The Central Artery Tunnel Project famously known as the Big Dig was the largest project ever undertaken in the United States, and for a project of this type, in the world. This week you will review the tremendous challenges of managing costs on the Big Dig and the underlying reasons why megaprojects commonly are underestimated and over budget. Respond to the following questions using your class readings, outside literature and class lectures and discussions.1. How would you avoid the problems discussed in Chapter 7 of MM(attachment) of cost overruns? What cost estimating tools and controls would you utilize to prevent overruns caused by inflation? design development? political infighting?2. What are your options once you identify the root causes of your budget overruns if you are midway through a major program?
megaproject_management__lessons_on_risk_and_project_management_from_the_big_dig.pdf
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MEGAPROJECT
MANAGEMENT
MEGAPROJECT
MANAGEMENT
LESSONS ON RISK AND
PROJECT MANAGEMENT FROM
THE BIG DIG
Virginia A. Greiman
Cover Design: Wiley
Cover Images: (from left to right)
Steven Phraner/iStockphoto
xenotar/iStockphoto;
Genyuan Huang/iStockphoto;
This book is printed on acid-free paper.
Copyright
2013 by John Wiley & Sons, Inc. All rights reserved
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Library of Congress Cataloging-in-Publication Data:
Greiman, Virginia A.
Megaproject Management : lessons on risk and project management from the Big Dig / Virginia A. Greiman.
pages cm
Includes bibliographical references and index.
ISBN 978-1-118-11547-3 (cloth : acid-free paper), ISBN 978-1-118-41634-1 (ebk.); ISBN 978-1-118-41887-1
(ebk.); ISBN 978-1-118-56765-4 (ebk.); ISBN 978-1-118-67109-2 (ebk.)
1. Central Artery/Third Harbor Tunnel Project (Mass.)–Case studies. 2. Tunnels–Massachusetts–Boston–
Design and construction–Case studies. 3. Public works–Massachusetts–Boston–Management–Case studies.
4. Project management–Case studies. 5. Risk management–Case studies. I. Title.
HE356.5.B6G74 2013
658.4 04—dc23
2012040855
Printed in the United States of America
10 9 8 7 6 5 4 3 2 1
This book is dedicated to the creativity, imagination, and
perseverance of all the engineers and construction workers on the
Big Dig, and to all those who come after them in creating the great
engineering projects of the world.
Contents
Author’s Perspectives
Acknowledgments
Introduction to This Book
xiii
xv
xvii
Overview
Key Concepts and Objectives
Transparent Frameworks
Shared Values
Collaborative Partnerships
Pedagogy
Course Structure
Overview of Course Chapters
References
1
2
xvii
xviii
xix
xx
xxi
xxi
xxii
xxiii
xxvi
Introduction to Megaprojects and the Big Dig
1
Introduction
Why Study Megaprojects?
Projects, Programs, and Portfolios
Characteristics of Megaprojects
Megaproject Framework
Lessons Learned
Summary
Ethical Considerations
Discussion Questions
References
1
2
7
12
25
30
30
30
31
32
History and Financing of the Big Dig
38
Introduction
The Vision
Innovation and Problem Solving
The Most Important Benefits of the Big Dig
The Financing of Megaprojects
Public-Private Partnerships
Major Sources of Big Dig Funding
Big Dig Revenues by Source, Dollar Amount, and Percentage
of Total Funding
The Real Cost of a Megaproject
38
38
42
49
54
55
67
vii
70
70
viii
3
4
CONTENTS
Lessons Learned
Summary
Ethical Considerations
Discussion Questions
References
72
73
74
75
75
Stakeholders
79
Introduction
Defining the Stakeholder
Stakeholder Principles
Project Stakeholder Framework
Stakeholder Management on the Big Dig
Conflicts of Interest among Internal Stakeholders
Multiple Roles of Project Owners and Sponsors
Multiple Roles of the Management Consultant (Consultant)
Stakeholder Concerns and Mitigation Tools
Corporate Responsibility Initiatives
Stakeholder Participation
Key Lessons Learned about Stakeholder Management
on the Big Dig
Summary
Ethical Considerations
Discussion Questions
References
79
80
81
82
87
90
91
93
94
97
97
Governance
Introduction
What Is Governance?
Project Governance
Multiple Governance Structures as a Dynamic Regime
Developing a Megaproject Governance Framework
Projects as Temporary Institutional Structures
Governance Framework Development: Five-Step Process
Governance as Decision Making
The Challenges of Implementing Project Governance
Frameworks
Lessons from Practice: The United Kingdom’s T5 New Product
Delivery Project
Lessons Learned
Summary
Ethical Considerations
Discussion Questions
References
5
Megaproject Scope Management
Introduction
1. Scope and the ‘‘Triple Constraint’’
2. Defining the Scope on a Megaproject
101
106
106
106
107
110
110
111
113
115
117
117
118
130
137
142
143
146
146
147
148
152
152
153
154
Contents
3. The Project Organization: Scope Controls Program
4. The Technical Scope Statement (TSS)
5. Project Work Breakdown Structure (WBS)
6. Scope Evolution and Scope Creep
7. The Specification Management Plan
8. Scope Change and Verification
9. The Top Ten Scope Control Tools
Lessons Learned
Summary
Ethical Considerations
Discussion Questions
References
6
Schedule
Introduction
Schedule-Driven projects
The Big Dig’s Timeline: A Long and Winding Road
Major Phases of Project Delivery
Perceptions of Stakeholders on Approaches to Reduce Highway
Project Completion Time
Impact of Design Development on Schedule
Schedule and Cost Integration
Project Delays
The Big Dig Lessons from Practice: Calculating Delay
Costs—Bottom Up
Incentives as Tactics for Keeping on Schedule
Lessons Learned
Summary
Ethical Considerations
Discussion Questions
References
7
Cost History
Introduction
Megaproject Cost Estimation Research
Cost Growth History on the Big Dig
The Big Dig Cost Construction Summary
Lessons Learned
Summary
Ethical Considerations
Discussion Questions
References
8
Cost Management
Introduction
1. The Project Budget Process and Cost History
2. Cost Centers
3. Cost Management Team
ix
157
162
162
166
169
173
174
179
180
181
181
182
185
185
185
186
191
193
194
196
202
205
206
209
210
210
211
211
214
214
214
216
229
229
231
232
232
232
235
235
236
236
236
x
CONTENTS
4. Data Resources
5. Cost Control Tools
6. Strategies to Address Cost Escalation
Lessons Learned
Summary
Ethical Considerations
Discussion Questions
References
9
Megaprojects and Megarisk
The Role of Risk Management on Megaprojects
Risk Management Framework: A Shared Vision of Risk
The Development of a Risk Model
The Broad Context of Risk for the Big Dig
Risk Management Organization
Risk Strategy
Lessons Learned
Summary
Ethical Considerations
Discussion Questions
References
10 Quality Management
Introduction
What Is Quality?
Elements of Quality Management
Continuous Improvement
Quality Programs at the Big Dig
Lessons Learned
Summary
Ethical Considerations
Discussion Questions
References
11 Building a Sustainable Project through Integration
and Change
Introduction
Project Integration versus Collaboration
The Relationship between Project Integration and Change
Management
Integration of Project Delivery
Integrated Project Organization
Innovative Process and Program Integration and Sustainability
at the Big Dig
Structuring the Change Process
Lessons Learned
Summary
240
241
257
258
260
260
261
262
264
264
266
267
276
278
280
308
310
311
311
313
316
316
317
319
324
325
341
344
344
344
346
349
349
350
351
354
357
358
382
384
386
Contents
Ethical Considerations
Discussion Questions
References
12 Leadership
Introduction
What Is Leadership?
Characteristics of Effective Leadership
Leadership Styles
Leadership for the Five Stages of Program Management
Ten Important Lessons on Leadership from the Big Dig
Summary
Ethical Considerations
Discussion Questions
References
xi
386
386
387
391
391
392
394
395
398
399
410
410
411
412
Appendix
415
Glossary
419
Abbreviations and Acronyms
453
Index
457
Author’s Perspectives
There are many reasons for writing about megaprojects, but perhaps one
of the most significant is to share the important lessons learned for future
projects so that the workers, engineers, contractors, government policy makers, project management professionals, and the communities impacted by
these large-scale projects will benefit from the challenges that others before
them faced. Having served on the Big Dig for the better part of nine years, as
both deputy chief counsel and head of risk management, I am grateful for the
opportunity of working with a devoted team of professionals who everyday
faced unprecedented risks, made difficult and often unpopular decisions, and,
despite the public criticism, burdens, and numerous hurdles, implemented
those decisions because it was the right thing to do. As James Tobin, in his
popular book Great Projects, notably writes, ‘‘Americans have admired their
engineers from afar. But few have learned much about them.’’
Hopefully, this book will enlighten the reader not only about the many
technical marvels of the Big Dig but, more important, about the day-to-day
obstacles, challenges, and uncertainties faced by the engineers and many
other participants in this megaproject. Rarely are the successes of these
mammoth projects noticed, as the stories that are told are too frequently
focused on what went wrong. The goal of this book is to provide some balance.
I am most appreciative of the participants in the Big Dig and other
megaprojects who willingly agreed to be interviewed for this book, so that
projects of the future can have even better outcomes. This book, of course,
is itself an ongoing research project, and I hope the lessons herein will
encourage others to share their experiences, so that we all may learn how to
build a better and safer world through the advancement of innovative ways
of thinking about and managing the projects of the future.
xiii
Acknowledgments
There continues to be a desperate need for innovative project managers, as
evidenced by the numerous endeavors to improve the quality of life for so
many, particularly those from the poorest and most war-torn countries in the
world. Academic scholarship, sometimes overlooked in the urgent desire to
get things built, plays an important role in the improvement of projects. As I
explored the tremendous amount of research that has already been done on
large projects, I was truly grateful for the honest evaluations and thoughtful
analysis of so many diverse projects in our universe—from deepwater and
underground tunneling to livable communities for the poorest of our society,
the great space explorations, and the Next Generation Air Transportation
Systems (NextGen).
I have many to thank for their tremendous contributions to this book
in bringing the story of the management of the world’s largest inner-city
engineering project to life. The names of those to whom this book is indebted
are legion. They include my students, who instill in me my passion for
teaching and enlighten me with their enthusiasm, dedication, and creativity.
I am also thankful to my fellow professors and colleagues, especially those
who provided insight and new direction and guided me when I went astray.
To my talented and dedicated research assistance, Nora Estrella, who
coordinated thousands of documents, explored every avenue of research on
megaprojects, and labored over every detail, there are no words to express
my appreciation. I could not have done it without her devotion and encouragement. To my colleague Dorothy Tiffany, who meticulously reviewed every
chapter and provided sound advice based on her many years of experience in
project and program management at NASA, I owe my deepest gratitude.
To my colleagues on the Big Dig, I will always be grateful for your support
and devotion to seeing this project through, despite its many obstacles and
challenges. I owe a special thanks to those who generously shared their
experiences and perceptions and gave sound advice on best practices and
lessons learned, as highlighted throughout this book. Among my many other
colleagues at the Big Dig who contributed to this book, a special thank-you
to Richard Schoenfeld, Nicole Hunter, Keith Diggans, and Yoke Wong for
sharing their insights and valuable knowledge.
To Fred Salvucci, the master planner of the Big Dig, I am tremendously
thankful for your generosity with time and for the knowledge you have given
me about a project that has forever changed the face of Boston. To Mary
xv
xvi
ACKNOWLEDGMENTS
Connaughton, a devoted member of the Massachusetts Turnpike Board,
thank you for all you did to raise the voice of the people a little louder.
Thanks also to all my colleagues who served in various capacities within the
federal and state government, to Bechtel/Parsons Brinckerhoff, and to those
members of the risk management and safety and health teams. I am also
most appreciative of the many who served on great projects throughout the
world and kindly shared their experiences with me.
To Dean Halfond, Dean Zlateva, Dean Chitkushev, professors Vijay
Kanabar, Wally Miller, Tamar Frankel, Kip Becker, Roger Warburton, Sam
Mendlinger, Barry Unger, and Stephen Leybourne, and to all my colleagues,
thank you for your support and guidance in this effort and for sharing your
love of projects with me. Thank you to my diligent reviewers, Khang Ta,
John Martin, Diane Hemond, Tom Kendrick, Charles W. Bosler, Jr., Star
Dargin, Jim Hannon, and Joann Frantino, for your critical analysis and
thoughtful recommendations. To Nancy Coleman and her staff, thank you
for your valuable perspectives on teaching methodologies and learning in
cyberspace.
To my student researchers, Bran Crudden, Heng Zhang, Ming-Hwa Wu
(Fiona), Visutthep Thammavijitdej (Tang), Silvano Domenico Orsi, and Sergei
Tokmakov, thank you for never missing a beat and for keeping me motivated
and excited about this project in the midst of the collection of massive
amounts of research and overwhelming documentation. To Martha Totten,
Fiona Niven, Susan Sunde, and Lucille Dicker, thank you for your unrelenting
administrative assistance and support.
A special thanks to my publisher, John Wiley & Sons; to Executive Editor
Robert Argentieri and Dan Magers for your willingness to take on this
project and your constant support; to Amanda Shettleton for preparing this
book for production; to Renata Marchione, Marketing Manager; Robert Wall,
Supervisor (Project Creative Services); and to my production editor Nancy
Cintron and my copy editor Ginny Carroll for their diligent review of this
book. Also, much appreciation to the Project Management Institute (PMI),
especially Barbara Walsh and Steve Townsend, for their excellent insights
into PMI standards and practices.
I would like to thank my wonderful family for their constant support
and inspiration throughout this lengthy endeavor and for their incredible
assistance with graphics and design.
My apologies to anyone I may have forgotten to mention here.
Finally, to the readers of this book, I would like to encourage you to
continue to explore the reasons why some projects fail and others succeed,
what makes megaproject management so inspiring and challenging, and how
we can better prepare for the projects of the future.
Responsibility for errors or omissions in this book remains mine alone.
Introduction to This Book
What we think, or what we know, or what we believe is,
in the end, of little consequence. The only consequence is
what we do.
—John Ruskin
OVERVIEW
In 1956, an interstate highway was built across the United States, which
ended abruptly at the edge of Boston and connected with an elevated highway
known to Bostonians as the ‘‘Highway in the Sky.’’ Almost 50 years later,
America’s most ambitious infrastructure project, the Big Dig, was substantially completed. This was the largest, most complex urban infrastructure
project in the history of the United States and included unprecedented
planning and engineering, as described in Luberoff and Altshuler’s political
history of the Big Dig (1996), and reflected in the many awards for recognized
excellence the project received (listed in the appendix to this book).
The Big Dig was originally projected to cost $2.5 billion and was to
be completed by 1998. Instead, the project cost $14.8 billion and was not
completed until 2006. Truly a massive project, the Big Dig involved 5000
workers, 130 major contractors, an army of construction equipment including
more than 150 cranes, excavation of enough dirt to fill a football stadium to the
rim 16 times, enough reinforcing steel to make a 1-inch steel bar long enough
to wrap around the planet, and enough concrete to build a sidewalk 3 feet
wide and 4 inches thick from Boston to San Francisco and back three times.
Unfortunately, the important lessons learned from this project have never
been formally developed or disseminated, and limited information about the
project’s numerous processes, policies, and procedures is available. As we
likely will never see a project of this size and complexity again in the United
States, it is important to preserve now the important lessons of this monumental project for students, project leaders, and government policy makers.
The need for knowledge about megaprojects is apparent from every corner
of the globe. Cities and towns across the United States are spending hundreds
of billions of dollars annually to preserve the nation’s infrastructure and
construct the next generation of roads, bridges, tunnels, energy resources,
and water supply, as are countries around the world. The Big Dig’s two
xvii
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INTRODUCTION TO THIS BOOK
decades of experience provide valuable lessons for students, scholars, urban
planners, engineering and construction professionals, project sponsors and
investors, regulators, and government transportation officials interested in
infrastructure and urban development. Better ways must be found to manage
infrastructure projects and reduce the cost overruns, schedule delays, injuries
and property damage, and the overall cost of risk that plague so many
megaprojects.
Significantly, the Organization for Eco …
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