IMPLEMENTATION OF PROJECTS 25 July 2013

1. IMPLEMENTATION OF PROJECTS25 July 2013 Lt Col (Retd) L ShriHarsha Project Management Consultant & Technical Arbitrator

2. AGENDA • Preparing TOR and RFPs • Evaluating feasibility reports, DPRs, procurement documents and contracts • Bidding processes, Evaluation and award of contracts • Monitor and Manage Projects

3. Project Management Context • Initiation - TORs & RFPs • Planning - Evaluating feasibility reports, DPRs, procurement documents and contracts • Execution - Evaluation & award of contracts, contract management • Monitoring & - Contract Management controlling • Closing - Contract Management

4. Project Initiation “Define the problem before you pursue a solution” - John Williams

5. Terms of Reference • Variety of activities ranging from engaging consultants, service providers, project partners, financers etc. • Defines boundaries of the relationship for mutual support for a particular objective. • Establish check points and methodology for reviews progress • Requires approval of competent authorities • Subject to change based on economical, functional and technical requirements by mutual consent

6. Contents of Terms of Reference • Context of the proposal • Objectives desired to be achieved • Scope of work • Expected Output/deliverables • Duration of engagement • Financial aspects • Qualifications and experiences • Method of submission of proposals

7. Preliminary Documents • Request for Information • Decided on course of action • Soliciting information from various sources on same subject • No legal binding • Leads to request for quotations

8. Preliminary Documents • Request for Proposals • Intend to do something, but not sure of what to do or how to do • Evaluate different approaches with same criteria • Finalize approach and methodology first • No legal binding with any proposer • Approved proposal then offered to multiple vendors for pricing through RFQs

9. Preliminary Documents • Request for Quotations • Clear course of action and intentions to act. • Not legally binding till contract signed • No changes in scope of work permitted • Evaluation based on capabilities to complete work and best price offer

10. Project Initiation and Planning Documents Terms of Reference Feasibility Reports Preliminary or Concept Project Report Detailed Project Report Procurement Documents or Tenders Contracts

11. Evaluation of Project Documents Relevance to environment and working conditions Functional Viability Technical Viability Financial Viability Institutional Capabilities

12. Hallmark of Good Contracts Simple and Understandable Precise and clear Fair and Practical Meet Technical and Commercial requirements Foresee eventualities Dispute settlement mechanisms

13. Project Monitoring and Controlling “If you don’t know where you are, a map is of no help.” - Watts Humphrey

14. Monitor & Manage Projects Stake holder Management Change Management Contract Management User Requirements Breach Management Relations Management Time Management Cost Management Professional Responsibilities and Ethical Issues Dispute Resolution

15. Contract Management • Begins even before the contract is drafted • On going process and a distinct end is not identifiable • Ensured by constant visits and interactions • Long term relations built on trust and reliability

16. Contract Administration • Begins after the contract is signed • Ensures that the provisions of the contract are adhered to by all parties • Roles by various SMEs defined and generally in phases • Concludes with the closing of all litigations and contract documents

17. Process Overlaps Contract Management Planning Initiating Executing Monitoring & Controlling Closing Contract Administration

18. Responsibility • Project Manager and his team • Contract Manager • The PMO

19. Role of a Contract Manager • Creation and Maintenance of Contract documents • Ensure compliance of statutory requirements • Review performance and progress • Customer Relationship management • Rebate management • Monitoring and regulating invoicing and payment • Interpretation of contractual conditions • Change management • Dispute resolution and escalation • Sub Contract management • Brand Ambassador

20. Essential Skills • Technical knowledge • Legal knowledge • Negotiation skills • Proactive Approach • Decision making • Analytical thinking • People skills

21. Advantages • Better understanding of the project from the inception • Ensures better and realistic planning • Realistic risk analysis and its mitigation • Clear assignments of responsibilities • Holistic problem identification and resolution • Establishes contractual milestones and tracking • Effective Cost tracking and controls • Facilitates contract audits • Minimizes contractual litigations • Enhances relationships amongst stakeholders

22. Weaknesses in Contract Management • More time spent in Contract award than administration • Unclear roles and responsibilities • Poorly defined Statement of work • Inadequate supervision and monitoring • Delays in contract closures and audits • Lack of diligence in closing contracts • Improper handling of breaches • Weakness in dealing with closeout issues

23. Do’s of Contract Management • Try to get Agreement signed in standard format. • Where Customer’s format is insisted upon, ensure that this is made known upfront. • Minute proceedings of all meetings and distribute copies. • Consider cost, time, risks involved in proposing/ reviewing change requests • Use breach and default notices as enforcement tools. • Maintain a Master File

24. Do’s of Contract Management • Get responses in writing from contractors. • Get contractor to address customer’s RFP requirements, not just their standard products on their terms. • Get contractor to agree to service levels and fix time lines. • Ensure that contractor is part of unit/ final acceptance testing. • Obtain and review clause by clause compliance to customer : tender/legal terms, flow downs, acceptance testing, language, governing laws. • Have NDA and Teaming Agreements in place with contractors.

25. Don'ts of Contract Management • Assume that a Contract Form once used is valid for all occasions. • Commence work without a Contract in place (LOIs, POs) • Agree for changes / additional Work without written approval and outside Change Control Procedure. • Take over what is clearly a contractor’s responsibility. • Forget to have a Close-out Procedure, including recording of Lessons Learned. • Neglect to use meeting minutes/graphs to record progress and issues.

26. Don'ts of Contract Management • Neglect to follow paper trail audits. • Agree to contractors working on their own terms. • Agree to payment terms not tied to users acceptance / payment. • Agree to pay travel costs (ie cost of business). • Use different currency, laws and language.

27. Procurement of Goods and Services • Understand the functional and technical requirements before finalizing specifications • Market study to compare and evaluate products • Purchase specifications should be broad based on functional and technical requirements • Assess capability of supplier/vendor • Link delivery schedules to payment conditions • Impact of changes in tax policies and currency rates • Conditions and warranties • Liquidated damages and penalties • Transit risks and losses • INCO Terms and HSN Classification of goods • Risk Purchase conditions

28. Peculiarities of Consultancy Services • For capabilities not available in house. • Ensure availability of manpower as promised during the tendering stage. • Clear boundaries of responsibilities including dependency on in house resources. • Deliverables linked to time lines and penalties. • Define liquidated damages on account of consultants non performance impacting other works • Risk and cost arrangements. • Performance evaluation mechanism.

29. FIDIC Conditions • Clause 2.4 – Employer’s financial arrangements • Clause 8.7 – Delay damages • Clause 14.2 – Advance payments • Clause 14.8 – Delayed payments • Clause 15.2 – Termination by employer • Clause 15.5 – Termination for convenience • Clause 201. – Contractor’s claims • Clause 20.2 – Appointment of Dispute Board • Appendix – General conditions of Dispute Board Agreement

31. THANK YOU