Individual Habits in Projects

“Ninety-nine percent of
failures Come from People
Who have habit of making
excuses.”

- George Washington
 Crisis and Opportunity in Projects
“When written in Chinese, Word “Crises”
is Composed of Two Characters. One
Represents Danger, & Other Represents
Opportunity.”

John F. Kennedy
Calamity & Opportunity in Projects
“Optimist sees opportunity in
every Calamity, Pessimist Sees
Calamity in every Opportunity.”

Sir Winston Churchill

 Changes in Projects
“If you don’t change
directions you’re likely to end
up where you were headed.”

Confucius
 Part Three:The Implementation Plan

Time Chart & PERT/CPM for subsystems/Total

• (If Owner wants or Project Requires)
• To Avoid constraints violation
• Usages of estimates on Period by period
basis:
– Personnel
– Equipment
– Resource
• Major M.S –on Time Charts.
– Contingency Plans made
– Load Charts prep Ensure
– Critical Facility available
 Part Four: Plan for Logistics Support &
Administration
Log Support- Ability to Supply:
• Routine Facilities:
– Equipment
– Skills needed during Projects
Occasionally Required capabilities Provide: Touch of
Class which Includes:
a) Meeting rooms
b) Stenographic Assistance
c) Reproduction of oversized documents
d) computer graphics
e) Word Processing
f) Video Teleconferencing
g)Artist Rendering
h) Special signs
 Administrative Support (Part II)
• How Project is Administered.
1.Controls Sub-contractors
– How performance is insured /evaluated.
2. Nature & Timing of Reports:
a. Progress Reports
b. Budgetary Reports
c. Audits & Evaluations
3.Description of final Documents for Users
4. Termination Procedures Described
– Disposition of Project Personnel
– Materials & Equipments.
 Plan for Administration
Often Overlooked
Change Orders - Significant Source of
friction – lawsuits.
a) How Change orders handled?
b) How Costs estimated?
Owner rarely understands Chaos by:
- introducing seemingly simple change.
Proposer Mislead Potential Client about:
• Ease of “minor” changes adopted.
 Part Five: Past Experience
• Proposal Strengthened by Past Experience
of Group.
• Contains a List:
– Key Project Personnel/Titles & Qualification.
For Outside Clients:
– CV for each Principal
• Proposal's Basic Purpose is to Convince
a Potential Funding Group that Project
is worthy of Support.
 Relevant Issues in Competitive Bids
- Only Price
- Schedule
- Financial Stability
- Quality of Experience and Resources
- Financing Offer (if any)
Many Contract - On Negotiated Basis.
• Success Depend on Some/all of a/m features,

Two Other important factors:

(1) Interpersonal Relations with Prospective Client.
(2) Written Word in Proposal. Conveying Real Proposal
Message. Effective writing is essential.
Some RFPs including Evaluation System
a) Qualification of Proposed
Personnel/Project Manager up to 50%
b) Experience on similar Projects: 25-35%
c)”Work Plan & Approach”: 25-35%
 Post Proposal Strategies
- Continuous contact with Perspective Client.
- Quick Response /Answer to Questions.
- Demonstrate your Commitment to Project.
Postmortem
If your Proposal not selected:
• Determine:
a) How U Went Wrong.
b) How Competition Outdid you.
 Ingredients of a Winning Proposal
Message: -We Understand your Project.
-Owner’s “Real Wants”.
-Prepared to “Satisfy” them.
-With our Resources.
-Company’s Commitment.

Response: Complete & Direct Response:

a) RFP
b) Bidding documents
Client expects to address his requirements in Complete form.

Disclosure: “Company’s documents” of all relevant

organizations’ experience.
-Careful attention to CV.
-Rewriting CV-Emphasize Pertinent Experience.
Creativity: Something unique/innovative to set apart from
competition.
Price: Significant Factor in Competitive Bids.
Financing: An important Consideration:
-Even a Requirement.
-Bids adjusted by “Financial Terms” offered.
• “Product of “Price & Financing” determines “Bottom
Line”.
Style:
• Well composed
• Concisely written
• Logically organized
• Properly referenced
• Attractively presented
 Gleaming Proposal
• Be Reasonable & Chronological.
• Ensure Methods flow from Goals &
Objectives.
• Apply 5 Ws:
• What, Who, Where, When, Why & How.
• Be Concise—but Systematic.
• Use Simple Sentences & Bullets.
 Barrier against Effective Proposal
-Required Elements Missing
a) Budget Justification,
b) Vital support letters
- “Unrealistic Goals” & Objectives for Project.
-Needs Assessment not supported by Reliable Data.
-Information – based on Emotion.
-Weak Methodology – Not a convincing case for Project.
-Typos or Excessive Jargon.
-Scope is Too Narrow.”
 Typical EPC Proposal Contents
Content of “Cost Reimbursable Proposal”
Engineering, Procurement & Construction
(EPC) Services:

1. Introduction & Summary:

a) RFP Conditions summarized.
b) General Approach by contractor indicated.
-Recap Section of Proprietor:
- Helps to Clarify Contents to:
- New Readers.
- Introduce method for material
presentation.
 Typical EPC Proposal Contents
2. Project Description (PD):
Source:
a) RFP
b) Information by site visits.
c) Prebid conferences.
d) Contact with Owner.
e) other knowable sources.
PD Indicates:
a) Battery Limits of Project.
b) Specify weak items by Owner (not
includes in contractor’s scope of services).
 Typical EPC Proposal Contents
3. Scope of Services:
What Services Contractor Will Provide.
-Services to be Performed.
-Documents to be Produced.
-Services Defined.
-Should not be Open Ended. (even in
Reimbursable Cost Prop)
-Services Listed According to:
– Division of “Project Organization Assigned
Responsibility” for that work.
 Typical EPC Proposal Contents
4. Work Plan (WP) & Schedule:
WP Delvped:
a) BY Stated Objectives of owner.
b) Defined by Sales Representatives.
c) Objectives of contracting firm.

•It Gives Strategy for achieving these

objectives in performing “Scope of
Activities”.
WP Consists of:
a) Sequencing Work Activities
b) How activities Executed.

WP Assumptions:
– Spelled Out Carefully.

Presented in Graphic form

-interrelationship between various
Activities.
 5. Project Organization
Describes Two things:
a) Proposed Project Organization.
b) Responsibility of Key Member.
Organizational Chart depicting Project Team drawn.
Standard Project Organization made to:
a) Best Respond to Particular Owners Organization.
b) Interface required by RFP.

Analyze-Type of Organization suited to Job Requirement?

Task/favors by owners

-Helps contractors/Project Manager to maintain:

a) Over Time Charges.
b) Personnel Assignments.
 Project Organization
•Interface with “Supplier of Technology
Defined.”
•“Technical Review Responsibilities”
Assigned.
-Incl CV of key Personnel (Two pages):
-Indexed or
-In Alphabetical order

If Lengthy then Placed in Appendix.

 6. Estimates, Hours, Cost
Estimate Preparation Based Strictly:
a) ”Scope of Services.”
b) Work Plan
c) Proposed Schedule.
Consolidate Various estimates from
Sources Charged –Final Cost estimates
prepared for Work.

Confidential Cost Data - Estimated by:

a) Corporate Estimates.
b) Financial group.
 6. Estimates, Hours, Cost
Supported by Manning Chart:
No of People by Discipline.
By Pay Grade.
Salary Ranges for each Pay Grade.
Cost Estimates include:
-Direct Salaries for:
–Technical Personnel
- Non-Technical Personnel
-Indirect Costs includes:
Travel
Communication
Computer use
Reproduction
 6. Estimates, Hours, Cost
•Preliminary Estimates of Total Project Cost
Required to:
– Check Validity of Cost Estimates for Services.

•Estimates Using “Standard Code of Accounts”

for Contractor.

Unless “Owner’s Code of Accounts”.

Consolidated Estimates Reviewed by:

a) Senior Project Members.
b) Representatives of Management’s Delegated
Authorities.
 7. Compensation
•After Estimate is Reviewed, compensation is reflected in
Proposal.
•“Commercial Term” Finalized by Adding Discretionary
Figures:
a) Burdens
b) Contingencies
c) Overlays
d) Fees required by format of bid.
T&C” for“Reimbursable-Type Proposal” Specify
compensation:
A) Through Payment.
b) Through proposed treatment of fee.
C) Costs Incurred in Performance of
Services.
 7. Compensation (part I-Services)
Six Elements for Reimbursable Costs:
1. Salaries/wages & Percentage for Payroll Burdens.

2. Commercial Terms 4 compensation of:

(a) Job shop
(b) Contract Personnel (Non regular employees of
contractor).

3. Percentage for Direct Costs to Cover Corporate

overhead:
1). Non-reimbursable selling.
2) Administrative & Management Costs of
Contractor’ Organization.
 7. Compensation (part I-Services)
4. Out-of-Pocket Costs for Outside services.

5. Costs –incurred in issuing Purchase orders

(not otherwise reimbursed).

6. Payment-
a) Traveling.
b) Living Expenses of Personnel on
assignment out of Contractor’s Office.
 Compensation (Part II Fee)
• RFP defines fee structure desired by owner.
• Type of Fee
a) Cover “Only Profit to Contractor.”
b) Contractor’s indirect costs.

• Preparation of “checklist” of “Reimbursable

Costs.”
Proposed checklist – If improper Potential Effect
on Profitability of Work.
 7. Compensation (Part III Payment)
• Schedule Terms – carefully determined - else Effect on
contractor’s Cash Flows.

• Set up systems of Advance Payments at pre-determined schedule.

• If Timely received, will help contractor.

• Will not finance from- “Borrowed Money.”

• Major Equipment & Building materials not Purchased by

Contractor.

• “Change Order Formula” included in Proposal.

 Qualifications
• Contain all relevant material in proper manner-
To Strengthen Confidence to Contractor’s
Capability in the “Mind of Owner”.
• Material from “Old Files of Contractor”.
• Reviewed to make sure info presented:
– Accurate
– Pertinent
– Forceful
• Proposal Manager should not stint on the editing of this section
of Proposal.
 Modifications to Standard Proposals
Many owners have Specific Format
Requirement Contractor Depart from
Standard Proposal Format.

Purpose: To simplify “Proposal Evaluation

Process” in owner’s offices.

Best to follow “Specified Format.”

Successful & Effective Management of Proposal
Requirement:
– Qualified personnel to propel Effort.
– Advance Preparation of Support Organization.
– Proposal information & data prior to Receipt of
RFP.
– Timing expected from Proposal Effort
– Close coordination between Proposal Manager,
Project Manager, Finance Manager & Senior
Management.
– Adherence to Realistic Publication Schedule.
 Winning Proposal

Wining proposal Requires:

a) Identification of things what owner really
needs.
b) Respond in sensitive manner about his
concerns.
c) Convince him –Qualify Most reliable to
Provide Best & Most Economic job.