Project Management

Certified Texas Contract Manager

(CTCM)

Common Negotiation Philosophies Win-Win

(Integrative) each party has a vested interest in the issue and the relationship with all parties. Look for mutual gains

Essential Clauses

*Indemnification/damage claims, funding out, dispute resolution, right to audit, force majeure, terminations Introduction scope of work damage price specifications antitrust payment affirmation clauses technology access term of contract confidential information abandonment or default ownership/intellectual property independent contractor buy Texas

Six Steps in Planning Phase

1. Analyze the other party's proposal - explore options 2. Establish your objectives 3. Formulate you positions 4. Assess the other party's positions/strengths 5. Define and organize the issues 6. Develop your strategies and tactics.

Contract Management Certification

A contract manager is a person who has significant contract management duties as determined by the agency in consultation with the state auditor.

Use Objective Standards

A non-mandatory criterion or a basis for comparison is known as a standard Market value, replacement cost, depreciated book value, competitive prices, precedent, professional standards, what a court would decide. An objective standard is an unbiased and widely accepted minimum requirement. Negotiate price based on objective standards.

*Process v. Project

A process is an ongoing and repetitive sequence of operations or events which produces an outcome in order to achieve organizational objectives(e.g. receiving bids and proposals)

Drafting the contract

A valid contract must have: offer, acceptance, legal purpose, mutuality of obligation, certainty of subject matter, consideration, competent parties.

Contract Closeout Extension

Additional time needed to complete contract

Change Management Types of changes

Administrative - changes within the scope of the contract and do not affect the rights of both parties. Substantive - changes that do affect the rights of both parties. Constructive changes requested by the agency beyond the scope. CM consults with purchaser about possible changes CM must have changes in writing and agree to pricing Change is not valid until change order is executed Purchasing is responsible for executing all changes

Contract

An agreement (usually in writing) between two parties to do or not to do a particular thing, enforceable by law

Assumptions

An assumption is a conclusion that is drawn without affirmation from another source.

Corrective Action

Analyze each issue including the current and potential impact if no action taken Prioritize problems from the most serious to the least serious Identify potential solutions

Teambuilding

Create a common goal and ensure all team members can articulate and are committed to achieving the goal. Ensure each team member knows and understands their responsibilities and boundaries related to achieving the common goal. Provide motivation, reward, and recognition for the contributions of each team member.

Initiating

Approval is granted to commit the organization's resources to working on the project phase.

Invitation for Bid Advantage

Award is simpler process; award made to the lowest responsive responsible bidder providing best value.

What is your BATNA

Best, Alternative, To A, Negotiated, Agreement. Tells you when to accept and when to reject an agreement.

Invoice Review

Billing is only for goods or service received Goods and services are inspected and accepted Invoice is correct and complies with pricing and terms and conditions of contract Total payment do not exceed the contract limit.

Quality Management

Both a philosophy and a method of management designed to provide evidence that a specific standard of quality has been met and is being continuously improved.

Three required classes

CPA Texas Government Contract Management CPA Texas Government Project Management Negotiation Skills and Strategies

Change Management

Change management plan must include a process for reviewing and analyzing the need for the change. Project managers are responsible for managing the changes and updating the appropriate projects documents.

*Project Life Cycle

Concept/Plan; Design; Build; Test/Inspect; Install/Deploy; Close. Beginning Period, Initiation Phase, Planning/ Study period (Cost are low, few team members); Intermediate Period, Implementation Phase, Delivery Period; Ending Period, Operations Phase, Closing Phase. (e.g. beginning, middle, and end)

Cost of Conformance v. non-conformance

Conformance (Quality - planning; training and indoctrination; product design/validation; test and evaluation; quality audits; maintenance/calibration; and field testing. Non-conformance - scrap; rework; material cost; warranty repairs; complaint handling; liability judgements; product recall; field service; expediting; process corrective; and actions.

Two processes during close out

Contract Closure - involves checking the work for completeness and accuracy and documenting formal project acceptance. Administrative Closure - involves disseminating projects closure information to relevant parties, archiving files, and documenting lessons learned.

Contract Closeout Closeout

Contract is complete; verify all parties met contractual obligations.

Common Negotiation Philosophies Lose-Lose

Negotiators don't choose this method, it chooses you. When everything goes south. When parties can't come to an agreement.

Contract Terms and Conditions

No one size fits all; Contracts often have standard terms and conditions or boilerplate language

Contract Closeout Renewal

Option to continue the contract for another term. Renewal clause must be included in contract and agreed to by both parties. Funding out clause required if contract extends beyond a legislative biennium

3 O's Approach to Contract Management

Outline - Identify need; develop CM Team; Conduct Risk Assessment; Determine Procurement Method Operate - Prepare Solicitation; Copies to CAT/CPA; Solicit Proposals; Evaluate Responses; Award Oversee - Execute Contract; Monitor Performance; Manage Change; Approve Payment; Contract Closeout

Contract Manager Role

Oversees and manages the entire process Participate in developing the solicitation and writing the draft documents Point of contact for disseminating the instructions regarding the work to the contractor Receive and respond to communications between the agency and the contractor Monitor the contractor's progress and performance to ensure goods and services conform to contract requirements Inspect and approve the final product/services through formal acceptance/receipt process Perform contract closeout process

Cost Management - proper cost planning pg. 51 book

Parametric Modeling - a mathematical model that uses parameters, or project characteristics, to forecast project costs. Bottom-up Estimating - The process of estimating and adding together every project work item in order to project total project cost. Analogous - the technique used to determine the duration of an activity by comparing it to a similar, completed activity; also known as top-down estimating.

Project Status

Performance Reviews - Status meeting and reports, Where we are. Variance Analysis - Projected progress v. actual progress. Trend Analysis - Project performance over time. Is performance improving or deteriorating? Earned Value Analysis - Analysis approach to objectively measure project status.

Controlling

Performance measures are taken and analyzed to determine if a project is on track if variances exist, corrective action may be taken to get project activities aligned with the project plan.

Contract Management Framework

Plan- ID contracting objectives and strategy. Procurement - Fairly and objectively select the most qualified contractors. Contract Formation/Rate/Price Establishment - Ensure the contract contains provisions that hold the contractor accountable for producing desire results, include all relevant terms and conditions as well as establish processes that are cost-effective and aligned with the cost of providing the goods and services. Contract Oversight - Monitor and enforce the terms of the contract.

Earned Value Analysis

Planned Value - what is the best estimated value Actual Cost - What is the actual cost? Earned Value - What is the estimated value of work actually accomplished? Estimate to Completion - how much more do we expect it to cost finish job Estimate at Completion - What do we currently expect the total project to cost? Budget at completion - how much did we budget for the total job?

Accountable Control Risk

Planning involves risk identification, risk management planning, qualitative risk analysis, quantitative risk analysis, and risk response planning. 3 criteria used for identifying the level of risk are: sensitivity, significance and susceptibility.

Contract Administration Process

Planning, Monitoring Performance, Payment Approval, Change Management, Dispute Resolution, Termination, Contract Close-out.

Cost of Quality pg 52 book

Preventative - satisfying customer requirement completely, accurately, and without defects. Appraisal - expended to examine a product or process and make certain the requirements are being met. Failure - opposite or prevention cost and are the result of the project not operating according to plan. Internal failure is the cost incurred to correct an identified error/defect before customer receives the product. External failure is the cost related to errors/defects not detected and corrected before reaching the customer.

Project Closeout

Primary purpose of the closeout is to formalize project completion and disseminate information to project participants.

*Quality Planning

Process concerned with targeting quality standards that are relevant to a project and devising a plan to meet those standards

*Risk Management Planning

Process of identifying, quantifying, and mitigating project risk.

3 Primary activities affecting project success

Project Planning, Risk Management, & Communication

Executing

Project plans are put into action. Costs are generally highest during the execution phase. (Solicitation and Contracting and Project Implementation

Closing

Project success is evaluated and document. Project closing is often the most neglected part of a project. It is important to remember that project closeout is also an essential process group. "Benefit's Realization"

Opportunities and Risks

Pursuing opportunities and managing/mitigating their risks

Corrective Action

Recovering to the plan

RFI

Request for Information (Planning tool only)

RFO

Request for Offers (automated information systems purchases made through DIR)

RFP

Request for Proposals

RFQ

Request for Qualifications

Invitation for Bid Use when

Requirement are clearly defined; negotiations are not necessary; price is a major factor in award.

Payment approval

Review invoices to ensure the contractor's billing is consistent with the contract payment method

Managing Risk

Risk Avoidance - Involves changing the project plan to eliminate the specific risk events or conditions. By avoiding the risk, the project team removes a source of poor product or project performance. Avoidance can include cancellations. Risk Transference - involves moving the responsibility for the risk to third party. Risk Mitigation - This reduces the probability or impact to an acceptable threshold. Strengthening a product's reliability. Risk Acceptance - Active acceptance is to develop a contingency plan which typically means establishing a contingency budget to buy our way out of a risk event if it occurs.

3 Primary constraints (triple constraints)

Schedule/Time; Budget/Cost; and Quality/Technical Scope

Request for Qualifications Use when

Selection is made solely on the skills and qualifications of the vendor. Price is not a factor until after a vendor is selected.

Principled Negotiations 4 Points People

Separate the people from the problem

Types of Specifications

Specification is a description of the physical or functional characteristics of supplies or services to be procured. They are the primary means of communication between an agency and a vendor. *Performance - Describes what the outcome is expected to be not how to get to the outcome. Allows vendor to bring their own expertise, creativity and resources without restricting them to pre-determined methods or detailed process. Most of risk is on vendor. Design - Complete description of what the product must look like. Outlines exactly how the vendor must provide the service or how the product is made. Risk is on the agency.

Project Team

Staffing a project based on character attributes, qualifications, and skills.

*Project Management

The discipline of defining and achieving specific goals and objectives for temporary and unique efforts by effectively managing and controlling technical performance (scope/quality), cost, and schedule.(e.g. developing statement of work)

Cost Management

The effective financial control of the project through evaluating, estimating, budgeting, monitoring, analyzing, forecasting and reporting cost information. PM make sure project stay in approved budget.

Project Planning

The most important phase in the project. Pg. 44 Work Breakdown Structure- divides a project into smaller and more manageable segments and is an effective way to manage complex and lengthy projects. Scope Planning - to create a scope statement and develop a scope management plan.

Integration Management

The process of achieving unity of effort amongst the various parties involved in the accomplishment of a project's goals and objectives. Integration management includes developing a project plan, executing the plan, and managing change.

Scope Management

The process of managing the boundaries of a project. Specifically, defining what constitutes the deliverables of a project and which deliverables are outside the scope of a project. Scope management involves all of the process involved with the work on a project and the only work required to complete the project.

Procurement Management

The process of managing the procurement cycle when procuring goods and/or services from vendors.

Risk Management

The process of measuring, or assessing risk and then developing strategies to manage the risk.

*Project Initiation

The purpose of the project initiation process is to produce a charter, which this recognizes the existence of a new project and commits resources to begin it. A goal is a state of affairs that a plan is intended to achieve. Objectives are the tangible activities, outputs and measures to ensure you meet your goals Constraints are anything that restricts or dictates the action of a project team (3) primary constraints: time, budget, and quality Project Deliverables: Internal - items provided to internal staff or project stakeholders or External - the commodities or services you provide to the customer. Smart specific, measurable, achievable, realistic and time bound

Communications Management

The systematic planning, implementing, monitoring, and revision of all the channels of communication within an organization and between organizations. It's the organization and control of information transmitted by whatever means to satisfy the needs of the project.

Request for Qualifications Disadvantages

Vendor is selected before price is negotiated

Steps in closeout

Verify receipt of deliverables Evaluate vendor performance Review status of funds and unencumber excess funds Equipment disposition Issue final payment Retire contract file Document lessons learned.

Project Execution

What is your agency's current organizational structure? Do you have the authority to select the optimal organizational structure for your project's success? No organization structure will contribute to a project success without an effective communication plan.

Statement of Work (SOW)

When writing a SOW, use provisions that are flexible without being ambiguous. While you must include provisions that protect the state from unnecessary risk - you must also make the SOW flexible enough to allow for customized proposals suggesting different approaches to the same business need.

Focus on Interests not positions

Your position is something you have decided Your interests are the needs, desires and fears that drive positions. Look at interests because behind every interest there are usually several possible positions that could satisfy it

Disadvantage Invitation for Bid

Defined specification may be difficult to develop; does not encourage innovative solutions.

Organization Options

Designing an effective contract team by considering the strengths and weaknesses of various projects structures.

Monitoring methods

Desk reviews - actual performance against the contract requirements, site visit - used to verify actual performance against schedule or reported performance, reporting - 3 types status reports -status- describe the progress of the work, activity reports - describe any activity on the project, vendor performance reports. TPASS vendor performance tracking system is required for purchases $25k+ Cancellation for cause or convenience

*Resource Planning

Determines what is needed for the project, including people, time, equipment, supplies, materials, etc. and how much of those resources are needed to perform project activities. Pg. 48 (resource req., staffing req., roles & responsibilities, staffing mana. Plan, org. chart, supporting detail, project team detail, statement of work, and procurement mana. Plan).

Project Planning

Developing the best tactical approach for accomplishing project objectives

Project Visibility

Disseminating information

Planning

Documents are formulated and revised to be used throughout the remainder of the project. Planning is the most critical and intensive part of any project. It involves developing the best tactical approach for accomplishing the project objectives. (Project Planning)

Request for Qualifications Advantages

Emphasizes the competency of the proposed vendors.

Non-Disclosure Statement

Employees complete when participating in development or award of an RFP

Conflict of interest Statement

Employees involved in specification development or award determination. Include in annual Procurement Plan

Tips for active listening

Encourage the other side to talk first - you can learn important information Don't jump to conclusions Be aware of body language - theirs and yours Paraphrase - check for understanding. Keep emotions under control Be open to new information and ideas Don't interrupt Cover one issue at a time - unless you mean to tie them together. If you get stuck on an issue - agree to come back to it later Follow the 70/30 rule. Listen 70% of the time and talk only 30% of the time.

Project Control

Ensuring that planned events happen as planned and that unplanned events don't happen

Principled Negotiations 4 Points Options

Explore multiple options looking for mutual gains before deciding what to do

Request for Proposals/Request for Offers Advantage

Factors other than price; customized proposals w/different approaches to same business need; allows negotiations

Measuring and Controlling Project Performance

Fix Price - reliable prior cost experience or requirements defined Cost reimbursement - research and development with challenging technology Time and Materials - not possible to estimate the task beforehand, staff augmentation. Cost Sharing - vendor shares costs in return for use of technology

Overcoming Negotiation Roadblocks

Focus on interest, not positions Defuse emotions Don't react Change the scope of risk sharing If you encounter strong resistance on the issues, move the discussion to the whole Conversely, if you cannot reach an overall settlement, focus on each issue one by one.

Principled Negotiations 4 Points Interests

Focus on interests, not positions

Four stages of team development

Forming - PM brings team together, fosters trust. Storming - Emotion response to project demands. Intra-group conflict ( competing for control) Norming - Open exchange of relevant information. Development of teamwork. Performing - Team members are working together in a productive and effective manner (understanding of project requirements at all levels). Emergence of functional roles and decision making.

Request for Proposals/Request for Offers Use when

High risk or complex procurements; price is not the primary concern; negotiations are desired; objective criteria cannot be defined.

Risk Assessment includes

Identifying the risk - internal or external factors may affect the agency goals or objectives Quantifying and analyzing the risk - analyze the potential likelihood and impact of the risk Minimize Risk - Limit, lesson or abolish the risk by completing risk mitigation plan

Principled Negotiations 4 Points Criteria

Insist that the result be based on some objective standard

Project Leadership

Inspiring, motivating, and rewarding the project team

Best value considerations

Installation cost; Life cycle cost; The quality and reliability of the goods and service; Delivery terms; Indicators of probable vendor performance under the contractor's financial resources and ability to perform, the contractor's experience or demonstrated capability and responsibility, and the contractor's ability to provide reliable maintenance agreements and support The cost of any employee training associated with a purchase The effect of a purchase on agency productivity The contractor's anticipated economic impact to the state or a subdivision of the state, including potential tax revenue and employment and other factors relevant to determining the best value for the state in the context of a particular purchase.

IFB

Invitation for Bids

Human Resource Management

Involves all aspects of people management and personal interaction including teambuilding, leading, coaching, training, and conflict resolution.

Time Management

Involves estimating the duration of project activities, devising a project schedule, and monitoring and controlling deviations from the schedule

Vendor Performance Monitoring

Is a comprehensive tool for evaluating vendor performance

Project management chart pg.35

Is a tool that is often used to manage either a complete project or WBS segments individually. Bar/Gant - used to manage projects in relation to units of time. Milestone - events, linear time scale assume, Network - activity or task dependencies (not normally shown on milestone), more complex than gant/milestone, allows calculation of important information (critical path, slack time, etc.)

Contract Administration

Is to ensure the contract is satisfactorily performed and the responsibilities of both parties are properly discharged.

Common Negotiation Philosophies Win-Lose

Issues matter more than the relationship

Negotiation

It's about give and take. Negotiation is often used to build partnerships.

Step 1 Analyze the other party's proposal - explore options

Know their proposal better than they do. Evaluate prices, delivery, specifications, and terms. Note any deviations. Explore options for mutual gain.

Request for Proposals/Request for Offers Disadvantage

Longer procurement lead times; Evaluations are more complex and subjective.

Contract Advisory Team (CAT)

Major contracts (10 m+) reviewed by CAT CAT consist of members from CPA, DIR, HHSC, Office of the Governor, TFC, Small Agency Representatives Agencies required to comply with CAT's recommendations or submit written explanation to CAT why recommendation is not applicable. Substantial changes to solicitation must be resubmitted to CAT

DIR Framework required for major projects

Major information resources projects (> 1million dollars) are required to use the DIR Texas Delivery Framework.

Step 5 Define and organize the issues

Make a list of questions Are there any self-imposed deadlines. Be ready to support your point Consider scarcity of product or services. Where a lack of resources exists to satisfy all parties include resolving or mitigating before negotiations

3 Major reason Projects fail

Managerial support diminishes A lack of organizational commitment Communication breakdowns

Change control System

Manages the impact of the changes as they pertain to project performance Defines the level of authority needed to approve changes Tracks the status of change requests. Documents project variances, corrective actions, and justifications for allowing change.

Project requirements

Managing the three baseline: business, budget, and technical from project initiation to closure

Motivation

Maslow- Hierarchy of needs (safety, social, esteem) Vroom - Expectancy theory (rewards, resources) McClelland - Achievement motivation theory (achievement, affiliation, power) McGregor - Theory X and Theory Y (x watch every min. Y want to achieve) Herzberg - Two factor theory (Hygiene- policies, work conditions, bonus; Motivational - advancement, recognition, growth)

Project Status

Measuring performance against the plan