Prioritizing Construction Over Commissioning is the Worst Way to Complete Capital Projects

Prioritizing construction over commissioning is the worst way to complete capital projects. I can understand why some people may believe this – construction as the priority is a long-standing industry norm, and it has been this way for decades. We’re working in the “construction” industry, so it’s understandable that project teams still think construction is the priority on capital projects.

But when you have a fixed date in the future, such as your project in-service date that you must meet, your project priorities must align from right to left – your project in-service date must align with your project operational objectives, your commissioning and startup activities must align to meet your project in-service date, and your construction activities must align with your commissioning priorities to meet your in-service date.

Your in-service date, therefore, sets the project priorities for commissioning, and commissioning then sets the project priorities for construction.

In the past, when projects were less interconnected with less complex technology, construction certainly needed to be the priority. Once the equipment was installed, projects were much less complicated to become functional. It took much less effort to get electromechanical relays to function correctly – a few settings to adjust, a few equipment checks to make, but systems were much simpler to get functional.

But today’s projects are complex, with PLC-based control and monitoring systems and a lot more complex interconnected E/M processes. Commissioning is a dedicated phase of projects to make these complex systems come to life. Construction activities need to align and support the commissioning phase of projects if they are to be successful and meet in-service dates.

Now I’m sure there will be comments saying – how can projects be commissioned if they are not built first? And I get it, this is the age-old debate between construction and commissioning groups. But the reality is, if you’re not starting from the end-goal of projects and planning from right to left, then it’s not physically possible to achieve your project objectives. There is no way to meet your project end-goal by planning left to right – your in-service date will be sometime in the distant future, and much later than the date you would like it to be.

I don’t want to discount the construction challenges on capital projects – there are significant hurdles to overcome to manage construction. Huge labor forces to coordinate on a daily basis, lots of heavy civil equipment to manage, productivity targets to achieve for concrete placement, material delivery and handling logistics. There are some really smart people working in the construction industry who are well-suited to manage construction. And managing construction takes a much different skillset than managing commissioning. However, all construction activities are required to support successful commissioning and must align with the priorities set by commissioning.

This is a mindset shift that the construction industry is struggling with. It manifests on-site as the push-pull between construction and commissioning groups, each group trying to assert their dominance. But this is a detriment to projects, and both groups need to collaboratively work together and understand the order of priorities to meet the project in-service date. Priorities need to be first established in contracts so there is no need for the debate to take place in the first place.

The new approach to projects must be to start with the end in mind, which means making sure these more complex systems function properly at the end of projects. This requires planning projects from right to left and prioritizing commissioning to achieve the functionality of systems to meet in-service dates. With commissioning as the priority to meet project objectives for our more complex systems, construction activities must, therefore, support commissioning and align with what commissioning groups need to achieve the project functionality, just like commissioning must support the successful operation of the plant.

Many projects are still structured to have construction as the priority and therefore inadvertently dictate the sequence of commissioning. And this is a broken project delivery strategy that does not allow projects to succeed. The order of priorities must be:

– Successful daily plant operations – this is why projects are started in the first place and must not be forgotten through all stages of projects.

– Project In-Service Date – on-time and on-budget completion, and meeting quality requirements.

– Commissioning and Startup.

– Construction.

– Design.

Project teams that are still planning construction as the priority are not planning for success. Start with the end in mind and plan backward, and you will see that commissioning is the priority, with design and construction activities to support commissioning.

The construction industry, of course, doesn’t like to hear this – it is called the construction industry after all. The site culture on many projects is still a claims-culture, with the threat of extra costs if there is any hint that construction will be impacted. This undermines the ability for project teams to collaboratively work together, with the threat of claims hanging over everyone’s head. Construction companies would like to continue to assert their dominance and have unimpeded control of as much as they can, but this incorrect prioritization of construction hurts the ability to complete projects. Contractors are certainly entitled to their means and methods, but this shouldn’t be to the detriment of the overall project outcome.

The root cause of the problem is gaps in contracts. If contracts aren’t structured properly right from the beginning, then construction activities will naturally take priority but will not align with commissioning. This is the fundamental reason to include commissioning input at the beginning of projects to get the needed commissioning requirements in contracts so that construction groups are pointed in the right direction right from the beginning. When contracts are written with commissioning in mind, there are no disputes later – there is no persistent mindset of construction versus commissioning priorities – the contracts align priorities right from the beginning to ensure commissioning is prioritized and everything preceding commissioning is aligned with what is required to finish the project. With correct contracts from the outset, construction and commissioning groups are able to work collaboratively in the best interest of the project.

When commissioning is not included in contracts when they are first being developed, projects become much more difficult to finish with misaligned priorities. What does it actually mean to include commissioning in contracts? These are some examples:

– Ensure a high-level definition of project systematization is included in contracts. This is easy to do, even in the absence of design details.

– Define what completion of each of these subsystems means – everyone’s definition of “done” always seems to mean something different on projects, and this is eliminated by explicitly defining what takes place at each construction complete milestone with regards to physical deliverables, document deliverables, and who has the authority to sign off on this milestone for each subsystem.

– What are the payment milestones associated with each construction completion, with explicit details of what is required to achieve each subsystem construction completion to get paid.

– How do the roles change at this milestone, who is responsible for portions of pre-commissioning before Static Completion, and who is responsible for portions of pre-commissioning after Static Completion? Who is in a lead role and who is in a supporting role before and after Static Completion.

– How do construction quality processes align and support commissioning processes? What proactive steps are required to identify defects early and often to avoid snags during commissioning? Quality processes cannot be viewed as a necessary evil to be done daily on-site, quality processes need to be viewed as value-adding activities to avoid expensive delays during commissioning.

Read any of the literature from the big management consulting firms and you’ll find lots of great information about starting and managing projects – portfolio optimization, value assurance, market sounding, early risk detection, best-in-class thinking, effective governance, etc. But very few (if any) talk about processes to complete CapEx Projects. Your portfolio can be perfectly optimized, you can have the best value assurance, and the best-in-class thinking, but none of these matter if you can’t finish projects efficiently. While these are certainly important aspects of projects, they’re missing one key framework – completing CapEx Projects. And again, this is not anyone’s fault. There are lots of super smart people in the industry. But the narratives we are stuck within the industry focus on getting projects started and the project management oversight to execute projects, but the frameworks to finish CapEx Projects are missing. And while we need to have processes to start projects, just as importantly we need processes to actually finish projects.

When contracts are being prepared, project teams are focused on getting the work started. There is typically not much thought put into contracts to define how the project will be finished. And when these details are missed in contracts, it becomes difficult and expensive to sort out later.

The industry still very much favors construction as the priority – many projects are still planned from left to right. But these projects are the ones that end up struggling during the final stages of construction completions and commissioning. Contracts are still written to favor construction, with a claims culture on many projects. Until contracts are written to align project priorities so that projects can be completed smoothly during commissioning to meet in-service dates, projects will continue to suffer. Include your project priorities correctly right from the start when contracts are being written, and you’ll have a much easier time meeting your project objectives.

Establishing commissioning as the priority to achieve your in-service date is the only way to correctly align your project priorities in contracts. Once contracts are awarded and missing these details, the damage is already done – your project is already in recovery mode as soon as contracts are signed, and you won’t even know what’s missing until your project is already 6 months late and you’re scrambling to meet your in-service date.