Project Management Basics – Five Rules for Successful Additional Service Requests

Posted by Jennifer Chiodo on Jul 19, 2018 3:31:59 PM

The first project that I managed as a young engineer was a tenant fit-up for a high-rise building in San Francisco.  Through a variety of random events, as a 22-year-old electrical engineer, I became the project manager as well as the project engineer for over 30 floors of mechanical, electrical and plumbing design for an oil company building out of its new west-coast headquarters.  Early on, I recognized that our fees were based on a limited scope of work and, as the client changed what they wanted in the space, I needed to make a case for the additional effort necessary to provide the services needed for the fit-up.  In some cases, it’s obvious when a project exceeds the contracted scope of work; for instance, the client added a large data center that required a code variance (another blog topic perhaps).

Project Management
 
Designing the electrical and mechanical systems for the data center was clearly additional work above our contracted scope.  I was able to make the case in an additional service request that met the needs of our client and my company. 
  1. Have a good contract with a clearly articulated scope of work. If you have a poorly documented scope of work, it is almost impossible to find the line between contracted and additional services.  The more specific we are about the services that we are including and the cost of those services, it will be easier to identify any services that arise that are clearly above and beyond the base contract.
  2. Raise the flag early. It is so easy to get lost in the pressure of a project.  That, coupled with a reluctance of project managers to “talk money,” often results in a project manager waiting to let the client know that additional scope is being undertaken.  I emphasize here that the approach needs to be that the owner didn’t buy the service.  Not “you owe me money,” rather, you haven’t purchased that option.  Imagine if you are at the grocery store and you add something to your cart on an impulse.  You still pay for that item, even though it was unplanned and not on your list.  Clients are the same way, if you can clearly show them that services are additional to the contracted scope and you do it up front, they are almost always willing to either pay for the service or, if not, instruct you not to do the additional work.  If you wait until after the fact, then you are presenting a client with a fait accompli. In this case, a client loses choice and may feel cornered or even manipulated.  If what you want is to establish a strong relationship with the client, waiting until after the fact undermines your standing and reduces the likelihood that your request will be approved due to the lack of transparency.
  3. Be clear about what is additional and how much effort is entailed. Additional service requests are contract amendments.  They must clearly describe the base scope of work that relates to the work area and the effort that exceeds the base.  For example:

“Our contract for the XYZ Project indicates contract completion by July 31, 2018.  It is our understanding that the project schedule is being extended to December 31, 2018.  This extension will result in additional effort to manage the project.  The base project management budget is based on 3 hours per month of Sr. Engineer Time during the construction phase of the project.  Due to the extension of the schedule beyond the contracted term, the additional fee required to support that effort will be $2,250.”

  1. When other parties are involved, clarity is critical. Often, the scope for commissioning projects increases because contractors have been unable to complete their work, but testing has been scheduled.  Unsuccessful commissioning testing has a spectrum.  If we expected 100% success for all items, we wouldn’t really be needed.  However, having engineers spend hours on site to watch systems repeatedly fail to perform is not a good use of resources for the contractor, the commissioning agent and, ultimately, the owner.  Having experienced this circumstance multiple times, I have suggested that the ideal response would be a carbon copy that documents the failed component(s) of the visit when they reach the mark of requiring a scope adjustment.  This document could be left on site with the construction manager and the responsible subcontractor with a copy brought back to the office and sent to the owner.  In this case it is essential to delineate what is base work, expected level of failure and what triggers the spec and contract section regarding failed visits and the scope of that impact.
  2. Be brief, clear and professional. Document changes in scope in a memo or letter that is brief and to the point and let your client know in advance that the information is coming.  For instance, in a telephone call:

“Mark, we are experiencing test failures that are beyond what we covered under our base services.  I want to get this on your radar for a couple of reasons.  Our spec requires the contractor to compensate you for any additional costs associated with failed tests; we’ve made PDQ Contracting aware of these requirements to assist you in pursuing those funds.  I’ll be sending you an additional service request for the work beyond the base scope and will be available to discuss the impacts on our fee and scope once you have the information.”

Most business people expect to pay for the services received.  Sometimes, engineers are hesitant to ensure that happens.  Following these steps can help keep your projects in the black, keep your clients satisfied and enable you to succeed in your job.

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