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|Federal Highway Administration > Publications > Public Roads > Vol. 68 · No. 1 > A Well-Conceived Plan Will Pull It All Together|
A Well-Conceived Plan Will Pull It All Together
by J. Richard Capka
A successful billion-dollar journey starts and finishes with a roadmap.
I had an opportunity to travel through North and South Dakota last fall, visiting sites and tracing some of the steps that Meriwether Lewis and William Clark had made 200 years ago. It struck me that the preparation requirements that preceded that adventure must have been quite similar to those that precede today's transportation megaprojects.
On February 28, 1803, President Thomas Jefferson won approval from the U.S. Congress to fund a small expeditionary group led by Lewis and Clark to explore the uncharted western United States. President Jefferson's goals for the expedition were many: to identify an overland passage to the northwest coast, to survey water routes on the Missouri and Columbia Rivers, to prepare Native Americans for the coming of traders, and to establish intertribal peace to the extent possible. It was a tall order, indeed, with many high expectations.
Over the next 4 years, Lewis and Clark's expedition would travel thousands of miles and come across lands, rivers, and peoples that no one on their expedition had ever experienced before. Their "undaunted courage" and their monumental journey ultimately opened the door to the westward expansion of the United States.
For many of us who manage today's transportation programs, megaprojects can be Lewis-and-Clark-like journeys into the unknown—something that we have never personally attempted previously. Megaprojects require not only a great deal of management courage but also well-conceived plans to define the objectives, shape the preparations, and ensure successful execution. Managing a megaproject is more than managing a major construction effort. It is also managing a public journey. Lessons learned from experiences on megaprojects over the past decade have shown that a hallmark of successful projects is a comprehensive project management plan that serves as a roadmap for the long journey ahead, from start to finish. This roadmap will be key to ensuring a quality product that is delivered safely, on time, within budget, and in a manner that meets or exceeds everyone's expectations.
Establishing a Game Plan
Project management plans are certainly nothing new. The Great Pyramids of Egypt likely benefited from project management plans. Lewis and Clark had a plan before they set out. They had a mission statement, knew where they were headed, had a budget and timeframe, and assembled a team with assigned responsibilities. They took great care both to anticipate their requirements along the journey and to account for the uncertainties that they would surely encounter.
The project management plan provides the guiding philosophies and management strategies for the project, serving as a comprehensive game plan approved by all key project decisionmakers and stakeholders. The project management plan is like an umbrella document under which all of the various supporting documents and planning components fall. Those supporting components capture key decisions, define strategies, and lay out the planning activities that are essential to managing all of the project's parts successfully. (See "Evaluating Your Plan: Asking the Right Questions".)
Several aspects of project management planning deserve special attention in a megaproject environment. Some issues that warrant particular emphasis include the following: adequacy of financial resources; effective integration of public-private sector management; a comprehensive project acquisition (procurement) strategy; identification and mitigation of project risk; and special, focused attention on achieving the ultimate success ensuring public trust and confidence.
Adequate Cash Flow and Financial Plans
Congress originally appropriated a total of $2,500 to fund the Lewis and Clark expedition. The final cost would eventually reach $38,000. Today, challenges to forecast costs accurately and to ensure adequate program funding continue to be major sources of concern. Megaprojects often demand a very significant proportion of a State's overall highway program and can have a considerable impact on the State's budget and bond ratings. Getting the financing right is absolutely crucial.
The project management plan's supporting financial plan will ensure that adequate funding requirements for the project are both identified and will be made available as required by the approved project schedule. Of course, accurately estimating the total funding requirement for a megaproject using year-of-expenditure dollars is a vital first step in developing a solid financial plan. (See "Accounting for Megaproject Dollars".) The estimate and optimum project schedule will provide the basis for determining adequate funding cash flow. Contingencies should be considered to ensure that unexpected occurrences do not undermine the project's financial health.
Synchronizing cash flow with the project schedule demand is much more of a significant consideration on megaprojects than it is on smaller infrastructure projects. Experience on a number of megaprojects at the Federal, State, and local levels has revealed that assumptions concerning the sources of required funding have often proven to be too optimistic. Starting the construction of a project under unrealistic and unachievable funding assumptions can lead to a future financial crisis and expensive delays. "Work-it-out-as-you-go-along" financing is certainly not the answer.
Pulling a financial plan together can be quite complex and often requires special skills. Funding sources may be varied and include both public and private sector sources that may have special restrictions on how they may be used. Large projects may likely require some form of borrowing that will be based on forecasted revenue streams. The various sources of funds must be integrated into an effective plan to support an optimum construction schedule. Innovative but complicated financing strategies are often necessary, and they require considerable skill to assemble and execute.
"It's clear that the project's financial plan provides a framework for maintaining public trust and confidence in a vital area—managing public resources," says John Broadhurst, financial specialist with the Federal Highway Administration's (FHWA) Major Projects Team.
As true for the project management plan itself, each financial plan will be tailored to the needs of the individual megaproject. The major elements include: total cost estimate, implementation plan (including schedule), financing and revenues, cash flow analysis, and an accounting of risk.
(The financial plan, a component of the overall project management plan, is worth special note since there is a statutory requirement to develop one for major projects. Special guidance developed by FHWA is available at www.fhwa.dot.gov/programadmin/contracts/fpgatt.cfm.)
Special attention should be given to converting the complicated megaproject requirement into a manageable series of contract activities that the private construction sector can deliver efficiently. Managers should be willing to explore unconventional or unfamiliar methods of contracting and carefully plan the allocation of risk with the private sector when determining how work will be assigned to the contract construction industry. A single megaproject might integrate a number of separate, large contracts using a variety of contracting tools in order to craft the optimum procurement solution. (See "Breaking from Tradition".)
There are certain advantages to minimizing the number of prime contracts to be managed by the project management team. The degree of risk assumed by the management team is directly proportional to the number of contracts to be managed. However, as with the Central Artery/Tunnel Project in Boston or the Woodrow Wilson Bridge Project near Washington, DC, the mere size of the project might demand awarding numerous large contracts rather than just one megacontract. In cases like these, it is vital that the public sector management team understands and accounts for the additional risk associated with owning and managing complex contract interfaces.
"A megaproject can require the concurrent management of numerous very large and complicated construction contracts," says John Gerner, former project manager with the Woodrow Wilson Bridge Project. "Effectively managing the various contract interfaces is crucial to keeping the project on schedule and within budget. The effect of delays on one contract can quickly multiply and ripple through the entire project, creating much more complex and costly problems to resolve as time goes on."
The project management plan, therefore, needs to account for the changed management dynamic and its inherent risks. The plan also needs to provide a strategy that focuses on assessing the impacts of delay and resolving those impacts effectively. Finally, other significant objectives, such as small and disadvantaged business involvement, labor dynamics, and project management flexibility, will require a well-thought-out acquisition strategy.
Risk Management Strategy
To cover their risks, Lewis and Clark recognized that they had to be trained and equipped to handle a broad array of unexpected encounters. In the spring of 1803, Lewis went to Philadelphia, PA, for instruction in botany, zoology, celestial navigation, and medicine from the Nation's leading scientists. He wrote list after list of provisions he would need, which included guns, ammunition, medical supplies, presents for the Native Americans, scientific instruments, clothing, and camp supplies.
The project management plan must account for how the management team will deal with the inevitable risks associated with large projects. How valid will all of the planning assumptions remain throughout the project's protracted lifetime? How many new requirements or surprises will surface after the project begins?
Major projects undoubtedly will present challenges that cannot be quantified or even forecasted in the traditional sense. But effectively managing the unexpected events, or uncertainty, will play a significant role in the successful outcome of the project. The management team must employ a disciplined and deliberate approach to identify, mitigate, and resolve the effects of unexpected events. (See "Reducing Uncertainty".)
According to Jim Ruddell, construction manager for the Woodrow Wilson Bridge Project, a number of factors make the Woodrow Wilson Bridge an especially big technical challenge. "The Woodrow Wilson Bridge is the only bridge in the United States owned by FHWA," he says. "The project involves the second largest soil-cement stabilization effort on the East coast [behind the Central Artery/Tunnel Project in Boston, MA]. In addition, the bridge crosses a national park [the Jones Point Park in Alexandria, VA] and passes through the habitat of endangered species [the short-nosed sturgeon and bald eagle]. Lastly, the milestone that takes traffic off of the existing bridge in 2006 requires six contractors, each with contracts valued at $50 million or more, to meet a common 6-week window. Writing the special provisions to manage and coordinate the effort has been one of the greatest challenges."
Integrating the Management Team
Lewis and Clark could not have been successful had they not been able to take advantage of and integrate into their team the skills and talents of the individuals and communities that they encountered along their journey.
The project management plan should provide a clear description of the project management team's composition and organization, and how it will conduct business. Roles and responsibilities need to be easily understood. Large projects, more often than not, will require the skills and talents of the private sector to augment those in the public sector's management organization. The plan should describe how those skills will be integrated to provide management with efficient decisionmaking while ensuring that public oversight is—and is perceived to be—appropriate and effective.
Because major projects commonly include multiple States, it is important to have a common plan that crosses multijurisdictional boundaries. In these cases, the plans should describe how the two or more States will synchronize their management, financial, and oversight activities to avoid inherent complications.
Effectively integrating the necessary talent into an efficient management team is vital to the success of the project. "One of the benefits of a project management plan is that it organizes the project team to deliver the objectives of the project in an efficient way," Ruddell says. "Our goal was to have a plan that outlined the schedules, budget, processes, and organization of the project. We have four agencies involved—FHWA and the DOTs from Maryland, Virginia, and Washington, DC—and 180 consultants and 20 agency staff to oversee 27 separate construction contracts concurrently. It was very important for us to define the roles and responsibilities at an early stage to establish an organization that was functional and effective in keeping all the parts well oiled and running smoothly."
Public Trust and Confidence
Lewis and Clark departed Camp Dubois (near St. Louis, MO) for the great unknown on May 14, 1804, but few Americans knew about the expedition until its triumphant return on September 23, 1807.
Today's transportation megaprojects, on the other hand, are conducted under intense public scrutiny. Unlike Lewis and Clark, who had to meet one person's expectations—President Jefferson—project managers of today must satisfy a variety of officials, stakeholders, and representatives of public interests. The projects are highly visible and inherently risky, require significant investment, take a number of years to complete, and often attract regional, if not national, attention. Megaprojects generate high expectations from the public, and management decisions are routinely subjected to critical second-guessing by onlookers. Achieving success under these conditions is a monumental task that cannot be left to chance. The project management plan needs to integrate the objective of building and maintaining public trust and confidence into its roadmap.
"Each project has different areas of emphasis," Ruddell says. "In ours, safety was a major priority, as was integrating the multiple contracts involved in construction of the corridor and taking into consideration the impact on the community. Specifically, we are focusing on timely completion of our construction contracts within budget, which builds public confidence for the prudent use of tax dollars. In addition, we have gone to great lengths to reach out to the public and establish working relationships with stakeholders. Through these relationships, we gather input for construction operations that consider community concerns. During construction, we engage our stakeholders to provide feedback and make adjustments to the extent that we can."
Traditional definitions of project success should be recalibrated. In the past, the success of a construction project was defined in terms of safely delivering a quality product, on schedule and within budget. However, with a much more informed and participating public, it has become clear that the definition of project success must be expanded. Transportation agencies now understand that success requires a new, intense focus on maintaining public trust and confidence throughout the life of a project, from its inception through completion. In fact, public trust and confidence may be the most important measure of success for any major project. This is why the traditional purpose and use of a project management plan must be adjusted when undertaking a megaproject.
The management plan needs to provide a clear project objective and strategy to achieve public trust and confidence. Maintaining public trust and confidence involves clear, unambiguous, and effective communications. The management team must be able to manage the megaproject as if in a "fishbowl," where all decisions are visible to the public, and have a plan that reflects that philosophy. Project owners need to manage the public's understanding of and expectations regarding the purpose and scope, required funding and schedule, and any risks or collateral impacts. The plan needs to define and track an accepted set of metrics against which all parties will measure success and facilitate effective communication to keep the public apprised of any changes to established expectations. The plan should truly guide the management of the public's journey.
Developing and delivering a megaproject is a protracted process. Key players, the environment surrounding the project, and public priorities may change several times during the project's development, yet the project must be managed with a consistent philosophy and set of rules. Without consistency in the project objectives, management philosophy, and management strategy, confusion and inefficiency will ensue. Inconsistency will ultimately result in added cost to the public in terms of money, time, and frustration.
Every transportation infrastructure project moves through a continuum of phases: planning, environmental review, design, construction, and operations. Important factors are identified and key decisions are made during each phase that must be carried through to the subsequent phases. Although the plan will necessarily evolve, adapt, and expand as the project moves from one phase to the next, care should be taken not to lose key information at phase transitions to avoid confusion when trying to define project success. An initial project management plan should be developed early in the planning process to ensure that such information is not lost and to guide subsequent activities and decisionmaking. The project management plan provides a means through which owners can achieve and sustain project continuity.
A successful megaproject leadership team involves a synchronized combination of project managers and proponents. The project management plan, itself, must have the support and concurrence of all key officials and decisionmakers in order to ensure that the management philosophies and strategies reflect a common expectation from both those who are responsible for oversight and those will be responsible for day-to-day management. The entire team should agree on what is to be accomplished and how success will be measured and reported. All key officials need to take ownership of plan, and periodic reaffirmations are crucial to maintaining effective and consistent leadership direction, since officials and managers will most likely change during project delivery.
Capturing Lessons Learned
The process of developing a well-conceived project management plan provides an excellent and disciplined opportunity to capture, assess, and integrate previous lessons learned into the management of subsequent major projects. Developing a project management plan helps managers anticipate challenges and devise plans to address them adequately. A good project management plan will align leadership and stakeholder expectations and energies at the earliest stages by establishing the philosophy, strategies, tactics, and metrics by which the project will be managed and the progress measured.
The plan is a journey of exploration in itself and will most certainly yield a solid roadmap to success, from defining what needs to be done and thinking through the stages of project delivery to searching through the experiences of others, identifying what will be important to project success, and designing a tailored team and set of business processes to execute the project. (See "Case Study: New Ohio River Crossings at Louisville".)
Developing a Template For Success
Although megaprojects present unique challenges and requirements, transportation agencies stand to gain from the established base of previous project experience. FHWA sees great value in leveraging its national perspective to assist States in considering key project elements based on lessons learned from previous projects.
One way that FHWA can help is by developing a draft project management plan, or template, that State departments of transportation (DOTs) can use as a guide to create their own specific plans. Rather than prescribe a cookie-cutter requirement for managing projects, the template would serve as a guide to assist DOTs through the thinking involved and stimulate management's deliberations in preparation for the project. As a result, the States will be in a position to produce high-quality, detailed plans that are clearly and adequately tailored to their specific project requirements.
A Living Document
The project management plan is a living document. Although it imparts consistency of objective and management philosophy, the plan that is developed early in the project development continuum will necessarily evolve to look quite different from that which is used to guide construction. In addition to the change in focus from planning-related activities to design- and construction-related activities, during the protracted life of a megaproject, early planning assumptions might prove to be inaccurate or technologies, techniques, and standard practices might change. The plan needs to be flexible enough to adapt when change requires. And project owners should periodically review and update the plan to ensure that it remains relevant and useful.
Stewardship for Tomorrow's Journeys
The quality of an executed mission is directly correlated to the quality of the mission planning. If Lewis and Clark were to have set out for a second adventure along the same route, they certainly would have been in a much better position to forecast their needs. The new plan would have been more specific and efficient, with much less left to chance. Consequently, the team would be much more comfortable about its expectations for the successful journey ahead.
However, if two other explorers, Jones and Smith, were to have set out for a journey along the same route, would they not be better off if they could tap into the experiences of Lewis and Clark? Armed with knowledge gained from the experiences of the explorers who had gone before them, Jones and Smith could set out with a level of comfort that their challenges were adequately identified and that their planning would lead to success.
Megaprojects are no different. Like Lewis and Clark, few megaproject teams have had previous experience with such large projects, and few will have the opportunity for a repeat performance. Not every State DOT is challenged with a megaproject on a regular basis, as these large projects normally emerge in different parts of the country and are managed by new teams without the advantage of previous experience. Successful outcomes demand filling those gaps in experience. The process of developing a project management plan based on others' past experiences can fill those gaps.
As transportation agencies undertake more and more megaprojects, the FHWA template and the process of developing the project management plan will capture an ever-increasing institutional body of knowledge that will enable managers to become more effective stewards and wise investors of the public wealth. Together, we can deliver successful megaprojects on a routine basis.
FHWA Deputy Administrator J. Richard Capka is responsible for shaping the management of highway megaprojects across the country and developing other FHWA programs and initiatives. Prior to joining FHWA in August 2002, Capka served as chief executive officer/executive director of the Massachusetts Turnpike Authority, where he directed the oversight of the $14.6 billion Central Artery/Tunnel Project in Boston. Capka is a West Point graduate and retired as a U.S. Army Brigadier General after a 29-year military career in the U.S. Army Corps of Engineers. He holds a master's degree in engineering from the University of California, Berkeley, and a master's in business administration from Chaminade University, Honolulu.
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