The Go/NoGo Process: Risk Analysis of Client, Project and Team

Projects are the lifeblood of A/E business. But the marketing resources required to secure a project can be significant. From a management perspective it’s a balancing act: Is pursuing this project a worthwhile investment? Are the project and client a good fit for our firm? Would this project truly benefit the business—in terms of profit and reputation? If we win this project will we be able to adequately staff it and manage the risk?

Without a standardized go/no go evaluation process, the decision can be based on individual enthusiasms, biases, and a host of other influences.

Firms have effective Go/No Go Processes that evaluate projects using point systems, positions on a 2x2 matrix, even the colors of a traffic light.

But whatever the visual presentation, a solid risk analysis will reveal the difficulties you are likely to experience with a particular project, so that you can plan for and mitigate the risks. It will help you have a higher rate of success in pursuing and implementing projects that are likely to utilize your firm’s strengths, enhance your reputation and earn a good profit.

Download Berkley Design Professionals’ Go/No‐Go Project Evaluation Checklist at https://www.berkleydp.com/risk-management/risk-resources/. Click on the first bullet point under Risk Management Plan.

Here are bullet points and comments from the discussion at the November Coleman Executive Roundtable for Architects and Engineers, presented by:

Dan Buelow, Managing Director
, Architects & Engineers
Dan.Buelow@WillisTowersWatson.com       312.288.7189

Andrew D. Mendelson, FAIA, Senior VP, Chief Risk Management Officer, Berkley Design Professional
amendelson@berkleydp.com     312.340.3475

The Purpose of Your Go/No Go Process

  • Align business development efforts with strategic goals
  • Use marketing dollars and effort effectively
  • Manage risk


Project Evaluation Process Factors

  • Client and project selection factors 

  • Internal firm and design team qualifications 

  • External design team considerations 

  • Overall project team components 

  • Financial aspects 

  • Quality and strategic goal alignment 


Client Selection Factors

  • Reputation

  • Experience in this project type. E.g., your firm’s sweet spot is single use office buildings and this client is developing a mixed use location.
  • Experience with this client. Have you worked with them before with a positive process and result?
  • Financial solvency. E.g., Can they pay for your design services (as you incur expenses) or will they expect you to work at risk in the early stages?
  • Contract negotiation. Do they treat design firms fairly and understand the limits of professional responsibilities? Does the negotiation indicate they’ll be difficult to work with? Are they prepared to budget and maintain adequate contingencies to deal with cost issues in the design and construction phases?
  • Litigation history. Do they have a history of legal action against designers and contractors? Litigation issues are more problematic to identify when you’re on unfamiliar territory, although many other countries are less litigious than the U.S.
  • Alignment of goals and expectations. Does the client share your vision for creating quality projects?
  • Repeat client or one-off. Is this client likely to offer further project opportunities?

Project Selection Factors

  • Project objectives. Are design and quality goals aligned?
  • Scope/size/budget/schedule. Are these critical factors realistic and attainable?
  • Will this be a project your firm will be proud of?
  • Funding source(s). Is the project likely to be delayed because of funding problems?
  • Regulatory approval process. How will this impact your work effort and ability to be efficient in project delivery?
  • Construction delivery. Design-build, P3 (Public Private Partnerships), IPD (Integrated Project Delivery) require extra consideration particularly if the design firm is expected to assume additional risk.
  • An unfamiliar state or foreign country will expose the project to different customs, laws, rules and regulations. There may be compulsory insurance requirements. Contracts may be written differently (or in a foreign language). Times zones are a consideration for communication. A good partnership with a local firm is a success factor.

Project Team EVALUATION
INTERNAL Design Team: Do you have sufficient skills in-house?

  • Depth of firm’s resources. Are project leaders and technical resources available for you to properly execute the project? What happens if you propose the same team to two or three projects and you win them all?
  • Leadership, management. Can your project manager lead and manage the project team?
  • Design/technical skills. In this robust economy it can be difficult to get adequate technical skills in house, especially for engineering firms.

  • How deep and complex will your consultant team be?
  • If you need to associate with another firm in the same discipline, how are you going to manage the partnership? Do you have a teaming agreement?

External Design Team

  • Subconsultants may be necessary to reinforce team qualifications. How deep and complex will your consultant team be?
  • Reputation, strategic benefit. If you need to associate with another firm in the same discipline, how are you going to manage the collaborative effort?
  • Impact on fee distribution and revenue/profit goals.
  • Established working relationship? If not, it will require a significant investment to build one.
  • Teaming agreement: duties, responsibilities, PM‐leadership, exclusivity, fees.
  • Process alignment, e.g., BIM, project management website. If they can use yours, great. If you have to use theirs, you will have the cost of training.
  • Professional liability insurance adequacy. You can require consultants to align their coverage to meet your levels of professional liability.

Overall Project Team Composition

  • Owner’s project manager, level of authority. 

  • Owner’s representative – will there be a third party owner’s rep or PM involved? 

  • Contractor, CM, subcontractors .

  • Any other consultants hired directly by the owner?

Financial Analysis
Conduct preliminary project planning to understand your work effort:

  • Ability to negotiate acceptable fee that meets a reasonable profit target.
  • Will there be irregular or unusual payment criteria for your services such as meeting schedule milestones rather than monthly invoicing?

Special Considerations for Design/Build and P3

  • Know/trust your contractor partner. 

  • Negotiate fair and balanced contracts. 

  • Expectations for cost estimate and deliverables. 

  • Be wary of limited tolerance for and inadequate budgeting of contingencies for design changes and construction change orders. 

  • Gain value for any upfront design investment by A/E. 


Comment: D/B can be a challenging project delivery environment. If you think twice with a typical project, think three times with design/build. We recommend you only proceed with D/B partners with whom you have had a previous positive working relationship.

Ultimately, the decision to proceed with a project is based on the overall analysis and alignment of your firm’s strategic, quality and financial goals. Will the project provide:

  • Current and future benefit to firm
  • A worthwhile investment of your marketing and sales time, energy and cost

More information

Dan Buelow, Managing Director
, Architects & Engineers
Dan.Buelow@WillisTowersWatson.com       312.288.7189

Andrew D. Mendelson, FAIA, Senior VP, Chief Risk Management Officer, Berkley Design Professional
amendelson@berkleydp.com     312.340.3475

 Legal Notice: This presentation is protected by US and International Copyright laws. Reproduction, distribution, display and use of the presentation without written permission of the speaker or the American Institute of Architects is prohibited.

Information provided by Berkley Design Professional is for general interest and risk management purposes only and should not be construed as legal advice nor confirmation of insurance coverage. As laws regarding the use and enforceability of the information contained herein will vary depending upon jurisdiction, the user of the information should consult with an attorney experienced in the laws and regulations of the appropriate jurisdiction for the full legal implications of the information.

Practice management recommendations should be carefully reviewed and adapted for the particular project requirements, firm standards and protocols established by the design professional.

 

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