Engineering work without dealing with the commercial side is just a hobby

The critical issue for all engineering construction projects is the delicate balance between cost, schedule, and quality – The Iron Triangle. Failure to hold this equilibrium in check, and the contractual obligations that underpin these can lead to disastrous consequences for project results. Engineers play a vital role in harmonising technical excellence with commercial necessity.

The Classical Dilemma

The challenge is not new. According to Fleming:

…the standards of contract performance typically thought of as cost (#1), schedule (#2), and technical (#3), are often reversed in priority, and are performed with an emphasis on: technical (#1), schedule (#2), and cost (#3)… (Fleming. 1988).

This observation is at the crux of many engineering projects – the tension between pursuing engineering excellence and adhering to commercial imperatives.

For the engineering contractor there is the risk of “more being less” with regard to their design deliverables. The golden rule in any contracting arrangement is to perform and deliver only that which has been promised by the contractor and is being paid for by the employer.

Engineering for Success

Engineers must aspire to deliver the scope as per contractual obligations while ensuring profitability. Every engineering-oriented decision or action has the potential to cause an impact (positive or negative) on the project commercial results. These usually occur in the design stage, but their full impact does not normally manifest until construction execution.

Updated, revised, erroneous and incomplete Approved For Construction (AFC) status design documents issued for construction, including those that are issued late, or out of sequence relative to the planned timing and sequencing of construction activities invariably disrupt construction performance and progress that then lead to delays and additional costs.

Disruptions in the iterative process between engineering and procurement, leading to late placing of or revisions to purchase orders, delay the receipt of vendor data needed for AFC status design documents. This, in turn, causes delays in site delivery of these documents, along with associated equipment and bulk materials, affecting the efficient execution of construction activities. This is how “more” engineering can lead to “less” with regard to commercial results.

Therefore, early recognition and reporting by engineers of engineering-oriented decisions and actions is fundamental to identifying and implementing the actions required to avoid or abate their negative impact on commercial project results.

The Successful Engineer

Undoubtedly the success of engineering construction projects can rise and fall from the decisions made by the engineers during the early phases of the projects. In summary then we offer three key points to remember during their work.

Engineering Deliverables:

Engineers must create deliverables that not only meet contractual and legal obligations but also provide cost-effective solutions for procurement, construction, and commissioning.
Efficiency and timeliness are paramount.
Avoid the pursuit of “best-in-class” solutions that surpass contractual requirements.

Risk Management:

Recognizing and assessing technical, commercial, and contractual risks is critical.
Maintaining a balanced risk distribution and implementing mitigation measures are vital to project success.

Change Management:

Engineers must have a clear understanding of the bigger picture of the contract – the project baseline, scope, contractual obligations & entitlements, and risk balance.
Identify changes promptly, eliminate change events at their source, comply with contractual change mechanisms.
Evaluate time and cost impacts meticulously.

Engineers, by adhering to these guiding principles and recognising the intricate interplay between cost, schedule, and quality, play a pivotal role in steering projects towards success.

Kingsfield Academy specialise in training and coaching solutions that focus on the critical capabilities such as managing scope, contract, risk, change and time on projects, and leveraging the leadership behaviours and stakeholder relationships that underpin successful projects.