PLANNING ENGINEERING AND PROJECT MANAGEMENT By Lec. Junaid Arshad 1 Lecture#03 DEPARTMENT OF ENGINEERING MANAGEMENT

Topics Covered  Project Life Cycle  Project Phase Activities  Request for Proposal (RFP)  Proposal  Recommended Proposal Format 2

PROJECT LIFE CYCLE 3 A project is by definition a temporary endeavor, which means it has its own life cycle.

StepsTwo (Generic) PhasesFour (Generic) StagesFive to Ten or More (Industry Specific) TasksMany (Project Specific) 4 Macro view Micro view Generic means applicable to any sort of project Micro and Macro Views

5 Project Steps The PM process, over the course of this life cycle, can be grouped into two sequential yet overlapping steps 1. Planning 2. Accomplishment

6 Project Phases The sequential steps can be further broken down into four distinct phases in time through which any project passes. 1. Concept 2. Development 3. Implementation 4. Termination

PROJECT PHASE ACTIVITIES 7 Concept Phase The concept phase is when a need is identified and background data are collected. At this point in a project, there is an attempt to determine if a problem exists. Goals and objectives are developed during this phase, and initial plans are developed as well. Some field work can be done in this phase i.e. data collection, market surveys

8 Important Note: It should be noted that the project can be terminated within this or any other phase of the project. For instance, an environmental project could be terminated at the concept phase because contamination was not found at the site.

9 Development Phase In development phase more detailed planning occurs. By this point, the problem has been identified and a need has been established. The question at this point is: What is the best manner to go about solving this problem or satisfying our need? Economic studies are often performed in this phase, as well as an evaluation of alternatives. Detailed design will also be performed in this phase.

10 Implementation Phase Construction activities often occur and the detailed design plans are implemented in this phase.

11 Termination Phase The termination phase is the point where the results of the project are documented, resources are released, and responsibility for the newly developed product is transferred. For example, if the project were to build a new chemical manufacturing plant, it is at the termination phase that the plant would be placed in the hands of the new operators.

12 Project Stages and Tasks In practice, on most projects, the four phases need to be broken down into greater detail. Each phase can be broken into a number of stages and further broken down into tasks.

Request For Proposal (RFP) A request for proposal (RFP) is a document that an organization posts to obtain bids from potential vendors for a product or service. For example, a new business or a business moving from a paper-based system to a computer-based system might request proposals for all the hardware, software, and user training required to establish and integrate the new system into the organization. 13

RFP Response Time The Typical Response time allotted in most RFPs is two weeks. This is relatively a short amount of time when one considers the significant amount of work that must be accomplished. 14

Within the RFP response time:  The information in the RFP must be fully understood  A strategic approach must be developed and estimated (schedule and cost)  The approach must be clearly articulated (expressed)  A sales theme must be woven throughout the text of the proposal 15

Importance of Proposal A proposal is a major tool by which a service company secures new business. A Successful proposal meets two primary criteria: 1) The proposal is approved by the customer’s review process 2) The proposal is executable as specified 16

Proposal is a Project Developing a proposal is a project in itself. This idea can clearly be seen by the definition of a project. Developing a proposal involves the completion of a series of tasks which have their objective the submission of a successful proposal. There is a defined scope of work for the completion of the proposal, which involves determining the technical approach, developing a work breakdown structure, designing a network schedule, estimating costs, and the actual writing of the proposal. 17

These tasks must occur within a schedule for completion as defined by the RFP. There is a definite cost for preparing a proposal, such as the base salary of the personnel working on the proposal and the cost of the materials, equipment and subcontractors. Although many companies neglect to consider the cost of proposal preparation, prudence requires developing a budget for proposal preparation and tracking preparation costs. Finally, resources are required for completion of a proposal, many of which are limited. 18

Proposal Cost A general rule of thumb is that the cost to prepare a proposal should not be more than 10% of the estimated gross cost of a project. (cost refers to the amount that will be incurred by the service company in completing the project, not the price the customer will be charged) 19

Recommended Proposal Format The recommended proposal format is as follows: 1. Introduction 2. Background information 3. Objectives 4. Technical approach 5. Scope of work 6. Project team and related experience 7. Schedule 8. Costs 9. Assumptions and terms and conditions NOTE: The proposal format should reflect both project criteria and the project planning and control cycle. 20

1. Introduction The introduction is used to briefly describe the events that led up to the submission of the proposal, as well as to introduce the service company. 2. Background Information The background information provides the opportunity for the service company to demonstrate its understanding of the project. Additionally this section should call out any gaps in data that will need to be addressed by the detailed scope of work, enabling cost effective completion of the project. 21

3. Objectives This section is used to restate the objectives as identified by the customer and more importantly, to state the long and short term objectives for the project as identified by the company. 4. Technical Approach The technical approach presents the basic strategy that has been developed in order to meet the objectives. 22

5. Scope of Work The scope of work provides a discussion of the details of how the technical approach will be implemented. 6. Project Team This section provides the company with the opportunity to introduce the selected personnel and their experience on related projects. 23

7. Schedule The schedule section of the proposal should present the duration of the project and various tasks, while showing how these tasks are linked and interdependent. 8. Cost This section should illustrate the cost of the various tasks, the cost of the project as a whole, and the cumulative cost over time curve. 24

9. Assumptions and Terms and Conditions Provide the boundaries for the project scope of work. This section tightens up the details of the scope of work and, if well written, protects both the company and the customer. Note that the assumptions are typically developed and recorded throughout the planning of the project, whereas the terms and conditions are often based on company policy. 25

In this section care should be taken to inform the customer that the assumptions and terms and conditions are based on the project scope. If new information gained during execution of the project, indicates that an assumption as invalid or a change in terms and conditions is required, the project scope of work will be affected, thereby making a change order necessary. 26

RFP vs Tender Notice 27 An RFP is used when the purchaser is looking for the best value solution to resolve a problem or to deliver a good or service, but is not exactly sure how to achieve it. A tender notice is used when the purchaser knows exactly what good or service they want and is looking for the best price to deliver it. A tender is an offer to do work or supply goods at a fixed price.

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