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Project Management Lifecycle (PMLG) for Green Building

In Vietnam, recently, there are some PMLG/PMLES projects which show a perspective of responsibility in protecting the environment both from Government Agencies and Non-Profit Organizations. However, there are also problems that affecting the projects.

1.            The market

2.            Commercial

3.            Dependence on Local Government’s Policies system

4.            The resource

5.            The techniques and technologies systems

6.            The real-life experience

The Project Management Lifecycle for Green building (PMLG) is the expectation of the 2^nd Green building generation, while the Project Management Lifecycle for Energy Saving Green building (PMLES) is the objective of the 5^th energy generation. PMLES is large representation sample of PMLG in which they can maximize the energy saving and minimize the cost for design and construction by using less energy & water in their own lifecycle. There is a difference between PMLG and PMLES in which PMLG is long-term strategy vision, while PMLES is short-term tactics of situation solution in Vietnam. But in reality, PMLES is a part of the PMLG’ spectrum. 

As a result, all stakeholders of the project need to understand thoroughly how the Green issues must be implemented during the PMLG – especially that the Green concept is created in the plan and design stages, and that will strongly affect the next stages as tender, construction, maintain and renovation stages.

Furthermore, a building can only be called PMLG/PMLES once it is certificated by an independent third party such as VGBC and/or ECC-HCMC (Energy Conservation Center of Ho Chi Minh City or Ministry of Industry and Trade of Vietnam) in which the Rating System depends on the 2^nd   Green building generation’s standard and codes (refer to Post-New York Zoning Law).

Mr. Nguyễn Anh Tuấn made a case study aimed to :

          1. identify what drives Green projects

          2. identify the PMLG development.

          3. find out the problems and benefits of the PMLG/PMLES in Vietnam; and to propose analysis and solutions for the problems/issues.

          4. propose a framework to implement the PMLG/PMLES in Vietnam.

  

Conclusions

During the past ten years, the energy saving criterion and energy using efficiency of Vietnam has been becoming the national aim program through Agreement No: 21/2011/NĐ-CP issued on 29 March 2011.

In this report, the author wanted to show the world trend to assess the green building based on the PMLG process. From that, there are efficiency methods to examine and evaluate the long-term project for the design or urban through its impact with environment in whole lifecycle of green building, since PMLG is expected to meet the requirements of owner, and PMLG is the result of the enhancement of PMLES process which is large representation sample of the PMLG process. Moreover, the scope of PMLG may be narrow, for example, it’s not only the maintenance policies of building energy saving but also the expansion in purchasing, cleaning, recycling of office waste and equipment.   

The PMLES is one of the criteria terms of Lotus tools. Therefore, PMLES’ solution is usually based on Eco-charrette process and Building Performance Simulation (BPS) to exactly assess and respond to the selected solution of PMLG, because PMLES are qualitative from the design stage to achieve aims as per as the following objectives:  

1^st Objective: In reality, there are three main factors to drive green project such as following:

(i)                The countenance and incentive from Government is the most motivation factor to rapidly expand the green industry. However, Vietnam has the higher cost which is the serious barriers and obstacle to attract developers and others. So, how can these problems/issues be solved? In order to encourage the developers and others, the most efficient solution supported by the government and community in each term of the payment is that they can promulgate the good tax policies and deliver the special permission with a short time approval.

(ii)    Green building perception in community: the Eco-charrette model is recognized in comparing the investment of new buildings to the conventional buildings and existing buildings in which they have been creating a long-term financial saving for green building and returning more effectively in investment initial capital to increase the lifecycle efficiency of new buildings.    

(iii)        To reduce energy consumption through operation stage and maintenance: The green buildings require a higher capital cost to design and build. On the other hand, in long term plan, the sustainable building experts assign that the potential green buildings reduce operational and maintenance costs which are equal or has lower capital cost through building’s lifecycle. Moreover, the financial motivation in building energy efficient buildings is recognizing the difference between latent energy use and consumption.  

2^nd Objective: the site for green building is one of the ten criteria which is of first importance of Lotus tools. Thus, in order to identify PMLG project for green building project development, the project must be connected with environment. Moreover, when we apply to Eco-charrette model which has critical situation in both pre and post-construction, we have to know for sure that the objective of both building and organization is met as well.

(i)          The project team may consider the use of appropriate environmental management systems for new green buildings and refer it to International environment standard ISO.14001 and Lotus tools.

(ii)            Many other criteria which can be also applied to existing buildings as ISO. 50001.

3^rd Objective: Landmark building brought the perceived benefits in reducing running cost and energy cost generally, particularly and dramatically; increasing health and reducing safety risks to occupants by improving internal/external environment, etc.; improving productivity and enhancing trade name for the organizations which involved in projects. It’s easier to lead the higher rents because of market distinction and a more attractable building, especially reduce the capital cost of construction. However, Vietnam has the problems/issues that need to have appropriate solutions for pre-design stage, design and post-design stage.  

(i)    In the Pre-Design stage:

          As the prerequisite for successful green building that is trend of the age, we should have to:

a.) Using Design goals about Green building to affect the PMLG process.

b.) Performing criteria effectively as solution tools.

c.) Budgeting

d.) Scheduling

e.) using successful criteria

f.) other supporting information (as BIM)

The project team should apply Green criteria efficiently. In this stage, the team should access, review and develop object of the OPRs. At the same time, all consultants (including green consultant) must perform completely.

(ii)          In the Design stage: Steps of concept design and design development must be applied by Green criteria as follows:

a.) Using the concept of Integrated Design Process (IDP) and Commissioning Process to manage and control the project.

b.) Using the design checklist.

Next steps are:

a.) MEP (election: water, envelope, ventilation, etc.)

b.) Architecture (façade, material, etc.)

c.) Structural Building

d.) Interior

e.) Landscaping systems

(iii)      In the Post-Design stage: Project environmental control plan

a.) Waste management

b.) Air pollution control

c.) Noise control

d.) Vector control

e.) Conservation of natural resource

f.) Emergency preparedness for environmental accidents

g.) Environmental records

At the same time, developing the system test, O&M and manual Building users’ guide system are facilities of the building.

In that case study, The Landmark Building was built for very long time, so it was innovated to implement the green building assessment system. Through the proposed framework and case study, we can see that the whole team was assigned and green building assessment system is also selected at the pre-design stage. Therefore, the green criteria will be developed by Green Consultant. To meet the OPRs, the green criteria becomes the key or norm for all team in order to operate the PMLES successfully.

4^th Objective: In order to operate PMLG/PMLES in Vietnam, we are supposed to adjust extra framework from PMLES process (Figure 1) to PMLG process (Figure 2) when we applied to Eco-charrette model (Figure 3.3). Thus,

 (i)  Eco-charrette is a jargon group that talks about a model of organization. They agree in corporation to change from old process to new process which has 26 prerequisite conditions and criteria. From a negotiation meeting with stakeholder, we can identify a route clearly and which new process will be belong to from the beginning to the end. Moreover, this project team has to collect database in design stage. 

(ii)  It’s obviously; the key of this study report framework is new Eco-charrette concept. Especially, when we apply to Eco-charrette model for new project or existing building in which we need to have been understood and implemented thoroughly. It means that the whole Green Consultants Experts should be participated in the beginning and early.

Recommendations

1. For the PMLG in this report

In order to implement the PMLG in Vietnam, we must study the theories and the recommendation on the efficiency of Green building such as follows:

  (i)  In the Developing Country like Vietnam, the PMLG is a new knowledge for all and at the same time, they are also short of the technique and technologies because of no previous Green building like this. Besides, the Government should promulgate or approach the climate data for using Building performance simulation tools.

 (ii) The Law of Vietnamese Construction should have the basic requirement to catch up with the environment problems/issues as trend of the Green issues.

(iii) The Government and community should have to find out how to supply the PMLG’s information for all residence to basically understand it.

(iv) Because Vietnam is at the tropical region, architecture must depend on weather and climate in this area. Moreover, PMLG’s solutions include advantage and disadvantage such as:

a.) There are tropical forests: bamboo, coconut

b.) There are lots of natural materials: sand, refined brick

c.)  There are lots of natural energy: solar, wind, tide, geothermal

This is the favor of the natural resource with very cheap cost which they can be reused to avoid environment degradation.

On the other hands:

a.) In Vietnam, thermal outdoor is always higher than the comfortable temperature area which base on the Webb Chart or Psychometric Chart.

b.)  Because it’s in the tropical region, monsoon/windy season has high humidity.

c.) It is inadequate both modern technology and forecast on environment depletion.

As the results:

1. Needing to integrate the concept of Eco-charrette, it means that the aspects of architectural design applied to technique and technologies to carry out efficiency perfectly and understand throughout about concept of mechanical aspect. It will make the PMLG more effective.

2. In PMLG, the Green experience and Local condition should be selected by the developer for the good project team that will affect the project in order to reducing and eliminating the risk for the project.

3. The PMLG brings the long-term benefits. So, when the PMLG start with involved parties, they should think about the Green because this is key issues of the developers. The investors need to know what they will invest directly into the project with their money.

4. Finally, in response to demand for a high quality, the PMLG requires the project team to have transparency, concise organization, role, duties and responsibilities in order to avoid the confusion and conflicts. Moreover, the time and cost overrun will not happen. 

For further study

Now, the big picture of Green Building in Vietnam is only portrait during the period of national industrialization and modernization. This report has just explored the general issues in implementation of the PMLG because of limitation of the scope and time of this study.

In order to build many green building project in the construction industry, investment in Green Building practices may be a leap of faith. Further research and successful examples of sustainable building will have a challenge for the developing technology and provide direct proof of its economic and health-related benefits, and encourage its greater adoption. Moreover, they have more analysis on the specific of the PMLG to prove the efficiency of this strategy which should be managed. In addition, the higher rate of the Green Building’s project should be also studied in comparison with the normal project. They have more confidential factors in encouraging the one who wants to involve in the PMLG.

To sum up, more studies on PMLG have to be conducted in order to compare more than the convention building, so that we will have enough spectrum for sustainable developments of PMLG.

His thesis abstract is copied and posted below.

Abstract

In the first decade of the 21^st Century, the Human face to challenges which demand them to support more their own responsibility. As we have to face not only too many opportunities which we have been living in, the fourth modern age of the technology revolution, but also too many challenges such as the resource depletions, greenhouse, pollution environment, climate change and so on. But there are some disasters coming from ourselves. Therefore, obviously, we choose this topic to response for the question of the Project management Life cycle for the Green building is really truth. The report focuses on the two problems suffered: minimizing or reducing impact on nature and requiring to adapt with changes, since the natural resource cannot restore its original source.

Nowadays, we usually talk about concept of the sustainable development which is willing to do something without damaging to environment. This concept is very large and complex which has Green building and tradition as well as a part of concept above. So, this report is awared to explore the main issues. Because of the short-time and narrow scope, we have only approached to foundation which based on the main issues in the implementation of Green building assessment system such as: LEED, BREEAM, CASBEE, BCA Green Mark, and especially the Lotus tools of VGBC, ECC-HCMC which have been operated in construction environment in Vietnam.

From that case, we learned some helpful lessons and use them as the historical data and references for other green buildings. 

Project Management Competency Assessment and Development of a Bridge and Road Contractor

The application of insurances and bonds to manage the risks is not new. However, not all the contractors and clients fully understand or appreciate their benefits, even if they obtain insurance coverage for their project. The reason that they purchase is mostly to comply with standard contracts or construction laws instead of their own interests of mitigating the construction risks.

The real trouble is the difficulty in making claims which they believe that the claim service is not standard. The fear and distrust of claims discourage the contractors to buy insurance.

Bonds/Guarantees are interesting but it is necessary to note the legal aspect of them. The owner may be refused in some cases because of illegal bond. It is the reason that the State Bank of Vietnam issued on October 3, 2012 Circular No. 28/2012/TT-NHNN on bank guarantees issued by credit institutions and branches of foreign banks.

Indentifying risks and transferring by insurances and bonds are the good ways for risk management, therefore the project performance will be better.  Mr. Ly Minh Van made a case study aimed to :

(i) study the risks of owners in high rise building project development

(ii) study the application of insurances and bonds to manage the owners’ risks

(iii) study the administration of insurances and bonds

a)   Conditions and negotiation process

b)   Claim procedure

(iv) develop a risk, insurance and bonds management framework

  

1 

Conclusion

Objective 1: To study the risks of owners in high rise building project development

The findings for this objective have indicated various kinds of risks in construction projects. The external risks are weather, political, economic, legal, and public and third party. The internal risks are contractor, consultant, designer, lender related, personal related, bidders related, contractual, technical, design and specification.

The owners’ risks may come any time from the planning stage of the project to the operation and maintenance stage. Risks affect the project through three primary constraints which are time, cost and quality.

The positive aspect of risks is that if any contractor has a good management of risk, they have ability to compete with others. This aspect is illustrated in figure below:

The application of insurances and bonds to manage the risks is not new. However, not all the contractors and clients fully understand or appreciate their benefits, even if they obtain insurance coverage for their project. The reason that they purchase is mostly to comply with standard contracts or construction laws instead of their own interests of mitigating the construction risks.

The real trouble is the difficulty in making claims which they believe that the claim service is not standard. The fear and distrust of claims discourage the contractors to buy insurance.

Bonds/Guarantees are interesting but it is necessary to note the legal aspect of them. The owner may be refused in some cases because of illegal bond. It is the reason that the State Bank of Vietnam issued on October 3, 2012 Circular No. 28/2012/TT-NHNN on bank guarantees issued by credit institutions and branches of foreign banks.

Indentifying risks and transferring by insurances and bonds are the good ways for risk management, therefore the project performance will be better.  Mr. Ly Minh Van made a case study aimed to :

(i) study the risks of owners in high rise building project development

(ii) study the application of insurances and bonds to manage the owners’ risks

(iii) study the administration of insurances and bonds

a)   Conditions and negotiation process

b)   Claim procedure

(iv) develop a risk, insurance and bonds management framework

1 

Conclusion

Objective 1: To study the risks of owners in high rise building project development

The findings for this objective have indicated various kinds of risks in construction projects. The external risks are weather, political, economic, legal, and public and third party. The internal risks are contractor, consultant, designer, lender related, personal related, bidders related, contractual, technical, design and specification.

The owners’ risks may come any time from the planning stage of the project to the operation and maintenance stage. Risks affect the project through three primary constraints which are time, cost and quality.

The positive aspect of risks is that if any contractor has a good management of risk, they have ability to compete with others. This aspect is illustrated in figure below:

Objective 2: To study the application of insurances and bonds to manage the owners’ risks”

One of the risk management methods is that the owner transfer risks to the other parties by applying the insurances and bonds. Based on the case study data analysis, each type of insurances and bonds can provide different categories of risk coverage for the project as follows:

      (i) Professional Liability Insurance covers breach of professional duty arising from any act    of      error or omission.

       (ii) Worker’s Compensation Insurance covers personnel injury and death of employees in the project.

    (iii) Construction Plant and Equipment Insurance covers for unforeseeable, accidental losses, physical damages to plant and equipment because of external causes, working or at rest, being dismantled specifically excluded in the policy.

    (iv) Erection All Risks Insurance covers for unforeseen and sudden physical damage during erection, including but not limited to the following risks: fire, lightning, chemical explosion, physical explosion, theft, burglary, earthquake, flood, inundation, windstorm, malicious acts, human errors, lack of skills... and for the insured’s legal liability for accidental bodily injury to or illness and/or loss of or damage to property damage belong to third parties arisen in connection with the insured erection works. 

    (v) Product Liability Insurance cover legal liability for personal injury or damage occurring anywhere in the world caused by goods or products which the Insured has supplied, sold, erected, repaired, altered, treated or installed in connection with and in the course of Business.

     (vi) Construction All Risks Insurance covers physical loss of or damage to the contract works necessary for repair or reinstatement costs caused by all risks not otherwise excluded by the policy wordings and endorsement.

     (vii) Third Party Liability Insurance covers legally to pay for accident bodily injury to any third party, damage to third party property occurring in direct connection with the construction or erection of the items insured.

     (viii) Bid Bond means a commitment of the guarantee party with respect to the party receiving the guarantee (bid solicitor) for assurance of obligation participating in bidding of the guaranteed party. If the guaranteed party violates the regulation of biding without performance or with insufficient performance of finance obligation for participation in bidding, the guarantee party shall perform for replacement.

     (ix) Performance Bond implies that the tenderer provides security by paying a deposit, providing collateral or providing a letter of guarantee for a definite term as stipulated in the tender invitation documents, in order to secure the liability of the winning tenderer to perform the contract.

     (x) Advance Payment Bond means a commitment of the guarantee party with respect to the party receiving the guarantee in order to ensure for obligation of repaying the advance of the guaranteed party under contract signed with the party receiving the guarantee. If the guaranteed party must repay advance but not repay or repay insufficiently, the guarantee party shall perform for replacement.

     (xi) Warranty Bond is similar to Performance Bonds but usually covers a warranty period after the contract completion.

Although the application of the insurances and bonds listed above brings the project owner a lot of benefits, these insurances and bonds still have some limitations that deserve the owner’s consideration.    

Objective 3: To study the administration of insurances and bonds

The main points of the insurance policy that must be taken into account include: 

(i) Preparing the survey report on the condition of any endangered surrounding property or land or building

(ii) Period of insurance;

(iii) Exclusion conditions;

(iv) Deductible;

(v) Some conditions are adverse or difficult to meet;

(vi) Some conditions need to be noticed;

(vii) Some conditions are useful for the insured.

The owners also need to pay attention to the following features of the bond:

(i) Its legality

(ii) Period of bond validity

(iii) Term of payment

Due to the perennial problem of failure to make full disclosure of all material facts and failure to promptly notify possible claims when making a claim, the claim management plays an important role in risk management. Any party taking out insurance should always carefully consider the policy wording to check that it is adequate for their purpose.

Recommendation for the owners

1. Using the insurance brokers

Policies are all too often unclearly or inconsistently worded and may contain exclusions which limit their usefulness. It is a reason that the owner should buy insurance through insurance brokers.

Technically, brokers work for the insurance buyer and are able to arrange insurance with any insurance company (Palmer et al., 1996). Under most insurance laws of the State, the broker has a legal obligation to be diligent in the placement of coverage. Their role is to represent and protect the exclusive rights and interests of their clients. Additionally, insurance brokers offer a wide variety of risk management support services such as:

(i) Issuance of certificates of insurance, endorsements, and other evidences of coverage

(ii) Premium cost estimation and billing

(iii) Advising the clients on insurance and risk management based on careful analysis and understanding of clients' requirements

(iv) Negotiation with the insurers to find the best terms, conditions and premiums based on  experience acquired in the world and in Vietnam

The owners can therefore be reasonably comfortable with the idea that their broker will make an effort to assure that there are no errors in the placement of insurance coverage.

2. Using one person specialized in insurances and bonds.

It is a good idea to assign one person full responsibility for all insurance matters. This person should maintain a checklist of a complete coverage, the due dates of reports and returns, and similar matters. It is this person’s responsibility to follow up on all reports, claims, cancellations and renewals (Palmer et al., 1996).

3. It is better if the contractor buy all insurances.

If the project scale is small or the owner chooses only one contractor for all of works, the contractor should purchase all types of insurance. The advantage is that the administration work is easier as compared to the owner buying insurance. Furthermore, the owner can transfer all of risks to the contractor.

On the other hand, the project scale is large or has many contractors; the owner should purchase Construction All Risks and Third Party Liability Insurance. The good point is that the owner just only purchase one time covering for all contractors. Therefore, the owner can get cheaper premium. However, the administration work may be complicated.

4. The consultants must purchase professional liability insurance with high limited liability.

The expense for consultants (soil survey, design, supervise, management) is often very small (3-5% of project cost), so it is difficult to pay compensation if the big loss come from the consultants’ fault. The owners should require the consultants to purchase professional liability insurance with high limited liability.

5. Getting bonds from the guarantee bank that is prestigious and reliable.

The prestigious bank with financial strength assures that the finances are available during the performance of the project. The reliability of the bank is also essential to assure the legality of the bond.

6. Risks, insurances and bonds management framework

Table below illustrates the recommendation for risks, insurances and bonds management framework. 

His thesis abstract is copied below:

Abstract

Construction projects have a lot of uncertainties and risks that affect both project performance and human being. Particularly, the high-rise building projects have more uncertainties and risks. Geological risks, height and others are one of the causes. In such cases, insurance and bond are very important to these projects because they can cover the risks and the contractor’s default. As a result, the project can get the financial and performance security.

With a focus on a case study approach to the high-rise building projects, an eighteen-storey complex in Ho Chi Minh City conducted in this study is to examine different types of risks, insurance and bonds of the owner. 

Although a variety of risks occur in construction projects, most of them can be protected by applying for insurance and bond schemes. The most common insurable risks include professional errors or omission, personnel injury and death of employees, material damages and losses, erection risks, public liability, construction risks and third party liability. The other risks which can be protected by bonds are contractor’s breach from tender phase to warranty phase.

Some problems, however, occur in administrating the insurances and bonds. This study is then to analyze the conditions of the processes and claim procedures. A framework for risk, insurance and bonds management are recommended at the end of the study.