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.

 

Labor Productivity

Project Professionals a blog by McLaughlin & McLaughlin Project and Dispute Consulting LLC   will be offering a few project tips regarding Project Management and Labor Productivity  over the next few weeks.

Labor Productivity – Productivity Factor (PF) according to #AACEI equals Actual Productivity divided by Baseline or Planned Productivity.

Labor Productivity – Performance Factor (PF), according to Schwartzkoff equals Estimated Unit Rate divided by Actual Rate.

Labor Productivity – A simple KPI is the ratio of Planned Man-Hours divided by Actual man-hours – “Earned over Burned.”

Labor Productivity – There are several KPI’s that can be used for project/construction management.

Labor Productivity – Use of labor productivity KPI facilitates proactive project management.

Labor Productivity – As a leading Indicator, Labor Productivity represents an excellent management tool.

 

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.

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CONSTRUCTION CLAIMS and DISPUTES – Subject Series Summary – Update 11-Nov-2014

Just as the businesses and economies have cycles, capital projects (particularly engineering and construction) have recurring cycles.  The pendulum swings back and forth within the bounds of the capital project cycle.  In capital projects, the cycle can be three to five years, depending on the economy, size and complexity of the projects and other factors.

At this time, the market seems to be transitioning from project planning and early execution into middle to later-stage execution with emergence of disputes.  As the claims and disputes marketplace intensifies over the next several years, Construction Claims and Disputes will become an increasingly commonplace and a relevant topic for capital project management professionals.

Construction Claims and Disputes continues to be the most popular subject on Project Professionals.  Further, it is the most requested line of services provided by McLaughlin & McLaughlinM&M are project management practitioners (in the field) and, yes, we practice what we preach.  Further, our choice of topics for Project Professionals posts is driven by and reflective of practical and current issues.  This is not esoteric, academic or hypothetical “stuff”.

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.  Initially, this Subject Series, Construction Claims and Disputes, was posted during January 2011 through July 2014.  During the past several years, greater than 25% of views by visitors have been to this Subject Series.

Ideally this Subject Series  provides a starting point to investigate best practice on many planning and execution features of construction claims and disputes. [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 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.

CONSTRUCTION CLAIMS and DISPUTES – (Part 4)

Pricing Construction Claims

This post is the fourth in McLaughlin & McLaughlins Project Professionals  Subject Series  Construction Claims and Disputes which are (will be) discussions regarding challenges in potential and actual construction claims and disputes situations.  In this series, we focus on the key aspects of construction claims and disputes management.  This discussion addresses the pricing of claims and disputes.  The compulsion or question is – “How much is a potential claim worth?”  In virtually all disputes, the central issue is the money.  Since it is a win-lose situation, the outcome may be that someone (one party) will pay another party.  Hence, the money is the ultimate issue (sometimes time is at issue, generally presenting itself in money or damages related to the time).

There is an old saying “win the battle, lose the war” which applies to damages in construction claims and disputes.  With facts, logic and analyses on their side, one party (Party A) can prepare and present a very compelling argument regarding the claim (against Party B).  However, winning the argument on the cause (or as it is called, entitlement) is relatively useless without winning the argument on the money related to the effect (or sometimes called damages, quantum, compensation).

Even more compelling, the decision to proceed with a claim (and potentially spend millions of dollars on expenses such as legal fees) should be heavily driven by the potential recovery (the money).  Consequently, parties must have a reasonable assessment of the true value of the dispute and the ability to successfully demonstrate or prove these damages in the resolution process.  Without the ability to prevail on a suitable and acceptable level of damages, pursuing a construction claim through a costly dispute resolution process could be an unwise decision.

In this discussion, we are guided by a highly useful and well grounded newly published book.  It is published by the American Bar Association (ABA) and has been recently (2013) been updated.  This publication is Construction Damages and Remedies, second edition, by Forum on the Construction Industry, American Bar Association.  It is edited by W. Alexander Moseley of the law firm Hand Arendall LLC.  There are nine authors. [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.

PROJECT MANAGEMENT CHALLENGES– Subject Series Summary

Having recently addressed the AACE International Western Winter Workshop, I am heading for Canada on a new consulting engagement.  Likely, we will have some additional posts and details at a later time.  The press of business has reduced our recent posting activity.  Given this trend and  the large number of new visitors to this blog, we will repost some of the Subject Series Summaries.

This  McLaughlin & McLaughlins Project Professionals summary update provides readers with an overview of prior posts and provides a baseline for future posts that will follow on a timely basis.  This Subject Series, PROJECT MANAGEMENT CHALLENGES was posted during June through September 2011.  Since that time, blog readership has increased significantly.

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 Subject Series provides a starting point to investigate best practice on many planning and execution features of project management.

Introduction (Part 1) – This post is the first in a series of discussions regarding challenges being encountered in current project management.  This post introduces the topic and sets the framework for ongoing posts on individual challenges.  This series is intended to draw upon many sources within the project management discipline or profession.

Project Initiation (Part 2) – This post addresses the starting point or initiation of the project.  This is a crucial challenge.  The initiation process (getting started formally) requires two processes and deliverables/outputs (see PMBOK® and Kerzner).  Both processes are discussed.

Project Initiation Lessons Learned (Part 3) – This post addresses the starting point or initiation of the project.  The study of lessons learned creates relevance and importance in (sometimes) abstract concepts.  It answers queries regarding the practical side of the issue.  There is a famous quote out there that talks about those that refuse to study history.  It is suggested that you avoid reliving the mistakes experienced by others.

Project Planning Process (Part 4) – This post addresses the project planning process.  This is a crucial challenge and the importance of this process cannot be overstated.  A logical and often asked question is along the lines of “Why plan?” as it can be complicated, time-consuming and aggravating.  There are several key benefits to planning.  These benefits are discussed.

Project Management Plan (Part 5) – This post addresses the Project Management Plan [also known as Project Execution Plan, Project Plan and other titles].  The Project Management Plan can consist of several pages of information and direction or a bookshelf full of many volumes of documents.  These many volumes can have a hierarchical structure.  PMBOK® provides guidance regarding this deliverable/work product.  The Project Management Plan is also known as Project Execution Plan, Project Plan, and other similar titles.

Project Planning Issues (Part 6) – Planning the project properly, documenting the plan professionally and then implementing the plan successfully are likely the source of most project success and failure outcomes.  While project planning is one of the most fundamental skill sets in project management, the requisite processes and actions are not well developed or successfully implemented.

Project Planning Lessons Learned (Part 7) – Learning from the experiences of others is an effective method for skill set development.  Many organizations that use project management on an ongoing basis close out projects with a compilation of “lessons learned.”  These firms have found value in studying the issues that have emerged in the past.

Project Planning Lessons Learned STAKEHOLDER MANAGEMENT (Part 8) – This post continues the focus on issues in planning and problems that have their source or root cause in planning.  The subject is Stakeholder Management.  The use of team and stakeholder workshops can be an effective mechanism for aligning, selling and implementing the Project Management Plan.  Obtain an audience with all stakeholders.  Start with the Project Sponsor.  Sell the Project Management Plan in detail.

Project Planning Lessons Learned RESOURCE REQUIREMENTS (Part 9) – This post continues the focus on issues in planning and problems that have their source or root cause in planning.  The subject is Resource Requirements.  In this regard, the post will focus on human resources or staffing. [Read more…]