Chapter 2

Project Life Cycle and

Organization

The PMBOKD Guide-Third Edition advises, "Projects and project management are
carried out in an enronment broader than that of the project itself." Section 1.2.1
of this Construction Extension describes some of the unique features of this environ-
ment for construction projects. Most ofthe contents ofthis chapter are closely applica-
I ble to construction projects.

2.1- The Project Life Cycle

See Section 2.1 of the PMBOKP Gttid.e-Third Edition. This concept is particularly
important for a construction project where each phase has defined decision points,
deliverables, or completion milestones which, when observed, prode a smooth flow
and improved control over the life of the project.

2.1.1 Characteristics of the Project Life Cycle

see section 2.1. t of the PMB0Jlo Gude-Third Edirion. As menrioned in the PMBo(o
Guide, "'I'he phases of a project life cycle are not the same as the Project Management
Process Groups described in detail in Chapter 3."
Figure 2-l of the PMBOIP Guide-Third Edition shows a typical start of a construc-
tion project. I-Iowever, a project proposal could start with design development (DD)
or a contractor request for proposal/quotation (RFP/RFQ), depending on the time of
initiation of the proposed project.
In the context of project and construction management, the portions of the con-
tracted services that extend beyond the completion of the facility itself (i.e., mainte-
nance or operation) are not considered to be a part of the management of a construc-
tion project. \\hile sucl] services may be a part of contracted services and need to be
consideled, planned, and executed carefully, they take place in the field of "operations"
and are not included in the Body of Knowledge related to the management of construc-
tion projects.
The most common tlpe of construction project is one that is performed outside of
the initiating organization by a team of discipllne specialists. However, construction

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 protects which are performed within a single organization do exist and are self-per-
forming entities, such as facility management.
The construction life cycle typically involves three main players: the owner, the
designer and the constructor (contractor). Each plays a major role in a construction
project, although the responsibilities may vary widely depending on rhe type of projecr
plan and contract form.
Usually, when the owner determines the need for a new facility or improvement
to a facility, a study (often called a feasibility study) is performed to more clearly
dene the viability and form ofthe project that will produce the best or most profitable
result. The study usually involves a reew of alternatives that may satisfy the need
(value management) and the desired form of nancing (financial management). The
study may be conducted in-house if the capability exists. More typically, the services
of an architect/engineer(s) or an architect/engineer/contractor are commissioned to
do most of the work. While this pre-project activity can utilize some input from a
contractor, often it does not, except in design-build projects. It may be performed by
an architect/engineer/contractor firm that possesses both design and construction
capabilities.
The successful completion ofthe feasibility study marks the first ofseveral transition
milestones and probably is the most important. This is the starting point for the proiect
by the owner if the project is approved. See Figure 2-2 of fhe PMBOK.| Guide-Third
Edition. Sometimes the proiect is not approved, or the feasibility study shows that the
project does not meet the financial criteria, and the project is cancelled. tt is better
to cancel the project at an early stage rather than spend more money on a project
that, most likely, will fail ultimarely.

2.7.2 Charcctetistics of Project Phases

See Section 2.1.2 and Figure 2-3 of the PMBOKa Guide-Third Edition for an explana-
tion of project phases.
Most construction projects can be ewed in five phases, although they are some-
times shortened to four; each one of these phases can be treated like a project in
itself, with all of the process groups operating as they do for the overall project. These
phases are concept, planning (and development), detailed design, construction, and
start-up and turnover.
The concept phase is essentially the feasibility study, which ends with its completion
and approval of the project. fn the planning and deuelopment phase, the concept is
defined further, the project criteria are established, and basic drawings are produced
along with a schedule, budget, and work plan of how the detaled desgn, constnrction,
and start-up are to be performed. It is customary, and often critical, that the client or
owner approve the basic drawings, criteria, and work plan, which then become the
baseline configuration for the project. ln the detailed design phase, all design details
are completed and drawings and specifications are issued for construction. This can
be accomplished using one of the following methods:
. A traditional design-bid-build project delivery method that results in completion
of the design work and subsequently, requests for competitive constntction bids.
o A design-build or phased design method in which design and construction are
performed in parallel. While this method is not new, it is seeing a current surge in
popularity. Design is performed in sequential packages, which are then bid and
constructed in the order released. This method is sometimes used in an attempt
to fast-track a project, but can have negative consequences if an overall design is
not locked in early in the proiect.

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 Vhen construction is completed, the project is ready for final testing and start-up
operations, followed by turnover to the owner. For ma.jor projects (e.g., industrial),
the start-up phase is often done in sequential segments following the process flow;
the project culminates when the plant or project becomes operational according to
its design.
The citical milestones for construction projects are:
o Initial approval of the concept (feasibility study)
o Approval of the project criteria (baseline configuration)
. Readiness to initiate start-up
o Contractual completion of the project
Project success depends upon the clear establishment of these milestones and the
criteria that defines them.

2.1.3 Project Life Cycle and Product Life Cycle Relatonships

See Section 2.1.3 of the PMBOK! cid-Third Edition.

2.2 Prciect Stakeholders

See Section 2.2 of The PMBOKT Guide-Third Edition. In addition to the basic eight
stakeholders discussed, every construction proiect involves one additional stakeholder
and many involve a second or third as follows:
. Regulatory agencies. Federal, state, local, and international agencies, which issue
permits and otherwise control ceain aspects of the construction process.
o General public. These can be organized groups or citizens who are affected by the
construction project during the building process or the facility's operation upon
completion of the project. Such public groups have had increasing influence in
delaying, modiliing the scope of, or, in some cases, causing the cancellation of
projects. Refer to Chapter 15 of this extension on Project Financial Management.
Public funding sources, such as bonds, tax levies, World Bank, and federal aid,
needs to be considered in the financial plan for the project. Funding participants
are all very important stakeholders in today's world and need to be included in the
analysis of stakeholder needs.
. Project managers. Project managers are often assigned to a construction project
from organizations, both public and private, that ae involved in the construction.
The project managers are often changed from one phase to another or some may
specialize in only one phase of the construction project.

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 2.3 Organizationa! lnfluences
See Section 2.3 of the PMBOIP Girl-Third Edition.

2.3.1 Organizational Systems

See Section 2.3.I of the PMBOK9 Gad-Third Edition.

2.3,2 Otganizalional Cultures and Styles

Gide-Third Edition. In construction, the imponance
See Section 2.3.2 of the PMBOKB
of culture may be emphasized when the performing organization's culture differs from
that of the owner or customer. This is particularly important to the proiect when an
owner hires the services of an architect/ engineer or construction manager to be a part
of an integrated project team consisting of emplovees of the owner and contractor.
The melding of different organizational cultues needs to be addressed in order for
the project to be successful.

2.3.3 Organizational Structure

The PMBOIG Gaide-Third Edition has a good discussion on the various t!?es of
proiect organizations but is generallv more applicable to the owner's or customer's
organizations and overall project organizations. Large engineering firms or engineer/
constructors rvill likelv utilize a matrix organization as shor,rm in Figures 2-9,2-10, and
2-l I of the Pi\IBOIG Gid-Third Edition, while a contractor will be organized more
along the lines of a projectized organization (see Figure 2-8 of the PMBOIP Gude-
Third Edition). The management of construction is sometimes made difcult when
several organizational structures intersect because of the various stakeholders' differing
\ie\\points and agendas. The challenge is to manage the decision process effectively,
recognizing these differences. Construction now utilizes partnering as a project align-
ment technique to bridge these differences. See Section 4.4.2.3.

2.3.4 The Role of the PMO in Organizatonal Structures

See Section 2.3.4 of the PMBOIO Guid-Third Edition.

2.3.5 Project Management System

See Section 2.3.5 of the PNIBOK', Guid-Third Edition.

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