1 fundamentals of project management dr. george f. jergeas project management specialization...

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Fundamentals of Project Management

Dr. George F. JergeasProject Management

SpecializationUniversity of Calgary

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ScheduleDay 1 Game Introduction

PMI stuff Step 1 - Define phase Step 2 - Plan phase

Sequence activities

Time estimate

Day 2 Cost estimate

Step 3 - Organize phase

Select team and PM Step 4 - Control

phase Step 5 - Close out

phase

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5 Step Project ManagementPLANNING IMPLEMENTATION

DEFINE

Identifyproject activities

Estimate time and cost

Sequence Project Activities

Identify Critical Activities

Write Project Proposal

ORGANIZE CONTROL PLAN CLOSE

State the State the ProblemProblem

Identify Identify ProjectProjectGoalsGoals

List theList theObjectivesObjectives

Determine Determine PreliminaryPreliminaryResourcesResources

Identify Identify AssumptionsAssumptions and Risksand Risks

Determine Personnel Needs

Recruit Project MangerRecruitProject Team

Organize Project Team

Assign Work Packages

Define Management Style

Establish Control ToolsPrepare Status Reports

Review ProjectSchedule

Issue Change Orders

Obtain ClientAcceptance

Install Deliverables

Document theProject

Issue Final Report

Conduct Post-ImplementationAudit

Project overview WBS Recruit Criteria Variance Reports Final Report Project network Define Work packages Status Reports Audit Reports Critical Path Assign Work Packages Staff Allocation Reports

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Step 2 – Plan the project: Basics of Cost Estimating

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Agenda

Introduction What is an estimate Estimating process What constitutes a good estimate Basic types of cost estimates

Order of Magnitudes Definitive Estimates

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Introduction Cost estimates

Key to successfully conceived, managed and completed projects

Not limited to construction An approximation procedure Mistakes can be very costly!

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What is a Cost Estimate? AACE Definition

“A compilation of all the costs of the elements of a project or effort included within an agreed upon scope”

To the contractor “To forecast cost required to complete a project in

accordance with the contract, plans and specifications”

To the owner cost includes: Administering the contract Contractor's charges, consultants and suppliers fees Price of land, financing and operating costs

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What Constitutes a Good Estimate? A clear, sound basis An agreed upon realistic execution

plan A sound plan for estimating

development Good estimating methods and data

base Well documented basis of estimate Good experienced estimator

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Order - of - Magnitude Estimates A quick method of determining an

approximate probable cost of a project due to the following specific situations: Time constraints High cost of a detailed estimate

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Order - of - Magnitude Estimates Prepared without detailed engineering

data Square feet of floor area Cubic feet of volume Plant capacity for input and output Km of road surface type

Use: In feasibility studies of a project and screening several types of alternatives or proposals

Accuracy: +/- 30%

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Definitive Estimates

Prepared from very defined engineering data

Requires as a minimum: Plans and elevations Piping and instrument diagrams Single line electrical diagrams Equipment data sheets and quotations Architectural and structural details Soil data and sketches of major foundations A complete set of specifications

Accuracy: +/- 5%

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Components of a Cost Estimate Direct Cost

Labor: actual amount paid to field personnel

Materials: essential to constructing and operating a facility including equipment installed permanently

Equipment: used to perform a contract Subcontracts

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Components of a Cost Estimate Indirect Costs

Overhead Home office overhead Job site overhead (general conditions)

Taxes Risks

Contingency Profit

Escalation

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Site Overhead (General Conditions) Cost of items that cannot be charged to

a specific element of work: Supervision Temporary facilities Office trailers Toilets Utilities Permits Photographs Clean-up

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Profit Is the amount of money included by the

contractor in its price as compensation for risk, effort and endeavor in undertaking a project. It is the money left after a contractor has met

all costs (both indirect and direct). Profit amount included is very subjective and

depends on: Size of project Extent of risk involved Need for work Extent of competition

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Contingency An amount added to cover any

additional costs that may occur during construction. To determine the amount of

contingencies desirable, an estimator should rely on:

Personal judgment, or Through statistical analysis of past

project costs

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Estimated Conference Planning BudgetCONFERENCE PLANNING

$243,325

Program

$41,100

Site

$170,425

Marketing

$31,800

Theme

$600

Materials

$13,300

Speakers

$27,200

Date

$1,000

Location

$169,425

Lists

$2,000

Brochure

$29,800

Registration

3 conf calls with pgm comm

Travel/expenses for 16 speakers @ $500 per speaker

Deposit3 site visits @ $800/visit food @$50 per person/day for 3 days for 1100 meeting rooms @ $225/day/room for 3 days for 3 rooms

25,000 labels @ $80/1000

Obtain Speaker Materials $800

Prepare Conference Notebook $12,500

Design Brochure $12,800

Mail Brochure $17,000

Edit/format @ $50/speaker

1100 binders @ $5/binder photocopy materials 350,000 pages @ $0.02/page

Layout: 16 pages @ $50/page

Printing: 30,000 copies @ $0.40/copy

25,000 pieces @ $0.68/piece

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PM ANNUAL CONFERENCE REVENUE & EXPENSE BUDGETRevenuesRegistrations - 1100 @ $335……………………………………………………………..$368,500

ExpensesSalary

Graphic artist………………………………………………………………………………………………...800Total Salary……………………………………………………………………………………………..800Non-Salary

Travel……………………………………………………………………………………………………...21,600Printing…………………………………………………………………………………………………….19,000Postage…………………………………………………………………………………………………...17,000Mailing Lists……………………………………………………………………………………………….2,000Telephone…………………………………………………………………………………………………….600Supplies…………………………………………………………………………………………………….6,300Speaker Honoraria……………………………………………………………………………………….8,000Site Deposit………………………………………………………………………………………………..1,000Food………………………………………………………………………………………………………165,000Meeting Room Rental…………………………………………………………………………………..2,025

Total Non-Salary………………………………………………………………………………..242,525Total Expenses………………………………………………………………………………………$243,325Gross Profit…………………………………………………………………………………………$125,175Indirect (@ 40% of Total Expenses)……………………………………………………$97,330Net Profit………………………………………………………………………………………………$27,845

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Estimating Issues Underestimating

Don’t be overly optimistic about time and costs

Cause problems in the long run and produce unsatisfactory product

Overestimating Danger that project will not get approval Over compensating for unexpected

delays/problems

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Estimating Issues Use your WBS: Define the lowest level

of activities to estimate the time and dollars required

Check activities costs on previous projects

Take into account circumstances during implementation, weather, transportation costs, availability of materials and labour etc.

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Summary There are different types of estimates Each type used for specific purpose

but no substitute of definitive estimates

An estimate information data base is essential

Good estimates come from looking at the details

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Important Points Order-of magnitude estimating important

to owner: Owner examines the estimate before

continuing with further development of project.

Liability issue: based on the information contained in your estimate, major decisions are often made by the owner

This places a responsibility and liability on you as an estimator

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Important Points Acquaint yourself with

terminology, elements of cost which include labor, equipment and material costs

Develop habits of thoroughly reviewing contract documents

Remember to document and maintain the data base

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Step 2 - Plan the Project: Writing a Project Proposal

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Agenda Writing a proposal The purpose Format

Executive summary Background Project manager Activity Schedule Budget/project cost

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5 Phase Project Management PLANNING IMPLEMENTATION

DEFINE




Identify Critical activities

Write Write Project Project ProposalProposal

ORGANIZE PLAN CLOSE

State the Problem

Identify ProjectGoals

List theObjectives

Determine PreliminaryResources

Identify Assumptionsand Risks


Recruit Project Manger

RecruitProject Team

OrganiseProject Team


DefineManagementStyle

Establish Control Tools

Prepare Status Reports


Issue Change Orders



Document the Project

Issue Final Report


CONTROL

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Writing a Project Proposal Represents the transition from the

planning (define, plan) to implementation (organising, control, close)

Used as an information source to decide whether the project should proceed to the implementation phase

Different terminology used DBM, Brief, Scope Definition Statement

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Purpose The project proposal provides: A statement of the need, the approach

being taken and the expected benefits Description of project activities,

timelines and resources required Documentation for project control Briefing document for new team

members and others in the organisation

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Purpose Tool for decision making,

managing, controlling, training and reporting

Written for: Senior management Project team Other managers who are indirectly

involved Consultants

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The remainder of this section should be reviewed by attendees.

Please go to slide #43

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Format Executive summary States the fundamental nature of proposal

and benefits that are expected Should deal with:

Nature and approach to technical problem Plan for implementation of project if approved Plan for logistic support and administration Description of team that will complete the work

and their experiences on other projects

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Technical Approach

General description of the problem to be undertaken

Organisational approach Provides sufficient detail for the

reader to understand what is intended

Method for resolving critical problems outlined

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Technical Approach

Proposal to meet clients requirements identified

Procedures for testing and inspections to assure performance, quality, reliability and compliance

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Implementation Plan

Contains estimate of time, cost and materials to be used

Lists sub-systems of project in cost estimate

Estimates of personnel, equipment and resources are provided by period

Major milestones are indicated

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Logistics Plan

Description of how skills, facilities, equipment will be supplied

Administration strategy Nature and timing of reports

budget, progress, evaluations and audits

Handling and costing of change orders

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Past Experiences

How the proposed team has performed?

Who the key personnel are and their qualifications?

Keep in mind - the purpose of the proposal is to convince the funder that the project should be supported

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Format: Example Proposal components Project name Project manager responsible Activities Schedule Budget

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Format Project Name Label to identify the project Should reflect uniqueness of the project Project Manager Person responsible for project Must be able to manage budgets,

schedules, team and meet specifications

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Format Activity Identified by number, description

and name Method for team to refer to an

activity Should be short, but reflect task to

be undertaken Description states in precise terms

the work to be done

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Format Schedule Based on the analysis of the

network Provides anticipated start and

finish dates. Dates may change

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Format Budget Information provided at an aggregated

level Details attached if requested by senior

management Includes:

Labour cost estimates Financing costs Materials and equipment costs (See Figures )

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Project Definition Report

PROJECT DEFINITION Project Name Project Manager DateActivity Schedule Budget

No. Name Description Start End Money Labor Matis Time(hrs)

Manager

Prepared by Date Approved by Date Sheet __of__

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Any Questions?

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Step 3: Organize the Project

Implement the Project and Organize the Team

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Agenda Organize the team Determine the personnel

requirement and skills Select the Project Manager Select the Project Team Characteristics of PM and team What makes teams work

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DEFINE






ORGANIZE PLAN CLOSE

State the Problem


List theObjectives



Determine Determine Personnel Personnel NeedsNeeds

Recruit Recruit Project MangerProject Manger

RecruitRecruitProject Project TeamTeam

OrganiseOrganiseProject TeamProject Team

Assign Work Assign Work PackagesPackages





Issue Change Orders

CONTROL




Issue Final Report


Obtain Client

Acceptance



Issue Final Report

Conduct Post-Implementation

Audit

CLOSE

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Implementation Phase Start once the project has been approved Project team for the implementation is

formed/procured In-house and external Procurement procedures

Work package assignments can commence Deliverables are agreed upon and clearly

understood Control systems are established

Time, Quality, Cost, Safety ….

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Organising the Project Team Projects are only as successful as

the project manager and team who implements them

Building an effective team takes a lot of work

Must consider more than just a person’s technical skills

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Organising the Project Team The selection of team members is

based on skills, availability and personality

There needs to be a commitment and chemistry among the team members

Team building is not a perfect art, there is always the risk of conflict

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Organising the Project Team Organized and located to facilitates

open continuous communication This does not mean they have to be

physically located together

Team members may be reallocated for the duration of the project or remain in their function areas

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Organising the Project Team Large projects

Dedicated core team Structured More defined roles Need for open and continuous

communication lines Self contained

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Organising the Project Team Small projects

Part-time commitment from team members

Team members remain in their functional units

Conflicting priorities/demands exist Conflicts may arise from having more

than one boss or more than one team involvement

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Organising the Project Team Be sure all parties understand the

need to: Build the team, What the priorities are within in the

organisation and Their assistance is appreciated

Project manager to ensure that the cross functional relationships are maintained and supported

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Characteristics of an Effective Project Manager

Understands purpose of the project

Has the necessary background and experience

Effective leader with proven managerial ability

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Characteristics of an Effective Project Manager Has credibility with team and client Sensitive to project and corporate

politics Excellent communication skills Consistent behaviour Facilitator rather than a dictator

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Selection of Project Manager Key position on the project

Selection of appropriate individual is essential to success of the project

Selection criteria should be established based on the skills required to carry out project

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Project Manager Selection Criteria

1. Background and Experience Should be consistent with the nature

and needs of the project Education should be compatible with

nature and expectations of the project

Look for a individual with a mix of conceptual, analytical, operational and practical experience

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2. Leadership Ability to design, co-ordinate, control

and implement project plan Stay the course until completion Ability to see the big picture and

understand the details

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3. Technical expertise Ability to direct, evaluate, and make

decisions on technical alternatives Does not and can’t be an expert in all

areas of the project Should have expertise in project

management, team management and training

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4. Interpersonal skills Should be able to:

Motivate, inspire, and coach Actively listen, give and receive feedback Empathise, relate feelings, needs and

concerns in a positive manner Prevent and resolve conflicts, negotiate Keep team, senior management and

stakeholders informed through effective communication channels

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5. Proven Managerial Ability Good track record, excellent indicator of the

future Knowledge of the organisation and its

operation Ability to effectively interface with all levels

of the organisation Ability to link project goals to corporate

mission and goals

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Selecting the Team Selection of team members

depends on a number of factors: Nature of the technical work to be

done Level and type of expertise required

at each phase of the project Availability of staff in the organisation

and reporting relationships

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Team Selection Criteria Similar to those of the project

manager More emphasis on the technical

skills Interpersonal skills essential Ability to function as a team

member with shared goals and objectives (us instead of me)

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Effective Team Characteristics Commitment to the project goals and

completion Ability to communicate, share responsibility

and power Flexible willing to change or try some new

methods Technically competent Willing to:

Admit mistakes Admit not have all the answers Accept feedback

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Effective Team Characteristics Politically astute Team players Creative and open to suggestions High self esteem, can do attitude Willing to work for more than one

boss, across formal structure and authority system

Results oriented

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What Makes Teams WorkSuccessful Projects: The team has fun Have the support of senior

management Everyone understands the reason for

the project Conflicts are addressed and dealt

with The entire organisation is committed

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What Makes Teams Work

Successful projects: Team understands the

organisation’s mission and how the project fits within that mission

Team understands what is to be achieved and when it is achieved

Trust and communication

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Step 4 - Control the Project

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DEFINE






ORGANIZE PLAN CLOSE

State the Problem


List theObjectives



Determine Determine Personnel Personnel NeedsNeeds

Recruit Recruit Project MangerProject Manger

RecruitRecruitProject TeamProject Team

OrganiseOrganiseProject TeamProject Team

Assign Work Assign Work PackagesPackages

DefineManagementStyleEstablish Control Tools



Issue Change Orders

CONTROL




Issue Final Report


Obtain Client

Acceptance



Issue Final Report

Conduct Post-Implementation

Audit

CLOSE

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Project Control Schedule control

Cost control

Team performance evaluation

Change control

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Schedule Control

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Incorporating Project Changes into the Schedule When a change is requested or needed,

you should: Estimate the impact on the schedule by

incorporating any additional tasks and revised duration estimates

Add activities that were overlooked when the original plan was developed

Add new activities due to unanticipated events Obtain client approval before proceeding A new baseline plan is established and used

as the benchmark for comparison

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Approaches to Schedule ControlSchedule control involves four steps: Analyse the schedule to determine

which areas may need corrective action Decide what specific corrective actions

should be taken Revisit the plan to incorporate the

chosen corrective actions Recalculate the schedule to evaluate the

effects of the planned corrective actions

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Approaches to Schedule Control If the planned corrective actions do

not result in an acceptable schedule, repeat the previous steps

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Approaches to Schedule Control Each time a schedule is recalculated:

Identify the critical path Identify any activities that have a negative slack Compare paths where slippage have occurred

(Slack got worse) with the previously calculated schedule

Apply acceleration to the paths with negative slack:

The most negative slack should be given top priority Focus on activities that are in progress or to be started

in the immediate future Focus on activities that have long duration estimates

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AccelerationTo reduce schedule: Apply more resources to speed up an activity

Add more people Increase hours per day or increase days per week Assign person(s) with greater expertise or more

experience Reduce the scope or eliminate the activity if

possible Increase productivity through improved

methods or technology

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Acceleration Trade-off in the form of an increase in

costs or a reduction in scope This could jeopardise elements of the overall

project objective: scope, budget, schedule, and/or quality

There may be a dispute over who should absorb any increased cost to accelerate

Bonus provision if project is completed early Liquidated damages

Project meetings are a good forum for addressing schedule control issues

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Evaluation of Delays in the Work

Questions to determine that a delay in the work is compensable: Was the cause of the delay beyond the

contractor’s control? Did the contractor fail to take normal

precautions? Was the contractor ready and able to

work?

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Did the contractor submit a detailed schedule projecting project completion within the allotted time? Was the schedule updated regularly? Did the updated schedule justify time extension?

Did this schedule contain a critical path analysis or equivalent?

Has the contractor maintained sufficient forces in those operations along the critical path where needed to meet target dates?

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How have causes, other than normal weather, beyond the control and without the fault or negligence of the contractor affected target dates along the critical path?

Has the contractor proven “unusually severe weather” with such information as climatological data, return probability of severe storms, or flood depth data?

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Did the weather phenomenon actually delay operations along the critical path or in secondary operations?

Was the contractor shut down for other reasons?

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Cost Control

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Cost Control System Any cost control system should

enable a project manager to observe current perfomance (productivity) levels, compare them with budget levels and institute corrective actions to keep productivity, and ultimately costs, within acceptable range

84

Elements of Effective Cost Control System Observation Comparison of observation with budget Corrective action to take if necessary Can also serve as:

A basis for a productivity improvement program

A measure of productivity loss caused by adverse factors and changed conditions such as winter work, acceleration, design changes, etc.

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Cost Control System Compares actual man-hours

expended to earned hours Actual work hours come from

contractor’s daily time sheets Earned hours are calculated by

multiplying the completed quantities during a period by estimated man-hours per unit quantity

See figure following as an example

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Labour Productivity Report

(1) Cost Code

(2)Code Description

(3) Estimated Quantity

m *m

(4) Estimated Man-hours per unit Quantity

(5) Budget Man-hours

(4 x 3)

(6) Actual hours

(7) Completed Quantity

(8) Earned Man-hours

(4 x 7)

(9) Variance

(8 - 6)

(10) Productivity

(6/8)

(11) Forecast to Complete (5-8) x 10

100Form walls utility shaft 4,000 0.5 hr/m*m 2,000 1,800 1,500 m 750 -1050 2.4 3,000

200

Form structural

slabs 1,500 0.6 hr/m*m 900 230 500 300 70 0.77 462

300Exterior

wall form 750 2 hr/m*m 1,500 900 400 800 -100 1.13 791

400Interior wall

form 750 1.9hr/m*m 1,425 500 300 570 70 0.88 752

500Wall infills and form 600 0.64 hr/m*m 384 250 100 64 -186 3.91 1,251

600Scaffold

slabs 770 1.3 hr/m*m 1001 800 650 845 45 0.95 148

700Install void

form 100 2.0 hr/m*m 200 - - - - - 200TOTAL 7,410 4,480 3,329 -1,151 6,604

Actual hours expended…………………………..4,480.0Add Forecast to complete hours…………………6,604.0Revised prediction……………………………….11,084.0Less budgeted man-hours…………………………7,410.0Forecasted overrun………………………………..3,674.0 Man-hours

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Money

Delay

Budget

Time Now

Earned Value Time

Actual

Expenditure

Cost overrun

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Budget

Time

Actual

Earned

Value

Ahead of

schedule

Making Money

Money

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ACTIVITY VARIANCE REPORT Activity Name Date___Cost ___Labor ___Time ___Other

Task Budget This Period Budget To DateNum

berName Responsibility Plan Actual Var Plan Actual Var

TotalsPrepared by Date Approved by Date Sheet __of__

Example: Activity Variance Report

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Conclusion You can draw immediate attention to

significant deviations from what was planned

Indicate what corrective action is necessary and by whom

Dependent on accurate reporting and

correct allocation of hours expended

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Performance Evaluation

92

Joint Evaluation Progress meeting Forum for identifying a problem Specific criteria to evaluate effectiveness

Teamwork Timely problem resolution

Periodic survey Comparisons of survey responses identify

areas of improvement and potential problems

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Measuring Success Met target price, quality and

schedule Goals achieved Benchmarking Positive client feedback Great safety record Disputes resolved effectively

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Joint Evaluation1. Communications between the owner/contractor personnel are…………

2. Top management support of partnering process is………………………

3. Problems, issues or concerns are……

4. Cooperation between owner and contractor personnel is……………………

5. Responses to problems, issues, or concerns frequently become…………

1 2 3 4 5Difficult, guarded

Easy, open, up front

1 2 3 4 5Not evidentInconsistent

Obvious, consistent

1 2 3 4 5IgnoredAttacked promptly

1 2 3 4 5Cool, removed,

detached,

Genuine, unreserved, complete

1 2 3 4 5Personal issues

Treated as project problems

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Change Control:Changes and Extra Work

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This Session Definition Impact costs Basic principles in handling change

orders Types of changes Elements of a change order Recommendations for good practice

97

Change Order Is a written agreement to modify, add to, or

otherwise alter the work from that set forth in the contract documents at the time of opening bids, provided that such alteration can be considered to be within the scope of the original project; otherwise, a contract modification may be required

It is the only legal means available to change the contract provisions after the award of contract

98

Change Order Could be addition to or deletion from the

work Changes in the method of execution or manner

of work performance Change in owner-furnished materials or facilities Change in the contract time or order of the work Correct errors in the plans or specifications Direct results of contractor suggestions that are

approved by the owner and its agents

99

Change Order Changes may involve

A price change in the contractor’s favor

Cash credit to the owner No price change at all

Make sure payment covers Impact costs & Loss of productivity Time extensions

100

Basic Principles in Handling Change Orders No work should be included beyond the

scope of the base contract The identity of the individuals

authorized to request and approve change orders should be established early

During the start up meeting the change order handling procedures must be established/discussed

101

Basic Principles in Handling Change Orders All changes in the work must be

authorized in writing prior to the execution

The scope of a change order must be clear

A request for a change proposal should contain enough information to enable the contractor to make a realistic estimate

102

Basic Principles in Handling Change Orders The contractor should submit its proposal

to execute a change order as soon as possible after receiving the request

The owner’s approval or rejection should follow as soon as possible

The Change Order should be fair. It should recognize the contractor’s right to include: Overhead and profit percentages Compensation for legitimate time-delay claims Compensation for legitimate impact costs if

any

103

Types of Changes Directed changes

Owner directs the contractor to perform work that differs from that specified in the contract

Easy to identify and mutually recognized Disagreements tend to center on

questions of financial compensation and the effect of change on the schedule

104

Types of Changes Constructive Changes

Is an informal act authorizing or directing a modification to the contract caused by an act or failure to act

Defective plans and specifications Engineer’s interpretation Higher standard of performance than specified Improper inspection and rejection Change in method of performance Owner nondisclosure Impossibility/impracticability of performance

105

Types of Changes Constructive Changes

Must be claimed in writing within time specified in the contract

Major source of disputes

106

Change Order Form Description of change Reason for change Change in contract price Change to contract time Statement that secondary impacts

are included Approvals by owner’s and

contractors representatives

107

Sample of a Change OrderPROJECT TITLEPROJECT NO. CONTRACT NO. CONTRACT DATECONTRACTORThe following changes are hereby made to the Contract Documents:Construction of access bridge abutment No. 1 drainage system; andReset two penstock bearing plates. All in accordance with revised DWG S-17209Revision 4, dated August 29, 2000 JUSTIFICATION:Unforeseen soil conditionsCHANGE TO CONTRACT PRICEOriginal Contract Price: $Current contract price, as adjusted by previous change orders: $The Contract Price due to this Change Order will be (increased) (decreased) by: $The new Contract Price due to this Change Order will be: $CHANGE TO CONTRACT TIMEThe Contract Time will be (increased) (decreased)by calendar days The date for completion of all work under the contract will be Requested by datedRecommended by datedOrdered by datedAccepted by dated

108

Recommendation for Good Practice Percentages for overhead and profit

to be applied Determination of the individual

representative of the owner who is authorized to approve change orders

Procedures to be followed in the submittal of change order proposals

Change order forms to be used

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Recommendation for Good Practice Time extensions required, if any The detail required of contractors when

submitting change order proposals - Will a complete breakdown of all costs be

required? Brief description - Descriptive drawings

Overtime necessary due to change orders - consideration of decreased productivity

Responsibility for record drawings brought about due to the change orders

110

Dealing with Disputes: Keys to Project Control

111

Agenda Causes Obstacles to resolution Successful settlement

112

Causes of Disputes Design changes, errors/omissions

and extras Late owner-supplied equipment Lack of co-ordination Changed soil/site conditions Access to site

113

Causes of Disputes Delays and acceleration Insufficient bid preparation time Inadequate bid information Underestimation by contractors Inadequate management

114

Resolving Disputes Face to face by parties themselves

By appointing a mutually acceptable third party

By accepting the jurisdiction of the

courts

115

Obstacle to Resolution Owner’s bias

Contractor’s bias

Total cost claims

116

Successful Settlement Get the facts

Keep good records Know your contract Preserve your rights

Show: Cause-Effect-Entitlement-Quantification

117

Settlement of Disputes The following options are available: Negotiation Mediation Dispute Resolution Board Mini-trial Arbitration Litigation

118

Mediation Voluntary Non-binding Economical Assist negotiation

119

Arbitration Binding 1 or 3 arbitrators Selection of arbitrators

Each party selects one arbitrator Both select a chairperson

Could be expensive

120

Dispute Resolution Board DRB consists of three members

and is established at the beginning of project

Non-binding

121

Mini-trial Presentation of both sides’

arguments before an advisory panel and executives of both sides. May include a judge

Predict the likely outcome and the

strength and weakness of the case

Voluntary and non-binding

122

Litigation Adversarial Costly Voltaire: “I have only been ruined

twice in my life. The first time was when I lost a lawsuit: the second, when I won one!”

123

Problem Resolution Lowest level with time limit

Escalated to the next level of management

No action is not an option

124

Problem Resolution

Stage One

Problem becomesapparent

Solution to problemoffered by those whoare directly involvedwith it.

If problem notresolved, go to stagetwo.

If solution agreed, donot go to stage two. Ifchanges affect otherproject parties, recordthem onto a proformafor circulation.

Start

Stage Two

Problem discussed atprogress meeting.

Solution to problemoffered by projectteam.

If solution to problemcannot be agreed atprogress meting, goto stage three.

If solution agreed, donot go to stage three.Solution to problemrecorded in meetingminutes.

Stage Three

A resolutioncommitteecomprising arepresentative fromeach of the projectparties is formed.

Problem resolutionmeeting called forcommittee.

Mutual way forwardfor project agreed byresolution committee.

Statement of wayforward recorded andissued.

Finish FinishFinish

If any projectparty is notcontent withthe wayforwardagreed by theresolutioncommitteethen they maytake normalrecoursethrough thecontract

125

Problem Resolution Systematic approach Seek solutions Increased and higher quality

discussion Win-win solutions Equality of rights among parties Agree on no adversarial relations

126

Problem Resolution: Negotiation Separate the people from the

problem Focus on interests, not positions Invent options for mutual gain When possible, use objective

criteria

127

Step 5 – Close the Project

128

Agenda

Purpose Prerequisite activities Project termination process Final project report Rewarding successes and learning

from failures

129

DEFINE







State the Problem


List theObjectives




Recruit Project Manger

RecruitProject Team

OrganiseProject Team






Issue Change Orders

Obtain Obtain ClientClientAcceptanceAcceptance

Install Install DeliverablesDeliverables

Document Document the Projectthe Project

Issue Final Issue Final ReportReport

Conduct Post-Conduct Post-ImplementationImplementationAuditAudit

Project overview WEBS Recruit Criteria Variance Reports Final Report Project network Define Work packages Status Reports Audit Reports Critical Path Assign Work Packages Staff Allocation Reports

5 Phase Project Management PLANNING IMPLEMENTATION

130

Purpose To ensure all deliverables are installed

or implemented according to time, budget and specification

131

Purpose To ensure that the works have

been completed as specified, and that all facilities work properly

To provide a record of the actual execution, together with operating instructions

To train staff in the use of the works

132

Purpose To formally close out contractual relationships

Obtain sign off on final report to show contracted deliverables have been successfully implemented

To formally terminate project team assignments To ensure adequate project

documentation and baseline information for changes that may need to occur in the future

To obtain client’s acceptance of project work and deliverables

133

Activities Test the engineering performance Search for non-operational defects, e. g. those

that affect only the appearance Inspect the facilities thoroughly and have defects

remedied Prepare as-built drawings and record Start up, test and adjust all services Prepare operational instructions and maintenance

manuals Train staff Monitor performance of work against original

requirements

134

Deficiency Lists These are lists of required repairs or

completion of deficient/incomplete items.

Schedule for completion of deficiencies. Need a sign-off procedure. Need a handover process to turn

project over to Owner in organized way.

135

Records During implementation, difficulties

may arise which result in changes to the original design. Records of these changes will be kept during implementation, mainly for financial reasons. These must be brought together to make a complete record of the actual execution.

136

As-built Drawings Mandatory on some projects. Should be provided on all projects. Reflect what was actually built. Contract documents must set a date for

completion of as-built drawings. Make sure they are worked on as the

project is built . . . do not wait for the end of the job.

137

Warranties, Spare Parts and Manuals

Watch for differing warranty starts and durations.

Recommended parts list. Operations and Maintenance

Manuals. Service and warranty contacts and

service agreements/expectations.

138

Termination Process Project termination can be complicated A systematic approach is required to

successfully cover all bases in terminating contracts and relationships.

Stay in close contact with the client and administration to ensure close down meets with the client’s satisfaction.

139

Termination Process Generally the termination phases include:

1. Prepare termination logistics2. Document project3. Conduct post implementation audit

and prepare and submit final report4. Obtain client approval5. Close operation

140

Close Operation

PrepareTerminationLogistics

Document The ProjectProject

TerminationPhases

Conduct Post- ImplementationAudit: Prepare and Submit Final Report

Obtain ClientApproval

PROJECT TERMINATIONPHASES

141

1. Prepare termination logistics

Establish project termination design Assign a termination manager Assign a termination team to assist

manager Conduct a termination meeting to

review process Assign close-out tasks

142

2. Document the Project Prepare personnel termination

reports Close down project office and

reporting system Terminate all financial documents

Complete all payments and expenses Collect all debts prepare the financial

project close out report

143

2. Document the Project Terminate all work orders, contracts,

assignments and outstanding supplier and customer obligations.

Document completion and compliance with all vendors and contractors.

Close all project sites and return all project equipment.

144

3. Conduct Post -Implementation Audit

Complete Final Report

Submit report to client Evaluation of project’s goals and activity

achievement. Measured against the project plan,

budget, time deadlines, quality of deliverables, specifications and client satisfaction.

145

Final Report Should answers the following questions:

Was the project goal achieved? Was the project work done on time? Was it done within budget? Was it done by specifications? Was the client satisfied with the project

results? Memory or history of the project. File others can refer to, study progress and

impediments of the project. Can follow many formats.

146

Final Report Usually includes the following elements:

Overall success and performance of the project Organisation and administration of the project Techniques used to accomplish project results Assessment of project strengths and weaknesses Recommendation of project manager and team

for continuation or extinction of project

147

4. Client Approval

Obtain Client approval.

5. Close Operation

Close all physical sites and terminate remaining project staff.

148

Rewarding Successes and Learning From Failures Closing a project is a celebration of effort. Brings resolution to the process. Project manager should bring the team

together to review their journey. Way of closing formal and informal

relationships. Way to re-enforce learning that occurred. Final get together brings project full

circle.

149

Summary All projects must be closed off. Project should meet with client

acceptance. Provide installed deliverables. Document the process and

achievements. Provide closure for the team and

client.

150

Critical Factors in Successful Project Implementation

Mission Senior Management Schedule Client Consultation Personnel

Pinto, J. K. and D. P. Slevin (1987). IEEE Transactions on Engineering Management EM34(1): 22-28.

Technical Tasks Client Acceptance Monitoring &

Feedback Communication Troubleshooting

151

Project Management Education / Training Online resources (websites and list

servers) Each other (sharing knowledge and

experiences) Balance experience with education Project Management Institute:

PMBOK Guide, http://www.pmi.org

152

Additional Online Resources in Project Management http://www.gantthead.com http://www.allpm.com http://www.4pm.com http://www.ipma.ch http://appl.nasa.gov/pmdp/handbook/guide.ht

m http://www.pmforum.org http://www.projectconnections.com http://www.tenstep.com http://listserv.uts.edu.au/mailman/listinfo/pmn

et http://www.spottydog.u-net.com/

153

Concluding Remarks Projects - an increasingly important way

of working Project management is challenging,

rewarding Keep it simple, use aspects of project

management that make sense Don’t be an Accidental Project Manager Its OK to make mistakes…learn from

them to improve project management practices

154

That’s all and thank you

Good luck in managing your projects

155

Sample Templates and Forms

156

5-Step Project Management PLANNING IMPLEMENTATION

DEFINE







State the Problem


List theObjectives

Determine PreliminaryResourcesIdentify Assumptionsand Risks


Recruit Project MangerRecruitProject Team

OrganizeProject Team


Project overview WBS Recruit Criteria Variance Reports Final Report Project network Define Work packages Status Reports Audit Reports Critical Path Assign Work Packages Staff Allocation Reports


Establish Control ToolsPrepare Status Reports


Issue Change Orders




Issue Final Report


157

Project Overview Project Name - PM Conference Project Manager

Problem/OpportunityMembership in PM Association has declined in the past four years and attendance at

conferences has declined in past three years. The viability and financial stability of the organization depends on maintaining membership and successful annual conference.

Goal Reverse downward trend in membership and annual conference attendance.

Objectives1. Develop the Program2. Set the Conference Site and Date3. Design and Implement the Marketing Plan

Success Criteria1. At least 50 of previous years conferences attendees will attend2. At least 150 of 450 PMI Canada members will attend3. At least 1.5% of the non-members receiving conference brochure will attend4. At least 5% of the non-member attendees will join PM Association

Assumptions and Risks1. Interest in PM can be renewed through the annual conference2. A quality professional program will attract members and non-members3. Key speaker(s) fail to show up or submit written paper.

Prepared by Date Approved by Date

Project Overview - Sample

158

Project Name Project Manager

Problem/Opportunity

Goal

Objectives

Success Criteria

Risks and Assumptions

Prepared by Date Approved by Date

Project Overview

Stakeholders

159

STAKEHOLDER and External Issues

Their Objective/Purpose

Their Strategy

How They Operate

Where they gain Support

Their Potential Impact onthe project

How to Manage them and your plan for

mitigation

Stakeholder and External Issues Analysis

160

Risk Management Template

Monitoring Schedule

Response Plan

OwnerImpactProbabilityRisk

161

CONFERENCE PLANNING

SITE MARKETINGPROGRAM

DATE PLACETHEME MATERIALS SPEAKERS LISTS BROCHURE REGISTER

OBTAIN MATERIALS

PREPARE KITS

DESIGN BROCHURE

MAIL BROCHURE

WBS - Sample

162

Estimated Project Planning Budget

Cost __________

Description __________

Cost __________


Cost __________


Cost __________


Cost __________


163

Estimated Conference Planning BudgetCONFERENCE PLANNING

$243,325

Program

$41,100

Site

$170,425

Marketing

$31,800

Theme

$600

Materials

$13,300

Speakers

$27,200

Date

$1,000

Location

$169,425

Lists

$2,000

Brochure

$29,800

Registration

3 conf calls with pgm comm

Travel/expenses for 16 speakers @ $500 per speaker

Deposit3 site visits @ $800/visit food @$50 per person/day for 3 days for 1100 meeting rooms @ $225/day/room for 3 days for 3 rooms

25,000 labels @ $80/1000

Obtain Speaker Materials $800

Prepare Conference Notebook $125,500

Design Brochure $12,800

Mail Brochure $17,000

Edit/format @ $50/speaker

1100 binders @ $5/binder photocopy materials 350,000 pages @ $0.02/page

Layout: 16 pages @ $50/page

Printing: 30,000 copies @ $0.40/copy

25,000 pieces @ $0.68/piece

164

Project Schedule - Sample

ID Task Name Duration

1 Develop the Program 0 days

2 Theme 1 wk

3 Obtain Material 4 wks

4 Speakers 3 wks

5

6 Conference Site 0 days

7 Set date 1 day

8 Select site 1 day

9 Confirm Arrangements 1 day

10

11 Marketing 0 days

12 Obtain lists 2 wks

13 Design brochure 2 wks

14 Mail brochure 4 days

15 Register participants 8 days

3/1

3/1

3/1

2/27 3/5 3/12 3/19 3/26 4/2 4/9 4/16 4/23 4/30 5/7March April May

Project: ____________________ Project Manager: ____________________ Date: _____________

165

Project Schedule

ID Task Name Duration 12/03 19/03 26/03 02/04 09/04 16/04 23/04April

Project: ____________________ Project Manager: ____________________ Date: _____________

166

Deliverable:_____________________ Manager:___________________ Project:_________

ACTION DATES

ActivityAnother activityBuild something

Another ItemYet anotherDesign a bitDesign moreSneezeGesundheitAnother thingWait for itemMore stuffFinish

A C G C F M J W B D M H F W L S W ER A A C I I - I C 120 400- R C I A A I A - 50 50R - A C I I - C - 345 1,500- R C I A A I A - 127 -R A A C I I - I C 90 9,000R - A C I I - C - 55 1,700

- A R I C C A I I 455 875R C A A I C I - - 200 7,785- R I I C - - - - 65 -

A C R - C I C - - 20 100,000- I C A A R I A I 655 -R A - I C I A A A 80 -A I C I I A A A R 12 100

Budget Actual Budget ActualW/Hrs. W/Hrs. Cost Cost

2.4.5 Major Element Amelia Drover Fred 2-5

RACI Charts (F.T Hartman)

167

RACI ChartsDeliverable:_____________________ Manager:___________________ Project:_________

ACTION DATES------People involved ----- Other Info. (e.g., Cost)

168

RACI Chart

2

1

InformCoordinate with

Accountable to

Responsible party

Task

169

PM ANNUAL CONFERENCE REVENUE & EXPENSE BUDGETRevenues

Registrations - 1100 @ $335……………………………………………………………..$368,500Expenses

Salary

Graphic artist………………………………………………………………………………………………...800Total Salary……………………………………………………………………………………………..800Non-Salary

Travel……………………………………………………………………………………………………...21,600Printing…………………………………………………………………………………………………….19,000Postage…………………………………………………………………………………………………...17,000Mailing Lists……………………………………………………………………………………………….2,000Telephone…………………………………………………………………………………………………….600Supplies…………………………………………………………………………………………………….6,300Speaker Honoraria……………………………………………………………………………………….8,000Site Deposit………………………………………………………………………………………………..1,000Food………………………………………………………………………………………………………165,000Meeting Room Rental…………………………………………………………………………………..2,025

Total Non-Salary………………………………………………………………………………..242,525Total Expenses………………………………………………………………………………………$243,325Gross Profit…………………………………………………………………………………………$125,175Indirect (@ 40% of Total Expenses)……………………………………………………$97,330Net Profit………………………………………………………………………………………………$27,845

170

Project Definition Report

PROJECT DEFINITION Project Name Project Manager DateActivity Schedule Budget

No. Name Description Start End Money Labor Matis Time(hrs)

Manager

Prepared by Date Approved by Date Sheet __of__

171

Sample of a Change OrderPROJECT TITLEPROJECT NO. CONTRACT NO. CONTRACT DATECONTRACTOR

The following changes are hereby made to the Contract Documents:Construction of access bridge abutment No. 1 drainage system; andReset two penstock bearing plates. All in accordance with revised DWG S-17209Revision 4, dated August 29, 2000.

JUSTIFICATION:Unforeseen soil conditions

CHANGE TO CONTRACT PRICEOriginal Contract Price: $Current contract price, as adjusted by previous change orders: $The Contract Price due to this Change Order will be (increased) (decreased) by: $The new Contract Price due to this Change Order will be: $

CHANGE TO CONTRACT TIMEThe Contract Time will be (increased) (decreased)by calendar days.The date for completion of all work under the contract will be

Requested by datedRecommended by datedOrdered by datedAccepted by dated