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Contents

Section 1 Project Evaluation Review

Section 2 Sale or Lease

Section 3 Facilities Management                                 

 

Description:  The purpose of this unit is to introduce the factors which need to be considered relating to the post completion strategy of a given project.

Author:  Nigel Maddern


Section 1 Project Evaluation Review




Aims and Objectives

At the end of this section you should be able to explain:
  • The factors that relate to the production of a Project Evaluation Review.


A Project Evaluation Review (PER) is a document produced on behalf of a client to show how successful a project was. The PER will also focus on any learning points or problems which have arisen during the work or after project handover. 

Once a project has been completed, it is necessary to measure it’s success or failure against the objectives and targets identified within the project plan. Production of a Project Evaluation Review will identify and document the project’s performance against the critical success factors and key performance indicators (KPIs), there is a useful article on the BRE web space that outlines the KPI’s for construction projects and states the importance of benchmarking. The UK Construction Industry KPIs are national data sets against which a project or a company can benchmark its performance, the BERR web link below provides details of KPIs. 

The PER should refer back to the information within both the initial feasibility study and the Cost Benefit Analysis to check validity of information. The document should clearly demonstrate actual against forecast performance in terms of time, cost and quality etc and carry out a critical reflective analysis (including lessons learnt) of both the management and outputs of the project.   

Key Project Evaluation Review issues include: 
  • Performance against programme – was it completed on time?
  • Performance against budget – was it within budget?
  • Number of immediate/latent defects – are there any construction faults after handover?
  • Timely handover date
  • Client or user satisfaction – was the client happy with the end result?
  • H&S performance  - eg were there any accidents?
There are a number of useful web sites and links below to help you gain a stronger grasp of this part of the unit and useful literature references further down the page. 




Websites



Publications

  • Smith, N, J. Dr. Merna, T. Jobling, P. (2006) Managing Risk: in Construction Projects, 2nd Edition: Wiley-Blackwell [Chapter 6].
  • Fewings, Peter. (2005) Construction Project Management: Taylor and Francis. [Chapter 8].



Self-Assessment Task

  • Explain the key factors relating to a project evaluation review and how it would be produced
  • Summarize how a new build project can be measured in terms of success or failure using key project management tools.




Section 2  Sale or Lease



Aims and Objectives

At the end of this section you should be able to:
  • Explain the factors that relate to the options available re retention or disposal of a completed project.


Once the project is complete, the client will want to utilize the building etc. and possibly start gaining income from their investment at the earliest possible opportunity. 

There are a number of options available to a client in order to maximize the benefit from the recently completed building. The economic climate and demand for the facility in any particular location at the time of practical completion will be key factors in any decision. Sale of the freehold or leasehold may derive greater benefits at a time of high property prices/demand - whereas it may be prudent to retain and manage/let out the property in less buoyant times for sale at a later date. Production of a risk analysis document for each option on the client’s behalf will assist his decision making process. 

The Royal Institute for Chartered Surveyors web site provides useful articles on each of these topics, just type in - retention, sale or lease in the search space for the relevant article.

Other considerations: 
  • Local supply/demand situation – eg what is the likely demand for the type of building constructed?
  • Current economic climate – is the economy in a period of growth?
  • Marketing costs – what will it cost to advertise?
  • Leasehold responsibilities – will new owners want onerous repair clauses?
  • Costs in use over life of the building – any new owner will be liable for these.
  • Fit out costs – a new owner will likely want to carry out some internal fit out work.



Websites



Publications

  • McMahan, J. (2006) The Handbook of Commercial Real Estate Investing: McGraw-Hill. [Chapter 14 & 19]
  • Galaty, F. W. Allaway, W. J. Kyle, R. C. (2002) Modern Real Estate Practice: Dearborn. [Chapter 15].
  • Vinter, G. D. (2006) Project Finance: Sweet & Maxwell. [Chapter 5]



Self-Assessment Task

  • Explain the options available to a client when considering disposal or retention of a newly built project.
  • Summarize the economic factors that may effect a client’s decision re retaining or disposing of a newly built project.





Section 3 Facilities Management



Aims and Objectives

At the end of this section you should be able to explain:
  • The factors that relate to the implications of retaining a building and being responsible for its management.


The new building will need some form of facilities management services to preserve value of the asset and this will require constant investment over the life of the building ie running costs.  

Before you get started you should visit the British Institute of Facilities Management (BIFM) web space. The link is provided below and it sets out to be the ‘natural home’ of facilities management in the UK. The site provides information, education, training and networking services in the specific are of facilities management and could prove useful to your study.  

If the client retains ownership of the property then it will generally be his responsibility to manage the facility from handover/practical completion of the completed building.  

Costs in use over the life of a building comprise of items including: business rates, reactive and preventative maintenance costs, capital and non capital improvements, energy costs etc.  Effective Facilities Management will preserve and maintain the building to an agreed standard and maximize the value of the recently completed asset.  

For further information on this subject a couple of other sites that also support the above study of facilities management are the FMA -  Facilities Management Association site which provides employer information on the subject of FM and the free magazine for the industry ‘Practical Facilities Management’ has useful articles and background reading on the subject.  

Other considerations: 
  • Formal FM contract between client and building user – this will ensure the work is carried out properly.
  • Appointment of approved FM contractors – eg to ensure competent contractors are used
  • Performance measures – to ensure contractors perform to agreed standards
  • Utilities contracts – eg can be set up to obtain best price for purchase of gas or electricity
  • 5 year maintenance programme – regular maintenance will be required to preserve the asset value
 



Websites



Publications

  • Langston, C. A. Lauge-Kristensen, R. (2002) Strategic Management of Built Facilities: Butterworth-Heinemann. [Chapters 2, 4, & 7].
  • Barrett, P. Baldry, D. (2003) Facilities Management: Blackwell Publishing. [Chapter/sections 2 & 4].
  • Atkin, B. Brooks, A. (2003) Total Facilities Management: Blackwell. [Chapter 3 & 8].



Self-Assessment Task

  • Explain the costs in use commitment of the building owner/manager and how these can be best managed.
  • Summarize the concepts of planned and unplanned work throughout a building’s life and how these can be predicted.





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