ConstructionPro Week, Volume: 4 - Issue: 3 - 01/23/2015

Untruths and Faulty Risk Analysis Responsible for Cost and Schedule Overruns – Fact or Fiction?

The October 2014 issue of the consistently excellent Tunnel Business Magazine has an interesting article on “Bullshit in Tunneling, Revisited.” The author, Dr. Thom L. Neff, a civil engineer, geologist and tunnel consultant, posits that anything not based entirely on facts represent BS to some degree. He goes on to explain that BS has increased since his first article appeared in 2010, primarily due to the fact that the population as a whole has become 24/7 connected and is increasingly “…impelled to speak extensively about matters of which they are to some degree ignorant.” With the intense competition to win “planning, financing, insurance, design, construction and other associated contracts, ...the temptation to sling a little bullshit is a bit more tempting than in other more mundane endeavors.” We would suggest that Dr. Neff’s comments apply to the construction industry as a whole, and not just tunneling projects.

 

Evolution, globalization and the increasing difficulty in discerning marketing and performance claims are the major reasons Dr. Neff suggests as reasons for the current situation. The consequences, as one might expect, are schedule delays and cost overruns.

 

Dr. Neff offers suggestions for improvements. The first is to more strictly enforce the ASCE’s Code of Ethics, which addresses individual competence, truth and objectivity. The second suggestion is that all of us players “…rely upon verifiable facts and evidence when judging the merits of any claim or prediction for project performance, or for team or individual performance.” In other words, resist the temptation to give or rely on opinions. The third suggestion is to look carefully at the use of risk management, which happens to be one of the subjects being researched by ConstructionPro Network in this month’s Estimating Survey. “Probability theory falls significantly short in trying to judge the actual outcome of truly complex projects,” claims Neff, who asserts that Game Theory provides a more realistic approach.

 

We invite you to read the entire article and tell us what you think. Click here to access the article.

 

Interestingly enough, Dr. Neff just weighed in this past Tuesday on the stuck Seattle tunnel boring machine fiasco in an editorial appearing in Slog, an online magazine serving the Seattle area. In the article, Dr. Neff asserts that the tunnel project has failed and chides the parties involved for not having a plan B in effect. He recaps the history of the project, including his own involvement in July, 2010, and points out that probability theory was used in the cost validation process to justify the project. Neff goes on suggest game theory now be employed to identify and evaluate the unknowns going forward and come up with a Plan B to provide the optimum solution for all parties involved. Click here for the full story.

 

Most of us working in the construction industry probably remember when we first got started that somewhere along the line a supervisor really nailed us for making an assumption on an estimate or a design calculation when a bit more effort would have resulted in a more reliable result. This lesson served us well, but it is not far fetched to imagine that, as we move up the ladder to become decision makers, those persons starting out today are not learning the same lesson. What’s your take on the state of “untruths” in the industry today? We welcome your comments.

 

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