SUPPORTING MANAGEMENT PLANS

Supporting management plans are added to a project as appropriate depending on the project's size and complexity. Larger and more complex projects may require adding one of the following supporting plans to the project management plan at project initiation:

• Quality management plan;
• Risk management plan;
• Contract management plan.

The quality management plan describes how the project will comply with the client's quality policy in terms of project procedures for quality assurance (QA), quality control (QC), and continuous process improvement. QA is the planned processes the project will follow to make certain that the quality policy is met through. QA audits to examine if the project activities are in compliance with project procedures, and process analysis to examine the effectiveness of project activities, learn from experience and problems encountered and thereby improve the process. QC is monitoring of the specific project results to determine whether they meet with predetermined quality standards and metrics. Continuous process improvement is the iterative application of  process  analysis over the length of the project and from project to project. Each consultant and construction contractor performing work on the project must have a QA plan that is acceptable to the client, so that the client can assess that the contractor's quality standards meet the client's quality management plan.

The risk management plan describes how the project is organized and the procedures used to manage the project risks, addressing in the plan:

• roles and responsibilities of project staff in risk management;
• identification of project risks;
• categorization of risks in terms of probability of occurrence and impact on project scope, cost, schedule, quality;
• risk handling, should the risk event occur, through either: 

Assumption-accepting the consequences of the risk;

Avoidance-changing the project deliverable design or work methods that lead to the risk;

Control-developing measures to reduce the risk's probability of occurrence, continually re-evaluating the risk, and having in place contingency plans to adopt that mitigate the impacts of the risk;

Transfer-sharing or transferring the consequences of the risk with others, for example, through insurance or warranty provisions.

The contract management plan defines what goods and services are to be acquired for the project and how they will be purchased or contracted, how project purchase orders and contracts will be administered, and what type of contracts will be used. 

PROJECT INITIATION-PM's TO DO LIST

In project initiation phase PMs turn their attention on how to plan an authorized project. In this phase PMs develop two important project planning documents: the project charter (sometimes called project requirements definition or statement of work) that documents what the project will deliver and project management plan that documents how the project is to be delivered. If needed, supporting planning documents (risk management plan, quality management plan, contract management plan) might be created. 

PMs to do list:

• receive project authorization;
• write project charter;
• assess client's capability and capacity;
• select procurement (delivery) strategy;
• establish project organization structure;
• write project management plan;
• write supporting plans- risk management plan, quality management plan, contract management plan

PROCUREMENT METHOD AND RISKS

The procurement strategy needs to identify how and when suppliers are brought onto the project. There are numerous procurement methods that have developed over time for use by construction owners as shown below:

• own forces-owner manages, design and constructs project with own forces. Owner has total control and accepts all risks;
• design-bid-build-owner manages project, contracts out design to engineering consultants and construction to contractors. Maintains overall project control and transfers detailed engineering design/ construction tasks and risks to contractors;
• CMAR (construction manager at risk)-owner retains a CMAR contractor in final design, who participate   in design review, estimating and value engineering and at some agreed point guarantees a fee to manage and carry out construction-owner transfers a share of control of scope through design to the CMAR contractor and all of the control and risk of the management and execution of construction;
• D/B (design/build)-consutlant contractor completes design through preliminary engineering (approximately 30%). Owner retains D/B contractor to complete design and construction-owner retains control of scope through concept design (30%) after which control and risk of design and construction is transferred to D/B contractor;
• design/build/operate/maintain-as for D/B plus contractor is responsible for the operations and maintenance of  the facility for a specified period-owner transfers control and risk of operations and maintenance to the contractor;
• turnkey-owner prepare performance specifications that is bid on by turnkey contractor, who also may participate in financing the project-owner controls scope of performance specification after which control and risk of conceptual/detail design and construction transfers to turnkey contractor. 

RISK MANAGEMENT

A few have incorporated risk management into their organizational culture and use it concept daily. Risk management is what you do to prepare for the unexpected. But how do you do prepare for the unexpected-it’s unexpected? Donald Rumsfeld’s ”Unknown unknowns” speech offers an explanation:

Reports that say that something hasn’t happened are always interesting to me, because there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns-the ones we don’t know we don’t know. And if one looks throughout the history of our country and other free countries, it is the latter category that tends to be difficult one.

Rumsfeld went on to say, “The absence of evidence is not evidence of absence, or vice versa.” He explained on this in a speech at NATO Headquarters in June 2002:

There’s another way to phrase that and that is that the absence of evidence is not evidence of absence. It is basically saying the same thing in a different way. Simply because you don’t have evidence that something exists does not mean that you have evidence that it does not exist. And yet almost always, when we make our threat assessments, when we look at the world, we end up basing it on the first two pieces of that puzzle, rather than all three. 

So PM's who skip the risk management process spend lots of time firefighting on problems that could have been avoided.  On even a small project we can undertake a simple 3-step risk management process, investing as little as one hour and possibly saving days of lost time. We start by identifying 2 to 4 risks than do a "quick and dirty" assessment of the risk's potential impact. Then we plan our risk response to mitigate or eliminate the risk. 

It's easy and must become a part of our project management methodology.