The role of the Project Manager and Project Monitor

Distinguish the figure of the Project Manager/Project Monitor from that of the Construction Manager

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Who assumes control of costs, deadlines and quality in your project?

In 2019 we worked on a residential project where the construction management was also handling the project management. As a consequence of this accumulation of roles, the deadline and costs increased, but the developer was not aware of this until very late.

Without exception, all the projects we have been involved in that did not have a Project Manager have had problems of some kind. For any real estate asset transformation process, it is necessary to have a person whose role is to verify that the project's objectives with respect to quality, cost and time are met. Even so, many investors perceive the hiring of a Project Manager or Project Monitor as an unnecessary expense. This is not true at all, since the cost of the control management and value engineering exercise is always lower than the increases in project variations requested by the construction companies.

Several agents are involved in a construction process. Normally, the architect focuses on the quality of the project and the builder on carrying out the work and finding possible errors. The Project Manager / Monitor focuses on controlling costs, analyzing alternatives when there are cost increases and performing value engineering exercises to optimize existing costs. He also keeps an eye on deadlines and monitors quality. It is therefore the only one who watches over project costs and deadlines. If he also knows the client's business, he informs about those critical elements of the project and how to manage them.

The main difference between the Project Manager and the Project Monitor lies in the time commitment and responsibility he/she assumes. In this sense, the former also participates in the management, so his fees will always be higher than those of the latter. In businesses with small structures, the figure of the Project Monitor -very widespread in the banking sector- may be sufficient to analyze the possible risks from an independent point of view and, in fact, it is the most common in operations with a smaller investment. A very valid option -and one that we recommend- is to have a project monitor who also includes in the team someone specialized in controlling costs.

My proposal, as detailed above, is that cost and schedule control should not be delegated to project management.

The roles of the Project Monitor are based on the RICS (Royal Institution of Chartered Surveyors) standards.

What are the benefits of the Project Monitor?

1. Acts in representation to approve project costs and variations
2. Follows up on risks
3. Track design issues that may impact quality, costs and deadlines
4. Verifies that the quality of the project is in accordance with the quality of the work carried out
5. Verifies the status of permits and licenses

What does the external Project Monitor not take on?

• Management
• Responsibility for licenses, projects and project management.

What considerations should we take into account when requesting a Project monitoring of the work?

During this stage, the role of the Monitor includes:

1. Follow-up of the certifications between the constructor and the promoter or occupant.
2. Project monitoring using the information contained in the initial document.

Generally, the Project Monitor will be entitled to attend site and monthly project meetings or a special meeting under terms arranged with the developer, his principal design consultants and the contractor. He should also have access to the minutes of key meetings. On the other hand, if the Project Monitor is required to inspect the works at more regular intervals or at particular stages during the construction process, this should be agreed at the time of appointment and with appropriate allowance made within the fee agreement.

The Project Monitor may also be required to ensure that any changes to the agreement between the investor and the constructor are managed in accordance with the agreed terms, which will normally require them to be included in the contracts. There will often be time limits for approval or rejection of variations and it may fall to the Project Monitor, depending on the scope of its services, to review the proposed changes and advise the client of any risks within an approval period. However, agreements often provide for variations that are not considered "substantial changes" and can be made without the client's approval. In this case, it is recommended that the Project Monitor report whether such a change is considered material or not, the cost and the implications it may have on the construction schedule.

It is recommended that the role of Project monitoring includes:

1. Review of the progress and quality of the works, through biweekly/monthly site visits.
2. Verification of whether the works are being carried out in accordance with the design and the construction contract, with special emphasis on the quality and suitability of materials and equipment.
3. Verification of contractor's invoices to confirm that they correspond to actual progress construction.
4. Verification that there are no additional costs beyond those agreed with the client.
5. Monitoring cost control and making changes to control records that could incur project cost overruns.
6. Advising on design and construction changes.
7. Checking the progress of the project in general and the works in particular in accordance with the approved schedule.
8. Implementation of corrective measures, in case of identified deviations from the program.
9. Suggestion of timely recovery of deviations.
10. Identification of potential risks associated with administrative procedures.
11. Maintenance and review of the risk register on a monthly basis.
12. In case of technical incidents that may affect the fulfillment of project objectives, preparation of the corresponding report, including recommendations to mitigate the effects of the mentioned incident.
13. Issuance of a monthly report including all the above mentioned review and supervision activities, as well as their explanation and a photographic report of the works.

For information on the role of Project Manager please refer to RICS Professional Guidance . We also recommend seeing the Code of Project Management and the Project Management Institute (PMI) standards.

Incorporating Project & Cost management best practices in the management of investment business helps to control and succeed in the project. To make a good real estate business, in my opinion, it is essential to have knowledge of the market and profitability. However, the most important thing is to understand that we have to monitor these asset transformation processes to avoid unnecessary capital losses. In most cases the Project Monitor can also be responsible for the project costs.

• It is recommended that the role of Project Manager/Project Monitor be performed by someone outside the project or project team, as they usually have different interests.
• If you do not have a technical profile in the management team, hire an external company with a detailed scope of objectives.

If a Project Manager is not available, consider the figure of the Project Monitor or assume it yourself as an investor.

For more information regarding Project Management and Project Monitoring of your projects, do not hesitate to contact VMT & Associates at: