Resource Planning & Management Associates, LLC. Project Management, Reporting, and Controls Resource Planning & Management Associates, LLC

ResourcePlanning & Management Associates, LLC

Project Management, Project Management, Reporting, and ControlsReporting, and Controls


Key Risks / ControlsKey Risks / Controls1. Strategy, Organization &

Administration• Undefined roles & responsibilities• Undefined or inappropriate delivery strategy• Undefined or inappropriate contract vehicles• Inadequate policies and procedures• Inadequate prudence documentation

2. Cost Management • Program budget overruns• Inaccurate program budget estimates• Inability to predict and manage cost overruns• Inadequate project reporting• Inability to reconcile and account for project cost

3. Procurement Management

• Lack of standardized or appropriate project contracts• No value engineering• Inadequate solicitation planning processes• Inappropriate contract management

4. Project Controls and Risk Management

• Major risks not identified and managed• No business justification for major decisions• Inadequate change control and pricing

5. Schedule Management • Program schedule overruns• Inability to determine schedule performance• Contractor claims and disputes

6. Fraud Risk Assessment • Employee fraud• External (vendor or subcontractor fraud)• Misappropriation of assets (theft)• Corruption (bribery)• Environmental and safety risks

Focus for TodayFocus for Today

►Procurement ManagementProcurement Management

►Contract Management and ComplianceContract Management and Compliance

►Cost Management and ReportingCost Management and Reporting

►Risk ManagementRisk Management


Procurement ManagementProcurement Management

►Grant Covenants – Create an AbstractGrant Covenants – Create an Abstract Key Requirements?Key Requirements?

►Disadvantaged firms?Disadvantaged firms?►Prevailing wages?Prevailing wages?►Project Delivery Requirements?Project Delivery Requirements?

Fixed Price?Fixed Price? Time and Materials?Time and Materials?

►Time limits on funds expenditures?Time limits on funds expenditures?

Utilize a checklist to ensure that any covenants Utilize a checklist to ensure that any covenants are covered in the procurement processare covered in the procurement process



► Establish clear-cut selection criteria on the Establish clear-cut selection criteria on the front end and then utilize a scorecard to front end and then utilize a scorecard to document the vendor selection process:document the vendor selection process: Licensing & InsuranceLicensing & Insurance Financial Performance & CapabilitiesFinancial Performance & Capabilities BondingBonding Criminal Matters – Civil SuitsCriminal Matters – Civil Suits Project Experience, QualificationsProject Experience, Qualifications Safety RecordSafety Record












Contract ManagementContract Management

► Prior to signingPrior to signing Use the Grant Abstract to align contract(s) to any specific Use the Grant Abstract to align contract(s) to any specific

covenants or requirements.covenants or requirements.

Review T’s & C’sReview T’s & C’s► Are allowable and unallowable costs clearly defined?Are allowable and unallowable costs clearly defined?

Home office overhead, travel costs, markups, printing, etc.Home office overhead, travel costs, markups, printing, etc.

► How are contract changes/modifications going to be handled?How are contract changes/modifications going to be handled?► Invoice issuance and certification?Invoice issuance and certification?► Schedule management issues? Liquidated damages?Schedule management issues? Liquidated damages?► Insurance and Bonding RequirementsInsurance and Bonding Requirements



Review T’s & C’s Cont’d..Review T’s & C’s Cont’d..► Reporting Requirements? Frequency?Reporting Requirements? Frequency?► Submittals?Submittals?

Utilize submittal schedulesUtilize submittal schedules

► MAKE SURE YOU INCLUDE AN AUDIT CLAUSEMAKE SURE YOU INCLUDE AN AUDIT CLAUSE

Develop a Contract Abstract:Develop a Contract Abstract:►Timing and Frequency for:Timing and Frequency for:

ReportingReporting Submittals – Schedule, Payroll Certification, Lien WaiversSubmittals – Schedule, Payroll Certification, Lien Waivers InvoicesInvoices

►Key ClausesKey Clauses►Cost Provisions serve as basis for invoice checklistCost Provisions serve as basis for invoice checklist




Cost ManagementCost Management► Invoice AnalysisInvoice Analysis

Create a checklist from the Contract AbstractCreate a checklist from the Contract Abstract► Scan for Unallowable CostsScan for Unallowable Costs► Confirm Overhead Rates and Profit Rates are correctConfirm Overhead Rates and Profit Rates are correct► Check for Markup on Markup, Markup On Sales Taxes, Etc.Check for Markup on Markup, Markup On Sales Taxes, Etc.► Contract Lien Waivers Submitted?Contract Lien Waivers Submitted?► Prevailing Wage and Certified Payrolls Included?Prevailing Wage and Certified Payrolls Included?

Provides evidence of due diligence and puts the Provides evidence of due diligence and puts the contractor/vendor on notice that costs are being reviewed contractor/vendor on notice that costs are being reviewed carefully.carefully.

Large projects ($50M+), consider conducting a full-blown Large projects ($50M+), consider conducting a full-blown contract audit at 30% and 80%.contract audit at 30% and 80%.


Cost ManagementCost Management


Cost ManagementCost Management► Change Order ManagementChange Order Management

Confirm that the change is legitimateConfirm that the change is legitimate

Identify and track the source of the changeIdentify and track the source of the change► Costs may be recoverableCosts may be recoverable► Information should be tracked for future supplier evaluationsInformation should be tracked for future supplier evaluations

Prepare independent “blind” cost estimates prior to Prepare independent “blind” cost estimates prior to reviewing vendor’s specific proposalreviewing vendor’s specific proposal► Provides an objective basis for negotiationProvides an objective basis for negotiation► Demonstrates due diligence on the part of the governing agencyDemonstrates due diligence on the part of the governing agency

Confirm that proposed change is calculate in accordance Confirm that proposed change is calculate in accordance with contract T’s & C’swith contract T’s & C’s


Cost ManagementCost Management


Cost ManagementCost Management► Cost Performance Monitoring Cost Performance Monitoring

Insist on bi-weekly or monthly project schedule updates Insist on bi-weekly or monthly project schedule updates from your staff and/or vendorsfrom your staff and/or vendors

Need to move beyond….Need to move beyond….Budget – Actuals - Open Commitments = Cost to FinishBudget – Actuals - Open Commitments = Cost to Finish

Use Earned Value Analysis to tie project schedules to costsUse Earned Value Analysis to tie project schedules to costs► How much work was planned to have been done at any given point in How much work was planned to have been done at any given point in

the project?the project?► What is the budgeted cost of that work?What is the budgeted cost of that work?► How much work has been done to date?How much work has been done to date?► How much of the budget has been expended?How much of the budget has been expended?


Project BudgetProject Budget


Budget to ActualBudget to Actual


► This only provides us with a partial pictureThis only provides us with a partial picture

Budget Burn RateBudget Burn Rate


► Now we realize we’ve got a significant problem. Now we realize we’ve got a significant problem. We’ve pretty much burned the construction budget We’ve pretty much burned the construction budget but we’re only about 80% of the way through the but we’re only about 80% of the way through the work.work.

Estimate to CompleteEstimate to Complete


► It looks like we’re going to end up about 20% over It looks like we’re going to end up about 20% over budget on construction cost.budget on construction cost.

► Doing this analysis provides early warnings as to Doing this analysis provides early warnings as to where the project is headed.where the project is headed.

Risk ManagementRisk Management► Establish a Risk Identification ProcessEstablish a Risk Identification Process

Determine the ParticipantsDetermine the Participants► Project ManagersProject Managers► Financial/Accounting personnelFinancial/Accounting personnel► Vendor RepsVendor Reps► Stakeholder/ Constituent RepsStakeholder/ Constituent Reps

Define risk categoriesDefine risk categories► PoliticalPolitical► PhysicalPhysical► Logistical/Procurement Logistical/Procurement ► FinancialFinancial► Design / ConstructionDesign / Construction


Risk ManagementRisk Management

Identify potential risksIdentify potential risks► Project team brainstormingProject team brainstorming► Constituent surveys, interviews, workshopConstituent surveys, interviews, workshop► SWOT AnalysisSWOT Analysis

Analyze the RiskAnalyze the Risk► Qualitative AnalysisQualitative Analysis

PrioritizePrioritize► Quantitative Analysis Quantitative Analysis

What’s the probability that this risk will occur?What’s the probability that this risk will occur? What will the impact be in DollarsWhat will the impact be in Dollars What will the impact be in Time?What will the impact be in Time? What will the impact be in other areas? What will the impact be in other areas?

► Reputation, credibility, public safety, etc…Reputation, credibility, public safety, etc…ResourcePlanning & Management Associates, LLC


Identify and Chose a Risk Response Strategy for Identify and Chose a Risk Response Strategy for SIGNIFICANT RisksSIGNIFICANT Risks► Elimination or AvoidanceElimination or Avoidance► Transfer - Insurance, Hedging, Contracting, etc.)Transfer - Insurance, Hedging, Contracting, etc.)► Mitigation – Are actions available that will minimize impact on Mitigation – Are actions available that will minimize impact on

cost, schedule, quality, or objectives?cost, schedule, quality, or objectives?► Acceptance – Generally chosen if costs of mitigation outweigh Acceptance – Generally chosen if costs of mitigation outweigh

the benefitsthe benefits

MonitorMonitor► Assigned to a responsible party to document, monitor, and Assigned to a responsible party to document, monitor, and

provide periodic status reportsprovide periodic status reports

Report Report ► Needs to be an integral part of the management cycleNeeds to be an integral part of the management cycle






Robert Stickney, PrincipalRobert Stickney, Principal

RResourceesourcePPlanning & lanning & MManagement Associates, LLCanagement Associates, LLC

2439 Nashville Avenue2439 Nashville Avenue

New Orleans, LA 70115New Orleans, LA 70115

Voice: 504.621.2927Voice: 504.621.2927

Email: [email protected]: [email protected]


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Resource Planning & Management Associates, LLC. Project Management, Reporting, and Controls Resource Planning & Management Associates, LLC