“Intelligence is the ability to adapt to change.”

The title of this post is from a quote by physicist Stephen Hawking. Though I doubt he was referring to ship building, it’s as true for us as it is anywhere. How we adapt to and manage change to our design will, as much as anything, be a measuring stick by which the success of the project will be measured. A recent study by the consulting firm McKinsey and Co. found that large construction projects go over budget by an average of 80%.  That’s a staggering number to me. It’s most likely a combination of two main factors.  First, poor (overly optimistic) planning; and second, insufficient change controls.

What is a change control? If you’ve ever remodeled a house you know what I mean.  You’ve come up with a plan and as you get into it you think something along the lines of “Boy, it sure be nice if we…”  or someone says “Hey, I’ve got a good idea. What if we…”  phrases like those mean that your plan could be in for a change.  You’re going to do something different–and in the construction world, different typically means dollars.

The RCRV project, as I’ve mentioned, is overseen by the National Science Foundation’s Large Facilities Office and funded through its “Major Research Equipment and Facilities Construction” line. As a result, we are in a “no cost overrun” environment. That means, if we’ve planned poorly or if we manage change with inadequate vigor and costs rise, we’re out of luck. There will be no cost overruns.

That’s largely why we spent as long as we did planning and budgeting and then planning some more and then re-budgeting.  Part of our planning process involved evaluating risks to the project. The team spent a lot of time asking the “what if” questions and thinking of things that could go wrong in order to create a list of known unknowns. We then looked to mitigate these risks how best we could.  One such risk that we identified was “requirements changes.”  The intent of that was to be prepared to respond when the requirements that led to our baseline design changed.

Keep in mind that there requirements and then there are “REQUIREMENTS.”  Things like “the vessel shall be able to accommodate 16 scientists” or “the vessel shall have azimuthing drives” are the latter. These types of requirements drive the entire design. Changing from Azimuthing drives to conventional shafts or designing the ship to accommodate 20 scientists would be very significant scope, schedule, and cost changes. But the former, the lower case requirements, are spelled out throughout the contract specifications.  Sometimes these need to change a bit because a safety hazard was revealed, the original specification was inefficient or just plain wrong, or maybe Gulf Island had a different way of constructing something then we originally thought possible. But no matter how noble the reason, a change is a change and changes cost money.  Changes made early in the process cost less than those made later, and that, in a nutshell, defines why we are going through this process of “Design Verification and Transfer.”

All this to say….drumroll….we’ve had our first official change. It’s true. It’s a lower case requirements change in what to most people would be a rather mundane and overlooked system. I won’t spell out every change we make, but I’ll summarize this one for a sense of scale:  A ship’s chiller provides for, among other things, air conditioning. Our original chiller had only one source of power. If that source failed, the entire vessel could lose air conditioning. The change we’ve made was to provide the ability to manually switch the chiller to another source of power if need be.  This change should cost less than $5,000 per vessel and we have likely saved some future sea going Chief Engineer a lot of headaches.

So there it is. We will continue to monitor change requests very closely both during the DVT process, and, more so, during construction. But we’ll always remember our first one…

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About Demian Bailey

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2 Responses to “Intelligence is the ability to adapt to change.”

  1. Scott Tuttle says:

    Very interesting perspective on planning and cost overruns. I’ve been involved with programs that went around 75% over budget, although it was related to Contractor performance, so it can happen multiple ways.

    • Scott, good point. What you mention were the types of situations we needed to evaluate as part of our risk management process. It’s definitely a different way of doing business than other types of federal projects.

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