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Weekly UpdatesActing as a surrogate client, the project management company is responsible for administration, management, communication and coordination of the project. It appoints and directly subcontracts other consultants (architect, quantity surveyor or expert engineers) to provide other services in connection with the project. The company selects the main contractor and prepares the contract, making clear to the main contractor that the client representatives are the project managers. The client directly employs the main contractor. Figure 3 shows the contractual relations among the parties.
[FIGURE 3 OMITTED]
The project management firm gets a fee for the overall management of the project (percentage or fixed). The fees include the services during construction of an architect and a quantity surveyor who will be appointed by the company.
The procurement strategy must be launched in various fronts. The project management company holds the contracts for the design, suppliers and subcontractors. They also select the main contractor who is contracted by the client.
The procurement strategy best adopted in Spain for property development is that of competitive tendering fixed price with scope for provisional sums. The industry is made up of small suppliers and sub-contractors; the projects are small. The combination of these two elements means that there is a lot of competition amongst suppliers.
Provided that the design is prepared in advance, then several suppliers can be invited to tender for the works. Supply and fix is the most common option used. With time, two-stage tendering can be used with the most reliable suppliers; this will speed up the procurement process. The method of payment most adopted by the suppliers is that of payment upon receipt. This is because they are small suppliers who could not assume a cash flow lock up.
The procurement of the main contractor is also best made via competitive tendering. Residential building is basic and contractors already have indices for types of construction, quality and site location. The tenders are usually turned around in a week and most contractors know their fares. When dealing with a client who has no financial problems and can afford fares that are a bit over the top then it is advisable given this particular situation, to opt for a bigger supplier. The reason is that bigger suppliers suffer less from logistic problems.
6. VALIDATION AND DISCUSSION OF RESULTS
As stated in the introduction, our model is constructed through empirical observation of a Spanish (South Mediterranean based) company for a fifteen month period. Yet this model needs to be validated. In order to test it, two different case studies were implemented; their main characteristics are summarised in Table 5. Eisenhardt (1989) thinks that at least four case studies are the right measure for analytic generalisation. Nonetheless, due to the typical long period for a complete property development, we could select only two case studies. One of the case studies stands for a simple housing development (Case A), whereas the other represents a more complex urban development process (Case B).
In both case studies, the clients were already the land titleholders and they approached the company with a general idea of their project goals (see Table 5); none of them had taken any steps in order to check the feasibility of the project: legal, technical and financial. Moreover, the organisational structures implemented were already advanced in Table 4 and Figure 3. The project management company acted as a surrogate client of each owner, being responsible for the administration of the project. It subcontracted other professionals or companies to supply needed services.
In case A, the client was proprietor of a single parcel of land of 3.500 [m.sup.2], intending to build a single villa of high quality. In this case, no urban development was needed due to the fact that the area was already urbanized by the city council. Our preliminary questionnaire (Table 1) was filled out by the client. The risk assessment flowchart (Figure 1) was implemented and the company decided to manage the project for the client. Then, the flowchart of the initial stages, developed in Figure 2, was applied. The detailed steps followed were:
* Verification of any charges, embargoes or encumbrances of the land.
* Comparison of details supplied by the land registry against those provided by the cadastral office.
* Visual inspection of the land.
* Surveying the plot to establish boundaries and actual surface-area compared to documentation.
* If any discrepancies found, new inscription in the notary, and adjustment of the deed in the land registry and cadastral office.
* Ensuring the updating of land tax contributions.
Cadastral and urban planning certifications did not relieve the responsibility for omission in the application to any rights of third parties. In this project, the original urbanization works were carried out by the local authority that charged 90% of the cost to the land owners affected. The previous owner did not pay these taxes, thus the client had to forfeit them. Finally, with all the papers in order, an official document regarding the urban planning characteristics of land was requested. This way the information needed to prepare the design of the villa was confirmed: minimum area, size and distances; maximum occupation and height; and buildability index. Once this official document was obtained, the pre-construction phase started (see Table 2) and no any other atypical problems appeared.
In case study B, the plot was one single parcel of land (13.000 [m.sup.2]) which the client wanted to divide into 14 individual parcels for semi-detached houses of medium quality. The area was not urbanized, thus a urbanizing process was also required. The initial idea of the client was to sell off 4 plots to be able to finance the construction of the remaining 10 houses. After applying the preliminary questionnaire (Table 1) and the risk assessment flowchart (Figure 1, including the detailed steps followed in Case A) two major problems were highlighted: easements rights of a public stream and a hosepipe that ran across the original parcel. Additional reports and permits had to be requested to several public agencies, thus the project slowed down.
Furthermore, the urban development required additional documents: some for the division into plots and zoning propositions for each individual plot; others for the urbanization works. They had to be submitted to the department of urban planning in the municipality that has planning jurisdiction over the land in question. These procedures took additional time and they were just approved when the research team left the company.
7. CONCLUSIONS
Project management provides methodologies, tools and controls to guarantee the quality of an investment. There is evidence that project management is being slowly introduced into construction in Spain and one of its greatest areas of influence is in the urban development and residential housing sectors. It is on the Mediterranean Coast where there is great potential for its use; this is because there are many foreign clients. There is a healthy expanding market for small to medium sized firms to be able to operate within this sector. Such companies need to provide a very wide range of services to the clients, which may break out of the traditional roles of a construction project manager. Many of the companies shave to adapt to work around the Spanish Building Law with great care, as many project managers are not architects.
The paper proposes a model for the implementation of project management principles in urban and property development projects in Spain; the stages, phases and steps were outlined and contractual relationships described. The empirical research was validated by two illustrative case studies. Nevertheless, future research is needed to improve and detail the model; supplementary case studies and surveys to companies and clients are also necessary.
Received 9 December 2005; accepted 11 October 2006
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