Fundamentals of Project Management

1
Fundamentals of Project Management

• Dr. George F. Jergeas
• Project Management Specialization
• University of Calgary

2
Schedule

• Day 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

3
5 Step Project Management PLANNING
IMPLEMENTATION
CONTROL

ORGANIZE
DEFINE
PLAN
CLOSE
Identify project activities
Determine Personnel Needs
Define Management Style
Obtain Client Acceptance Install
Deliverables Document the Project Issue Final
Report Conduct Post- Implementation Audit
State the Problem
Identify Project Goals
Estimate time and cost
Recruit Project Manger
Establish Control Tools
Recruit Project Team
Prepare Status Reports Review
Project Schedule Issue Change Orders
Sequence Project Activities
List the Objectives
Determine Preliminary Resources
Identify Critical Activities
Organize Project Team
Write Project Proposal
Identify Assumptions and Risks
Assign Work Packages
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
4
Step 2 Plan the project Basics of Cost
Estimating
5
Agenda

• Introduction
• What is an estimate
• Estimating process
• What constitutes a good estimate
• Basic types of cost estimates
• Order of Magnitudes
• Definitive Estimates

6
Introduction

• Cost estimates
• Key to successfully conceived, managed and
  completed projects
• Not limited to construction
• An approximation procedure
• Mistakes can be very costly!

7
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

8
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

9
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

10
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

11
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

12
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

13
Components of a Cost Estimate

• Indirect Costs
• Overhead
• Home office overhead
• Job site overhead (general conditions)
• Taxes
• Risks
• Contingency
• Profit
• Escalation

14
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

15
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

16
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

17
Estimated Conference Planning Budget
CONFERENCE PLANNING 243,325
Site 170,425
Program 41,100
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 _at_ 500 per speaker
3 site visits _at_ 800/visit food _at_50 per
person/day for 3 days for 1100 meeting rooms _at_
225/day/room for 3 days for 3 rooms
Deposit
25,000 labels _at_ 80/1000
Obtain Speaker Materials 800
Prepare Conference Notebook 12,500
Design Brochure 12,800
Mail Brochure 17,000
Layout 16 pages _at_ 50/page Printing 30,000
copies _at_ 0.40/copy
25,000 pieces _at_ 0.68/piece
1100 binders _at_ 5/binder photocopy materials
350,000 pages _at_ 0.02/page
Edit/format _at_ 50/speaker
18
PM ANNUAL CONFERENCE REVENUE EXPENSE BUDGET

• Revenues
• Registrations - 1100 _at_ 335
  ..368,500
• Expenses
• Salary
• Graphic artist
  ...800
• Total Salary..
  800
• Non-Salary
• Travel...2
  1,600
• Printing.1
  9,000
• Postage...1
  7,000
• Mailing Lists
  .2,000
• Telephone.
  600
• Supplies.6
  ,300
• Speaker Honoraria
  .8,000
• Site Deposit
  ..1,000
• Food165,0
  00
• Meeting Room Rental
  ..2,025
• Total Non-Salary..2
  42,525
• Total Expenses24
  3,325

19
Estimating Issues

• Underestimating
• Dont 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

20
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.

21
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

22
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

23
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

24
Step 2 - Plan the Project Writing a Project
Proposal
25
Agenda

• Writing a proposal
• The purpose
• Format
• Executive summary
• Background
• Project manager
• Activity
• Schedule
• Budget/project cost

26
5 Phase Project Management PLANNING
IMPLEMENTATION
CONTROL
DEFINE
ORGANIZE
PLAN
CLOSE
Identify project activities
Determine Personnel Needs
Obtain Client Acceptance Install
Deliverables Document the Project Issue
Final Report Conduct Post- Implementation Audit
Define Management Style
State the Problem
Identify Project Goals
Estimate time and cost
Recruit Project Manger
Establish Control Tools
Recruit Project Team
Prepare Status Reports Review
Project Schedule Issue Change Orders
Sequence Project Activities
List the Objectives
Identify Critical activities
Determine Preliminary Resources
Organise Project Team
Write Project Proposal
Identify Assumptions and Risks
Assign Work Packages
27
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

28
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

29
Purpose

• Tool for decision making, managing, controlling,
  training and reporting
• Written for
• Senior management
• Project team
• Other managers who are indirectly involved
• Consultants

30

• The remainder of this section should be reviewed
  by attendees.
• Please go to slide 43

31
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

32
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

33
Technical Approach

• Proposal to meet clients requirements identified
• Procedures for testing and inspections to assure
  performance, quality, reliability and compliance

34
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

35
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

36
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

37
Format Example

• Proposal components
• Project name
• Project manager responsible
• Activities
• Schedule
• Budget

38
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

39
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

40
Format

• Schedule
• Based on the analysis of the network
• Provides anticipated start and finish dates.
• Dates may change

41
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 )

42
Project Definition Report
43
Any Questions?
44
Step 3 Organize the ProjectImplement the
Project and Organize the Team
45
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

46
5 Step Project ManagementPLANNING
IMPLEMENTATION
Obtain Client Acceptance Install
Deliverables Document the Project Issue
Final Report Conduct Post- Implementation Audit
CONTROL
CLOSE
DEFINE
ORGANIZE
PLAN
CLOSE
Identify project activities
Determine Personnel Needs
Define Management Style
Obtain Client Acceptance Install
Deliverables Document the Project Issue
Final Report Conduct Post- Implementation Audit
State the Problem
Identify Project Goals
Estimate time and cost
Recruit Project Manger
Establish Control Tools
Recruit Project Team
Prepare Status Reports Review
Project Schedule Issue Change Orders
Sequence Project Activities
List the Objectives
Identify Critical activities
Determine Preliminary Resources
Organise Project Team
Write Project Proposal
Identify Assumptions and Risks
Assign Work Packages
47
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 .

48
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 persons technical
  skills

49
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

50
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

51
Organising the Project Team

• Large projects
• Dedicated core team
• Structured
• More defined roles
• Need for open and continuous communication lines
• Self contained

52
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

53
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

54
Characteristics of an Effective Project Manager

• Understands purpose of the project
• Has the necessary background and experience
• Effective leader with proven managerial ability

55
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

56
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

57
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

58
Project Manager Selection Criteria

• 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

59
Project Manager Selection Criteria

• 3. Technical expertise
• Ability to direct, evaluate, and make decisions
  on technical alternatives
• Does not and cant be an expert in all areas of
  the project
• Should have expertise in project management, team
  management and training

60
Project Manager Selection Criteria

• 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

61
Project Manager Selection Criteria

• 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

62
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

63
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)

64
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

65
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

66
What Makes Teams Work

• Successful 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

67
What Makes Teams Work

• Successful projects
• Team understands the organisations mission and
  how the project fits within that mission
• Team understands what is to be achieved and when
  it is achieved
• Trust and communication

68
Step 4 - Control the Project
69
5 Step Project ManagementPLANNING
IMPLEMENTATION
Obtain Client Acceptance Install
Deliverables Document the Project Issue
Final Report Conduct Post- Implementation Audit
CONTROL
CLOSE
DEFINE
ORGANIZE
PLAN
CLOSE
Identify project activities
Determine Personnel Needs
Define Management Style
Obtain Client Acceptance Install
Deliverables Document the Project Issue
Final Report Conduct Post- Implementation Audit
State the Problem
Identify Project Goals
Estimate time and cost
Recruit Project Manger
Establish Control Tools
Recruit Project Team
Prepare Status Reports Review
Project Schedule Issue Change Orders
Sequence Project Activities
List the Objectives
Identify Critical activities
Determine Preliminary Resources
Organise Project Team
Write Project Proposal
Identify Assumptions and Risks
Assign Work Packages
70
Project Control

• Schedule control
• Cost control
• Team performance evaluation
• Change control

71
Schedule Control
72
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

73
Approaches to Schedule Control

• Schedule 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

74
Approaches to Schedule Control

• If the planned corrective actions do not result
  in an acceptable schedule, repeat the previous
  steps

75
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

76
Acceleration

• To 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

77
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

78
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
  contractors control?
• Did the contractor fail to take normal
  precautions?
• Was the contractor ready and able to work?

79
Evaluation of Delays in the Work

• 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?

80
Evaluation of Delays in the Work

• 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?

81
Evaluation of Delays in the Work

• Did the weather phenomenon actually delay
  operations along the critical path or in
  secondary operations?
• Was the contractor shut down for other reasons?

82
Cost Control
83
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.

85
Cost Control System

• Compares actual man-hours expended to earned
  hours
• Actual work hours come from contractors 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

86
Labour Productivity Report
87
Budget
Money
Time Now
Actual Expenditure
Cost overrun
Earned Value
Time
Delay
88
Money
Budget
Ahead of schedule
Earned Value
Making Money
Actual
Time
89
Example Activity Variance Report
Fundamentals of Project Management
Tool Kit
90
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

91
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

93
Measuring Success

• Met target price, quality and schedule
• Goals achieved
• Benchmarking
• Positive client feedback
• Great safety record
• Disputes resolved effectively

94
Joint Evaluation
1. 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
Difficult, guarded
Easy, open, up front
1 2 3 4 5
Not evident Inconsistent
Obvious, consistent
1 2 3 4 5
Attacked promptly
1 2 3 4 5
Ignored
Cool, removed, detached,
Genuine, unreserved, complete
1 2 3 4 5
Personal issues
Treated as project problems
1 2 3 4 5
95
Change ControlChanges and Extra Work
96
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 contractors 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 owners approval or rejection should follow
  as soon as possible
• The Change Order should be fair. It should
  recognize the contractors 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
• Engineers 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 owners and contractors
  representatives

107
Sample of a Change Order

• PROJECT TITLE
• PROJECT NO. CONTRACT NO. CONTRACT DATE
• CONTRACTOR
• The following changes are hereby made to the
  Contract Documents
• Construction of access bridge abutment No. 1
  drainage system and
• Reset two penstock bearing plates. All in
  accordance with revised DWG S-17209
• Revision 4, dated August 29, 2000
• JUSTIFICATION
• Unforeseen soil conditions
• CHANGE TO CONTRACT PRICE
• Original 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 TIME
• The Contract Time will be (increased)
  (decreased)by calendar days
• The date for completion of all work under the
  contract will be
• Requested by dated
• Recommended 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

109
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

• Owners bias
• Contractors 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
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
5 Phase Project Management PLANNING
IMPLEMENTATION
CONTROL
DEFINE
ORGANIZE
PLAN
CLOSE
Identify project activities
Determine Personnel Needs
Define Management Style
Obtain Client Acceptance Install
Deliverables Document the Project Issue
Final Report Conduct Post- Implementation Audit
State the Problem
Identify Project Goals
Estimate time and cost
Recruit Project Manger
Establish Control Tools
Recruit Project Team
Prepare Status Reports Review
Project Schedule Issue Change Orders
Sequence Project Activities
List the Objectives
Identify Critical activities
Determine Preliminary Resources
Organise Project Team
Write Project Proposal
Identify Assumptions and Risks
Assign Work Packages
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
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 clients 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 clients satisfaction.

139
Termination Process

• Generally the termination phases include
• 1. Prepare termination logistics
• 2. Document project
• 3. Conduct post implementation audit and
  prepare and submit final report
• 4. Obtain client approval
• 5. Close operation

140
Prepare Termination Logistics
PROJECT TERMINATION PHASES
Close Operation
Document The Project
Project Termination Phases
Obtain Client Approval
Conduct Post- Implementation Audit Prepare and
Submit Final Report
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 projects 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.htm
• http//www.pmforum.org
• http//www.projectconnections.com
• http//www.tenstep.com
• http//listserv.uts.edu.au/mailman/listinfo/pmnet
• 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
• Dont be an Accidental Project Manager
• Its OK to make mistakeslearn from them to
  improve project management practices

154
Thats all and thank you

• Good luck in managing your projects

155
Sample Templates and Forms
156
5-Step Project Management PLANNING
IMPLEMENTATION
CONTROL
DEFINE
ORGANIZE
PLAN
CLOSE
Identify project activities
Determine Personnel Needs
Define Management Style
Obtain Client Acceptance Install
Deliverables Document the Project Issue
Final Report Conduct Post- Implementation Audit
State the Problem
Identify Project Goals
Estimate time and cost
Recruit Project Manger
Establish Control Tools
Recruit Project Team
Prepare Status Reports Review
Project Schedule Issue Change Orders
Sequence Project Activities
List the Objectives
Identify Critical activities
Determine Preliminary Resources
Organize Project Team
Identify Assumptions and Risks
Write Project Proposal
Assign Work Packages
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
157
Project Overview - Sample
Sample
158
Project Overview
Project Name Project Manager

Problem/Opportunity
Goal
Objectives
Success Criteria
Stakeholders
Risks and Assumptions
Prepared by Date Approved
by Date
Fundamentals of Project Management
Tool Kit
159
Stakeholder and External Issues Analysis
STAKEHOLDER and External Issues
Their Objective/Purpose
Their Strategy
Their Potential Impact on the project
How They Operate
Where they gain Support
How to Manage them and your plan for mitigation
Fundamentals of Project Management
Tool Kit
160
Risk Management Template
161
WBS - Sample
CONFERENCE PLANNING
SITE
MARKETING
PROGRAM
DATE
PLACE
THEME
MATERIALS
SPEAKERS
LISTS
BROCHURE
REGISTER
OBTAIN MATERIALS
PREPARE KITS
DESIGN BROCHURE
MAIL BROCHURE
Sample
162

Estimated Project Planning Budget











Cost __________
Description __________
Cost __________
Description __________
Cost __________
Description __________




Cost __________
Description __________
Cost __________
Description __________
Fundamentals of Project Management
Tool Kit
163
Estimated Conference Planning Budget
CONFERENCE PLANNING 243,325
Site 170,425
Program 41,100
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 _at_ 500 per speaker
3 site visits _at_ 800/visit food _at_50 per
person/day for 3 days for 1100 meeting rooms _at_
225/day/room for 3 days for 3 rooms
Deposit
25,000 labels _at_ 80/1000
Obtain Speaker Materials 800
Prepare Conference Notebook 125,500
Design Brochure 12,800
Mail Brochure 17,000
Layout 16 pages _at_ 50/page Printing 30,000
copies _at_ 0.40/copy
25,000 pieces _at_ 0.68/piece
1100 binders _at_ 5/binder photocopy materials
350,000 pages _at_ 0.02/page
Edit/format _at_ 50/speaker
164
Project Schedule - Sample
Project ____________________
Project Manager ____________________
Date _____________
Sample
165
Project Schedule
Project ____________________
Project Manager ____________________
Date _____________
Fundamentals of Project Management
Tool Kit
166
RACI Charts (F.T Hartman)
2.4.5 Major Element Amelia
Drover Fred 2-5
Deliverable_____________________
Manager___________________ Project_________
DATES
A C G C F M J W B D M H F W L
S W E
Budget Actual Budget Actual W/Hrs.
W/Hrs. Cost Cost
ACTION
Activity Another activity Build something
R A A C I I - I C 120
400 - R C I A A I
A - 50
50 R - 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 9,000 R - A C I
I - C - 55
1,700
Another Item Yet another Design a bit
Design more Sneeze Gesundheit
- A R I C C A I I 455
875 R C A A I C I
- - 200
7,785 - R I I C - - - -
65 -
Another thing Wait for item More stuff Finish
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
167
RACI Charts
168
RACI Chart
169
PM ANNUAL CONFERENCE REVENUE EXPENSE BUDGET

• Revenues
• Registrations - 1100 _at_ 335
  ..368,500
• Expenses
• Salary
• Graphic artist
  ...800
• Total Salary..
  800
• Non-Salary
• Travel...2
  1,600
• Printing.1
  9,000
• Postage...1
  7,000
• Mailing Lists
  .2,000
• Telephone.
  600
• Supplies.6
  ,300
• Speaker Honoraria
  .8,000
• Site Deposit
  ..1,000
• Food165,0
  00
• Meeting Room Rental
  ..2,025
• Total Non-Salary..2
  42,525
• Total Expenses24
  3,325

170
Project Definition Report
171
Sample of a Change Order

• PROJECT TITLE
• PROJECT NO. CONTRACT NO. CONTRACT DATE
• CONTRACTOR
• The following changes are hereby made to the
  Contract Documents
• Construction of access bridge abutment No. 1
  drainage system and
• Reset two penstock bearing plates. All in
  accordance with revised DWG S-17209
• Revision 4, dated