United States General Accounting Office General Government Division

Washington, D.C. 20548

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July 11, 2000

The Honorable Jeff Sessions

United States Senate

The Honorable Richard C. Shelby

United States Senate

The Honorable Sonny Callahan

House of Representatives

Subject: Federal Facilities Council’s Report on the Role of Facility Design Reviews in

Facilities Construction

This letter responds to your request for a review of federal agencies’ practices for reviewing

the plans and specifications used in the facility acquisition process. Your request resulted

from reports you had received from constituents that plans provided to their construction

firms for federal contracts were often inadequate and that the design and review process of

the government has gotten progressively worse in recent years. You were concerned that

either agency engineering departments or the architect-engineering (A/E) firms hired by the

agencies, or both, were neglecting their duties to provide construction contractors with plans

and specifications that were sufficiently clear and comprehensive to allow projects to be

completed without extensive change orders and rework.

Early in the planning of our work, we learned that the Federal Facilities Council (FFC) had

completed a study of public and private sector design review practices.1 This study, which

was published in January 2000, identified 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. We discussed the contents of the

FFC study with Senator Sessions’ office and jointly reached the conclusion that information

in the study would satisfy the intent of the requested review. We then agreed to provide an

abridgment of the findings and best practices discussed in the FFC study in lieu of going

forward with the requested review, which is provided in enclosure I. We did not

independently verify the information contained in the FFC study. However, on the basis of

prior work and experience in this area, we were already aware of many of the problems in the

1

Ralph S. Spillinger, in conjunction with the Federal Facilities Council Standing Committee on Organizational Performance and

Metrics, Adding Value to the Facility Acquisition Process: Best Practices for Reviewing Facility Designs, Federal Facilities

Council Technical Report #139 (Washington, D.C.: National Academy Press, n.d.).
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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 field-activity-level 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 agencies--GSA, 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 construction-delayed facility start-up, 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 design-related activities associated with

each phase of the facility acquisition process, from conceptual planning through start-up.

• 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 in-house staff can fulfill the functions of a “smart buyer.

A smart buyer is one who retains an in-house 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 review-related 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, computer-aided design and drafting, and a wide range of project

management software. Emerging technologies, such as the use of holographic projection

techniques to create three- and four-dimensional 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 post-occupancy evaluation to develop a lessons-learned 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 senior-level 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 FFC-sponsored

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) 512-8387.

Bernard L. Ungar

Director, Government Business

Operations Issues
Enclosure I

Abridgment of the Federal Facilities Council

Study on Facility Design Reviews

Page 8 GAO/GGD-00-172R Study on Facility Design Reviews

We condensed the FFC study Adding Value to the Facility Acquisition

Process: Best Practices for Reviewing Facility Designs, Federal Facilities

Council Technical Report #139 (Washington, D.C.: National Academy

Press, n.d.), authored by Ralph S. Spillinger in conjunction with the FFC

Standing Committee on Organizational Performance and Metrics, to focus

on issues that address the concerns of the requesters. We made minor

revisions to the wording in some instances for clarity and contextual

purposes. We also omitted parts of the study, including some footnotes

and bibliographic references, to shorten the presentation. We have

nevertheless retained the essential elements and relative completeness of

the original FFC study.

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 start-up.

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 in-house 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 design-bidbuild method of facility acquisition was used almost exclusively. Today,

agencies increasingly rely on design-build, construction management, and

program management contracting methods. Further, advances in

computer-aided design and other technologies are occurring

Background
Enclosure I

Abridgment of the Federal Facilities Council Study on Facility Design Reviews

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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

consultant-prepared 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 in-house 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 value-added of design

review processes and the appropriate level of oversight for owners of

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 value-added of design review processes?

• How do (and how can) federal agencies measure the value-added?

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.

Defining Design Review

Study Purpose and

Objective
Enclosure I

Abridgment of the Federal Facilities Council Study on Facility Design Reviews

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• What is the role of in-house 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,

and start-up. 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 design-bid-build

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 design-build 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.

Facility Acquisition

Practices and Industry

Trends
Enclosure I

Abridgment of the Federal Facilities Council Study on Facility Design Reviews

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Complex facility projects usually include a procurement phase in order to

expedite the purchase, manufacture, and delivery of long-lead-time

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 long-lead-time

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 start-up 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

regard to how corporate and government owners manage the acquisition

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 in-house 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).

Downsizing of Facility

Engineering Organizations
Enclosure I

Abridgment of the Federal Facilities Council Study on Facility Design Reviews

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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’ in-house staff from about 30 percent during 1970-1975 to about

25 percent during 1981-1985, 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

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 design-bid-build 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,

• design-build, 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 start-up, not including land costs.

Contracting Methods
Enclosure I

Abridgment of the Federal Facilities Council Study on Facility Design Reviews

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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 large-scale

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 design-bid-build

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 “at-risk”

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.

• At-risk 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 design-build 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.

General Contract Approach

Construction Management

Approach

Design-Build Contract Approach
Enclosure I

Abridgment of the Federal Facilities Council Study on Facility Design Reviews

Page 14 GAO/GGD-00-172R Study on Facility Design Reviews

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, well-defined, and unambiguous scope

of work upon which all subsequent design-build activity will be based.

Once the design-build 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 design-build 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 “at-risk” capacity.

American business has regained its competitive edge by reengineering its

business practices to improve their effectiveness and, in the process,

downsize their in-house 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

Program Management Contract

Approach

Owner as a “Smart Buyer”
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outsourced services. A smart buyer is one who retains an in-house 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 line-of-business 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 in-house 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

increased TPC. These cost growth drivers include

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

design documents;

• owner-driven construction change orders required to incorporate desirable

features overlooked during design;

• inefficient construction resulting from a failure to incorporate

construction-enhancing 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).

Cost Implications of Facility

Acquisition Practices
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• 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 CII-led 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 orderof-magnitude estimate would be 8-15 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 10-1 (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).

10Measuring the Cost of Quality in Design & Construction, CII, Publication 10-2 (Austin, Texas: The

University of Texas at Austin, 1989).
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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

construction-delayed facility start-up, 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 start-up 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 design-build and program management contract methods when

11Improving 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).

Effective Design Review

Processes: FFC

Conclusions
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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 long-lead-time 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 start-up 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

12In 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.
Enclosure I

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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 owner-published 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 life-cycle 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 cost-effective maintenance and repair over the useful life of

the facility?

Life-cycle 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, start-up, 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

general conduct of the government’s business. It is estimated that the

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

Table I.1: Topics Addressed in an Effective Design Review Process

Design Review

Practices in Federal

Agencies
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spectrum are the truly capital-intensive 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 10-15 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

cost-effective 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

construction-related functions.

The FFC’s Standing Committee on Organizational Performance and

Metrics developed a two-part 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 Architect-Engineer Responsibilities, Building Research Board

(Washington, D.C.: National Academy Press, 1994).

Downsizing of Federal

Facilities Engineering

Organizations

Design-Review-Related

Trends in Nine Federal

Agencies
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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 government-owned but

contractor-operated. Some agencies, like the VA, have moved to fieldbased design review and a mix of field-based and headquarters-based

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 in-house 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 in-house 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 in-house. Nearly all facility

acquisition functions except agency policy development and oversight

have been considered for outsourcing by one agency or another.

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?
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• 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 self-review 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 design-build is now the favored contracting strategy

and the traditional design-bid-build strategy has become the least favored.

Risk management, compliance with user expectations, and reductions of

change orders were cited as the primary reasons for conducting design

reviews. The least cited reason was to maintain in-house 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 self-review 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 value-added 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 in-house or

Why and How Do Federal

Agencies Approach the Practice

of Design Review?
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outsourced resources. That decision rested primarily on in-house staff

availability.

• When elements of design review are outsourced, all responding agencies

still use in-house 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 computer-aided 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.

Eight of the nine responding agencies reported that they have changed

their approach to design reviews since 1994. The primary reasons cited for

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 one-third of the responding agencies reported

that they are considering further outsourcing of design review functions.

How Have Federal Agencies

Changed Their Approach to

Design Review?
Enclosure I

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During the course of interviews and an extensive literature search, a

number of innovative practices were noted that may have broader

implications. These practices are discussed below.

Although this practice is achieving widespread recognition, some

programs have proven more effective than others. USACE and CII have

both been recognized for their particular programs, and both offer formal

training.

Agencies have developed in-house 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 1-week short courses of facility engineering

management practices.

USACE’s latest software program used for documenting, collecting,

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 follow-up of actions taken in response to review comments, which is

a particularly troublesome area.

GSA recently established the GSA Project Management Center of

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 high-visibility

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.

Some large A/E firms have secured ISO 9000 certification as a quality

control activity. Among federal agencies, several USACE’s district offices

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

14Subsequent 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.

Interesting Initiatives

Partnering and Team-building

Training

In-house Training Programs

Review Comment

Documentation

Project Management Center of

Expertise

International Standards

Organization (ISO) 9000

Certification
Enclosure I

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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

surveyed. The findings of this report as they relate to the original questions

posed about the value-added 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

process. An effective design review process helps to unify and align all

interested parties to a common objective and integrate their knowledge,

Conceptual or Advance Planning

Design Review Lessons Learned

A/E Historical Performance

Database

NIH Contractor Performance

System

Findings About the

Value-added of Design

Review Processes

What is the Value-added of

Design Review Processes?
Enclosure I

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experience, and skills throughout all phases of the facility acquisition

process (conceptual planning, design, procurement, construction, and

start-up). 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 construction-delayed facility start-up, and litigation.

The nine federal agencies that responded to FFC’s questionnaire indicated

that they currently measure the value-added 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.

Within most federal agencies, acquiring facilities is a means to support the

agency’s mission rather than the mission itself. The agency’s in-house

facility engineering staff exist to support the agency’s mission. First and

foremost, the in-house 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, in-house facility engineering

staff should be capable of providing the overall process leadership,

ensuring that all activities proceed in the best interest of the owner.

How Do (and How Can)

Federal Agencies Measure

the Value-added?

What Is the Role of In-house

Staff, and What Value Do

They Add to Design Review

Processes?
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Toward this end, the owner’s interests are best served if the in-house 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 in-house 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 high-security military facilities). Agencies are well advised to

retain such unique specialized skills in-house as core competencies, with

design review a primary in-house responsibility.

Industry-related research and the author’s interviews with public and

private sector practitioners suggest that agencies should retain the

capabilities in-house to

• define facility requirements in relation to the agency’s mission, assess

facility-related mission impacts, and conduct facility-related strategic

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.

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?
Enclosure I

Abridgment of the Federal Facilities Council Study on Facility Design Reviews

Page 28 GAO/GGD-00-172R Study on Facility Design Reviews

The risks and liabilities will vary depending on whether an agency

maintains the in-house capabilities to perform the design review-related

functions listed above. If an agency does not retain such in-house

resources and capabilities, agencies risk the following consequences:

• Consultant access to agency decision makers may be limited, resulting in

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

may find out too late to remedy the problem or to save 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.

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

three- and four-dimensional models of project designs in order to visualize

the impact of proposed changes. The Internet and computer-aided 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 technology-based practices. It is important to recognize that

some of the technology practices will cause major changes to established

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?
Enclosure I

Abridgment of the Federal Facilities Council Study on Facility Design Reviews

Page 29 GAO/GGD-00-172R Study on Facility Design Reviews

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

designs) work best when the owner has sufficient in-house expertise to

qualify as a smart buyer. A smart buyer is one who retains an in-house

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 in-house 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 team-building and partnering techniques to build good working

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 “buy-in,” 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

Best Practices

Role of the Owner

Teamwork and

Collaboration
Enclosure I

Abridgment of the Federal Facilities Council Study on Facility Design Reviews

Page 30 GAO/GGD-00-172R Study on Facility Design Reviews

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 cost-effective 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

start-up 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

complexity, cost, mission criticality, visibility, method of contracting,

Advance Planning

Process
Enclosure I

Abridgment of the Federal Facilities Council Study on Facility Design Reviews

Page 31 GAO/GGD-00-172R Study on Facility Design Reviews

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 stop-start 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, 30-50 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 computer-aided

design, three-dimensional modeling, data collection and distribution

software programs, and rapid communications systems, including the

Internet.

16. Conduct a postoccupancy evaluation to develop a lessons-learned

document for future reference. After facility start-up, 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.

Benchmarking
Enclosure II

Comments from the Director, Federal

Facilities Council

Page 32 GAO/GGD-00-172R Study on Facility Design Reviews

See footnote 14 on p. 24.
Enclosure III

Comments from Mr. Ralph Spillinger, Primary

Author of the FFC Study

Page 33 GAO/GGD-00-172R Study on Facility Design Reviews

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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