The City of Edmonton will implement an Independent Project Management Office (IPMO) to ensure that Capital Projects are not only delivered on schedule and budget, but that the appropriate responsibility split between planning/approval and delivery is maintained.
How Will The IPMO Operate?
With a fully Independent and autonomous Project Management Office, the City will have the confidence that the Capital investments it has approved through the Capital Budget Process will be delivered efficiently.
The Core Mandate of the IPMO will be: Securing appropriate resources and methods to efficiently deliver the City’s approved Capital Construction Plan in the most cost efficient and effective manner.
As an independent organization (yet guided by the City’s policy objectives), the IPMO can implement procurement policies (within allowable Trade Legislation) to promote competition within the local construction industry as well as foster and grow a strong local pipeline of construction talent.
The City currently uses a 5 stage approach to deliver Capital Projects defined as: Strategy; Concept; Design; Build; Operate.
The City is the Planner, Owner, Decision Maker as well as the Delivery Body. Often when projects go wrong, the blame is shifted to ‘the last one to touch it’ – the Delivery Body. There is incentive to brush over issues, and keep them from the public eye.
At other times, project decisions made earlier in the process don’t come to light until construction and/or operation. These earlier decisions are often pointed at the construction arm, when they should be owned by the Planning and Decision arm. Accountability is lost, and potential missteps are repeated into the future.
Long Term Liabilities related to construction projects are often downplayed. With long life projects or after the fact court/arbitration cases, there is limited recognition of the potential downstream cost implications of capital works. If costs are recognized, they are not clearly indicated in the same transparent manner as a private corporation. This visibility into short and long term cost implications (and obligations) will enable the City to make sound decisions with the full understanding of the financial landscape.
Too often politics can become influential in the project delivery phase of the work (rather than the planning or approvals phase). It can be expedient to lay blame for project execution/implementation when the root of the issue can be found much earlier in the process – at the Conceptual, Planning, or Design phases of the project. Effective Project Management is a commercial, transactional activity, which ensures the physical infrastructure is completed on time, on budget, and within the scope originally conceived by the approving body. Perceptions about the efficacy of the work should not be conflated with the originating decisions about what work to undertake in the first place.
New IPMO Office
The IPMO would have sole responsibility for the Build stage of the City’s Capital Project Lifecycle.
After the City has a project greenlit for construction, it is the IPMO’s responsibility to ensure:
No Project will Proceed unless the IPMO has High Confidence that it has been properly planned, scoped and budgeted and that it has a high probability of being delivered on time and on budget.
- The City of Edmonton Creates a municipally controlled corporation (IPMO Inc.) with the express intent to deliver the City’s Capital Project Portfolio.
- The IPMO will be governed by a Board of Directors appointed by the City Council. The Board will use a competency based approach encompassing expertise in the areas of Finance, Construction, Risk, Legal, Communications, No elected Councillors or City Staff will be part of the Board of Directors.
- This separation of responsibilities (from the City Decision Making process about *which* projects to build and the process of building them) will ensure that the primary focus is on effective delivery of capital works on time, on budget and within the original approved scope.
- The IPMO will be led by an appointed CEO hired by, and accountable to, the Board of Directors.
- The CEO will hire the appropriate staff and expertise to effectively deliver the suite of approved projects that have been turned over to the IPMO.
- Where internal or backoffice (corporate) resources are required, the IPMO will either contract the services from the marketplace or obtain resources through the City of Edmonton on a shared services (and paid for) basis. Internal resources may be services such as Human Resources, Payroll, Corporate Accounting, IT, etc.
- Annually, the City of Edmonton will fund the IPMO with the approved Capital Budget Allocation for the fiscal year
- The IPMO will be required to fully operate within the annual allocation.
- Cost Validation: Upon receiving Budget approval for a Project to be delivered, the IPMO will undertake a Cost Validation Exercise (similar to Value Engineering) to determine the accuracy of the City’s budget estimation, and determine the optimum construction / delivery strategy.
The IPMO will take an active role in managing Vendor Performance to ensure that the City continues to obtain outstanding value from proponents who demonstrate the highest level of capital project delivery. The IPMO will develop a Vendor Performance Framework that will incorporate dimensions such as:
- Schedule Adherence
- Budget performance and Change Order history
- Social Procurement Objectives
Accountability & Reporting
As an independent and fully separate corporation, the IPMO is accountable to its Board of Directors. The Board, as the mind of the corporation, is responsible to the Shareholder – the City of Edmonton as represented by Council. The CEO will provide regular reporting on its activities to the Board, and the Board in turn will provide regular reporting to City Council in the form of:
- Monthly Financial, Performance and Risk Reporting to be done by the IPMO CEO to the Board
- Quarterly Financial, Performance and Risk Reporting from the Board to Council
To ensure as much political independence as possible, the term of Board of Directors will be appointed on terms of 4 years (on a rotational basis). The term of the Chair of the Board will begin at the mid point of a Council Term.
Social & Ethical Benefit
Capital projects should provide not only greater value for the dollars spent, but greater social impact as well. In addition to being on time and on budget, municipal projects should result in the maximum possible benefit to the community during their execution.
Social procurement weighting should focus on the following:
- Local workforce recruitment plans to support apprenticeship opportunities and programs
- Diversity and inclusion plans for signatory bodies
- Opportunities to assist veterans, displaced workers, and our indigenous peoples
Procurement must focus on contractors that provide meaningful and tangible employment of local tradespeople and at-risk and underrepresented communities. The advantages to the City of Edmonton of this approach include:
- Ensuring that local tradespeople and their families directly benefit from construction of the region’s public and civic infrastructure
- Supporting a diverse and inclusive local trades workforce
- Supporting the investment made in training local tradespeople.
Inclusion of social procurement parameters in contracts also results in:
- Better project value
- Overall increase in the skill level of the local workforce
- Retraining of existing workforce for new economic opportunities
Protecting Future Generations
The overall objective of the IPMO is to deliver the City’s capital projects with higher reliability for cost and schedule performance, greater accountability for construction performance, and to ensure that the City’s limited capital resources are invested in the most efficient manner possible.
In operation, it is conceivable that the IPMO may cost more to operate annually than with the internal resources of the City. While annual costs may be overall more than currently expended by the City, the long term value will be in the greater visibility in project control and long term cost implications.