Owner-oversight vs. Project Management Explained

Owner-oversight vs Project Management

This article explains how project oversight differs from project management. Let's begin with a hypothetical example of how oversight professionals can be lured out of their role. 

Oversight Insight: Role Boundaries
U.S. Navy Nuclear Carrier Photo
US Navy Photo

Naval Reactors assigned John as an oversight professional to oversee the initial reactor startup of an aircraft carrier following power range detector replacement. After the plant reached critical operations, John noticed that the power range indications were not in agreement. The difference between the power range indications appeared to be out of specification. John raised this issue with the ship’s engineer, the prime contractor, and the shipyard’s chief test engineer (CTE). The startup procedure halted, and a discussion ensued. 

In the end, the ship’s engineer, prime contractor, and CTE all agreed the out-of-specification was not an immediate problem and the startup could continue. The CTE stated, “I know what the procedure says, but the prime contractor is convinced this is an expected condition until the power range detectors are aligned later in the procedure.” The prime contractor chimed in, “I saw the same thing a couple of years ago during similar testing; I wouldn’t worry about it until after the detector alignment.” 

John was a qualified engineer on this plant and was not convinced, so he asked to see the applicable schematics. After a few minutes of review, the commanding officer (CO) of the aircraft carrier called down to the control room and asked about the delay. The engineer informed the CO that the Naval Reactors representative paused the startup due to concerns about power range readings. John could hear the CO say, “Make sure he understands this ship is already a month behind its deployment schedule and every minute counts.”

Feeling the pressure, John made a deal with the ship’s engineer and the CTE: “Test these points in the instrument drawer, and if they are within specification, you may proceed.” With John closely observing, the points tested satisfactorily. He then granted the permission to proceed and then diligently documented the event in his oversight log. 

After eight hours of power range operation, it turned out the power range indication was indeed faulty. The plant was shut down and the fault was repaired. John’s intuition was right all along, but his action resulted in the plant operating for hours with a faulty power range indication.  
The question is were John’s actions acceptable? Why or why not? What should he have done differently?

In the example above, John’s instincts about the power range indication were correct; however, he was wrong to abandon his oversight role. In doing so, John substituted his judgment for what should have been the project team’s responsibility. Instead, he should have demanded that the project team investigate his valid concern with all resources available to them. It was the project team’s responsibility to determine the method of investigation and the criteria for continuing the evolution.

The statement, “I know what the procedure says, but . . .” should invoke skepticism and raise alarm in any good oversight professional.  

Most importantly, oversight professionals must remember that they are not agents of the project. Owner oversight exists independently—outside the project organization’s agency—and is not governed by the project’s program of processes, procedures, policies, and protocols except as bound by mutual agreement. In general, this means owner-oversight personnel should not insert themselves into the project’s framework by directing or redirecting supervisors, workers, or project team leadership. Personnel who do so are out of role and undermine the project management team’s authority. As demonstrated by John, it can result in project owners facing additional liability, avoidable change requests, and litigation. 

Owners should invest in keeping staff aligned to the oversight mental model. This is an important distinction and needs to be reinforced to ensure oversight professionals focus their efforts on their primary function verses that of the project management team. This is particularly important when oversight staff are also experienced project management professionals. Their familiarity with knowledge areas of the project management book of knowledge (PMBOK®) may cause them to insert themselves into project management related matters that fall outside of their oversight role.  

Figure 1 compares labor hours spent performing oversight to staffing levels between project oversight and project management teams. As shown, project oversight and project management teams occupy opposite ends of the spectrum.

Figure 1 – Oversight Perceptual Map

U.S. Navy Nuclear Carrier Photo

Owner oversight consists of a small staff that spends most of its time performing oversight, while the contractor has a larger staff that spends most of its time delivering on the scope of work and much less time on performing oversight. For the contractor, oversight is mostly a collateral duty.

Since owner oversight functions outside the framework of project management and contractor self-governance, issues identified through owner oversight may indicate a failure within the project management organization and its layers of defenses. Consequently, issues identified through owner oversight should be inherently less frequent and considered more significant than issues identified by the project management team. Causal analysis should be used to investigate and determine the root causes of a breakdown in project defenses. In general, the frequency of issues identified through owner oversight is a key indicator of project management performance.

The project management and owner-oversight programs limit the potential for major issues to go unidentified, thereby minimizing the number of safety incidents, noncompliance events, and major risks to cost or schedule. Figure 1.2 is a visual illustration of the relationship between project management and owner oversight. 

Figure 2 – Layers of Project Defense

U.S. Navy Nuclear Carrier Photo

Issues identified as a part of the project management framework are handled in-process and should occur most often. Moving out from the project management framework, fewer issues should occur but are considered more significant as they represent a breakdown in one or more layers of defense. In the worst cases, issues escape detection altogether. 

Best Inspector Scenario

The best inspector scenario refers to when project management teams rely explicitly on owner oversight to identify their problems. This behavior undermines the owner-oversight program’s independence from the project management framework and wrongly shifts the project management team’s responsibility to identify problems to the oversight organization.

Oversight Insight: Best Inspector Scenario

Bob is an oversight manager attending a pre-job brief for a concrete pour of an independent spent fuel storage installation (ISFSI) pad. He is filling in for the regularly assigned oversight professional, John, who is a civil engineer and a subject matter expert. Bob had to temporarily reassign John to observe higher-risk work.

The risk assessment for the ISFSI pours is lower now that several pours have been successfully completed without incident using the same work crew. The brief is about to begin when the contractor’s supervisor asks if anyone has seen John. When Bob explains that John was reassigned for the day, the supervisor informed his crew that they were going to prep an adjacent pad and delay the pour until tomorrow.

When Bob asked the contractor’s supervisor why the work was being rescheduled, the supervisor said, “John’s an important member of our team. His feedback and direction have been instrumental in our success thus far. I’d really prefer that he’s here when we pour these pads.”  
Are the contractor’s reasons for not proceeding with the concrete pour valid? Why or why not? What action should Bob take?

To minimize the risk for best inspector scenarios, owners should ensure issues identified through owner oversight are appropriately investigated. In doing so, underlying problems and weaknesses within the project management framework can be more quickly detected and addressed. Without consequences, the project team is free to outsource their responsibility to oversee execution of the work to the owner, at no cost to themselves. The owner’s oversight staff are then in danger of being hijacked by the project management team as their best inspectors. This is advantageous to the project management team, but it only increases the owner’s liability and risk.

How to become the contractor’s best inspector and the owner’s worst oversight professional: Routinely find problems on behalf of the contractor and then allow the contractor to fix them without consequence or accountability. This is a recipe for ensuring systemic problems go undetected. 

Code of Ethics and Professional Conduct

Oversight professionals must acknowledge the nature of their work is not unlike “living in a glass house.” Their role is one of examination, assessment, and critique of others, including PMI-certified managers. Because of this, project oversight professionals should expect that any perceived compromise of integrity or values will be seen as unprofessional and hypocritical, and hinder the contractor’s continued cooperation.


In the aftermath of the Three Mile Island accident in 1979, Admiral Rickover was asked to testify before Congress. In this testimony, he said:

"Over the years, many people have asked me how I run the Naval Reactors Program, so that they might find some benefit for their own work. I am always chagrined at the tendency of people to expect that I have a simple, easy gimmick that makes my program function. Any successful program functions as an integrated whole of many factors. Trying to select one aspect as the key one will not work. Each element depends on all the others."

Project oversight is not an easy gimmick that owners can apply as a “cookie cutter” solution. It is a comprehensive and integrated strategy that considers environmental factors, risk considerations, and specific business goals. A project oversight program is never one-size-fits-all; every project is unique.

The process of crafting the methodology of choice and applying the principles of this guide is called tailoring. Because every project is unique, tailoring is necessary to determine the best practices, processes, tools, and techniques to be deployed in the owner-oversight program. Experience with a variety of these practices is beneficial when determining which are best suited to the project at hand.

Tailoring should address the competing constraints of scope, schedule, cost, resources, quality, and risk. The importance of each constraint is different for each project. The approach for managing these constraints should be based on the project environment, organizational culture, stakeholder needs, and other relevant variables. The scope of the oversight program should be appropriately negotiated with the contractor.


In summary, owner-oversight of capital projects is a much different discipline than project management. As discussed in this article, success depends greatly on the following:

  1. Ensure staff the role of oversight.
  2. Ensure staff adhere to the code of ethics and professional conduct.
  3. Ensure staff understand the oversight mental model.
  4. Understand the projects defense-in-depth posture. 
  5. Avoid becoming the contractor's best inspector.
  6. Investigate problems as they arise.
  7. Tailor the oversight organization to suit project needs. 
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