CAPITAL PROJECTS COST CONTROL

 

In light of the 2017-2018 Construction Forecasts, Capital Projects Cost Control is paramount and one to take a more acute focus.

In Project Execution, Field Labor Shortages Represent The Highest Risk To Achievement Of Time & Cost Objectives Large And Complex Projects.

Major Shortages in Construction Field Labor Will Influence (Negatively) US Construction Costs.

In Execution (After Stage Gate Three), A Major Risk to Project Cost Management Resides in Labor Cost (overruns),

The Highest Risk to Achieving Project Cost Management Occurs In Execution – After Stage Gate Three/Full Funding.

Driven By A Long History of Cost and Schedule Overruns, Managerial Thinking Now Prioritizes Cost Certainty.

On Complex Capital Projects, Cost Certainty Has Become a Compelling Objective.

 

McLaughlin & McLaughlin has assisted numerous  Major Capital Projects successfully over the years by providing cost effective business solutions and recovery plans.

What makes McLaughlin & McLaughlin unique from the others is that we  not only perform project management services but dispute resolution as practitioners.

 

It is important to note that McLaughlin and McLaughlin Project and Dispute Consulting LLC [M&M] is not a law firm and is not intending to provide legal advice.  M&M is a consulting firm providing (among other services) non-legal expertise in construction claims, dispute resolution and litigation support.   For further information on M&M services, please see www.McLaughlinandMcLaughlin.com.

 

MANAGING RISK OF DELAY – Managing Contractor Schedules (Part 13)

This McLaughlin & McLaughlin post is the thirteenth (13th) in a series  of discussions regarding various aspects of time management as it relates to the risk of delay.  This post addresses managerial considerations for dealing with schedules prepared by contractors and submitted to owners or their agents (construction managers, managing contractors, advisors, etc.).

Recently, Mr. Chris Carson authored an excellent article titledDealing with Contractors Schedules That Cannot be Approved.  This fine article was published in COST Engineering(September/October 2013).

This article contains excellent advice for project teams regarding schedule management.

Mr. Carson’s article is, in reality two articles in one.  While Mr. Carson’s article presents a methodology for problematic situations (which he calls DSAB), the preamble and initial discussion for this article is highly useful and applicable to project management teams as they address the frontend of project planning and execution.  This post summarizes the sage advice provided by Mr. Carson regarding frontend project management challenges as they relate to scheduling and time management. [Read more…]

A View from the Field Project Execution / Contracting Strategies Large and Complex Industrial Projects

This article from the Division 1 of the ABA Forum on the Construction Industry Newsletter “The Dispute Resolver” represents George T. McLaughlin’s “View from the Field” formed throughout the course of his 30+ year career in the industrial marketplace.[1]   His article is broken into four parts.  Part 1, below, describes the evolution of the delivery systems in large and complex industrial projects[2]. The remaining sections, which we will publish in our next three newsletters, will discuss the legal implications (Part 2), impact on claims, disputes, and resolutions (Part 3), and prevention and corrective processes (Part 4).

Part 1 of 4 – Framing the Issue 

When the earth’s tectonic plates shift, unless there is a resulting earthquake, it goes unnoticed.  The movement is not perceptible.  Nevertheless, major changes are occurring.  In large and complex projects, with three to five (or longer) year schedules, industry shifts may not be perceptible.  Nevertheless, major changes and related impacts may be in progress.  Trends and changes in project execution and contracting strategies are similar.  These trends, however gradual and unnoticed on a daily or monthly basis, cause major impacts on existing and future projects.  While industry experts cite or drive these changes, the impact on the field may be delayed or go unrecognized by many, if not all stakeholders.  The business motivations driving the trends discussed below are varied and complex.  Perhaps, the central theme is risk tolerance or management.  The large worldwide prime contractors (typically Engineer Procure Construct) migrated toward limiting major risks by limiting scope of work, insisting on reimbursable cost (as opposed to fixed price) commercial  terms, or both.  Owners chose to limit or compartmentalize risks by breaking scope of work into smaller packages and seeking fixed price on these smaller packages.  Construction Contractors retained a willingness to work on fixed price commercial terms; but, increased their tendency toward claims and disputes processes in order to manage their risks.  Collectively, we see a myriad of fixed price scope of work packages being pieced together to form a complete project.  Formerly, this mosaic of work scopes was under one Prime Contract. [Read more…]

WAYS OF WORKING – Subject Series Summary

This is McLaughlin and McLaughlins Project Professional’s first Subject Series Summary regarding Ways of WorkingWays of Working aggregates a collection of topics that may be helpful to program and project managers.  This summary update provides an overview of prior posts and provides a baseline for future posts that will follow on a timely basis.

The topics include:

This summary is very brief and simply serves as an index for readers to follow.  Of course, detailed descriptions are contained in the individual posts.  The Subject Series page may also be helpful.  It contains links to several popular series that consist of multiple posts that build upon earlier discussions.

Ideally this Subject Series provides a starting point to investigate best practice on many topics of interest or features of project management.  If you have a suggested topic, please feel free to contact us and let us know. [Read more…]

MANAGING RISK OF DELAY – Subject Series Summary Update

This summary update provides readers with an overview of prior posts and provides a baseline for future posts that will follow on a timely basis.  The last summary was posted on June 12, 2011

This summary is very brief and simply serves as an index for readers to follow.  More robust summaries are provided in the June summary.  Of course, detailed descriptions are contained in the individual posts.

Ideally this summary provides a starting point to investigate best practice on many delay-related features of project management.

The Context and Challenge (Part 1) – Talk/Speech by Mr. Keith Pickavance

Time-Management Strategy (Part 2) – Strategy according to CIOB Guide

As-Planned Schedule / Accepted Programme (Part 3) – Establishing the Time Management Baseline

Schedule Preparation and Maintenance (Part 4) – Managing the Time Baseline

Earned Value Management (Part 5) – Importance and Management of the Time Baseline Tool

Critical Path and Earned Value Management (Part 6) – Managing with Critical Path, Earned Value Management and Productivity Tools

Earned Value and Schedule Performance Indicators (Part 7) – Time Management Tools

Schedule Specification Sources and Implementation (Part 8) – Managerial Tools with sources

Recognition and Notice (Part 9) – Managerial Alerting and Action Tools

Going forward, we will post other features of MANAGING THE RISK OF DELAY. [Read more…]

MANAGING RISK OF DELAY – Forecasting and Management (Part 12)

This post is the twelfth in a series of discussions regarding various aspects of time management as it relates to the risk of delay.  This post addresses the managerial aspects of forecasting related to time management.

Planning for and implementing (time-related as opposed to cost-related) forecasting is, perhaps, one of the most important aspects of Time Management and, consequently, Managing Risk of Delay.  As with progress assessment, timely (early) detection of trends (positive and negative) allows timely managerial action.  Timeliness of action has a heavy influence over the effectiveness of Time Management.  In project work, it is imperative that one finds problems quickly and fixes these problems rapidly.  In order to implement timely action, professional and realistic time forecasting is required.

The challenge associated with managing time is intensified in the case of larger and more complex projects as well as fast-track and high technology projects. [Read more…]

MANAGING RISK OF DELAY – Progress Assessment (Part 11)

This post is the eleventh in a series of discussions regarding various aspects of time management as it relates to the risk of delay.  This post addresses planning for and implementing progress assessment.

Planning for and implementing progress assessment is, perhaps, one of the most important aspects of Time Management and, consequently, Managing Risk of Delay.  Timely (early) detection of trends (positive and negative) allows timely managerial action.  Timeliness of action is a heavy influence over the effectiveness of Time Management.  In project work, it is imperative that one finds problems quickly and fixes these problems rapidly.  In order to implement timely action, professional progress assessment is required.

The challenge associated with managing time is intensified in the case of larger and more complex projects as well as fast-track and high technology projects. [Read more…]

MANAGING RISK OF DELAY – Schedule Updates and Progress Considerations (Part 10)

This post is the tenth in a series of discussions regarding various aspects of time management as it relates to the risk of delay.  This post addresses planning for and implementing progress measurement and schedule updates.

The challenge associated with managing time is intensified in the case of larger and more complex projects as well as fast-track and high technology projects.

In order to professionally manage time (and, therefore, risk of delay) the manager must have a time baseline [typically a Critical Path Method schedule and a Performance Measurement Baseline – please see earlier posts on these topics] and a method to recognize variations from the baseline.  In order to detect variances, the managerial team must have an effective process to measure progress data and update the schedule (or time model). [Read more…]

MANAGING RISK OF DELAY – Subject Series Summary Update

This summary update provides readers with an overview of prior posts and provides a baseline for future posts that will follow on a timely basis.  The last summary was posted on June 12, 2011.

This summary is very brief and simply serves as an index for readers to follow.  More robust summaries are provided in the June summary.  Of course, detailed descriptions are contained in the individual posts.

Ideally this summary provides a starting point to investigate best practice on many delay-related features of project management.

The Context and Challenge (Part 1) – Talk/Speech by Mr. Keith Pickavance

Time-Management Strategy (Part 2) – Strategy according to CIOB Guide

As-Planned Schedule / Accepted Programme (Part 3) – Establishing the Time Management Baseline

Schedule Preparation and Maintenance (Part 4) – Managing the Time Baseline

Earned Value Management (Part 5) – Importance and Management of the Time Baseline Tool

Critical Path and Earned Value Management (Part 6) – Managing with Critical Path, Earned Value Management and Productivity Tools

Earned Value and Schedule Performance Indicators (Part 7) – Time Management Tools

Schedule Specification Sources and Implementation (Part 8) – Managerial Tools with sources

Recognition and Notice (Part 9) – Managerial Alerting and Action Tools

 

Going forward, we will post other features of MANAGING THE RISK OF DELAY. [Read more…]

TIME MANAGEMENT – Schedule Specification Implementation (Part 6)

This Subject Series addresses the sources and implementation of a contract schedule specification.  The Subject Series structure is presented in multiple parts and the series is a logical extension of the series titled MANAGING RISK OF DELAY.  The intention is to capture sources of best practice in Time Management as it relates to implementing a professional schedule specification.

The overview of this series is:

The balance of this post is from the paper.  In general, this informative work compares two approaches to schedule specification implementation.

This extract from the paper covers: