Project Controls Procedure The Function of Project Controls Project Controls contributions and responsibilities during project execution are described in the following sections which provide an overview of cost, estimating and schedule functions, and their role in the project risk management and the progress and performance measurement processes. Figure 1. The three main pillars of Project Controls: Cost, Schedule and Quality. Any successful project will as a minimum meet planned costs, schedule and quality requirements. Index 1. Overview and Function of Project Controls 1.1. Organizing and Defining 1.2. Planning and Budgeting 1.3. Monitoring Execution Status, Performance Measurement and Reporting 1.4. Analysis, Trending and Forecasting 1.5. Change Management 1.6. Systems 1.7. Project Controls Team 2. Project Cost Control 2.1. Cost Baselines 2.2. Cost Control 2.3. Change Management 2.4. Project Team Roles 3. Project Planning and Schedule Control 3.1. Implementation Plan 3.2. Starter Schedule 3.3. Schedule Baselines 3.4. Executive Summary Schedule 3.5. Detailed Schedules 3.6. Schedule Control 3.7. Scheduling Change Management 3.8. Project Team Roles 4. Risk/ Contingency Management 4.1. Contingency Management 4.2. Project Team Roles 5. Project Performance Measurement 5.1. Performance Measurements Methods 5.2. Performance Measures 5.3. Project Team Roles 1. Overview and Function of Project Controls Introduction Project Controls personnel, work processes, and systems provide management with performance information required to effectively manage the projects budget, scope, schedule, and risk. Proper implementation of estimating, cost control, and planning/ scheduling principles enables coordinated development of work breakdown/coding structures, budgets, schedules, analysis, forecasts/ trends, and reports to support project management in achieving the projects cost and schedule objectives. Timely change management, analysis, and trending help identify deviations from plans so that management can make informed decisions on project performance and implement appropriate corrective actions. To accomplish this, Project Controls utilizes five organizing principles to align skills and methodologies with project requirements, contract strategies and risk management. 1. Organizing and defining • Identifying Contractual, Client, and Company requirements. • Establishing the Work/ Cost Breakdown Structures. • Establishing the Project Controls Execution Plan. 2. Planning and budgeting • Establishing the project control levels and reporting plan. • Developing and communicating the baseline costs/ schedules and their basis. 3. Monitoring execution status, performance measurement and reporting • Accumulating and verifying actual commitments and expenditures. • Performance Measurement - Identifying project status and progress measurement. • Timely and accurate reporting/ communicating of status, changes, and trends. 4. Analysis, trending and forecasting • Analyzing cost and schedule deviations, their causes and corrective actions. • Identifying trends and forecast impacts. • Contingency analysis and drawdown. 5. Change management • Establishing and administering the Change Management Process. • Controlling changes and adjustments to budgets and forecasts. The above principles are further detailed as below. 1.1. Organizing and Defining The processes and methodologies employed here establish the basis of all future work and include: 1.1.1. Identification of Project Requirements The Project Manager ensures accessibility of the contract to the Project Controls team to facilitate compliance of the Project Controls Execution Plan with the contract. This establishes contractual parameters for cost, schedule, and financial reporting and an understanding of contractual terms and conditions, client requirements and expectations, contract/ execution strategies and reporting/ invoicing requirements and their implications to the Project Execution Plan. A thorough understanding of the project requirements ensures that the Project Controls team addresses managements needs to control the work. Client requests for WBS or reporting requirements in conflict with COMPANYs normal execution methods and systems must be brought to management’s attention and any impacts must be assessed prior to agreement. 1.1.2. Subdivision of Work - Work Breakdown Structure (WBS)/ Cost Breakdown Structure (CBS) The establishment of the project WBS subdivides the project into manageable/ measurable work segments where responsibility for execution can be assigned. It is often depicted as a hierarchical tree of deliverables and services. Where necessary, considerations for risk elements are incorporated. The WBS is the basis for quantification of project scope in the estimating and scheduling processes and is a key interface component of the Engineering, Construction, and Project Management deliverables, work processes, and systems. In conjunction with the WBS development, the CBS is developed to provide the levels of cost control deemed necessary to satisfy internal and external reporting requirements. Development of the WBS/ CBS and the effective communication of this coding structure to the project team are essential for effective management. The Project Manager and the Execution Management team review and approve the WBS/ CBS including the level of cost/ schedule control on the project. 1.1.3. Project Controls Execution Plan (PCEP) Identifies the project specific plans to execute the project controls work processes, systems, and addresses the staffing/ training requirements of the project. The focus is on what we are planning to do, and how we plan on accomplishing it, rather than a proposal level recap of sound project controls practices. The Project Manager approves the Project Controls Execution Plan. The plan includes but is not limited to the following: • Estimate Plan. • Schedule Plan. • Change Management Plan defining the change management process, forms, roles, and responsibilities including an explanation of the budget types. • Project coding structures. • Project Reporting Plan - Standard reports, distribution and distribution frequency. • Project Controls Systems to be used and the plan to interface them with other systems and data sources. • Cash Flow Plan. • Risk Management/ Contingency Management Plan. • Forecasting Plan including the quantity analysis effort. 1.2. Planning and Budgeting Planning and budgeting begins with the implementation of the Project Controls Execution Plan. It includes the setup of the project controls systems at the appropriate level of control and the budget and schedule development and communication to the project team. This phase establishes the Cost & Scheduling baselines and ensures that project team execution is aligned with them. 1.2.1. Levels of Control Level of control is defined as the selection of appropriate WBS/ CBS levels for storing budgets, recording commitments and expenditures, identifying schedule activities, progress measurement, and assigning discipline or craft responsibility. Risk management may also dictate certain levels of detail in order to gain visibility of specific risk elements. Reporting requirements also impact selected levels of control. It is important to select appropriate levels of control in order to correctly configure the Project Controls Systems and avoid duplication of detail stored in other systems. The Cost, Schedule and Progress Measurement systems and work process are typically at different multiple levels of detail and in accordance with WBS Structure. 1.2.2. Developing and Communicating the Project Baseline Using scope documents, plans and code structures, the estimating process quantifies project resource requirements and costs in accordance with the project WBS/ CBS structure. Once approved, estimate data is loaded into the detail project schedule and along with resource leveling methodologies, allows review of discipline/craft resource availability. The result is a time-phased, resource loaded project schedule based on activity sequence relationships, estimated activity durations, and planned resource requirements, which establishes the planned progress curves. The estimate data is also input in the cost and progress measurement systems. Reconciliation of the data across these systems provides alignment in measuring deviations to the work plans and budgets, as well as consistent reporting. The Project Manager ensures that an estimating led turnover review of the project’s Control Estimate is initiated and for ensuring the project team understands the elements of the estimate, its basis, assumptions, and qualifications. The effective communication of project baseline to the project team and their understanding of the basis, assumptions and risk are essential for effective project control. The Control Estimate establishes the budget baseline for performance measurement and Change Management processes. The Change Management process relies on each project team member understanding project scope and their deliverables in order to recognize deviations to the execution plan and baseline, and communicate them to management. The organizing, defining, planning and budgeting processes are critical for effective project execution. They require teamwork, and need to be accomplished quickly following project kickoff. The ability to define the specific deliverables and set the project up correctly and get the project team into the execution phase with minimal changes later is crucial to project success. 1.3. Monitoring, Performance Measurement and Reporting During execution, the following processes occur simultaneously and in conjunction with managing change, analysis and forecasting. 1.3.1. Commitment and Expenditure Accumulation The project CBS structures at the appropriate level of control are used to validate commitments and expenditures (labor, paid invoices, etc.) against budgeted costs in the project Cost System. Verification of cost and revenue transactions are reconciled with Financial and Time Entry systems to ensure an accurate and complete basis for subsequent reporting and performance evaluations. Procurement commitments are also verified against procurement system documentation. The Cost Specialist verifies and assures that project costs and revenues are being reported accurately, completely and against the correct project coding. 1.3.2. Project Status and Progress Physical accomplishments for all tasks/ work packages are statused by milestone, and linked by coding to a higher level control package, where the budgets are maintained. Status and progress are normally recorded at the lowest level of detail and summarized to the budget level where earned value is determined for each WBS/ CBS budget element of measurable work. 1.3.3. Reporting and Communication of Project Status Reporting requirements (specific reports, their timing/ frequency, the reporting periods, and distribution) are established in the Project Controls Execution Plan. Status, progress and accumulated commitments and expenditures all adhere to the selected reporting periods. This provides for a consistent set of data from which to evaluate performance. It is important that selected reporting periods are agreed to by all project participants, so that consistency can be achieved, across Procurement, Financial, and Project Controls functions. Any deviations in cutoff dates such as field payroll cut-off requirements should be identified. The Project Manager must approve the monthly Project Status Review Report (PSR) used to communicate project, status, and issues to Senior Management. These reports support and ensure formal assessment/ review of the project financial status, forecasting, and profit recognition. 1.4. Analysis, Trending and Forecasting 1.4.1. Analysis Project Controls personnel analyze project performance by comparing plans and budgets against current status and actual commitments and expenditures. The goal is to identify deviations, their causes, and potential impacts and communicate them to project management for corrective action. 1.4.2. Forecasting and Trending Forecasting and trending efforts are vital to keeping project management informed of the project’s health. They provide management with accurate assessments based on performance to date, the work left to be performed and the associated resource requirements. Forecasting and trending results should be validated against historical data from similar projects to ensure accuracy within acceptable limits. 1.4.3. Management Notification Significant impacts identified by the analysis, trending and forecasting are processed by the Change Management Team and communicated to both Project Management and Project Controls Department Management during the monthly Project Status Report. 1.5 Change Management It is the Project Manager’s responsibility to implement and ensure execution of the projects Change Management process of timely identification, communication, screening/ control, authorization, and implementation of changes and providing early warning of potential trends. The timely quantification of the impact of change and the inclusion in the Project Controls systems is necessary to provide management with accurate project status and cost/ revenue forecasts upon which to make management decisions. All changes must have management approval before release to budgets, schedules, and progress measurement systems. On lump sum projects work should not begin on any change order without client approval of the change; specific exceptions require the approval of the Project Manager. If the Client or JV partners are unresponsive in the approval or recognition of changes, it is the Project Managers responsibility to request Operations Management support and to ensure that the project team continues submitting the changes. 1.6 Systems 1.6.1 Databases A cost database can be used to maintain multiple budgets, commitments, expenditures, earned value progress, and forecast information at a project defined Cost Breakdown Structure (CBS) in terms of quantities, work-hours, and costs. 1.6.2 Primavera P6/ Microsoft Project/ Deltek Open Plan/ Other Scheduling should be via the use of a Critical Path Method (CPM) scheduling program (as opposed to a simple Gantt chart). Furthermore the actual schedule should then take advantage of this and be developed in a robust manner and complete logic (all activities having relationships). The particular choice of scheduling software should be tailored to the project, Company and Client’s needs, bearing in mind that each scheduling software while similar it has distinctive advantages and disadvantages. Sometimes the choice of the scheduling tool will be dictated contractually. 1.7. Project Controls Team The Project Controls team will vary depending on the size and complexity of the project, risk assessment, and client specific requirements. Project Controls Manager - On major/ complex projects, the Project Controls Manager leads and coordinates the Project Controls activities. Responsibility includes ensuring the correct application and operation of controls systems in accordance with the Project Controls Execution Plan, as well as initiating the organizing and planning/ budgeting activities at project kick-off. The Project Controls Manager reports to the Project Manager, and is supported by the controls staff. In the event the size of the project does not justify the assignment of a Project Controls Manager, then these responsibilities will be shared by assigned Schedulers and Cost Specialists. Leadership is expected to be provided by the senior of these two individuals. Project Scheduler - Establishes and operates the project scheduling, and progress measurement systems in accordance with the Project Controls Execution Plan and selected work processes. Responsibilities include participation in organizing and defining efforts, as well as change management, analysis and forecasting. The primary focus is on planning and coordination of project activities, performance, and progress measurement. Project Cost Specialist - Establishes and executes the Cost Control Execution Plan including the change management, forecasting and reporting processes, and systems. Responsibilities include validation, monitoring, analysis and forecasting/ trending of work-hours, expenditures, commitments, and performance against the baseline plan and current forecast. The Cost Specialist is responsible for maintaining budget/ forecast integrity and reconciliation of the Cost System with the Time Entry and Financial systems as necessary to ensure the integrity of the Cost System and reports. Project Estimator – As required for specific projects either on a full time or a part time basis for estimate development and/or oversight and estimation of scope changes. Responsibilities include assisting the Project Controls Team with quantity, workhour and cost summarization for estimates and changes and for risk development and assessment. Field Control Specialist - Field Control Specialists carry similar responsibility as those defined above, but primary focus is the support of the construction effort and site manager. Once the project moves to the field, the Field Cost and Scheduling Specialists are responsible for the control activities at the site. They will report to either the Site Controls Manager or the Technical Services Manager. They will also report to the Home Office PCM as relates to controls methods, procedures, and status reporting. Site Quantity Surveyor - The Quantity Surveyor has responsibility to manage and execute the quantity reporting and progress measurement function for the construction phase of a project. Additionally, drawing take-offs and loading of take-off quantities, quantity trending, variancing and quantity forecasting are elements of the Quantity Survey function. 2. Project Cost Control Introduction Cost control is the process of recording, analyzing, forecasting, and reporting project cost and revenue data and communicating deviations against project baselines to management to assist in minimizing project cost impacts and maintaining project profitability. Invariably, Client satisfaction is influenced by the Company’s ability to control project costs. Identification of project requirements is fundamental to the cost control process. Contractually specified financial considerations, reporting requirements, and risk assessments are significant variables that impact client satisfaction and the projects financial execution. Developing, aligning and communicating the Work Breakdown Structure and Cost Breakdown Structure, and systems to meet these requirements and enable effective reporting, exception analysis, change management, and forecasting is a primary function of the Project Controls Team during the setup phase of the project. 2.1. Cost Baselines (Budgets) The projects estimates and schedules define the Cost Control budget and time-phasing baselines. It is important that they are aligned with the project requirements and WBS/ CBS coding structures. Project Cost Control is based on the following standard budgets and forecast: Original Budget: The initial cost for the project work scope based on the Control Estimate as agreed to by both the Client and Company’s Management at the effective date of the Contract. The Original Budget is synonymous with Initial Approved Costs (IAC) Budget. Current Budget: Current approved budget for the contract scope, as agreed to by the Client and Company’s management. It is the Client Change Order adjusted budget and is synonymous with Control Budget and Client Approved Cost (CAC) Budget. Work Content Budget: The project progress and productivity budget as calculated by the current projected quantities at the estimated unit rates. It is synonymous with the Quantity Adjusted Budget, and Target Budget. Current Forecast: The anticipated costs at project completion. The Current Forecast is a reflection of the actual commitments and expenditures to date and the forecast of costs left to commit and spend. The Current Forecast is synonymous with the Estimate at Completion (EAC). 2.2. Cost Control (Accumulation of Actuals, Analysis and Trending) During project execution, the Cost Specialist is responsible for maintaining data and coding integrity with other systems in the accumulation of progress, commitments, and expenditures, the maintenance of budgets and forecasts and management reporting. Procurement, time entry, financial and performance measurement systems must be reconciled to the Cost Control System to ensure this integrity of the cost and revenue reporting function. Project progress, commitment, and expenditure status are compared to the baseline plan and deviations and trends identified. A comprehensive Forecast Plan to analyze quantities, unit rates, unit costs, and other costs must be established and agreed to with Company and Client’s management and then executed in a timely manner. Focus should be on the elements identified as high risk in the Risk Analysis and estimate assumptions and qualifications. The Cost Specialist is responsible for analyzing project deviations and trends for their causes and potential impacts. The analysis impacts and corrective action should be quantified and forecasted. At the end of each reporting period, project status (budget, progress, commitments, and expenditures), trends, and risks are communicated to management to provide a basis for corrective action. 2.3. Managing Change The Project Manager is responsible for establishing the Project Change Management Team (PCMT), leading the development of the project specific Change Management Plan and the project execution of the Change Management process. Managing change starts with the communication and understanding of the project baseline and key reference documents. The focus of the project team on identifying changes and deviations from the plan on Deviation Requests (DR) or Project Deviation Notices (PDN) is essential to controlling change and accurate project forecasting. Changes are reviewed and validated in PDN review meetings and sent to the Project Change Management Team for classification, authorization to proceed and impact quantification. Timely incorporation of PDNs as they are identified and acted upon is an essential element for accurate cost and schedule forecasting and financial performance analysis. Changes include those adjustments to scope requested by the Client (Client Change Orders) as well as in-scope Project Variances. Deviation Requests (DR) or Project Deviation Notices (PDN): Used to identify, document and communicate changes to the project reference documents (contract, scope, execution plan, cost, or schedule) throughout the life cycle of the project. A detailed DR/ PDN register is initiated and maintained by cost control personnel to ensure that all DRs/ PDNs are listed tracked, and the status maintained and communicated to the PCMT. Project Deviation Notices do not change budgets or the forecast until they are approved as either a Client Change Order, or Project Variance. Client Change Orders (CCO): A formal contract-related document for presenting to the client a change in the project contractual terms/ conditions, project scope additions/ deletions, and changes in the execution plan, cost or schedule that was requested or agreed to by the client. Project Variances (PV): Used to document changes to the work content, and performance to plan adjustments. Project Variances include Work Content Variances arising from evolving scope/ quantities and Forecast Variances arising from unit rate, pricing, and resource productivity adjustments. The Project Manager approves and signs off each PDN as a CCO, or PV for the project. Depending on the magnitude of the change, other company management may be required to approve/ sign as well. Client Change Orders are submitted to the Client for approval in accordance with the timing established in the project Change Management Plan. Disputed CCOs not approved in accordance with the project Change Management Plan are to be elevated to the appropriate company senior management for assistance in resolving. 2.4. Project Team Roles for Costs Control Project Manager Responsible for ensuring identification of the projects cost control requirements and proper management of all cost control functions, including establishing the baseline, change management, trending/ forecasting and initiating appropriate corrective actions as well as initiating check estimates. Cost Control The Cost Specialist is responsible for the timely collection and cost coding of commitments and expenditures, and the subsequent analysis of this data versus the budget/ forecast. They identify deviations from the plan/ budget and recommend forecasts based on their analysis/ trending, as well as administer the project Change Management process. Project Team Provide accurate and timely input from their respective areas of responsibility to Project Controls for up-to-date knowledge on the actual costs, management of change, identification of trends and corrective actions, and predictions of future costs. 3. Project Planning and Schedule Control Introduction Project schedules are prepared to reflect the projects scope of work for each of the WBS elements. The schedule defines the sequence and relationships among the schedule activities. Through the estimating and budgeting process, resource requirements are identified in accordance with the WBS and time durations for each activity are established. Date calculations within the scheduling system provide the start and finish dates for each activity and resources are time phased in accordance with the schedule dates. The schedule defines the Detailed Engineering, Procurement, Construction and Commissioning (EPCC) activities. This process incorporates the major project milestone dates, the WBS execution area priorities, and all identified schedule critical paths, it is based upon the path of construction and system handover sequence that has been identified by Construction and Commissioning respectively. The assembled information should be reflective of the intended Project Execution Strategy and is performed as part of either the FEL Phase 3 deliverables or in the early stages of a project. A Critical Path Method (CPM) scheduling program facilitates the modeling of the project plan. Throughout the life of the project, the schedule is maintained with current status and is analyzed against the baseline plan to identify deviations that require corrective actions. 3.1. Implementation Plan The Project Scheduler prepares a time phased schedule that is representative of the plan to develop the planning deliverables. Interfaces with other systems such as the estimating and progress measurement systems are defined in the plan. The Implementation Plan is developed in accordance with the Project Controls Execution Plan. The Project Controls Manager or Lead Controls person will review and approve the Implementation Plan. 3.2. Starter Schedule The Starter Schedule is prepared at the beginning of a project if a more detailed schedule has not been developed in an earlier FEL or FEED phase. The Starter Schedule reflects work priorities for the project for the next 90 to 120 Days. This detailed schedule is the communications tool that sets project priorities until such time that a more fully developed schedule is approved. Once the projects more formal baseline plan is developed and approved, the Starter Schedule is no longer used. At a minimum, the Project Manager will review and approve the Starter Schedule. 3.3. Schedule Baselines The Schedule baseline is a model of the way the project is planned to be executed. The scope of work is divided into defined activities that are organized and coded in accordance with the WBS. Activity sequencing is then performed by defining the relationships of one activity to another within the scheduling system. Resource work hours, as defined by the project estimate, are downloaded into the schedule activities. Activity durations are finalized and resource scheduling time phases the resources as required by the plan. Once reviewed and approved by the Project Leadership Team, the baseline reflects a time phased and resource loaded schedule which will be used through the life of the project to compare the planned schedule performance with actual schedule performance. It serves as a tool to identify and document deviations caused by work performance and scope changes. 3.4. Executive Summary Schedule (ESS) The Executive Summary Schedule (Level 1) is initially developed during the proposal phase and approved with the Proposal Estimate. The Executive Summary Schedule is a summary of the entire scope of work and reflects the work of each major phase of the project such as engineering, procurement, and construction. Once the contract is awarded, the Executive Summary Schedule will be reviewed and revised to reflect any changes as a result of contract negotiations, contract requirements, or new work execution knowledge. As the project proceeds and detail schedules are made, these are coded in such a manner as to roll up to the Executive Summary Schedule, and in this manner the Level 1 becomes reflective of the schedules of greater detail. In some cases the project proposal may require a Project Master Schedule which serves the same function but is further developed to a level of detail where the major logic ties, critical path, integration, and phase overlap points are clearly defined. Schedule assumptions and risk areas are identified and documented. The Project Manager will approve and issue the Executive Summary Schedule. 3.5. Detailed Schedules The more detailed project schedules are developed soon after the contract award of the project, which will define the Engineering, Procurement, Construction and Commissioning activities in more detail. 3.5.1 Detailed EPC Schedule It is the detailed Level 3 CPM network for control of Engineering and Procurement activities. It also contains Construction activities by craft at a level of detail sufficient to represent the intended execution plan. The EPC Schedule is prepared at the end of the FEL Phase 3 or at the very beginning of the Detail Engineering Stage. This detailed schedule will become the baseline of the Project following the resource loading, leveling and Project review/ approval. This Level 3 Schedule will be summarized to create the Level 2 EPC Schedule. The Baseline Schedule Package consists of the EPC Critical Path Method (CPM) Schedule, Resource Histograms that are produced from the resource loaded schedule; earned progress curves for overall project, and by engineering discipline/ construction craft; and the Basis of Schedule Document. The Project Execution Management Team has the responsibility to review and approve the Baseline Schedule prior to the Project Managers release. At a minimum, the approvers include the Project Manager, Engineering Manager, Procurement Manager, Construction Manager, and the Project Controls Manager. 3.5.2. Detailed Construction Schedule The Detailed Construction Schedule is a further evolution of the construction phase as depicted Level 3 Detailed EPC Schedule Baseline. It represents a level of detail greater than the Level 3 EPC Schedule. This is a living schedule and detail is developed as design information is released and available to the Construction Management Team. This Schedule is used to identify the near term look-ahead schedules that are used in the craft planning and execution of construction work. This schedule is generally organized for Construction by WBS Area and Sub-area. As a general rule, Summary Level System Turnover and Commissioning activities will be detailed at approximately 50% progress of the construction phase. Work effort will then transition as appropriate to a systems completion focus rather than a work area focus. 3.5.3. Detailed Break-Out Schedules These are often necessary to reflect an even greater level of detail for critical work or work that is complex and requires more than normal coordination between work groups. Break-out scheduling may be done as part of the project schedule, but can be done outside the formal schedule if the need for this level of coordination is very specific for a short term work effort. 3.6. Schedule Control Schedule Control begins at the commencement of the projects work. The steps involved in control are: - Monitoring the schedule activities for actual start and finish dates and projecting the remaining durations for work that is in process. - Performance evaluations of progress and earned value. - Schedule Analysis to determine critical path and schedule deviations from plan. Schedule Control provides early indication of deviations from plan in order that corrective actions can be implemented to minimize schedule and cost impact to the projects performance. 3.7. Scheduling Change Management The Change Management Process recognizes the importance of understanding the Projects Execution Plan/ Baseline and the identification and evaluation of the schedule and resource requirements associated with the changing scope or changing quantity basis. The schedule update must incorporate changes to accurately reflect the current scope of the projects work. Activity durations and resource requirements must be adjusted as changes are approved. This process ensures that the project schedule continues to function as an accurate model of the projects execution plan and the project forecast reflects current resource requirements. 3.8 Project Team Roles for Schedule Control Project Manager The PM leads the project team in planning activities that result in the preparation of all project schedules, and ensures that the schedules in each selected level are in sufficient detail to support requirements for project planning and that status and progress can be monitored during the life of the project. Review all schedules, pursuing the following questions: Is the level of detail sufficient so that contract line items, tasks, or WBS elements are shown on the schedule as specified in the contract? Are the milestone completion dates consistent with the contract requirements? Are the deliverables clearly identified? Do the schedules depict each project phase or other element as required by the contract? Based on knowledge of the project, do the schedules appear to be reasonable for tasks? Are the schedules realistic for the accomplishment of work within the planned time schedule? Have the primary critical path and secondary major critical path been clearly identified? Project Planner/ Scheduler The Project Planner/ Scheduler works with the management team in a coordinating role to develop the project plan and schedule in accordance with contract requirements and the Project Execution Plan. The Planner/ Scheduler updates schedule progress on all schedules, documenting actual starts, actual finishes and an estimate of remaining duration for those activities in progress. The Planner/ Scheduler will collect schedule status on the detailed schedule, either through scheduling meetings or marked-up copies of the schedule from responsible supervision. Following the update, the Planner/ Scheduler will perform time analysis to calculate the new CPM dates. After data validation of the update, and approval of the Project Manager or Construction Manager, the Planner/ Scheduler will distribute the updated schedule to project personnel. The Planner/ Scheduler conducts performance evaluations, comparing planned progress and earned value against actual progress and earned value. Additionally, the Planner/ Scheduler performs schedule analysis to determine critical path, resource, and event deviations from the plan. Deviation identification is fundamental to understanding the direction and trends that the project is taking. The Planner/ Scheduler prepares a schedule analysis report to the Project Team and the Project Controls Department management. The report is concise and itemizes deviations and future risks to the project schedule. The Project team should determine any corrective action requirements in order to minimize schedule and cost impacts to the plan. The Planner/ Scheduler participates with the Controls Team to forecast the schedule and cost outcome of the project. Management reporting, as a result of the detailed schedule update will be performed, at a minimum, on a monthly basis. 4. Risk/ Contingency Management Introduction Risk/ Contingency management is the process of managing the contract risks and operations uncertainties such that the current forecast and schedule always accurately reflects remaining risk and known uncertainties. It includes understanding risks identified and quantified in the proposal, and each subsequent estimate, as well as planning the reduction of contingencies or risk funds over the life of project to match expected reduction of risks. The process includes the evaluation of remaining risks at regular intervals and ensuring that remaining contingencies cover these risks. It also identifying new or potential risks as the project progresses and choosing to estimate new contingencies needed, or retaining existing funds when the originally associated risk item does not materialize. 4.1 Contingency Management There are two components of Contingency, Operations Contingency, and Fixed Contingency, and they are managed according to different guidelines. Fixed Contingency covers contract risks associated with potential contract liabilities and is assessed quarterly as part of Project Financial Status Review and revised at that time. Operations contingency is evaluated and adjusted as part of the Cost Control Process. Work Content and Forecast adjustments, as well as trends and discovered risk items are used as part of the basis to adjust retained contingencies. An Operations Contingency Drawdown Plan should be prepared and a structured review held monthly and the results used as a basic input into each monthly Cost Report forecast update. 4.2 Project Team Roles for Risk/ Contingency Management Project Manager - Review contingencies and the contingency drawdown plan in light of contract conditions and make adjustments as needed. Ensure that contingencies conform to approved strategy and are at all times commensurate with contract risks and known uncertainties. - Ensure that contingencies are used only for their designated purpose. - Thoroughly document any reallocation of contingencies. - Ensure that contract risk and operating contingencies at any point in time reflect remaining risk; adjust drawdown plan as necessary. - Reallocate operations contingency and contract risk funding only in proportion to the diminishing risks. Avoid both premature and late contingency reallocation. - Document deviations from plan. Project Controls Should provide the following to the Project Manager: - Recommended operations contingency drawdown curve. - Current Forecast and actual commitment information. - An analysis of remaining contingencies as project progresses, and an adjusted drawdown curve or table for PMs approval. - Analysis of established or evolving trends. - Monthly analysis of operations contingency. - Amount of remaining operations contingency in monthly cost report. Risk Management Services - Provide PM with risk analysis as requested during project execution. - Review drawdown plan for actual contract conditions as requested, and provide to PM Estimating Services - Assists with risk analysis as requested during project execution. - Assists with drawdown plan for actual contract conditions as requested. Project Financial Review approved contingencies and drawdown curves with Director of Finance and Director of Project Management. Reallocation of contract risk requires approval of senior management for example of the responsible Director of Project Management, Director of Finance and Sr. VP Project Management. 5. Project Performance Measurement Introduction Performance Measurement includes the planning and statusing of project progress and productivity based on the following principles: - Integration of schedule and cost elements to create performance measurement baselines using the Work Content Budget and schedule for each account code in the Work/ Cost Breakdown Structures (WBS/CBS). - Measurement of subsequent project performance against pre-established baselines. - Reporting and analyzing deviations. 5.1. Performance Measurement Methods Engineering Defined at the work operation (Work Ops) level. Job leaders are responsible for preparing scope definition (specifications, drawings, data sheets, etc.) and set-up of the Engineering Performance Measurement. Allocate budget and review predetermined milestones with percentage completion for each work op item. Progress percent complete is credited to each work ops item as milestones are reached. Physical progress for total engineering measured by adding the earned workhours for each engineering account and dividing by the Work Content Budget is carried out by Project Controls Schedulers. Procurement Based on milestones established for performance achievement steps, e.g. inquiry issued, materials purchased, material delivered and material installed. Construction Progress is measured by the actual physical quantities installed. Installed quantity divided by the total quantity adjusted workhour budget gives the physical percent complete. Earned workhours are calculated by multiplying the installed quantities by the budgeted unit labor hours for the material. The sum of the earned hours for the different crafts divided by the total Work Content Budget hours for all the crafts provides the overall construction completion percentage. 5.2. Performance Measures The performance measures will be reported for most projects in the monthly Project Status Report. These factors are ratios of earned workhours versus expended workhours such that ratios greater than one are good and less than one are poor performance. 5.3. Project Team Roles for Performance Measurement Project Manager The Project Manager (PM) is responsible for setting performance standards as a basis for measuring the performance of the project team during all phases of a project with a view to maximizing profit, achieving client satisfaction, and rewarding staff for superior performance. - The performance standards should reflect the goals, as agreed with the client, of cost/ schedule/ quality/ safety and operability specific to the project. Overall responsibility for direction and control of project. - Approve necessary documents. - Keep client and COMPANY management informed, utilizing the capabilities of the project control team to assist with the management of change and to provide analysis and forecasts to permit any deviations from plan to be corrected. Project Controls - Responsible to the PM to implement and monitor performance measurement and control requirements effectively. - Advise Project team of deviations from established plan and possible corrective action, at as early a point in time as possible. - Provide reports, as necessary. Project Team Members - Support in the above activities, as required, in a timely manner to include providing deliverable status and estimates to complete as well as verifying reported status. - Keep PM and Project Control informed of areas of concern, which may impact schedule and cost. - Immediately identify changes to the defined scope of work and the impact of the changes.
Posted on: Thu, 21 Nov 2013 04:32:02 +0000
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