M08-2 Develop Cost Estimating & Budgeting Policies & Procedures Manual

Contributing Authors
goduspopevawibrotoslukijecimonekumuprubruslaspotufrepuwrofri
James Williams

08.0 - MANAGING COST ESTIMATING & BUDGETING

08.1 - Module 08-1 - Introduction to Managing Cost Estimating & Budgeting

08.2 - MODULE 08-2 - DEVELOPING THE COST ESTIMATING & BUDGETING POLICIES & PROCEDURES MANUAL

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Figure 1 - The Developing a Cost Estimating & Budgeting Policies and Procedures Manual Process Map

Source: Guild of Project Controls

08.2.1 INTRODUCTION

This is the document which governs how the cost estimating and budgeting policies are to be set up and managed. It should include the appropriate organization charts and responsibility assignment matrices. It should be especially clear on the roles, responsibilities and interfaces between the scheduling and the cost professionals. It should also include the performance evaluation criteria for managers to use in evaluating, rewarding developing and promoting project control professionals in their organization

08.2.2 INPUTS

  • GPC Compendium and Reference
  • Supporting / supplemental references
  • Lessons learned from the double loop learning process

08.2.3 TOOLS & TECHNIQUES

08.2.3.1 Formatting Your Standard Operating Procedure

A Standard Operating Procedure (SOP) is a document consisting of step-by-step information on how to execute a task or series of tasks. As minimum, the procedure should contain the following key elements:

  • Title Page - This includes the title of the procedure, a unique document identification number, a date of issue and a revision number. The name of the company or division / department or Project the SOP applies to, and the signatures of those who prepared and approved of the SOP.
  • Table Of Contents - This is only necessary if your SOP is quite long, allowing for ease of reference. A simple standard outline is what you'd find here.
  • The Step-by-Step Information on How to Execute a Task or Series of Tasks - This is to explain, prescribe and define what the practitioner is required to do; it is the body of the procedure.
  • Quality Assurance / Quality Control - A procedure is not a good procedure if it cannot be checked. Have the necessary materials and details provided so the reader can make sure they've obtained the desired results. This may or may not include other documents, like performance evaluation samples.
  • References - Be sure to list all cited or significant references. If you reference other SOPs, be sure to attach the necessary information in the appendix.

08.2.3.2 Writing your Standard Operating Procedure

To create the procedure, the following elements, as a minimum, need to be documented within the Specific How-To-Do-It section:

  • Purpose – A brief narrative to explain why this procedure is necessary and what it will achieve for the user.
  • Introduction - A brief outline of the subject and the need for the procedure.
  • Responsibilities - Narrative to explain who is required to do what.
  • The Step-by-Step Information on How to Execute a Task or Series of Tasks – The detailed description of what is to be carried out.
  • Forms / Templates - Where forms, reports or templates are referenced in the above text, the samples should be included so that all documents or reports follow the same format and consistently include all necessary or prescribed data.
  • Internal And External References - This section is used to list all controlled internal references (e.g. other procedures etc.) and external references referred to within the text of the procedure.

08.2.3.3 Maintaining and Updating your Standard Operating Procedure

To implement a process whereby the project team:

  • Test The Procedure - Have someone with a limited knowledge of the process (or a person representative of the normal reader) use your SOP to guide them.
  • Have The Procedure Reviewed By Those Who Actually Do The Procedure - At the end of the day, it doesn't really matter what your bosses think of the SOP. It's those who actually do the work that it matters to. Have the SOP reviewed by all stakeholders. Once the team gives you the go ahead, send it to your senior managers for final acceptance and endorsement.
  • Once Approved Start Implementing Your Procedure - This may involve executing a formal training for the affect personnel (e.g. classroom training, computer-based training, etc.) or it may mean your paper is hung up in the bathroom.
  • Make Certain That You Include A Way To Update And Improve The Procedure - This will require a feedback loop from the Double Loop Learning process.

08.2.4 OUTPUTS

  • A Standard Operating Procedure That People Actually Follow And Works

08.2.5 REFERENCES & TEMPLATES

08.3    - Module 08-3 - Define The Estimates Purpose And Scope Of Work (Owner)

08.4    - Module 08-4 - Creating The Owners Cost Estimate (Top Down)

08.5    - Module 08-5 - Define The Estimates Purpose And Interpret The Scope Of Work (Contractor)

08.6    - Module 08-6 - Developing Contractors Cost Estimate (Bottom Up)

08.7    - Module 08-7 - Validate The Time & Cost Trade-Offs

08.8    - Module 08-8 - Validating Horizontal And Vertical Integration

08.9    - Module 08-9 - Conducting A Cost Risk Analysis

08.10 - Module 08-10 - Baselining And Communicating The Cost Estimate/Cost Budget

GPCCAR Module M08-2, Revision 1.01