Customer and Contractor Project Management Book
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Customer and Contractor Project Management Book - Roberto Pisani
Roberto Pisani
Customer and Contractor Project Management Book
Copyright © 2015 by Roberto Pisani
All rights reserved
This book is copyrighted property of the author, and may not be reproduced, copied or utilized, totally or in part, in any form or by any means without permission in writing of the author.
First Printing: 2015
UUID:
This ebook was created with BackTypo (http://backtypo.com)
by Simplicissimus Book Farm
Table of contents
1 FOREWORD
2 SOME TERMS TO REMEMBER
3 GENERALITIES
3.1 Theme and characters
3.1.1 Project
3.1.2 Project and Project Management
3.1.3 Customer and Contractor
3.1.4 Stakeholders
3.2 Stage and action
3.2.1 Action field
3.2.2 Contract and Project life cycle
3.2.3 Project Management topics
4 PROJECT MANAGEMENT
4.1 Management of the Resources
4.1.1 Human Resources
4.1.2 Material Resources
4.2 Management of the Works
4.2.1 Scope of Supply
4.2.2 Works crucial requirements
4.2.3 Quality of the Works
4.2.4 Progress of the Works
4.2.5 Changes and Variations
4.3 Management of the Risks
4.3.1 Customer and Contractor risks
4.3.2 Before Contract
4.3.3 Risk Register
4.3.4 Project execution phase
4.4 Management of the Time
4.4.1 Planning
4.4.2 Overall Master Schedule
4.4.3 Critical path
4.4.4 Project execution phase
4.4.5 Project Completion date
4.5 Management of the Costs
4.5.1 Contract price
4.5.2 Terms of payment
4.5.3 Project initial budget
4.5.4 Project cost control
4.5.5 Contract price management
4.6 Reports
4.6.1 Communication
4.6.2 Progress Report
4.6.3 Final Report
5 CRITICAL POINTS
5.1 Selection
5.1.1 Delays
5.1.2 Changes
5.1.3 Operational interface
5.2 Reducing or adding criticalities
1 FOREWORD
Does a Customer manage a project like a Contractor?
If their roles are different, will their management activities be the same?
The answer is obvious. Managing a project as Customer or as Contractor is not the same thing and even though both have the same goal (the project success) each of them will have to manage it taking account of his own functions.
For example, if the Customer will exercise his management activities with care that the project is carried out on schedule with the expected quality, on the other hand, the Contractor will cover the same issues with a greater focus on costs and remuneration.
Therefore this book was created with the purpose of dealing with the project management activities related to the resources, the works, the risks, the time and the costs by specifying how they should be addressed by a Customer and by a Contractor to ensure that the Parties know what to do and understand what each of them expects from the other.
The book, which provides concepts, criteria and data coming from the management experience of complex international projects, will provide useful information to execute a project, starting from the initial stage of preparation and planning until its satisfactory conclusion, treating the techniques and the aspects necessary for its management. It will describe how to communicate progress and results and it will inform how to face and overcome the most critical issues.
The goal is to help the insiders to complete the project with success and profit and the beginners to start the art
that is to know the beauty of Project Management and to learn how to do it.
I repeat, this book was thought not for generic insiders or beginners, but for people who is Customer or Contractor, to support them in understanding their responsibilities, their duties and how they should make the Project management together.
The book comes with elements taken from existing projects and contracts in order to provide the readers with examples of how certain issues are handled in the reality.
The last observation is about people.
I wish you to have to do with honest women and men, because there are no skills and experiences that take if they are not placed at the service of a work done with rectitude. If bad faith, greed and arrogance are prevailing, your good idea, your good project will not be successful and all your efforts will be in vain.
You will be prepared: Good luck!
2 SOME TERMS TO REMEMBER
This chapter defines the meaning of some words you will find in the book.
Note: within each term, the capitalized words have their own definition.
Agreement
The written document concerning the Works, which establishes the Contract between the Customer and the Contractor.
Change
Modification, alteration, deletion, addition to the Works requested by the Customer to the Contractor or proposed by the Contractor to the Customer.
Completion date
The date set in the Agreement to achieve the Substantial completion of the Works.
Contract
The Agreement between Customer and Contractor for the execution of the Works.
Contract documents
They establish the Works to be performed and the rights and obligations of the Parties.
Contract price
The amount of money that the Customer has to pay to the Contractor for the execution of the Works in compliance with the Contract documents.
Contract times, Time for completion
The period of time expected to complete the Works as specified in the Contract documents.
Contractor
Who will carry out the Works when entered into the Agreement with the Customer.
Critical path
The sequence of activities in the program (Schedule) of Works which are mutually dependent (each of them depends on the execution of others) and essential to reach the end of the Works in time.
Customer (Owner, Employer, Purchaser, Buyer)
Who has entered into the Agreement with the Contractor and for which the Works have to be executed.
Defects
Any irregularity, lack or failure of the Works.
Minor ones which do not prevent the use of the Works and shall not affect the issue of the Provisional Acceptance Certificate) must be eliminated by the Contractor in the Warranty period.
Extension of time, Time extension
Prolongation of the Contract times.
Final Acceptance (or Defects Liability) Certificate
Document that certifies the end of the Warranty period, confirming that the Contractor has fulfilled all his contractual obligations and, specifically, those related to the Defects of the Works.
Milestones
Dates specified in the Agreement which are associated with defined Works events. Typically these events, if not respected, are associated with onerous contract terms at charge of the Contractor.
Order
The binding agreement between the parties. It commits one party to provide the specified product at a certain date and the other party to pay the price.
Owner’s Engineer
Organization entrusted by the Customer to support his staff during the Project execution. Usually he is involved in interfacing and controlling the Contractor Works.
Parties
The Customer and the Contractor.
Penalty, Liquidated damages
The reduction in the Contract price that is up to the Customer when the Contractor does not complete the Works within the Completion date.
Project
See chapter 3.2.
Project Initial Budget
The assessment of the Project costs performed by the Project Team following the Project Contract award.
Project kick-off
First meeting between Customer and Contractor after the Contract award or first meeting inside each organization of Customer and Contractor to communicate the Contract award and to start the Project activities.
Project Life Cycle
Development stages of a Project from its born up to its final completion.
Project Manager
The professional appointed by the Customer or by the Contractor after the Contract award to lead the Project execution.
Project Management
See chapter 3.2.
Project Overall Master Schedule
The whole schedule of the Project, issued by the Contractor after the Contract award, detailing all the Project activities up to its completion.
Project Team
Group of professionals that will support the Project Manager in the management of the Project.
Project Whole-life Costs
The total costs to be sustained to implement the Project from its beginning up to its completion.
Provisional Acceptance Certificate or Taking Over
Document that certifies the Substantial completion of the Works according to the requirements of the Contract, starting the Warranty period.
Risk
An event, a condition that can adversely affect the smooth running of a Project activity.
Risk Register
A database containing all Project identified Risks with their individual characteristics and the necessary information for their management during the Project execution.
Schedule, Program
Document in which the Contractor indicates, over time, the activities for the execution and completion of the Works, the contractual Milestones to be achieved and, if any of interest, the activities pertaining to the Customer.
Scope of supply
The share of the works to be performed by the Parties to complete the Project as defined in the Contract.
Site
The place, made available by the Customer, where the erection, commissioning and test activities will be carried out and the Project completed.
Stakeholder
Who has an interest in the Project, participating to its implementation and contributing to its completion and success.
Sub-contractor, Sub-supplier or Supplier
Who has a direct Order with the Contractor for the execution of a part of the Works.
Substantial completion of the Works
When the Works are sufficiently completed and can be used for the purpose for which they were made.
Terms of payment
The payment conditions specified in the Contract to remunerate the Project Works.
Variation, Change order, Supplemental agreement
Document agreed by the Parties authorizing an addition, a deletion, a review of the Works and/or a change of the Contract price and/or of the Contract times.
Vendor List
List of the main supplies of the Project with the indication of the possible Suppliers.
Warranty period, Defects liability period
The period, following the issue of the Provisional Acceptance certificate, during which the Contractor has to eliminate any Defects