Breakout Session 1504

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(No Transcript)
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Project Management for the Contracts
Professional
Breakout Session 1504 Dr. Rene G. Rendon, CPCM,
C.P.M., PMP Naval Postgraduate School April
11, 2006 1100 1200
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Learning Objectives

• After completing this session, you will
• 1. Understand the nature of todays new business
  environment.
• 2. Be able to define project management and
  relate it to contract management and other
  disciplines.
• 3 Understand the roles of the project sponsor,
  project manager, project team, and stakeholders.

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Learning Objectives

• After completing this session, you will
• 4. Gain an appreciation for the various tools
  used in managing projects
• 5. Gain an appreciation for the project
  management knowledge areas and process groups
  identified in the Guide to the Project Management
  Body of Knowledge (PMBOK Guide).

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Todays New Business Environment

• Todays new business environment
• Growing demand for complex, sophisticated,
  customized supplies and services
• Increased reliance on contractors for performance
  of mission-critical functions
• Evolution of worldwide competitive markets

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Todays New Business Environment

• Results
• Increased complexity of supplies and services
  produced and purchased
• Increased complexity in the processes used to
  produce and procure supplies and services
• Need for sophisticated systems to control
  contract management processes and outputs

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Todays New Business Environment

• Traditional management systems are not suitable
  for procurement, production, and distribution of
  complex supplies or services
• Project management processes are needed to manage
  in todays contract management environment!

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Todays New Business Environment

• Todays procurement and contract managers
• Need knowledge in supplier analysis, total cost
  analysis, pricing, purchasing strategies,
  supplier relationship, commodity mgt, and
  supplier evaluation
• And in the future, knowledge in outsourcing, make
  versus buy, and

Purchasing Education and Training II, CAPS
Research, 2004
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Todays New Business Environment

• Todays procurement managers
• Need knowledge in project management
• Planning
• Project scoping
• Project execution
• Need skills in managing projects and working in
  project teams and in a project environment

Purchasing Education and Training II, CAPS
Research, 2004
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Why Study Project Management?

• Center for Business Practices (CBP) survey
• 23.9 Lack a consistent approach to managing
  projects
• 19.7 Lack qualified people to manage large
  complex projects
• 16.9 Poor resource allocation
• What is your
• organizations experience
• in managing projects?

Survey Results of Center for Business Practices
(CBP), 2003, PM Solutions, Havertown, PA
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What is Project Management?

• Project management is the application of
  knowledge, skills, tools, and techniques to
  project activities in order to meet or exceed
  stakeholder needs and expectations from a
  project

A Guide to the Project Management Body of
Knowledge (PMBOK Guide)
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Project Management Body of Knowledge

• A Guide to the Project Management Body of
  Knowledge (PMBOK Guide)
• The PMBOK is an inclusive term that describes
  the sum of knowledge within the profession of
  project management
• PMBOK Guide Identifies and describes that subset
  of the project management body of knowledge that
  is generally accepted

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Project Management

• Project Management differs from other management
  efforts
• Projects are generally very complex
• Projects progress in phases
• Each phase has unique different goals,
  challenges, timelines and products
• Project Managers must bring together the specific
  expertise needed to address unique phase
  challenges, release those experts when complete,
  and bring together a new set of experts for the
  next phase

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Project Management

• Project Management concepts and skills
• Industry independentconcepts and skills
  transcend industry boundaries
• Universally applicable to different fields of
  workproject management concepts can be applied
  to various fields and disciplines such as
  contract management
• However,....

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Project Managers

• Project Managers are not industry independent
• Effective project managers must have strong
  technical skills in their respective field
• To be an effective project manager in the
  contracting professionyou must first be a
  competent contract manager!

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The Definition of a Project

• Program an exceptionally large, long-range
  objective that is broken down into a set of
  projects
• Project a specific, finite task to be
  accomplished
• Task set of activities comprising a project

A Guide to the Project Management Body of
Knowledge (PMBOK Guide)
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Characteristics of a Project

• All projects have ....
• Purpose
• Life cycle
• Interdependencies
• Uniqueness
• Conflict

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Project Life Cycle

• All projects have a . . .
• Beginning
• Initiating
• Planning
• Middle
• Executing
• Controlling
• End
• Closing

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Project Life Cycle

• Project Life Cycle
• A collection of generally sequential project
  phases whose name and number are determined by
  the needs of the organizations

A Guide to the Project Management Body of
Knowledge (PMBOK Guide)
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Project Life Cycle

• Project Phases
• Improve monitoring and control
• Ensure proper definition of the project
• Focus on deliverables
• Control project progression
• Sequence of phases produces project life cycle

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Objectives of a Project
COST - SCHEDULE - PERFORMANCE
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Key Players

• Stakeholders
• Anyone actively involved, or have an interest at
  stake in the project
• May have influence, responsibility, and authority
  over the project
• Project Team
• Individuals that are performing the project work
• Typically involves the use of cross-functional
  teams
• Project Management Team
• Project team members that have management
  responsibilities for the project

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Key Players

• Project Manager
• The individual with overall responsibility for
  the project
• Project Sponsor
• The individual with the authority and resources
  needed to champion the project effort
• Typically functions as the linking pin between
  the project and the parent organization
• Customer
• The individual/organization that represents the
  end-user of the projects resulting product or
  service

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Knowledge Areas

• Project Management Knowledge Areas
• The PMBOK Guide reflects nine project management
  knowledge areas and forty-four project management
  processes
• Knowledge areas and processes reflect what is
  generally recognized as good practice in project
  management

A Guide to the Project Management Body of
Knowledge (PMBOK Guide)
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Project Management Areas

• Project Integration Management
• Ensure that the various elements of the project
  are properly coordinated
• Project charter
• Project plan
• Change control
• Project Scope Management
• Ensure that the project includes all of the work,
  and only the work required, to complete the
  project successfully
• Work breakdown structure

A Guide to the Project Management Body of
Knowledge (PMBOK Guide)
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Project Management Areas

• Project Time Management
• Ensure timely completion of the project
• Project schedule network
• Schedule baseline
• Project Cost Management
• Ensure that the project is completed within the
  approved budget
• Cost baseline

A Guide to the Project Management Body of
Knowledge (PMBOK Guide)
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Project Management Areas

• Project Quality Management
• Ensure that the project will satisfy the needs
  for which it was undertaken
• Project Human Resource Management
• Make the most effective use of the people
  involved in the project
• Responsibility assignment matrix
• Resource histogram

A Guide to the Project Management Body of
Knowledge (PMBOK Guide)
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Project Management Areas

• Project Communications Management
• Ensure timely and appropriate generation,
  collection, dissemination, storage, and ultimate
  disposition of project information
• Project Risk Management
• Process of identifying, analyzing, and responding
  to project risk
• Risk matrix

A Guide to the Project Management Body of
Knowledge (PMBOK Guide)
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Project Management Areas

• Project Procurement Management
• Acquire goods and services from outside the
  performing organization
• Solicitations
• Contracts

A Guide to the Project Management Body of
Knowledge (PMBOK Guide)
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Procurement Process

• Definition of Procurement
• The processes required to acquire goods and
  services from outside the performing organization
• Objectives of the Procurement Process
• To obtain the goods and services for a program in
  accordance with the technical, quality, schedule,
  cost, and other performance objectives

A Guide to the Project Management Body of
Knowledge (PMBOK Guide)
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Procurement Process

• Roles and Responsibilities
• Project Manager Overall responsibility for
  meeting program objectivescost, schedule,
  performance
• Authority comes from Project Charter
• Contract Manager Responsible for providing
  contract support to the project manager
• Authority comes from the organization (Law of
  Agency)

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Procurement Process

• Procurement Planning
• Determining what to procure and when
• Solicitation Planning
• Documenting product requirements and identifying
  potential sources
• Solicitation
• Obtaining quotations, bids, offers, or proposals
  as appropriate

A Guide to the Project Management Body of
Knowledge (PMBOK Guide)
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Procurement Process

• Source Selection
• Choosing from among potential offerors
• Contract Administration
• Managing the relationship with the contractor
• Contract Close-Out
• Completion and settlement of the contract,
  including resolution of any open items

A Guide to the Project Management Body of
Knowledge (PMBOK Guide)
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Processes Groups

• Project Management Process Groups
• The PMBOK Guide reflects five project management
  process groups that consist of processes related
  to the project management knowledge areas
• The process groups are linked by their outputthe
  output of one process becomes an input to another
  process.

A Guide to the Project Management Body of
Knowledge (PMBOK Guide)
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Processes Groups

• Project Management Process Groups
• Initiating processes
• Planning processes
• Executing processes
• Controlling processes
• Closing processes

A Guide to the Project Management Body of
Knowledge (PMBOK Guide)
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Initiating Processes

• Defines and authorizes the project or phase
• Project charter
• Document that formally authorizes a project
• Issued by senior management
• Briefly describes project scope
• Designates the project and project manager
• Authorizes project manager to apply resources to
  project activities

A Guide to the Project Management Body of
Knowledge (PMBOK Guide)
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Planning Processes

• Defines project objectives and describes the
  effort required to attain them
• Project scope statement
• Purpose of the project
• Project objectives
• Project deliverables
• Project cost and schedule estimates
• Project stakeholders

A Guide to the Project Management Body of
Knowledge (PMBOK Guide)
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Planning Processes

• Project work breakdown structure
• Logical, organized, decomposition of work tasks
  within a project
• Used for organizing the project effort, assigning
  project tasks to project team members, and
  developing budget estimates
• Level of work decomposition will depend on type
  of project and specific situation

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Planning Processes

• Responsibility assignment matrix
• Chart that relates work breakdown structure with
  project team to ensure project scope is assigned
  to an individual
• Used to manage human resources in project effort
• Also used to aid in developing project budget

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Planning Processes

• Project schedule
• Converts the project plan into an operating
  timetable
• Serves as the basis for monitoring and
  controlling project activities
• The basic approach is to form a network that
  graphically portrays the activity relationships

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Planning Processes

• The project budget
• Converts the project plan to a cost baseline from
  which to measure the difference between the
  actual and planned use of resources
• Two fundamentally different strategies for
  gathering budget data
• Top-down
• Bottom-up

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Planning Processes

• Risk Planning
• Process of identifying, analyzing and
  prioritizing risks to increase the likelihood of
  meeting cost, schedule and performance objectives
• Requires a methodology for assigning a risk
  rating to each risk event

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Planning Processes

• Procurement Planning
• Involves the consideration of
• Whether to procure (outsource decision)
• How to procure (procurement method and contract
  type)
• What to procure (products and services needed)
• How much to procure (quantity desired)
• When to procure (delivery schedule)

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Planning Processes

• Solicitation Planning
• Involves consideration of
• Determining how to specify the requirement
• Identifying potential suppliers
• Conducting risk analysis
• Developing the contract terms and conditions

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Executing Processes

• Processes and activities used to implement the
  project plan
• Involves the coordination of people and resources
  needed to execute the project

A Guide to the Project Management Body of
Knowledge (PMBOK Guide)
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Executing Processes

• Solicitation
• Involves the consideration of
• The solicitation form to use (RFQ, IFB, RFP)
• Method of solicitation (oral, electronic, hard
  copy)
• Clear and effective communication of requirement

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Executing Processes

• Source Selection
• Involves the consideration of
• Applying evaluation criteria and standards to
  proposals
• Conducting negotiations
• Documenting agreements

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Controlling Processes

• Processes used to monitor and measure project
  performance
• Preventive actions are taken in anticipation of
  possible problems
• Corrective actions are taken when variances from
  project plan are identified

A Guide to the Project Management Body of
Knowledge (PMBOK Guide)
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Controlling Processes

• Contract Administration
• Involves the consideration of
• Managing the contract change process
• Monitoring the contractors effort in terms of
  cost, schedule, and performance objectives
• Managing contractor payments

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Controlling Processes

• Earned Value Management (EVM)
• Earned Value is a tool for effectively
  integrating cost, schedule technical
  performance management
• EVM is designed to provide Early Warning of
  impending cost, schedule performance issues

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Closing Processes

• Processes used to formalize project completion,
  including collecting and documenting lessons
  learned and best practices for use in planning
  future projects
• May also include a post-project audit to identify
  lessons learned and best practices

A Guide to the Project Management Body of
Knowledge (PMBOK Guide)
52
Closing Processes

• Contract Closeout
• Involves the consideration of
• Identifying and resolving any uncompleted
  obligations or pending liabilities on the part of
  either party
• Ensuring that contract-related decisions and
  actions have been properly documented

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Closing Processes

• Project Closure
• Formalize and document project completion
• Conduct post-project audit to identify lessons
  learned and best practices for use in planning
  future projects

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Future of Contract Management

• Contract management environment will continue to
  be characterized by
• Increased complexity of supplies and services
  produced and purchased
• Increased complexity in the processes used to
  produce and purchase supplies and services
• The need to use project management processes and
  knowledge areas to manage critical and complex
  contracts

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Future of CM and PM

• Both Contract Management and Project Management
  professions are moving from a specialty area to
  the mainstream of business management
• More and more organizations are looking for
  fewer people, with higher-level skill sets
• Contract Managers need to be knowledgeable of
  contract management, as well as project
  management to ensure successful business results

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Future of CM and PM

• Rapid growth of the Project Management
  Institute (PMI) indicates the positive force
  project management skills are having in the
  marketplace
• Likewise, the growth of the National Contract
  Management Association (NCMA) demonstrates the
  importance of contract management education and
  skills
• Certifications are critical for success!
• NCMA Certified Professional Contracts Manager
  (CPCM)
• PMI Project Management Professional (PMP)