Audience Focus: Advanced
Application Type: Theoretical
Time/Location: MON 3:45-4:45/Salon K
Abstract: The oil sands billions of dollars in magnitude major projects in Northern Alberta have typically been approved alongside the soaring price of oil which has contributed to their fast-tracked inherent nature. With the recent pause in oil and gas projects, owner companies have been able to reassess execution strategies and plans and had a common realization that a significant amount of project costs could have been saved if effective cost saving exercises had been performed prior to the commencement of construction, and many major projects were re-considered as non-schedule driven. This paper presents a very effective methodology based on cost / schedule optimization method in combination with resource levelling and smoothing for those major projects. The critical path method (CPM) based cost/schedule optimization method utilizes the opposite correlation between construction direct cost and construction activity duration, and the correlation between construction indirect and overhead costs and the project overall construction duration. The analysis shows this methodology is promising and expected to provide a solid base to save significant cost on those major projects. (CSC-1058) Implementing Project Control Process from Planning Through Project Completion
Primary Author: Mr Kenneth W Sparks PSP Jacobs Associates
Audience Focus: Basic
Application Type: Experience-Based
Time/Location: TUE 5:00-6:00/Salon K
Abstract: This paper discusses the role of project cost and schedule control in the planning, contract preparation and execution of a construction project and how proper management of these stages can help manage claims and delays if and when they arise. Starting with the role of the project controls professional during the development phase, this paper will describe how proper cost, schedule, risk management and earned value techniques can be used to properly plan and budget the project. From the planning stage review and support in the preparation of the Division 1 specifications the project controls professional can provide managers with a meaningful baseline and tools to enforce contract requirements. As delay and claim issues occur, proper planned and executed project controls measures will allow owners and contractors to quantify compare these contentious issues. (CSC-1066) Leveraging the Power of Schedule Margin
Primary Author: Mr Charles I Budd EVP Budd Management Systems
Co-author(s): Dr Charlene Spoede Budd Baylor University
Audience Focus: Intermediate
Application Type: Experience-Based
Time/Location: TUE 11:00-12:00/Salon K
Abstract: Late project completion and ensuing cost overruns are a continuing problem. The use of time buffers (schedule margin or schedule reserve) in project schedules to address project risk has become a more common practice and has resulted in some improvement. However, research has indicated that the use of schedule margin alone does not eliminate late project delivery and cost overruns. Several suggestions for further improvement have encouraged the use of simulations based on task distribution assumptions, but the sensitivity of chosen simulation results to actual distributions and actual parameters of those distributions cannot currently be validated. This paper is based on experience and research in the realized value of using schedule margin in combination with changes in management expectations and task completion behavior as reflected in psychological and behavioral research. This combination of project management methods has a proven track record of success, but has enjoyed little exposure in the body of mainstream project management and cost estimation theory. This paper addresses this information void and the changes required to implement this new methodology.
Audience Focus: Intermediate
Application Type: Experience-Based
Time/Location: TUE 2:00-3:00/Salon K
Abstract: Over Target Baseline (OTB) projects or programs are those that have run significantly over cost and require formal reprogramming – essentially a complete re-planning of the project – in order to help the contractor regain management control over the effort. The OTB process has been well documented and become an established part of Earned Value Management practice. Much of the literature-to-date has focused on OTBs from the contractor perspective, including the steps to take in order to propose and implement an OTB, and the proper channels and occasions for engaging the customer in the process. But effective OTB implementation is a two-way street. The customer also must take an active role in the OTB process, examining variables such as mission need, overall strategic objectives, and prevailing business conditions, when determining if a request for OTB reprogramming should be granted, or if there exist other potential alternatives to pursue. Recent research suggests that OTBs, as currently implemented, have little effect on subsequent project performance, so new questions and criteria for engaging OTBs are now beginning to emerge.
Audience Focus: Intermediate
Application Type: Experience-Based
Time/Location: TUE 9:45-10:45/Salon K
Abstract: The Project Controls Plan (PCP) provides the membership of AACE International with a guideline to improve the communication among stakeholders involved with preparing, evaluating, and use of project controls information. The time invested in preparing, documenting, and communicating a solid project controls plan will increase the success of the execution of the project. The recommended practice defines the overall development and implementation of a project controls plan. The purpose of the project controls plan should include, in part:
A plan to implement an integrated set of work processes, procedures and applications to plan, monitor, execute and control the work. The AACE TCM Framework will provide the basis for general work processes.
A plan to implement an integrated suite of applications (systems).
A plan to identify the roles, responsibilities, and accountabilities for the Project Controls Team members.
A plan to produce the Project Control Deliverables.
This recommended practice and presentation will provide the audience with an understanding of the Project Controls Plan (PCP) for the purpose of assisting individuals and organizations in developing a narrative document that describes specific processes, procedures, tools and systems that guide and support effective project control.
Audience Focus: Basic
Application Type:
Time/Location: MON 5:00-6:00/Salon K
Abstract: Benchmarking requires a consistent and methodological approach to the management and analysis of data. This paper sets out five recommended steps in benchmarking offshore development cost and schedule data to ensure that comparisons are meaningful. Used correctly, benchmarking is a structured process that can add value to a project by providing feedback on how projects of a similar nature have previously been executed. Used incorrectly, there is a danger that bad practices can be repeated. This paper will identify the appropriate stage of a project’s lifecycle to undertake benchmarking as well as how to collect data, compare data on a like-for-like basis and effectively interpret benchmarking analysis. It will also highlight practical applications of benchmarking, such as the ability to compare regional cost and schedule differences in order to set strategies for success in future offshore developments.
The field data used for the analysis will be drawn from a joint industry project (JIP) which has been benchmarking offshore facilities projects for almost twenty years.
(CSC-889) Designing to Budget: New Mississippi River Bridge Case Study Primary Author: Dr. Kelly Strong Colorado State University
Co-author(s): Dr Carla Lopez del Puerto CCC Colorado State University; Dr Jennifer S. Shane Iowa State University; Ms Megan Miller Colorado State University
Audience Focus: Intermediate
Application Type: Experience-Based
Time/Location: TUE 8:00-9:00/Salon K
Abstract: The strong demand to deliver public infrastructure projects in the US requires complicated finance systems to satisfy funding requirements. These finance systems often have fixed, expiring appropriation that must be disbursed within a specific timeframe. The traditional approach that the project’s design drives the budget is often no longer true for complex projects with financial constraints. In these projects the budget needs to drive the design. This paper presents a case study of the New Mississippi River Bridge in Saint Louis where the project team had to design to budget. The paper concludes with the following recommendations when designing to budget: 1) identify funding constraints, 2) establish maximum budget and schedule, 3) confirm cost and schedule values early and update them often, 4) communicate design exceptions early and track them often, 5) communicate cost and schedule constraints and financing limitations to external stakeholder groups.
Audience Focus: Basic
Application Type: Theoretical
Time/Location: WED 9:45-10:45/Salon K
Abstract: The oil and gas industry recent history showed a wide gap between the estimated quantity of man-hours and the actual amount of man-hours worked. Estimators will adjust estimates, addressing the effect of changes based on feedback from the field; mainly incorporating a factor to overcome challenges related to the loss of time and, therefore, decreased productivity. Evidence based on the historical data showed that lost time contributes significantly to the deviation between actual and estimated quantities.
Lean manufacturing theory proves to be an effective tool to identify value-added and non-value-added activities in order to minimize the waste and quantify the effect of the waste elimination the project performance.
This paper will use historical data based on past oil and gas projects that cost $50 million or more. Lean manufacturing principles will be utilized on this project, and recommendations and conclusions will be drawn.
Audience Focus: Intermediate
Application Type: Experience-Based
Time/Location: MON 2:00-3:00/Salon K
Abstract: A State bonds millions of dollars per quarter to fund the State Department of Transportation's (State DOT) capital projects. Accuracy in forecasting the amount and timing of bonds to be sold is crucial in order to avoid incurring additional interest costs, or worse, underfunding projects that may result in delay or cancellation of projects. On a large central waterfront highway replacement program (the Program) in the Pacific Northwest, the mission is to replace an earthquake-damaged section of an elevated freeway with a new approach and interchange utilizing one of the largest design-bid-build projects (the Project) ever undertaken by the State DOT. The authors will demonstrate the methodology for how a contractor's construction cash flow for this freeway replacement was modeled using a summarization of bid-items (schedule of values). This methodology allowed for the development of an accurate cash flow that adjusted dynamically from month to month with the progress of the construction work, as well as the effect of schedule changes that were reflected through time-impact analyses. Both work progress and changes to the schedule affected estimates-at-completion forecasts and subsequent cash flow forecasts.
Audience Focus: Basic
Application Type: Experience-Based
Time/Location: WED 11:00-12:00/Salon K
Abstract: Cost control and reporting has always required multidimensional functionality, with a breakdown (aligned to the cost breakdown structure) into work packages used for forecasting. However, with the latest 3D modeling, more sophisticated data integration possibilities are within reach of the cost engineer.
Proposals described in this paper attempt to address the data overload in cost control functions caused by the impact of software systems. Such systems can drown the cost engineer in data, which results in more time being spent on data manipulation and financially driven reporting and less on true cost engineering, i.e., scope control and good forecasting. The smart application ideas for data integration and development are described herein. As a possible solution to the experienced overload, slick access to data information could shift the cost engineering focus to more analysis and mitigation.
Audience Focus: Basic
Application Type:
Time/Location: TUE 3:45-4:45/Salon K
Abstract: Change management is a key skill for any cost control professional. The basics of effective change management for an entry-level cost control professional are outlined in this paper. The new cost control professional must understand that a proactive approach to change management will help minimize project costs. Topics discussed will include budget viewpoints, documentation, and change management. Change documents must be specific and concise, as they affect not only budgets, but also scope. Project change documentation is important to project success. Finally, understanding the differences between how the client and the contractor view the project budget will be discussed along with the basic differences in management approaches to the budget.
Primary Author: Dr. Kelly Strong Colorado State University
