1. Problem or Opportunity Statement
A series of blogs in reference to an ongoing PMO set up for a Governmental owner will be posted in the coming days, this to set up all the processes to monitor the construction of two hospitals. Our perspective is from the owner's side, which normally sees decision gates to evaluate the asset's feasibility. The studies are presented to the relevant organization that will evaluate the final go-ahead of the projects and comply also with the social benefits for the affected communities.
A revision of the final feasibility is needed to comply with local regulations. As per common practice, the first cost estimate is not the final one, but different iterations are needed to estimate the final estimate, based on the basic design, for the construction of the assets.
The result of this could produce several changes to the previously established deliverables, that are the base of the estimate. Some of this can be detailed as follows:
- Drawings
- Construction Methodology ( Fast Track by contract )
- Final decision of the contract type
- Programme
- Indirect Cost not included, due to the lack of understanding of local customs
- And many others
What is the best solution/process to determine our goals and processes on a Top-Down methodology?
2. Feasible Alternatives
We have narrowed down to four international associations:
Guild of Project Controls: Overall Cost Estimating and Budgeting Process Map
AACE International: Cost Estimating and Budgeting Process Map from Total Cost Management Framework
Government Accountability Office: Cost Estimating Process
NASA Cost Estimating Process
3 Develop the outcomes for each alternative
This is the detail for each of the 4 chosen alternatives:
Fig.01: Guild of Project Controls: Overall Cost Estimating and Budgeting Process Map [1]
Fig.02: AACE International: Cost Estimating and Budgeting Process Map from Total Cost Management Framework [2]
Fig.03: Government Accountability Office: Cost Estimating Process [3]
Fig.04: NASA Cost Estimating Process [4]
4 Selection of the acceptable criteria.
Based on our requests, to obtain continuous improvement of our process, we need to determine which approach in the Process Maps seen at point 3, allows us to have better visibility and how the process will "send us back" in the process if we do not meet the requirements. The iterations are a fundamental part to improve our process and based on the Deming Cycle [5] we have other characteristics:
Cyclical
Practical
Evidence-based
Structured
Action-Based
Sustainable
BIM ( 5D to 7D )
Twikable
A critical part is the simulation process to verify the impacts that might occur, and that can support us in providing inputs fro more realistic results. And most importantly, simulation can cyclical, practical and based on evidence. Analyzing from this perspective, which of the mentioned processes include a simulation or a similar process to improve the final result?
5. Compare the outcomes from each alternative analysis done in Step 3 against the minimum acceptable criteria from Step 4.
To better understand the different processes, we can see a summary below:
Fig.05: Summary of the processes[6]
Base on the above table we can quickly verify that all process, apart from the TCM, allows for simulation, analysis or risk evaluation.
So which of the processes complies with the requested characteristics?
Fig.06: MADM of remaining processes.
6. Selection of the “best” and Conclusions
Based on our scoring attributes from figure 6 we can see that the remaining 3 processes provide a very good overall assessment.
But we need to take in considerations also the social needs and the nature of the client/projects which can have a bigger weight on the overall results.
This is why the NASA process, which is very similar to the GAO process but with slight changes that will be more in line with the requirements of the client.
7. How to plan on tracking/reporting on the recommended choice.
As the process is underway for the mentioned projects, we will review the ongoing simulations to help improve the current processes chosen by the PMO team. As this will include 5D BIM a specific assessment of this will be performed to compare against the current analysis. A detailed analysis of the differences in the processes should be also made and later compared to the actual progress in the projects to evaluate if the process chosen is the best solution. A second blog posting will be issued in the next days comparing the actual final process agreed with the client and comparing with the above processes
REFERENCES.
[1] Guild of Project Controls. (2015, October 03). 08.01 Introduction to Managing Cost Estimating Budgeting Rev 1.03. Retrieved September 15, 2018, from http://www.planningplanet.com/guild/gpccar/introduction-to-managing-cost-estimating-budgeting [1]
[2] H. Lance Stephenson. (2015). Total cost management framework: An Integrated Approach to Portfolio, Program, and Project Management (2nd ed.). Morgantown, WV: AACE International. Page 176
[3] GAO Cost Estimating and Assessment Guide Best Practices for Developing and Managing Capital Program Costs [2] (2009)
[4] https://www.nasa.gov/pdf/263676main_2008-NASA-Cost-Handbook-FINAL_v6.pdf [3]
[5] Deming. (n.d.). PDSA cycle. The W. Edwards Deming Institute. https://deming.org/explore/pdsa/ [4]