Program management is emerging as a new tool for owners who have downsized or eliminated in-house construction staff. Such trends in the 1980s and 1990s were an outgrowth of the need to be organizationally lean. Still, the need to renew and expand facilities remains, and many companies are looking to outsource this specialized function.
Program management has emerged in response to these market forces, providing services the owner might otherwise have obtained in-house. Recognizing this trend, the Association of General Contractors (AGC) has published a new form, the AGC 800. This is intended to set the framework for the unique role of program manager, providing the owner with any array of services. The options range from the project conception and planning to establishing the project team, procuring design, overseeing construction and facility start-up. The range of services is nearly as vast as the parties can conceive. It has the flexibility to be used with a variety of project systems.
Program management can bring several benefits beyond the savings realized from eliminating in-house staff. The program manager can bring independent expertise gained from working for a variety of owners. The early involvement of a program manager promotes quality through early value engineering and constructability analysis. It can bring efficiency through single source expert services, and timeliness through project fast-tracking.
The AGC 800 establishes that the project manager is the owner’s agent. The focus of the relationship is the development and implementation of the owner’s program. The foundation is the “team relationship” in which the parties agree to proceed on the basis of trust, good faith and fair dealing.
The AGC 800 then breaks down each party’s responsibilities during each phase of service. This process begins with fully defining the owner’s program. The parties begin to get their arms around the program and set the course for the services to be provided. Next they establish critical lines of communication, procedures and authority. Once this is in place, the master project schedule is established identifying major milestones, long-lead items and compliance tracking. Efficient management of this aspect of the project is essential to its success.
A major element of expertise is typically in the area of cost identification and control. This includes development of budgets and evaluating bids and claims. The final significant benefit of program management lies in the ability to provide quality assurance. Within this topic, the AGC 800 includes the very important issue of safety. Though not directly responsible for safety, the program manager needs to be involved in evaluating and managing safety risks.
As with any new construction contract, the AGC 800 will evolve as best practices are identified by owners and program managers. In the meantime, it provides an excellent foundation on which to build the program management relationship.
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