Technical Program Abstracts

(OWN) Owner Issues

NOTE: Program Subject to Change

(OWN-3417) A Model for Project Governance for Major Construction Projects: Owner's Perspective

Author(s)/Presenters(s): Tariq Hussain

Abstract:

Effective project governance, within corporate governance framework, has become a serious concern for organizations' (Crawford, Cooke-Davies, 2005). A research was conducted to evaluate the current understanding of project governance in the construction industry, recognize the current governance practices, and evaluate the existing project governance structures. Findings of the research revealed various levels of understanding of project governance and a range of governance structures in practice within industry. In this paper a new project governance model is proposed. The model recommends project owner organizations to reorganize their project governance structures, improve their policies and procedures, develop tools that support project governance, make it mandatory for project personnel to follow governance procedures, improve the governance role of the project management office (PMO), do audits for compliance, keep processes updated, and use lessons learned. The results of the focus group survey, conducted to validate the new governance model, revealed an overall agreement from industry professionals. The researcher concludes that the new governance model applied proficiently will help project owners improve governance, oversight and project predictability for major construction projects.

(OWN-3420) (Presentation Only) Improving predictable outcomes on offshore oil and gas projects

Author(s)/Presenters(s): Aileen A. Jamieson

Abstract:

In the last year, we have seen a considerable number of projects in the oil and gas industry announcing early start-up of production as well as completing under budget.  This is a phenomenon that was unheard of only a few years ago, if ever. There is no doubt that the industry has learned some important lessons since the oil price crash, but can we now believe that these results are the new norm? Some of the projects making these bold statements have, in fact, built something with a different or reduced design from the approved scope. In other cases, the planned schedule was significantly longer than should have been necessary. So, how can we predict if a project will actually complete on time and budget?

This presentation will use field data from a joint industry project which has been benchmarking completed offshore projects for twenty-five years. The analysis will examine the changes in cost, schedule and scope from investment approval to project start-up for recently completed projects to identify ways to improve predictability on your final cost and schedule.

(OWN-3478) Validating Contractor Cost Forecasts for Reimbursable Labor

Author(s)/Presenters(s): Robert C. Mathias; Paul G. Williams

Abstract:

Owners, CMs, and Prime Contractors, to whom another Contractor is providing craft labor on a reimbursable (RE) or time-and-materials (T&M) basis, are faced with accepting risk associated with the performance of the contracted workforce. RE/TM Contractors would periodically be expected to issue reports indicating manhour and labor costs to-date as well as forecasts through and at completion.

Whether one is charged with actively managing the Contractor or simply paying the bills, it is important to understand whether such reports from the Contractor represent viable forecasts going forward. Developing an opinion of whether or not the data makes sense and if the reports may be possibly overstating or understating forecasts are critical to success.

Early identification of issues maximizes the time available to initiate corrective decision-making, and hence enhances the probabilities of successful outcomes.

This paper is intended to familiarize readers with basic concepts that can be applied to the review of such Contractor labor forecasts, enabling them to pro-actively deal with issues identified. It will address basic factors that directly affect the cost of installation labor, appropriate investigative approaches and action plans based on findings.

(OWN-3494) Owner Project Management Challenges that Affect Cost and Schedule Outcomes

Author(s)/Presenters(s): Stephen L. Cabano

Abstract:

It's no secret that project outcomes of large to mega scale projects in the process industry are less than stellar. Numerous papers/presentations have outlined the effects these project 'blowouts' have on owner business results. This paper will provide hands-on feedback from owner organizations across the process industry on these Business and Project Management challenges. These issues address aspects of project work such as Owner's inability to lock down capacity, variability and feedstock requirements early in the asset development process typically resulting in late project changes. The paper will also address poor scope definition and scope freeze at project sanction which causes cost/schedule fluctuations between sanction and project end results. Other owner issues include poor contracting strategy selection, ineffectual change management, inadequate project controls, misaligned operations and maintenance expectations, etc. Contractor productivity and performance issues will also be discussed. Results of a recent owner study conducted by Pathfinder will be shared that address these issues. Metrics will be provided by the Construction Industry Institute regarding effective application of industry best practices. The session will correlate these issues back to Cost Engineering and Project Control practices and provide proven solutions to address pitfalls and support owner business opportunities with effective/efficient project delivery.

(OWN-3495) Deploying An Assurance Framework to Identify and Repair Troubled Projects

Author(s)/Presenters(s): Joshua P. Rowan, CCP

Abstract:

Many capital intensive organizations now utilize stage-gate systems as a part of corporate governance.  Yet, the failure rate for major projects remains high.  Stage gate systems are necessary but not sufficient for governance of capital projects and programs.  Project assurance aims to provide independent and objective oversight of the likely, future project performance, typically through internal and external (independent) reviews.  The discipline developed in the late 2000s in response to recurring safety, social, economic, cost and schedule problems with major projects. Such reviews are now mandated by many governments, insurers, and financing entities.  Project assurance, as practiced today, is additive to a stage-gate process.  The field is still evolving and there is no dominant or generally accepted model.  Most often it relies on a small group of project experts reviewing a project between the official stage-gate reviews.  A robust project assurance framework considers a series of questions which are then tailored to the timing of the review as well as the project’s risk profile.  In asking these questions, Owner organizations can identify troubled projects and take steps to improve the outcomes.

(OWN-3497) Managing Scope creep in public sector projects

Author(s)/Presenters(s): Rashmi Vailaya; Moraima Dones

Abstract:

Scope creep, also called kitchen sink syndrome in project management, refers to uncontrollable continuous scope changes at any point after the project start. When a project requires changes due to scope creep, new tasks most likely will require additional budget and may cause delays in schedule.  Even though the schedule and budget are different concepts, they are in fact an integrated component and if one does not capture the total project scope correctly, there is little hope that the project can be executed favorably for the budget or schedule. This paper presents the causes and discusses strategies to reduce scope creep in public sector projects.

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