Revay Presentation

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Published on September 17, 2007

Author: Techy_Guy


Typical Pitfalls in DeliveringMega ProjectsApril 26, 2007:  Typical Pitfalls in Delivering Mega Projects April 26, 2007 Stephen Revay APEGGA Annual Conference Managing Mega Projects AGENDA:  AGENDA Common causes for claims (requests for more money) Common causes for disputes (unresolved requests requiring third party intervention) Opportunities to minimize unproductive behaviour CENTRAL THEMES:  CENTRAL THEMES SCOPE DEFINITION TRUST / COMMUNICATION PROCESS COMMON CAUSES:  COMMON CAUSES SCOPE FAST TRACK PROCESS BREAKDOWN AVOIDANCE / EARLY ATTENTION Slide5:  Construction Owners Association Alberta Slide6:  CLAIM Ingredients – Fixed Price Contracts Acceleration: Overtime / Congestion Poor Scope Definition: Extensive Growth / Rework People : no communication and no TRUST:  TRUST BETWEEN PROJECT PARTICAPANTS AND WITHIN THE PROJECT TEAM Fast Track:  Fast Track Fast Track:  Fast Track andamp; Hard money Excellent source of business for claims consultants What the Owner thinks the project looks like:  What the Owner thinks the project looks like SILO 1 CONTRACTORS SILO 2 CONTRACTORS SILO 3 CONTRACTORS SILO 4 CONTRACTORS What the project actually looks like:  What the project actually looks like SILO 1 CONTRACTORS SILO 2 CONTRACTORS SILO 3 CONTRACTORS SILO 4 CONTRACTORS UNRESOLVED CLAIMS:  UNRESOLVED CLAIMS THIRD PARTY INTERVENTION Who is responsible:  Who is responsible Owner Engineer Contractor Unrealistic expectations at senior management levels Agrees to unrealistic expectations Poor documentation and project controls 'Get the job done – worry about problems later' EVERYONE ENCOUNTERING A SHORTAGE OF EXPERIENCED PEOPLE One sided perceptions:  One sided perceptions Distorted generalities Claims:  Claims Should be about money Too often About people Claim Objective:  Claim Objective Transfer money Ostrich Approach:  Ostrich Approach Slide18:  'The research suggests that the culprit in 85% of project failures is silence. The study showed that there is a definable set of project communication problems that are far more common than most senior leaders realize. An estimated 90% of project managers routinely encountered one or more of five critical problems in the course of a project but the killer is the silence that follows.' Computer World: 'For IT projects silence can be deadly.' NOTICE:  NOTICE CAN BE FATAL NOT A POKER GAME:  NOT A POKER GAME Slide21:  PROOF:  PROOF ENTITLEMENT (CONTRACT) CAUSE FACTS LINK OF CAUSE TO EFFECT EFFECT DAMAGE / COST INCURRED TOTAL COST CLAIMS:  TOTAL COST CLAIMS A total cost claim occurs when a contractor attempts to recover its entire man-hour and/or cost overrun, i.e., claiming the difference between its planned and actual manhours or the difference between what has been spent and received. TOTAL COST(OR MODIFIED TOTAL COST ):  TOTAL COST (OR MODIFIED TOTAL COST ) THE TENDER WAS REASONABLE THE ACTUAL COST IS FAIR AND REASONABLE ALL OF THE INCREASES IN COST RESULTED FROM THE COMPLAINT THERE IS NO PRACTICAL WAY TO DETERMINE THE QUANTIFICATION PROCESS:  PROCESS Contract Requirements Ignored:  Contract Requirements Ignored Statutory Declarations Change Order Provisions Scheduling Specifications Claims Avoidance:  Claims Avoidance Avoidance is perhaps Impossible Minimizing the effect is quite achievable Notice provisions Project Controls Change Order Management Contracting Strategy Non Adversarial communication Minutes of Meetings Record Keeping Early Attention Scope Definition Improvement Required1965 NRC Study:  Improvement Required 1965 NRC Study Lack of proper organization Inadequate scheduling Lack of detailed cost controls Lack of supervisory training Slide29:  Slide30:  CHANGING :  CHANGING BEHAVIOUR OPPORTUNITIES FOR IMPROVEMENT :  OPPORTUNITIES FOR IMPROVEMENT PARTNERING / COMMUNICATION PROJECT DELIVERY WORKSHOPS FACT BASED MEDIATION / PROJECT NEUTRAL Slide33:  The root causes of poor communication*:  The root causes of poor communication* Fear Misaligned Expectations Confusion Loss of momentum Dissatisfaction Lack of commitment Unconscious incompetence * June 2006 –Cost Engineering Journal - Sue Dyer Slide35:  WORKSHOPS:  WORKSHOPS PLANNING INTERFACE RISK PLANNING WORKSHOPS:  PLANNING WORKSHOPS CLEAR END-STATEMENTS KEY RESULTS STAKEHOLDER ANALYSIS CONSTRAINTS MILESTONES AND GATES PRIORITIES / DRIVERS INTERFACE WORKSHOP:  INTERFACE WORKSHOP SCOPE DEVELOPMENT WORK BREAKDOWN STRUCTURE RCIANO RESPONSIBILITY CHARTS DELIVERABLES DEFINITIONS TASK DEFINITIONS STAKEHOLDER MANAGEMENT Slide39:  R – Responsible C – Contributor I – Input Required (data) A – Approves (reviewer) N – Notified When Completed O – Owns on Completion (customer) RISK WORKSHOP:  RISK WORKSHOP RISK IDENTIFICATION RISK ANALYSIS OPPORTUNITY ANALYSIS VALUE IMPROVEMENT IDENTIFICATION COST AND SCHEDULE CONTINGENCY RISK MANAGEMENT PLAN In the event parties have a legitimate difference of opinion:  In the event parties have a legitimate difference of opinion Requiring analysis Options:  Options Each party engages claims consultant Each party diverts project people to perform analysis Two parties engage independent to provide objective basis Proposed Best Alternative:  Proposed Best Alternative The appointment of an impartial independent claims consultant to offer: Unbiased advice and decisions Assist in negotiation Conduct forensic analysis ModelFact Based Mediation:  Model Fact Based Mediation Voluntary and economical Assists negotiation Relies on communication to achieve resolution Problem solving approach Uses impartial claims consultant for forensic analysis and to facilitate conciliation process Decision is not binding Forensic Analysis:  Forensic Analysis Initiation of Process Fact Finding Draft Report Final Report Initiation of Process:  Initiation of Process Differences with regards to delay / productivity Generally speaking not scope issues Fact Finding:  Fact Finding Access to documents from all parties Access to project people from all parties Better results less cost Draft Report:  Draft Report Issued with the expectation that it will be challenged Each party has input into final result Manage expectations regarding outcome Final Report:  Final Report Parties have contributed to final result Legitimate interests have been considered Most economic alternative Based on objective criteria

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