Source https://source.aacei.org Source Tue, 19 Nov 2024 14:25:42 +0000 en-US hourly 1 https://wordpress.org/?v=6.7 https://source.aacei.org/wp-content/uploads/2020/12/AACE-Site-Icon.gif Source https://source.aacei.org 32 32 What Do You Want to Do When You Grow Up?  “I Don’t Know Yet” is a fully acceptable answer! https://source.aacei.org/2024/11/19/what-do-you-want-to-do-when-you-grow-up-i-dont-know-yet-is-a-fully-acceptable-answer/ https://source.aacei.org/2024/11/19/what-do-you-want-to-do-when-you-grow-up-i-dont-know-yet-is-a-fully-acceptable-answer/#respond Tue, 19 Nov 2024 14:25:36 +0000 https://source.aacei.org/?p=9750

What Do You Want to Do When You Grow Up?
“I Don’t Know Yet” is a fully acceptable answer!

Nan She

Nan She is a project controls officer at Ontario Power Generation and an active volunteer in the AACE Women in Project Controls Committee at AACE International. Outside of work, she enjoys fishing, baking, and immersing herself in science fiction. She thrives in collaborative environments and enjoys working on projects that push the boundaries of what’s possible. She is passionate about continuous learning and embracing new challenges and is always open to exploring new interests and expanding her skill sets.

Have you ever been asked by your boss or a colleague, “What do you want to be when you grow up?” as if everyone is supposed to have their career paths like a schedule, ready to be baselined, monitored, and tracked?  What if you don’t know?  Is that bad?  Will they think less of me?  Sometimes not knowing is OK, especially if there is still so much to learn and you are not ready to “baseline” that schedule yet.  Nan She, a project controls officer at Ontario Power Generation, shares her perspective three years into her career.

When you were last asked, “What did you want to do when you grow up?” How did you respond?

To be honest, I always cringe a little when asked that question, even though the question always comes with good intent.  I love my job in project controls right now, but I often wondered if I knew the perspectives of the project manager I’m supporting or the thought process of the contractor I’m monitoring, would I change my approach?  There are still so many positions to explore in project management alone.  How does one choose?

How did you decide on a project controls role right out of school?

I majored in chemical engineering at the University of Toronto with a minor in sustainable energy and engineering business, so a career path with prospects in both business and technology in the energy sector was what I was after.  I was fortunate to have been accepted for a 14-month internship at Ontario Power Generation (OPG) in Canada, where my role was to support the reporting of over 200 projects within the entire nuclear portfolio, and my duties included analyzing project performance, monitoring risks, conducting gap analysis, and helping the development of tools and templates.  I found the job very rewarding, and the organizational, planning, and communication skills I’ve gained from it solidified my intent to return to OPG as a full-time employee after graduating!

What drove your decision-making regarding your current career path?

I think my personal experiences have stealthily guided my career choices.  I moved to Canada from China alone to pursue my studies at age 15.  The experience, albeit lonely, allowed me to embrace self-reliance.  The independence also gave me the freedom to make decisions on my own.  I knew at a young age how important it is to set goals, make plans, and see them to completion.  These skills helped me tremendously through my university education. In hindsight, they set me up for success at my internship, where my planning skills and the ability to execute plans were seen as assets and prerequisites of a great project control professional.  My colleagues’ and managers’ support and positive feedback made that choice much easier. 

Since the future career path is still uncertain, what are you doing to help you decide what to do next?

I think there is nothing more important than being prepared.  That can come in the form of getting a mentor or pursuing a degree or certification.  But for me, my personal growth was something I identified as critical, as this will prepare me for any role and any profession.

I have done some self-reflection in the past couple of years. I found myself too shy in a group environment and often hesitated to speak up in a meeting. This could be because of my culture, where we were taught to blend in, not to stand out, and not to challenge the status quo. It could also be that I did not think that my contribution was going to be valuable, seeing that I am still new to the company and the profession.

Last year, I raised my hand at a work initiative to identify what business processes can be simplified. I identified an improvement opportunity to develop a training manual to onboard new project control staff to the company.   I know I had suffered as a shy intern and remembered that I did not have a resource that I could use to quietly and quickly get up to speed.  To my surprise, everyone loved the idea, and I helped bring that initiative to fruition.  That product is being used today for new staff. 

You are an active member of Women in Project Controls. What motivated you to join this group?

I joined AACE Women in Project Controls, first as a support staff at the Toronto Section, then two years ago, I joined the WPC team in developing webinars to help foster a safe forum for project controls women all over the world to achieve gender equity.  These experiences fueled my passion for supporting others in need, pushed me outside my comfort zone, and made me more confident and courageous to speak up and contribute to discussions.  I am very proud to be able to reach out to WPC on a global scale.

What advice would you give to an aspiring project controls professional if asked, “What do you want to do when you grow up?” and they do not feel comfortable because they don’t have the perfect answer?

It’s okay not to have the perfect answer or a clear career path. Feeling lost, unsure, or anxious is normal when you are still career-exploring. Many of us don’t have everything figured out from the start. We all begin from different places, and the journey towards finding your direction happens at different rates for everyone.

What matters most is taking the right steps: embrace the challenges and opportunities that come your way, learn as much as you can from each experience, and keep growing. There’s so much value in simply staying curious and prepared for what comes next.

I’m still figuring it out, and that’s okay. I see myself as a work in progress, evolving with each new experience. As I explore my journey, I’m confident I’ll eventually find clarity, and so will you

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Unlock Your Expertise with the Relaunch of the Decision & Risk Management Professional (DRMP) Certification Exam https://source.aacei.org/2024/11/12/unlock-your-expertise-with-the-relaunch-of-the-decision-risk-management-professional-drmp-certification-exam/ https://source.aacei.org/2024/11/12/unlock-your-expertise-with-the-relaunch-of-the-decision-risk-management-professional-drmp-certification-exam/#comments Tue, 12 Nov 2024 06:00:00 +0000 https://source.aacei.org/?p=9708

Unlock Your Expertise with the Relaunch of the Decision & Risk Management Professional (DRMP) Certification Exam

The AACE International Certification Institute’s Certification Board is excited to announce that the DRMP certification examination is officially open for registration after a two-year restructuring. This expertise-level certification, long considered a benchmark for excellence in cost engineering and project controls, has been reimagined to reflect our profession’s evolving landscape better and ensure it continues to set a high standard for professional expertise.

The decision to pause the exam was to provide time and devote resources to update the content and structure since launching AACE’s Project Risk Management Professional (PRMP), the professional level certification in 2021 – which was borne out of the DRMP exam. During the restructuring period, the DRMP Committee worked closely with leading experts and industry partners to ensure the restructured certification remains relevant in today’s dynamic risk management environment that reaches numerous industries.

What’s New?

  • Updated Content: The revamped exam now includes the latest developments in decision and risk management, ensuring that certified professionals are current with the skills and knowledge that matter most at the highest levels of responsibility.
  • Improved Delivery: We’ve made the certification more accessible by offering in-person testing and secure online options through remote proctoring, allowing candidates to choose the best schedule and location for the exam.
  • Refined Domain Structure: Domain 1 focuses on basic cost engineering and statistics. Domain 2 will allow test candidates to choose a memo based on their preference for a risk—or decision-based scenario. Domain 3 focuses on complex decision and risk management practices scenarios. Domain 4 focuses on general decision and risk management practices. These enhancements aim to provide a practical, hands-on assessment of critical skills.
  • Revised Recommended Practice: RP71R-12 has been updated to reflect an extensive list of all relevant RPs, PPGs, and PPDs published since the first edition in June 2013.
  • Revised DRMP Study Guide: This has been updated to include changes made to the examination, references, and recommended practice.

The DRMP has long been a prestigious credential within our community, and AACE’s relaunch ensures it continues to hold that reputation. Those who earn this certification demonstrate mastery of critical skills, a commitment to professional development, and excellence in executing responsibilities.

Do you want to be a DRMP?

The first thing you must do is understand if you’re eligible. The eligibility requirements are:

  • 4-year college or university degree*
  • 4 years of industry-related experience
  • 4 years of experience (does not need to be continuous) directly related to the field of decision and risk management, with at least 18 months of recent experience required, demonstrated by providing any combination of the following:
      • Three (3) letters of recommendation from a client (past or present) describing the project’s complexity, the type of risk management implemented, and the candidate’s role in implementing or providing such risk management services. All letters submitted must include the time the candidate spent on decision and risk management tasks. If three letters of recommendation and no work products are submitted, those durations must sum to 4 years of combined experience.
      • Three (3) work products personally produced by the candidate that demonstrate having performed any aspect of the risk management work (decision analysis, schedule and cost risk analyses, implementation of risk management programs, risk workshops, etc.) on their projects to sum 4 years. The candidate must demonstrate they were the primary author/contributor in developing the work product. Merely being a junior-level participant or member of a larger team without being the lead is not an adequate demonstration of a senior-level practitioner with leadership responsibility. NOTE: A candidate may provide a total of three (3) letters of recommendation or three (3) work products, or a combination of two (2) letters of recommendation and one (1) work product, or a combination of one (1) letter of recommendation and two (2) work products, etc.

Depending on the combination that works for your application, remember that at least one recommendation letter or work product must demonstrate recent experience within the past 18 months.

* Applicant may substitute a 4-year of college degree with an additional 4 years of industry related experience or one of the following professional certifications: AACE’s CCP; CEP; EVP; PSP; Certified Construction Manager (CCM); Certified Professional Constructor (CPC); Professional engineer (PE); Registered Architect (RA); or Chartered Surveyor.

Registration is now open for all eligible candidates. When you are ready to register, click here. For step-by-step instructions for creating your application, click here.

Thank you for your continued support and commitment to excellence within the AACE International Certification Institute.  We look forward to seeing many of you achieve this highly valued credential and to celebrating your career successes.

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Rising Professional Spotlight – Megha Udayshankar https://source.aacei.org/2024/11/11/rising-professional-spotlight-megha-udayshankar/ https://source.aacei.org/2024/11/11/rising-professional-spotlight-megha-udayshankar/#respond Mon, 11 Nov 2024 06:00:00 +0000 https://source.aacei.org/?p=9738

Rising Professional Spotlight –
Megha Udayshankar

Megha Udayshankar is a dedicated professional with over 10 years of experience in the heavy civil construction industry. She has advanced through various roles, including estimator, field engineer, project engineer, and currently she is a scheduler. Based in the Dallas-Fort Worth (DFW) area, Megha’s career has been shaped by her involvement in a diverse range of projects, from commercial construction to heavy civil roadway and bridge projects.

Originally from Bangalore, India, Megha earned her bachelor’s degree in civil engineering from Bangalore University. She began her career in commercial and residential construction, where she managed daily field operations, tracked costs and quantities, and coordinated with subcontractors and material suppliers. Her commitment to continuous learning led her to complete a master’s degree in civil engineering at the University of Texas at San Antonio, specializing in transportation and environmental engineering.

At Zachry Construction Corporation, Megha has played a crucial role in estimating, project engineering, and scheduling. In her current position as a scheduler, she manages schedule updates, forecasting, commodity curves, time impact analyses (TIAs), escalations, and claims for heavy civil projects in the DFW area. Megha’s diverse project experience has provided her with a comprehensive skill set that encompasses project management, cost control, scheduling, and claims analysis.

Introduced to AACE by Josh Wollan, Director of Project Controls (Scheduling) at Zachry, Megha attended the 2023 AACE conference in Chicago. She found great value in the Rising Professionals and Women in Project Controls groups and continues to leverage the knowledge gained from the seminars and sessions to enhance her work.

Advice for Upcoming Engineers/Project Control Professionals:

“I encourage new engineers and project control professionals to seek mentors who can support and guide them through their professional journey. Engage with professional associations like AACE; these networks offer invaluable opportunities for growth and learning from diverse backgrounds.”

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Is Emeritus Certification For You? https://source.aacei.org/2024/11/04/is-emeritus-certification-for-you/ https://source.aacei.org/2024/11/04/is-emeritus-certification-for-you/#respond Mon, 04 Nov 2024 06:00:00 +0000 https://source.aacei.org/?p=9687

Is Emeritus Certification For You?

By Joe Vollbracht, EVP | Certification Board Member

For credentialed professionals nearing or having entered retirement, it might seem like a good time to give up the credentials you have worked so hard to maintain rather than worry about earning CEUs or retaking the exam to keep them. However, that AACE credential may have become part of your identity and, therefore, not so easy to abandon. For those of you who are nearing the end of your career or already in retirement, there may be an alternative to recertifying that will allow you to maintain your certificate.

When it comes time to recertify, AACE will reach out and ask if you intend to recertify by CEUs or recertify by exam. In lieu of these two options, you may have the opportunity, under certain conditions, to apply for emeritus certification. AACE provides an emeritus certification category for retiring/retired certified professionals for the certificant’s lifetime with no fees or renewal credits required. To be eligible to obtain emeritus certification, you must be at least 60 years of age, retired, and not engaged in consulting activities or part-time cost engineering-related work of any kind. This seems like a no-brainer for those leaving the workforce and desiring to keep their certification. It is free, and it is a lifetime. What could be better than that?!

As with everything, some terms and conditions come with emeritus certification, which you must know. The first is that if at any time in the future, you accept cost engineering-related work, you must reapply for certification, submit the required fees, and sit for the examination. In other words, you cannot reenter your career field and present yourself as an emeritus certificant. You are not allowed to regain your original status by recertifying with CEUs. You must retake the test. The second stipulation is that you must hold AACE harmless from any future liability associated with, or arising out of, an emeritus certification.

If you opt to go the emeritus certification route, meet the eligibility requirements, and agree with the terms and conditions, it is as simple as filling out a one-page online application. Once approved for emeritus certification, your credential will be switched to emeritus status. You will continue to be carried in the AACE Directory in your credentialed field and listed, for example, as “Jordan Smith, Emeritus PSP.” If you hold multiple credentials, all of your credentials will go into emeritus status simultaneously, and all will be included in the AACE Directory. Credentialed professionals with multiple certificates will likely have staggered renewal dates for their credentials, so those in this category may hold off on applying for emeritus certification until it is time to renew their most up-to-date credentials. For example, you may hold an EVP credential that expires in 2024 and a PSP credential in 2026. When it comes time to renew the EVP credential in 2024, you can inform AACE that you will not be renewing your EVP credential in 2024 but will be applying for emeritus certification in 2026 when your PSP credential comes up for renewal. Once you apply for and are approved for emeritus certification in 2026, you will then be listed in the directory as both an Emeritus EVP and an Emeritus PSP, even though your EVP credential lapsed in 2024. The bottom line for those of you holding multiple certifications is that you cannot become an emeritus certificant in one certificant field and continue to hold an active credential in another certificant field until that second credential is up for renewal. In the case above, if you choose to go the emeritus certification route when the EVP credential is up for renewal, then the PSP credential goes into emeritus status at that point as well.

There are multiple reasons why emeritus certification may be for you. You may want to hold onto your credential because it was hard to attain and maintain, and it still means a lot to you. Or you may be a person who dislikes giving up anything. The best reason is that emeritus status is currently free and is for a lifetime. There are currently over 200 active emeritus certificants and several serve as volunteers with AACE and in other organizations. If emeritus certification seems like a good fit for you and you would rather go that route than continue to maintain your credential through the traditional recertification process, then fill out the online application for emeritus certification when it comes time for renewal and enjoy retirement. If you would like more information or help with guidance through the application process, you can reach out to AACE Credentialing Analyst Sara Peters at speters@aacei.org or (304) 296-8444 ext. 1110.

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New Member Profile: Lee Vandevort https://source.aacei.org/2024/10/28/new-member-profile-lee-vandevort/ https://source.aacei.org/2024/10/28/new-member-profile-lee-vandevort/#comments Mon, 28 Oct 2024 05:00:00 +0000 https://source.aacei.org/?p=9664

Meet Lee Vandevort

My name is Lee Vandevort, and I was born in Sacramento, CA. I am a sixth-generation native Californian. I attended high school in Auburn, NE, and then USC for architecture and civil engineering. I work at Construction Claims International where I provide dispute finance to large contractors involved with public works projects. What I love most about my job is helping cash-strapped companies with their cash flow to finish jobs. 

Thirty years ago, I sponsored a lunch with about 25 construction lawyers and presented the concept of dispute/litigation financing. They all said that paying for the prosecution of claims could not be done and was against champerty laws. It turned out to be the genesis of the field of litigation finance. The biggest career challenge I’ve had to overcome is fundraising. I am very proud to hear others talk about their successes in the litigation finance space and to know that the concept started with construction. My future career goal is to deploy $500M annually in the construction space. To the best of my knowledge, I am the first to do it. 

I joined AACE in the late 80’s. I was doing scheduling, and this organization helped me by providing the framework for best practices. The best thing about being an AACE member is meeting with people who are involved in a niche and learning more about best practices. It’s great to make connections and learn while funding companies in the claims and project control areas so they can prosper.  

If you are just starting out in the field, keep in mind that it is a growing field and one that affects companies’ bottom lines. Companies are seeing that project control is not just overhead but the department that drives profit. Construction companies should be profitable and not the financing source for government projects. 

On the 18th hole at Pebble.

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New Recommended Practice 131R-23: Introduction to Fault Tree Analysis for Projects https://source.aacei.org/2024/10/22/new-recommended-practice-131r-23-introduction-to-fault-tree-analysis-for-projects/ https://source.aacei.org/2024/10/22/new-recommended-practice-131r-23-introduction-to-fault-tree-analysis-for-projects/#respond Tue, 22 Oct 2024 16:15:36 +0000 https://source.aacei.org/?p=9629

New RP 131R-23: Introduction to Fault Tree Analysis for Projects

This document is intended to provide a guideline, not a standard, for using fault tree analysis (FTA) to improve the quality of the outputs of the project or product by providing a comprehensive and systematic way to identify, assess, and prioritize risks. FTA enhances a decision-maker’s understanding of the complex relationships regarding potential risks or failure points that should be addressed to improve or optimize project outcomes. This document further provides practitioners with the opportunity to improve the reliability of design and to improve the quality by reducing potential failures. Examining what would potentially cause the product to be less reliable is also related to decision analysis. For an organization that executes capital projects, the FTA is also applicable in providing insight into performing other analyses, such as:

  • Functional analysis of highly complex systems
  • Evaluation of safety requirements and specifications
  • Evaluation of system reliability and the identification of potential design defects and safety hazards
  • Simplification of design to support operations and maintenance requirements (for lifecycle cost analysis)
  • Evaluation of human interfaces (project teams and systemic risks)

System failure analysis is an overarching process that includes different techniques, which include fault tree, logic tree, fishbone diagrams, failure mode and effects analysis, etc. Fault tree analysis is just one tool that can be used in system failure analysis. With that said, this RP is intended to introduce the purpose and basic methods of developing a fault tree, calculating the consequence for the failure of the overall system (called the top event) given the structure of the tree and the probability (P) that the building block elements (called gates and events) occur, and identifying the most important sources of potential failure for inspection and action.

FTA is a deductive, top-down method aimed at analyzing the effects of initiating faults and events on a complex system and is defined as “a risk analysis method used to evaluate risk threats employing a deductive logic tree linking a parent event to the combinations of sub-events that could cause it.” A fault tree is not the same as an event tree analysis. Fault trees assist project teams in examining undesired events, identifying the cause(s) leading to potential failures, and determining how to prevent them in the future.

Fault tree analysis necessitates a robust level of engineering that accurately represents events and their interactions. This requires an engineering framework that delineates basic events and their interactions, enabling the construction of the fault tree. Even in early partial designs, FTA can identify major causes of system failure, guiding engineering efforts to mitigate these issues, for example, by incorporating backup systems for failure-prone events.

Using the FTA methods described in this RP assists in asset planning. These planning efforts include the optimization, optioning, and value-engineering assessments of the equipment and systems. This further includes improving the quality of the design to ensure the operability, reliability, and maintainability of the asset(s). Asset planning, value engineering, and quality management all support risk management functions. These efforts ultimately determine the lifecycle cost of the equipment, systems, etc., which supports the decision to invest in the asset.

Contributors:

Dr. David T. Hulett, FAACE (Primary Contributor)
Lance Stephenson, CCP, FAACE Hon. Life (Primary Contributor)
James E. Arrow, DRMP
Tim Boatwright, EVP
Francisco Cruz, CCP
Larry R. Dysert, CCP CEP DRMP FAACE Hon. Life
Rafi Polak
John R. Schuyler, CCP DRMP
Pei Tang, PRMP PSP

About David:

Dr. David T. Hulett, FAACE is a Principal with Hulett & Associates, LLC, and has focused for the last 28 years on quantitative schedule risk analysis, integrated cost-schedule risk analysis, and project scheduling best practices. He has conducted many risk analyses, focusing on quantifying the risks and their implications for project cost and schedule, and many schedule assessments.

David has held strategic planning positions at TOSCO, an oil company, and at TRW in aerospace and defense. In the federal government, he managed offices in the Federal Energy Agency (FEA), the Department of Energy (DOE), and the Office of Management and Budget (OMB). He was an economist with the Federal Reserve Board of Governors. Dr. Hulett was also an Instructor in the Economics Department at Harvard University.

Dr. Hulett is a contributor to 11 recommended practices, with three as the primary contributor. He has authored two books, Practical Schedule Risk Analysis and Integrated Cost-Schedule Risk Analysis, as well as numerous articles for AACE.  David is a frequent presenter at AACE’s annual conference and expo, and the current Vice-Chair of the Decision and Risk Management Technical Subcommittee.

Dr. Hulett was elected as a Fellow of AACE International in 2015 and received the Brian D. Dunfield Educational Service Award from the Association in 2018. He holds a Ph.D. in Economics from Stanford University. You may reach David at: david.hulett@projectrisk.com

About Lance:

Lance Stephenson, CCP FAACE Hon. Life joined AACE in 1999 and obtained the designation as a Certified Cost Professional in 2003. He has served AACE as a member of the Technical Board since 2007. He is the editor of the TCM Framework, 2nd Ed. and is in the top 10 contributors to the AACE recommended practices. He has authored/presented more than 30 papers at the AACE Conference & Expo – in addition to presentations he has done for other organizations. Lance served the TCM Analytics Technical Subcommittee as chair (2020-2021) and, since 2021, has been the chair of the Decision Science and Advanced Analytics Technical Subcommittee. He has previously been recognized by AACE with the Technical Excellence Award (2011), as a Fellow (2014), and the TCM Excellence Award (2016). A senior leader and manager with over 35 years of experience in the operational, portfolio, program, and project delivery environment, Lance is the Director of Operations at AECOM. You may reach Lance at: lance.stephenson@aecom.com

This new RP may be found here: 131R-23: Introduction to Fault Tree Analysis for Projects

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In Memoriam, October 2024 https://source.aacei.org/2024/10/14/in-memoriam-october-2024/ https://source.aacei.org/2024/10/14/in-memoriam-october-2024/#respond Mon, 14 Oct 2024 16:54:04 +0000 https://source.aacei.org/?p=9609

In Memoriam

Dr. Patricia Galloway

June 14, 1957  –  September 26, 2024

Pat’s company released the following:

In Honor of Dr. Patricia Galloway

It is with great sadness that we announce the passing of Pegasus-Global Holdings’ Co-Founder and Co-Chair. Dr. Patricia Galloway, who passed away unexpectedly on Thursday, September 26, 2024, in the company of family and beloved friends. She lost her courageous battle with pancreatic cancer.

Pat was an AACE International member since 1986. She was a Certified Forensic Cost Consultant (CFCC) and had been on the committee that created and developed this certification. She was also named an AACE Fellow.

Dr. Galloway leaves behind a monumental legacy as a renowned leader in civil engineering, gigaproject construction, and dispute resolution.

Her extensive experience as CEO for The Nielsen-Wurster Group and Pegasus-Global Holdings included large and complex projects throughout the world such as the Panama Canal Expansion, London’s Crossrail Project, Vogtle Nuclear Units 1, 2, 3 & 4, Kuala Lumpur International Airport and many, many more.

Dr. Galloway also served as an arbitrator since 1987 in many U.S. domestic and international arbitrations and dispute resolutions. She was recognized by her peers as a Fellow of the College of Commercial Arbitrators, becoming the first non-lawyer to be elected to the College, a Fellow and a Chartered Arbitrator of the UK Chartered Institute of Arbitrators and a member of the Distinguished Academy of Neutrals.

Throughout her career, Dr. Galloway lent her skills and expertise to a broad portfolio of corporate, community and government boards. Highlights include serving as the first woman President of the American Society of Civil Engineers in 2004 and serving as a member of the U.S. National Science Board having been appointed by U.S. President Bush for a six-year term with two of those years as its Vice Chair. She also served on boards for the SCANA Corporation, Bergmann and Associates, the American Arbitration Association, the Central Washington University Foundation Board of Trustees, the Pacific Science Center, and the Pan American Academy of Engineering.

At the time of her passing, Dr. Galloway was serving on the boards of Pegasus-Global Holdings, Stantec, Granite Construction and Life Support (a local not-for-profit).

Dr. Galloway was a prolific writer and world-renowned speaker, having authored over 130 papers, approximately 30 peer-reviewed journal articles, and nearly 200 public speaking engagements, including over 45 keynote addresses. She served as a guest lecturer at multiple universities across the globe from Australia to China to Europe and here in the United States.

Dr. Galloway’s achievements were highlighted by her TEDx talk on “Are Engineers Human?” and on a variety of media outlets such as Sky News Australia TV, ADR Perspectives, PM Network, Time magazine, CNN Lou Dobbs; Discovery Channel; Engineering News Record; and Federal Technology Watch. She was also a blog writer for Engineering News Record discussing current trends, challenges, and hot topics in the construction industry.

Her unending curiosity and love of adventure led her to all seven continents. From horse riding in Australia, to deep sea fishing in Alaska with her family, safaris in Africa and expeditions on the Galapagos Island, she was well traveled and always planning her next trip. Pat and Jim shared a mutual love of the outdoors which took them on many hunting and fishing expeditions across the globe. If she wasn’t travelling the world, she was entertaining friends and family at Unionville Ranch or relaxing with Jim at their Montana and Lake Kachess cabins. Pat always held a special place in her heart for her beloved pets, a good glass of wine (or two), and gardening at her home. She was an integral part of her community here in Cle Elum. She was passionate about mentorship, with an emphasis on women in engineering. She was generous in her support of many causes which include Life Support, The Nature Conservancy, Women in Engineering, Alzheimer’s Association, and the Pancreatic Cancer Awareness Network.

If she wasn’t traveling the world, she was entertaining friends and family at Unionville Ranch or relaxing with Jim at her Montana cabin.

Our thoughts are with her husband Jim, their children Megan and Travis, her late husband Kris Nielsens’ daughters Chri, Tanya, Tara and Lia, and the many friends and colleagues whom she held dear.

Our founder, mentor and friend will be sorely missed.

Her obituary from the Brookside Funeral Home notes:

Pat was born in Lexington, Kentucky, on June 14th, 1957, as the only child of John and Maudine Frisby. She had the natural ability to captivate the room with her infectious energy, bright smile, and zest for life. Pat never met a stranger. She was a natural leader, meeting challenges with determination, creativity, and grace. She had an insatiable thirst for knowledge that followed her through life, garnering her numerous degrees, certifications, and accolades.

Pat is loved, cherished and survived by her husband Jim. She is also survived by their children Megan and Travis, her mother Maudine Frisby, her late husband Kris Nielsens’ daughters Chri, Tanya, Tara and Lia, and the many friends and colleagues whom she held dear.

She leaves an enormous void in our lives, and she will be sorely missed.

Per her request, her celebration of life will be held at Unionville Ranch Cle Elum, Washington at 2:00pm on Saturday October 19, 2024. We invite you to join us immediately after for cocktails, hors d’oeuvres, and sharing memories of her remarkable life with family, friends, and colleagues.

In lieu of flowers, please consider a donation to Life Support, The Nature Conservancy, Alzheimer’s Association, Pancreatic Cancer Awareness Association, or Purdue University’s Women in Engineering (WiE) Program in honor of her memory.

Memories and condolences can be shared at www.brooksidefuneral.com

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New Member Profile: Nicholas Garvey https://source.aacei.org/2024/09/25/new-member-profile-nicholas-garvey/ https://source.aacei.org/2024/09/25/new-member-profile-nicholas-garvey/#respond Wed, 25 Sep 2024 19:46:55 +0000 https://source.aacei.org/?p=9582

Meet Nicholas Garvey

Where are you from, and where did you go to school?

I am from the UK, and I have pursued my education in the construction field. I initially trained as a quantity surveyor and have progressed to senior commercial manager at Mace Consult, part of the Mace Group. I obtained my construction management degree from the University of Wales and studied this in Wrexham, Wales. 

What’s something about you (a fun fact) that not many people know?

A fun fact about me is that I have had the opportunity to travel extensively for work and have visited various countries worldwide, such as Hong Kong, Singapore, Australia, Gibraltar, and the Falkland Islands. I still need to get to North America, and then I can tick off visiting every continent; one day, I will. 

Where do you work?

I work as a senior commercial manager at Mace Consult. I am currently involved in a project forecasting the future spend profile for a £443 million project.

What do you love most about your job?

What I love most about my job is the opportunity to work on challenging projects that demand strategic planning and critical thinking. Seeing how my work contributes to successfully completing large-scale construction projects is rewarding.

Do you have a project story to share?

An interesting project story is about when I was working in Australia and had the chance to prepare estimates for mining sites in the remote Pilbara region of Western Australia. The experience of working in such a unique and challenging environment was truly memorable.

What are your future goals and aspirations for your career? Did someone inspire you to be on this career path?

My future goals and aspirations in my career involve continuing to excel in cost engineering and contributing to innovative solutions in the construction industry. Despite the challenges I faced when I was diagnosed with multiple sclerosis, I have learned to adapt and use technology to further my profession.

What is the biggest career challenge you’ve had to overcome?

A significant career challenge I overcame was accepting the need to use adaptive technology and aids due to my diagnosis of multiple sclerosis. This challenged me to find innovative ways to continue in my profession and led me to explore the field of cost engineering.

What’s been your favorite or most memorable moment of your career?

One of the most memorable moments in my career was the extreme commute I undertook for a meeting in Sydney, Australia, from Perth, Western Australia. The five-and-a-half-hour flight, each way in a single day, exemplified the diverse and challenging aspects of my work in different locations and the extreme work commutes that you sometimes have to do to get the job done. 

Why did you join AACE?

I joined AACE to connect with professionals in cost engineering and project management, gain insights, and share experiences with like-minded individuals.

What do you like most about being an AACE member? Or What’s your favorite part of being an AACE member?

I enjoy being an AACE member because it provides networking opportunities, access to valuable resources, and the chance to stay updated on industry trends and best practices.

What advice would you give someone wanting to enter the field?

My advice for someone looking to enter the field of cost engineering would be to stay curious, continuously update your skills and knowledge, network with industry professionals, and be open to embracing new technologies and methods in the construction industry.

Monkeying around in Gibraltar 

Taking the dog for a walk and not letting my wheelchair be a barrier 

Being a tourist in London 

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A Professional Pathway and Embracing Core Values: An Interview with Jessica Edwards Project Controls Specialist for Brindley Engineering Corporation https://source.aacei.org/2024/09/18/a-professional-pathway-and-embracing-core-values-an-interview-with-jessica-edwards-project-controls-specialist-for-brindley-engineering-corporation/ https://source.aacei.org/2024/09/18/a-professional-pathway-and-embracing-core-values-an-interview-with-jessica-edwards-project-controls-specialist-for-brindley-engineering-corporation/#respond Wed, 18 Sep 2024 14:59:16 +0000 https://source.aacei.org/?p=9560

A Professional Pathway and Embracing Core Values

An Interview with Jessica Edwards, Project Controls Specialist for Brindley Engineering Corporation

Jessica Edwards  

What led you to a career in Project Controls?

I began working in the oil and gas industry using SAP in purchasing and procurement.  This eventually led to a role in sales and marketing.   Married life took my family from Wyoming to Illinois, where I began working as a transportation dispatcher.  It became apparent that the department needed support with backlogs in the mechanical garage and transportation sectors. As a result, I was able to employ my previous SAP experience to broaden my understanding of safety, security, health, and environmental concerns within the industry.

After curating my experience within the oil and gas industry, I pursued my interest in project controls by applying for a project controls specialist position.  Successfully securing the role, I became one step closer to achieving my career goals at a company that prioritized growth and learning.

Why did you choose this line of work?  What was the attraction for you?

I chose this path because I thrive on collaborating with diverse individuals.  Project controls align perfectly with my aspiration of becoming a project or programs manager.

Can you share any childhood experiences that have significantly shaped your values or influenced your approach to education?  

I grew up mainly in Illinois and then moved to Wyoming in the middle of high school, later graduating in Cheyenne.  My weekends were spent at my grandparents’ houses, surrounded by family.  Family — a value I’ve instilled in my children — is paramount to me.  Whether near or far, we cherish time together, grateful for the technology that keeps us connected across distances.

It was difficult to decide which school worked best for me.  I needed flexibility, so I chose to attend the University of Phoenix. This allowed me to balance working full-time and parenting three active children.  I earned my Bachelor’s in Business Management and Master’s in Business Administration.

Did you have a mentor or someone who encouraged your journey?

My husband encouraged me to follow my heart.  If I wasn’t happy with what I was doing, I needed to change direction.  The wind doesn’t always blow in one direction, so place your sails where they will catch the breeze and help you to your destination.

What advantages do you think the annual AACE conference offers to members like yourself and non-member women? Can you share some memorable experiences?

I attended my first annual meeting in 2023.  I learned a lot from the sessions I attended and made wonderful connections with people inside and outside my work field.  Additionally, I learned that I am not alone as a woman in the project controls world.  There are opportunities for women to grow, advance, and develop into leaders.  I look forward to attending in 2025 and seeing what the conference will offer.

How has being associated with AACE added value to your professional development?  

AACE is new to me, and I am excited to continue to explore the certifications and training as I progress along my project controls journey.  Networking is extremely important to me as it allows me to collaborate with those from other subject areas.  It is fantastic to know that there is a world of people to reach out to and bounce ideas off of. This often leads to discovering solutions for obstacles I may face.

As we conclude, what words of inspiration would you share with other professionals?

My favorite quote is, “If you hear a voice within you say you cannot paint, then by all means paint and that voice will be silenced,” by Vincent Van Gogh.

I use this quote to empower myself.  If you feel you can do something, I urge you to keep trying.  It may shift and transform as you grow, but keep working until YOU are satisfied.  I was told time and again that I “couldn’t be a good single mom of three children while managing to work and having a social life,” yet here I am! I am remarried to a man who loves me and my children as his own.  I value my children and the fantastic engineering company that helps to empower my dreams and reinforces the notion that anything is possible.

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Part 5 – Six Elements of Project Controls – Proof of Value https://source.aacei.org/2024/08/29/part-5-six-elements-of-project-controls-proof-of-value/ https://source.aacei.org/2024/08/29/part-5-six-elements-of-project-controls-proof-of-value/#comments Thu, 29 Aug 2024 14:27:38 +0000 https://source.aacei.org/?p=9459

Part 5 – Six Elements of Project Controls –Proof of Value

By Lance Stephenson, CCP FAACE Hon. Life

Lance Stephenson, CCP FAACE Hon. Life, is a contributing member of AACE’s Technical Board and is a Certified Cost Professional. Lance has provided direction in the areas of organizational design, process improvements, auditing, maturity assessments, and the development and implementation for improved capital portfolio and project effectiveness. He is a senior leader and manager with over 35 years of experience in the operational, capital portfolio, and project delivery environment and is currently the Director of Operations for AECOM.

This article continues the series on the Six Elements of Project Controls. Past articles included the basics of the six elements of project controls, the effect of quality, the maturity required, defined competencies, and the level of effort. Today’s article discusses the value of introducing and managing the six elements of project controls within your organization. The six elements include the following:

The six elements of project controls are the operational steps for managing functional project control requirements within a project. As discussed in earlier articles, knowing about these elements is not enough; it is essential to know why they need to be applied to fully comprehend the value these efforts provide. The following case study provides the required context for further comprehending their criticality.  

Case Study – Interconnecting Piping System Project

A project was required to improve the throughput of an interconnecting piping system to an existing pipeline facility.

  1. The project’s total installed cost (TIC) was estimated at $27.97 MM.
  2. Contingency was set at $3.17 MM.
  3. The TIC for the project included all front-end loading (FEL), execution, and commissioning/startup costs.
  4. The Front-End Loading (FEL) phases were estimated to take eight months to
  5. Detailed engineering (six months).
  6. Construction (ten months).

The project had an aggressive finish date as it had to align with the shipper’s shutdown date (to connect to their oil refining facility); a one-month schedule buffer was added to the overall duration to ensure that the in-service date would be met. The project was highly complex, with numerous significant risks identified due to the large number of underground work and connection points. Much above-groundwork was also required, so coordination efforts were critical for success. Due to the complexity and aggressive finish date, it was determined that time and material (T&M) contracts would be required, and the owner would carry most of the project and financial risks. The construction portion of the project was competitively bid, where a target estimate was determined.

Because of these requirements and subsequent concerns, it was decided that a more experienced project controls team would be required to provide the proper governance and oversight to manage the risks and, subsequently, the execution of the project. The total owner project controls budget was then set at $559.5 K (2% of TIC) of which $111.9 K was allocated to manage the FEL phases and $447.6 K was used to manage the execution portion of the project (detail engineering, procurement, and construction). The contractor was required to assign dedicated, experienced project control personnel funded within their respective contract. Table 1 illustrates the budget elements for the project per phase, including a breakdown of the owner project controls budget.

Table 1 – Project Controls Budget for the Interconnect Piping System Project

The project progressed smoothly through the FEL phases with no substantial cost increase or delay in meeting the required in-service date. The detail-design portion of the execution phase also experienced minimal issues; the design intent was maintained. With everything going according to schedule and budget, the project manager (and his senior manager) cut the budget for the owner’s field project control staff as they didn’t see the value of having a field project control presence. The owner project controls budget for field activities was estimated at $342.4 K. This budget was required to provide governance, oversight, and risk management for contractor activities while providing overall project administrative/controls duties for the owner project manager and team. Even though eliminating the owner project controls effort was highly contested, the decision was not overturned. Because of this budget cut, the project controls manager requested that his team validate the schedule, resource requirements, and progress measurement (earning rules) to ensure a robust plan was in place. This request was also denied.

Construction activities started on time as planned, and as the construction activities progressed, the contractor provided construction reports on the work activities. The contractor did assign a project coordinator to complete the project controls deliverables as outlined in the contract; however, minimal reporting was introduced, and only a three-week look-ahead schedule was used. It was later determined that the project coordinator did not have the project controls skill set as defined in the contract, nor did the contractor comply with the requirements.

At the end of the sixth month of the 10-month construction schedule, it became apparent that the contractor and its subcontractors were experiencing performance and delay issues, which impacted both the costs and schedule of the construction activities. The senior manager, who enforced the decision not to have owner project controls oversight, asked for a team of project controls specialists to be assigned to complete an investigation and provide triage support as necessary. The triage efforts introduced allowed the project team to recover one month of the seven-month schedule delay and identify some improvements for a small reduction in the forecasted cost overrun.

Findings from the Investigation – The Dissection of Impacts

Upon project completion, a post-mortem[i] was completed. Table 2 represents the activities that contributed to the project cost impacts on the owner and constructor’s costs. The list provides the cost increases for owner costs as well as the construction costs. The most significant cost increase for the owner was due to the schedule extension. The extension to the schedule also contributed to increased construction costs; labor performance also contributed to the increase.

Table 2 – Post-mortem of Project Costs

The contractor costs grew from an original budget of $18.20 MM to $26.67 MM, while the owner costs grew from $3.20 MM to $7.00 MM, as illustrated in Table 3. The owner project controls cost to complete the investigation and support the triage effort was $702,720, over twice the amount of the original budget of $342,390. With 100% of the contingency funds used to pay for some additional costs, the total project overrun came to $9.27 MM. The overrun was paid for out of the portfolio funds[ii] allocated for the fiscal period.

Table 3 – Variance of Project Costs by Participant

The more significant issue was the owner’s revenue and profit loss. Table 4 illustrates that the outage and schedule delays contributed to $8.48 MM in lost profits. The business cost[iii] overrun, including profit/loss, was $17.75 MM, 97.5% of the original construction costs ($18.2 MM).

Table 4 – Total Cost Impact

While the cost and schedule impacts on the project were quite evident, there was a negative ripple effect on the organization. The project’s estimated return on investment (ROI) was 28%, with a hurdle rate of 13.5%. The investment was expected to yield returns exceeding the minimum rate of 12% required to justify the risks and costs of spending capital dollars on the project. Unfortunately, once the project was completed, the post-mortem assessment determined the expected yield at 10.5%, which would have resulted in the project’s rejection.

Owner organizations need to be acutely aware of the mismanagement of costs and schedule durations, given it has a negative impact on the project’s return on investment (ROI) and internal rate of return (IRR). These cost impacts affect the organization’s bottom line. For instance, it may result in the cancelation of downstream projects as other funding streams (portfolio funding, OPEX, etc.) are being expended to correct struggling project(s). Unfortunately, owner project teams may not realize their contributions to the total impact of their project(s) and the impact they may have on the residual costs the organization is required to absorb. This lack of realization, as illustrated in this case study, can have an even more significant impact on the organization’s competitive advantage. Because of the cost impact, the owner company may have to increase its rate structure for moving products to absorb the losses of the project. This approach to increasing the rate structure is known as the death spiral[iv]. Increasing the rate structure could change the competitive landscape in which they operate and put their market share at risk (further enhancing the downward spiral).

While the focus of the case study has been on cost impacts and schedule delays, other critical issues were also identified. Due to the lack of planning efforts, a significant safety event occurred in which two laborers were injured. The contractor was required to install a concrete pony wall and elevated pump foundations in one of the work areas. Unfortunately, the installation of the pony wall restricted access to the area where tanks needed to be installed. This, along with the elevated pump foundations, further restricted the team from moving any construction equipment (backhoe with hydraulic breaker) into the work area. Therefore, laborers had to demolish the pony wall using jackhammers and hand tools. While jackhammering, a portion of the wall collapsed on the two laborers. One individual suffered a sprained wrist, while another individual broke his leg. This individual was caught between the fallen pony wall and the elevated pump foundation. This issue restricted the ability to evacuate the laborer to receive medical care, which could have potentially turned this into a catastrophic event had the injuries been much worse. If a proper schedule had been developed and validated, the project team would have been made aware of the sequencing required to install the tanks, build the pony wall, and construct the elevated pump foundations. While this event did not have a direct monetary impact on the contractor, it did, however, change their safety rating, disqualifying them from bidding on any future work.

Another impact that occurred was the erosion of team morale. The lack of accountability and responsibility to execute the work destroyed any trust among the team members. This created a silo mentality, which instituted the blame game. This further hindered collaboration, eliminating the ability to collectively solve any problems that occurred. While it is difficult to determine the cost impact of team morale, this did have a causal effect on quality, safety, and productivity.

The case study provided demonstrates a myriad of lessons learned opportunities. Based on the post-mortem assessment, many contributing factors were identified which resulted in cost overruns and schedule delays. A summary of contributing factors include:

  1. The contractor demonstrated competency in project controls during the pre-qualification phase but did not implement the processes/systems as contractually required, i.e., bait and switch!
  2. The contractor had identified that two on-site project controls specialists were assigned in their proposal but chose not to fill these positions. The contractor had delegated the project coordinator (having minimal training) to complete the project controls efforts. His lack of focus on project controls efforts compounded site issues, which included:
    1. Actual costs/hours were not collected correctly (missing information).
    2. No progress measurement or earned value management was implemented; therefore, performance assessments were not carried out.
    3. Developed 3-week look-ahead schedules in Excel (without logic) instead of CPM Schedules (with logic). CPM schedules provide a structured, logical, and analytical approach with the capability to depict dependencies, progress tracking, float, delays, and resource allocation. 
  3. There was a lack of change management controls (the contractor did not identify changes to the scope of work until the last few weeks of the project). A claim of $350,000 was submitted after the contractor left the site. This limited the ability to forecast potential outcomes. The lack of change management controls resulted in the inability to accurately identify additional risks as well.
  4. There was a lack of risk management controls, where the risk register was not kept up to date. This eliminated the ability to administer and identify mitigation strategies and use contingency funding properly, further reducing the ability to forecast potential outcomes.
  5. The contractor never applied the required resourcing levels to maintain the execution of the scheduled activities. Without proper reporting, the project team could not identify the impact of the lack of full-time-equivalent (FTEs) craft resources required to complete the construction activities. A resource-loaded CPM schedule would have provided this foresight. 
  6. A proper schedule would have identified access/egress issues; the contractor had excavated numerous areas to install underground pipe. The numerous open areas restricted teams from working in a systematic and efficient manner, creating performance, productivity, and safety issues. 
  7. Construction delays also caused compounding performance issues and introduced additional undue risks to the project including:
    1. Overtime and work week extensions resulted in fatigue and morale issues (diminished productivity and performance).
    2. Parallel work zones created congestion and interface issues between craft crews.
    3. Quality and craftsmanship of the installation were reduced due to fatigue and rework.
    4. Fatigue, team morale, congestion, rework, and performance issues all contributed to an unsafe work environment. The contractor’s safety rating doubled.

Most of the attention of this case study demonstrates cost and schedule impacts absorbed by the owner, as a T&M contract was put in place. The T&M contract structure shifted liability to the owner, requiring them to provide increased contractor oversight; however, if a firm-price contract were chosen, the contractor would have been liable. The contractor would have absorbed most of the cost impact because of their lack of compliance and due diligence in executing the work.

Degree of Application

Some would state that the project provided in the case study was destined to fail because of the impact of upstream events, which affected the construction activities. However, the investigation determined that this statement would be untrue. The scope of work was well-defined prior to starting construction activities. This was substantiated by the fact that minimal scope changes were introduced during the FEL and detail-design phases of the project. The contractor did accuse the owner of having a terrible target estimate[v]. This claim was refuted as a third-party assessment concluded project costs were in the mid-to-high point range of historical and benchmarked data of similar projects. In fact, the production rates used to validate the estimate were higher than the contractor’s original bid estimate and their supporting historical data. The owner also applied $3.17 MM (11.3% of the TIC) for contingency based on a P70 ranking (70% probability of achieving the estimated costs).

From the investigation, it was determined that the contributing factor was the means and methods of execution, compounded by the lack of project controls (oversight), resulting in inhibited and diminished performance. Unfortunately, by not assigning the personnel as budgeted by both the owner and contractor, the project teams introduced layers of systemic risks[vi] to the project. The budget of the project controls personnel was the countermeasure to mitigate any cost and schedule impacts and assist in implementing corrective actions via re-planning efforts. If the project team had introduced the assigned resources, appropriate governance, oversight, control, and analysis would have been provided to determine the project’s health. This would have identified issues in advance where mitigation measures could have been introduced. While not all costs or delays would have been eliminated, the team would have been aware of them and instituted corrective actions to minimize their impact[vii].

Numerous studies have been conducted indicating the application of project controls efforts can positively influence the project’s outcome. Organizations can establish the application of project controls by introducing both development costs/efforts and monitoring and controlling costs/efforts to drastically reduce project failure costs, as illustrated in Figure 1.

Figure 1 – Application of Project Controls Costs/Efforts

To understand the relationship between effort and reduction of failure costs, one must understand the individual efforts and their contributions. Each effort is driven by the same components: people, process, and technology, known as the PPT framework. Without the full complement of the PPT framework, the maturity of the efforts would not be realized, resulting in an increase in failure costs. The following further elaborates on this philosophy:

  1. Development effort is expended to prevent or avoid execution problems and enhance and optimize project delivery. The effort and subsequent costs are associated with designing and implementing the performance measurement baselines, which become the surveillance envelope. These deliverables are planned and incurred before the actual execution of the project or parts of the project.
  2. Monitor and control effort is associated with measuring and monitoring activities related to the project teams’ execution efforts. This is where surveillance begins and continues until the project closeout.
  3. Failure costs are incurred based on the influence of deliverable defects and lack of monitoring and control. These costs occur when the results of work fail to reach quality standards.

It must be noted that both development and monitoring/controlling efforts complement the best practical approach for instituting project controls. These efforts cannot be completed separately or in part. For instance, completing development efforts without monitoring and controlling the project does not ensure a favorable outcome. It’s equivalent to instituting laws without police officers or a judicial system to administer (monitor) and enforce (govern) them. On the flip side, you have nothing to monitor and control if you do not have the required deliverables developed. Worse yet, if you don’t have the skills (competency and capacity), you don’t know what or how to monitor and control the project. With this said, there is no opportunity to complete variance analysis to determine the impacts and institute course correction. Development efforts, complemented by monitoring and control efforts, go hand in hand. These efforts are effective barriers[viii] and act as an early warning system, eliminating factors causing project failure.

If the suggested efforts identified in this series of project control articles are implemented, organizations can significantly increase their chances for project success and minimize financial losses. On the other hand, if these efforts are not implemented, organizations will continue to introduce chaos and go down the path of failure. Your project control actions determine your success.

Proof of Value

The Value of Project Controls, as defined by the author, is the methodology that allows organizations to determine how much their resources are used for activities that enhance project delivery. This value is provided through the quality, maturity, competency, and level of effort of the organizations’ project control services. Project controls should never be considered a cost to a project; rather, they should be a value that contributes to positive outcomes, as demonstrated in the case study provided. Because the project team considered the project control effort as a cost (as illustrated in the case study), issues arose that contributed to the failure of this project. The decision to eliminate the field portion of the owner project controls team and the contractor’s lack of project controls compliance and skills impacted both parties. Both organizations experienced monetary, strategic, and reputational damage from this outcome. The contractor lost out on future work with the owner company because of their inability to provide the required personnel, and the owner project team was moved out of the organization due to their lack of judgment. Ultimately, this eroded trust and accountability, eliminating both organizations’ focus on value.

Figure 2 illustrates the association of the six elements in relation to the quality, maturity, competency, and level of effort components. These components can be further enhanced using credible, industry-based practices and standards, like AACE International’s TCM Framework, recommended practices (RPs), and skills and knowledge (S&K) study guides. Using these industry-recognized resources further increases organizations’ quality, maturity, and competency levels.

Figure 2 – Value of Project Controls

From earlier articles, it’s been discussed that an organization’s success is greatly enhanced if quality, maturity, and competency measures are implemented. Based on the case study provided, it is equally important to comply with these requirements. Proof of value is difficult to justify if these measures are not applied. The contractor and owner teams blatantly chose to ignore the requirements, resulting in costly (tangible and non-tangible) losses. The existing attitude towards compliance was problematic, to the tune of $17.57 MM to the owner company. While the project team knew what needed to be done (based on the original baseline), their refusal to introduce the defined measures obstructed management from knowing the complete scope of work. This, in turn, affected how the performance measurement baselines were assessed and how change was managed, resulting in the minimization of the team’s ability to know what had been done. Having used the assigned project controls personnel, the project teams would have known how actual performance compared to the baseline and checked the results of the corrective actions. This ripple effect impeded the teams’ ability to effectively compare the project’s performance to their respective baselines. The ability to know what work remained to be completed was, therefore, misleading. This inhibited the teams’ ability to identify and implement corrective actions to align performance with expectations. The cumulative effect of the lack of project control efforts and mismanagement contributed to project failure.

Defining and demonstrating project controls’ value may be difficult for some organizations. It is incumbent on the organization to recognize the requirements and minimize these difficulties. The following statements assist an organization in establishing the value that project controls can provide:

  1. If you can’t define the value, how do you know its worth? Make sure you define the value.
  2. If people can’t understand the value, why should they care? Make sure you communicate the value.
  3. If you don’t know where you’re going, how will you get there? Make sure you deliver the value.
  4. If you can’t prove what you’ve delivered, why should people trust you again? Make sure you measure the value.

In closing, imagine the following: You own a $65,000 vehicle but do not have any insurance on it. Imagine getting in an accident where you are at fault. Imagine having to replace both vehicles, plus pay for a civil lawsuit for personal damages. Imagine if a fatality had occurred. Now imagine if you had bought insurance, where a small investment of $200 a month would have saved you millions of dollars and potential jail time. In terms of the case study, imagine if both development costs/effort and monitoring and controlling costs/effort for both the owner and constructor were applied. Imagine that the organizations introduced effective barriers to minimize project failure. Imagine!

Footnotes:

[i] The post-mortem assessment included an event tree analysis and systems dynamic modeling. System dynamics modeling, introduced in Part 2 of this series of articles (Six Elements of Project Controls— Quality), is a continuous simulation model using hypothesized relations across activities and processes. It can describe ways to assess the degree of the formal process needed to deliver the system (i.e., project controls) with the required level of quality. 

[ii] Most, if not all owners, irrespective of their portfolio size, set an upset limit (spend ceiling) for Capex funds to be utilized annually. These limits play a pivotal role in financial management, allowing organizations to regulate their portfolio’s financial debt.

[iii] Business cost overruns go beyond project cost overruns; they define the tangible costs instigated by the cause-and-effect relationships that projects have with the overall organization. Business costs do not include intangible costs, which may include costs to repair the organization’s reputation, strategic endeavors, competition risks, etc.

[iv] A death spiral occurs when an owner organization tries to re-balance its costs (who pays for what). Death spirals are caused by a decrease in revenue and an increase in costs. To offset this, in terms of pipeline providers, rate hikes are introduced. In most circumstances, both the shipper and end customer will pay for this increase.  Death spirals can also be caused by the downward demand of products.

[v] A target estimate was established based on the submittal of the competitive bids from five contractors. The target estimate provided a fair and equitable approach to managing the project.

[vi] Systemic risks are uncertainties (threats or opportunities) that are an artifact of an industry, company or project system, culture, strategy, complexity, technology, or similar over-arching characteristics. AACE 10S-90 Cost Engineering Terminology.

[vii] For further understanding of project failure, it is recommended that you read the article TCM.3933 The Project Life Cycle: Preventing Change and Project Failure, AACE Transactions, 2022, H. Lance Stephenson, CCP FAACE.

[viii] Established barriers are key components for defining preventative actions for instituting the Swiss cheese model. The Swiss cheese model is used in risk analysis and risk management as the principle behind layered security. It likens human systems to multiple slices of Swiss cheese, stacked side by side, in which the risk of a threat becoming a reality is mitigated by the differing layers and types of defenses that are “layered” behind each other. In theory, lapses and weaknesses in one defense do not allow a risk to materialize since other defenses also exist to prevent a single point of failure. It is sometimes called the cumulative act effect (Wikipedia).

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