. July
REFERENCES
Accounting Guide for Construction Grants U S En-
vironmental Protection Agency, Office of Resources
Management, Financial Management Division, Oc-
tober 1977
Construction Grants 1985 (CG 85) U S En-
»ft Ky"\|-l rYlQm+n I D», 4. j.* A /'^^ «^^« ^.1 I
Management of A Construction Project- A Guide for
OfTf ? MU'S- Environ™<*a' Protection Agency
Office of Municipal Pollution Control, April ?986
Management of Construction Change
-- on
of Water Program Operations, March
Agency,
Prevention and Resolution of Contractor Claims-
n^io£°rSnU^^ntPr°gram Gu''dance for Mu-
nicipal Grants, U.S. Environmental Protection Aaen-
cy, Off,ce of Municipal Pollution Control, Ma?ch1 985
Uniform Appraisal Standards for Federal Land Ac-
quisition, GPO #052-059-00020
For additional information, contact:
EPA Office of Municipal Pollution Control
Municipal Construction Division (WH-547)
401 M Street, SW
Washington, D.C, 20460
EPA Region 1
John F. Kennedy Federal Building
Boston, MA 02203
EPA Region 2
26 Federal Plaza
New York, NY 10278
EPA Region 3
841 Chestnut Street
Philadelphia, PA 19107
EPA Region 4
345 Courtland Street, NE
Atlanta, GA 30365
EPA Region 5
230 South Dearborn Street
Chicago, IL 60604
EPA Region 6
1201 Elm Street
Dallas, TX 75270
EPA Region 7
726 Minnesota Avenue
Kansas City, KS 66101
EPA Region 8
999 18th Street
Denver, CO 80202-2413
EPA Region 9
215 Fremont Street
San Francisco, CA 94105
EPA Region 10
1200 6th Avenue
Seattle, WA 98101
United States , JU
Environmental Protection Agency ' 1986
Washington DC 20460
&EPA IVIanagemetTTof
a Construction
Project:
An Opportunity
and a Challenge
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MANAGEMENT OF A CONSTRUCTION PROJECT:! AN OPPORTUNITY Ais|
INTRODUCTION
To help achieve its mandate to protect America s
waters, the Environmental Protection Agency's goal
is to ensure that its construction grants funds are
being used to complete properly designed, well-con-
structed wastewater treatment systems. In that re-
gard, the Agency has identified two concepts that
have generally resulted in the successful use of
grant funds. These are:
• Good project management and management
planning have proven to be key factors in suc-
cessful construction projects; and
« The purpose of a construction grant is most likely
to be achieved when the municipal official re-
sponsible for the construction project is held
strictly accountable for expenditures and ultimate
performance of new facilities.
A PROVEN APPROACH
Successful management of a wastewater treatment
works construction project is a major undertaking for
any municipality.
Those that have succeeded have gained valuable in-
sight into techniques and approaches that have
worked well in the management of construction pro-
jects. Based on a review of these various ap-
proaches, EPA has developed a booklet entitled
Management of a Construction Project: A Guide for
Grantees, April 1986. It is designed to help a
municipal official responsible for a construction pro-
ject to avoid problems that others have encountered.
Recommendations in this guidance include:
• Designating a project manager to represent
municipal interests;
• Using a team approach to manage the project;
and
• Developing a project management plan.
The guidance also highlights project management
issues and ways they can be addressed. Much of it
can be used as a reference document for the pro-
ject manager. The guidance includes management
plan worksheets that can be used for preparing the
municipal project management plan.
The guidance may also be used by a municipality to
demonstrate its capability to manage a construction
grants project. While use of the management plan
worksheets is optional, each grant applicant is re-
quired by EPA regulation 40 CFR 35.2104 to
demonstrate its project management capability. The
reviewing agency (EPA or delegated State agency)
can be expected to review the municipality's project
management capability demonstration and manage-
ment plan as part of the construction grants over-
sight process.
ESTABLISHING THE PROJECT
MANAGEMENT TEAM
There are a multitude of tasks to be performed,
supervised, approved, analyzed, monitored, and re-
corded throughout the construction of a wastewater
treatment project. The key to good project manage-
ment is to designate a project manager who will
take charge of all project and grant-related activities.
This person should be readily available full-time to
deal with project matters as an employee of the mu-
nicipal government, if possible, and be given the
necessary authority to oversee and coordinate all
project activities.
The project manager on a relatively small project
may do the administrative work and much of the
financial work personally or with temporary help. On
a large or complex project, the project manager may
be supported by a team of professionals who can
provide advice and assistance in specialized areas.
The project management functions are the same,
however, on small or large projects and are com-
mon to all successful project management teams.
THE PARTICIPANTS
The Authorized Representative is the municipal of-
ficial responsible for the project. This person de-
velops and implements the municipality's project
management plan, and organizes a management
team to meet project needs.
The Project Management Team includes the project
manager and administrative, technical, financial, and
legal support.
• Project Manager—Manages the overall project on
behalf of the municipality.
• Construction Manager—May be used on larger or
more complex projects to provide the project
manager with construction management services
including detailed cost estimating, schedule
monitoring, and quality control systems.
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A CHALLENGE
• Administrative Support—Assists the project man-
ager in developing and maintaining the record-
keeping system, prepares progress reports and
grant reimbursement requests, and provides other
support functions.
e Technical Advisor and Support—Ensures that the
project is well-constructed, completed on time,
and satisfies applicable State and Federal re-
quirements. Generally, this team member is re-
sponsible for field personnel, including the resi-
dent engineer and inspectors.
» Resident Engineer—Oversees inspection and
quality control, handles field communications, and
supervises and coordinates work of inspectors.
• Inspectors—Inspect the work and prepare detailed
daily inspection reports.
• Financial Advisor and Support—Establishes and
maintains auditable, financial systems, arranges
financing for municipality's cost share, and
prepares vouchers and disbursements.
• Legal Advisor—Oversees issues related to con-
tract law, legal authority, acquisition of property
" and easements, procurement, and resolution of
disputes.
The Construction Contractor builds the facility and
installs the equipment in compliance with contract
documents. Subcontractors and equipment suppliers
are responsible to the construction contractor.
• Subcontractors—provide specialized construction
services.
• Equipment Suppliers—Fabricate and deliver
equipment, provide warranties and bonds for pro-
duct performance, and furnish shop drawings of
specified equipment.
The Reviewing Agency is the EPA Regional office or
the State construction grants agency if the EPA pro-
gram has been delegated.
PREPARING FOR CONSTRUCTION
Preparing for the construction phase of the project
begins with organizing the project manager's sup-
port team and field personnel. The project manager
should meet with the team as a group to review in
detail the project management plan and organiza-
tional structure. This will ensure that all team mem-
bers understand their roles. At this organizational
meeting, the project manager should provide the
team members with a summary of their major re-
sponsibilities and duties, an organizational chart, the
project schedule, names, addresses, and telephone
numbers of key contacts.
When project management performance was ana-
lyzed nationwide, the activities described below were
identified as areas that most often require the pro-
ject management team's attention before construc-
tion contract award. The guidance highlights tech-
niques that can be used to address these potential
problem areas:
• Procurement Strategies and Procedures—To. pro-
cure the professional and construction services
needed for the project.
• Municipal Coordination—To prevent project delays
in obtaining municipal services to support con-
struction and operation of the project.
• Recordkeeping Procedures—To minimize cost
overruns and delays in project completion, and to
verify the allowability of project costs.
• Financial Management—To ensure accountability
and control of all project funds and to document
that all construction grant funds are used solely
for their authorized purpose.
• Cash Flow Control—To ensure that there will be
sufficient funds available throughout the project to
meet all obligations as they arise.
• Permit Needs—To avoid project delays and addi-
tional costs associated with delays in obtaining
permits.
', • Bonding and Insurance Requirements—To secure
fulfillment of the construction contractor's obliga-
tions and to protect against fire, theft, and other
hazards during construction.
• Work Site Availability—To guard against project
delays and the possibility of cost increases that
are generally not allowable for construction grant
participation.
MANAGEMENT DURING CONSTRUCTION
The project manager should use the project
management team to assure that the project is con-
structed in accordance with approved plans and
specifications, addenda, change orders and grant
conditions. Good communications among all parties
to the project are essential in managing the project
during construction.
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Effective communication tools for the project man-
ager include regularly scheduled project manage-
ment team coordination meetings and a routine for
written communications. In addition, on-site meetings
between the technical advisor or resident engineer
and construction contractors are recommended on
about a weekly basis to monitor actual progress
The project manager, technical advisor, and resident
engineer should also hold management meetings at
least monthly to review progress.
Once construction is underway, the following areas
have been shown to need significant project man-
agement attention:
• Tracking construction progress against project
and contract schedules to ensure the project is
kept on schedule.
* Relating payments to work accomplished to avoid
overpayment.
• Conducting change order negotiations in a man-
ner which will preserve the benefit of the original
competitively bid price.
• Monitoring construction activities closely to an-
ticipate problems that can lead to construction
contractor claims.
• Ensuring that on-site safety, security, traffic con-
rol, and utility coordination are provided to main-
tain the integrity of the project.
PREPARING FOR OPERATION
Before the construction contractor is released the
project manager should conduct a final construction
inspection with the technical advisor, resident en-
gineer, and chief facility operator to assure that all
work has been properly completed. The final inspec-
tion should take place after all equipment has been
tested, and generally after a start-up period in which
all the treatment processes have been run. Before
releasing the construction contractor, all warranties
should be legally transferred to the municipality.
The project manager should also be responsible for
initiating a final inspection by the reviewing agency
when construction is complete. This final inspection
formally establishes that the project has been con-
structed in accordance with the approved plans
specifications, and change orders.
At the end of the one-year certification period, which
begins after construction is completed, the author-
ized representative must certify whether or not the
project meets its performance standards. The project
manager should endeavor to make it possible to
certify that the project does meet its standards by
closely monitoring the status of equipment, opera-
tion of the facilities, and training of operating per-
sonnel during the certification period.
PREPARING FOR FINAL AUDIT
In accepting an EPA construction grant, the author-
ized representative has agreed to make all project-
related documents, books, records, and papers ac-
cessible to the reviewing agency for audit purposes
Either the authorized representative or project man-
ager should be the main point of contact for the
auditors.
During the final audit, a municipality's care in estab-
lishing and maintaining up-to-date and accessible
records will be an advantage. The auditors can be
expected to review accounting records, verify claims
trace transactions, and determine that costs which
were eligible for Federal participation were properly
segregated from ineligible costs. If cost'documenta-
tion is lacking, the municipality may have to reim-
burse the Federal government for overpayments.
Common audit problems that are identified and
discussed in the guidance include:
• Claims for undocumented costs.
• Costs claimed in excess of grant or contract
limitations.
• Costs claimed which have been previously deter-
mined ineligible or unallowable.
• Costs incurred after the authorized construction
contract completion date.
« Redesign or rework costs.
• Inadequate records supporting force account or
administrative costs.
• Costs of unapproved or unallowable chanqe
orders.
• Non-compliance with procurement regulations.
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