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Construction Management or Contract Management?
- 1. Construction Management or Contract Management? October 21th, 2010 “Construction software built by the industry, for the industry.” www.digitaltimecapture.com
- 2. Speakers Scott Cuthbert, CMA Chief Executive Officer Nick Mizera, CET VP of Operations www.digitaltimecapture.com
- 3. Industry Best Practices 1. Project Alignment & Integration 2. Scope Management 3. Safety Management 4. Quality Management 5. Cost Management 6. Schedule Management 7. Human Capital Plan 8. Communication Plan www.digitaltimecapture.com 9. Risk Management 10.Procurement Plan 11.Dispute Resolution 12.Performance Management a. Know the contract b. Speak your customers language c. When you don’t know seek clarification d. Report/Communicate all work
- 4. Project Alignment & Integration • Internal Project Execution Plan & Checklist – Scope, Estimate & Schedule Review – Budget & Cost Control Set-up • Project Readiness Assessment • Client Kick-off Meeting www.digitaltimecapture.com Construction Industry Institute Research – Alignment & Integration = 20% decrease in cost & 30% improvement to schedule – Scope = 4% improvement in Change Management & 2% improvement in Pre-assembly
- 5. Kick-off Meeting www.digitaltimecapture.com Kick-off Meeting Understand your customers expectations Understand their interpretation of the contract Kick-off is the start of communication not the end Involve the right people (Project Admin) Ask Questions Set the tone for an open dialog Kick-off Checklist
- 6. Communication Building Blocks www.digitaltimecapture.com Client W B S Project WBS Development • Project Description • Overall Scope • Work Elements by area by discipline • Activity Definition • Progress • Reporting Format
- 7. Communication Building Blocks www.digitaltimecapture.com Client W B S Lessons Learned? Why do scheduling specification get ignored? – Mistrust / Reliability of Tool in question. #1 Develop & regularly use a tracking & appraisal system.
- 8. Increase Approval Rating www.digitaltimecapture.com “Seek first to understand and then to be understood.” – Stephen Covey • Understand the Contract • Speak the Language - WBS • Open Communication
- 9. Manage Changes in Scope www.digitaltimecapture.com • Project Scope & Objectives are understood • Project WBS is clear and logical • Timely & accurate information • Make sure everyone has the same information • Change logs, Separate Cost Codes, identify RFI, SI, NCR, etc. • No Ambiguity – “Owner would like”, “Engineer Requested” • Identify impact on schedule as well as budget • Confirm payment provisions
- 10. www.digitaltimecapture.com “Scope” Management Contractor Operations Contract Admin LEM & E Classification Rate UoM Quantity Budget
- 11. Reporting Everything www.digitaltimecapture.com Express Contract Provisions – A provision that is plainly written in the text of the contract. Implied Contract Provisions – Provisions that come from long-standing or commonly held understanding that come both from the customs and practices of the construction industry and from past decisions of the court.
- 12. Manage Approval Process www.digitaltimecapture.com Approval Process is multi dimensional. Multiple elements to each transaction.
- 14. Construction Management or Contract Management? “Construction software built by the industry, for the industry.” www.digitaltimecapture.com Where does DTC fit?
- 15. The Foundation www.digitaltimecapture.com Estimate/Schedule Financial/Payroll Work Breakdown Structure (WBS) Financial Chart Field (G/L) WBS mapped to Schedule & GL Actual to Plan
- 23. Contact Me Scott Cuthbert Chief Executive Officer scott.cuthbert@digitaltimecapture.com Digital Time Capture Inc. Suite 201, 9644 – 54 Avenue Edmonton, Alberta T6E 5V1 Direct: 1.780.454.3301 ext 223 Mobile: 1.780.221.6737 www.digitaltimecapture.com
- 24. Thank you for attending www.digitaltimecapture.com Follow Us on LinkedIn and Twitter
Notas do Editor
- Thanks you for taking the time to join us today we truly appreciate your participate and look forward to your feedback. In today’s market it goes without saying that construction companies need to be expert builders. But the need to be expert administrators is often over looked.
- Scott – PCL & KPMG Consulting, Co-Founder of DTC Nick – Altair Contracting, Constructive Strategies, beginning Thanks Michelle Klopstra our marketing specialist for organizing the webinar. Today’s webinar will be made available on our website. Also watch for some of the best practices checklists I will be referring to throughout the presentation as we will also be posting them on our website. Project Review Checklist Project Readiness Assessment Project Kick-off Agenda & Checklist
- Volumes upon volumes of Best Practices Everyone had their own Flavour Today’s focus will be on a few key learning's around Project Alignment & Integration and Scope Management. From the Contract Management perspective.
- Success of a project is directly linked to meeting stakeholders expectations, and failure is linked to communication breakdown. – Francis T. Hartman (DPBO) Good constructors fail because inability to communicate. It is easy to be aligned but much more difficult to be integrated. The contract defines the details of how the relationship between the owner and the contractor will work. Therefore the contract is key to project integration. Are your people and systems organized and able to integrate? Bring admin into the processes as early as possible. It is important to understand the internal stakeholders expectations as well as the customers expectations. Understand the contract and assumptions from your companies perspective first is the best starting point.
- Sending the PM won’t set you up for success. Seldom if ever are all aspects of the project accounted for day one in the contract. It’s important to set the tone for open communication and establish who your key contacts are for operations, contract admin and finance. #1 – Ensure there is a kick-off meeting #2 – Ensure the project admin are in attendance as well as the operations. (typically we invited once there is an issue) Fundamentally Business is based on relationships the better (more clear more open) the relationship the easier it is to transact with each other.
- The project plan/schedule is the baseline for managing and measuring progress and performance. Don’t expect the owner to take the time to understand your internal coding. It won’t matter if you are performing the work according to the plan if you can’t clearly substantiate actual performance. Speak your customers language and rise above the competition. Owner - Wanted level 4 detail but learned to live with level 2.
- During the project lack the discipline to accurately manage the schedule or measure progress. In hind sight – the number one “Do Over” is develop and regularly use a tracking & appraisal system. If you are able to provide accurate, timely information analysis can be performed and corrective actions can be made. If the information isn’t meaningful it will be ignored and you’ll look back and wish you had done a better job.
- Alignment – you are all working towards the same objectives. Integration – if you understand the commercial terms, the intent of the contract and you know who to talk to regarding your questions. You are in a very good position to effectively resolve issues and challenges as they inevitably arise. Why do some relationships work and others do not. If you are known as a contractor who proactively works with the owner to resolve issues – you will typically get the assistance you need. If you are known as the contractor who throws information over the fence you will be waiting a very long time before you hear back. Know your role regarding Contract Management – restaurant.
- No matter how well the project has been planned there will be changes to the scope. The best approach – don’t perform the work until the proper authorization has been granted. The reality – the work is completed before it is approved. #1 - Report all work – approved or pending and even rejected (come back to this) #2 – Document, document and document Unreported hours - Significantly distort schedule/performance if not reported
- Not always understood is there is the scope of work being performed and there is the scope or terms of the contract. New equ, or class – if it’s not in the contract it’s a change to the scope. Operations may be directing and signing off on the work performed But it is contract admin that ensures the work conforms to the terms of the contract as they are responsible for controlling change management process. You can’t just perform the work you also need to adhere to the contract and follow the change management process.
- Why report everything Reporting the work - Arguably provides contractual notice (if you file it in folder under pending approval it’s no help to anyone) Field level approval – provides acceptance of the work performed Contract perspective there are potentially still many details to address – authorizations, classification, rate, UoM, Quantity, Coded properly. Realize that not disputing the work was performed but rather questioning - was it performed in accordance with the contract and the change management process? If the work was completed before it was approved it’s probably the first time contract admin is hearing about it.
- Thanks you for taking the time to join us today we truly appreciate your participate and look forward to your feedback. In today’s market it goes without saying that construction companies need to be expert builders. But the need to be expert administrators is often over looked.
- We can import or mirror the WBS of the schedule and track actual labour, equipment and materials against the plan. We are able to update the schedule with actuals. We are also able to map to contractors internal systems and export labour, equipment and material information back to your job costing or payroll system.
- In addition to mirroring the WBS DTC also allows the terms of the contract to be set-up and automated.
- When using a rules based system to capture timesheet data you can begin to manage and measure your information. Summary of overall labour, equipment and materials. Organized by original scope or extra work. And grouped by pending, approved, submitted or rejected – these statuses are configurable to meet the specific workflow of each project.
- Statuses are configurable. Timesheets or even lines within the timesheet will follow along the required approval route.
- Just and example of DTC’s ability to break out the approval process by each individual line. One timesheet was submitted but two lines where “rejected”. Better to get 90% of the work approved and paid than have 100% of rejected and on hold.
- WBS that represents a change prior to formal approval. Can identify the relevant documents. Define the nature of the scope change (field instructions, contractor initiated, engineer requested, etc.) Project Type is configurable Can even manage the status of the folder to ensure it isn’t invoices or reported as approved work.
- WBS that represents a change prior to formal approval. Can identify the relevant documents. Define the nature of the scope change (field instructions, contractor initiated, engineer requested, etc.) Project Type is configurable Can even manage the status of the folder to ensure it isn’t invoices or reported as approved work.
- Our observation has been If you communicate in terms of the WBS clearly and openly Manage the complexities of the approval process As closely as possible follow the terms of the contract and change management process Report accurately and in a timely fashion You will be paid on time We know this is not always and easy task but we know from first hand experience there are contractor who are paid on time.