Megaproject Management

VIRGINIA A. GREIMAN is Professor of Megaproject Management and Inter- national Development and Project Finance at Boston University. She is the former deputy counsel and risk manager for the Big Dig (from 1996 to 2005), and served as a core manager on the twelve-member project executive team responsible for the daily operations of the project. She had an opportunity to participate firsthand in addressing the project's challenges and fulfilling its goals during its peak years of construction.

Author’s Perspectives xiii

Acknowledgments xv

Introduction to This Book xvii

Overview xvii

Key Concepts and Objectives xviii

Transparent Frameworks xix

Shared Values xx

Collaborative Partnerships xxi

Pedagogy xxi

Course Structure xxii

Overview of Course Chapters xxiii

References xxvi

1 Introduction to Megaprojects and the Big Dig 1

Introduction 1

Why Study Megaprojects? 2

Projects, Programs, and Portfolios 7

Characteristics of Megaprojects 12

Megaproject Framework 25

Lessons Learned 30

Summary 30

Ethical Considerations 30

Discussion Questions 31

References 32

2 History and Financing of the Big Dig 38

Introduction 38

The Vision 38

Innovation and Problem Solving 42

The Most Important Benefits of the Big Dig 49

The Financing of Megaprojects 54

Public-Private Partnerships 55

Major Sources of Big Dig Funding 67

Big Dig Revenues by Source, Dollar Amount, and Percentage of Total Funding 70

The Real Cost of a Megaproject 70

Lessons Learned 72

Summary 73

Ethical Considerations 74

Discussion Questions 75

References 75

3 Stakeholders 79

Introduction 79

Defining the Stakeholder 80

Stakeholder Principles 81

Project Stakeholder Framework 82

Stakeholder Management on the Big Dig 87

Conflicts of Interest among Internal Stakeholders 90

Multiple Roles of Project Owners and Sponsors 91

Multiple Roles of the Management Consultant (Consultant) 93

Stakeholder Concerns and Mitigation Tools 94

Corporate Responsibility Initiatives 97

Stakeholder Participation 97

Key Lessons Learned about Stakeholder Management on the Big Dig 101

Summary 106

Ethical Considerations 106

Discussion Questions 106

References 107

4 Governance 110

Introduction 110

What Is Governance? 111

Project Governance 113

Multiple Governance Structures as a Dynamic Regime 115

Developing a Megaproject Governance Framework 117

Projects as Temporary Institutional Structures 117

Governance Framework Development: Five-Step Process 118

Governance as Decision Making 130

The Challenges of Implementing Project Governance Frameworks 137

Lessons from Practice: The United Kingdom’s T5 New Product Delivery Project 142

Lessons Learned 143

Summary 146

Ethical Considerations 146

Discussion Questions 147

References 148

5 Megaproject Scope Management 152

Introduction 152

1. Scope and the ‘‘Triple Constraint’’ 153

2. Defining the Scope on a Megaproject 154

3. The Project Organization: Scope Controls Program 157

4. The Technical Scope Statement (TSS) 162

5. Project Work Breakdown Structure (WBS) 162

6. Scope Evolution and Scope Creep 166

7. The Specification Management Plan 169

8. Scope Change and Verification 173

9. The Top Ten Scope Control Tools 174

Lessons Learned 179

Summary 180

Ethical Considerations 181

Discussion Questions 181

References 182

6 Schedule 185

Introduction 185

Schedule-Driven projects 185

The Big Dig’s Timeline: A Long and Winding Road 186

Major Phases of Project Delivery 191

Perceptions of Stakeholders on Approaches to Reduce Highway Project Completion Time 193

Impact of Design Development on Schedule 194

Schedule and Cost Integration 196

Project Delays 202

The Big Dig Lessons from Practice: Calculating Delay Costs—Bottom Up 205

Incentives as Tactics for Keeping on Schedule 206

Lessons Learned 209

Summary 210

Ethical Considerations 210

Discussion Questions 211

References 211

7 Cost History 214

Introduction 214

Megaproject Cost Estimation Research 214

Cost Growth History on the Big Dig 216

The Big Dig Cost Construction Summary 229

Lessons Learned 229

Summary 231

Ethical Considerations 232

Discussion Questions 232

References 232

8 Cost Management 235

Introduction 235

1. The Project Budget Process and Cost History 236

2. Cost Centers 236

3. Cost Management Team 236

4. Data Resources 240

5. Cost Control Tools 241

6. Strategies to Address Cost Escalation 257

Lessons Learned 258

Summary 260

Ethical Considerations 260

Discussion Questions 261

References 262

9 Megaprojects and Megarisk 264

The Role of Risk Management on Megaprojects 264

Risk Management Framework: A Shared Vision of Risk 266

The Development of a Risk Model 267

The Broad Context of Risk for the Big Dig 276

Risk Management Organization 278

Risk Strategy 280

Lessons Learned 308

Summary 310

Ethical Considerations 311

Discussion Questions 311

References 313

10 Quality Management 316

Introduction 316

What Is Quality? 317

Elements of Quality Management 319

Continuous Improvement 324

Quality Programs at the Big Dig 325

Lessons Learned 341

Summary 344

Ethical Considerations 344

Discussion Questions 344

References 346

11 Building a Sustainable Project through Integration and Change 349

Introduction 349

Project Integration versus Collaboration 350

The Relationship between Project Integration and Change Management 351

Integration of Project Delivery 354

Integrated Project Organization 357

Innovative Process and Program Integration and Sustainability at the Big Dig 358

Structuring the Change Process 382

Lessons Learned 384

Summary 386

Ethical Considerations 386

Discussion Questions 386

References 387

12 Leadership 391

Introduction 391

What Is Leadership? 392

Characteristics of Effective Leadership 394

Leadership Styles 395

Leadership for the Five Stages of Program Management 398

Ten Important Lessons on Leadership from the Big Dig 399

Summary 410

Ethical Considerations 410

Discussion Questions 411

References 412

Appendix 415

Glossary 419

Abbreviations and Acronyms 453

Index 457