July11-2001_gg00172r.txt

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facility design review area discussed in the study, as well as
the efforts that have been made by federal agencies to address the
conditions covered in the study.


Results in Brief
According to the FFC study, opportunities exist to significantly
reduce total project cost (TPC) by conducting an effective design
review process. The study found that effective design review
practices result in less rework on the part of the construction
contractor, fewer change orders to correct design errors and
omissions, and lowering the cost of belatedly adding project
upgrade features that should have been addressed in the original
design. FFC reported that, historically, 30 to 50 percent of all
construction change orders result from errors in the design
documents directly related to improper interfaces between design
disciplines (civil, structural, architectural, electrical, and
mechanical).
The FFC study notes that attention should be focused on review
of designs during the conceptual planning and design phases, where
the ability to influence ultimate functionality and cost of the
project is the greatest. The study states that the potential
savings resulting from conducting effective design reviews range
from a minimum of 3 percent to as much as 20 percent of TPC, and
even higher when indirect savings are taken into account. The FFC
study concludes that, in the end, effective review of designs
maximizes the probability that a mission or operational requirement
will be successfully supported by a facility that was conceived,
designed, constructed, and placed into operation efficiently and
effectively.
The study identifies 18 best practices that federal agencies and
other facility owners can use to manage and/or oversee design
reviews throughout the facility acquisition process. It organized
the best practices into five categories related to (1) the role of
the owner, (2) teamwork and collaboration, (3) advance planning,
(4) process, and (5) benchmarking.


Background
FFC (formerly the Federal Construction Council) is a continuing
activity of the Board on Infrastructure and the Constructed
Environment of the National Research Council (NRC). It is a
cooperative association of 20 federal agencies with interests and
responsibilities related to all aspects of facility design,
acquisition, management, maintenance, and evaluation. FFC is
convened under the aegis of NRC, the operating arm of the National
Academies. Its mission is to identify and advance technologies,
processes, and management practices that improve the performance of
federal facilities over their entire life cycle, from planning to
disposal. The federal agencies that sponsored the facility design
review study, which was produced as an element of the FFC's 1999
Technical Activities Program, included the


•
Department of the Air Force, Office of the Civil
Engineer;


•
Department of the Air Force, Air National Guard
(ANG);


•
Department of the Army, Assistant Chief of Staff for
Installation Management;


•
Department of Energy (DOE);


•
Department of the Navy, Naval Facilities Engineering
Command (NAVFAC);


•
Department of State (DOS), Office of Foreign Buildings
Operations;



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•
Department of Veterans Affairs (VA), Office of Facilities
Management;


•
Food and Drug Administration;


•
General Services Administration (GSA), Public Buildings
Service;


•
Indian Health Service (IHS);


•
International Broadcasting Bureau;


•
National Aeronautics and Space Administration (NASA),
Facilities Engineering Division;


•
National Institutes of Health (NIH);


•
National Institute of Standards and Technology (NIST),
Building and Fire Research Laboratory;


•
National Science Foundation;


•
Smithsonian Institution, Office of Facilities Services;
and


•
U.S. Postal Service (USPS).


FFC's study discusses the results of a questionnaire survey of
nine federal agencies that acquire, maintain, and operate a
significant inventory of buildings and other constructed facilities
in supporting their mission.2 Questionnaires were answered by
agency headquarters senior facilities engineering program directors
and fieldactivitylevel project managers. In addition, FFC used the
results from research done by The Business Roundtable (TBR),
NRC,
U. S. Army Corps of Engineers (USACE), Construction Industry
Institute (CII),3 and other FFC efforts, as well as others, to
augment the study. A literature search was used to identify
facility acquisition practices and industry trends, as well as best
practices and technologies being used to provide adequate
management and oversight of design reviews. Supplemental
information was obtained through interviews with various public
agencies, private sector facility owners, trade and professional
organizations, and A/E firms in order to characterize the current
state of the art from a broader perspective.
The federal government, the nation's largest building owner,
acquires buildings and other structures to support specific
functions and missions and the general conduct of its business. It
spends more than $20 billion a year for facility design,
construction, and related services. Owners, the government
included, traditionally have maintained some level of internal
facility planning and design oversight capability to ensure that
new facilities acceptably balance the factors of cost, schedule,
quality, and performance.
Over the last decade, as a result of efforts to reduce the size
of government, agencies have downsized their design and engineering
staffs and relied more on outside consultants for technical
expertise. Although agencies have generally retained their design
oversight responsibilities, fewer staff resources are now devoted
to reviewing facility designs. The changes in the facilities
acquisition environment led FFC to conclude that a review of
issues, practices, and methods related to the design phase of the
acquisition process would be beneficial.
2
The report was authored by Ralph S. Spillinger in conjunction
with the FFC Standing Committee on Organizational Performance and
Metrics. Mr. Spillinger is a retired federal official with 30 years
experience in planning, design, and construction of federal
facilities with the Navy and NASA.
3
CII's membership includes several federal agenciesGSA, USACE,
NAVFAC, NASA, DOS, NIST, and the Tennessee Valley Authority.


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FFC Findings
The core issues of the FFC study concern the value added by
design review processes and the appropriate role of facilities
owners, particularly federal agencies, in such processes. In
developing a detailed scope of work for its study, FFC found that
no two of the sponsoring agencies defined the design review process
and its elements in exactly the same way. Nor was a common start or
end point identified for design review. In view of the lack of
commonly accepted definitions of the elements, duration, and
substance of the design review process, FFC decided to focus on
practices for reviewing facility design over the entire facility
acquisition process. The study viewed design review as a
multiphased process not limited to the reviewing of designs during
the design phase of the acquisition. The objective of the study was
to identify a range of best practices and technologies that could
be used by federal agencies and other owners to provide adequate
management and oversight of design reviews throughout the facility
acquisition process.
Briefly, the FFC study presents five key findings on design
review processes.



•
Effective design review processes add value by saving
time and money over the entire facilities acquisition
process.

Effective design review processes result in the preparation of
more comprehensive and accurate design and construction documents
that, in turn, result in lower project construction costs. Areas of
savings include less rework on the part of the construction
contractor, fewer change orders to the owner for correction of
design errors or omissions, and a lowering of the cost of belatedly
adding project upgrade features that should have been addressed in
the original design. Indirect cost savings can be realized by
avoiding costs associated with loss of productivity during
constructiondelayed facility startup, and with litigation. In
short, effective review of designs maximizes the probability that a
business requirement will be successfully supported by a facility
that was conceived, designed, constructed, and placed into
operation efficiently and effectively.



•
The team responsible for design oversight should include
representatives of all project stakeholders: owner, user, A/E,
construction contractor, operation and maintenance staff, and major
equipment vendors.

The team should participate in and contribute to designrelated
activities associated with each phase of the facility acquisition
process, from conceptual planning through startup.


•
The use of metrics by federal agencies to measure the
value added by design review processes is not well
established.


Although research has been done by the Construction Industry
Institute and other organizations to identify metrics that may be
used to measure both the efficiency and the effectiveness of each
phase of the facility acquisition process, the extent to which
individual federal agencies measure design review processes and
analyze results is highly variable.

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•
To provide effective oversight of design review
processes, the owner's interests are best served when the inhouse
staff can fulfill the functions of a "smart buyer.

A smart buyer is one who retains an inhouse staff who
understands the organization's mission, its requirements, and its
customer needs, and who can translate those needs and requirements
into corporate direction. A smart buyer also retains the requisite
capabilities and technical knowledge to lead and conduct teaming
activities, accurately define the technical services needed,
recognize value during the acquisition of such technical services,
and evaluate the quality of services ultimately provided. As long
as the owner retains the inhouse capabilities to operate as a smart
buyer of facilities, there does not appear to be any greater risk
from contracting out a broad range of design reviewrelated
functions, so long as such functions are widely available from a
competitive commercial marketplace. If the owner does not have the
capacity to operate as a smart buyer, the owner risks project
schedule and cost overruns and facilities that do not meet
performance objectives.


•
The ongoing revolution in information technology and
communications offers opportunities to improve design review
processes.


Examples include audio and video teleconferencing, immediate and
widespread data distribution via the Internet, computeraided design
and drafting, and a wide range of project management software.
Emerging technologies, such as the use of holographic projection
techniques to create threeand fourdimensional models of project
designs, guarantee a continuing stream of future enhancements.
The FFC study identifies 18 best practices for the review of
designs, which it summarized as follows:


Role of the Owner


•
Be a smart buyer.


•
Develop a scope of work that clearly and accurately
defines the owner's expectations regarding cost, schedule,
performance, and quality.


•
Avoid the temptation to micromanage the design review
process.




Teamwork and Collaboration


•
Use teambuilding and partnering techniques.


•
Ensure that all interested parties participate in design
review processes.


•
Use the same A/E throughout the process.


•
Use senior, experienced staff to evaluate the evolving
design and guide the review process.


•
Commit for the duration of the activity.


•
Participate in a design awards program.




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Advance Planning


•
Focus attention at the front end during the conceptual
planning and design phases, where the ability to influence the
ultimate cost of the project is the greatest.


•
Do not start the final stage of design until the
preliminary engineering is complete.




Process


•
Tailor the review approach to project
specifics.


•
Keep up the pace of the process to maintain
momentum.


•
Pay special attention to civil, structural,
architectural, electrical, and mechanical interfaces.


•
Exploit technology.


•
Conduct a postoccupancy evaluation to develop a
lessonslearned document.




Benchmarking


•
Measure results achieved by the design
process.



•
Document both unusually good and bad
performance.

FFC's study identifies four areas where it was felt that
additional cooperation, research, and discussion could lead to
either fundamentally new approaches or significant improvements to
current practices. These areas are


•
establishment of a seniorlevel advisory group on federal
facilities issues;


•
identification of a set of metrics that could be used to
measure performance across all phases of the facility acquisition
process;


•
evaluation of current practices of federal agencies with
regard to the standards, guidelines, and policies supplied to A/Es
in support of facility acquisition activities; and


•
study of the potential benefits of establishing a peer
review process for agency design review practices.


The study also identifies a number of federal agency initiatives
related to the design review process. These initiatives are
included in the enclosure to this letter, which provides a more
detailed presentation of pertinent information extracted from the
FFC study relating to the changing facilities acquisition
environment confronting federal agencies today, facility
acquisition practices and trends, and best practices.



Government/Industry Forum
On May 24, 2000, FFC sponsored a government/industry forum on
best practices for reviewing facility designs. Approximately 120
individuals from 30 federal agencies registered to attend the
forum. The major participants were GSA, all branches of the
Department of Defense, DOS, DOE, NASA, and the Smithsonian
Institution.
The forum highlighted identified best practices and tools that
can be used by federal agencies and other facility owners to manage
and/or oversee design reviews throughout the facility

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acquisition process. The findings and 18 best practices
highlighted in the FFCsponsored study were presented to the forum
participants by FFC. Government and industry practitioners
discussed best practices, tools, and processes they have used or
seen used to review facility designs, and suggested how federal
agencies could use such tools and processes to foster quality
design.
In addition, presentations were made on three systems that have
been developed to support different aspects of the design review
process. These design review tools were the Army's DrChecks
software program for documenting, collecting, distributing, and
archiving design review comments; the Construction Industry
Institute's (CII) Project Definition Rating Index for preproject
planning; and the REDICHECK Interdisciplinary Coordination system
for design reviews-the first system designed specifically to
correct the interdisciplinary coordination discrepancies that
account for about half of the construction change orders involving
errors and omissions.



FFC Comments
On May 24, 2000, we asked both the FFC Staff Director and the
primary author of the FFC study to review and comment on a draft of
this letter and enclosure I. Both concurred with our presentation
of the information. In her letter dated June 7, 2000, the FFC
Director said that the letter fairly and objectively presented the
findings of the FFC study, and the primary author in his letter
dated June 5, 2000, said that the abridgement of the study both
accurately reflected the report and maintained its spirit and
intent. Both provided minor technical changes and updated
information, which we incorporated into the letter and enclosure I
where appropriate. The FFC Director's letter is reproduced in
enclosure II, and the letter of the primary author of the FFC study
is reproduced in enclosure III.
We are sending copies of this letter to Senator George V.
Voinovich, Chairman, and Senator Max S. Baucus, Ranking Minority
Member, Subcommittee on Transportation and Infrastructure, Senate
Committee on Environment and Public Works; Representative Bob
Franks, Chairman, and Representative Robert Wise, Jr., Ranking
Democratic Member, Subcommittee on Economic Development, Public
Buildings, Hazardous Materials and Pipeline Transportation,
Committee on Transportation and Infrastructure; and to others upon
request.
If you have any questions about this letter, please call me or
Ron King at (202) 5128387.

Bernard L. Ungar
Director, Government Business Operations Issues
Enclosure I


Abridgment of the Federal Facilities Council Study on Facility
Design Reviews
WecondensedtheFFCstudyAddingValuetotheFacilityAcquisition
Process: BestPracticesforReviewingFacilityDesigns,FederalFacilities
CouncilTechnicalReport#139(Washington,D.C.:NationalAcademy
Press,n.d.),authoredbyRalphS.SpillingerinconjunctionwiththeFFC
StandingCommitteeonOrganizationalPerformanceandMetrics,tofocus
onissuesthataddresstheconcernsoftherequesters.Wemademinor
revisionstothewordinginsomeinstancesforclarityandcontextual
purposes.Wealsoomittedpartsofthestudy,includingsomefootnotes
andbibliographicreferences,toshortenthepresentation.Wehave
neverthelessretainedtheessentialelementsandrelativecompletenessof
theoriginalFFCstudy.

Background
The federal government, like private corporations and other
organizations, acquires facilities to support specific functions
and missions and the general conduct of its business. Confronted
with a requirement to acquire a building or other constructed
facility, owner organizations, both public and private,
traditionally participate in a multiphased process involving
conceptual planning, design, procurement, construction, and
startup. Throughout this process, owners usually maintain some
level of design oversight to ensure that the acquired facility is
an acceptable balance of cost, schedule, quality, and
performance.
Until the 1990s, federal agencies often maintained an inhouse
facilities engineering organization, comprised in part of
architects and engineers, responsible for both the technical
aspects and the oversight of the planning and design phases of the
acquisition process. As a result of executive and legislative
initiatives to reduce the size of the government, federal agencies
have downsized their design and engineering staff. Agencies are
increasingly using outside consultants to provide technical
expertise for the planning and design phases of both new projects
and major renovations of existing facilities. Although oversight
responsibility for the facility planning and design phases
generally remains within the agencies, fewer staff resources are
being devoted to the effort than in the past.
Concurrent with downsizing, procurement regulations have been
modified to allow agencies greater flexibility and choice in
selecting contracting methods for acquiring facilities. As recently
as 5 years ago, the designbidbuild method of facility acquisition
was used almost exclusively. Today, agencies increasingly rely on
designbuild, construction management, and program management
contracting methods. Further, advances in computeraided design and
other technologies are occurring

Defining Design Review
simultaneously with process changes in federal agencies,
increasing the importance of technology support in the design
process.
Prior to developing a detailed scope of work for the study, the
sponsor agencies shared information on their own design review
processes and the design review processes of some private sector
organizations with which they were familiar. Analysis of this
information revealed that no two of these organizations defined the
design review process and its various elements in exactly the same
manner. Nor was a common start or end point identified for design
review as an element of the facility acquisition process.
For some organizations, design review was limited to reviewing a
consultantprepared schematic design to ensure that it met the owner
organization's functional requirements for floor area, functional
adjacencies and connections, and budget. For other organizations,
design review primarily involved reviewing a more detailed facility
design prepared by an inhouse design team or a private A/E firm
under contract.
The level of the review and the elements reviewed-for example,
architectural reviews, mechanical and electrical interface reviews,
or constructability1 reviews-also varied. Some processes were
formal, incorporating design reviews at specific design milestones
(such as at 15, 30, and 60 percent of design completion). Others
were less formal, relying on periodic meetings between the owner
and the design team to review the progress being made toward
preparation of final construction contract plans and
specifications.
The core issues of the FFC study concerned the valueadded of
design


Study Purpose and
review processes and the appropriate level of oversight for
owners of
Objective facilities, particularly federal agencies, in such
processes. FFC's objective was to identify a range of best
practices and technologies that can be used by federal agencies and
other owners to provide adequate management and oversight of design
reviews throughout the facility acquisition process. Specifically,
it sought to provide answers to the following questions:


•
What is the valueadded of design review
processes?


•
How do (and how can) federal agencies measure the
valueadded?


1
In constructability reviews, experienced construction managers
look for such items as inappropriate materials, physical barriers,
and complex interfaces that will unnecessarily complicate the
construction phase.
Page 9 GAO/GGD00172R Study on Facility Design Reviews


•
What is the role of inhouse staff, and what value do they
add to design review processes?


•
What functions are being (and should be) contracted to
outside consultants?


•
What skills and resources do federal agencies need to
provide effective oversight of design review processes?


•
What risks and liabilities do federal agencies face in
outsourcing most or all of their design review
functions?


•
How can new and emerging technologies be integrated into
design review processes?




The process of acquiring a
facility usually includes five phases that can be generalized as
conceptual planning, design, procurement, construction, Practices
and Industry and startup. The contracting method used will
determine whether the five phases occur in sequence or if some
phases occur concurrently. The
contracting method can also affect who is involved at each phase
(A/E,
construction contractor, etc.). For example, using the
designbidbuild
contract method, the five phases generally occur in sequence
with the A/E
involved in the design phase and a construction contractor in
the
construction phase. A designbuild acquisition, in contrast, will
use the
same contractor for the design and construction phases, thus
allowing
some phases and activities to occur concurrently. Regardless of
the
contracting method used, the acquisition of a facility will
necessarily
involve activities and decisions related to all five phases.
During the conceptual planning phase various feasibility studies
are done to define the scope or statement of work based on the
owner's expectations for facility performance, quality, cost, and
schedule. Several alternative design solutions can be considered
during this phase, leading up to the selection of a single
preferred approach. The preferred approach may be a schematic that
includes functional requirements, such as square footage estimates
for various functions and adjacencies or connections to functions
that are desirable or required.
The design phase usually starts once the statement of work and
preferred design approach have been developed. From the schematic,
the design matures into final construction documents comprising the
plans and specifications from which equipment procurement and
construction bids can be solicited. Estimated facility cost and
schedule issues receive increasingly intense review during the
design phase so that the owner has a high level of confidence prior
to bid that the performance, quality, cost, and schedule objectives
defined during the conceptual planning phase can be met.
Complex facility projects usually include a procurement phase in
order to expedite the purchase, manufacture, and delivery of
longleadtime equipment, such as unique process machinery, large
electrical and mechanical equipment, and sophisticated
architectural components. Such equipment procurement may proceed in
parallel with construction phase activities, so that the owner
ultimately is able to furnish longleadtime equipment to the
construction contractor in a timely manner, thus avoiding
construction delays attributable to late equipment delivery.
Early in the construction phase a formal construction management
plan is developed describing the intended sequence and method of
construction activity as well as the relationships,
responsibilities, and authorities of all involved parties (owner,
user, A/E, construction contractor, specialty contractors, and
relevant consultants). The biggest challenge during the
construction phase is managing changes resulting from such sources
as scope of work changes by the owner, errors and omissions in the
construction documents, and unknown or changed site conditions. The
construction phase is considered complete when the owner accepts
occupancy of the facility, although final completion of
construction may continue for months (or even years) until all
discrepancies have been identified, resolved, and mutually agreed
upon.
The startup phase, sometimes called commissioning, begins with
occupancy of the facility by its user. Building components are
tested individually and then together with other components in
order to measure and compare their performance against the original
design criteria. Facility operation and maintenance plans are
implemented, tested, and refined as appropriate.
During the last 20 years, change has been particularly
pronounced with


Downsizing of Facility
regard to how corporate and government owners manage the
acquisition Engineering Organizations of facilities and other
projects. As noted by TBR in a 1997 white paper,
"Virtually all major firms have reduced the size and scope of
work performed by engineering organizations. Many firms are
drifting because they are uncertain about the appropriate size and
role of their inhouse capital projects organization. Nearly every
owner's engineering and project management organization in the U.S.
has been reorganized, sometimes repeatedly, without achieving a
satisfactory result in many cases."2
Since 1970, owner engineering downsizing has resulted in
increased use of contractors to perform design and construction
functions. Graphs published by TBR, based on data compiled by
Independent Project
2
The Business Stake in Effective Project Systems (Washington,
D.C.: TBR, 1997).
Analysis (IPA) of Reston, VA, for more than 2,000 projects from
a variety of industries, show a decline in the percentage of major
projects designed by owners' inhouse staff from about 30 percent
during 19701975 to about 25 percent during 19811985, to less than
10 percent after 1991.
Many owners originally identified the project definition
activity as a core competency.3 However, IPA's data indicate that
project definition, too, is increasingly being outsourced. Data
compiled through 1997 by CII, closely correlates with TBR
data.4
Fortunately, an increasingly competitive, productive,
sophisticated, and capable facility design and construction
industry is capable and willing to take on this increased workload.
Unfortunately, this trend has not reduced owners' overall
engineering costs as a percentage of TPC.5 The engineering share of
TPC has increased over the past 20 years from 13 to 20 percent. The
interpretation of this increase is controversial: It is not clear
if the increase reflects an increased cost of outsourced
engineering or simply the cost of increased intensity of
engineering required by today's technologydriven projects and more
sophisticated design and construction practices.
Since 1993, federal regulations have been modified to allow
agencies


Contracting Methods
greater flexibility and choice in the contract methods used for
acquiring facilities. Downsizing and the increased outsourcing of
design and construction services have provided the impetus for
selecting methods other than the traditional designbidbuild
contract method.
Although there are many variations, current practice recognizes
four basic categories of contract types that apply to several
facility acquisition systems:


•
general contract,


•
construction management,


•
designbuild, and


•
program management.


3
Core competency is defined as an essential skill that should be
retained within the organization in order to perform
effectively.
4
Benchmarking and Metrics Summary for 1997, Benchmarking and
Metrics Committee (Austin, Texas: The University of Texas at
Austin, 1998).
5
TPC is defined as the sum total of all costs associated with a
project's planning, development, design, construction, outfitting,
and startup, not including land costs.
Page 12 GAO/GGD00172R Study on Facility Design Reviews
General Contract Approach
Construction Management Approach
•
•
DesignBuild Contract Approach
The general contract approach assumes that the owner contracts
individually for all engineering and construction services required
to acquire a facility. This is the traditional approach that most
largescale owners (both public and private) used to design and
construct their facilities until the relatively recent growth of
interest in outsourcing of design and construction services. It is
illustrative of the designbidbuild contract method used by federal
agencies.
Under this approach, the owner manages individual contracts with
all design, engineering, and construction service providers,
implying that the owner must also manage all interfaces between
service providers. Interface management becomes critical because
assessment of accountability for problems incurred during the
project's evolution is difficult due to the variety and separation
of individual contracts. To succeed, such a process requires a
relatively large and experienced facility design, engineering, and
management staff within the owner's organization in order to
protect the owner's interests.
Under the construction management approach, the owner contracts
with an outside firm to manage the construction of a project. The
construction manager (CM) may function either as an "agency" CM, or
as an "atrisk" CM.
Agency CM: The owner holds all individual construction
contracts, and the CM functions as the construction contract
administrator, acting on behalf of the owner and rendering an
account of activities. The CM is typically not responsible for
construction means and methods, nor does the CM guarantee
construction cost, time, or quality. Atrisk CM: The actual
construction work is performed by trade contractors under contract
to the CM, who then becomes responsible to the owner for
construction means and methods and delivery of the completed
facility within the owner's scope of work for cost, time, and
quality.
Under this approach, the owner typically retains responsibility
for managing all preconstruction A/E services, and therefore must
address all interface issues between service providers.
The designbuild contract approach represents a much larger step
toward outsourcing of traditional owner functions than occurs with
the abovedescribed CM contract. Under this approach, an owner
prepares a project scope definition and then engages a single
entity that will provide all services necessary to complete the
design and construct the facility.
Generally, the scope definition package represents a design that
is between 15 and 35 percent complete, although variations may
begin much earlier, often with a performance specification, or much
later with perhaps a 65 percent design package.
Project success under this approach is primarily dependent on
the owner's ability to produce a comprehensive, welldefined, and
unambiguous scope of work upon which all subsequent designbuild
activity will be based. Once the designbuild contract has been
awarded, changes to owner requirements will generally incur heavy
penalties to the project cost and schedule. The owner is therefore
well advised to ensure that preparation of the project scope
definition package accurately and clearly expresses expectations
for project performance, quality, cost, and schedule.
Use of the designbuild approach for project delivery is growing
dramatically in both public and private organizations; NAVFAC, GSA,
and USPS have become particularly strong proponents of this
approach, but not without controversy.
The program management contract method represents the ultimate
step in outsourcing of the owner's project management functions.
The program manager (PM) is engaged by the owner to exercise
oversight of the entire facility delivery process for a multitude
of projects. Similar to the construction management approach, the
PM can serve in either an "agency PM" or "atrisk" capacity.
Program Management Contract Approach


Owner as a "Smart Buyer"
American business has regained its competitive edge by
reengineering its business practices to improve their effectiveness
and, in the process, downsize their inhouse staff. However,
competitive pressures caused many organizations to approach staff
downsizing without adequate planning. Mistakes were made:
reductions were insufficient, or too extensive, or made in the
wrong area.
The loss of technical competence through downsizing was
sufficiently pervasive that FFC, in conjunction with TBR and the
NAVFAC, conducted the "Government/Industry Forum on Capital
Facilities and Core Competencies" in March 1998. A fundamental
finding of this forum was that owner facilities engineering
organizations need to identify and retain core competencies-the
essential technical and managerial skills that cannot be outsourced
without serious risk to an organization's ability to conceive and
acquire necessary facilities. The forum participants recognized the
advisability of the owner performing as a "smart buyer" of
outsourced services. A smart buyer is one who retains an inhouse
staff capable of


•
understanding the organization's business or mission, its
requirements, its customer needs, and who can translate those needs
and requirements into corporate direction or mission;


•
accurately defining the technical services to be
contracted;


•
evaluating the quality, performance effectiveness, and
value of technical work performed by contractors; and


•
managing the interface between technical service
contractors and the owner's lineofbusiness managers who will
ultimately benefit from services provided.


These functions are intrinsic to the entire facility acquisition
process and underscore the need for the owner's inhouse staff to be
intimately involved in these aspects of the process, particularly
the leadership role.
It should be intuitive that poor planning and design practices
result in


Cost Implications of Facility
Acquisition Practices increased TPC. These cost growth drivers
include



•
construction change orders required to correct errors and
omissions in the design documents;

• ownerdriven construction change orders required to
incorporate desirable features overlooked during design;


•
inefficient construction resulting from a failure to
incorporate constructionenhancing features during
design;


•
rework resulting from unclear construction
documents;


•
standby costs incurred while construction is either
stopped or slowed to incorporate changes;


•
litigation;


•
delayed completion of the facility (i.e., lost business
revenue, staff standby, nonproductive capital investment costs);
and


•
a poorly performing facility.


Numerous research reports have been published characterizing
cost growth resulting from poor planning and design practices. The
following are a few of the key statistics contained in documents
abstracted by FFC: 6,
7, 8, 9, 10
6
Benchmarking and Metrics Summary for 1997, CII, Benchmarking and
Metrics Committee (Austin, Texas: The University of Texas at
Austin, 1998).
7
The Business Stake in Effective Project Systems, (Washington,
D.C.: TBR, 1997).
Page 15 GAO/GGD00172R Study on Facility Design Reviews


•
Project design costs average 13 percent of
TPC.


•
Total project engineering costs average 20 percent of TPC
(in addition to design costs discussed above, includes planning,
development, and project management costs).


•
Project rework costs average 12.4 percent of TPC. Eighty
percent of this rework results from errors and omissions in the
design documents. The remaining 20 percent results from poor
construction practices.


•
Fifty percent of construction change orders result from
errors in the design documents directly related to improper
interfaces between design disciplines (civil, structural,
architectural, electrical, and mechanical). These change order
costs contribute anywhere from 0.8 to 3.4 percent of
TPC.


•
Comprehensive review of project document development
during the design phase of acquisition should cost from 0.2 to 0.5
percent of TPC. Properly done (i.e., using best practices discussed
later in this study), such activity should drive down the cost of
construction change orders by an average of 3 percent of
TPC.


•
To evaluate the value of thorough concept definition a
CIIled review of 62 projects compared final TPC against the
estimated TPC at time of project approval for construction. The 21
projects with the highest degree of definition averaged 4 percent
cost underrun. The middle 21 projects averaged 2 percent cost
underrun. The 21 projects with the lowest definition averaged 16
percent cost overrun.


•
Indirect costs, the business impact costs discussed
above, are highly variable and very difficult to estimate, but are
potentially huge. An orderofmagnitude estimate would be 815 percent
of TPC.


•
Research conducted by Redichek Associates, an A/E firm
specializing in outsourced design review, indicates that the single
biggest source of construction change orders (approximately 50
percent) is errors in the design documents directly related to
improper interfaces between design disciplines (civil, structural,
architectural, electrical, and mechanical). Redichek's cost for
conducting the discipline interface design review is approximately
0.1 percent of TPC, with a resultant reduction of rework cost
ranging from 0.8 to 3.4 percent of TPC. The estimated payback ratio
here ranges from $8 to $34 saved for every dollar invested in a
discipline


8
Costs of Quality Deviations in Design & Construction, CII,
Publication 101 (Austin, Texas: The University of Texas at Austin,
1989).
9
William T. Nigro, and Martha W. Nigro, Redicheck
Interdisciplinary Coordination, 3rd edition (Peachtree City, GA:
The REDICHECK firm, 1992).
10
Measuring the Cost of Quality in Design & Construction, CII,
Publication 102 (Austin, Texas: The University of Texas at Austin,
1989).
Page 16 GAO/GGD00172R Study on Facility Design Reviews


Effective Design Review Processes: FFC Conclusions
interface design review activity.
The implication of these statistics is that opportunity exists
to significantly reduce TPC by conducting an effective design
review process. The potential savings range from a minimum of 3
percent to as much as 20 percent, and even higher when indirect
savings are taken into account.
Intuitively, good design review practices result in the
preparation of more comprehensive and accurate construction
documents, which in turn result in lower project construction
costs. Areas of savings include less rework on the part of the
construction contractor, fewer change orders for correction of
design errors or omissions, and the cost of belatedly adding
project upgrade features that should have been addressed in the
original design. By reducing changes that are required during the
construction phase, good design review practices also generate
significant indirect cost savings by avoiding costs associated with
loss of productivity during constructiondelayed facility startup,
and litigation.
During the 1980s and 1990s, a number of business practice
studies were conducted by construction trade associations,
professional societies, and academic groups to better understand
which practices produced better results in terms of facility
performance, quality, cost, and schedule. These studies concluded
that quality design yields buildings that perform well throughout
their service lives.11 Quality design resulted when all interested
parties (owner, user, A/E, construction contractor, and specialty
consultants) in the facility acquisition process worked together in
an intense, collaborative, complex, and multiphased process
beginning with conceptual planning and concluding after the startup
phase.
These business practice studies also found that decisions made
during the conceptual planning phase will establish initial
constraints limiting future design flexibility. These early
decisions thus have a disproportionately greater influence on a
facility's ultimate performance, quality, cost, and schedule than
decisions made later in the process. The conceptual planning phase
should therefore be the phase when the review of designs is most
intense, with the primary focus upon ensuring the appropriateness,
accuracy, and thoroughness of the owner's expectations regarding
facility performance, quality, cost, and schedule. This will be
especially true when using the designbuild and program management
contract methods when
11
Improving the Design Quality of Federal Buildings, NRC,
Committee on Improving the Design Quality of Federal Buildings,
Building Research Board (Washington, D.C.: National Academy Press,
1989).
Page 17 GAO/GGD00172R Study on Facility Design Reviews
the owner's involvement in design reviews declines after the
conceptual planning phase.
If design review activity during the conceptual planning phase
has resulted in a clear scope of work regarding the owner's
expectations, design reviews during the design phase are greatly
simplified. Those parties involved should focus upon ensuring that
the evolving facility design incorporates high standards of
professional engineering practice, with regard to architectural,
civil, structural, electrical, and mechanical systems and their
interfaces. Formal reviews may be scheduled periodically during the
design phase, at approximately the 35, 60, 90, and/or 100 percent
design completion milestones (although these milestones may vary
significantly depending on the individual project's size and
complexity). Such structured formality helps ensure the widest
possible participation of interested parties during the review,
including specialists and consultants who bring expertise in such
areas as value engineering, constructability, biddability,12
operability, maintainability, and environmental compliance.
During the procurement phase, the review of designs can continue
to contribute to overall project success by monitoring progress
made in ordering the various items of longleadtime equipment. It is
not unusual for suppliers to detect errors in the ordering
specifications, or to make substitution recommendations for either
greater economy or performance enhancement. The review team should
evaluate the impact of these changes on facility performance,
quality, cost, and schedule.
It is almost inevitable during the construction phase that scope
of work changes by the owner, errors and omissions in the plans,
unknown or changed site conditions, and creative initiatives on the
part of construction staff will result in recommended changes to
the facility design. Design reviews in this phase should focus on
assessing the impact and advisability of changes on facility
performance, quality, cost, and schedule.
Design reviews should continue into the startup phase. At this
juncture, it is important to document the results achieved by
conducting what is commonly referred to as a postoccupancy
evaluation, whose purpose is to record lessons learned for future
reference. Facility performance, quality, cost, and schedule
actually achieved should be objectively measured and compared with
the owner's original expectations. Lessons learned during
In biddability reviews, procurement specialists look for
conflicts, errors, omissions, and lack of clarity in the
construction documents that could create confusion on the part of
prospective equipment suppliers or construction contractors.
Page 18 GAO/GGD00172R Study on Facility Design Reviews
the five facility acquisition phases concerning design strengths
and weaknesses should be recorded for use in improving future
similar project activities. And perhaps most important, the
facility users' subjective satisfaction with both the acquisition
process as well as the completed facility should be noted.
Based on industry research by CII, NRC, FFC, and similar
organizations, interviews conducted for this study, and the
author's experience, it can be concluded that an effective design
review process will be structured to address all of the topics
included in table I.1.


Topic Key question to be addressed
Owner satisfaction Does the constructed facility meet the
owner's expectations as originally defined by the project scope
definition or statement of work (i.e., performance characteristics,
architectural statement, level of quality, cost, schedule, and any
relevant ownerpublished standards and/or policies)?
Sound professional practice Is the approach taken in each of the
specialty areas (architectural, civil, mechanical, and electrical)
commensurate with professional standards?
Code compliance Does the design comply with all applicable
codes, such as fire protection, life safety, and access?
Architectural statement Is the overall presentation
representative of established architectural standards?
Value engineering Are there any less expensive methods or
materials that could be used in the design without impacting
project quality or performance (or lifecycle costs)?
Biddability Are the construction documents sufficiently clear
and comprehensive so construction contractors will have no
difficulty developing an accurate bid with minimal allowance for
contingency?
Constructability Does the design impose any unnecessarily
difficult or impossible demands on the construction contractor?
Operability Does design of the facility operating systems ensure
ease and efficiency of operation during the facility's useful
lifetime?
Maintainability Does the facility design allow for easy and
costeffective maintenance and repair over the useful life of the
facility?
Lifecycle engineering Does the design represent the most
effective balance of cost to construct, cost to start up, cost to
operate and maintain, and (perhaps most important) the user's cost
to perform the intended function for which the facility is being
acquired over the useful life of the facility?
Postoccupancy evaluation Based on a review of the construction,
startup, and ongoing functioning of the facility, could any
unexpected difficulty have been avoided by a different design
approach?
Source: Federal Facilities Council Technical Report #139.

Federal facilities comprise a
portfolio of significant, durable assets that have been acquired to
support specific functions and missions and the Practices in
Federal general conduct of the government's business. It is
estimated that the Agencies government spends about $20 billion per
year for new facilities and major
renovations of existing facilities. Even a relatively small
agency such as
IHS is a major player, with over $265 million of construction
activity in
planning, design, or construction as of 1999. At the other end
of the spectrum are the truly capitalintensive agencies, such as
the Department of the Navy with a $2.5 billion annual construction
budget.
As missions, priorities, and situations change, agencies may
experience wide fluctuations in the scope and budget for their
facility acquisition programs. For example, a recent program to
upgrade federal courthouses around the country has added billions
of dollars to GSA's construction activity. DOS is facing a similar
situation. Following the 1998 bombings of embassies in Africa,
legislation requiring rapid and extensive upgrade of embassy
security features worldwide was enacted which could require several
billion dollars to execute. Given the size of the government's
expenditures on facilities, it is important that federal agencies
have effective design review processes that result in buildings
that perform well throughout their service lives.
Like private sector corporations, federal agencies' facilities
engineering staffs have been considerably downsized in the past
1015 years. A 1987 report of FFC noted that "due to budget cuts,
agencies have had to reduce the number of project managers, design
reviewers, inspectors, and field supervisors they employ."
Procurement specialists trained primarily in contract negotiation
and review rather than design and construction have been playing
increasingly greater roles in facilities development.13
The federal downsizing trend accelerated after 1991 as a result
of a changed global environment, a shift in focus toward smaller
and more costeffective government, and a number of legislative
initiatives. In the nine federal agencies that responded to the
questionnaire associated with this FFC report, facilities
engineering staffs have been reduced on the order of 20 to 65
percent, with the average at about 50 percent. As a consequence of
the loss of technical staff, particularly architects and engineers,
federal agencies are increasingly outsourcing design and
constructionrelated functions.



Downsizing of Federal Facilities Engineering Organizations
DesignReviewRelated Trends in Nine Federal Agencies
The FFC's Standing Committee on Organizational Performance and
Metrics developed a twopart questionnaire focused on design review
processes and distributed it to FFC sponsor agencies. Part one was
sent to senior facilities engineering program directors at the
headquarters level and focused on agencywide policy issues. Part
two was sent to randomly selected project managers at the field
activity level and focused on
13
On the Responsibilities of Architects and Engineers and Their
Clients in Federal Facilities Development, NRC, Committee on
ArchitectEngineer Responsibilities, Building Research Board
(Washington, D.C.: National Academy Press, 1994).
Page 20 GAO/GGD00172R Study on Facility Design Reviews
How Are Agency Facility Engineering Functions Organized to Carry
Out Their Missions?
What Has Been the Extent of Downsizing on Agency Facility
Engineering Organizations?
How Are Agency Facilities Engineering Organizations Responding
to Mitigate the Impacts of Downsizing?
individual project review issues. The nine federal agencies that
answered the questionnaires were ANG, DOE, DOS, GSA, IHS, NASA,
NIH, NAVFAC, and VA.
The FFC report included a summary and analysis of questionnaires
returned by each of these agencies that described the agency's
design review practices at the time of the study. The following
discussion compares and contrasts the responses contained in the 44
questionnaires that were returned by the 9 federal agencies listed
above.
There is no single organizational model for federal agency
facilities engineering organizations. DOE's facilities are
governmentowned but contractoroperated. Some agencies, like the VA,
have moved to fieldbased design review and a mix of fieldbased and
headquartersbased project management. Others, like NASA, have a
centralized program policy and oversight office, with all program
and project management functions conducted at the field activity
level. The majority of the responding agencies maintain multiple
regional project execution offices.
Seven of the nine responding agencies' facility engineering
organizations experienced significant downsizing between 1994 and
1999, on the order of 20 to 50 percent reduction of inhouse staff
positions (the VA's reduction has been estimated at 65 percent). As
of August 1999, only DOS and ANG have been able to maintain a
relatively stable situation with regard to staff size.
During the early stages of downsizing, the responding agencies
simply tried to do more with less. However, this adaptation became
untenable at a certain point. Agencies then began to reengineer
their facility engineering processes and practices. Intensity of
this reengineering varies among the responding agencies, reflecting
the fact that the speed and extent of downsizing has varied greatly
from one agency to another. Impactreducing strategies reported by
various agencies include the following:


•
Augmenting inhouse staffing voids through personal
service contracts. Personal service contracts allow agencies to add
contractor staff to inhouse staff on a temporary basis to fill
voids in specific disciplines, or to address unusual peaks in
workload. Procurement policies vary among agencies with regard to
allowing use of personal services contracts.


•
Outsourcing functions previously accomplished inhouse.
Nearly all facility acquisition functions except agency policy
development and oversight have been considered for outsourcing by
one agency or another.


•
Reducing the intensity of oversight activities such as
design review and construction inspection by either contracting
such functions to third parties, or by including the functions
within the scope of the design and/or construction primary
contracts.


•
Eliminating some activities entirely. One NAVFAC field
office reported that it has eliminated formal design reviews on
many smaller projects, holding A/Es responsible for instituting a
selfreview process. Similarly, a GSA region reported that it
generally only requires a single formal progress review during
design.


•
Using project delivery contracting schemes that shift
more responsibility for design and construction oversight to the
contractor, such as designbuild, construction management, and
program management. Indeed, NAVFAC reports that designbuild is now
the favored contracting strategy and the traditional designbidbuild
strategy has become the least favored.


Why and How Do Federal Risk management, compliance with user
expectations, and reductions of Agencies Approach the Practice
change orders were cited as the primary reasons for conducting
design of Design Review? reviews. The least cited reason was to
maintain inhouse core
competencies. All nine responding agencies report participation
in a
design review process. Significant differences were noted,
however, as
follows:


•
All responding agencies reported that they participated
in design reviews, although not at every field office (a few field
offices of decentralized agency engineering organizations reported
no or minimal design reviews- they rely on A/Es to selfreview their
work). Also, the degree to which agencies and their field
activities varied the intensity of the design review process
between simple and complex projects varied greatly from one agency
to another.


•
Design review functions identified as having the greatest
valueadded were scope and budget compliance, constructability, and
compliance with client design guides. Functions identified as
adding the least value were the discipline reviews-architectural,
electrical, mechanical, and structural (although the responses did
not support the idea that these functions could be dropped from the
review process without risk.)


•
Nearly all responding agencies reported conducting formal
design reviews at the 30 and 90 percent project design milestones.
Only two (NASA and GSA) reported conducting formal reviews
routinely earlier than the 30 percent milestone.



•
The primary criteria used to determine the intensity of
design review are project value, complexity, and the project
delivery method. Conversely, these criteria had little impact on
the decision to review with inhouse or

outsourced resources. That decision rested primarily on inhouse
staff availability.


•
When elements of design review are outsourced, all
responding agencies still use inhouse staff to review project scope
and budget compliance. The most consistently outsourced elements
included constructability, value engineering, and compliance with
building codes.


•
Nearly all responding agencies exploit technology tools
to support their design review activities, including computeraided
or assisted design software, Internet and Intranet communication
links, and computer software word processing and project management
programs.


•
Fewer than half of the agencies measure performance of
their design review processes.


How Have Federal Agencies Eight of the nine responding agencies
reported that they have changed Changed Their Approach to their
approach to design reviews since 1994. The primary reasons cited
for Design Review? change are staff downsizing, changes in contract
methods, and business
process reengineering. The most frequently reported changes
included


•
consolidation of agency design guides and standards for
simplification,


•
increased outsourcing of either parts or all of the
design review activity,


•
exploitation of technology to assist the process,
and



•
reduced frequency of formal design reviews.

Several questions related to outsourcing of design review
functions. Opinions and experience on this issue were varied, and
no conclusions could be reached from the data provided. The
following were typical comments:


•
"Outsourcing results in a loss of core design capability.
This in turn results in a lack of ability to be a Smart Buyer. At
some point, we wouldn't even have enough expertise to hire a
contractor to conduct design reviews."


•
"Outsourcing poses no risk, as long as the contractors
are liable for performance."


•
"Outsourcing poses a very significant risk, particularly
on renovation type work. And it is very difficult to have
technically competent contractors in specialty areas."


•
"Outsourcing is our present way of doing business, and we
have experienced little risk."


Looking to the future, about onethird of the responding agencies
reported that they are considering further outsourcing of design
review functions.
During the course of interviews and an extensive literature
search, a


Interesting Initiatives
number of innovative practices were noted that may have broader
implications. These practices are discussed below.
Partnering and Teambuilding Although this practice is achieving
widespread recognition, some
Training programs have proven more effective than others. USACE
and CII have both been recognized for their particular programs,
and both offer formal training.
Inhouse Training Programs Agencies have developed inhouse
training programs specializing in program and project management
practices for federal agencies. Among the oldest are schools run by
USACE and NAVFAC. More recently, NASA has developed two 1week short
courses of facility engineering management practices.
Review Comment USACE's latest software program used for
documenting, collecting,
Documentation distributing, and achieving design review comments
is called DR CHEKS. It runs on a desktop computer and uses the
Internet for communication among design review participants.
Perhaps most important, it has features to aid followup of actions
taken in response to review comments, which is a particularly
troublesome area.
Project Management Center of GSA recently established the GSA
Project Management Center of Expertise Expertise. The center has
been staffed by GSA's most senior and competent project managers to
serve two functions:


•
Actively manage all of GSA's uniquely large, complex, or
highvisibility projects, regardless of location.


•
Provide mentoring, counseling, and training services in
the area of project management in support of all of GSA's regional
offices.


International Standards Some large A/E firms have secured ISO
9000 certification as a quality Organization (ISO) 9000 control
activity. Among federal agencies, several USACE's district offices
Certification have received ISO 9000 certification for their design
and construction
programs. Other agencies, including NASA and NIH are working
toward ISO 9000 certification for their facility engineering
activities.14 It should be noted that ISO 9000 does not guarantee a
quality product. Rather, it guarantees that the process that
produces the product (good or bad) has been carefully structured,
documented, and measured. Organizations have
14
Subsequent to the issuance of the FFC report, NASA received ISO
9000 certification for its headquarters office and each of its
centers. Also, NIH received certification for the design and
construction branch of its Division of Engineering Services.
Page 24 GAO/GGD00172R Study on Facility Design Reviews
Conceptual or Advance Planning
Design Review Lessons Learned
A/E Historical Performance Database
NIH Contractor Performance System
found that the process of securing ISO 9000 registration has
been a valuable experience in understanding just what they do and
how they go about it.
Most projects that fail to meet their planned objectives do so
because of faulty or inadequate predesign development. CII has
recently developed a comprehensive preproject planning approach
that allows organizations to measure whether they have adequately
addressed all predesign requirements. CII also has developed a
training module intended to assist organizations in adopting this
recommended approach to preproject planning.
Problems identified in the design review process can become a
powerful tool to improve performance. VA uses a method of
documenting and publicizing such lessons learned in an innovative
program called ProCATS. Its purpose is to identify recurring
problems that result in change orders, claims, and delays and then
to take positive steps to avoid such problems in the future. The
system is the first of its kind in the federal government and was a
1996 winner of the Vice President's Hammer Award.
USACE has, for many years, maintained a database containing
historical evaluations of A/E performance on past projects. This
database, the ACASS, can be queried by any federal agency
interested in a particular A/E's past performance.
NIH has developed a multiple agency, shared file system that
allows all authorized users to have access to the completed
contractor performance evaluations of all subscribing agencies via
the Internet. A separate module for each subscribing agency is
developed with a unique URL, allowing each agency control of agency
data and access authority. Planned future enhancements include
automated construction and A/E forms, electronic storage of
contractors' rebuttal and comments, electronic and encrypted
transmittal of evaluations to contractor, and ad hoc reporting.


During the course of the study, a
literature search was conducted, industry experts and practitioners
were consulted, and federal agencies were Valueadded of Design
surveyed. The findings of this report as they relate to the
original questions posed about the valueadded of design review
processes and the role of
facilities owners are addressed in this segment.
Design reviews are an essential component of the facility
acquisition


What is the Valueadded of
process. An effective design review process helps to unify and
align all Design Review Processes? interested parties to a common
objective and integrate their knowledge,
Page 25 GAO/GGD00172R Study on Facility Design Reviews
experience, and skills throughout all phases of the facility
acquisition process (conceptual planning, design, procurement,
construction, and startup). In the end, effective review of designs
maximizes the probability that a business requirement will be
successfully supported by a facility that was conceived, designed,
constructed, and placed into operation efficiently and
effectively.
Effective design review practices result in the preparation of
more comprehensive and accurate design and construction documents,
which in turn result in lower project construction costs. Areas of
savings include less rework on the part of the construction
contractor, fewer change orders to the owner for correction of
design errors or omissions, and the cost of belatedly adding
project upgrade features that should have been addressed in the
original design. By reducing changes required during the
construction phase, effective design review practices also generate
significant indirect cost savings by avoiding costs associated with
loss of productivity during constructiondelayed facility startup,
and litigation.
The nine federal agencies that responded to FFC's questionnaire
indicated that they currently measure the valueadded of design
review processes primarily from a broad context: Their insight is
both subjective (is the user reasonably happy with the completed
facility?) as well as objective (how close did the completed
facility come to the original cost and schedule objectives?).
Sufficient industry research has been conducted in recent years to
identify metrics that can be used to measure both the efficiency
and the effectiveness of each phase of the facility acquisition
process and compare the results to established benchmarks. The
extent to which individual federal agencies currently take such
measurements and analyze results varies widely.


HowDo(andHow Can) Federal Agencies Measure the Valueadded?
What Is the Role of Inhouse Staff, and What Value Do They
AddtoDesignReview Processes?
Within most federal agencies, acquiring facilities is a means to
support the agency's mission rather than the mission itself. The
agency's inhouse facility engineering staff exist to support the
agency's mission. First and foremost, the inhouse staff should be
able to identify facility requirements in the context of their
impact on the agency's mission success and, in so doing, to act as
a smart buyer. The staff should be capable of leading a strategic
planning process involving representatives of the agency's facility
user community where give and take decisions are made balancing the
facility's ultimate performance, cost, and schedule.
During the tactical facility acquisition phase, inhouse facility
engineering staff should be capable of providing the overall
process leadership, ensuring that all activities proceed in the
best interest of the owner.


What Functions Are Being (and Should Be) Contracted to Outside
Consultants?
Toward this end, the owner's interests are best served if the
inhouse staff can also perform in the role of a "smart buyer" of
the necessary technical services. A smart buyer is one who retains
the requisite technical knowledge to accurately define the
technical services needed, recognizes value during the acquisition
of such technical services, and can evaluate the quality of
services ultimately provided.
Individual and often uncontrollable circumstances have resulted
in nearly all facility engineering functions, from conceptual
planning to project startup, being contracted to outside
consultants at one time or another. Today's general practice among
federal agencies is to outsource design development and, to a
lesser extent, certain specialized technical review functions, such
as shop drawing reviews, value engineering, and
constructability.
As long as sufficient skills are retained inhouse to meet the
smart buyer approach discussed above, there does not appear to be
any greater risk from contracting out a broader range of design
review functions, including such services as construction document
discipline reviews and code compliance checks, so long as such
functions are widely available from a competitive commercial
marketplace. The exception occurs when complex projects include
unique and specialized features of high mission relevance and
limited skill availability in the commercial marketplace (examples
would include NASA wind tunnels, VA medical research facilities,
and highsecurity military facilities). Agencies are well advised to
retain such unique specialized skills inhouse as core competencies,
with design review a primary inhouse responsibility.
Industryrelated research and the author's interviews with public
and


What Skills and Resources
private sector practitioners suggest that agencies should retain
the Do Federal Agencies Need capabilities inhouse to
to Provide Effective OversightofDesignReview • define facility
requirements in relation to the agency's mission, assess
facilityrelated mission impacts, and conduct facilityrelated
strategic


Processes?
planning activities;


•
lead and conduct teaming activities involving
participants from various interested parties (owner, user, A/E,
construction contractor, specialty consultants, etc.);


•
develop, implement, and maintain overall policy and
direction of the agency's facility engineering function;
and


•
perform as a smart buyer of outsourced technical
services.


The risks and liabilities will vary depending on whether an
agency


What Risks and Liabilities
maintains the inhouse capabilities to perform the design
reviewrelated Do Federal Agencies Face functions listed above. If
an agency does not retain such inhouse in Outsourcing Most or All
resources and capabilities, agencies risk the following
consequences: of Their Design Review
• Consultant access to agency decision makers may be limited,
resulting in


Functions?
difficulty understanding the owner's project performance
expectations.


•
Project schedule may be compromised at key decision
points due to lack of owner insight.


•
A design review process with little or no owner
participation may become ineffective without the owner being aware
of the developing process deterioration. An owner with little or no
participation in design reviews is less likely to become aware of
any breakdowns in the process; the owner mayfind out toolate
toremedy the problem or tosave the project schedule, and this may
result in cost overruns.


•
Consultants may find it difficult to communicate with
owner staff regarding technical issues and problem
solving.


In the case of unique or unusual facilities, consultants may
have limited access to unique skills, potentially resulting in
naïve and inappropriate technical solutions.


How Can New and Emerging Technologies Be Integrated Into Design
Review Processes?
The ongoing revolution in information technology and
communications offers unlimited opportunities to improve design
review processes. Examples range from relatively simple practices,
such as effective use of audio and video teleconferencing to
improve meeting flexibility, to emerging technologies using
holographic projection techniques to create threeand
fourdimensional models of project designs in order to visualize the
impact of proposed changes. The Internet and computeraided design
and drafting can be used for fast, comprehensive, paperless
communication between reviewers, managers, and A/Es.
Benchmarking offers one tool to identify which technologies
offer the most return for the investment made. Agencies can
identify similar organizations that have successfully incorporated
desirable technologies and adopt those practices that offer
significant improvements in process, cost savings, time, or
resources.
Agencies can also consider joining any of the many trade and
professional organizations that assist their membership in
identifying and implementing appropriate technologybased practices.
It is important to recognize that some of the technology practices
will cause major changes to established routines, require new
equipment and software, and require mastering new sets of
skills.
Effective design review processes require work, some of it
obvious and

some of it quite subtle. The
following list of 18 best practices relies heavily on research
conducted by CII, TBR, NRC, FFC, and similar organizations. The
best practices are organized into five categories related to the
role of the owner, teamwork and collaboration, advance planning,
process, and benchmarking.
1. Be a smart buyer. Facility acquisition processes (including
review of


Role of the Owner
designs) work best when the owner has sufficient inhouse
expertise to qualify as a smart buyer. A smart buyer is one who
retains an inhouse staff that understands the organization's
mission, its requirements, and its customer needs and who can
translate those needs and requirements into a corporate or
strategic direction. A smart buyer also retains an inhouse staff
that includes technical experts who can articulate the nature of
technical services being bought, recognize good value during the
negotiation of such services, and evaluate the quality of the
services as they are provided.


2.
Develop a scope of work that clearly and accurately
defines the owner's expectations regarding facility cost, schedule,
performance, and quality. The owner's standards, more than those of
any other entity involved in the acquisition process, will set the
tone for all aspects of design review activity. The owner's scope
of work should be used as the yardstick against which to measure
performance.


3.
Avoid the temptation to micromanage design reviews. A/Es
are selected based on their experience and expertise; they should
be given wide latitude to bring that expertise to
fruition.


4.
Use teambuilding and partnering techniques to build good
working




Teamwork and
Collaboration and communicative relationships among the
participants, as well as to align all participants toward common
objectives and expectations.
5. Ensure that all interested parties participate in design
reviews from the planning and design phases, so that all
perspectives are represented as the design evolves. Broad
participation creates early project endorsement or "buyin,"
reducing the potential of later disagreement or need for changes.
At a minimum, involve representatives of the owner, the user, the
A/E, construction management staff, maintenance and operations
staff, and special staff such as procurement, safety, and


Advance Planning
fire protection. Where possible and appropriate, include the
construction contractor, permitting agency staff, and independent
specialists for value engineering and independent review. Err on
the side of excess participation-it is costeffective protection
against subsequent unexpected and expensive fixes and
oversights.


6.
Use the same A/E throughout the facility acquisition
process to maximize continuity and allow participants to build and
apply their experience baseline. Using the same A/E for conceptual
planning, detailed design, construction support engineering
services, and startup takes advantage of the A/E's intimate
understanding of both the owner and his project needs, and supports
continuity of personnel involved.


7.
Use senior, experienced personnel who understand the
relationship of a facility to meeting the agency's overall mission
and who can effectively evaluate the evolving design and guide the
review process.


8.
Participants should commit for the duration of the
activity to ensure continuity. Changing participants from any of
the organizations involved in reviewing the design can disrupt the
work flow and threaten the stability of good teaming
relationships.


9.
Participate in a design awards program in order to
recognize and motivate excellence. Nothing succeeds like success!
Recognition of a job well done gives visibility to a successful
process and motivates all of the participants to continually
improve.


10.
Focus attention on the review of designs during the
conceptual planning and design phases, where the ability to
influence the ultimate functionality and cost of the project is the
greatest. Effective design review processes start out being very
intensive and proactive, with an intensity that declines through
the procurement, construction, and startup phases of the
acquisition process.


11.
Do not start the final stage of design-preparation of the
construction plans and specifications-until the preliminary
engineering has been completed. To do otherwise could significantly
slow the overall design activity due to frequent interruption and
rework caused by incomplete project scope definition.


12.
Tailor the design review approach to project specifics.
Project




Process
complexity, cost, mission criticality, visibility, method of
contracting,
Page 30 GAO/GGD00172R Study on Facility Design Reviews


Benchmarking
and schedule are just a few of the variables that can drive
aspects of the design review approach such as frequency, intensity,
and reliance on outsourced experts and consultants.


13.
Keep up the pace to maintain momentum and keep the
facility acquisition process on schedule. The review of designs at
each phase of the process should not impede progress toward a
completed facility. A stopstart or prolonged process impacts the
acquisition in many ways, perhaps the most critical being the
increased potential that organizations will reassign
participants.


14.
Pay special attention to the civil, structural,
electrical, and mechanical interfaces. Historically, 3050 percent
of all construction change orders result from interference fit
problems between trades. Is the power supply appropriate to the
specified mechanical equipment? Does the HVAC (Heating,
Ventilating, and Air Conditioning) ducting interfere with
structural members?


15.
Exploit technology. The technological revolution has
provided many tools to enhance design review processes, including
computeraided design, threedimensional modeling, data collection
and distribution software programs, and rapid communications
systems, including the Internet.


16.
Conduct a postoccupancy evaluation to develop a
lessonslearned document for future reference. After facility
startup, the design review team should document objective results
(how did final cost and schedule compare to planned?) as well as
subjective results (is the user pleased with facility
performance?). The postoccupancy evaluation should also relate
approaches taken during the various phases of the facility
acquisition process with the final results.


17.
Measure results achieved by design review processes in
order to assess their level of performance. A process cannot be
managed if it is not measured. Successful benchmarking requires an
organization to identify relevant performance characteristics,
measure them, and compare results against either established
industrial norms or against similar measured characteristics of
other organizations recognized for their excellence.


18.
Document both unusually good and bad performance for
future reference. Even better, find a way to share such information
with other organizations and federal agencies.


Enclosure II




Comments from the Director, Federal Facilities Council
See footnote 14 on p. 24.

Enclosure III


Comments from Mr. Ralph Spillinger, Primary Author of the FFC
Study
Now on p. 4.
Now on p. 16. Now on p. 25. Now on p. 25. Now on p. 26. Now on
p. 28 Now on p. 29 Now on p. 30. Now on p. 31.


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