Shutdown or Reset: What Will Inoculate the VA Hospital Project Against Scope Creep?

About a week ago, I began this case study on scope creep. But the developments in this case are moving faster than I expected. On December 9, 2014, much to my surprise, news reports announced a third-party U.S. Civilian Board of Contract Appeals decided the Department of Veterans Affairs breached its contract for the Aurora VA hospital. On Wednesday morning, December 10, 2014, the Denver Post reported Kiewit-Turner, the contractor-consortium, halted work on the project.

This article is an informal case study into the signs, pitfalls, and consequences of scope creep. With these new developments in this project, my hope is we gain a deeper understanding of what drives a project off track, and gives project managers nightmares.

In an earlier article, we explored how to inoculate a project or plan against scope creep: Rein in Scope Creep and Create a Successful Project. Now let’s explore how a project might look once it becomes infected. What could an up-to-date and effective leadership structure be able to bring to this project? What other elements will heal the project?

Scope Creep Expanded/Improved

But first, thanks to readers’ suggestions, I revised the definition of scope creep. In fact, it is observable in many business ventures and organization changes.

Scope creep defined: when leaders allow uncontrolled changes, and/or add-ons, to a project’s goals, deliverables, features, and/or requirements. Scope creep occurs, as well, during the implementation of an organization’s mission, strategic vision, goals, and plans.

This definition assumes a project leaders spell out their goals and requirements at the beginning, before the project starts. When they are not, the project is at greater risk of scope creep.

512px-Female_Mexican_fruit_fly_insect

Like fruit flies in a ripe orchard, projects are abuzz with scope creep

 

Question: Why it is so important to spot and control for scope creep?

Answer: It destroys good ideas. It over-burdens innovative plans. It may draw attention and resources away from otherwise robust organization renewal initiatives.

Here’s the reasoning. #IdeasAreNotAssets: the value potential of a great idea is not an asset until leaders have implemented it so its tangible benefits are delivered. This applies to software products, construction designs, OD organization culture changes, or in new ventures such as a hospital’s roll out of a new patient care process.

Question: When does a project, program, or plan become most vulnerable to scope creep?

Answer: During its implementation process.

Outsider interference is often a source of scope creep. They do not understand how to honor the project goal(s), time, and budget. Interruptions and distractions can come from for those inside the project, as well. In combination, these well-intentioned folks are like fruit flies in a ripe orchard. All during project implementation they keep scope creep abuzz at its edges. This requires leaders to keep up a project’s boundaries and limits .

What are some of the openings where scope creep infects a project? To answer this question, let’s review the highlights of the Colorado VA hospital project.

Signs of Scope Creep: Aurora, Colorado VA Hospital Project

The new Veterans Affairs Hospital in Aurora illustrates how scope creep threatens to kill good ideas.

First, scope creep seems to start in 2011. The leaders of the Kiewit-Turner contractor-consortium and VA set the stage. They hand wrote their contract with a few lines on a piece of paper. This friendly but casual action may have opened the project to scope problems. It appears informal and to gloss over many details. The act was like a lapse in infection control.

How?

This act could have set the tone and culture of this project. It forewarns of the casual way the VA later added features to the project design.

The leaders agreed to build a new VA hospital for $604 million without the test of precise contract language. Their mutual understanding of goals, responsibilities and role relationships went unexamined. Their informal agreement looks more like a spur of the moment statement of intent than of a contract. Yet as the project slid further out of control news accounts report the parties referred to this note as though it were a binding agreement.

Second, the contractor claims there were many management problems. They claim massive conflicts, bungled designs, and mismanagement. These short-comings fostered more cost overruns and delays in the project.

Quotes of U.S. Rep. Mike Coffman, R-Aurora, agree with this assessment. According to news accounts, he said the project is more than $470 million over its original budget of $604 million and has experienced many delays.

When a project design begins to exceed the mutually agreed budget can we say scope creep is in the house? From my experience, the answer is yes. If not controlled and mutually approved, anything outside a project’s established build budget, schedule and other parameters is a sign of scope creep. But how does a project grow beyond its budget? When one or more of the project leaders make changes without consulting with the implementers about the impact on the budget.

In this project, there exists a change order process where the VA and others suggest and seek approval to add late-blooming innovations. But here is the third sign of scope creep. According to the contractor, the VA has not followed this change order process. The VA has made errant, uncontrolled, and possibly unspecified changes all along the way, according to the contractor, and each of these instances is a sign of more scope creep.

The goal of a change order process is to make sure the project leaders control, approve and manage changes. The process intends to eliminate disruptions and costs. An effective change order process allows approved changes but only after the leaders determine they will not derail the project or add unnecessary costs. Change orders make it possible to add creative ideas or recover from design lapses after a project has already started. These ideas make take advantage of greater efficiencies or create novel solutions that were not obvious at the start of the project.

Can Kiewit-Turner and the VA Recover At This Late Date?

Latest news: The U.S. Civilian Board of Contract Appeals determined the VA created a hospital campus design that would cost $1 billion, not the $604 million promised in the starting contract. Furthermore, the Board found the VA does not have the funds to pay for a $1 billion dollar project.

Does it make sense now to set up special leadership structures to cut out and/or manage further scope creep on this project? Let’s take a look at just how entangled the project is so far.

Reading between the lines of the Kiewit-Turner formal complaint, little evidence of a mutually agreed leadership structure exists for this project.

  1. The Kiewit-Turner complaint details miscommunications, unresolved conflicts, violated expectations, confusing accountability, and ill-definition outcomes, all signs of an outmoded leadership structure. Each of these missing elements creates entry points through which scope creep can enter this project.
  2. In addition, there is much finger-pointing and blaming by parties on all sides, a common result of an inadequate leadership structure. These activities are most often direct indicators of gaps, overlaps, and confusion in accountability.

Loss of Value

A structure of leadership is one of those important details to put in place up front, before a project even starts. It answers the question, “How can we best lead and work together to deliver our most critical outcomes without disrupting the work of our partners on this project?”

Leadership structures provide an organization able to make sure a project delivers its value.

But as it stands, the potential value of this project is in decline. For over 10 years its cost of implementation has climbed. For those veterans whose special needs this hospital will treat, every delay is a loss of value.

Agree or disagree?

  1. At this late juncture, what can rescue this project and turn it into a successful healthcare facility?
  2. What can we do as citizens and taxpayers to boost this project toward a healthy conclusion?
  3. Will stopping this project and resetting it be enough?

Please share your ideas and suggestions in the comments section below.

 

Postscript

I send all of my best wishes to the VA and Kiewit-Turner. Let’s hope they will be able to transcend these project setbacks soon. My prayer is they will be able to complete a flagship healthcare facility and improve the well-being and lives of veterans for many years to come.

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About Gene Morton

OD Consultant and Author of the two-time award winning book, Leaders First: Six Bold Steps to Sustain Breakthroughs in Construction. See excerpts at www.genemorton.com. Leader development and team development through coaching, consulting, and presenting on topics related to the structure of leadership in groups and organizations. Through his years of experience implementing mergers, reorganization, culture change, and organization transformation, Gene learned how an effective structure of leadership compensates for, and balances, leader blind spots, improving performance overall, and making innovation and change possible. He enjoys working in the construction industry, heath care, governmental, as well as the non-profit world.
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2 Responses to Shutdown or Reset: What Will Inoculate the VA Hospital Project Against Scope Creep?

  1. Lola Wilcox says:

    I worked for a construction company for two years, and follow closely Degan Wilcox’s (my son) design and construction firm, http://www.livingspacecostarica.net Scope creep seems to be a structured game played by a multitude of players, with moveable rules. In my limited but successful experience stopping it requires three things:
    1) a project lead who is devoted to bringing the project in on time and on or under budget, period. LivingSpaceCostaRIca’s profit sharing model ensures every team member is also committed to that goal.
    2) a very tight upfront signed contract that specifies ANY change to ANY item of the contract will cost.
    3) a commitment by both parties to discuss any changes before they happen, and REVISE (and resign) the contract accordingly. Just doing this discourages non-essential or padding changes.

    In the case of a government funded project I think a small (2-3 person) oversight team would be essential, and one of those members would be an accountant who weekly reviews the project expenses and payments.

    Like

    • Gene Morton says:

      Lola, thanks for sharing your experience. I think your point in #1, a profit sharing model, provides a real incentive for everyone to pick up the responsibility for keeping a project’s boundaries in place. Points 2 and 3 are often considered standard practice but maybe not in the face of the diverse pressures of the Aurora VA project.

      Like

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