TOPIC 3 PROJECT PLANNING

TOPIC 3

PROJECT PLANNING

• Meaning of Project planning
• Features of a good project plan
• Factors to be considered when planning a project
• Types of project plans
• Developing a project plan
• Constraints in project planning
• Techniques applied in project planning (CPA critical path analysis)

 

PROJECT  PLANNING.

One distinguishing feature of projects is that each is tailored toward some unique end-product or result. That uniqueness implies that every project has to be defined anew and a scheme created telling everyone involved what to do. Deciding and specifying what should be done is the main function of project planning.

A complete project plan in summary covers project requirements, works tasks, responsibilities of each member of project management team, schedules, budgets, actual project performance, time frames, cost breakdowns, corrective actions to be taken, project control etc.

The Project Manager has a personal responsibility of assembling all the finer details required to accomplish the objectives of a project in a systematic and structured manner.

 

Before generating a plan for the project, the Project Manager and the entire project management team must:

 

• Trace the origin of the set objective.
• Understand fully the reasons why the objectives were set.
• Understand fully the current status of the financiers of the project.
• Analyze and understand fully the risks associated with the achievement of the set project objectives.
• Involve all the key stakeholders in the design of the project plan right from the scratch.

 

Factors considered in project planning. 

• Availability of adequate funds to finance project activities.
• Availability of technically competent and ethical staff to manage the project.
• Adequate time to plan and manage the project competently including liability defect period.
• Steady market supply capacity for the materials and services to be incorporated into the project works.
• Need for compliance with the policies and culture of the parent organization and general interests of other key stakeholders.
• Need to embrace the best technologies and best practices in rolling out the project end-products or results.
• Need to comply with the legal and regulatory requirements in respect of project undertakings.

 

Developing a project plan.

• When planning for the project activities, the steps hereunder should be systematically followed:
• Analyze the project objectives, requirements and scope.
• Set the works activities and tasks that are required to achieve the objectives and break them down, define them clearly and list them down for ease of reference.
• Create the project organization and specify the reporting lines and specific duties of each project management team member.
• Prepare the work schedule clearly showing the timings of each work activity, deadlines and milestones.
• Prepare a budget and resource plan clearly showing the amount and timing of resources and expenditures for work activities and related items.
• Prepare a forecast of time, costs and performance projections for the completion of the project.

 

 

Qualities or characteristics  of a good  project  plan.

Projects with good plans stand higher chances of achieving the set project objectives, it is therefore the concern of the project management team to look into it that the developed project plan has the qualities desired. Precisely, a good project plan is likely to have the following features:

 

• Simple, adequate, clear and accurate for easier and more effective interpretation and understanding.
• Should provide realistic time frame, giving breakdown of each specific project activity.
• Should provide finer details of all the relevant skills required, specifying when such skills will be required.
• Should be comprehensive and exhaustive clearly indicating all the project activities.
• Should be capable of accommodating future changes without difficulty and interference with planned project activities.
• Should be capable of being monitored easily, quickly and effectively.
• Should be more cost effective and capable of eliminating waste expenditures to enhance substantial project cost savings.
• Should fully embrace and incorporate the most current technologies and best practices.
• Should be capable of rolling out end-products or results that are environmentally compliant and environmental friendly.
• Should incorporate project activities that fully comply with the legal and regulatory requirements and general interest of the society.
• Should be capable to deliver the results or benefits that will achieve the objectives for the project was initiated.
• Should comfortably accommodate multi-functional teams or committees.

 

Importance of project plans.

Project plans may be used for purposes of:

• Viewing the mix of projects within each illustrated aspect.
• Analyzing and adjusting mix of projects within each illustrated aspect.
• Assessing the resource demands on the parent organization, indicated by size, timing and number of projects proposed.
• Identifying and adjusting the gaps in the project categories, aspects, sizes and timing of the projects.
• Identify potential career paths for developing project management staff.
• Eliminating uncertainties or risks associated with the project implementation.
• Improving the efficiency of the project management team.
• Obtaining better understanding of the project activities.
• Providing the basis for monitoring, evaluating. Reviewing and controlling project activities

 

Types of project plans.

Generally, the following are the commonest types of project plans namely:

• BUDGET PLAN. These are the estimates of the expenditures to be incurred in implementing the project activities giving specific breakdown of a cost apportioned to a particular project activity.
• CONFIGURATION PLAN. These are the activities associated with project designs and project change control.
• FACILITIES PLAN. It lists all the physical operational facilities to be used in the course of implementing the project activities eg. Machinery, equipment, vehicles etc.
• LOGISTICS PLAN. It is a summary of all the activities both inbound and outbound that are necessary in facilitating physical movements of materials and staff, procuring the materials and services, safe and secure storage of materials and operational facilities etc. needed to implement the project activities successfully.
• MANAGEMENT PLAN. It is concerned with how the project management staff will be spread, their specific duties, roles and responsibilities and reporting lines.
• PROCUREMENT PLAN. Summarizes all the goods, services and works that are required for translating and transforming the project activities into reality.
• SCHEDULE OR OPERATIONAL PLAN. It is concerned with the breakdown of all the activities involved in the practical actualization of the project plan.
• QUALITY MANAGEMENT PLAN. It is concerned with appropriate programmes and practices necessary for assuring and re-assuring consistent quality of the project works.
• RESEARCH PLAN. It is a summary of the actions to be taken in scanning the market or industry for the best practices in managing the projects.
• TOOLING PLAN. It is a timetable of how the available operational facilities will be used at different times and different dates in executing the project activities.
• TRAINING PLAN. It is concerned with the appropriate arrangements for developing and building the capacity of the staff responsible for managing the project.

 

Contents of project plan or project plan work activities.

Before considering how to plan a project, we should decide why we are planning and what information the plan should address.

The project plan should be designed in such a way that the project outcome also meets the objectives of the parent organization, as reflected by the project portfolio or other strategic selection process used to approve the project.

A good plan should further include allowances for risk and features that allow it to be adaptive or be responsive to emerging events that might disrupt it while being implemented.

Finally, the plan should include any constraints on activities and input materials prescribed by law and society.

The purpose of project planning is to facilitate a formidable direction to project start to successful accomplishment. It is a complicated process to manage a project, and plans act as a road map of this process.                                                                                                                                               The road map should have sufficient detail to determine what must be done next but simple enough that project staff are not lost in a welter of minutiae.

The more time you spend planning, the less time you need to spend on implementation. Plans are only good intentions if degenerated into hard work.

The process of developing project plans varies from one parent organization to another, but any project plan must contain the following basic and core elements:

• Overview of the plan. This is a short summary of the objectives and scope of the project, together with the lists of the significant events in the proposed project. It also addresses the expected benefits or profitability and probable technical hitches. It is typically directed to the top management and contains a statement of the goals of a project, a brief explanation of their relationship to the parent organization’s objectives, a description of the managerial structure that will be used for the project and a list of the major milestones in the project schedule.
• Objectives or Scope. This contains a more detailed statement of the general goals or project deliverables and outcomes noted in the overview for the purpose of communicating to project team members and other stakeholders to make decisions that are consistent with the proposed project expectations. Such statement should include profit and competitive aims as well as technical goals.
• General Project Approach. It describes the managerial and the technical approaches to the project work, including plans that go beyond the parent organizational standard management practices. The technical discussion describes the relationship of the project to available technologies. If consultants and sub-contractors are to be engaged without special approval, it should be clearly made known in advance.
• Performance plan. It includes a complete list and description of all reporting requirements, customer-supplied resources, liaison requirements, advisory committees, project review and cancellation procedures, propriety requirements, technical deliverables and their respective specifications, drawings, special instructions, lead times or delivery schedules, incentives for exemplary performance, penalties for non-compliance, specific procedures for making changes in project contractual obligations, payment modalities and any other specific management agreements.
• Payment modalities. The conditions that must be met before any payment is made should be clearly specified.
• Quality management practices. Safe-fail tests required to ensure right and consistent quality levels should be clearly specified.
• Warranties and guarantees. Performance commitment required to assure and re-assure competent implementation of the project activities should be clearly specified.
• Schedules. It outlines various schedules and lists of all milestone events. Each task is listed and the respective estimated time apportioned to it including specific staff responsible for each of such tasks are identified.
• Human Resources. It lists the expected staff technical competences including special skills, types capacity building required, possible recruitment challenges, legal or policy restrictions on work force composition, security clearances, confidentiality protection, protection of intellectual property rights. It is helpful to time-phase personnel needs to the project schedule.
• Financial and Other Resources. Details of both capital and expense requirements are provided. One-off budgets are separated from recurring project costs. Cost monitoring and control procedures should also be provided adequately. Special resource requirements for the project such as special machines, special equipment and other special physical and non-physical facilities should be fully covered.
• Total project cost. Specific cost breakdowns for all the project activities required to implement the project competently should be clearly indicated.
• Risk Management Plans. Potential problems that commonly strike projects similar to the one being undertaken as well as potential lucky breaks that could affect the project are analyzed and substantially covered. Mitigation plans to deal with such problems and breaks should be developed early enough in the project’s life. Improving project plan is a more effective risk management approach than using the actual risk management tools.
• Staff obligations. The responsibilities, roles and duties of project management team member involved in the implementation activities should be clearly specified and counter-signed by each individual staff.
• Evaluation methods. Each and every project should be evaluated against standards and by methods established at the project’s inception, allowing for both the direct and ancillary goals of the project. A brief description of the procedure to be followed in monitoring, collecting, storing and evaluating the history of the project should be developed.
• Change control. These are the procedures for reviewing and making decisions about requests for changes to any aspect of the project plan.
• Documentation. List of all the records and documents to be produced and how they will be organized and maintained is prepared.
• Implementation. Discussion and guidelines showing how the client will convert to or adopt the results of the project are prepared.
• Economic justification. Summary of alternatives in meeting project objectives clearly showing trade-offs between costs and schedules is prepared.
• Testing. Listing of things to be tested including procedures, timing and specific staff responsible for each.

 

Causes of failures or constraints in project planning.

Project planning may fail due to one or more of the reasons or constraints hereunder:

• Failure to understand and interpret the project objectives accurately by the stakeholders.
• Inadequate funding that may lead to the stalling of plan.
• Attempts to cover too much within too limited time.
• Use of inaccurate and inadequate data in planning the project.
• Engaging incompetent and unethical staff in project planning.
• Failure to organize, harmonize and coordinate project plan activities systematically.
• Use of inappropriate technologies in the project planning.
• Lack of true support and total commitment from the key stakeholders.
• Use of inappropriate materials in the project plan.
• Lack of strong co-operation and teamwork among the key stakeholders.
• Poor feasibility studies leading to the selection of a wrong project.
• Exit of key technical staff from project planning without proper replacement.
• Failure to comply with legal and regulatory requirements in place.

 

TECHNIQUES APPLIED IN PROJECT PLANNING

Much of the technical contents of the project plans is derived from the basic tools or techniques hereunder:

• Work breakdown structure and work packages-Used to define the project works and breakdown of specific tasks.
• Responsibility matrix-Used to define project organization, key individuals and their respective specific responsibilities.
• Gantt charts-Used to display the project schedule and detailed finer tasks.
• Events and milestones-Used to identify critical points and major occurrences on the project schedule.
• Network analysis

 

Critical path}

PERT  }NA SALEEMI , QT SIMPLIFIED

 

 

TENDERING METHODS VS CONTRACTING METHODS

A tender or bid is a formal offer to supply goods or services for an agreed price.

Tendering is a method of locating and identifying the potential and significant supply sources in the market by inviting them to come forth and make offer of the price and terms on which they will supply specific goods or services in response to the requirements of the procuring entity or client to be. On acceptance, this becomes the basis for the subsequent contract.

 

PROJECT TENDERING PROCESS

The interested eligible supply sources respond by obtaining the tender documents from the procuring entity, which they complete and submit back in accordance to the tender instructions.

Upon opening of the completed and submitted back tender documents, the procuring entity constitutes an evaluation committee carry out both technical and financial evaluation.

The evaluation committee, upon successful evaluation, forwards its final evaluation report to the relevant office or committee for further scrutiny with a view to awarding the tender to the most responsive tenderer.

Tendering may be done openly or restrictively, depending on the unique needs of the procuring entity.

Whatever the tendering method, whether open or restricted, the entire tendering process must meet the set objectives of the procuring entity or potential client.

 

TYPES OF PROJECT TENDERS

a)Open tendering

Open tendering may be national or international depending on the market supply capacity. In open tendering, any willing supply source is free to treat the offer. Open tendering whether national or international is characterized with the following features:

• All willing supply sources or contractors are free to apply or treat the offers.
• The offer will be advertised in newspapers of wider geographical coverage.
• The required works must be accurately specified.
• The information given in the tender documents must be uniform to all the tenderers.
• The criteria for awarding the contract must be clearly spelt out in the tender document.
• The deadline date and time for submission of the tender bundles must be clearly indicated.
• The tender documents may be obtained upon payment of a non- refundable fee set by the tender committee.
• Tenderers or their authorized agents are allowed to attend the tender open exercise.
• Tender documents delivered after the deadline date and time will be returned back to the owners unopened.
• Tender documents will be submitted in plain sealed envelopes.
• Tender documents must guide the tenderers on where to obtain and deposit completed tender documents.
• Any alteration in the information in the tender documents will be communicated to all the applicants.

 

ADVANTAGES OF OPEN TENDERING

• Earns the organization good reputation in the market for fairness, transparency and accountability.
• Increases supply sources for the selection of the best contractors.
• Sourcing expenses are recovered through tendering fee.
• Ensures that the contract terms and conditions are to the advantage of the

procuring entity.

• Less involving in terms of cost, time and administration.
• Enables new contractors to gain a hold in the market.
• Prepares the potential supply source or contractor in advance on the expectation of the procuring entity or client.

 

DISADVANTAGES:

• Loss of tender fee by tenderer incase of withdrawal or failure to win contract or failure to sign contract documents in time.
• Tenderer cannot vary contracting terms and conditions even when such terms are harsh.
• Some of the wordings in the tender documents may be too technical to interpret by the tenderer.
• Tenderer has no free hand to modify the information in the tender documents once submitted to the procuring entity.
• High possibility of appeals by unsuccessful tenderers leading to delays.
• The procuring entity may get many applications leading to high administration work.
• Good contractors in the market tend to shy off for fear of their trade secrets leaking to outsiders including their competitors.

 

It is a form of negotiation after receiving formal tender documents from applicants but before selecting the eventual winner of the tender. It is usually initiated to discuss some pertinent issues with a view to making improvements in some tender subject matter e.g. quality, costs, lead time etc.

 

1. b) Restricted tendering

Type of tendering where only few identified prospective profitable contractors are invited to submit their proposals or quotations for consideration unlike open tendering, each prospective contractor is handled individually with the discussed data remaining confidential.

After analytical comparison and contrast of proposals submitted, evaluation is carried out based on both technical and commercial benefits. Thereafter the most profitable contractor is awarded the tender.

 

Circumstances  for  using  restricted  tenders

• If the provisions required are unique.
• If there are only fewer contractors with required capacity.
• If there is need to maintain both client’s and contractor’s trade secrets.
• If the required provisions are urgent.
•  If it is organization’s own policy that certain specific procurement requirements be sourced through restricted tendering.
•  If there are only few approved contractors in market capable of meeting client’s requirements.
•  If the client is a non- profit maker and not interested in commercial aspects but superior quality.
•  If other tendering methods have failed before. If the client is an old player in the market and understands market conditions very well.

 

ADVANTAGES

• Eases sourcing for contractors with unique service provisions.
• Ensures that organization’s trade secrets are maintained and kept confidential.
• Enhances urgent construction works.
• Ensures that organization’s policies are adhered to strictly.
• Reduces sourcing costs as only few contractors are handled.
• Improves confidence in the contractor relationship.
• Reduced administration cost.
• Reduced lead times.
• Motivates the supply source for having been recognized in the industry.

 

DISADVANTAGES

• Reduced competition hence compromised quality and total costs.
• Denies an opportunity to other would be better contractors.
• Difficulty in developing new and better contractors in the market.
• Encourages malpractices as tendering process is not open to ensure fairness, transparency and accountability.
• Client may end up not getting the right contractor thus resulting into delays.
• Gives the client bad history and reputation in the market.
• New clients in the market may not find this method practicable as they lack knowledge and information on contractors to restrict themselves to.
• Little known supply sources or contractors are denied the opportunity to participate in the tendering process as only the established ones have the advantage.

 

c)International Competitive bidding

Competitive bidding emphasizes direct prices rather than the total cost. Other added expenses apart from direct price are not given sufficient attention

It achieves the lowest price because of the following reasons:

• There is post tender negotiation which ensures that prices remain lowest all throughout.
• There are many bidding supply sources or contractors’ hence stiff competition and this leads to better offers.
• There are quality assurance schemes which assure and reassure quality by all contractors.
• There is true tight competition among the contractors with each one striving to offer the best to survive.
• There are up to date approved contractor lists which give guidelines on who is offering lowest prices are.
• The contracts are ever long leading to long term strategizing with low prices much more.

 

CAUSES OF COMPETITIVE BIDDING FAILURE IN ACHIEVING LOWEST PRICES:

Competitive bidding may at times fail to achieve lowest prices under the following circumstances:

• When the market is non- competitive i.e. presence of monopolistic and imperfect market conditions.
• When the contracting services are urgently required giving no room to source for many supply sources or contractors.
• When contractors are not technically competent and actually not willing to contract.
• When specifications are not clear to contractors making them not able to project true total costs, when the contract value does not justify the cost due to under evaluation.

 

PROBLEMS WITH COMPETITIVE BIDDING:

Common problems likely to arise with competitive bidding include:

• Quality is not given sufficient attention as criteria bases mostly on direct prices
• If it is a reactive provisioning approach instead of being proactive.
• Operating with wider contractor base is very costly.
• It conflicts with better contracting practices which advocate for total costs and quality rather attractive direct prices.
• It is not capable of posting substantial savings hence reduced profits or benefits.

 

1. c) Negotiated tenders: Negotiated tenders are obtained by the employer inviting a contractor of his choice to submit prices for a project. Usually this is for specialized work or when particular equipment is needed as an extension of existing works, or for further work following a previous contract.

Sometimes negotiated tenders can be used when there is a very tight deadline, or emergency works are necessary. A negotiated tender has a good chance of being satisfactory because, more often than not, it is based on previous satisfactory working together by the employer and the contractor.

When invited to tender the contractor submits his prices, and if there are any queries these are discussed and usually settled without difficulty. Thus mistakes in pricing can be reduced, so that both the engineer advising the employer and the contractor are confident that the job should be completed to budget if no unforeseen troubles arise.However, negotiated tenders for public works are rare because the standing rules of public authorities do not normally permit them. But a private employer or company not subject to restraints such as those mentioned in the next section can always negotiate a contract, and many do so, particularly for small jobs. Even when a negotiated tender is adopted it is usual to prepare full contract documents so that the contract is on a sound basis. Production of the documents also means they are available for open or selective tendering should a negotiated tender fail, or should the chosen contractor be unable to undertake the work.

TENDER DEBRIEFING

Debriefing refers to disclosing of confidential information upon request by an unsuccessful tenderer.

Information requested for debriefing may include reasons for not selecting, advantages other tenderers had over him, names of bid winners etc.

Legally, debriefing information may only be given verbally and not in writing.

 

  The advantages for tender debriefing include:

• Establishes client reputation for fairness and transparency.
• Getting unsuccessful contractors know what to do so that they can be more competitive in future.
• Ensures smooth relationship with contractors/vendors in the market.
• Reduces possibility of legal battles from unsuccessful tenderers.
• The debriefed discussion reports help for future reference to ensure continuous service improvement.

Disadvantages:

• Breaches commercial confidentiality.
• Time consuming and costly.
• May end up in arguments leading to poor relationships.
• Any error committed by tendering board may lead to commercial disputes.
• Opens door to further challenges by other unsuccessful tenderers.
• May discourage (the would be) better tenderers who may not wish their trade secrets exposed out to competitors.
• May lead to corrupt deals out of influence due to physical contact as familiarity can easily lead to contempt.

 

DEBRIEFING  RESTRICTIONS:

The recommendations are that debriefing:

• Should not disclose information about other tenderers which may breach commercial confidentiality
• Should not be turned into arguments or casing to justify non- compromising tender issues
• Should only confine itself to the unsuccessful bid and weaknesses for rejection  g. quality issues, inadequate experience, lead times, total costs, technological level etc.
• Should only confine itself to indicating perceived strengths of unsuccessful tenderers
• Should request for contractor’s views on the debriefing process
• Should strongly encourage the unsuccessful tenderers to continue having ambition to tender in the future
• Information sought for should only be given verbally
• Only one tenderer should be attended to at time and not two or more.