Controlling Project Cost and Schedule

1. Controlling Project Cost and Schedule Protecting the Waters of the State…

2. What is GCA • Political Subdivision of the state • Established 1969 • Governed by a 9 member appointed Board of Directors • Can operate statewide • Fully funded by services provided • No ad valorem taxes • Mission • Protecting the waters of the State of Texas through environmentally sound and economically feasible regional waste management practices

3. GCA Operations • Own and operate 4 regional industrial wastewater treatment facilities ~90 industries 50 mgd • Blackhawk Facility is a regional municipal wastewater treatment facility • POTW so operate a pretreatment program • Odessa Facility supplies treated wastewater for O&G water supply

4. How to Produce a Poor Project Outcome • Lack of Clear Project Objectives • Weak Project Management Processes • Poor Change Management • Ambiguity in Bid Package

5. “Benefits” of a Poor Project Outcome • Excessive Contractor Change Orders $$ • Project Delays $$ • Contractor Disputes $$$ • Attorney Fees $$$$

6. Avoiding a Poor Project Outcome

7. Basic Elements of a Project • Scope • Schedule • Budget • All exist in equilibrium- changing one changes the other two • Key to maintaining Schedule and Budget is to define Scope early and control of Scope to the extent possible

8. How GCA Avoids a Poor Project Outcome • Formal Project Management Process that Requires: • Clear Project Objectives • Inclusive Project Team • Specific Project Deliverables to Avoid Ambiguity in Bid Documents • Strong Change Management Process

9. GCA Project Work Process (Stage/Gate) • Project is broken up in to clearly defined stages of work • Each stage has specific expectation that need to be addressed before progressing to next stage • Progression to next stage requires senior management approval

10. Project Objectives • Defines what is the expected project result not what to build. • What problem(s) will this project address? • What are the expected performance outcomes? • What is the required project delivery date? • What are the know constraints?

11. Project Objectives- All Projects Must Address • Core Values • Safety • Reliability • Compliance • Cost Effectiveness • Operability • Maintainability

12. Project Objective Example • Provide a disinfection system upgrade to meet the new regulatory limits • System to be in compliant operation by November 1, 2022 • The system must be installed on the current plant site but not include the area reserved for future treatment expansion • The system must be expandable to meet future planned capacity • The system must be installed without interruption of operations • The system must not include gaseous chlorine or other potential off site vapor release hazards • Minimize operational and maintenance complexity. • Control of capital cost is more important than operational cost

13. Project Execution Process • Strong Project Manager • Authority to control the project • Clear delineation of roles • Inclusive Project Team • Report to PM for project work • Provide communication between the project team and respective area of representation

14. GCA Project Work Process- Project Team • Project Manager • Project Engineer • Facility Representative (Operations & Maintenance) • Compliance Representative • Engineering Consultants • Other staff as necessary (Safety, Reliability, QA/QC Reviewers, etc.)

15. GCA Project Work Process Stages

16. Key Stage Deliverables • Stage 0- Needs Identification • Clear objectives and preliminary justification. • Stage 1- Planning Studies/Technology Selection • Define initial Basis of Design • Evaluation and selection of technology to meet objectives

17. Key Stage Deliverables • Stage 2 • Process configuration, layout and key equipment needs • Updated cost estimate • Permitting requirements • Equipment delivery issues • Utility needs • Plan of how to address obstacles to completion. • Initial Transition Plan

18. Key Stage Deliverables • Stage 3- Detail Design • Bid Package • Detail of how to construct the project • Complete specifications • The more detailed the bid package the more likely to be able to build a partnership with the contractor rather than an adversarial relationship • We use Best Value bid evaluation process • Assure compliance with GCA standards • Updated cost estimate • Updated Transition Plan • Startup and Commissioning Plan • Identification of construction risks and associated costs • Project turnover requirements

19. Key Stage Deliverables • Stage 4- Construction • Complete construction of the project • Careful review of contractor submittal • Assurance of meeting design package requirements • Maintaining up to date as-builts • Stage 5- Commissioning • Project team verifies work is ready for turnover to operations • Complete Turnover Packages including warrantee documents • All manuals and as-builts up to date • Stage 6- Startup • Training and support to operations • Complete PSSR

20. Change Management • Key element in maintaining cost and schedule targets • All projects will requires some changes due to unforeseen weather or site conditions • Having a formal change management process valuable tool to meeting cost and schedule targets • Avoid Scope Creep

21. Scope Creep

22. GCA Change Management Process • Key elements approved in one stage require formal approval to be changed in subsequent stages • Guidelines for approval are defined in PWP documentation • Two types of changes • Project Changes • Scope Changes

23. Project Changes • Allows changes to completed work under certain conditions • Needed to meet Project Objectives • Needed for to meet a safety requirement • Need to meet a regulatory requirement • Change goes through Project Manager’s chain of command • Requires justification of one of the above • Requires definition of cost and schedule impact

24. Scope Change • A change request that is not a Project Change • Change is approved through Facility Operations chain of command • All Scope Changes require General Manager approval • Requires technical and cost/schedule evaluation by Project Management Team • Approval provides a change to the project budget and schedule

25. Summary • A Formal Project Management Process can improve your ability to meet cost and schedule targets • Key elements of good project management process include: • Clear Project Objectives • Inclusive Project Team • Specific Project Deliverables to Avoid Ambiguity in Bid Documents • Strong Change Management Process