Posted by: Fred Soelter | December 15, 2009

Project Steps to Success

Most projects can be broken down into discrete stages. These stages are then able to be accomplished by either a specialist trained in that area, such as purchasing or construction, or it will at least allow you to retain some control over the project if you are performing all the steps yourself.

I won’t be discussing scheduling at this point, as that is a whole science in itself. I have broken down a project life cycle into seven separate parts, but I will talk about the first one last. Trust me, there’s a reason behind this…

2) Once a project has become a reality, the first steps are crucial, since they will determine the scope and detail of your project. The initial designs and plans will set the stage for the life of the project. Bad plans, bad project… good plans, good project! It only makes sense, but you would be surprised at the number of people who are not willing to take the time, effort and expense of having a good coordinated set of documents to start.

3) While designing and permitting your project, you should be estimating the costs by finalizing  your bids and contracting for the individual scopes of work. (We will discuss Scopes of Work in a future blog) This will allow you to get good hard numbers and also control your risk of future cost increases by contracting the work right now. It also doesn’t allow you to capture any savings if prices should go down, but I don’t think we will be seeing that again in the future.

4) During the purchasing process, it is critical to let each separate contractor have input into the schedule and also to have the schedule as a part of the contract itself. This gives the contractor some ownership of the project process and eliminates any disagreements over time for each task in the schedule.

5) By now you should have your project planned, approved, scheduled and purchased. Now you can start the actual project itself! This is where budget and schedule control are critical, and if you have proper documents and scopes of work, there shouldn’t be too many items that were left out of the original contracting. If each contractor performs according in the timeframe that they requested in the schedule and for the cost that they are contracted for, everything should come out perfect. But we all know that is never the case and there is always an unforeseen circumstance, or several, with weather being a prime culprit.

After the initial mobilization, intelligent and hands on oversight of the process is the key. There must be weekly meetings, submittals, approvals, permits, etc. and every step of the process requires someone to make sure that everything goes according to plan. A single point of responsibility is the best approach, because design by committee gets you an Edsel!

6) As the project approaches completion, there is a separate complicated process for project closeout. This is when all the various final approvals by State, Federal, County and City agencies need to be obtained. This part of the process should be an ongoing part of the actual project implementation, so that there are no surprises at the end of the project. All warranties, replacement parts, manuals, documentation and as-built final plans must be obtained while the contractors and design team are still engaged in the project.

7) Now the project actually starts to operate. All the little bugs and items that were ignored now come to light and a “punch list” of corrections needs to be made and the contractors held accountable for repairing these items, within reason. The end users, owner or lessee, now takes control and needs to be made happy if you ever want to do another project again. Anything that you think you will ever need to document this project, now is the time to get it, while everything is still fresh on everyone’s mind

1) And now back to the beginning… project concept and acquisition, or better yet, “Who pencils the deal?” It is a constant balancing act to reduce the costs and time so that the project pro forma shows a profit. But sometimes the person making the deal doesn’t have enough background in the nuts and bolts of actually completing the project to make accurate assumptions. And then the deal goes south.

To eliminate this, it is essential to have informed input during the initial concept stage. And as the project progresses to actually getting financing, there has to be accurate information in the proposal. The bank will know if it is actually feasible, or you may have to convince them a little… But if there is real world input into the costs and schedules, backed up by written documentation from the contractors, there shouldn’t be a problem on the operations end of the deal. But forecasting final sales prices over a year in the future, now that is an art!

Hope you enjoyed my random ramblings, Fred

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