September 20, 2023 | Articles
Photo Credit: EwingCole
The Essentia Health system serves patients in 14 hospitals, 72 clinics, several long-term care and assisted living facilities, and a research institute, among other assets, across Minnesota, Wisconsin, and North Dakota. An award-winning system, Essentia is a healthcare leader, earning the highest certification levels from several industry organizations, and is well-known for the exceptional quality of their staff and their services. And when Essentia began work on the $900 million Vision Northland ® replacement of the St. Mary’s Medical Center in Duluth, MN, Essentia recognized the need to enhance their project management team.
An ambitious project, Vision Northland will enable Essentia to consolidate their campus facilities more vertically, maximizing the available space of the site and connecting to two existing clinics. The new hospital tower will also improve efficiencies, provide state-of-the-art medical facilities, and meet the needs of patients from across the region.
“Vision Northland® is a challenging project,” explains Hill International, Inc. Senior Program Director Stephen Catts. “Building 942,000 SF of new facilities on a rocky slope, among existing facilities with varied elevations that need to remain operational during construction, all while dealing with the impacts of the pandemic and associated supply chain issues, really demanded a management approach based on confidence and decisiveness. Essentia saw the need for a more formal, structured project management role for Vision Northland®, and I think the results we’ve achieved since we joined the team show that was the right call.”
A Potent Combination: CMAR with a CMa
Essentia chose to deliver Vision Northland® using the CM-at-Risk (CMAR) delivery method, with EwingCole as designer and McGough Construction of St. Paul, MN, as construction manager (CM). When using CMAR delivery, the CM, in this case McGough, acts as a consultant to the owner in the development and design phases but assumes the risk for construction, holding all trade subcontracts. The CM holds greater cost and schedule risk than when using traditional design-bid-build delivery, as the CM provides a Guaranteed Maximum Price (GMP), which helps protect owners from cost and schedule overruns.
“CM-at-Risk offers many benefits,” says Catts, “and Essentia recognized that having McGough working with EwingCole early in the process could help address issues long before they could impact costs and schedule. The team came up with innovative ideas to meet Vision Northland’s ® programmatic needs, address the tricky site conditions, and to build the project Essentia needed. But overlaying this team with a strong management structure has helped to make sure the team works as a cohesive unit and that cost and schedule goals are maintained.”
Hill has been supporting Vision Northland ® since 2019, when the team came aboard to identify areas of greatest cost impact. Following this initial work, Essentia retained Hill to provide owner’s representative and project management services throughout construction. “What Hill brings is the process that is helping realize the project within an agreed upon framework,” says Catts. “This, I think, is the main benefit that adding a CM-as-Agent (CMa) brings—the tools to improve transparency and accountability.”
Catts notes the project is an excellent example of how a CM-at-Risk project can benefit from having a CMa on the team, regardless of the challenges a medical construction project may encounter.
“Hill has managed several successful CMAR projects, acting as the owner’s representative overseeing the work of the CM holding the contracts,” says Catts. “CMAR works best when a project presents a high degree of complexity and can benefit from the interaction between the CM and designer and the owner is willing to trade some control for increased cost certainty.”
However, the more complex a project, and the more expertise is required from the team, the more a CMAR project can benefit from the CMa role. Explains Catts, “We first came aboard in 2019 to help Essentia monitor and control costs, and, largely through the results of that initial work getting everyone on the same page, we’re now providing Owner’s Representative support to maintain the momentum we’ve all built. Adding the CMa function doesn’t preclude any of the benefits of CMAR—in fact in reinforces those advantages.”
Three Keys to a Healthy Project: Governance, Coordination, and Leadership
“The team has really come together. What we did as CMa was give the stakeholders the processes and procedures to excel in each role, and now we make sure the entire enterprise runs smoothly.”
Catts has managed healthcare projects and programs around the world, from major hospital campuses from Idaho to Maryland in the U.S. to multi-hospital programs in Saudi Arabia with Hill. He leveraged this expertise at Essentia to help align the entire team. “Wherever we come in during the project life cycle,” he says, “the Owner’s Rep can add value. At Vision Northland, that value encompassed estimating expertise at first, as we originally came aboard at the request of an outside assessment following the initiation phase. Vision Northland® is a ‘first and only’ type project for many on the team—and we all needed to come together to get organized, build morale, and develop a shared focus.”
Catts explains that the team is accomplishing these goals by concentrating on three key areas:
“Early on in the project,” says Catts, “there was some doubt if, given the pandemic and related issues, the project could be built on time and on budget. At first, when our role was focused on understanding and controlling project costs, a critical aspect of our work was reassuring the C-suite that they have a solid project that will be successful with some planning help.
“As owner’s rep, I shifted to building the confidence that the entire team could, in fact, control, manage, and deliver the project successfully. We did this piece by piece, making changes to the approach and structure, and then the culture of the project itself built itself up almost organically from this foundation.”
Collaboration, Not Coercion
With work well underway, Catts and the Hill team are now responsible for maintaining the direction of the project. “The CM-as-Agent role can be responsible for planning, design, and construction but often just design and construction,” says Catts. “For Vision Northland®, we’re now responsible for making certain the entire project enterprise runs smoothly for Essentia.”
Catts says that the project offers two major lessons for owners. “I’d say any owner looking to deliver a complicated, multi-faceted healthcare project should definitely consider adding the CM-as-Agent role to their team, regardless of the delivery method they choose or the circumstances of the project—pandemic or otherwise. Healthcare projects are, by their nature, complex and challenging, and the cost-benefit ratio of the CMa function is just too great not to add if you can.”
Catts concludes, “I’d also say Vision Northland® is a case study in how the Owner’s Representative role can benefit a project at any time during the process and in any management capacity. Essentia had the right delivery method, the right designer, and the right contractor, but even then, there were management, control, and oversight challenges they needed to address, which they did. Adding an owner’s rep to the team was not a silver bullet, but maybe it was a not-so-secret ingredient.”
Vision Northland® is on track to finish construction in early 2023, as originally planned.
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