at a satisfactory validation result.