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.

 

PROJECT PROFESSIONALS POSTING RESUMPTION

McLaughlin and McLaughlin [M&M] is pleased to announce that they will resume postings at their blog, Project Professionals.  Since mid-2013, M&M has been heavily involved with several large assignments [Construction claims regarding several power plant projects].  Now that workload permits, new blog postings will be offered.

M&M wishes to remind followers (new and ongoing) that there are many offerings at the Project Professional site.  They are organized by what we call Subject Series.

These Subject Series  are:

M&M will resume with additional posts in the Subject Series Construction Claims and Disputes.  This Subject Series focuses on methodologies, process, reference resources, techniques and other practical advice regarding the preparation, evaluating and managing construction claims and disputes.

We hope that you will find these existing and new posts informative and relevant.

We wish you the best of luck in this New Year.

 

Please note that McLaughlin and McLaughlin [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 dispute resolution and litigation support.  The Resource Center is for the convenience of blog visitors and M&M does not offer this for commercial purposes.  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…]

CONSTRUCTION CLAIMS and DISPUTES – (Part 3)

Current Project Professionals Posts

McLaughlin & McLaughlins Project Professionals post is the third in a Subject Series.  Construction Claims and Disputes which are (will be) discussions regarding managerial challenges in potential and actual construction claims situations.  In this series, we focus on the managerial aspects of construction claims and disputes management.  This summary discussion addresses the many posts that have been presented in the past and are at the Subject Series tab of Project Professionals.

In the engineering and construction industry, claims and disputes take many forms and focus on many topics.  For simplicity of discussion, we will use the follow the following categories:

  • Scope of Work, Changed Work or Variations
  • Delay and Acceleration, Time-Related
  • Disruption / Productivity (usually labor/labour)
  • Terms and Conditions (and other subjects).

McLaughlin & McLaughlins Project Professionals has posted (or published) greater than 60 posts regarding one or more aspects of Construction Claims and Disputes.

The balance of this post identifies the Subject Series and posts that are at Project Professionals and are relevant to construction claims and disputes. [Read more…]

PROJECT PLANNING – (Part 5)

A Key Planning Resource

Industrial Megaprojects by Edward W. Merrow (Merrow, 2011)

This post is the fifth in a series of discussions regarding challenges in project planning and management situations.  In this series, we focus heavily on program / project planning and management.  This post addresses a major resource that can be highly useful in the planning and initial management of large and complex projects.

This resource is Industrial Megaprojects by Edward W. Merrow.   The subtitle is Concepts, Strategies, and Practices for Success.  This subtitle is particularly appropriate and compelling.

While the title is focused on “megaprojects,” the advice and guidance has value and merit in considering the planning and management of large and complex projects.  Smaller projects may be better guided by previous Project Professionals discussions.  Some of the key discussions are summarized in the previous post, PROJECT PLANNING (Part 4) Summary of Posts.

As presented on the dust cover of this fine book, “Mr. Merrow is the founder and CEO of Independent Project Analysis, Inc. (IPA), the world’s leading consulting firm evaluating billion-dollar megaprojects of national and international oil, chemical, pharmaceutical, and major mineral companies, and benchmarking their cost, schedules, safety, startup, and operational performance.”

While this lofty description can be both impressive and intimidating, the book has a wealth of information regarding project planning and initial execution. [Read more…]

PROJECT PLANNING (Part 4)

Summary of Posts

This summary update provides readers with an overview of prior posts regarding Project Planning and provides a baseline for future posts that will follow on a timely basis.

There are two applicable Subject Series.  One Subject Series, PROJECT MANAGEMENT CHALLENGES  was posted during June through September 2011.  Since that time, blog readership has increased very significantly.

The other Subject Series, PROJECT PLANNING  was started in late 2012.  This Subject Series is ongoing and new posts will occur in the upcoming weeks and months.  Readers are encouraged to subscribe to automatic update notification.

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.

Ideally these Subject Series  provide a starting point to investigate best practice on many planning and execution features of project management. [Read more…]

PROJECT PLANNING – Managerial Challenges (Part 2)

Project Initiation

This post is the second in a series of discussions regarding managerial challenges in current project management situations.  In this series, we focus heavily on the managerial aspects of program / project management.  This post addresses the starting point or initiation of the project.  This is a crucial challenge.

In a recent consulting assignment, M&M encountered a highly respected client using a phrase that is something like “Building the right project in the right manner.”  While this is paraphrased, the notion is clear.  But, what could they mean “Building the right project…?”  Why would an organization devote time and investment money to building the wrong project?  The answer typically resides in the Project Initiation process.  Inadequate attention and alignment regarding such items as the project objectives and scope of work [also known as the Project Scope Statement] can lead to a misguided start (and sadly sometimes, finish) of the wrong project.  Project Initiation is the essential foundation.

[Read more…]

PROJECT PLANNING – Managerial Considerations (Part 1)

Introduction

After a long period [since March 2012] of inactivity, McLaughlin and McLaughlin is pleased to resume posting activity in this blog.  Project Professionals is intended to offer advice and tips regarding various aspects of Program and Project Management.  For a statement of blog Objectives and Goals, please follow this link.

During this inactive period, M&M has been performing two time-consuming assignments.  One is program management support work on large Canadian oil sands investment/expansion program.  The second is a construction claim on an international power plant project.

In considering the general topic of project planning, consider the following question.  Why do so many projects experience serious negative issues, if not failure, when project planning has been pursued?  Often the answer is that the plans are defective or ignored.  Alignment, implementation and updating are essential features.  Good quality plans must be developed and implemented.  Often, this is not the case.

[Continued] [Read more…]

PROJECT PROFESSIONALS POSTING RESUMPTION

McLaughlin and McLaughlin [M&M] is pleased to announce that they will resume postings at their blog, Project Professionals.  Since March 2012, M&M has been heavily involved with several large assignments [Canadian Oilsands program management support and construction claim regarding an international power plant project].  Now that workload permits, new blog postings will be offered.

M&M wishes to remind followers (new and ongoing) that there are many offerings at the Project Professional site.  They are organized by what we call Subject Series.

These Subject Series are:

  • Managing Risk of Delay [15 posts]
  • Contract Notice and Recognition [4 posts]
  • Productivity [18 posts]
  • Schedule Validation and Audits [3 posts]
  • Staffing Your Project Management Team [8 posts]
  • Project Management Challenges [11 posts]
  • Time Management – Schedule Specification Implementation [6 posts]
  • Ways of Working [1 post]

M&M will resume new posts with a Subject Series titled Success through Project Planning.  This Subject Series will focus on methodologies, process, sequencing, synchronization and other managerial considerations.

We hope that you will find these existing and new posts informative and relevant.

May we wish you the best of luck and let us all attempt to confront and deal with Project Management Challenges.  It is crucial that recognition and anticipation of these issues occur during initiation and planning.  However, the recognition and management should continue through execution, controlling and closeout.

Please note that McLaughlin and McLaughlin [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 dispute resolution and litigation support.  The Resource Center is for the convenience of blog visitors and M&M does not offer this for commercial purposes.  For further information on M&M services, please see www.McLaughlinandMcLaughlin.com.