Due Diligence & Feasibility Studies

All construction projects are subject to uncertainty. The success of a construction project can be greatly diminished when outcomes diverge from what is anticipated by project stakeholders. The work required to complete the project, the potential hazards encountered or the resulting costs can all vary significantly from pre-construction expectations. In some cases, a project might be found infeasible during the design process or abandoned during construction, after significant costs have been incurred to advance the project.

This can be avoided by more thoroughly identifying risks and opportunities early in the project by performing due diligence or feasibility studies. Due diligence and feasibility studies are tools for managing construction project risk by evaluating project alternatives, challenges and hazards during the site acquisition, project conception, or financing stages. Risks are best managed at project inception before programmatic planning has reached a stage where risk avoidance and mitigation measures are no longer available. Due diligence and feasibility studies can identify issues that must be addressed in project planning and design early in the process when changes can be made at minimal cost. These studies are relatively inexpensive and precede design studies and ordinary site investigations.

Understanding Costs and Risks

At the beginning of project planning, cost estimates for use in evaluating alternatives are usually made based on similar projects under typical conditions. However, these estimates cannot always account for projects of a different size, with novel attributes or are constructed under unusual conditions.

On urban sites, the costs and risk associated with adjacent structures and subsurface conditions are often disproportionately high. Consequently, if the early planning that fails to account for these costs and risk, the project may later prove to be unfeasible. Existing structures and subsurface conditions on and near the project site are typically subject significant uncertainty and risk. If neglected, either can threaten the feasibility of a construction project. However, these issues are typically not investigated until the design phase, with some conditions not understood until construction occurs. A poorly planned or executed investigation can lead to false confidence during design, inflated contractor bids and claims during construction.

Whenever a project is unusual as to size, scope, location, site conditions, type of construction or occupancy, the likelihood that past experience and typical data will fail to capture actual project performance can become significant. This seriously exacerbates the risk inherent to all construction projects.

Exploring Opportunities

In addition to the potential for due diligence and feasibility studies to reduce risk, they can also be used to identify opportunities to optimize the project. On urban projects with below-ground space, it is often advantageous to consider applicable construction methods during initial planning. The type and condition of adjacent structures may drive the choice of foundation systems or excavation support, which in turn may affect the design of permanent work. For example, use a rigid excavation support system that can carry permanent loads can provide cost and schedule benefits compared to use of a temporary excavation support system for construction of a deep basement. Considering these issues in advance also allows the scope of site investigations to be better coordinated with the anticipated construction and thus be more cost-effective and reduce risk.

Richard J. Driscoll, Consulting Engineer (RJDCE) can provide knowledge and experience with foundations systems and below-ground construction techniques and assessment and protection of adjacent structures exposed to construction impacts. In addition to technical proficiency, RJDCE understands the uncertainties and potential hazards associated with this work. This expertise can assist project developers, designers, and other stakeholders explore risks and opportunities associated with their below-ground construction on urban sites.

See also: Assessment and Rehabilitation of Existing Structures, Consulting for A/E/C Firms,  Foundation / Geostructural Engineer, Risk Management, Urban Construction