PROJECT MANAGEMENT FOR STATE CONTRACT MANAGERS

Transcription

1 PROJECT MANAGEMENT FOR STATE CONTRACT MANAGERS by William D. Agee, Jr. WDA and Associates, Inc.

2 Project Management While we all acknowledge that we understand the concepts of project management. However, when asked for a definition we are all at a loss for words. It is not that the task is that big and broad, rather that the task, is so large we are often a loss for exactly where and how to begin. Simply stated project management is the portion of the project or the contract that is acquired or contracted from anotherfirm or that which must be scheduled and managed from either our firm or that must be scheduled and acquired from anotherfirm or from a sister facility. As such, our purpose is to describe the project management process in a meaningful way so as to help the project manager and their team do a better job of coordinating and managing the contract to a successful fruition. Over the last few years, as projects have become more complex and the reach of the projects extend further outside the company to even international vendors, the need for more professionalism in the field is paramount. Today, depending on the size and scope of the project, the amount of the scope contracted out could range from 25% to as high as 90%. As the projects become more complex and integrated the utilization of prime contractors, subcontractors, and teaming arrangements will progressively take a larger share of business. Thus, we must perform the management process well, if we are going to going to deliver value in our projects for the state and agency. Best value in the acquisition process can easily be lost if we do not bring the project in according the contract or project plan. The Teaming Agreement is a commonly used marketing tool whereby a prime contractor and subcontractor agree to combine resources to bid on a major government system procurement. The prime then may submit that bid as an exhibit to its own bid for the government work. In most cases, the prime is bound to use the subcontractorfor the work once the bid is accepted, and the parties will follow the teaming agreement closely when finalizing the subcontract between the parties. Benefits Why enter into a teaming arrangement? A competent, smaller business may obtain access to government business that would otherwise be denied to it by teaming with the larger prime in bidding for government work. The prime contractor, on the other hand, can achieve greater control over its costs and more certainty through a pre-bid teaming agreement a potential subcontractor. 1

3 As such we must manage both work effort and materials both MADE in the agency as well as procured from the outside under a BUY arrangement. Therefore, the equation below can have a simple but resounding foundation: Portion of the contract MADE within the agency + Portions of the contract BOUGHT outside = Project Scope Now think for a moment about the risk and impact we can have should either of the two, MADE or BOUGHT be found wanting per the contract deliverables. What are the risks if the MADE items are not available? What are the risks if the BOUGHT items are in short or unavailable supply? Good effective management and control is the ultimate key to success in either case. So what the current importance in both the state and private circles? 1

4 Take a look at the items identified as essential for the contract or project manager to know about this subject. While the list above is truncated it still highlights the importance to the overall functionality of the professional position. Each of these will be further enhanced and explained in the session but the true value will come as we show how the success of a process can come from the combining of these elements into the deliverables of the contract at the agency or state level. Define Plan the Project Implement the Project Complete the Project Evaluate the Project Schedule Cost Technical 2

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7 Project A temporary undertaking to create a unique product or service. A project has a defined start and end point and specific objectives or deliverables which when completed reach the goal or conclusion of the plan. Program Management Coordinated management of a related series of projects over a period of time, delivered to accomplish the goals of the agency to which the individual projects contribute through their scope. Project Scope All of the work effort required to deliver a projects products or services within the parameters of the contract. ~ Scope Creep Refers to uncontrolled changes or continuous growth in a project's scope. ~ Hope Creep The team members hope they can catch up by the next report period or project team meeting to be back on schedule. ~ Effort Creep Effort creep is doing more work without added scope. ~ Feature Creep Is a tendency for product or project requirements to increase during development. Project Life Cycle A collection of generally sequential project phases who s specific identifying characteristics are determined by the organizations involved in the project. These could include such steps as; conceptual design, initiating, designing, developing, executing, and closeout of the projects deliverables. Remiss from this grouping of steps is the applications associated with operations of the particular product and through life maintenance. 5

8 PMI PMP CAPM Certified Associate in Project Management (CAPM) entry level position PMBOK 6

9 Consider the following as well: A Statement of Work (SOW) An Request for Proposal (RFP) A Risk Model 7

10 Project Manager Critical Skills to Possess? Contract Manager Critical Skills to Possess? 8

11 Draw a Project Life Cycle Trend p7 9

12 1) Initiating A process of formally recognizing that a new project exist or that a previous project should continue to another phase. This is also where the agency grants approval for the organization s resources to be dedicated to the attainment of the task. 2) Planning A phase in the project life cycle where the project plan or the program plan is prepared. In this phase documents are created for use throughout the remainder of the project. 3) Executing This is the deployment stage where the project plans are put in action. Costs are generally higher during the execution phase. 4) Controlling Performance measures are taken and analyzed to determine if a project is on track. Should variations or variances be found corrective action may be taken to get the project activities aligned and brought into sync to the project plan. 5) Closing Activities associated with formal acceptance of a phase, project or program and bringing it to an orderly end. Project success is evaluated and documented. 10

13 a) To initiate a contract b) When planning for a contract c) When executing a contract d) To control contract success e) When closing a contract 11

14 There are nine (9) core competencies that are used to classify each of the five (5) project management process groups. Proper planning is essential to project success and consideration must be made concerning all nine (9) of the project management knowledge areas. The nine competencies known as Project Management Knowledge Areas (Heldman 43) include: Integration Management The process of achieving unity of effort amongst the various parties involved in the accomplishment of a project s goals and objectives. Integration management includes developing a project plan, executing the plan, and managing change. Scope Management The process of managing the boundaries of a project. Specifically, defining what constitutes the deliverables of a project and which deliverables are outside the scope of a project. Scope management involves all of the processes involved with the work on a project, and only the work that is required to complete the project. Time Management Involves estimating the duration of project activities, devising a project schedule, and monitoring and controlling deviations from the schedule. Generally, some form of project management software will be used to assist with time management. 12

15 Despite the obvious there are a number of reasons projects fail. However, the root cause of most failures hubs around the following common and consistent areas: 1) Lack of managers support 2) Lack of organizational commitment 3) Poor communications 13

16 A successful project delivers a result that does what is expected, when it is supposed to be done, for or below the predicted costs, and at or above the expected quality. Success is determined by the project stakeholders or owner. Many times stakeholders have conflicting interests. It is the contract manager s responsibility to understand these conflicts and try to help resolve them. There are five (5) essential activities for ensuring project success. 1) Organizational commitment 2) Communications 3) Team work 4) Project life cycle 5) Project Management 14

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18 It has been stated not only in project management but all areas of business and interpersonal relationships that the primary tool to enhance your chances of success is good, effective communication. 16

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20 Initiating Approval is granted to commit the organization s resources to working on the project phase. Planning Documents are formulated and revised to be used throughout the remainder of the project. Planning is the most critical and intensive part of any project. Executing Project plans are put into action. Costs are generally highest during the execution phase. This also involves the operational phase of the project or program. Controlling Performance measures are taken and analyzed to determine if a project is on track. If variances exist, corrective action may be taken to get project activities aligned with the project plan. Closing Project success is evaluated and documented. Project closing is often the most neglected part of a project. It is important to remember that project closeout is also an essential process group. 18

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22 Page 16 1) List the five project management process groups. 2) Poor communications is a common reason many projects fail? True or False 3) All of the following are phases of a project life cycle except; 20

23 This is the phase where the team recognizes that a new project should exist or that and existing project should be continued. They say that this is one of the hardest part of the project management and contract management cycle. The reason is that if the scope was not well defined by the customer or the project owner the first step is the last step before a project fails. The end well you must begin correctly so this is a very critical juncture for the entire project and agency. 21

24 One of the primary aspect which could be conveyed to the project manager is that we work hard to ensure the success of the project. If you look at the listing above we are trying to start correctly in accordance to the contract and what the defined deliverables are as set forth in the contract. Before we can ensure the success of the project we must also know when and how we are going to complete and what constitutes a satisfactory closure to the project. Exactly how will our customer communicate their complete satisfaction for a project well completed. The deliverables are like applying bricks to the outside of the building. Yes, there is a correct alignment, order and sequence to how we need to apply the bricks to create a completed wall. The same applies to a project and the steps could possible be sequential and paramount to the success of the project. Constraints are throughout a project and must be actively sought and minimized if not eliminated so that the project can go to a successful fruition. Assumption are some of the unknown of a project which over the course of the entire acquisition, contracting and project deliverable will come to sight and later known. These initially might be how the project scope is assembled but should come to a solid form shortly. These can affect the original scope, budget and schedule. 22

25 Needs are one of the most basic requirements of all people and at the same time one of the more critical aspects everyone must satisfy to some regard. Project are generally initiated as a result of various needs which may include some of the listed below. These are; ~ marketing demands ~ business needs and requirements ~ customer requests ~ technology enhancements/changes ~ legal issues and requirements ~ social or human needs 23

26 1. Product description A document that describes the product and clearly indicates the business need(s) that is driving the reason for the product. In contract management the product description is known as a specification or statement of work (SOW). 2. Strategic plan New projects should take into consideration the agency s strategic plan. For example, if one of the agency s goals is to develop five (5) technical support centers then it would make sense that a project initiated in order to furnish the centers would take all five (5) centers into consideration. 3. Project selection criteria Similar to the make or buy analysis in procurement. Project selection involves making decisions regarding which projects to accept or reject based on criteria such as financial data, risk, efficiency, etc. 4. Historical information When evaluating new projects, historical information regarding similar projects can be useful in determining if the new project should be accepted and initiated. Each of these project initiation inputs is processed and applied using tools and techniques to produce the project initiation outputs including the project charter. 24

27 If you carefully look at the goal listed in the right column in the slide above you will see they are both very broad and may be intangible. They are the ultimate end result of an ultimate accomplishment toward which and effort is so directed. // Think for a moment about the last project you were a part of or possibly managed. What was the goal? Was it well defined? Was it too broad to be specifically accomplished leaving alternative ways around? Did the project satisfy the customers needs and meet the objectives of the agency? Would you do it differently if you had been brought in sooner to the process? 25

28 Think about the SMART approach above and what could be do to increase our efficiency using this application on an agency project? ~ specific, ~ measurable, ~ achievable, ~ realistic, ~ time bound. Projects must also be performed within specific time frames and produce realistic and tangible results. The following table highlights the difference between goals and objectives. Goals Broad in scope Highlights general intentions Intangible results Abstract concept. Not measurable Objectives Narrow in scope States precise intention. Tangible result. Concrete concepts Measurable 26

29 One way to begin determining project deliverables is to identify the project initiator. Whose idea was it that led to the creation of your project? Chances are it is not the same person that assigned the project to you. Once you have identified the project initiator, you should interview them to see what they expect as project deliverables. Once you have interviewed and received feedback from the project initiator, it is important to seek feedback from others who will play a role in your project. What are their expectations, opinions, and assumptions about the project and the project s deliverables? Be exhaustive in your search for information Get information from all possible sources/stakeholders. Get information from primary sources/stakeholders whenever possible. Collect written sources. Speak to two (2) or more people from the same area to confirm information. Arrange to have at least one (1) person in addition to yourself present when speaking with people. Write down all information obtained from personal meetings. Plan to meet at least two (2) times with key audiences. Confirm the information you learn in personal meetings with information from written sources whenever possible. * Sidney Portny. Project Management for Dummies 27

30 What could be some good questions you might ask in order to determine project deliverables on your next project. What could be some checklist questions which are mainstays in nearly all project in which you manage the output for a similar customer? 1) 2) 3) 4) 5) 6) 7) 8) 9) 28

31 There are four primary statements of work often employed in attaining project and contract deliverables. These can have a significant impact on the time and output responsibilities of the owner as well as the contractor. Every buyer, contract administrator and project manager should know these well. These are: 1) Functional 2) Performance 3) Design/Technical 4) Level of Effort (LOE) 29

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33 A constraint can be almost anything! Now that s a huge problem. To effectively manage constraints, you must first identify the primary constraint of the project. One way to do this is to communicate with the project sponsor, or in the case of procurement, the end user to determine their priority. For example, if an end user prefers quality over rapid delivery then you know that quality is the primary constraint to which you will manage. Take a look at the primary constraints associated with a project and see if these can occur independently of each other or are they dependent on each other in their occurrence? a) time/schedule b) budget/cost c) quality/technical 31

34 Assumptions actually lend and breathe of credibility to a proposal or a contract despite the fact they are not always valid in fact. If that is the case how then do then lend this credibility to the project and its deliverables from a contractor placing a certain degree of reliance on their basis?

35 Today, the package of information in your contact and project file is validation and documentation. However, in the future that same documentation you control today could be called evidence. What to keep or not?? It s not an easy question to answer but lets defined some critical parameters. 33

36 When you compare the timely, comprehensive measurement of progress against the progress charter you have generated a project status report or update. These status reports provide a description of where the project currently stands; part of the performance reporting process, and those formal reports on input, output, issues, constraints, and actions resulting from a project status meeting. 34

37 As we walk through the simple charter exercise think about the sections you feel would have beneficial had you had a charter to work with on your last major project. Also, think about ways we could enhance this to be a better document we can style as a checklist going forward. 35

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39 A project planning phase involved developing the best tactical approach for accomplishing the project or programs objectives. Some of the activities will include developing and maintaining the project plan, identifying the project objectives, activities required to complete the project and ensuring the resources and quantities required to carry out the specified activities. 37

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42 Knowledge Areas Integration Management Scope Management Time Management Cost Management Quality Management Human Resource Management Communication Management Risk Management Procurement Management 40 Processes

43 Scope Statement Scope Management Plan Work Breakdown Structure Communications Management Plan Resource Requirements Document Staffing Requirements List Organizational Chart Project Team Directory Activity List Project Network Diagram Cost Estimates Cost Management Plan Quality Management Plan List of Prioritized Risks Risk Management Plan Procurement Documents Statement of Work Evaluation Criteria Procurement Management Plan Schedule Management Plan Cost Baseline Project Plan 41

44 Project scope management is the application of all processes that ensures the project includes all the work required, and only the work required to successfully complete the project. Other segments of the project scope will include the initiation, scope planning, scope definition, scope verification and (scope) configuration management and control. 42

45 Project Initiation Project Planning Project Execution Project Controlling Project Closing 43

46 A well defined communications conduit is said to be a 360 degree design divided into three parts. What would you feel a very effective communication conduit would look like? The three sections of the conduit are top, middle and bottom. The first area employed is the middle with the contract manager and the project manager interfacing with their counterparts. This is then followed by the lower section which is the direct and adjunct team members of the project. The top or upper management tier is for status, communication on results and counsel. 44

47 Resource Requirements Document A detailed description of the kinds of resources and the quantity needed for the project. Staffing Requirements Document Identifies the kinds of skills required, the individuals or groups who might posses the named skills and contribute to the project, and the estimated length of time each person will be needed for the project. Roles and Responsibility Assignment Determines the project roles and responsibilities for the project manager and the project team members and is usually represented by a Responsibility Assignment Matrix (RAM). Staffing Management Plan Documents how and when people are introduced to and released from the project and is usually represented by a resource histogram. Organizational Chart A chart, similar to a WBS, which shows the reporting relationships of project members. Supporting Detail A document that further describes the impact to organizational units due to work requests. Project Team Directory A document listing the names of all project team members. Statement of Work A document that contains the details of the procurement item in clear, concise terms. 45

48 Procurement Management Plan Details how the procurement process will be managed. 45

49 The scariest commodity in the world and the only commodity which can only be procured with a common unit of value. Time management is the process of using tools and techniques to manage time. Estimating the duration of project activities involves identifying the activities and sequencing them in the correct order. If you use project management software to help manage your projects then project activity times will most likely be estimated using the precedence diagramming method (PDM), also known as activity on node (AON). Precedence diagrams connect activities with arrows that show dependencies between the activities. A project management chart is a tool that is often used to manage either a complete project or WBS segments individually as separate sub projects. The purpose of a project management chart is to estimate the duration of project processes and activities. 46

50 A Gantt chart is a common project management tool used to manage projects in relation to units of time. Some of the common names include MS Project, Fast Track, and Primavera. It consists of a vertical individual task list and a horizontal timeline or calendar expressed in a unit of time such as hours, days, weeks, etc.. It can also keep track of work assignments by individuals, resources other than personnel and costs. The PERT charts display tasks, duration, and dependency information. Each chart starts with a preliminary point from which the first task(s) begins. Each task is represented by a line upon which is generally written a task identifier (i.e. name), task duration, number of people assigned to the task, and in some cases the initials of each assigned person. (see example on board) CPM charts are similar to PERT charts. They are used for complex, one time projects that generally include high costs. CPM charts track interrelated and interdependent activities allowing the project or contract manager to pinpoint areas (critical paths) that will have the most impact on the completion of a project. Tasks that fall on the critical path should be indicated by a special designation or symbol. Some of the ways to do this is to create a double line or colored line for critical paths. What these all have in common as a project management tracking tool is the ability to estimate the duration of the project processes and activities. 47

51 How can resource leveling be of benefit in effectively managing a project in regards to the primary constraints associated effective project management?

52 Project management often employs three types of estimating techniques to affect control over project costing. These include: 1. Analogous Estimating A top down estimating technique that involves using historical information from similar projects to determine project costs. Analogous estimating is a form of expert judgment and is not the most accurate way to determine project costs. 2. Parametric Modeling A mathematical model that uses parameters, or project characteristics, to forecast project costs. If multiple parameters exist in a project, then it is important to account for each parameter separately and incorporate those into the total project cost. Parametric modeling is most successful when used in conjunction with analogous estimating. 3. Bottom up Estimating A cost estimating technique used to determine the costs of every input and output associated with a project and adding the estimates together to determine the ultimate project cost. Pricing is a vendor function and is a strategic decision made by management that includes the costs associated with producing a product or providing a service plus a profit margin. It is important for you to understand general components that make up their price. 49

53 A standard is a basis of comparison employing a criterion bases application. For example; UL approved on wiring. Assessing and employing quality is not difficult as there are over fifty different standards organizations. Some of the resources include: International Organization for Standardization (ISO) ( American National Standards Institute (ANSI) ( ASTM International ( NSF International ( National Council for Prescription Drug Program (NCPDP) ( and the American Society for Quality (ASQ) ( You can also find a listing of federal r4egulations on the Internet at There are three costs associated with quality; 1) prevention costs, 2) appraisal costs, and 3) failure costs. 50

54 There are several ways to identify risks associated with a project. These include:. Brainstorming. Interviewing. SWOT. Delphi Technique. Nominal Group Technique 51

55 In the space below create a risk matrix for a project and with your group mitigate the risk for your project/ High Medium Low

56 It has been stated that how you manage risk is up to you, but it will be determined in part by its potential for damage! What are some of the ways we utilize these risk mitigation techniques almost everyday at work and home? 53

57 Answer the following questions with your group or table. What are some inherent risks you can identify with this portion of the project? What control risks will you need to consider? What are some assumptions that you have already made from reading about the project? What major constraint has been identified? What risk management method(s) would you use if you were in charge of the project? 54

58 Procurement planning is the process of determining what goods or services you will purchase externally. This determination is often made by conducting a make or buy or make vs. do analysis where direct and indirect costs are analyzed to determine whether it is more cost effective to make or buy the products and/or services needed for a project. If the buyer, or team, elects to procure the goods or services then the procurement process as shown abo0ve will need to be implemented. The two other state agencies which serve in an advisory role to the Contract Advisory Team (CAT) in the state are the Legislative Budget Board (LBB) and the State Auditor s Office (SAO). Why is it stated that the end of the SoT Procurement Cycle is actually the beginning? 55

59 The project plan combines all outputs from the project planning processes to create a complete project document that is used to track project performance. It is an assortment of documents that constitutes what the project is, what it will deliver, and how all the processes will be managed. When information documented in the project plan changes, the project plan should be updated accordingly. Caution should be exercised when people try to utilize an open order or unfinished contract to morph or change the scope of the approved and acquired original acquisition. 56

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61 This is a phase in a general project life cycle where the product or service to be delivered by the project or program is either produced or made. It has been referred to a the execution phase or the implementation phase of a project. 58

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63 It is important to understand the organizational policies for information systems, human resources, purchasing, fiscal, and other departments that may play a role during your project in order to keep the project on track and avoid schedule delays. Considering the listing of all the other areas which could contribute to possible delays in a project what are some of the specific areas each could be cited for? 1) 2) 3) 4) 5) 60

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65 Define a Team. Team members should be selected based on their knowledge, skills, abilities, attitudes, and leadership potential. You want to choose team members with experience and expertise regarding the scope of your project. Team members should be able to cooperate and adapt in a changing environment. 62

66 Forming Storming Norming Performing 63

67 Motivation is the reason(s) behind a person's actions which causes them to act in a particular way. In business, motivation occurs when people perceive a clear business reason for pursuing knowledge. Motivation can be extrinsic where people are motivated by material things like bonuses, the use of a company car, training opportunities, and administrative leave, or intrinsic where people are motivated from within. Several motivational theoriesa) Maslow s Hierarchy of Needs b) Expectancy Theory c) Achievement Motivation Theory d) McGregor s XY Theory Recognition and reward should be directly linked to project performance. Team members should be recognized and offered a reward for going above and beyond the call of duty during a project. However, it is important to consider individual preferences and cultural differences when recognizing a team member 64

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71 One of the primary reports a project manager can generate through this process is either a GAPs analysis or a variance report. Both of these reports shows the objective compared to the actual performance and the open space or the gap is the variance to the plan. However, it is important to remember than all variances are not necessarily bad. For example, actual cost versus planned or budgeted could show a lower cost saving the agency money on the project. It is through this process that we can ensure that the planned event do occur as slated and that the unplanned events do not occur at all. What are the tools you currently employ for this at your agency today? 68

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75 Earned Value Graph I l 72

76 Performance Criteria Metrics Schedule Scope of Work Cost Quality End User Satisfaction Procurement lead time Percent on time delivery Percent milestones completed on time Schedule Variance Number of contract changes Number of configuration changes Budgeted Cost of Work Scheduled Budgeted Cost of Work Performed Actual Cost of Work Performed Cost Variance Mean Time Between Failures Mean Time to Repair Number of Product Returns Number of Product Failures Number of Customer Service Complaints Repeat Business Letters of Appreciation 73

77 Corrective action alone does not signify a major problem for the project manager. Actually, to have a contractor or vendor who can adjust and improve their situation is a major improvement. 74

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79 There are a variety of quality control techniques a project manager could employ. These include; Inspection involves physically looking at, measuring, or testing results to determine if they conform to requirements and quality standards. The purpose of inspection is to prevent errors in a product or process from reaching the customer. Control charts measure the results of processes over time and display the results in graph form. Control charts are generally used to measure products that must meet specific specifications and fall within certain variances to be considered in control. Pareto Diagrams are a tool for identifying the most significant problems in order to help prioritize improvements. They are displayed as bar charts that plot failure modes from left to right largest cause of failure to least cause of failure. Statistical sampling involves taking a sample number of parts from the whole population and examining them to determine if they fall within the variances outlined by the quality control plan. Flowcharting and trend analysis were discussed earlier in this workbook. The results of quality audits are quality improvements. 76

80 All change requests should be submitted in writing so that there is a paper trail to help you manage project changes. It should also well define the point person for the tendering of a change, the process we have established and who has the final authority to approve. NO CIRCUMVENTING THE CHAIN!! One important aspect of change is that it does not always have to be accepted. If you allowed changes every time they were requested, the project may never be completed. It is important that you review the reasons for the change and determine if change is justifiable. It is wise to employ a change control log as part of the project managers documentation package. This can be a quick validation of in or out of scope. When changes are submitted to the CM/PM they should initially be reviewed to see if they are already apart of the original scope. If out of scope or a owner generated change, for which the contractor should be compensated, this should be reviewed against the documented WBS from the original proposal. A valid change control system should establish the procedures for any and all changes, create a change control log for tracking throughout the project all contractor or owner generated changes and establish the levels of authority for any such changes. 77

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82 Project closeout is usually the processes which provide for project acceptance by the projects owner or PM, completion of the various project records, final revision and issue of he document to reflect the actual deliverable or as built condition, and retention of essential project documentation. This is all inclusive to validate that the work effort or the services provided meet the standards of the project and a final payment to the contractor should be issued. 79

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84 Projects generally come to a close as a result of the following four (4) events: Project Addition Projects that evolve into ongoing operations and surpass the criteria of being unique and temporary with a definite beginning and ending date. Project Starvation Projects whose funding resources are eliminated. Project Integration Projects whose personnel resources are reassigned or eliminated. Project Extinction Projects that are successfully completed and accepted by all stakeholders. There are two (2) processes that occur during project closeout: a) contract closure, and b) administrative closure. 81

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