Post on 29-May-2017
transcript
310-PROJECT MANAGEMENT
FACULTY:
Dr. CH. VENKATAIAHB.Tech, MBA, PhD
Associate Professor (Operations, Quality & Project Management)
PROJECT CLOSEOUTUNIT
V
CONTRACT MANAGEMENT & PARTNERING
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
A contract is a formal agreement between two parties
wherein one party (the contractor) agrees to perform a
service and the other party (the client) agrees to do
something in return.
A contract is legally binding.
It defines the responsibilities of both the parties and the
conditions under which it is operative.
It defines the rights of the parties in relationship to each
other and the remedies available to the parties in case
the other party breaches the contract and fails to
discharge its obligations.
Contract
4
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
Fixed price contract :
A price is agreed upon in advance and remains fixed as long as there are no changes to the scope or provisions of the agreement.
Cost plus contract:
the contractor is reimbursed for all or some of the expenses incurred during the performance of the contract.
Contracts - Types
5
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
Fixed Cost Contracts
The contractor agrees to carry out all the work specified in the contract at a fixed price.
The client can obtain a minimum price through competitive bidding.
Preferred when scope of the project is well defined, the costs can be estimated fairly accurately, and the project has low implementation risks.
Variations Economic price adjustment contracts. – Inflation clauses and /or
provision for price revision is included.
Fixed price incentive contracts – Incentives may be on a cost sharing ratio basis, schedule based incentives or performance based incentives.
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
The contractor is reimbursed for all direct allowable costs, like materials, labour, travel and so on and an additional fee to cover overheads and profit.
The fee is negotiated in advance and is usually in the form of a percentage of the total costs.
Cost Plus Contracts
7
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
It is a contract awarded to one or more
vendors to deliver supplies and services. It
may be in the form of:
Definite Quantity Contract
Requirements Contract
Indefinite Quantity Contract
Indefinite Delivery Contracts
8
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
Tenders
Tendering is the process in which a detailed specification of goods or services to be provided is circulated to a number of potential contractors.
The contractors bid for the work by providing a tender document that includes the price for the work, a timetable, and an explanation of how it will be carried out.
The tendering authority is free to select from the tenders supplied, though public bodies are generally forced to accept the lowest bid or the cheapest tender on grounds of principle.
Sometimes selection may be based on quality, reliability, projected speed of operations, and the track record of the contractor rather than the price.
The main focus through tender is on competition of price and quality.
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
Tenders - Types
Global Tender
Open Tender
Limited or Restricted Tender
Single Tender
Negotiated Tender
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
Tendering Process
Issue advertisements to the press/ magazines inviting expression of interest for the project.
Receive response to pre-qualification questionnaires from interested contractors.
Analyse pre-qualification responses and shortlist potential contractors based on selection criteria as stated in the advertisements.
Carry out negotiations or competitive dialogue with potential contractors identified in previous step. This may be required only in the case of negotiated contracts. In some cases even pre-qualification requirements may not be necessary.
Invite all contractors identified (after negotiations or competitive dialogue, if undertaken), to bid for the contract.
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
Tendering Process
A site visit for identified contractors may be arranged in case of projects involving construction or other work at site.
Receive filled in tenders from selected contractors along with earnest money as specified in the tender documents. Earnest money is a sum of money deposited at the time of submitting tenders to ensure the seriousness of the contractor towards the bidding process. The earnest money is refunded to unsuccessful bidders, while it is converted to guarantee money in the case of the successful bidder. Tender boxes for receiving tenders are sealed by the authority appointed for the purpose at the time intimated in the tender documents. Late tenders are not allowed to be put in the tender box.
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
Tendering Process
Open the tenders together at the place and on the date and time fixed for the same. Tenders are opened in the presence of bidders and the person opening them reads out the amounts quoted by each bidder. The opening authority makes a comparative statement and hands over the same to the contract section for their further action.
Evaluate the tenders against the award criteria.
Select the successful tender.
Issue contract to the successful contracting firm.
Inform the unsuccessful contracting firms about their non-selection.
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
Registration of Contractors –
Public Sector Undertakings and Govt Agencies
Constitution of the firm, its legal status, and partners
Immovable, movable properties and bank deposits held by the firm. This gives an idea about the financial standing of the firm and whether it shall be able to undertake the project with the payment schedules envisaged.
Turnover during last five years, balance sheets.
Valid ITCC
Performance from previous employers
Major equipment held
Qualifications and experience of key personnel
Information regarding litigations
List of works carried out in time
Engineers proposed to be employed and technical capability of the firm.
Whether proprietorship or partnership firm.
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
Contract Law
All contracts in India are subject to The Indian
Contract Act 1872.
Disputes settled through conciliation or
arbitration.
These are governed by the Conciliation and
Arbitration Act 1996.
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
Contract Closeout
The contractor gives a notice of completion to the client.
A joint inspection of the work is carried out after which the client also issues a completion certificate.
A list of defects to be rectified is prepared. The defects are intimated to the contractor, who then rectifies the defects.
The client should be informed of completion of rectification of defects by the contractor and a request made for performance certificate on satisfactory completion of defect liability period.
Once the client is satisfied that all defects have been rectified, the security performance guarantee sum is released to the contractor.
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
Partnering
A method of transforming contractual relationships into a cohesive, cooperative project team with a single set of goals and established procedures for resolving disputes in a timely manner.
The customer, community, consultants, prime contractor, major subcontractors, and suppliers form as one project team and cooperate, share goals, communicate openly and resolve issues speedily
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
Steps in PartneringThe steps involved in partnering are as follows:
1. Introduction
2. Preparation
3. Workshop
4. Application
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
PPP Project means a project based on
contract or concession agreement between a
government or statutory entity on the one
side and a private sector company on the
other side, for delivering an infrastructure
service on payment of user charges.
PPPs are being promoted for implementation
of infrastructure projects.
Public-Private Partnership (PPP)
19
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
BOT or BOOT is a form of project financing
wherein the private entity receives a concession,
that is the right to operate the business (for
example, a parking lot) from the government to
finance, design, construct and operate a facility
stated in the contract.
For instance, the new airports constructed in
India are being undertaken as BOT projects.
This enables the builder to recover investment,
operating & maintenance expenses incurred on
the project.
Build-Operate-Transfer (BOT) or Build-
Own-Operate-Transfer (BOOT
20
Project Close-Out and
Termination
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
Project Termination
All activities consistent with closing out the
project
Extinction
Addition
Integration
Starvation
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
Elements of Project
Closeout Management
Putting it All to Bed
Disbanding the Team
Finishing Handing Gaining
Acceptance
for the
Product
Harvesting
the Benefits
Reviewing
How
The WorkProduct
Over the
It All Went
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
Lessons Learned Meetings
Meeting Guidelines
Establish clear rules of behavior
Describe objectively what occurred
Fix the problem, not the blame
Common Errors
Misidentifying systematic errors
Misinterpreting lessons based on events
Failure to pass along conclusions
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
Closeout Paperwork
Documentation
Legal
Cost
Personnel
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
Why are Closeouts Difficult?
Project sign off can be a de-motivator
Constraints cause shortcuts on back-end
Low priority activities
Lessons learned analysis seen as
bookkeeping
Unique view of projects
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
Dynamic Project Factors
1. Static
2. Task-team
3. Sponsorship
4. Economics
5. Environment
6. User
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
Early Warning Signs of Project Failure
Lack of viable commercial objectives
Lack of sufficient authority to make
decisions
New product developed for stable market
Low priority assigned to the project by
management
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
Early Termination Decision Rules
Costs exceed business benefits
Failure to meet strategic fit criteria
Deadlines are continually missed
Technology evolves beyond the project’s
scope
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
The Top 10 Signs of IT Project Failure
10. Best practices and lessons learned are ignored
9. Project lacks people with appropriate skills
8. Sponsorship is lost
7. Users are resistant
6. Deadlines are unrealistic
5. Business needs change
4. Chosen technology changes
3. Project changes are poorly managed
2. Scope is ill-defined
1. Project managers don’t understand users’ needs
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
Project Termination Issues
Emotional Intellectual
ClientStaff ExternalInternal
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
Claims & Disputes
Two types of claims
Ex-gratia claims
Default by the project company
Resolved by
Arbitration
Binding
Non-binding
Standard litigation
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
Protecting Against Claims
o Consider claims as part of the project plan
o Verify stakeholders know their risks
o Keep good records throughout the life cycle
o Keep clear details of change orders
o Archive all correspondence
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
Final Report Elements
Project performance
Administrative performance
Organizational structure
Team performance
Project management techniques
Benefits to the organization and customer
Dr. CH. VENKATAIAH
Associate Professor
310-Project Management
Any Queries…???
35