Change is inevitable; scope creep is not.
Project managers in any industry have a difficult task—to plan, organize, direct and control resources to meet a certain objective by a specific date within a finite budget.
For architects, engineers and contractors, the budget imperative is a particular management challenge due to the fixed-fee nature of most professional services agreements, the unique nature of individual project factors and the preponderance of circumstances that are beyond design professionals’ control. Despite careful preparation of project plans, unknown or unanticipated issues can impact the project schedule and therefore challenge the ability of the architects, engineers and contractors to deliver services efficiently.
If the amount or nature of services expands without a corresponding increase in compensation, that is considered scope creep—and can result in negative implications beyond diminished profit margins, including extended accounts receivable, client misunderstandings and even additional elements of design risk such as taking on unanticipated aspects of design services.
For architects, engineers and contractors to fulfill their contractual obligations, satisfy their clients’ expectations and return a reasonable profit to their firms, it is imperative for contracts to:
- clearly define the scope of services and deliverables to be provided for the defined fees, including consultants in the firms’ responsibility;
- distinguish supplemental and additional services from basic services; and
- include project and design schedule definitions to provide an overall context for the provision of services.
Remember that owners have key responsibilities as well, including providing site surveys, geotechnical and environmental reports, identifying a representative authorized to make decisions in a timely manner and processing pay requests and change orders. There may be other parties of the project with key responsibilities that can be relied on by the design and project team, such as a construction manager or general contractor retained to provide cost estimating and other strategic preconstruction services.
The bottom line is the roles, responsibilities and expectations of all participants in the project delivery process should be understood so changes or deficiencies can be identified and addressed as they occur — including, for example, the failure to receive required existing conditions information and increased site observations due to fluctuating construction implementation.
At the execution of the design contract, establish an understanding of the project’s intent and conditions, including location, budget, schedule, functional/technical program, sustainable design goals, project delivery method and other relevant initial information. These factors form the basis of the professional services agreement and changes to these project conditions can justify change in services and additional fees for the architect and engineer.
Project managers should be encouraged to share the business issues and criteria contained in the contract such as the scope, schedule, deliverables, budget and responsibilities of the parties so team members can help the project manager manage change on the project. A well-defined change management identification and control protocol is recommended for each project and should consist of the following key steps.
- Identify: Be able to recognize change conditions when they occur.
- Notify: Follow the chain of communication to notify the project manager and communicate promptly to the client.
- Authorize: Receive authorization. (It is the client’s right in any contract to authorize additional services before they are performed.)
- Document: Record the situation, recommendations and any authorization or other client decision in the project file.
Every project is different—that is the nature of design and construction. Changes will occur, but diligent project management and effective change management can effectively control scope creep to preserve intended profit margins and help avoid client miscommunication.
