понеделник, 29 август 2011 г.

NEW ENGINEERING CONTRACT AND ACTIVITY SCHEDULE

NEC calls schedule of values an activity schedule. How NEC interprets activity schedule in Option A:Priced contract with activity schedule.

Activity schedule is prepared and priced by tenderers. It is not part of the works information and must not be used to describe the works.
The prices entered by the tenderers for each activity are lump sums, not unit rates as in the bill of quantities. The tenderer decides how to break up his work into activities, enters them on the schedule and prices each one. If the employer wants to specify particular activities which the contractor is to identify in the activity schedule he may do so, stating his requirements in the instructions to tenderers.

Use of Option A of the NEC does not require a bill of quantities to be issued to tenderers or to be used subsequently. Consequently, tenderers have to calculate quantities from the works information where they need to know a quantity in order to estimate the cost of the work. For many contracts (including process plant, building construction etc) this is a significant task.

In order to reduce the cost and time involved during the bid preparation period, employers may wish to calculate quantities before inviting tenders and then issue a copy of the quantities list to all tenderers. When this is done, it must be made clear that the tenderer will have used the quantities and relied upon them entirely at his own risk of their inaccuracy or incompleteness. No amendment to the contract or addition to the contract is necessary to achieve this as the contract is clear that the contractor's obligation is to carry out the work described in the works information. There's no mechanism for this obligation to be qualified or modified by the issue of quantities to tenderers.  

The total of the prices of the items in the activity schedule is the tenderer's offer for providing the works. The cost of any items the tenderer may have omitted is deemed to be included in the prices for the other items.

RE:SHEDULES OF VALUES

Dear Cadgas,

I'm impressed how many project managers make mistakes when dealing with schedules of values. Sub-Clause 14.1 (d) The Contract Price  (Red book-FIDIC 1999 edition) says:

Unless otherwise stated in the Particular Conditions:

(d) the Contractor shall submit to the Engineer, within 28 days after the Commencement Date, a proposed breakdown of each lump sum price in the Schedules. The Engineer may take account of the breakdown when preparing Payment Certificate, but shall not be bound by it.

Indeed, if lump sum, there's no need for method of measurements or BoQs. And indeed if you want to include them do it only for evaluation of interim payments. It means that you can use BoQs but only for the purposes stated in the schedules and may be inapplicable for other purposes.To have a transparent tender and tenderers will know from the beginning what they are to expect explain carefully what these BoQs mean. 

I prefer not using BoQs because they mislead the contractors. I usually instruct the contractors to send me a proposed breakdown of each lump sum price in the schedules within some period after the commencement date.
But be careful because no matter how correct is your design, there will be inevitable changes. It means you should specify in advance how you will manage the evaluation of the changes.

Hope this answer your question.

Best regards
Rado

SHEDULES OF VALUES

Dear Rado,

We are the PMC of a multi-use development project. The Client intends to go into a lump sum contract with FIDIC Red Book 99 form. The design will be 100% complete before going into tender. The Designer has prepared a BOQ and Method of Measurement along with Specs and Drawings.

I think that:

a)The tender documents should only include a Schedule of Prices, together with Specs, Drawings.. etc. (No BOQS and Method of Measurement).
b) I dont actually suggest any BOQ to be incorporated whatsoever. Nevertheless, if insisted, I may not object the Contractor (after the tender is awarded) is given the BOQ prepared by us (with or without quantities) to provide breakdowns for his lumpsum price. This BOQ will be non-contractual and for only valuation of variations.. etc.

Not so-experienced PM thinks that:

a) The BOQ and MOM will be submitted during tender phase, but it will be stated that the contract is Lump Sum. Payments will be made as per BOQ items.

I strongly believe that using a BOQ instead of a Schedule of Prices has no use, especially considering that the design will be 100% complete, i.e. changes are not likely to occur. A Schedule of Prices itself is very useful for Cash Flow Calculations, Scheduling etc. as well.


I am also of the opinion that, submission of BOQ's during tender phase gives Tenderers the impression that (even clearly its purpose is stated) the BOQ is contractual, and it is hard to explain people that, they are supposed to do everything written in their contract as "lump sum" but get paid on BOQ items basis. It has, and it will, mislead people to think that their responsibilities are bound with what is stated in the BOQ.
I think that, in lump sum contracts the payments / remuneration shall ne through a "Schedule of Prices". If still a BOQ is desired for valuations, etc., it might be requested after the Tender is awarded, i.e. from the Contractor, not the Tenderers. I seriously hesitate on using  "Lump Sum Contract with Bill of Quantities" even though it's widely used, especially in the Gulf region.

What do you suggest on this one? Is a Schedule of Payments alone the best solution, or can both (BOQ & SOP) be used? Can you give further recommendations as it will be a FIDIC Red Book 99 type of Contract?
I'd appreciate your prompt answer,

Kind Regards, 

Cadgas

събота, 27 август 2011 г.

ТАБЛИЦАТА СЪС СТОЙНОСТИТЕ (SCHEDULE OF VALUES)

Напоследък наблюдавам доста голямо объркване, дори от признати консултанти, при провеждане на търгове на твърда цена и боравенето с таблицата на стойностите (schedule of values). Преди да продължа с разсъжденията по темата бих искал да задам въпроса-кога трябва да се представи таблицата със стойностите? По време на търга или след подписване на договора за изпълнение на строителството?

NEC COMPENSATION EVENTS

One of the reasons to like the New Engineering Contract is the the simple and clear clause 6 (Compensation events) where the user of the contract can find all compensation events. Compensation events are:
1.The contract administrator gives an instruction changing the works information.

2.The employer does not give possession of a part of the site by the later of its possession date and the date required by the accepted programe.

3.The employer does not provide something which he is to provide by the date for providing it required by the accepted program.

4.The contract administrator gives an instruction to stop or not to start any work.

5.The employer or others do not work within the times shown on the accepted program or do not work within the conditions stated in the works information.

6.The contract administrator does not reply to a communication from the contractor within the period required by this contract.

7.The contract administrator gives an instructions for dealing with an object of value or of historical or other interest found within the site.

8.The contract administrator changes a decision which he has previously communicated to the contractor.

9.The contract administrator withholds an acceptance (other than acceptance of a quotation for acceleration or for not correcting a defect) for a reason not stated in this contract.

10.The contract administrator instructs the contrctor to search and no defect is found unless the search is needed only because the contrctor gave insufficient notice of doing work obstructing a required test or inspection.

11.A test or inspection done by the contract administrator causes unnecessary delay.

12.The contrctor encounters physical conditions which:
  • are within the site,
  • are not weather conditions and,
  • which an experienced contractor would have judged at the contract date to have such a small chance of occurring that it would have been unreasonable for him to have allowed for them.
13.A weather measurement is recorded
  • within a calendar month,
  • before the completion date for the whole of the works and,
  • at the place stated in the contract data
the value of which, by comparison with the weather data, is shown to occur on average less frequently than once in ten years.

14.An employer's risk event occurs.

15.The contract administrator certifies take over of a part of the works before both completion and the completion date.

16.The employer does not provide materials, facilities and samples for tests as stated in the works information.

17.The contract administrator notifies a correction to an assumption about the nature of a compensation events in this contract.

18.A breach of contract by the employer which is not one of the other compensation event in this contract.

Do you like the NEC clause 6 or prefer using the FIDIC contract clauses?

петък, 19 август 2011 г.

ЗА ПОЛЗИТЕ ОТ КОМИСИЯТА ЗА РАЗРЕШАВАНЕ НА СПОРОВЕ


Каква е практиката понастоящем в България по отношение на разрешаването на споровете по време на строителството? Ами, мога да кажа никаква. Използва ли се комисия за разрешаване на споровете, независимо дали  договорът е някой от познатите FIDIC, JCT, NEC и др. или се използва нестандартен договор? Отговорът е не. Какво се прави вместо това? Ако е назначен администратор на строителния договор  или инженер/архитект, той се произнася по внесения иск и ако изпълнителят или възложителят не е удовлетворен, искът оставя висящ и ако страните имат добрата воля да намерят взаимно изгодното решение добре, но ако не постигнат споразумение, работа се забавя и започват едни непрестанни спорове. Явно този начин е неприемлив и е крайно време страните в процеса да започнат да използват услугите на комисията за разрешаване на спорове.

Статистиката показва, че 98 % от случаите, разгледани от комисията, намират решение и страните са доволни от отсъжданията и и тези случаи не стигат до арбитраж или съдебната зала. А това наистина е забележителен успех, което е и крайната цел на използването на комисията за разрешаване на споровете.

Ако сравним разходите за комисия за разрешаване на споровете с разходите за арбитраж или съдебно дело, се оказва, че те са несравними. Разходите за функциониране на комисия за разрешаване на споровете са между 0.05%-0,5% от стойността на строителството в зависимост от големината на проекта. За големите проекти комисията може да се състои от трима човека, докато за малките проекти наемането на един човек е достатъчно.

Освен намаляване на разходите за разрешаване на споровете комисията допринася и за стремеж у страните за достигане на разбирателство. Това се дължи на факта, че страните имат респект от наемането на висококвалифицирани лица с нужния авторитет в комисията за разрешаване на споровете. Само този факт кара страните да не стигат до услугите на комисията, а да стигат до разбирателство. Комисията допринася и за по-добрата комуникация между участниците, увеличава доверието и кооперирането между тях.

Заради познаването на проекта от участниците в комисията, които правят редовни посещения на строителната площадка, отсъжданията стават бързо и с все още пресни факти, т.е. избягва се намесата на свидели, които „нещо” си спомнят при разрешаването на споровете от арбитраж или в съдебната зала. Администраторът на договора също е стимулиран да взема навременни решения, а не да разчита, че искът ще се размие от само себе си. 

Няма да навлизам в практиката за назначаване и функциониране на комисията за разрешаване на спорове, тъй като всеки може да намери съответните клаузи в стандартните договори.

С какво се сблъсквате на вашите проекти, когато се налага разрешаване на спорове? Колко време се губи и какви разходи се правят?

петък, 12 август 2011 г.

DESIGN CREEP

След ужким завършването на кризата клиентите започват да търсят сигурност в бюджетите и продължителността на проектите си, като ми се струва, че предпочитат все повече договори на твърда стойност. Дотук добре. Но остава вечният конфликт при използване на традиционната форма на изпълнение на проекта, а именно проектиране-търг-строителство-твърде много искове от страна на изпълнителя. Може би е време да започне използването на проектиране-строителство форма на изпълнение на проекта. Тук, обаче, искам да засегна една тема, наречена „design creep”, свързана с позицията на клиента, при която той смята, че щом строителят проектира, то каквото и да поиска клиентът, строителят трябва да го изпълни без да предяви иск за компенсация (парична, времева илии двете). Забележете, че в много от договорите има и така наречената клауза „годен за целта, за която е проектиран”. 

Нека вземем, например, договора за проектиране и изпълнение от строителя на FIDIC. При него изпълнителят има относителна свобода да проектира и строи, стига да се съобразява с изискванията на клиента. Но тук се изявява желанието на клиента да упражнява контрол върху проектирането, като се опитва да внася подобрения в проектирането под формата, че преглежда чертежите на изпълнителя.

Клауза 5.2 от жълтата книга дава възможност на клиента, чрез инженера да преглежда документацията на изпълнителя. Но какво се получава, като прегледът е придружен с коментари. Това промяна ли е, която би дала възможност на изпълнителя да бъде компенсиран или е нещо по-малко от промяна и изпълнителят би трябвало да я изпълни в стойността и времетраенето на договора? Ето това е класически пример за „design creep”.

Какво би трябвало да направи изпълнителят в такъв момент?
Първият въпрос, който трябва да си зададе изпълнителят е:„Представлява ли промяна така направения коментар съгласно договора”? Промяната съгласно жълтата книга е дефинирана в клауза 13, като всяка промяна в изискванията на клиента. Тази промяна може да се въведе по всяко време с нареждане или с поискване на предложение предварително от изпълнителя. Изпълнителят е поставен в трудно положение, защото той е длъжен да изпълни нареждането, ако, разбира се, не уведоми незабавно невъзможността си да изпълни нареждането, като се аргументира иначе е в нарушение на договора. Но ако изискванията на клиента са доста „широки”т.е. не достатъчно конкретизирани, тогава изпълнителят трудно би могъл да оцени коментара като промяна.

Какво трябва да направи изпълнителят? Първо да изиска писмено потвърждение от инженера, че коментарът е промяна съгласно клауза 13.1. След това да следва изискванията на клауза 20.1 (искове на изпълнителя) и  да поиска инженерът да одобри или да даде определение относно промяна на цената на договора съгласно клауза 3.5.

Тук искам да отбележа, че инженерът е длъжен да прегледа и одобри представената документация. А да одобри означава да отговаря на договора. А не да се правят коментари. Изпълнителят трябва да провери формалностите относно издаване на инструкции и промени съгласно договора, за да се увери дали трябва да изпълнява промяната.

И така без значение как е одобрил документите инженерът (с коментар или без) изпълнителят трябва да действа съгласно процедурата в  клауза 20.1.

А какъв е вашият опит с “design creep”? Случва ли се често?

понеделник, 8 август 2011 г.

63 PROJECT MANAGEMENT TIPS-PART FIVE

Closedown and Review

1. Agree well in advance a date to hold a post project review meeting. Put this onto the Gantt chart.

2. Invite key stakeholders, sponsor, and project team to the post project review. If the date is in their diary well in advance it should make it easier for them to attend.

3. Focus your meeting on learning – identifying what you can use on the next project. Share the learning with others in the organization.

4. Check whether you have delivered the original project objectives and benefits and not gone out of scope.

5. Make sure that you have delivered against budget, quality requirements and the end deadline.

6. Understand how well you managed risks and your key stakeholders. Use questionnaires to obtain feedback.

7. Prepare a list of unfinished items. Identify who will complete these after the project and circulate to any stakeholders.

8. Hand over the project formally to another group (it is now their day job) - if appropriate. You may need to build this into the project plan and involve them early in the plan and at different stages throughout the project.

9. Write an end of project report and circulate. Identify in the report key learning points.

10. Close the project formally. Inform others you have done this and who is now responsible for dealing with day to day issues.

11. Celebrate success with your team! Recognize achievement, there is nothing more motivating.

General Tips

1. But what is a project? Why worry whether something is a project? Why not use some of the project management processes, e.g. stakeholder analysis or use of traffic lights to manage your work? The key principle is to deliver the piece of work using the appropriate tools. We use the term project based working to describe this approach.

2. Get trained! Research points out that only 61% of people have received any project management training.
 
3. Ensure you have the buy-in of senior managers for your project. You will need to work hard to influence upwards and get their support.

4. What about the day job? Projects get in the way and the day job gets in the way of projects! Many people have found that by applying project based working to day to day activities and by being more rigorous on project work, more is achieved.

5. Identify early on in the life of the project the priority of your projects. Inevitably there will be a clash with another project or another task. Use your project management skills to deliver and your senior management contacts to check out the real priority of the project.

6. Discover how project management software can help. But, you will need to develop the business case, produce a project definition alongside planning what will go into the software. Many project managers use simple Excel spreadsheets or charts in word to help deliver their project.

Good luck in delivering your project!

петък, 5 август 2011 г.

63 PROJECT MANAGEMENT TIPS-PART FOUR

Project Delivery – Monitoring and Reviewing Your Project
(Project Governance)


1. Have a clear project management monitoring and reviewing process – agreed by senior managers - the project sponsor and the project Board, if you have one.

2. Ensure your organisation’s corporate governance structure and your project management monitoring and control structure are compatible. If you do not know whether this is the case then seek senior management involvement.

3. Be aware early in the project what will be monitored, how they will be monitored and the frequency. Keep accurate records of your project not only for audit purposes but to ensure you have documents which enable you to monitor changes.

4. Use a Planned v. Actual form. It is easy to create – it allows you to monitor how you are progressing with specific tasks – time and money. Link these forms into milestone reviews.

5. Identify with your sponsor the type of control that is needed – loose or tight or a variation of these, e.g. tight at the start, loose in the middle, tight at the end. Ensure the system you develop reflects the type of control intended.

6. Agree a system for project changes – have an agreed system for monitoring and approving changes. Use change control forms and obtain formal sign off (agreement) by the sponsor, before action a change. Look for the impact of the change on the project scope as well as the “key driver” - quality, cost and time.

7. Appoint someone to be responsible for project quality especially in larger projects. Review quality formally with the client at agreed milestone dates.

8. Make certain you have agreed who can sanction changes in the absence of  your sponsor. If you haven’t agreed this, what will you do in their absence?

9. Set a time limit for project meetings to review progress. Have an agenda with times against each item and summarise after each item at the end of the meeting.

10. Produce action points against each item on the agenda and circulate within 24 hours of the meeting. Use these action points to help in the creation of your next agenda.

11.Review the items on the critical path checking they are on schedule. Review risks, review yours stakeholders and your communication plans and whether you are still on track to deliver on time, to budget and to the required quality standard.

12. Set a tolerance figure and monitor e.g. a tolerance figure of ±5% means as long as you are within the 5% limit you do not have to formally report. If exceed the 5% limit (cost or time) then you need to report this to the agreed person – probably your sponsor.

13. Report progress against an end of a stage – are you on schedule? Time, cost or quality? Ensure that if something is off schedule the person responsible for delivering it suggests ways to bring it back on time, within budget or to hit the right quality standard.

14. Develop an issues log to record items that may be causing concern. Review at your project meetings.

15. See whether you are still delivering the original project benefits when reviewing your project. If not, consider re-scoping or if appropriate abandoning the project. Do not be afraid of abandoning a project. Better to abandon now rather than waste valuable time, money, and resources working on something no longer required. If you close a project early – hold a project review meeting to identify learning.

16. Produce one-page reports highlighting key issues. Agree the areas to include with the Sponsor before writing a report.

17. Use a series of templates to support the monitoring process, e.g. milestone reporting, change control, log, planned v. actual.

18. Engender honest reporting against specific deliverables, milestones, or a critical path activity. If you do not have honest reporting imagine the consequences.

четвъртък, 4 август 2011 г.

63 PROJECT MANAGEMENT TIPS-PART THREE

Delivery Planning

1. Create a work breakdown structure (WBS) for the project. A WBS is a key element you will need to develop your plan. It lists out all of the activities you will need to undertake to deliver the project. Post it notes can be a great help in developing your WBS.

2. Group tasks under different headings (HLA network-high level achievements network can be a great help) once you have a list. This will enable you to identify the chunks of work that need to be delivered, as well as put together the Gantt chart and milestone chart.

3. Identify dependencies (or predecessors) of all activities. This will let you put together the Gantt and milestone charts. Ensure you write them down otherwise you are trying to carry potentially hundreds of options in your head. Estimate how long each activity will take. Be aware that research points out we are notoriously bad at estimating. You estimate a task will take 3 days. Identify how confident you are that you can deliver in 3 days by using % e.g. I’m only 40% certain I can deliver in 3 days. You should aim for 80%. If you do not believe you can achieve 80% then re-calculate. Remember the previous article about estimating.

4. Identify the critical path for the project. The critical path identifies those activities which have to be completed by the due date in order to complete the project on time. 

5. Communicate, communicate, communicate! Delivering a project effectively means you need to spend time communicating with a wide range of individuals. Build a communication plan and review it regularly and include it in your Gantt chart.

6. Are you involved in a major change project? If you are, think through the implications of this on key stakeholders and how you may need to influence and communicate with them.

7. Conduct Risk Assessment – carry out a full risk analysis and document it in a risk register. Regularly review each risk to ensure you are managing them, rather than them managing you. Appoint a person to manage each risk. Be cautious-project sponsors and stakeholders don't like risk assessment. You must be careful and do this assessment with tact.

8. Develop a Gantt chart and use it to monitor progress against the plan and to involve key stakeholders in the communications process.

9. Draw up a milestone plan. These are stages in the project. You can use the milestone dates to check the project is where it should be. Review whether activities have been delivered against the milestone dates and take a look forward at what needs to be achieved to deliver the next milestone.

10. Develop your project management plan and supporting plans (procurement plan, contract plan, safety plan, quality plan) using the Broadbrush plan as a base.

11. Present your project management plan to the project sponsor and stakeholders and get their approval of the plan. 

сряда, 3 август 2011 г.

63 PROJECT MANAGEMENT TIPS-PART TWO

Defining Your Project

1. Produce a written project definition statement (sometimes called PID, BROADBRUSH PLAN, etc.)  and use it to inform stakeholders – see point 10. This document is ‘your contract’ to carry out the project and should be circulated to key stakeholders.

2. Use the project definition statement to prevent creep. Use it to prevent you going beyond the scope of the project through its use in the review process.

3. Identify in detail what will and will not be included in the project scope. Avoid wasting time by working on those areas which should not be included –identify these in the PID.

4. Identify who fulfills which roles in your project. Document them on the PID. Include a paragraph to show what each person does.

5. Identify who has responsibility for what in the project. This helps reduce doubt early in the life of the project.
 
6. Create change control process-a very important issue! Identify who will be responsible for approving changes and specify the decision authority matrix.

7. Think ‘Team Selection’ – give some thought to who should be in your team. Analyse whether they have the skills required to enable them to carry out their role? If not, ensure they receive the right training. Check they are available for the period of the project. NOTE: this includes any conractors you may need to use

8. Form a group of Project Managers. The Project Manager role can sometimes be very lonely! Give support to each other by forming a group of Project Managers.

9. Identify who the stakeholders are for your project – those affected and ‘impacted’ by the project. This should be an in- depth analysis which needs updating regularly.

10. Recognise early in the life of the project what is driving the project. Is it a drive to improve quality, reduce costs or hit a particular deadline? You can only have 1. Discuss with the sponsor what is driving the project and ensure you stick to this throughout the project. Keep “the driver” in mind especially when you monitor and review.

11. Hold a kick off meeting with key stakeholders, sponsor, project manager project team. Use the meeting to help develop the PID (seeTip 1). Identify risks, constraints, assumptions and generally plan the project. If appropriate hold new meetings at the start of a new stage.

12. Ensure you review the project during the Defining Your Project Stage –involve your sponsor or senior manager in this process. Remember to check progress against the business case.

вторник, 2 август 2011 г.

63 PROJECT MANAGEMENT TIPS-PART ONE

The word project can be misleading. Many people think of large scale building works or changes in information technology. Your project may not be as big as those quoted; preparing  and writing a report, developing an internet product alongside marketing and sales plan, relocating an office. They all need careful planning.
This project management tips will help you in many ways:
  • Providing you with a structure to manage your projects;
  • Giving practical advice based on over 10 years of running projects;
  • Answering many of the questions posed by people involved in projects;
  • Using it to check current project management practices in your organization.
Let's start with the initiation phase.

Getting Started – Initiation

1. Develop a solid business case for your projects. Where appropriate, ensure you obtain senior managers’ agreement before you start the project. Research points out that too many projects are started without a firm reason or rationale. Developing a business case will identify whether it is worth working on.
2. Ensure your project fits with the key organizational or departmental agenda or your personal strategy. If not, why do it? Stick to priority projects.

3. Carry out risk analysis at a high level at the initiation stage. Avoid going into great detail here – more an overview focusing on the key risks.

4. Identify at this early stage key stakeholders. Consider how much you need to consult or involve them at the business case stage. Seek advice if necessary from senior managers.

5. Where appropriate, involve finance people in putting the business case together. They can be great allies in helping crunch the numbers which should give credibility to your business case.