Managing Capital Projects Life Cycle Stages: The Project Design Stage

For capital projects, the design stage is crucial for the project success as the different end user requirements are captured to be developed into design drawings, specifications, contract agreement and bill of quantities for which the qualified contractors can bid on to execute the project’s scope of work. It is during this stage where the project realistic completion date can be established as well as the project investment budget can be finalized. In addition, the risks identification and mitigation actions will be performed during the design stage to ensure not only enough contingency been allowed in the project’ completion date and budget but to ensure that the contract agreement terms and conditions incorporated the clauses to transfer the risks to the successful contractor.

Performance Schedule

Using the WBS levels developed earlier, the project management team needs to develop the project delivery schedule which in a way reflects the strategy that the organization wants to execute in achieving the final project product that will generate the target revenue to attain the desired return on investment. During the design stage, the project schedule will be continuously detailed and updated to reflect the project scope development and additional information that will become available for the project management team.

Although it is very common to user Oracle Primavera P6 for developing the project schedule, nevertheless, it is very important to capture the schedule data into the PMIS as it needs to be extracted with the other project management aspects administered and managed using the PMIS. Therefore, the project schedule data will be imported into PMWeb to become available to other project management processes.

Project Performance Budget

By nature, every capital project is an investment. It is very critical that new cost estimates are developed at the end of each phase of the design stage. For example, cost estimates need to be done the concept, schematic, 30% design development, 60% design development, 100% design development and construction documents phases. Each cost estimate version should be formally reviewed and approved.

The approved cost estimate will be the basis for generating the project budget. The budget will include provisions for contingency, management reserve, funding among others. Similar to the cost estimate, a performance budget should be generated at the end of each design phase which needs to be formally reviewed and approved. One of the key requirements for the performance budget is to develop planned spending for the approved budget where each budget cost center will be linked to the project schedule to identify the start and finish dates of those items.

When the budget is approved, any adjustments or transfers must be done through a formal process known as the budget requests. Through this process, any increase or decrease to the approved budget needs to be detailed and formally submitted for review and approval. This also applies for budget transfers where funds will be moved between cost centers but without increasing or decreasing the approved project budget. As an example, this could be to transfer funds from contingency to concrete works.

The integration of project schedule and project budget will enable the project team to report on the project schedule and budget performance. The reports can be designed in the format that the organization along with the project team can best use to ensure that there will be no delays to the project target completion date and no increase to the approved project budget.

Project Document Management

During the design stage, there will be a lot of documents that will be generated to detail the project scope of work that will be made available for qualified contractors to bid on. In addition, there will be a lot of documents that relate to the meetings, permits and other communications that took place between the different project stakeholders to define and approve the project scope of work. PMWeb document management repository will be used to create the folders and subfolders to upload and store those electronic documents.

For the uploaded documents, attributes and other important details of each document can be added. Uploaded documents can be viewed online as well as marked with comments. PMWeb will allow the user to search for uploaded documents including the content of those documents if they were readable. In addition, the option of checking out and checking in documents is important to maintain track of all document versions.

Communication Management

Project communication is not limited to the design stage but actually it starts from the first day a project idea is incepted. Nevertheless, what makes communication unique and of great importance on a project, is that most communications are formal communications between the different parties of the entities that will be involved in delivering the project. There is predefined type of formal communications that are common to the engineering and construction such as Transmittals, Meeting Minutes, Request for Information, Correspondence among many others. One of the best practices in project management, is to have what is known as Responsibility Assignment Matrix (RAM) to list those communications and what entities will be responsible for submitting, reviewing, approving and sharing those project communications.

This will enable the project team to define the workflow steps that need to be followed by the different project entities to ensure successful yet contractually binding collaboration. Those workflows will include conditions to ensure that level of authorities to approve communications is part of the automated workflow.

By automating project communications, the project team member as well as other entities involved in delivering the project will have real-time report of all actions that are due for them as well as the status of those project communications. The report can be designed to identify delayed project communications are red while those that are critical by not delayed as Cayan and non-critical non-delayed communication as Green. The report can also include visuals to group communications by status, type and the issuer.

Risk Management

By nature, risks are part of every project delivery as it is about to delivering products in the future based on what is known today. Therefore, the project team need to make many assumptions to allow for those unknowns. The best practice of Risk Breakdown Structure helps the organization in enforcing a formal process for identifying project risks which could be due for many causes. For each risk, the project team member needs to identify the likelihood and impact that this risk could have on the project’s completion date and approved budget if it actually happens. This will help the organization to identify possible response actions to reduce the exposure of this risk. Those response actions include avoiding the causes of the risk, treating the impact of the risk and transferring the risk to a third party which could be the contractor for example. Managing project’s risk is an ongoing process and will continue until the project is completed.

Stakeholder Management

Managing the stakeholders who could directly or indirectly influence the project’s successful delivery is very critical. The project team needs to identify those stakeholders and get them engaged in the project’s delivery in a positive way. This would require sharing important project information that matters most to those stakeholders in the form and format that is best suited to them. Those could be in the format of logs identifying actions needed from their end or dashboards that detail the performance information that they want to be made aware of.

Design Deliverables

The project owner needs to ensure that the engineering consultant is delivering the design stage scope of work as planned. PMWeb design deliverables module will be used to capture the details of all design deliverables as per the design services agreement scope of work and the status of those deliverables. The design phase performance report will provide details on the status of those deliverables and their percent complete and if they have any impact on the design stage milestone dates.

Value Engineering

With the growing demand to improve the value of capital projects investment, the best practices of value engineering become a must to be part of any project delivery. The engineering consultant along with the project owner’s project management team need to formally implement the value engineering workshops to identify ideas that could improve the overall project life cycle cost. Those would result in VE proposals for which the advantages and disadvantages of each needs to be analyzed before deciding on either accepting or rejecting the VE proposals. PMWeb custom form builder will be used to capture all VE ideas and their evaluation as well as VE proposals with their advantages and disadvantages. This will not only ensure that VE best practices are formally implemented but will capture the VE knowledge across all projects delivered by the organization and make this knowledge available for future project investments.

Similar to other project life cycle stages, the project team needs to adopt the stage gate best practice to formally confirm that the SMART deliverables of each phase within the design stage had been formally submitted, reviewed and approved.