Four yrs ago i was watching Spain win the World Cup. Since then I've moved from Phoenix to Rockville, to San Luis Obispo, to Tempe, to VIctorville.... all in four years. And in that time I've worked on Hurricane Katrina size mitigation projects, combine cycle projects, Photovoltaic projects, Concentrated Solar projects and others. Did I plan it that way, not by a long shot, but I did plan on searching and pursing opportunities. That was my goal sort of speak and i stayed with it. To me thats what its about; not being afraid of the unknown and grabbing opportunities when they present themselves. Who knows what the next four years will bring. No body knows, i certainly dont. but I do know I plan to continue to stay true to myself by looking forward to the future and taking advantage of those opportunities. Let the chips fall where they may and lets see where we're at when the next World Cup comes around in 2018. It should be fun!
The average person spends 30mins in the car commuting to work and another half hour on the way back. Thats 1,250 hours in five years. Put those hours to good use and learn by listening to audio tapes of topics you're interested in.
It’s typical for projects to be driven by a "critical path" method of scheduling, in which the project itself is broken down into simpler, manageable activities, necessary to complete the job. All activities are identified and sequenced with durations, establishing a critical path with a project end date. Critical path activities must be started and finished on established dates or the completion of the project will be delayed. Activities that do not fall on the critical path are sometimes given longer durations than actually necessary; building a type a “cushion,” and or “buffer,” in the schedule to help mitigate against project unknowns. This is called float. Float is the period in an activity between the earliest possible start and the latest possible finish, minus the duration of the activity itself. If the duration of the activity is longer than what the available float allows, the activity then becomes part of the critical path and it will very likely impact the end date of the project if the issue is not addressed.
Fortunately, not all activities on a project are typically on the critical path, especially on a large project; they can’t be, and if they are, run away fast and far from that project because it will never succeed. It’s not possible to schedule a project with several thousand activities and expect the outcome to turn out exactly as planned. Some activities are going to take longer while others will take shorter time to actually complete. A schedule with float designed within it allows for a contractor or owner to adjust without affecting the project’s end date when things don’t pan out as planned. As a result, it becomes important who owns the right to control float.
So who owns float? Who gets to choose what to do with the "cushion" that is designed into the schedule, or is created when an activity takes less time to complete than originally planned? The Owner will argue float must be theirs since they're paying the bills; they're at most risk if the project is not completed on time. If the owner has control of the float, then he would have the right to delay any activity in the project and consume the float at his will, without liability to the contractor. This could result in several additional expenses and/or affect the performance of the project. Some owners think the contractor must always work towards the early date schedule of each activity. In practice this would never work. There are too many uncertainties with resource peaks and valleys throughout the project cycle. If the contractor owns float, however, then he can control the time and sequencing of activities that are not on the critical path. Float allows the contractor to manage and level out resources over times and the contractor can accommodate changes and delays to the maximum extent possible, thereby mitigating the owner's cost and schedule impacts. It is in the projects best interest if the contractor is allowed to do his job, complete the project as he has planned, with anticipation of uncertainties and the use of float.
Ownership of float can be settled clearly in contract negotiations and provisions. The Contractor should take extra care in bargaining towards the ownership of the float in contract negotiations. Float permits the contractor to diminish peaks and valleys of resources during execution of the project. Facing clear allocation of float towards the owner, the contractor should consider preparing the schedule to have minimal float so that he has more control over his activities and of the project. Any delay or disruption by the owner will allow the contractor to obtain compensation with greater ease.
Mohammed Taher Netarwala • The commnest Attribute is scope creep. Doing things not under project scope leads to cost over run. Normally it starts with one small request. But this small small request add up.
Samer Zawaydeh, Msc, PMP, AVS, Mentor • Here is a quick list:
1. Poor Estimates
2. Not reading between the lines
3. Poor Project Management
4. Changes in management
5. Inefficient uses of material
6. Increased prices
7. Unforeseen Events
With kind regards,
Francis Moyalan Varghese,PMP • Scope creep shall not be a contributing factor for any cost over runs, if contract is administered professionally. The contract conditions should be checked initially to see whether it clearly stipulates the way forward for claiming any additional works beyond the main contract scope.
Diligent contract administration including timely notifications to the client for any Instructions and later claiming additional cost will prevent any cost overrun.
Hence in line with the above situation, I strongly believe lack of vigilant and apt contract administration can be a cause of cost over run.
Kul Uppal, PE, CEP • Major factors for cost over-run on any project are:
1. Scope of work not well defined
2. Basis of estimate is not available
3. Poor Cost Control
You can add lot more factors to this list but these three pretty much determine the outcome of the established bottom-line.
Ricardo Borges • Samer and Kul's list are good. I would like to add the following:
- Poor project team and lack of roles and responsibilities definition
- Management of changes (either scope or design changes)
- Lack of project controls
- Poor FEL
- Lack of PEP - Project Execution Plan
Alexia Nalewaik, CCE FRICS MSc • Here's a top ten.
1. have a risk mitigation strategy in place
2. forecast cost to complete
3. resolve change orders and prevent them from becoming claims
4. respond to and close audit findings
5. conduct diligent contract administration
6. generate timely, accurate and relevant cost reports
7. implement strong project controls and internal controls
8. establish and periodically review contingency and reserves
9. conduct periodic audits and risk assessment
10. include strong contract language that establishes the contract administration, change and claims processes, allowable & unallowable costs, and more...
Douglas W. Leo CCC CEP FRICS • good comments... put as a whole certainly covers a good overview of the problem. Let me add, lack of integrated project teams, teams that keep swapping out members, lack of any constructabilty reviews, teams too busy to meet at the front-end of the project cycle and teams who just throw info over walls at each other.......,
Ahmed Syed • From the perspective of developing institutions, there are other factors too such as government fiscal policy of changing the import tariff on certain capital goods (plant and machinery) and cost of capital the funds providers change during the disbursement period per monetary policy of the Central Bank. This is usual practice in case of developing world where the government run out of income and looking for further avenue to narrowing down the budget deficit. The victim of course, the project which are in progress of implementation, keep incurring this unforeseen cost.
Ty Keith • Procurement, procurement, procurement! I've been on many jobs that do not get key pieces of material on time. The contractor is forced to figure out a less than optimum work-around or postpone that work until the material/equipment arrives.
Without a good procurement department the project team can try having the project scheduler track material delivery but that often has it's challenges.
I've even seen instances where eveyone thought the material was ordered and on it's way, only to find out too late that the order was not placed or held up somewhere in route. And, I've seen wrong material/equipment arrive on site which forces a re-order resulting in more lost time.
Sometimes it is the contractor's fault and other times it is the project owner's fault. Irregardless; there needs to be a better way!
Glenn Counts, MBA, PMP, EVP • Kartik,
From my experience, the factors that contributed most to cost-overruns were 1) an unrealistic baseline (or no baseline), 2) incorrect tracking of cost (i.e. tracking actual vs. planned cost), and 3) inability or reluctance by the project team to enforce change control.
It all starts with number 1, a realistic baseline; the project team has only one opportunity to get this right - at the outset. It’s unfortunate to see so many projects fail just as they are getting off the ground….
Tony Barrett • In my experience, cost overruns are usually the direct result of top-level scope creep a/o schedule overruns. Whether the cost overrun is labeled as a scope or schedule issue is simply a result of the contracting mechanism employed. The root cause of either is generally attributable to a "ready-fire-aim" contract start with no realistic attempt to get a performance measurement baseline in place.
P. S. The corollary to this is: if there is a mutually agreed to performance measurement baseline in place, a later attempt by either party to enforce a cost overrun issue disappears.
Eric Jubert • Kartik, I couldn't come up with just one reason; in my humble opinion, its two top level ones. Initially, its the failure to plan all relevant work and account for all costs. Secondly, its a lack of true cost & schedule integration thereafter... One feeds off the other, even in fixed cost scenarios.
Raphael M Dua,FAICD, MACS Snr, PCP, CP, GradDISC • Folks
My long time experience covers all of the above suggestions and what happened.
IMHO the basic reason for project failure on some projects and not on others is the quality of the Project Manager, The PM Capability maturity of the contractor itself, operating a "best for project attitude", keeping subbies on side by not only paying them on time, but listening (communication!) to them.
I have been saved on more than one occassion by a sub contractor spotting potential problems and getting them fixed before they cause the project to go pear shaped
Matthew Baker • Kartik,
All of these projects that go into cost overrun have a lot in common. They tend to get stunted in the beginning with a bad estimate. Then, mgmt arbitrarily leans on pre-conceived budget amounts and milestone dates that are unrealistic and have no quantifiable basis. The whole time this is going on, no one is really communicating reality. Changes are poorly tracked, if at all. Then when all the smoke clears, the project finishes up over budget and behind schedule and everybody's scratching their head saying 'How did this happen? Who's fault is it?'
When you fail to plan, you plan to fail!
Kul Uppal, PE, CEP • Matt,
You have hit the nail on the head - first bad estimate followed by pre-conceived budget amounts by management and poor to non-existing cost controls - you are set-up for failure because of no planning. Well said.
Nick Papadopoulos • Blow the estimate and no cost management, risk management or project management tools, processes or talent will save you. The estimate will set up the construction team for success or failure.
Elena Sandoval • The much common aspect that I have usually seen is lack of information concerns with the real cause of deviation so that management decisions are focused in errors mitigations actions which do no attack the real cause of problem. Other typical aspect and quite related with the first mentioned, it is a budget bad structured and planned with an unreal database. When I mention that the database is unreal is because again it does not reflect the resource performance of the company whom is going to develop the project. As a resulted, the figures are based on cost and productivity false indexes. As a consequence, the budget will never guarantee all main aspects concern with time, productivity and cost of the resources to allow that the project funds will cover all expenditures and provide profits.
Poor quality of budget structure is also critical, in order to get the cost driver to understand well the process and focus the control and decision management process in risky activities to be overrun generating a reduction of the profits.
Mitigation concerns with budget structure is to define the correct work breakdown structure and cost breakdown structure to permit determining the critical activities and cost element where control system should be focused, to implement efficient corrective actions. Once the cost drivers are defined, it is easy to detect the real cause of deviation to evaluate its impact using EVA and give to management tools and useful information to implement corrective actions that would solve the problems by reducing o eliminating the cost impact of been overrun.
The real cost and productivity indexes will give to company a database of own performance to address if it is competitive doing the benchmarking and take the actions for enhancing the profits.
Lawrence Reinhart • Everything is manageable but the one thing almost everyone is guilty of doing is not communicating with all parties dealing with the budget. How many times have you been notified of plan or specification change(s) through an informal conversation? Oh and by the way the change took effect 2 weeks ago.
It has been my experience that communication, or the lack thereof, leads to one of the largest reasons a budget will have a cost overrun. As an Estimator it is our prerogative and our duty to be the gate keepers of the budget. Estimators are the brain and heart of any company because we feed information to both project management and (in my case) construction management. If the Estimator is not told of potential changes then how can your company work properly? Project management needs us to provide an accurate budget they can plan to and construction management needs our estimates to perform all the tasks required in the project.
Communication even extends to the people performing the work. If a field change is made on a project due to field conditions or incorrectly drawn plans then the Estimator needs to know about these changes, so the budget can be tracked accordingly. Any deviations from the plans and the estimate will lead to a cost increase. Far too often the Estimator is overwhelmed with office work and they can not make it to the field to watch the progression of a construction project. However, this doesn’t mean the Estimator shouldn’t make time. In fact, any good management team would encourage the Estimator to go to the field and see how the project is progressing. This has a multitude of benefits for the Estimator. It allows the estimator to compare their estimate to the way it was executed which helps the Estimator understand how their estimate is an integral part of the construction phase. This also allows the Estimator to make changes the next time this same type of estimate is performed. If the estimator assumed one thing and another was performed then it’s a learning experience. The installation of a structural slab can be performed differently throughout a region or other countries. If the Estimator doesn’t take this into account when performing the estimate then there will cost issues. However, this could be alleviated by communication with the construction management department because they are the subject matter experts.
Once again, it all comes down to communication. If key personnel are not communicating then a project will have cost overruns because each department wants to think they are more important than the other(s). In all reality, every department relies on each other and too often department managers seem to forget this when a project is under way.
As people, we make decisions all of the time. The things we say and the things we do are derived from the decisions we make through our daily lives. With that said, decisions are not always easy to make, especially when the necessary information is not readily available. And, unfortunately, there is no easy formula that one can use. The best you can do, when faced with a tough decision, is to approach it from as many directions and angles as possible and then pick an action that is reasonable and thought out. Try following these decision making steps the next you face a tough decision to get you in the right state of mind for making a balanced decision.
List your options. Even if your situation seems difficult to solve, try to make a list of all of the approaches to the problem. It is not necessary to analyze at this point, just simply brainstorm and write down the ideas that come to mind. Many solutions may seem crazy but the goal of this exercise is quantity and not necessarily quality. You can always cross off the ones you don't like later, but you may be surprised to find some ideas that are creative as well. If stumped, ask others for ideas. Sometimes, those not directly involved can think of things you may not have thought of.
Weigh the possible outcomes. For all of your alternatives, now list every possible outcome and label it as positive or negative. Simply assign a plus sign (+) next to a positive outcome and a minus sign (-) next to each negative outcome. Some people find it helpful to make a decision tree at this point, as shown above, which lays out every possibility in a graphical format.
· For every scenario, think about whether the best possible outcome is worth accepting the risk of the worst possible outcome. If the worst possible outcome is completely unacceptable to you, meaning that you could never forgive yourself if it happens, then you probably shouldn't make that decision.
· Assign a probability for each outcome with a percentage (e.g. there's an 80% chance of this happening, and a 20% chance of that happening). Your estimates must be based on experience, observation, or from outside help.
· Consider which option will encounter the most resistance and why. Significant difficulty in implementing a decision can sometimes outweigh the benefits of the outcome, depending on the situation. Other times, it's the most resisted decision that would make the biggest difference.
Make a decision. Hopefully, there will be a decision on your list that is backed up by both logic and intuition. The decision you choose must have more plus signs than negative signs, and it should have your intuition's approval. At this point, you should feel comfortable with your decision. If for some reason, the logic and your intuition don't match up clearly, ask for advice from people you trust. Their input can be a good tie-breaker. No matter which decision you make, be prepared to accept responsibility for the outcome. If things don't work out, it's always better to have made a conscious decision than to have been careless. At least you can say that you put thought into your efforts. If possible, have a contingency plan in preparation for any negative outcome. Always think ahead. The best decision makers aren't people who never make mistakes; they're people who hope for the best and prepare for the worst.
Evaluate your decision. This is one of the most important steps. If you don't evaluate your decision afterward, you won't learn anything from it. Ask yourself whether the outcome was what you expected. Would you do it again? What do you know now that you didn't know before? How would you turn this lesson learned into advice? By drawing insight and wisdom from every decision you make, you can ensure that every choice has at least one positive outcome.
Most everyone agrees, you need to network to find work these days. With unemployment as high as it is, networking gives job seekers the best chance in landing jobs, with some saying as high as 70% of jobs found are through connections made. A short time ago companies aggressively searched for talent. It took nothing more than posting your resume on Monster.com, and within days or weeks you would be at an interview. Those days are long gone and now it can take months to get the chance to sit across the table with a potential employer . There is no way around it, it's up to the individual to seek the companies out, to get noticed, to find the connections that will open doors to companies that lead to jobs. In todays world, its not what you know, its not who you know, but who knows you.
Unfortunately, networking doesn't come easy to many people. Oh, there are some crazies out there who thoroughly enjoy it , but I would argue a lot are uncomfortable doing it. If you're like me , you view going to networking events with no greater enthusiasm than an appointment with the dentist. Fortunately, I've learned, networking is a skill, and like most things, the more you practice the better you get at it. As a life long introvert, I knew I needed to read up on the subject so last year I picked up and read the book "Highly Effective Networking" to help jump start my networking activities. I am convinced introverts can be extroverts when necessary and this very informative, motivating, and inspirational book is a great resource to learn how. I highly recommend it to all, whether you are a seasoned networker or just beginning.
Below are some highlights from the book that stuck with me as I searched for work this past year.
What happens when there is misunderstanding and ambiguity in projects? You could potentially end up with very different project results as is illustrated in the cartoon above. It is not uncommon for clients, project managers and other stakeholders to have different perspectives on project requirements. This occurs frequently, and if not dealt with immediately, project haziness can quickly have a negative impact on a project. Nobody heavily invested in a project wants to see this, especially the client. To reduce the risk of ambiguity, gathering requirements must start early in the development of the project and occur often throughout the life of it. Clarity is the name of the game. Unfortunately this is easier said than done, and project managers will find that gathering requirements is one of the first big challenges they will face with their clients. Nonetheless, the importance of having a good process for collecting project requirements cannot be overstated. Project requirements are used to define scope of work and are the inputs for work break down structures. They are what deliverables, activities, and schedules originate from. For these reasons, project managers must have project clarity prior to planning, designing, building or executing any part of the project.
Clients are often good at expressing their wants but not their needs. In the swing project illustration, for example, the client only really needed a tire swing but explained as though he/she wanted something else. Project managers must always look for needs. A successful project starts with the knowledge of what the client really needs and ends when those needs are satisfied. If a project manager is not clear on what the client needs out of the project, don't expect him or her to know what it takes to complete it. More often than not, project managers have to prepare the client to have the attitude, commitment, and willingness to be involved because not all clients will be open and proactive in this process.
Here are a few tips for gathering requirements;
The City of Tempe recently celebrated the tenth anniversary of an amazing environmental project, the Tempe Town Lake. That was December 12th, 2009. Eight months later, Tempe Town Lake is no longer a lake but back to an empty riverbed as it was before. The culprit: one of four inflatable rubber bladders on the west end of Tempe Town Lake failed and released 977 million gallons of water (the equivalent of 50,000 swimming pools) down the river. Witnesses said it started with what sounded like a “large explosion”, followed by the rubber bladder collapsing and a surge of water, 8 to 10 feet high, emptying in to the salt-water river. Fortunately, no one was on the lake at the time and no injuries or deaths were reported. It seems fitting, however, a project with such difficultly getting off the ground and actually being built suddenly failing as it did. This incident just adds more controversy to an already controversial project.
The idea for Tempe Town Lake originated in 1966 from Dean Elmore of the College of Architecture at Arizona State University and his students. They envisioned building a series of locks and channels along the dry riverbed. They proposed refilling the channels with water, building sections of park and greenbelt along the rivers neglected banks and rehabilitating the surrounding ecosystem. After years of research, planning, political bickering and fighting the opposition, eight rubber bladder dams, each 16 feet tall and 240 feet in length, were installed along the river, creating a 2-mile long lake with over 220-surface acres of water. On June 2, 1999, water from the Central Arizona canal began flowing into the Tempe Town Lake and 30 days later the lake was officially declared full. Tempe finally had its lake... up until last month of course.
Interesting enough this incident should have been avoided all together. In 2009, Bridgestone Industrial Product, the manufacturer of the dams, urged the city of Tempe to replace the western dams because inspectors had found evidence of damaged material due to the scorching desert sun. Apparently, there once had been a plan in place to keep the rubber bladders constantly wet but for whatever reason it was never implemented. With no protection, the Inflatable rubber dams, once thought to last 25-30 yrs, had no chance under the intense Arizona heat. The unfortunate part of if it all is had the city of Tempe and Bridgestone officials not spent so much time arguing over who was responsible, the damaged dam could have been replaced way before it failed last month. Now it seems Bridgestone will shoulder the cost for repairs and the lake will be back open prior to Tempe’s Ironman event in November but what a shame it is to have this happen to the lake. It took so long for the project to materialize, from its origins in 1966 to finally being built in 1999, and it washed away (literally) so quickly. Its just another black eye for a lake plagued with controversy.
I see it as only fitting that the topic for my initial blog on this website is related to the Internet. The Internet is a fascinating thing, especially now with the increase use of social networking media. For better or for worse, these networking sites in recent years have made the world a bit smaller and our lives a bit more public. Yes, there are pro and cons for posting information about yourself on-line, but if used with the understanding that everything you post can be seen by anyone, anywhere, and forever, I for one see social networking media as a good thing. Facebook, LinkedIn, and Twitter allow us to freely express ourselves to the audience of our choosing in whatever way we desire. No doubt, the use of these sites has changed the way we communicate, the way we gain and pass information with one another. Social media allows us to easily and instantaneously get messages across to people and to get back in touch with those that were previously just memories. And even professional athletes, politicians, and celebrities alike are in on it, using social media to connect with people on a level that was not possible just a few short years ago. Celebrities communicating with the common man; It’s as if they are speaking directly to us (please note the sarcasm).
The absolute beauty of it all is that we are in full control of how we are perceived online. We create what is called an online profile, and many of us have multiple ones. In fact, in 2009, the majority of adults (52%) who used social networking media used more than one site.  Facebook is currently the most popular used online social networking site with over 500,000 million active users.  Among adult profile owners, 73% have a profile on Facebook. Fifty percent of active users will log on any given day and spend a total of 700 billion minutes on monthly basis. Forty eight percent who have networking site profiles have a profile on MySpace and 14% have a LinkedIn profile. 
Corporations are also using social networking sites to their advantage. PM Networking came out this month with an article titled “Hire Power”, discussing how companies are joining the social media to recruit talent. It was an interesting read, especially for me since I’ve consciously tried this year to increase my online profile exposure by publishing this website and with my LinkedIn account as a means to communicate with employers. Although social networking sites have been around for many years, recruiters just recently began using them to gather information on potential candidates. Companies can directly learn about candidates and contact them with essentially no cost to them what so ever. According to Jump Start Social Media, as many as 75% of hiring managers use LinkedIn on a regular basis to research candidates. Their method of recruiting is definitely evolving which means the ROI in online recruiting is very appealing to organizations.
Needless to say, there are many, many usages for social networking media and I think we have only scratched the surface. The common theme in all of it is we all want to be seen, heard, and understood by those important to us. What social networking media does is it allows that to happen among groups of people that in normal circumstances would not be possible.
 Danko, Jenn,. Hire Power. PM Network, July 2010. Project Management Institute.
My Personality Trait: