Advanced Project Management

Techniques I & II

Advanced Project Management Techniques

By
Dominic P. Perrotta, P.E.

PDHLibrary Course No FL10066

9 PDH HOURS
 Online Course (4 PDH)

Advanced Project Management Techniques

Dominic P. Perrotta, P.E.

2014

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 Advanced Project Management Techniques
Dominic P. Perrotta, P.E.

Introduction
This course in project management is intended to improve the prospects for existing project
managers and would-be project managers to manage a successful project. The simple definition
of “successful” has rarely been defined in specific terms of a given project, but a general
definition usually encompasses “being on time and being under budget”. Nevertheless, while
this definition may be too narrow to satisfy many PM’s and executives, the project is not
“successful” unless you combine these two finite factors with a more than satisfactory end
result.

The course is divided into two separate parts, each of which is intended to improve the
capabilities of a Project Manager or a potential Project Manager. The first part describes the
steps necessary to become a top quality PM, and focuses on the background and education
necessary to be considered for a project management role. Once an individual has been
considered for this very important position, a PM should take advantage of training and
experience opportunities that become available and should also maintain a conscientious effort
toward self-improvement. Other items in this first part concentrate on developing
characteristics of leadership as well as motivational skills that will improve the PM’s efforts to
ensure that your project team will work closely with you so that the project’s goals will be met.

The second part of this course deals with the actual fundamentals of managing a project so that
a Project Manager and every team member are performing at an optimum level. This section of
the course covers the multiple functions of the project, including the activities necessary to
assure that engineering, equipment and construction meet the quality objectives of the project.
This portion of the course describes techniques to obtain optimum scope and design
parameters as well as how to maintain schedule and cost controls. Examples are given of
solutions to problems that are encountered as the project unfolds. The PM is made aware of
the subtleties that are available to resolve seemingly difficult issues.

In almost all projects the Project Manager and project team members will develop and utilize
some core principles. One of those core principles is that the burden of assuring the finite
factors in addition to the end result is primarily the responsibility of the PM. The Project
Manager not only needs to know what to do, but also “how to do it” and what to do when a
difficult situation presents itself. Invariably, the solution is not begun until the PM and/or the
project team members recognize that a problem exists. It can then be resolved with training
and experience, each of which is an equally valuable commodity. As you will discover by reading

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and studying this course, having personal discipline is very important to a Project Manager.
Another sometimes difficult lesson for most PM’s to learn is that you can’t possibly be
everywhere and do everything yourself, so learn to delegate authority by investing your trust in
others and discover in this course what you need to know to have a successful project.

Course Outline

A. Qualifications for a Project Manager

1. Background/Education
2. Experience/Training
3. Leadership Qualities
a. Direct Company representative
b. Indirect representative
4. Motivational skills
a. Maintain Unity
b. Maintain Integrity
c. Strive for Excellence

B. Direct Project Responsibilities and Functions

1. Scope of Work
a. Understanding Client Requirements and Goals
b. Assignments and Communications
c. Communicating with Executive Management
d. Preparing Executive Summaries
2. Developing a Budget
3. Scheduling – Understanding Time vs. Costs
4. Engineering and Design
5. Procurement
6. Construction
7. Cost Control and Cost Correction
8. Startup
9. Closing – Achieving Success and Avoiding Failure

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A. Qualifications for a Project Manager

1. Background/Education
Having a college degree is certainly beneficial, but by no means mandatory, to your
success as a Project Manager. Depending on the type of project in which you
become involved and the overall responsibility that you are given, a specific college
degree may or may not be a requirement. Not having a degree in this era, however,
may hinder your prospects for future advancement, whether the degree is in
engineering, engineering technology, science, or even a non-science degree such as
business. This is particularly true if you are considering the role of project manager
as a stepping stone within your company or primarily as a potential highlight on
your resume.

If you had attended an engineering school, for instance, you may have been led to
believe that there are four major engineering curriculums: Civil, Chemical,
Mechanical, and Electrical. Possibly you have come to the conclusion that a Project
Manager must have one of those major educational backgrounds in order to be
considered for a project management position and to function successfully. As you
gain in wisdom and maturity and your experience broadens, you may come to
realize that there are many subordinate academic studies within the primary areas
of study: Piping has become a very specialized and distinctive academic entity.
Included in this very important area of formal study are pneumatics (compressed
air, instrument air, etc.), hydraulics (lubricants and synthetic fluids, pumps,
cylinders, drives and the like), and many variations of these two categories. Civil
engineering can run the whole gamut from ground water intervention to
architectural support for 100-story office buildings.

Petroleum engineering and chemical engineering are cousins. Chemical engineering

and chemical engineering technology have now been sub-divided into numerous
categories, many of which now fit into such social engineering parameters as
petrochemicals, pharmaceuticals, and even cosmetics. Consider an electrical
engineering graduate; electrical engineering can be sub-divided into several
categories, including power generation, visible and solid-state motor controls,
telecommunications, and electronics where transistors control everything from
televisions and satellites to automobiles and airplanes. Items that are “state-of-the-
art” one year are practically obsolete one year later. Today’s technology lists hand-

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helds of every variety, automobiles that potentially drive themselves, and a
treasure-trove of automatic devices that weren’t even on the radar thirty years ago.
If you are under thirty years of age, you are probably not aware of such names and
terminology, for instance, as PC Junior, Commodore, and keypunch operators.

In addition to a background in engineering or computers or some other technical

field, many PM’s today acknowledge that a background in business and/or finance is
equally as important as engineering and technology in becoming a valuable project
management tool. Whether or not you have a degree in industrial management or
business administration, your value to the project will become abundantly clear as
you process the many cost factors involved throughout the project. Your ability to
weigh the costs and expenses versus the timelines and calendar challenges of the
project is a significant aspect of nearly all projects throughout their duration. While
you may have to rely on so-called financial experts to provide you with many of the
necessary details, this financial understanding will give you the wherewithal to make
decisions in a timely manner. In addition, financial knowledge will also give you an
edge in negotiations with team members, suppliers, contractors and many others
who may be involved in the project.

2. Experience/Training
In my case, for example, I was transferred from the steelmaking plant where I had begun
my career into the large corporate engineering group, and was placed in the Project
Management section. Looking around that first morning at the others in that section, I was
struck by their ages and seeming experience. Of the fifty or so men – no females among
them – spread out over parts of two floors, less than a handful were under the age of fifty-
five. Most had been at least division managers – I had been an Area Manager – and several
had even been Plant Managers. I learned over the next few months that, not only had they
been inexperienced when they had been transferred into this division as Project Managers,
but also most of them were lacking in the fundamental skills and techniques of Project
Management.

However, on the first day of my new career as a PM, at about 10:00 a.m., I was assigned to
two projects that management believed would fit my background and qualifications. One
was at a company plant in Salt Lake City, Utah, and the other was at a plant in Houston,
Texas. Management suggested that I prepare to meet the project team in Salt Lake City on
Tuesday morning, and that they would like me to meet with the project team in Houston on
Thursday. I immediately learned three valuable lessons that all PM’s should prove to find
beneficial:

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a. Always have a suitcase ready.

b. Have the ability to make your own travel accommodations, even if you have your own
administrative assistant or the company has a travel department.

c. Get a passport and always keep it in your possession. Even travel to Canada usually
requires a passport.

My company gave me the opportunity in the second month at my new position to attend a
two-week project management training program at a nearby university. The diversity of the
people attending this program as well as the many types of company, institutional and
organization projects that they were representing was a true revelation. There were men
and women representing many different industries and organizations. Furthermore, some
valuable project management concepts were presented and developed, and every attendee
was asked to participate in the program discussions. While there didn’t seem to be a major
effort to explain how we should manage a project, there was a concerted effort to prepare
us to manage ourselves as Project Managers. Two of the most valuable concepts that were
presented and that stayed with me throughout my PM career were:

a. Keep accurate daily records

b. Maximize use of your time by establishing your daily project priorities

One of the exercises that comes to mind involved being in a plane crash that occurred in a
desert area. All of the passengers were survivors, and we knew that there would be an
attempt to rescue us, despite the fact that we would be in a large desolate area where the
temperature might exceed 100 degrees F. Each of us was given a list of twelve items from
which we could make up a survival kit, and we had to rate each item on the list from highest
to lowest in importance and priority. Not one person in the program selected the most
important item on the list as Number 1, which turned out to be a small magnifying glass.
The second most important item on the list was a basic wrist watch and nobody got that
one either. There were no cell phones or any other communication systems available. We
also had to plan our daily activities in order to be found and rescued as soon as possible.
Many in the program moved in different directions, while others stayed at the crash site,
which was the correct thing to do.

Keep Daily Records

The function of keeping accurate daily records is basic to any PM. There are numerous ways
in which you can accomplish this. For the more detailed PM, you might consider the use of a
Franklin-Covey Daytimer to record meetings and attendees, phone numbers and
conversations, and other items of particular interest to you that will serve as your reminder
as to what was said and done on a specific date. These notes will save you much time as
references and will jog your memory as you recall those activities. Also rest assured that
those notes are valid in a Court of Law, should the need ever arise. With modern technology

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and the advent of tablets, smart phones, and software for every occasion, such things as
speaking your notes and making an album of progress photos is easier than ever. Many
project teams today utilize software programs such as Asana and Tracker that not only list
the tasks for each project group, but also recognize which tasks have been determined to
have greater priorities. Incidentally, utilizing a tape recorder or turning your cell phone into
a listening device in project meetings is not usually a good practice for many reasons,
including the obvious fact that recording devices may inhibit conversations and limit ideas
to potential problem solving. Nevertheless, keeping concise notes of meetings, whether by
the PM or a project team associate is essential.

Establish Priorities
There is really an art to establishing project priorities in order to maximize use of your time
with your daily activities. Let’s suppose that hypothetically your project involves a backup
diesel generator, and that you have five phone calls to make after your morning progress
meeting with your project team or project group. One of these calls is to the State
Environmental Organization that is concerned about some of your design calculations, one
of these calls is to an equipment supplier, one is to your Lead Mechanical Engineer, another
is to one of your construction contractors who is looking for a delivery date for the
equipment, and a fifth call is to a local utility. Logic and experience will tell you that the
order of the phone calls has to be: (1) Lead Mechanical Engineer (2) Environmental agency
(3) equipment supplier (4) contractor, and (5) the local utility. While this sequence of calls
may become fairly obvious, things don’t always go as planned. Some of the responses may
not be immediate, while others may have a negative connotation that will require follow up
phone calls, or even visitations or meetings. Nevertheless, planning your daily activities is
nearly as important as planning the project.

In this hypothetical case the Environmental Department is concerned with the amount of
carbon emissions that are escaping from the diesel generator that is being specified and
purchased for the project. Your first call will be to the Mechanical Engineer who was
responsible for the generator specification, and the engineer assures you that the proper
filtration system has been specified to meet environmental standards. Your next call is to
the Environmental Agency with your assurance that the emissions control system will meet
their standards. The third call is to the generator manufacturer to ensure that the emissions
system is an integral part of their generator equipment, and that all equipment will be
delivered as per the schedule and purchase order. You can then call the contractor – or
better yet, have your Construction Manager make the call – to assure the contractor that
the equipment will be delivered as required and there will be no extra work involved.
Finally, the local utility can be notified that the diesel generator will become part of the
project, and that no additional utility requirements will be needed by them.

Seek Formal Training

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Hopefully, part of your early training would have been participating in Project Management
seminars and conferences, or even being sent to a college or university with a summer
curriculum for Project Management training. The school may have a two-week program, but
pressing commitments in your company might limit you to be there for only the first week,
so cram as much as you can into that first week. Whether you are attending a school or a
seminar, you will quickly learn how much you have to learn about Project Management as
well as how much effort is required to become a top PM. These courses usually focus on
what basic tools can be utilized by you as a practitioner rather than you as an individual
Project Manager. They are varied because, as you will quickly learn, there are PM’s in nearly
every business or industry – manufacturing, road building, banking, healthcare, and even
horse racing.

And yet there’s no substitute for hands-n experience. Some of the best experience a Project
Manager can receive will be the ability to visit a facility similar to the one for which you are
responsible, either in your own company or in that of a competitor’s company. While
visiting that of a competitor may be a little more intricate and involve a certain amount of
diplomacy, the rewards can be great in the long run. You will see firsthand the arrangement
of the overall facility, the interaction of the adjoining facilities that are required, potential
space limitations, and other features that possibly neither you nor your Client(s) had
considered. In addition you may be able to discuss with those personnel that are in charge
of the operation some of the problems and other subtleties associated with their facility.
Also be willing to have others on your project team accompany you on this visit so that you
gain their perspective. Sometimes you may determine that visiting more than one similar
facility is necessary to gather sufficient information and understanding. Often the supplier of
equipment similar to that which you plan to purchase will make the necessary contacts to
arrange for a visit of this type to occur.

As your experience level increases, your ability to prioritize the various project functions as
well as your own daily objectives will improve. In order to fully understand project
priorities, you will have to know the ultimate financial goal of your project, especially as it
applies to a late finish. You should be in a position to evaluate how a one month, or a one
week, or even a one day delay will affect your company’s bottom line. Knowledge of this
aspect of the project will allow you to determine the effects of slight, or even major,
schedule changes in design, procurement, or construction. In addition you will have the
ability, if the need arises, to either tap into the contingency fund, or even go beyond that
and justify a request to executive management for additional project funding.

Maintain a Professional Attitude

Although the life of a Project Manager can become very strenuous at times, you are
expected by those around you – peers, supervisors, contractors, etc. – to maintain a certain
mental posture at all times because you are a Professional. Kudos, when they come are
great, but don’t count on being verbally rewarded; remind yourself that you are expected to

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perform at a high level and to produce results. After all, you may have been selected for this
position as a promotion, since your reputation was that you are a quick thinker and a strong
decision maker who was probably one of the better engineers or financial personnel in your
current field. In most cases the first two characteristics were probably true, although your
credentials in your specific field may have been only slightly above average. Nevertheless,
your background and education have enabled you to comprehend complex situations and
make determinations that allowed projects to move forward with a minimum of schedule
interruptions.

While you and everyone around you will consider you a consummate professional, you
must always draw the line between your own self-confidence and your unwillingness to
compromise. Often you and your Client or Boss, or even one of your peers, will have a
difference of opinion. Keep in mind that you are usually dealing with a matrix organization
wherein nobody is under your direct authority. You must be willing to listen to any team
member’s opinion or argument and be prepared to give them your point of view on the
subject. If your viewpoint is convincing, it will be accepted. If not, keep discreet notes of
what has transpired and back off. Remember that no one is born with humility and that it
must be developed. Even though you may not be lacking in self confidence, there is almost
always at least one occasion during each project when you will be required to humble
yourself. Embrace the challenge.

Not only is willingness to give concessions or to compromise a good character trait, but you
are also preparing for future situations that might occur. Just as life is temporal, so is your
current project. Suppose you encounter a situation such as the following:

Two adjacent transfer systems were side-by-side. One system would be receiving very
heavy plate products from another area of the plant by special trucks, while the second
system was transferring individual plates into a mill for further production. Once the
second system had been emptied, the process would be reversed. The functionality for
performing this operation, while still maintaining continuity as well as traffic flow and
personnel safety, seemed to be an enigma and had been discussed at all levels of the
company for about a month. After hours of contemplation, suddenly you had a vision as
to how the problem could be solved, and you told the Client representative about your
solution just before a very large and important meeting. During the meeting the Client
representative explained “his” method for solving the dilemma. You might have seemed
astonished that you were left out of the equation, but you said nothing and routinely
carried out your PM duties.

Certainly this type of situation has occurred to a PM at least once in his or her career. As for
the project, it was a great financial success. The Client representative, basking in the
aftermath of his success, had enough influence to strongly suggest that the PM be given the
assignment as PM for the next project, which just happened to be the largest project in the

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company, even though he was an outside consultant. Knowing when to be humble and
display your loyalty often results in greater future opportunities.

3. Leadership Qualities
What does being a Project Manager mean? Very simply, being a Project Manager
means being a project LEADER. You have earned the position of Project Manager,
and you have been given an assignment Now you must take that assignment and
make it your mission. A Project Manager who operates with a clearly defined
mission will have an obvious advantage over another PM who cannot embrace a
leadership role and doesn’t envision a clearly defined mission. This in no way implies
that you are to become a project dictator. Remember, as often as is necessary under
the circumstances, that the Master of the project is the Client (Owner/Vice
President/Technical Director/etc). In spite of your near autonomy in most cases, you
still answer to him/her, and must understand the boundaries and limitations under
which you can function.

However, as the Leader of the project, you have certain responsibilities as well as
specific duties. Some leadership qualities which you are expected to exhibit include:

a. Enthusiasm
b. Sincerity
c. Initiative
d. Flexibility
e. Empathy by showing concern for others
f. Interest in other’s opinions
g. A teachable spirit
h. Willingness to sacrifice your ego

As was stated earlier one character trait that a true Leader must develop, because
nobody is born with it, is humility. A second character trait of equal importance that
must be developed by a quality Project Manager is discipline. In the course of a
project a Project Manager will call for many meetings and will attend most of those
meetings. A good example of discipline is being on time for every meeting in which
you are participating. This attitude will resonate throughout your project
organization and will establish a path for others on the project team to follow. As
has been said many times and in many ways, “your attitude determines you
altitude.” An even better approach is to be early for these meetings, especially those

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that you have called. Being even a little early to a meeting communicates to others
that their attendance at the meeting is important, that you value their time, and
that your humility does not require you to make a grand entrance.

The manner in which you acknowledge others’ ideas, whether you always accept
them or not, is also very important. The way that you interact with your peers as
well as your clients and supervisors goes a long way toward determining your
attitude. You may be looking at the “big picture”, but your teammates will
determine the success or failure of the project by how well they perform their
individual tasks. Thus, paying attention to the smallest detail is as important to you
and the project as it is to them. As far as your project team is concerned, there is no
insignificant task, and this is both a concept and a general philosophy that you must
adopt.

Anyone who is in your position as the leader of the team must remain strong and
exhibit an air of confidence at all times. A negative, or defeatist, attitude is not only
a danger to your position as a Project Manager, but also becomes a burden to your
everyday well being. Those defeatist attitudes that you must try to avoid as a Leader
include harboring resentment, giving in to discouragement, engaging in self pity, or
even engaging in self rejection. Remember that you are the “go to” guy or girl for
many people on your team, and your attitude will reflect their feelings toward the
success of the project. This by no means implies that you are to micro-manage your
project, but you as the Project Manager must keep a steady hand on the wheel, and
be prepared to take action should the project lose its steam or begin to change
course.

There are two different categories under which a Project Manager can represent the
company for whom the project is being performed: as a Direct Companu
Representative or as an Indirect Representative.

a. Direct Company Representative

In this category you are an actual employee of the company that is implementing
the project. There are several ways that you can benefit from this arrangement. One
way is that you might be blessed with a Project Team over which you have
substantial control. In this case you would have all the necessary project groups
under your direct authority, including Engineering and Design, Cost Control,
Procurement and Construction Management answering directly to you. This
scenario is quite likely if the project is of such a magnitude and has such financial
incentives as to make the Project Team concept viable to Executive Management.

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The real dilemma with this concept is twofold: most companies have streamlined
their workforce and rarely employ a staff of this nature because of the standby costs
involved; and, secondly, this caliber of personnel is more commonly found in the
engineering companies and consulting firms that typically perform this work for a
variety of companies. Nevertheless, should the financial benefits to the company for
whom you are working be warranted, this concept is a strong possibility.

A more likely scenario in this category is what is termed a Matrix arrangement.

Under these guidelines, certain individuals in each necessary project group who are
employed by your company may be assigned to your project, although their direct
supervision would come from an Area Manager of that particular company group
rather than yourself. In addition those assigned to work with you to implement your
project might well be working on two or three other projects or assignments. In this
scenario the company will not feel the need to employ additional personnel, and
you as the PM will be faced with the situation whereby you will need most of the
skills that you have developed as a Project Manager in order to ensure that your
project will be a success.

In either of these two scenarios, they are more common whenever a company is
attempting to bring a new facility on line that will complement an already existing
facility that has proven to be very profitable. In this situation the entire project may
be profit driven due to a strong domestic and/or global market, and timing is critical.
Consequently, the schedule is of greater importance, and the overall cost of the
project assumes lesser importance.

b. Indirect Representative

Perhaps you are a Project Manager from an outside engineering firm or an outside
consulting firm with a strong track record for managing successful projects of the
type for which you are being hired. In this instance your firm may be supplying the
various engineering and design groups as well as other support groups for the
project. In this situation you will be in a good position to “make things happen”
because your firm’s reputation as well as its bottom line are at stake. In this case the
communication barriers are not as cumbersome and the potential rewards are
greater. However, the risks can also be greater. Your deliverables are expected to be
on time and your billings should be in line with your preliminary estimates. Here
again you will probably be dealing with a Matrix organization, and your choice for
key personnel to become a part of your project team may not necessarily be the

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choice of your supervision. In this scenario the pressure by your Client to perform
may be greater, although your lines of communication may be easier and more
direct.

There may be occasions, as an alternative to the above scenario, where you may be
a private consultant who is being hired as a Project Manager. In this case you have
no direct or indirect affiliation to either the Client or the firm or firms being retained
to supply necessary personnel. In this scenario the burden will fall entirely on you to
maintain closer communications with all pertinent groups, to quickly ascertain and
report any variations from the norm, and to assure your Client that the project will
still be on time and within budget. You will necessarily have to spend more time
with the engineering firm and its lead managers to keep their engineering and
design groups on track and to avoid their wasting time and money on questionable
issues that don’t bring positive results. There are two ways to do this, particularly in
the formative stages of engineering and design: (1) schedule weekly meetings with
the lead managers and group leaders, again at a set time for no more than one
hour, and utilize a printed agenda as often as possible. If circumstances prevent you
from attending the meeting, notify the firm immediately and offer an alternate time
and date for another meeting. (2) maintain a small office at the firm or firms where
you can receive and answer questions as well as resolve any problems or issues on a
regular basis. This simple but highly personal action should keep your project
moving in the right direction.

4. Motivational Skills

Whether you are an in-house or outside (contracted) Project Manager, and

irrespective of your affiliation with the various project groups and personnel who
are assisting with your project, you must be able to motivate the individuals and/or
the supervisors involved. In general, this means that the Project Manager must stay
positive throughout the project, maintaining a strong personal discipline, and
avoiding any negativity. A negative attitude which would illustrate a lack of
discipline might include such incidents as browbeating, entering into short-
tempered arguments, or – worst case – telling on someone or calling that person
out in front of peers and/or supervisors.

The quickest way to lose the respect and control of your project group and,
ultimately, your Client is to perform in an immature manner. Should you have a

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disagreement with an individual over a performance failure that is egregious enough
to get your attention, plan to meet with that individual and his/her supervisor, keep
the meeting confidential but cordial, and maintain an open mind. You may
determine that your concern was misplaced or, conversely, that there was a
complete misunderstanding by the individual of your intentions. Resolve the issue at
the meeting without creating any ill will or rancor. Should your concern be serious
enough in your opinion to jeopardize the project and to warrant replacement of
personnel, discuss that issue in a separate meeting with the group leader and/or
your Client representative.

a. Maintain Unity
Some things that will aide your situation in this regard include the following:

a. Communicate on an individual basis

b. Answer their questions as concisely as possible
c. Promise to get the answer if you don’t have it readibly available
d. Be willing to look at options and alternatives
e. Be prepared to give a project update to any and all
f. Hold short meetings as frequently as necessary
g. Show an interest, no matter how large or how trivial the topic
h. Avoid minor controversies and be prepared to make decisions
i. Be positive and upbeat and never be critical of the company

Nearly all of these fall into the category of maintaining a good line of
communications with all involved parties, from the Client to the last draftsman.
Never assume understanding that has not been explicitly verified; never take
anything for granted! There is the story of the national furniture company that had
developed a revolutionary design for an ergonomic stackable chair. They retained a
project manager in Alabama to oversee the manufacture of a prototype chair, and to
then assist them in bringing the chair to market. The prototype was shipped to a
manufacturing facility in Taiwan, where about 200 of the chairs were to be
manufactured as marketing and sales demos.

A few weeks later the Project Manager and the Client’s VP traveled to Taiwan to
view the results of the two hundred chairs that had been quickly manufactured. The
chairs looked great, the chrome-plated chair frames were perfectly formed, and the
chairs stacked very neatly and compactly. They were even more comfortable than
the furniture company had expected. There was just a small problem: where the
original seat and back of the prototype had been processed, the polyethylene

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injection port had left a hole in each part about the size of a quarter. The Taiwan
manufacturer, being an expert in copying American products, had copied each piece
exactly as it had been received, which naturally included the holes. The PM learned
a valuable, but costly, lesson that day. As the PM, you must take the time to assure
that all project team members are aligned with the same mission-critical details.

b. Maintain Integrity
Your performance as a person of character, accepting the responsibility of your
position and avoiding any backstabbing will gain your respect and reward you with a
more loyal project group. There will likely be occasions when situations will occur
which you had not planned, potentially costing your project time and money. There
is even the likelihood that your client has become aware of the situation and is
critical of your performance. The common approach by a consternated project
manager might be to voice your criticism and to blame others. While some of this
may be justified, you risk losing your project team’s confidence in you if the situation
is not properly managed.

Your course of action in a situation of this type is to determine what went wrong,
accept responsibility, apologize to your client and/or respective management, and
assure all parties that the situation will not occur again. That will be a good
beginning to restoring the confidence that was placed in you, but the conclusion will
be your follow up actions in quickly resolving the problem. While actions of this type
understandably require a great deal of discipline, the amount of respect that a
Project Manager will receive following an incident of this type is immeasurable.

c. Strive for Excellence

There has probably never been a perfect project, and in spite of all your training and
experience, your chances of becoming the first Project Manager to manage a
project in such a manner are remote. There was a great football coach more than
fifty years ago who told his professional team to “…strive for perfection every day.
You will never become perfect, but you will achieve excellence.” He instilled this
thought in his players so often that they came to believe his words. And they did
achieve excellence, five times over an eight-year period.

In case you hadn’t heard this story before, the coach was Vince Lombardi and the
players that he was talking to were the Green Bay Packers, including Hall of Fame
Quarterback Bart Starr. The year before Mr. Lombardi arrived in Green Bay, the

15
 Packers won one game and were about to lose their franchise. Mr. Starr was a last
round draft choice (in those days the National Football League had a seventeen
round draft) and a third string quarterback on that one-win team. Three years later
the Packers won the National Football League championship. They went on to win
four more NFL championships, including the first two Super Bowls. Mr. Starr was
named the Most Valuable Player in Super Bowls I and II. Mr. Starr along with
several of his teammates from that one-win team are now in the NFL Hall of Fame.
Mr. Lombardi is also in the NFL Hall of Fame, and the Super Bowl trophy is named in
his honor.

The correlation between playing a football game and managing a project is similar in
many respects. The Owner/General Manager/Head Coach represents the Company/
Organization/Client that provides you with the stadium and the uniforms to play in,
the pads and helmets to protect you, the finances to see you through to completion
of the game and the season. You are the Project Manager, the quarterback, the 17th
round draft choice, who was selected by the Head Coach to lead the team, your
Project Team. You may have experienced some success at another level, but now
you are being asked to call the plays and lead your team to victory in the big
leagues. Even though you have been given a “game plan” by executive
management, you will have to overcome setbacks and use you options (ingenuity)
to achieve victory (success). You may not win the Super Bowl, or even every game
that you play, but everyone should have the confidence in you that the project will
end in a victory.

B. Direct Project Responsibilities and Functions

1. Scope of Work

a. Understanding Client Requirements and Goals

Congratulations! You have just been assigned as the Project Manager for one of
your/that company’s most important projects. Your Boss/Client has chosen you
over other PM’s due to your track record, which includes past performances,
character, experience, training, and intangibles that seemed to make you most
suitable for the leadership position.

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Now, however, your first personal objective is to meet with the Boss/Client and
his closest aides to determine precisely what they hope to accomplish with your
project. Perhaps they have preliminary drawings or sketches, have chosen a
tentative location for the new project, and have received a commitment for the
maximum funding necessary to implement and complete a successful project.
This early stage of the project is extremely important to understand their long-
term goal, and requires your experience and training in interrogation, discussion
of options, and precise note-taking.

At this initial meeting you will learn several peripheral things that will have an
indirect consequence on the success of the project:

1. A general description of the project as seen by executive

management
2. The company’s expectations when the project is completed
3. The person to whom you will report directly, and your personal lines
of communication with other management members
4. The frequency and agenda of meetings to update executive
management
5. The context, frequency and mailing lists of progress reports
6. Relationships that the company has with various sister companies,
suppliers, and contractors

Pay very special attention to this latter item because you, as the project
manager, are in the very unique position of either fortifying these relationships
or else creating unnecessary problems for the company and its management.
Not only are you obligated to have a close and honest relationship with the
Client Representative, but you will be well served to develop similar relationships
with any personnel who will be directly responsible for implementing the project
(the project team) and operating the facility once it is into the startup phase.
They may have the critical experience, and even some key personnel contacts,
that will provide you with worthwhile guidance along the way. This is not to say
that you will not have any options to perform your duties in an objective
manner, but only to prepare you further to justify any of the options where
management and operations might have a particularly strong interest.

b. Assignments and Communications

You might have noticed that nowhere in the six items above is there any
mention of Scope of Work. That is because quality management should be

17
explaining to you what they want you to accomplish but not how they expect
you to accomplish it. The company management has given you as the Project
Manager most of the information necessary for you to develop the Scope of the
project and this is your responsibility. Depending on the size and complexity of
the project, and even though you may have enough familiarity with the facility to
form an outline of the Scope, this is usually a major task and will require support
and input by others. Thus your next objective, and arguably your most important
other than understanding what your Client expects to accomplish, is the
gathering of personnel that can best assist you in achieving your ultimate goal.
Each person, whether selected by you or offered to you, represents a candidate
that can determine success or failure. While this phase of building the project
team is critical, it is also quite subjective.

In building your team, you should be looking for those personnel that have the
same characteristics, but not necessarily the same personality, as you. While you
may be seeking a team member that is determined and dedicated as well as
competent, you really don’t need any “Yes men or women”. Conversely, your
team members must be flexible and not stiff-necked or argumentative. Team
member should be given the opportunity by a Project Manager to express their
alternative viewpoints, which the PM will be receptive to hearing. Nevertheless,
every team member must understand that you are the decision maker and you
will have the final word regarding any controversy. At a very early stage in the
project you will develop discernment for whose ideas and concepts you are
willing to accept without too much discussion. You cannot expect to
micromanage any aspect of the project, so you must quickly determine which
team members you can implicitly trust and which of them will try to fleece you
when they can. Always be prepared to reprimand a team member (in private) or
to have a non-performer or a troublemaker replaced.

With this phase of the project firmly in hand, you will now begin to develop a
basic outline that should include the following:

1. Location of the facility

2. Environmental requirements
3. Design criteria
4. Equipment purchases
5. Needs of construction, including special applications
6. Individual component and system testing
7. Punch lists, startup and optimum operations
8. Project closing

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Whether or not the Project Manager has an official Project Team within his/her
direct supervision, the PM is responsible for the assignment of project
responsibilities. This implies that the PM will determine which groups, but not
necessarily which individual, will be responsible for each phase of the project.
For instance the PM will determine the method for designing the project:
whether to use in-house engineering services, if available, our outside sources if
not. In some cases, depending on the time constraints and or the budget
available, a combination of the two resources may be justified.

In another instance selection of procurement services is equally critical. The

purchasing group must have the same sense of awareness as the PM, and must
be sensitive to the overall objectives of the Client. Essentially every step of the
project must be preplanned by the PM to the extent that each responsible
member of the project team has a clear understanding of the duties and timeline
required.

c. Communicating with Executive Management

On nearly every project with which you become involved, you will have at least
one person who will become your Project Mentor. These individuals may be in
positions of executive management, may be persons who have gained valuable
experience working with the company and/or clients, and may have even been
successful project managers. You as the project manager should regularly
communicate with these individuals and welcome the supervision they provide.
Your functioning as a PM is incomplete without them. Consider this to be an
obligation.

There are many ways to accomplish this obligation in today’s age of media
coverage. Telephone calls are a quick and easy method of communicating,
although your list of call recipients must always be approved by your immediate
client representative. Even if you receive a direct phone call from someone high
in the organization, take any message and clear your response with your Project
Mentor. If your Mentor is not available, return the call as soon as possible,
preparing your response in a totally truthful manner. Remembering the truth is a
lot easier than remembering a half-truth or an outright fabrication. Once you
have reached your Mentor, explain your reasoning for temporarily bypassing him
or her.

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The use of emails is another excellent method of communicating with the
members of your project team as well as with your client and executive
management. In this case the same rule applies; even if you receive a direct
email from someone high in the organization, clear your response with your
Project Mentor. If your Mentor is not available, return your email response as
quickly as possible, preparing your response in a totally truthful manner, copying
your Mentor on any correspondence.

d. Preparing Executive Summaries

One of your primary functions as “the” Project Manager is to keep your project
team, your Client and your Client’s management informed of the progress of the
project. Your responsibility is to perform this task as detailed as necessary, but as
succinctly as possible. Keep in mind that a report of this type is not meant to be
an opinion piece, but rather a fact document. If you are asked to give your
opinion on a project matter, do it verbally, but don’t put it in writing if you can
avoid doing so. There are various means to maintain a good line of
communications with your client as well as with the various leaders of your
project team.

One example of this format is a weekly Project Memo update, which can be
patterned after your project schedule. In this type of format, the PM prepares a
weekly summary of activities that reflect the progression of the project as it
occurs, citing such aspects as the progress being made in specific operational
areas and the problems being encountered. A memo of this type will carry more
weight with management if it is first reviewed and then signed off by both the
Project Manager and the Client Representative. The PM should also include
various notes that incorporate features such as safety and environmental issues.
This type of Memo should also include updates from the previous three or four
weeks to indicate the level of progress as well as to illustrate any problem areas
that may or may not have been resolved.

Another method which has found favor in recent years is the creation of a
website dedicated strictly to a specific project. This type of format, while being
somewhat more complicated, is generally reserved for larger projects. The initial
setup will be more expensive, but the actual maintenance of the site will be
relatively inexpensive. The progress of a project can be updated literally every
day with input from different key personnel who are members of the project
team. In general the team members have a “write only” capability, and don’t
necessarily have the option of viewing parts of the project which are not

20
 considered their responsibility. Executive management, which is usually
described as any member of management that has a vested interest in the
progress of the project, will be equipped with a password and “read only”
capability, and will have the option of viewing any or all parts of the project for
which they have a concern. The Project Manager has the ability to analyze and
override any issue on the site which might be considered inaccurate, or even to
some degree disruptive, to the overall benefit of the project.

2. Developing a Budget
About half of the time a Project Manager is involved in a project early enough to
have some meaningful input into the overall project estimate and its subsequent
appropriation request. Just as often company management (the Client) has
established the approximate amount of money that its Board of Directors will
approve, and has already submitted its request for funds. In the former case the
PM will have a Scope of Work with a Budget that can be fine tuned. In the latter
case the PM will have to assemble a Budget from the very beginning, but will
have to be very careful and meticulous not to change the appropriation in any
significant manner from what has been presented to the Board.

In either situation the PM must develop a preliminary spreadsheet that can

illustrate, primarily to the PM’s Client Representative, what the estimated cost of
the project will be. There are likely several ways to provide this information, but
the simplest and most effective means is to use an Excel format. With this
program you can use the vertical column to list all items and functions of the
project, normally utilizing no more than a few pages on 11” x 17” sheets of
paper. Across the horizontal row of the Excel spreadsheet, you can list your
timeline, whether in weeks or months. A spreadsheet of this type on one or two
sheets of 11” by 17” paper is usually satisfactory for no more than a twelve
month schedule, while a larger project using a similar arrangement on 11” by 17”
will usually cover twenty-four months, but might require several more pages.
Expenditures for each month can be summarized at the bottom of the
spreadsheet, and total costs for each line item can be summarized at the right
hand side of the spreadsheet.

Should the budget estimate prove to be more than what management expects
or appropriates, measures will have to be taken by the PM to reduce the Budget
by streamlining or reducing the Scope of Work until management is satisfied
with the revised budget. The alternative, of course, is for the PM to reduce the

21
timeline and postpone unnecessary auxiliary facilities until a later date when
sufficient funds may be available from the company. In either situation the PM
must have detailed knowledge of both the estimated cost and the schedule
requirements.

Your budget may begin with a land purchase or lease, include an environmental
study, and possibly a new road or a railroad track extension. The estimate should
include engineering fees, equipment costs and shipping (always attempt to keep
shipping costs separate, as this is not a capital expense), utility requirements,
construction costs, supervision of erection, and travel costs for members of the
project team. Included in construction costs will be such items as trailer rentals
and setup, utility fees, sanitation, field office staffing, and possibly new roadways
and access ways.

Know Your Facts – Don’t Guess

During preparation of a budget estimate, the Project Manager will have to make
calculated estimates rather than simply guessing. For instance engineering fees
can usually be determined as a percentage of the total project cost. Equipment
costs can be determined by a review of similar projects and/or by the use of
judicious research and phone calls. The PM can estimate the majority of
construction costs by using the same criteria that contractors develop when
preparing their bids: volume of concrete and weight of steel versus cost per
square foot for main, auxiliary and office buildings; weight of equipment to
establish rigging and erection costs; lengths and sizes of piping that an M&P
contractor would estimate; and equipment, conduit, trays and cable that an
electrical contractor would require. Inasmuch as this would be a budget
estimate, the PM should consider a much higher contingency factor, possibly as
high as 12 to 15 percent.

There are also several factors which most Project Managers include in their
estimate to cover variable project costs that will occur as the project proceeds.
The first of these is called “design changes”, which applies to almost any
equipment in your project. This could simply mean that the old version is
obsolete, and the new version is faster, has more modern controls, and will give
you a higher production rate. On the other hand the manufacturer may not have
made any significant changes or improvements, and simply had a price increase
with the intent of passing that increase to the buyer.

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 Another obvious factor to consider is the cost of living increase, which requires
the PM to utilize a forward escalation feature in the project estimate. This factor
will apply to virtually every item in the budget estimate, and which will vary
somewhat depending on the overall length of the project. Since this is a time-
sensitive factor, a prudent PM and the project team members will seek
commitments from as many potential suppliers and contractors as possible. One
specific example of this would be to solicit firm unit prices for building
foundations and steel supply as well as placement and erection.

A third factor to consider and include in your project estimate is defined by most
projects as “contingency”. This number is usually a fixed percentage of the total
cost of all other items in the estimate, and depending on the complexity of the
project, can vary from as low as 2.5 to 3.0 percent all the way up to 7.0 or 8.0
percent. However, a well defined and well planned project should never have a
contingency factor greater than 4.0 percent. Although construction costs are
often more difficult to estimate and project, these estimated expenditures must
be included as you develop your forward escalation and contingency costs.

3. Scheduling – Time vs. Costs

The two most important aspects of any project, other than to assure the Owner
of the prospects for getting it right, are schedule and budget. A competent
Project Manager will always weigh these two variables on a daily basis in order
to ascertain whether or not he/she is providing a truly valuable service to the
Client(s). This is never an easy task for anyone, and often creates much
controversy within the project ranks. However, you are hopefully being paid well
for your services and should never be in doubt as to your ultimate goal.

Regarding your responsibility to meet your Client’s schedule, the objectives of

nearly every project are to complete the project within a certain time frame and
to have a financial reserve available for startup and any emergencies. On the
surface this may appear to be a routine matter, but often becomes difficult and,
at times, nearly impossible. However, a competent Project Manager should be
capable of creating and maintaining a quality schedule by using some basic tools.
If you can quickly master the fundamentals of Microsoft Project, you will be able
to provide a schedule that utilizes a Gantt Chart, and can keep you and the Client
current with the tasks and activities involved. As you grasp the nuances of MS

23
Project, your ability to furnish additional details, and to even prepare a critical
path for your project, will greatly improve.

In the event of larger projects, such as those that might easily exceed $50 million
to $75 million, there will likely be a need for the you and the Client to hire
personnel from outside firms to provide such schedules as Primavera or
Timberline in order to provide more specific details. Always keep in mind that
the personnel doing those types of schedules would be looking to you and your
project team to provide them with the necessary general details. Thus your
ability to understand the basics of scheduling and to quickly grasp the
fundamentals of your scheduling team, if required, is exceedingly important.

Where to Start
There are several important factors to consider when preparing a schedule. One
factor that is not always obvious is to start with the end date. If your Client or Customer
has a completion date as the target, use that as your end date, allowing the necessary
time for punch list items, equipment startup and system startup. Unless you are dealing
with a Federal government project, you are almost always under some schedule
deadline. With each of these “end- of-the- project” factors, include sufficient float time
as contingencies in the event of significant delays. As you work your way back on your
MS Project schedule, follow the same principle of allowing sufficient float time toward
each category. The chances are reasonably good that you will have used excessive float
time throughout your schedule. In that event first look at items where you feel certain
that float time can be either reduced or eliminated. Next look at items in which time is
established by you and your project team, such as the time allotted for receiving bids or
the time allotted for placing contracts.

Scheduling Is a Process
Establishing a viable schedule is a process that will take several iterations. The main fact
to consider when finalizing any initial MS Project schedule is to have most of your float
time toward the end. This is when enthusiasm wanes and tedium sets in, or as one
infamous sage once commented, “…unforeseen variables occur.” During the formation
of your MSP schedule, one of your first duties is to provide a separate list of all the
equipment that you and/or your team will be required to purchase for the project. Once
this list is issued, you can meet with your engineering group to assign priorities for
preparing specifications, requests for quotations or proposals, and bidders. Needless to
say, the longer lead time items and more complex installation will require higher
priorities and, ultimately, greater float times in your project schedule.

24
Include in the equipment list the various vendors who will be bidding, your
estimated or budget prices, their pricing and delivery schedule, as well as your
estimate and theirs of how long the installation will take. With regard to vendor
delivery dates, you must allow a certain amount of float time in your schedule to
accommodate any variables that might occur. The higher the complexity of the
equipment that is being purchased, the greater amount of float time should be
considered. Also, the same general formula applies to equipment being
purchased overseas; leave ample time for ocean freight, clearing customs and
the port of entry, and overland freight to the project site.

Once you have decided on your major equipment and have placed your purchase
orders, you now have the basis for a quality MS Project schedule. You can
evaluate the delivery times of the major items and how those dates coincide
with your estimates for installation in order to determine which critical path
items will need to be expedited. You will also be able to determine other critical
issues such as which equipment items you can schedule as “early start” and
which items will have a later start date. Regarding any equipment with a long
lead time delivery, the PM and the project team may have anticipated a later
delivery date. If that were not the case, then you should consider the reduction
in float time for that item and/or the utilization of specifically targeted
construction overtime for that equipment.

If you and your engineering firm have properly coordinated your project
activities, the engineer will be receiving vendor drawings in a timely manner so
that the construction drawings can be produced as quickly as possible without
overloading the engineers. In an ideal project the release of construction
drawings will occur in a manner consistent with product flow. However, that
situation rarely occurs, so that there are two main procedures to concentrate on
at this point. First, be certain that your engineer has enough time to produce
accurate, if not total quality, construction drawings. Failure to do so will prove to
be costly as well as time-consuming. Do not permit the constructor to begin his
work utilizing preliminary drawings unless you, personally, have reviewed them
for reasonable accuracy. After all, you as the PM are the only one responsible for
both cost and schedule. Initiate your utility specifications with your engineering
group, making them especially aware of any unusual requirements. At the same
time your engineering group will be preparing construction specifications and
you will be furnishing them with a list of experienced contractors from which to
solicit bids.

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Second, and equally important, is the necessity to establish the sequence of your
project tasks, which is the next to last step before preparing your project
schedule for general publication. This involves a beginning point, which might
include such items as choosing a site for the project, securing environmental
permits, selecting an engineering firm, and even receiving financial approval of
overall costs and ROI (Return on Investment) for the project. In today’s world of
restrictions and regulations, your chances of successfully maintaining a project
schedule will depend on the ability of the Project Manager to multi-task. This
simply means that, once the project has been approved and funded, the PM
must have a mindset to move forward in as many areas as possible without
waiting for all documents to be formally signed and delivered.

Still a Moving Target

Finally, as you begin to incorporate each function into your project schedule, you
should now have a fairly concise idea regarding the duration of each task. Keep
in mind that at this point everything is still on paper, and nothing is yet cast in
stone. You can still alter either the sequence or the duration of each task to best
suit your end result. Overlap functions where necessary, avoid unnecessary
duplications, and minimize movements by all parties so that projected costs are
within your limits. This MS Project schedule now also becomes a useful tool for
verifying your project budget by assuring that all items are covered.

Once you as the Project Manager have a viable schedule with which to work,
bear in mind that it will probably change every week until the project is
concluded. Most of these changes can be managed by the Project Manager in a
fairly routine manner. However, there will be a few occasions during the course
of the project when you may have to make a decision which could alter not only
the time frame but also the end date of the project’s completion. In such cases
the PM must know how each day’s delay will affect the Company’s future as well
as current bottom line. For such an eventuality there is a general rule of thumb
that can be applied by the PM, commonly known as the 60 Percent Rule. This
rule implies that if the potential cost of the delay should exceed 60% of the
project’s loss in profits over the same time period, then the PM should seriously
consider making the expense necessary to correct any lost time in the schedule.

For instance, you may have been made aware by the Client that each day of
project delay will cost the Company $10,000 in lost revenue, or approximately
$1,000 in lost profits. You then learn that a critical piece of equipment is being

26
shipped by general freight, which is included in the supplier’s contract and will
take a delivery time of one week longer than expected. However, if you ship the
equipment by “exclusive use of truck”, the equipment will arrive on site in four
days at an added cost of $1,500. If your analysis is that the site contractor is
ready to install this critical equipment the moment that it arrives and that the
extra three days of shipping could jeopardize the project completion date, then
you are justified by your decision to spend the extra $1,500. In this case the rule
of thumb is being applied, because you are spending $1,500 to save the
company a total of $3,000, or about 50%. However, you might have several
options at this point in the project. Quite likely the project team had inspected
the equipment at the supplier’s manufacturing facility and the PM may feel
confident that the installation will go smoothly. In the meanwhile you may have
had your electrical contractors and your process control engineers perform
sufficient preliminary work so that, when the equipment does arrive and is
installed, the time saved in startup will offset the late delivery time. Finally, by
closely tracking the shipping routes and transfer depots, you may be able to
expedite the actual delivery date of the equipment, thus reducing the actual
shipping time by one or more days.

Suppose that in another situation you have a site contractor that is demanding a
12-hour workday (ten hours has been the normal workday) and a 6-day work
week (five days has been the normal work week) in order to complete a
particularly critical phase of the project. If your analysis is that the overtime cost
will be an additional $3,900, but the project schedule will benefit by five days (or
$5,000), then you might want to consider this expenditure as unnecessary since
it exceeds the 60% rule. In a case like this, nevertheless, the Project Manager
must look at the impact of being possibly five days late with the project,
reevaluate activities that can be scheduled concurrently, and look for other ways
that can bring the project to completion on the original date. In any event
entering into communication with your Client and Construction Manager as soon
as you are made aware of the problem is essential. Having the Client involved
when you are in a situation that might delay the final completion date of the
project is imperative; management might shed some light on a little known facet
of the project that might change your approach. The Construction Manager, on
the other hand, may be able to offer an alternative to overtime, such as
simplifying the task, or even completing the majority of that particular phase
after startup. Even though the final decision rests with the Project Manager, the
PM should never be afraid to look for some guidance. In general, the prudent
use of overtime can benefit the project for a myriad of reasons which will be
27
 discussed later in this article. On the other hand, abusive use of overtime can be
detrimental to any project.

4. Engineering and Design

Whether the design for the project is being developed by an in-house group or
by a contracted engineering firm, the same “rules of engagement” apply. In the
first situation you are dealing with what is termed as a Matrix Organization, in
which you have no direct authority. Your main “weapons” are communications
and motivation. Not only are you required by your position to communicate the
philosophies of executive management, but you are also obligated to deal with
the individual design managers and design leaders in a forthright and truthful
manner. In the second instance, you are working with a Captive Organization
which is under contract to provide the necessary deliverables in a timely
manner. Nevertheless, your obligations and objectives remain the same, even
though your personal influence may be somewhat greater.

In either case the personnel that are working on your project may be working on
two or more other projects, have their own priorities, and need to plan their
activities and work schedules accordingly. You should be meeting with the design
leaders who are directly involved with your project on a weekly basis, giving
them a summary of the MS Project Schedule for the items that are to be
accomplished by them. These meetings should be brief (less than one hour) and
should be agenda-driven. Design associated with site work and buildings,
followed as closely as possible by packages for equipment design, should initially
take precedence over construction bid packages. Although this latter item is
ultimately important, a major factor in project cost overruns occurs when a
constructor is in standby, waiting for equipment to be delivered.

The design functions of the engineering group that are an integral part of your
project team are comprised of three major deliverables as well as a general
support function:

a. General arrangements and layouts of the facilities

b. Design bid packages and specifications for equipment
c. Design bid packages and specifications for construction
d. Other general support functions

These functions are more specifically described in the following sections:

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 a. General Arrangements and Layouts of the Facilities
In the case of item a) above, the initial drawings must necessarily be preliminary,
mostly based on the experience and knowledge of the Project Manager, the
Client, and the design team. This particular portion is actually comprised of
three separate areas of design, none of which are in a perfect sequence for
construction:

i. The first construction item is usually the building or

buildings, but they can’t be properly sized and designed
until the equipment is sized and laid out in an orderly
manner. This will include walkways, traffic and equipment
accesses, office space, and restrooms among other items.
The risk in not having most, if not all, of the critical
equipment dimensions is that the building (s) will be too
small or too large, both of which are costly propositions.
ii. The second construction item includes the utility
requirements such as sub-stations, air compressors, HVAC
equipment, and climate controlled buildings. Some of the
utilities would be underground, and some would be
overhead. Some, such as an electrical sub-station,
switchgear, and/or a computer or control room would
require large areas as well as strategic positioning.
iii. Finally, construction drawings for all the process
equipment will have to be developed. At this point your
engineering team has allowed for such mandatory design
features as maintenance access and overhead clearances.

Should building design or utility design begin without some significant

equipment information, the same practice of either under designing or over
designing becomes a real threat to the project cost. Other than calling on the
experiences and knowledge of the Project Team, the first option for gathering
this data is to search within the company for similar facilities. If this new facility
is to replicate an existing one in some manner, the time the project team will
take inspecting and observing those operations will be time well spent.

Another ethical solution to this dilemma would be to engage suppliers of critical

equipment for assistance. The Project Manager and the Client may have a clear
understanding of the type of equipment needed, and might even have a recommended
list of suppliers’ names. Most equipment suppliers should be willing to recommend

29
visitations to existing facilities in other companies where their equipment is being
operated. Under normal circumstances those suppliers would make the necessary
arrangements for those visits, and also would accompany the PM and team members on
those visits. A third option, if all else fails, is to request that any two legitimate
vendors who will likely be on the bidders’ list submit non-binding and non-
proprietary proposals for their equipment that would include basic dimensions
and utility requirements. These solicitations would probably occur with no more than
a verbal or one-page specification, and should be handled by the Purchasing
Department under the authority and direction of the Project Manager

General arrangements and various layout drawings, as well as critical sections

through those layout drawings, are the lifeblood of most industrial and
commercial projects. Even where architectural drawings may have a more
significant role, arrangement and layout drawings will be used to signify the
overall footprint of the facility and to provide guidelines for planning and
developing the project. This phase of the project is often tedious and is slower to
develop than many Project Managers seem willing to tolerate. One method for
accelerating this process, depending on the overall size and schedule of the
project, is to divide the master general arrangement into multiple plan views.
These plan views can be connected by means of “match lines” and/or “match
markings” which identify their locations on the arrangement drawing. These
individual plan views can then be developed separately. The obvious advantage
is that each plan view can be assigned to a different designer or design group,
thus expediting this phase of the engineering function and effectively providing
the PM with a better quality product. Although the ultimate responsibility for sizing
the equipment and determining the specific requirements of these arrangements lies
with the engineering group, the support of the PM in this effort cannot be
underestimated.

b. Design bid packages and specifications for equipment

Given the above information, the engineering group must now put forth a strong
effort to develop the necessary bid packages for the critical process and utility
equipment (item b above). Having already received a substantial amount of
preliminary information for this equipment, they should be able to provide the
necessary bid packages, including specifications, in an expeditious manner. In
addition the payment terms and the legal structure of the pending contract are usually a
combined effort involving legal, purchasing, finance, and project management. An
important aspect of the engineering group is securing supplier drawings for use in

30
finalizing facility design as well as providing those drawings as references in the
construction bid packages.

As previously noted, finalizing building design is a formidable task when

equipment dimensions and utility requirements are not completely known. In
those situations the Project Manager should be more inclined to advise his
engineering team to go lager rather than smaller. Your experience as a PM has
probably illustrated to you in other projects that a project rarely has too much
building to spare. The cost per square foot of buildings in the primary bidding
stages is usually less than 75% of the cost for an add-on once the building
contract has been let, and usually less than 50% of the cost for an add-on once
the building is erected.

c. Design bid packages and specifications for construction

Bid packages for construction (item c above) follow the same guidelines as
equipment bid packages, using final layout drawings and suppliers’ drawings as
references. Payment terms and specifications are a joint effort of several groups,
including legal, purchasing, finance, and project management. Scheduling of field
activities must remain as a unified effort of the Construction Manager and the
Project Manager.

Having the equipment suppliers submit their certified drawings requires a

concerted effort of an experienced Project Manager as well as the project team.
The suppliers that submit certified drawings of their equipment per a contractual
date are not usually in the majority. On most projects, and especially on fast-
track projects where the construction contractor may be on a time and material
contract, the schedule for certified drawings is just as important and unique as
equipment deliveries.

d. Other Functions of the Engineering Group

In addition to these major functions, an experienced engineering group will also
provide expediting of equipment drawings, inspection and quality control of
equipment drawings that are received, and assistance in resolution of problems
that may occur when a contractor discovers a discrepancy in the equipment
during installation. These items will be discussed later in this section, but the
three core functions listed above are described in more detail as follows. As
mentioned earlier is this section, there are several auxiliary functions listed
below which a Project Manager should demand of a professional engineering
group:

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 i. Inspection and quality control of equipment drawings - once a
firm contract has been let to a supplier, the engineering group
has the responsibility to thoroughly review that supplier’s
drawings to determine whether the equipment is being
manufactured according to design and specifications. In the event
that the drawings are not conclusive, a visual inspection of the
equipment would also be warranted, and should include the
determination that materials such as metals and wiring, and
manufacturing practices such as welding and machining meet
necessary quality requirements and standards of the project
specifications.
ii. Assistance in resolution of problems that may occur – during the
course of regular supplier drawing reviews, specific visits to the
suppliers may be necessary. These are generally scheduled by the
Project Manager in order to optimize costs and benefits. Any
problem areas should be noted in writing and resolved
immediately at the manufacturing site. Otherwise an open or
contested problem should be communicated to the Project
Manager for analysis and resolution.
iii. Expediting of equipment drawings – unfortunately, most first-
time Project Managers have learned that, unless there is a well-
defined incentive clause in the contract, a supplier will often be
late with a scheduled delivery of equipment drawings. Thus the
engineering group provides a valuable service by recording
manufacturing drawing status and expected delivery dates after
each supplier phone call or email, and issuing written status
reports. Although the PM may make an occasional supplier visit,
reliance on the engineering group for this information is
imperative.
iv. Inspection and quality control of installation - once a firm
contract has been let to a site contractor, the engineering group
has the responsibility to visit that site to determine whether the
equipment is being installed according to specifications.
Inspection of the construction site should also include the
determination that materials such as welding rods, fasteners,
piping and wiring meet necessary quality requirements and
standards of the project.

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 All of these above listed activities which are being delegated to the engineering
group do not abrogate them from being the ultimate responsibility of the
Project Manager. A quality PM is expected to know and understand the
generalities, if not the specifics, of the layout better than any designer. Most
PM’s will make a concerted effort to visit facilities that are manufacturing critical
equipment, particularly if that equipment is on the critical path schedule, and
form an opinion of the quality of manufacturing and the timeliness of deliveries.
A PM’s most important role during the formative stages of design as well as with
the ongoing manufacturing is to make the necessary decisions that will keep the
project moving without delays. Decision making in the early and middle stages
of a project will help to relieve some of the pressure from the late stages of the
project and minimize or altogether eliminate panic decisions.

5. Procurement
Once your various equipment bid packages have been prepared, you are now
ready to work with the Procurement, or Purchasing, Group. They, along with the
Client Representative and your Design Leaders, shall have collaborated at your
request to form a bidders’ list that will meet the project requirements of
specifications, cost, and delivery. As the PM you (and your Client), based on past
experiences, should retain the right to recommend other bidders or override the
selection of any suppliers on those lists with whom you may have had bad
experiences, or otherwise may not be qualified in your opinion. However, you
must stay objective in this regard, because you are working with other
Professionals in this area who may or may not have more experience than you.

There are many factors to be considered while working with a Purchasing Agent,
and even an entire Purchasing Department, especially when the time comes for
their direct involvement. In the initial phase, which involves the preparation of
bidders’ lists, your Client, your engineers and you will have the primary
responsibility in the selection process. Someone in the Purchasing group may
have a preference for including a particular supplier on the list. As long as you
are satisfied that the supplier will meet your technical requirements and
standards, including that supplier should not be an issue. This should be the
normal method of engaging suppliers, regardless of whether the item is large
and significant or not.

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Once the design packages have been issued to the listed suppliers, bid due dates
have been established according to your project schedule, and proposals have
been received, there is sometimes a lack of harmony in the final supplier
selection process. The Purchasing Group has a set of guidelines that may require
them to award a contract to the low bidder. You and your engineers may
determine that the product being offered by the low bidder is technically
unacceptable. Your Client may prefer one of the higher bidders. For you as the
Project Manager, the time has come to put on display your skills and experience
as well as your integrity, emphasizing as objectively as possible your reasoning
for selecting the low, technically acceptable bidder. By maintaining your
objectivity, which might include a series of supplier meetings whereby all
interested and dissenting parties are invited to ask questions and to listen to the
answers, you will minimize any discord within your project team.

As a further note, your project is too important to accept a promise from a

supplier that has never met your particular criteria. Maybe that supplier should
not have been on the bidders’ list in the first place, but you and your team were
fortunate to have learned of the deficiency before a contract was signed. In
addition, and irrespective of the successful suppliers’ credentials. You will be
wise to insert a performance-based retention clause in all significant contracts.
This retention usually amounts to a 10% retention on the total contract, not
including shipping charges, which are normally negotiated and paid separately. A
very important element for the Project Manager to maintain is to ensure that
the supplier is paid per the terms of the contract as soon as the project team has
accepted the equipment.

Purchase Order Follow Up

After the Purchasing Group has issued a purchase order to a supplier, they are
often the group that assists the Project Manager by expediting the supplier and
maintaining the original intent of the project schedule. An experienced PM can
usually acknowledge that Purchasing has a certain amount of “clout” with
suppliers, which often means that those suppliers perform to the best of their
ability when the Purchasing Group engages them. Another “friend” of the
Project Manager is your Client’s Legal Group, which probably assisted in
developing the terms and conditions of the various suppliers’ contracts. This is
particularly true in the event that a penalty-bonus clause has been established in
any of the supplier contracts.

34
In a similar manner your various construction bid packages will be prepared
according to your project schedule, and you are now ready to work with the
Purchasing Group to select contractors that will perform the field construction.
Purchasing along with your Design Leaders, Client, and Construction Manager
shall have collaborated at your request to form a bidders’ list that will meet the
project requirements of specifications, cost, and completion dates. As the PM
you (and your Client), based on past experiences, again retain the right to
recommend other bidders or override the selection of any contractors on those
lists. However, you again must maintain your objectivity as in the case with
equipment suppliers, keeping in mind that other Professionals in this area may
have more and/or different experiences than you.

Your options for this critical phase of the project are now quite different from
the design and equipment phases of the project. If the project is large and ample
funds have been allotted, then you may be better suited to be dealing with
general contractors who have the capability to bring in a workforce and sub-
contractors that will meet your schedule requirements. In a situation of this
magnitude the Project Manager will almost certainly be assisted by one or more
Project Engineers who will be given the responsibility for completion of specific
site or operating areas. Conversely, the PM may determine that there is a limited
budget and will have to work with several specialty contractors. In either case
the burden on the PM can be considerable, depending on whether you are
working with an experienced Construction Manager in whom you have
confidence.

Regardless of your approach, your project efforts will become much more
intense after the proposals have been received. As with the equipment
proposals, rarely will you receive a proposal that does not elicit a series of
objections and questions. The PM must have allotted time for issuing
questionnaires and scheduling contractor meetings. At these meetings with all
pertinent parties present, you will likely get a consensus of which proposals,
whether or not they are the low bids, will offer the most value to the project
from a cost and schedule stand-point. These contractor meetings should also be
held consecutively whenever possible, occurring in the shortest window
available. As with the supplier meetings, never schedule more than one company
at a time, and prepare a list of questions which each contractor can review
before the meeting.

After the Purchasing Group has issued a purchase order to a contractor, they
should be kept in the loop of communication by the Project Manager. An

35
 experienced PM can usually acknowledge that Purchasing has a certain amount
of influence with contractors as well as suppliers, which gives those contractors
the incentive to perform to the best of their ability. The same courtesy should
also be extended to your Client’s Legal Group, which probably assisted in
developing the terms and conditions of the various construction contracts,
especially in the event that a penalty-bonus clause has been established in any
of the construction contracts.

6. Construction
Most projects of any significant size will usually have a construction manager
who will be assigned to the Project Manager. This individual may be a company
representative or may come from an engineering and/or construction firm. The
CM should be hired early in the process, not only to help set up the project field
offices but also because he or she should be a valuable resource for potential
bidders. The CM should also be expected to develop an intimate knowledge of
the project, especially the schedule, and will assist the PM with the site planning
of the project.

As noted earlier, the design packages are to be prepared for release to the
various construction bidders, and the PM and the procurement (purchasing)
group should have collaborated with the Construction Manager in order to
develop a construction bidders’ list. Let’s assume that, as a Project Manager, you
have significant experience in dealing with construction companies in your fields
of expertise. However, each project has its own nuances, and each geographic
area may have its own set of valid constructors. If your project is quite large
($100 million or more) and has a high degree of complexity, then your best
interests may be served by engaging national construction firms that have
served you in the past. Otherwise, your secondary objective in this situation is to
stay in the background during the selection process for preparing the bidders’
lists. Your primary objective is to evaluate each construction proposal in terms of
safety programs, superintendents’ experiences, manpower availability and
schedule commitments. At some point during the evaluation process, best
acceptable price may become an issue. If that number is over your budget, then
you as the Project Manager will be required to work with your design group to
bring the price in alignment with the budget. However, remember your
assignment; the responsibility for negotiating the best final construction price
lies with the Purchasing Department and not with the Project Manager.

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Selection Process
There are several criteria besides lowest cost for selecting any major contractor
and most sub-contractors for your project. Some of these include:

a. Being aware of resource allocation. Choose construction

companies that can multi-task, but your ultimate responsibility is
to assure that none of the companies is over-burdened. Short
(one hour or less) meetings with an agenda prior to contract
placement to get specific answers to your timetable requirements
should suffice to identify and address potential problems in this
area.

b. Determining the level of experience that a contractor might have

with the same or similar type of project that you are
implementing.

c. Being certain to receive and review a resume of the contractors’

superintendents who will be responsible for the onsite
management.

d. Being certain that any contractor that you might select will be
willing to consider a penalty-Bonus clause in the terms and
conditions of the final contract. While the clause may not be
implemented, the contractors who are willing to accept this
clause are at least demonstrating confidence in their
superintendents and workforce.

While this latter item may seem to some of your project team or to some
management members as unnecessary, a well crafted clause of this type will give
you assurance that the contractors will give you their best efforts. And also
remember that the courts have ruled that a company or organization cannot
implement a penalty clause unless a corresponding bonus clause is also
stipulated.

Placing a Design/Build contract with the same firm minimizes your ability to
control the project. Most successful projects maintain engineering separate from
construction. This is not to imply that the Project Manager should be looking for
an adversarial relationship between the two entities, but rather that this simple
procedure might enhance the competitive nature of the project toward a more

37
 successful completion. In addition this tactic assures the Client that the PM has
made a sound business decision by avoiding any appearance of a conflict of
interest. Furthermore, an engineering firm will take a certain amount of pride
during its inspection process in knowing that its design practices and standards
are being met by the construction contractor, and that it has played a prominent
role in the success of the project. Conversely, there will be a line of
communication between the construction contractor and the engineering group
in order to resolve minor discrepancies, without the necessity for involving
either the PM or the CM.

An experienced PM will make the rounds of the jobsite at least twice a day,
possibly with the Construction Manager in the a.m. to verify such items as
workforce size, priorities, and progress. Resource leveling - the ability of the
contractor(s) to provide a consistent, quality workforce for each critical phase of
the project – may be one of the construction issues that might need to be
addressed during this inspection. A tour of the facilities in the p.m. with a lead
engineer might expose any problem areas which may necessitate some last
minute design modifications. In any event the PM must be careful not to
interrupt the work flow, but rather denote any potential problem areas that can
be quickly resolved as well as to be in a good position to assist in developing the
inevitable punch list.

7. Cost Control and Cost Correction

Larger projects may have a Cost Control Associate on site who is responsible to
the PM. If that is the case, then you as the PM should expect this associate to
provide a detailed report of the costs and expenses incurred on the project and
to compare these costs against the original budget plus any financial additions or
deductions that have been made. You, and undoubtedly your Client, should
expect to receive these reports bi-weekly for the first 90% of the project’s
duration, and to receive at least updated mini-versions on a weekly basis during
the last ten percent of the project.

Keeping a critical view of the project’s costs are as important at the beginning of
the project as they are in the latter stages. As an experienced PM, or even as a
novice, you will recognize areas and functions whereby some items may be
eliminated, some items will require a reallocation of funds from “known” savings
elsewhere. Some equipment items which were either possibly overlooked, or

38
else had to be replaced by more expensive items in order to benefit the overall
project, may just have to be funded out of contingency. While utilizing the
Contingency Fund to cover project overages may be enticing, this fund should be
used by the Project Manager only as a last resort. PM’s need to regard this fund
as a safety valve, to be used only in cases of absolute emergencies.

As your project becomes active and your original budget actually begins its
conversion to collect current expenditures, the PM and Cost Control Associate
will have to add some columns to the spreadsheet. The first additional column
could be entitled “Expenditures to Date”, which is a summation of actual
expenditures by the company. This column will take into consideration the actual
amount of funds expended to date (actual payroll for in-house personnel, checks
written to suppliers, utilities, contractors, etc.).The financial factors in this
column are usually occurring on a daily basis and should also include all travel
and living expenses incurred for the project. One of the more significant features
of this column is for the Project Manager and his/her Cost Control Associate to
determine whether the rates of payments are in alignment with the company’s
funding of the project. For instance, if the project is completely funded, then the
Cost Control team can save money by using a discount factor (usually 2%) in its
payment terms. Conversely, if funding for the project is coming from recurring
profits from operations, then the team might want to extend contractor and
other payments to net thirty days, or even to net 45 days. Extending payments
beyond these periods is not a good business practice and is not recommended.

A second additional column would be entitled “Required to Complete”. This

column should primarily reflect commitments, or promises, to fulfill existing
contracts such as any retention being withheld, extra work accepted but not yet
paid for, known freight charges not yet paid, used but unbilled payroll, and the
like. Financial factors in this category are transferred into the “expenditures”
column only as soon as an invoice has been paid by the company, regardless of
whether the project team has approved payment.

A third additional column is referenced commonly as “Estimated to Complete.”

This column can sometimes become loaded with ambiguous numbers, but an
experienced Project Manager can keep these financial factors realistic through
erstwhile communications with all involved entities. This column might include
such financial factors as incomplete engineering drawings, equipment that was
promised by the suppliers but never manufactured and delivered, equipment
that was regarded as necessary subsequent to the original budget being drafted,
or even an extra door or aisle way. The PM should keep in mind that this column

39
is extremely important also for deletions that can be made to the project scope.
This is the one column that permits the Project Manager to maneuver the
project costs in order to more closely adhere to the original budget estimate.

A fourth and final column would be the summation of the second and third
columns, and those numbers would then be compared to the numbers in your
original budget estimate. The PM and the Cost Control Associate should attempt
to adjust each of these values in an effort to have them more closely
approximate the project budget. However, the PM will also have to deal with any
additional items that have been added to the initial scope which have proven to
be necessary. Consequently, before the PM is required to start cutting away at
specific items in the budget, a comparison of the total cost at the bottom of the
new fourth column should be made to the total projected cost of the original
project budget.

Know Your Budget, Know Your Costs

By maintaining a close relationship with your Cost Control Associate, you will be
in a stronger position to move rapidly and to ward off potential financial pitfalls.
Conversely, smaller projects may not be able to support a Cost Control Associate.
In this case you may have to wear two hats and keep your own set of financial
records, or you may have access to a lower level employee who can at least
enter the information that you give that person. That would be at least some
benefit to the Project Manager, so that critical financial information can be
regularly recorded, and the PM will be able to generate and issue regular
reports.

As your project proceeds, rest assured that there may be significant differences
in your forecast expenditures versus your actual incurred costs. Equipment and
construction expenditures are seldom exactly as you had forecast, and there are
usually several reasons for those variations. That is a principal reason why the
Project Manager must keep up with “design changes” for engineering and
equipment, cost of living increases, which are dependent on the overall length of
your project, and the “contingency” factors that all PM’s must control.

You will be either pleasantly surprised or somewhat shocked as the actual costs
begin to be recorded. For instance engineering and design costs may trend
higher than what you had forecast. That may not surprise you if you have been
following the design activities closely, and realize that there have been several

40
 scope changes, including an attempt on your part and theirs to reduce overall
equipment and construction costs. Remember that you are not autonomous in
this venture; you have been working with this team and motivating them to be
an integral part of this project, and to be participants in its ultimate success. You
have come to believe, and often rightly so, that sound engineering practices will
benefit the project in the final analysis. This information can be compared to
your forecast budget for a given period of time, and can even be displayed
graphically (again expenditures vertically and timeline horizontally).

8. Startup
Sometimes these two words, startup and closing, are used interchangeably by
both the Client and the management members involved with the project.
However, most experienced PM’s are well aware that these two words are not
synonymous. As the PM you have allotted sufficient time in your project
schedule to test the equipment on site, even though you have undoubtedly had
the manufacturer put the equipment through its necessary testing at the factory
or shop. Now that the equipment is on site at your project, the manufacturer’s
representative as well as your own on-site personnel may be dealing with
different conditions than what was available in an ideal shop environment. There
is little doubt, however, that quality planning by the Project Manager and the
project team to prepare for onsite testing and tryout of equipment will save both
time and startup costs for the project.

Equipment can be damaged in shipment, particularly if it is coming from

overseas. In addition special care must be taken by your construction manager to
insure that the installation is in accordance with manufacturer’s guidelines, that
utilities such as electrical power and instrument air are clean, and that the
manufacturer’s representative is present for initial startup and testing. Your
responsibility at this phase of the project is to acknowledge whether the
equipment works as intended, and to communicate with executive
management, your engineers, and the manufacturer whether it does or does
not.

In the next phase of startup you and your team will be dealing with the
coordination of individual equipment as it relates to other equipment on either
side. This “systems integration” is the heart of your startup schedule, and may
require the input and recommendations of many people on your project team as

41
 well as operations personnel in the event that things don’t go according to plan.
In this event, even though you may be receiving (and recording) advice from all
sides, you are still in control of the project and must continue to be the primary
decision maker.

This phase of the project is where the relationships that have been developed by
you (and your team) and operations personnel are so important. As part of the
startup cycle many of these personnel should be present during testing of each
piece of equipment, and the manufacturers’ representatives who performed the
original testing must be available to answer any operations’ questions. The
interests of the project team as well as operations are well served when this
coexistence and continuity exists.

However, irrespective of the efforts that the Project Manager, the project team,
and various groups associated with the project may have made, neither the PM
nor Executive Management should expect perfection during this phase. Unless
you are duplicating an existing facility, there is never any guarantee that a new
facility will start up without any hitches or glitches. The great majority of new
facilities, whether industrial or commercial, can expect to go through a “learning
curve” which will require painstaking attention to detail in order to achieve a
relatively successful operation. There is probably no hard and fast rule as to how
long before your facility will achieve this success – some facilities achieve a high
degree of success in six months or less, while others may be climbing the curve
toward 100 percent operation for close to two years. The simple fact is that, if
you have followed the principles and guidelines presented here, you are more
likely to achieve complete success earlier rather than later.

9. Closing – Achieving Success and Avoiding Failure

There is almost always some pressure on the project manager to close the
project in an early, if not orderly, manner. You will undoubtedly have a “punch
list” of uncompleted tasks that, in your opinion, require resolution before the
project can be officially closed. While you may not be inclined to close out the
project under those circumstances, your assignment is to communicate with all
involved parties. At this final phase of the project, and although you are dealing
with a smaller group of personnel (Executive Management, Operations), their
opinions matter a great deal to your future assignments and/or promotions. In
spite of the phrase “Failure is not an option!” used in the Armed Services, pro

42
sports, and other environments, failure is still very much an option for the
Project Manager. The PM must now utilize all the project management skills and
tools that have been developed to make decisions and resolve open issues that
will insure the success of the project. As you reach the final phase of the project,
you are obligated to determine the following:

Are the Clients satisfied with the results of the project?

If the above question is answered affirmatively, then your function as project

manager is essentially completed. You have fulfilled your obligations, and the
pressure is mitigated to the extent that you have a happy Client. You are now
able to improve the final details of the project rather than to significantly
restructure it, and you are in a position to move forward with the closing
documents that are required. There still are some final questions, albeit of lesser
importance, which need to be answered prior to the conclusion of the project:

Are there any uncompleted tasks which may have a negative impact on the
operations at a later time?

Nobody is asking you to look into a crystal ball, but you especially as well as your
engineering team and your construction manager will likely be in the best
position to make this call. They must assist you in verifying that all pertinent
project drawings are updated and certified. Now that the facility is up and
running, and possibly there is a production schedule to be met, your Client
probably would not be willing to forego operations in order to achieve total
completion. The last thing left for you to determine is:

Are project funds still available to complete the remaining tasks?

This is an easy one; if there are still some funds available from the original
budget, which you have guarded so carefully to protect, then you should
recommend that these tasks be completed by the outside services organizations
and contractors that were used to perform the original project and may still be
on site. This will enable your Client to capitalize the project to the fullest extent
without any interference to the ongoing operations. However, if the decision has
been made (by someone other than you) to have local operations and
maintenance personnel perform any remaining tasks, then your goal has been

43
 met and the time has come for you to sign off and move on to your next
assignment.

Summary
As you may have discovered by navigating this course, having personal discipline and learning
to delegate authority are very important characteristics of a Project Manager The primary goal
of this course in project management is to provide existing project managers and would-be
project managers with the necessary tools to manage a successful project. In almost all projects
the Project Manager and project team members will develop and utilize some core principles.
One of those core principles is that the burden of assuring the finite factors of cost and
schedule in addition to the end result is primarily the responsibility of the PM. Also the Project
Manager is given guidelines and examples of what to do when a difficult situation presents
itself. Invariably, the solution is not begun until the PM and/or the project team members
recognize that a problem exists. It can then be resolved with training and experience, each of
which is an equally valuable commodity.

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 Advanced Project Management

Questionnaire

Background/Education
1. A/an _________ background is a valuable project management tool.
a. Business
b. Finance
c. Engineering technology
d. All of the above

Experience/Training
2. Which of the following should a Project Manager know about the company?
a. The ultimate financial goal of the PM’s project.
b. The ultimate financial goal of the company.
c. The company’s current list of outstanding liabilities.
d. All of the above

3. A good character trait for a successful Project Manager is ____________.

a. A reluctance to being criticized by Executive Management.
b. A willingness to criticize any member of the project team.
c. Preparing for future situations and opportunities that might occur.
d. All of the above.

Leadership Qualities
4. You as the Project Manager are expected to _________.
a. Micro-manage your project.
b. Tell your Client how well things are going, whether or not it’s the truth.
c. Become argumentative with your project team when things aren’t going well.
d. None of the above.
Motivational Skills
5. When Vince Lombardi had a football player who didn’t achieve perfection, he
___________.
a. always got rid of that player.
b. put that player on the practice squad.
c. placed that player on injured reserve.
d. none of the above

6. A Project Manager can be likened to ____________.

a. A quarterback on a professional football team.
b. A head coach on a professional football team.
c. An offensive coordinator on a professional football team
d. A defensive coordinator on a professional football team

Scope of Work
7. Your first personal objective after you have received a project management assignment
is to _______________.
a. Meet with the project team to find out what they know about the project.
b. Take a quick tour of the potential project site.
c. Meet with the Client and closest aides to determine precisely what they hope to
accomplish with your project.
d. Look at the company’s list of similar projects to determine how to go about
managing your new project.

8. When building your project team, you need personnel that have the same ____________.
a. Personality
b. Technical background
c. Characteristics and objectives
d. Employment experience.

9. Issuing a weekly progress report to management from the Project Manager

____________.
a. Keeps management current with the progress of the project.
b. Apprises management of any short or long term problems.
c. Affords management the opportunity to be involved in the project.
d. All of the above.
Developing a Budget

10. A measure sometimes taken by the Project Manager when the Budget is too high is to: a.
Proceed with the project and hope for savings to occur later in the project.
b. Work with the project team and the Client to reduce the Scope of Work in a logical
manner.
c. Reduce the Scope of Work without regard to management’s ultimate objectives.
d. None of the above.

11. When preparing a preliminary budget that has many unknown cost factors, the Project
Manager should ____________.
a. Consider a contingency factor possibly as high as 5 to 6 percent.
b. Consider a contingency factor possibly as high as 12 to 15 percent.
c. Lowball the estimate to get funding for the project and deal with the
consequences later when the scope is better defined
d. None of the above

Scheduling
12. An experienced Project Manager will
a. Relate the project schedule closely to the project budget.
b. Keep the project schedule completely independent from the project budget.
c. Show minimum concern for the project schedule.
d. Show minimum concern for the project budget.

13. When developing an initial MS Project schedule, most of your float time should be ____________.
a. Right at the beginning.
b. In the middle.
c. Toward the end.
d. Do not use float time as a scheduling tool.

Engineering and Design

14. The responsibility for sizing the equipment and determining the specific requirements of that
equipment lies with ___________.
a. The Project Manager.
b. The engineering and design team.
c. The procurement department.
d. The Client
 15. The engineering group ___________.
a. Is directly responsible to project management.
b. Needs approval of the Project Manager when scheduling a visit to a supplier.
c. Notifies the Project Manager if a supplier will be late with deliveries.
d. All of the above.

Procurement
16. A major factor in project cost overruns occurs when ___________.
a. A constructor is in standby, waiting for equipment to be delivered.
b. Procurement places a contract with a sole source supplier.
c. The Project Manager requires a thorough review of all proposals by engineering.
d. The Client rejects one of the bidders as a supplier of equipment.

17. When selecting a supplier for any major or critical equipment, the Project Manager and the
Procurement Department should ___________.
a. Evaluate that supplier’s history with the company.
b. Not accept a promise from a supplier that has never met your particular criteria.
c. Visit that supplier’s facility to determine their work load and quality control program.
d. All of the above.

18. The __________ can assist the Project Manager by expediting the supplier and maintaining the
original intent of the project schedule.
a. Legal group
b. Procurement group
c. Client
d. All of the above

Construction
19. In general, the prudent use of overtime __________.
a. Can benefit the project for a myriad of reasons
b. Is never a good idea
c. Is only a benefit to the contractor
d. Both (b) and (c)

20. One advantage in dealing with one general contractor rather than numerous smaller
contractors is that;
a. There are fewer employees to have to pay.
b. There is usually only one construction representative with primary responsibility.
 c. The Project Manager doesn’t have to be concerned about safety rules and
regulations.
d. None of the above.

21. Courts have ruled that a company or organization cannot implement a penalty clause in
a contract _______________.
a. When the total value of the contract is under $10 million
b. Unless it is a design/build contract where the contractor is not dependent on other
parties
c. Unless a corresponding bonus clause is also stipulated
d. Under any circumstances

Cost Control
22. The Project Manager must keep up with ________ in order to control project costs.
a. “Design changes” for engineering and equipment.
b. Cost of living increases, which are dependent on the overall length of your project.
c. The “contingency” factors that all PM’s must control.
d. All of the above.

Startup
23. There is a need to test and try out all major equipment _____________.
a. At the supplier’s factory or test site.
b. As soon as possible after all the major equipment has been installed.
c. As soon as possible after all the major and auxiliary equipment has been installed.
d. All of the above.

Closing

24. Before the project can be officially closed, verification must be made that all pertinent
project drawings are updated and certified by ___________.
a. The Project Manager and the Client.
b. The Project Manager and the engineering team.
c. The Legal Department.
d. The Procurement Department.
25. The completion of any remaining punch list items is the joint responsibility of
______________.
a. The Project Manager and the Client Representative
b. Company management
c. The contractors
d. The Procurement Department
 Online Course (4 PDH)

Advanced Project Management Techniques - II

Dominic P. Perrotta, P.E.

2015

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 Advanced Project Management Techniques
Dominic P. Perrotta, P.E.

Introduction
This course in project management is a continuing attempt to improve the prospects for
existing project managers and would-be project managers to manage a successful project. This
course provides the student with a series of case studies of actual Project Managers and
projects for which they were responsible. Advanced Project Management - I is not a
prerequisite for this course which is meant to be a sequel to APM-I, and is intended to broaden
your knowledge about how successful projects are managed. Once you have completed this
course, you will realize that there are no perfect projects, nor are you expected to be a perfect
Project Manager.

This course is divided for all Project Managers into three important categories, which were
previously defined in APM-I:

1. Leadership
2. Decision Making
3. Project Team

In each category there are two different case studies, and in each case study the Project
Managers utilized certain techniques, mostly orthodox but some unorthodox, in order to bring
the projects to successful conclusions. Regardless of the paths that were chosen by the Project
Managers, their implementation of the core principles of quality project management proved to
be a huge asset. You will also recognize that, although these Project Mangers may have had
different levels of experience, they all went about their business in a confident and professional
manner.
The last part of each of these above three categories tries to give an interesting account of
people that we either know or have read about who faced similar challenges in the sports
world. The projects that each of them managed was simply their livelihoods. Through diligence,
wisdom, and an understanding of those around them, they were able to be successful in their
life's projects.

The fourth and last section of this course relates what actually took place following a major fire
at a large manufacturing plant. In this case study, the Project Manager went beyond anything
that he was obligated to do, resulting in a great savings to the plant as well as significant future
benefits to his engineering firm and to himself.

Course Outline

I. Dealing with Engineering Firms

A. Small and Local Firms

B. Intermediate and Multi-National Firms

C. Defining Leadership

II. Dealing with Manufacturing Company Management

A. Mid-sized Companies

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 B. Larger and Multi-National Companies

C. Defining Decision Making

III. Dealing with the Project Team

A. Matrix Organization

B. Direct Supervision Team

C. Defining a Project Team

IV. Negotiating with Insurance Companies

Advanced Project Management - II

I. Dealing with Engineering Firms

A. Small and Local Firms

Occasionally a Project Manager may receive a telephone call with a surprising and
completely unexpected message. A PM received such a phone call late one summer
afternoon after successfully completing a rather large project in a nearby city. The caller was
the president of a mid-sized engineering firm that was in the expansion mode, and had just
received a verbal commitment from the vice president of a large North American industrial
company to provide engineering services for the company’s new Greenfield project.
However, there was one stipulation prior to the company issuing a formal contract to the
firm; they must be willing to hire the Project Manager of the company’s choosing, who
happened to be this particular PM. This individual, who had previous experience with the
company as a PM, would also be able to furnish substantial production expertise – a quality
that was lacking within the engineering firm's organization.

A meeting time was established within a few days of the phone call at the engineering firm’s
offices, at which time the PM met both the president and vice president of the engineering
firm – no representative from the industrial company was present. The PM listed previous
involvement in various projects, particularly those related to the industrial company. The
management of the engineering firm furnished a basic list of activities that they had
performed since their starting the firm about ten years earlier. The meeting was going
smoothly and issues of the firm’s work hours, office space, lines of communication, payroll
dates and reporting procedures were discussed and quickly resolved. When the subject of
payment to the PM finally came up, however, the meeting became slightly contentious.

Be Humble but Be Prepared

The PM was an independent contractor who was close to Social Security age and had been
paying his own social security taxes and income taxes, had his own healthcare plan, and
lived less than 15 miles from the engineering office. Although he exhibited his enthusiasm
for the new project and the firm's role, he was in a strong position to negotiate a good rate
from the engineering firm, since failing to hire this PM would jeopardize the firm’s pending
contract. The initial offer from the firm was quite low, in keeping with the engineering firm’s
policy. At this point wage negotiations began in earnest, and both the firm and the PM
utilized their best arguments for winning the verbal, albeit peaceful, battle that ensued.

The PM’s counter-offer was substantially higher than the firm's original offer and
represented a figure that was more or less in line with the type of wage (or salary) that was
customary for the project involved. His offer was immediately met with great resistance.
After a few higher and lower numbers were brought forth, the PM then asked the firm’s
management to provide a copy of their proposal to the industrial company. The engineering
firm apparently agreed to supply the requested information, although with some degree of
reluctance and hesitation, and their proposal included the following information:

1. A summary of the total hours for the firm’s Project Manager to complete the project;

2. All hourly rates that would be charged to the industrial company during the course of
the project, including those for the Project Manager;
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3. A summary (resumes) of the experience of the engineers, designers, and drafters who
would be involved with the project;

4. Letters, memos, and emails linking the engineering firm to the financial success of the
project;

5. Previous projects by the engineering firm either of a similar nature or with the industrial
company, accompanied by any letters of commendation or criticism.

Take the Initiative

The PM took a day to analyze and evaluate the data from the firm’s proposal, calculated the
cost of personal taxes, healthcare, and other potential expenses and arrived at a number
that was presented to the firm as a compromise. The PM’s rate was sufficient to cover
expenses, and to earn the PM a good income for the work performed. It also allowed the
firm the opportunity to receive a net profit of more than thirty percent of the hourly rate
that they would charge to the company, and this last remaining issue was accepted and
adopted by both parties.

However, the PM quickly became aware of the reason behind the engineering firm’s
reluctance to share this proposal information. Buried in the proposal was a substantial
number of hours plus accompanying rates for “administrative fees”, meaning that the two
owners of the firm would be “double-dipping” - collecting on the markups of the
engineering team that was actually working on the project as well as direct billing the
industrial company for work in which they were not directly involved. The compromise to
this situation was to reallocate most of the owners’ hours to the engineering group,
including to the Project Manager, while the owners would bill the industrial company only
for those hours that actually involved their work on the project.

Possess a Teachable Spirit

For a little over one year (actually 14 months) the Project Manager’s assignment with this
coastal engineering firm was to function as their PM on this local project that they had won
with the low bid. The PM provided leadership and production expertise to the firm's in-
house design team, being mindful of the fact that, due to its low-bid nature, the project
would be under constant scrutiny by the firm’s management.

During the course of the project the PM was diligent and respectful of the engineering firm’s
quest to do a good job and to make a decent profit, while at the same time leading the
engineering group to provide a quality facility for the industrial company. As the individual
with the most related experience on the project, the PM also felt duty-bound to protect the
industrial company Owners’ interests and ensure that the new facility would function
properly and would ultimately provide the company with a decent profit margin for their
new products. Because of the high profile nature of the project within the company, and
owing to the company’s request that the PM furnish them with his production experiences
for making their project a success, this created other issues not of the PM’s making.

Despite his being required to routinely explain the purpose and function of the industrial
company's operations to his project team, his efforts were not always met with
wholehearted support and enthusiasm by the engineering firm’s top management. While
his production expertise was always met by the project team with appreciation, the
Executive Management of the engineering firm would occasionally try to derail his efforts.
Whether this action was due to his favored status with the industrial company or just the
management firm's seeming lack of control over every output was never quite clear to the
PM.

At one stage the firm’s vice president countermanded one of the PM's recommendations for
proper grounding design while the PM had been gone for a few days to visit a supplier.
Upon his return and having been made aware of the VP’s action, the PM had challenged this
design change, explaining to the VP why his design would be neither functional nor
acceptable to the Plant Owners. Furthermore, the Project Manager suggested that they
investigate the reasoning for the PM’s recommendation with the Plant Owners. When the
Plant Owners supported the PM’s recommendation, explaining that traditional electrical
grounding was ineffective due to the very high water table in the plant, the matter was
seemingly settled and the project proceeded.

However, there were other incidents that involved the engineering firm’s VP and the PM. On
another occasion while in an automobile with him and the firm’s president (the other
owner), the VP threatened to fire the PM on the spot for not billing the industrial company
sufficiently during the previous month. The PM attempted to justify the lower billing month
by explaining that two of the engineers on his project team had been on vacation that
month, that no one had been available to replace them, and that billing should be quite
strong in the coming month. The firm’s president diffused the situation by explaining that
the PM had come to him for additional support before the vacations occurred, but that
nobody was available due to their small size and the critical nature of another project, thus
again offering necessary support to the PM.

As the project was winding down, the engineering firm had decided to bid on another large,
industrial project being planned in an adjoining state by an international company. Their
confidence had been buoyed by the pending success of the existing industrial project. About

7
two weeks before the very successful startup of the current project, the engineering firm
was informed that they had been selected because they were not only the low bidder on
this new project, but also in large part because of the firm’s success with the project which
was being concluded. The engineering firm, seemingly feeling that their capabilities were
now sufficient to manage an industrial project of such size and scope, made no attempt to
negotiate with the PM for the new project.

Be Flexible and Sincere

In the meantime the PM had been directly contacted by the Owners from the industrial
company to determine if he would be their contract Project Manager for a new industrial
facility similar to the one being started up, which was two states away. The PM’s decision
was based partially on money (there would be no markup by any engineering firm in order
to make a decent profit) as well as the integrity of the industrial company Owners. When he
notified the engineering firm of his decision to work directly for the Plant Owners, but to
support them for the next few months with their new industrial project until a replacement
could be found, he was shown the front door quickly and without any kind of thank you for
his efforts.

Following his rather ungrateful departure from the engineering firm, the PM spent two
years on the new project, engaged with a larger and more experienced engineering firm,
and completed another very successful project. His former engineering firm began its new
project with a minimum of industrial expertise, struggled through the early phases of the
large industrial project, and were finally relieved of their contract obligations after about six
months. There are many lessons to be learned by the Project Manager as well as by the
engineering firm and the industrial companies regarding these activities.

Summary: Whether functioning as a direct employee or as an independent contractor, a

qualified Project Manager should always try to be in a position of strength in order to
negotiate the best contract, whether with an engineering firm or with the company. Often
a PM may be hired or retained primarily for his or her specific expertise in a commercial
or industrial endeavor. Under the circumstances in which this PM was hired, and in spite
of his enthusiasm and sincerity, he was always considered a liability in the eyes of the
firm's management.

While taking the initiative and exhibiting a large degree of flexibility may be key factors in
ultimately achieving success, the support of the firm's management is very critical.
Obviously the firm's vice president had much more personal ambition than concern for his
employees and the project, and seemingly harbored a great deal of resentment toward
the PM throughout the project. However, the PM never seemed to become discouraged,
and maintained an open line of communication and cooperation with all parties involved.

B. Intermediate and Multi-National Firms

Bruce had been a Project Manager for a large industrial company with operations
throughout the United States, but had an enterprising spirit. Bruce felt that he could do
better with his own company, and decided to form an engineering and construction
company that would service local customers with efficiency and quality. Starting out with
just one other employee, Bruce worked 12 to 16 hours a day, and often six days a week.
Bruce had a business background (degree also) and a good understanding of what was
required to build his firm: work hard (to the point of sacrificing a normal lifestyle, find a
niche market, and offer sincere and loyal service. Within five years Bruce was a successful
entrepreneur with a monthly payroll of several hundred thousand dollars. Articles were
written about Bruce and his successful company, and Bruce seemed to have discovered the
methods for satisfying his customers. Then some of Bruce’s mistakes and some outside
events occurred which entirely changed the course of Bruce’s company as well as his career.

In the process of expanding his company, Bruce had hired some employees who did not
have the same set of ethics and loyalty that were needed to maintain quality relationships
with the customers. In addition Bruce had taken on larger and larger projects, which had
resulted in increased financial burden and greater debt. Then, without any warning, one of
his company's largest customers declared bankruptcy, setting up a long and costly court
battle. Soon following that devastating news, one of his company's key personnel became
grievously ill, leaving Bruce without the necessary support in critical areas of his business.
Finally, in an effort to increase the magnitude of the company, one of his largest projects
was grossly underbid and lost several hundred thousand dollars. This financial blow caused
Bruce to drastically reduce his employee workforce and raised the possibility that he would
face personal bankruptcy. To his credit, Bruce worked tirelessly over the next few years to
pay off his creditors and never did consider declaring bankruptcy. At the end of that time in
his life, Bruce closed his business and looked around for a company that might want to hire
him.

No Time for Discouragement or Self-Pity

One of his former employees suggested that Bruce talk to a large multi-national engineering
and construction company with offices in most of the United States as well as more than a
dozen foreign countries. Bruce called the HR Manager, who informed him that they did not

9
have any immediate openings; however, one of their Southwest offices was expanding, and
he would make arrangements for an interview. Bruce was not too enthused about making
the trip, not even when the HR Manager called him back the next day and told him that the
company would reimburse Bruce for the airfare, and that they would have a driver from the
office there to meet with Bruce the following Monday outside the airport terminal.
Although those issues had been resolved between the company and Bruce, he still did not
feel comfortable about the interview, nor did he have the faith in his abilities after his recent
business failure. Believing that the whole day just might be a waste of time, nevertheless,
Bruce made his plane reservations and called the HR Manager’s secretary to notify her of
his travel plans.

Surprising Development

On Monday morning Bruce dutifully boarded an early morning flight to his destination, still
feeling less than confident about the purpose of the trip. Once the plane landed and Bruce
made his way into the terminal, he headed immediately for the terminal exit. Outside the
terminal he spotted the company’s car, and quickly walked over to it. Expecting to be
greeted by a single driver, Bruce was totally shocked to see three men in business suits
sitting in the large sedan. Each man greeted Bruce warmly and identified himself by name
and position in the company. One was the Office Manager, or vice president, and the other
two were the General Managers. Bruce was nearly overwhelmed by the surprise reception,
but did his very best to keep his cool. That morning he was introduced to several
employees, and was shown all of the company’s latest tools, devices, and instruments that
made them unique and gave them a worldwide advantage. Over lunch the Office Manager
presented Bruce with an offer for employment and asked him to seriously consider it,
because they would like him to start with them the following Monday. Bruce said that he
would talk it over with his wife, bid them farewell, and boarded an early afternoon flight.

The very first thing that Bruce did, after he got back home and told his wife about his visit,
was to call his former employee who had recommended the company originally. There were
some surprising issues that had occurred since Bruce had called the company and requested
an interview the previous week. On the Friday before Bruce arrived for his interview, the
company had terminated a Project Manager for mishandling a major project that was being
closely watched by most of the top executives in the company. Furthermore, management
for the client had criticized the now dismissed PM for being uninformed about their
industry and overall objectives as well as unresponsive to their requests for expedient
service. The engineering firm's executives spent the rest of that Friday and much of the
weekend trying to determine their course of action. Then they analyzed Bruce’s resume,
realized that he had a strong background in both project management and that specific
industry, and had an offer prepared before they actually met with him. The only thing that
could have prevented the company from presenting the offer to Bruce was either arrogance
or indifference on his part; instead they found him to be likeable with a confident air of
humility, so they made Bruce the offer. He accepted their offer the next day and began his
new assignment the following week.

Assignment to An Ongoing Project

On the first morning of his new job, Bruce signed all of the necessary “new employment”
documents and was introduced to many of the firm’s employees, including the other top
management members that he had not met the previous week as well as most of the
members of his new project team. That afternoon he met with the office’s financial
manager in order to develop a clear understanding of the financial and short term status of
his new project. What he learned from her was not very comforting; the project had only a
few thousand dollars available to charge to the company, and the company had refused to
authorize further funds – they were seriously considering cancellation of the contract with
the firm and finding an alternative source. Later that afternoon Bruce met with several key
individuals on the project team. Each engineer and designer gave a nearly similar answer
when Bruce asked them what kind of problems they had encountered on the project; the
previous Project Manager was “…in over his head”, “…had little understanding of the
industry”, “…was prone to berate team members” in front of other team members and even
top management, and never took any blame for any of his miscommunications or
inadequacies.

New PM Makes It His Project

Bruce had learned several lessons from his experiences over the previous ten years as an
entrepreneur, and the ten years before that as a highly regarded Project Manager. Whether
functioning as a PM, or following his excursion into the area of starting and operating an
engineering and construction company, he realized that being sincere with his clients and
acknowledging when his firm occasionally did not have the necessary industrial or
commercial experience were crucial to the success of his firm. Bruce brought that attitude
with his new assignment as a Project Manager and, while that sometimes had caused
political heartburn among his superiors, the customers had usually been patient with Bruce
and his project team and had remained positively responsive. The following morning Bruce
called the company’s vice president, who was the company representative responsible for
the success of the project, and introduced himself as the new Project Manager. Bruce
arranged a meeting and flew to the company’s mid-west office the next day to meet with
the VP and other company executives. During the meeting some of the management
members recognized Bruce from past projects, were comfortable with the new direction of

11
the engineering firm, and agreed to authorize an extension to the firm’s contract for several
hundred thousand dollars.

During the ensuing months, as the eyes of the firm’s top management were on Bruce and
the project team, his performance became less scrutinized and the project activities became
somewhat routine. Bruce had learned the critical lessons of a quality Project Manager:
never take anything or anyone for granted; trust but always verify, and listen to ways in
which he and the project team could improve. Bruce also became aware of the nuances of a
large, multi-national engineering firm: practices, procedures, and politics. Very rarely in the
first year did Bruce get involved in water cooler or coffee pot discussions. He preferred
simple meetings, always pre-scheduled and usually one-on-one, with his team leaders,
department heads, and other staff members such as the Financial Manager (a female) and
the Director of Marketing (also a woman). The firm’s portion of the project was completed
successfully over the next several months. Bruce’s management skills and client
relationships were duly noted by the firm, and he was offered a promotion by the firm,
which he accepted after completion of the project. However, the politics of such a large firm
became overwhelming to Bruce and his senses of discipline and humility. He remained loyal
to the firm throughout his short career with them, but was open to other opportunities that
were presented to him.

Summary: One thing that usually escapes a quality Project Manager with a good track
record is that he or she will often be exposed to new and greater opportunities. A Project
Manager should always have the faith that he or she will succeed where others may have
failed. There is a common concept that a good executive can be just as good at another
company, no matter where that executive has been or where he or she is going.
Unfortunately, that philosophy is sometimes proven wrong; a CEO from a sporting goods
company probably won’t have an easy time trying to manage an oil company, or even a
multi-national bank.

However, this same philosophy usually does apply to Project Managers, who might have
a golf course as a project this year, a refinery next year, and a 20-story bank building the
year after that. In addition to being a decision maker, a successful PM is a planner and a
builder. Although a quality Project Manager always has a high value and should be open
to opportunities, the very best thing that any PM should do is stay completely loyal to the
present company, while being open to opportunities that may arise.

C. Defining Leadership
In a previous course, which is referenced as Advanced Project Management - I, there were
numerous leadership characteristics that were used to define a quality Project Manager.
While that course is not a prerequisite for this one, its emphasis on the personal values
required by a successful PM will hold very true as you read through and study this course.

One of those leadership qualities that was not discussed in the previous course centered
around a relationship between Head Coach Vince Lombardi of the Green Bay Packers and
Bart Starr, his quarterback,. Mr. Starr had been drafted in the 17th round in 1956 by Green
Bay – at that time there were only 12 teams in the National Football League – and was used
primarily as a backup quarterback and in mop-up roles as the Packers struggled to a
franchise low 1-11 record in 1958. In danger of losing their franchise, the Packers hired Mr.
Lombardi in 1959 to help change the direction of the team and to salvage the franchise.
Needless to say, no one could have predicted how much Green Bay’s good fortunes would
occur. In the period of time from 1961 through 1967 the Packers won five league
championships, including three straight and the first two Super Bowls. While that was
considered one of the greatest turnarounds in professional sports history, nevertheless the
late Paul Harvey would have said “…and now the rest of the story.”

Mr. Lombardi had a reputation as a perfectionist with a very volatile temper and a very
short fuse. Midway through the 1959 season he had installed Mr. Starr as his starting
quarterback, primarily due to what he considered Mr. Starr’s leadership qualities, and the
team completed the season somewhat successfully with a 7-5 record. During a pre-season
practice the following year Mr. Lombardi was very vocal, being critical of nearly all of his
players, including issuing a stern reprimand of Mr. Starr in front of the rest of the team.
After practice Mr. Starr caught up with Mr. Lombardi in his office. He politely but firmly
reminded Mr. Lombardi that he had asked Mr. Starr to be the leader of the team – in those
days there were no headphones in helmets and quarterbacks called nearly all the plays. Mr.
Starr then informed Mr. Lombardi that, in the future when he had a criticism of Mr. Starr, he
should call Mr. Starr into his office and air his grievances in private. From that day forward
Mr. Starr and Mr. Lombardi had a player-coach relationship that resulted in five league
championships in a six-year period. Mr. Starr not only became the leader of a great team,
but was also awarded the Most Valuable Player of Super Bowls I and II.

As a Project Manager, one of your strongest qualities will be in the leadership role. Although
you are expected to be a decision maker, not every decision that you make will be met with
approval by executive management, and you may sometimes be criticized or even
reprimanded. The same situation will hold true for those on your project team who are
actually responsible for the numerous tasks that propel a project. You as a Project Manager
would like to command the same respect that Mr. Starr received from Mr. Lombardi by

13
having any dissatisfaction of your performance expressed to you only behind closed doors.
This same philosophy should apply to those members of your project team whenever you
are dissatisfied with their efforts or production on your project.

Summary: Leadership is both a way of life as well as a state of mind. Nobody is born with
it, just like nobody is born with true discipline or humility. However, many people
naturally develop the necessary skills for true leadership early in life through good
parenting, personal experiences, and other tangible methods. Others may acquire it later
in life through diligence and effort, including study and training. Irrespective of how you
have managed to position yourself as a leader, know that leadership is one of the two or
three greatest qualities of a Project Manager. As you go through this course in Advanced
Project Management, you will note several other important qualities for a PM, although
none is more important to the success of your project than strong leadership

II. Dealing with Manufacturing Company Management

A. Mid-sized Companies
Following his moderately successful completion of a difficult multi-million dollar project,
Sammy was asked by a similar-sized company to manage their new project. Over the next
two months Sammy as the Project Manager was given the opportunity to meet with the
team of executive managers who had the responsibility for scoping and developing the
budget for the new project. The first meeting, which included Sammy and three company
executives, occurred at the company’s North American home office on a truly cold winter
day. Once the meeting began and Sammy was introduced as the Project Manager, he was
made aware of the scope details of the project. Their plan was to design and build a
Greenfield plant in the southeastern United States that would receive unfinished products
from a nearby plant, complete the manufacturing of those products, and non-destructively
test those products. The finished and quality inspected products would then be shipped to
all parts of North America. All of this was in his area of experience and expertise, and
Sammy soon became comfortable with the project and the people describing it until the
management executives on the team began to define the process that would be used for
the production portion of the project..

A Subtle Warning
 As the management team began to describe the method that they planned to utilize for the
finishing process, Sammy quickly realized that this part of the project did not represent the
industry standard and was not anything with which he was familiar. The standard industry
process for finishing these products, whether they were long or short, square or round, was
on an individual unit basis to maintain consistency and quality control. The company plan
for preparing the products to be finished was a continuous process that utilized an older
technique which was inconsistent, did not follow industry quality control practices, and
during the past forty years had been abandoned by similar companies as being not only
obsolete but also too costly and quite fallible. The industry standard for the past several
decades had been to bring the product up to a certain process temperature, usually
between 1650⁰F and 1750⁰F, in a natural gas-fired furnace. Each product would then be
individually discharged through a furnace exit door and into an enclosed quench unit, where
the heated product would be quickly drenched with a high pressure water spray.

Quickly estimating that this portion of the project would represent about 25% of the total
project budget, Sammy was at first disbelieving, and then really dismayed. The scope was so
contrary to any similar project in which the PM had been involved that he remained
completely silent, choosing only to ask specific questions during the remaining discussions.
Sammy was aware that a similar project had just been concluded at one of that company’s
other plants within the past six months. That facility was utilizing the latest technology, and
was already operating very successfully. Listening carefully regarding this area of the project
scope where the PM had many years of expertise and experience gave Sammy an uneasy
feeling, but the management team was surely knowledgeable of the recently completed
project at one of their other plants. Although he was feeling a certain amount of discomfort
with this most critical scope of the project, Sammy believed that the management team
very likely had good reasons for their decision..

Sammy's Concerns Were Temporarily Tempered

Toward the end of the four hour meeting, the rationale for the company’s scope for this
new project became apparent. The company had a similar facility at one of their older North
American plants which functioned seemingly quite well. Neither their Board nor their
Executive Management had any interest in changing to a newer or different technology in
their attempt to expand their product business model as well as the company’s actual
production.

The leader of the team – we’ll call him Dave - was extremely pleasant and knowledgeable,
and was the company’s General Manager – Operations for all North American plants. The
new Project Manager and he hit it off very well, and they met twice over the next thirty
days to finalize the budget. One of the meetings occurred at the company’s home office,

15
while the second meeting was at a company’s planned plant expansion site in the
Southeastern U.S. After that second meeting, Sammy never saw Dave again. Just three days
after his visit with the new PM, Dave died of a massive heart attack while playing in a pickup
basketball game in his hometown. To say the least, the entire company as well as the new
PM were devastated, not only by the sudden death of a middle-aged man who was a good
friend to all that knew him, but also because of the uncertainty of the new project.

The Company Regroups

About two weeks after the initial shock waves surrounding Dave’s death had subsided
throughout his company, Sammy received a phone call from the company’s vice president
who had been involved with the company’s most recent project the previous year. Stuart
informed the new PM that the company wished to proceed with the project, that they still
wanted Sammy to be the Project Manager, and that Stuart would be the new Company
Representative for future activities. The PM was asked to finalize a project schedule and a
project budget by the end of the week which the VP could present to the Board of Directors
at their next meeting.

Sammy worked on those two items practically from sunup until sundown for the next four
days, talking to engineering firms, suppliers, and contractors who might be involved in the
project. By the end of the week he had a project schedule that, with the exception of one
major equipment supplier who later proved to be unreliable and several weeks late on
deliveries, would prove to be very accurate. However, he was very apprehensive regarding
the project budget. The PM adhered to the planned scope of the new facility as defined by
the executive management team, but many outside changes had occurred. Some of the
suppliers that had supplied the original equipment for the older facility were no longer in
business, while others had raised their prices much higher to cover inflation as well as
previous losses on marginal equipment. The final budget package which Sammy presented,
including a somewhat abnormally high contingency, came in at slightly more than ten
percent over the initial budget. Although this made it the highest capital project in the
company at that time, the new Project Manager analyzed the numbers several times, but
could never significantly affect a reduction in the bottom line.

The Project Moves Forward

Subsequently, Sammy submitted the project schedule and the project budget to the
Company Representative with some trepidation. To the Company Representative’s credit he
reviewed the package, accepted it with very few questions or changes, and submitted it at
the next Board meeting. The project was approved in its entirety at the Board meeting and
the new Project Manager was handed a project with which he did not have complete
familiarity, would receive minimum guidance from others, and lacked total confidence that
the project would achieve a high degree of success.

As the product preparation process was the most critical part of the project and
represented a high percentage of the project’s costs, one of the first actions by the Project
Manager and the Company Representative was to seek out suppliers who claimed to qualify
for their needs, including the one supplier who had provided the similar system at the
company’s other North American plant many years prior. Three seemingly credible suppliers
were selected and individual meetings were scheduled with each. After those meetings that
each lasted all day with the three potential suppliers, the Company Representative and the
Project Manager reached the same conclusions; all three suppliers could probably satisfy
the first phase of the preparation process, only the one supplier who had worked with the
company prior could possibly satisfy the requirements of the second phase, and none of the
three had the internal ability to satisfy the requirements of the third phase.

The PM and the representative then made the decision to work with the one supplier, which
shall be designated hereafter as Acme, that had provided the prior product preparation
system to the company. In order to provide the engineering for the balance of the project
and to furnish oversight for the Acme portion of the project, Sammy and Stuart selected a
local engineering firm to provide them with a qualified project team. The PM and CR then
offered Acme the opportunity to enlist outside support of the company’s choosing. The PM,
project team, and Acme met with a third party company that had over fifty years experience
in how to efficiently process the products in order to improve the metallurgical and physical
properties of that product.

Another Warning Sign

However, Acme refused to accept any help or support for two reasons: 1) they claimed to
know as much about properly processing those products as the third party company, and 2)
anything that they might learn from the third party company would not be held proprietary
and might be used by Acme in future projects. Consequently no real agreement was
reached with Acme other than the basic fact that the company was removing the third
phase of the project from their contract and would be purchasing that item separately. The
company, cautiously supported by the Project Manager, felt that Acme would be the most
logical supplier for the first and second phases of the preparation process. The PM was
hoping that Acme could actually deliver the system design and the equipment that would
satisfy their needs, based on their promises, their facility at the other company plant, as
well as any support that the PM and the project team could provide.

17
A contract was drawn up by the company’s legal department, accompanied by the Project
Manager’s very rigid specifications. The legal department developed a set of terms and
conditions that appeared to be quite stringent as well as compensatory, and which later
proved to be very prophetic. After much review and discussion, the contract was signed
with Acme, the preferred, although somewhat suspect, system supplier for several million
dollar. The PM and the project team knew that a big part of their workload would be the
expectation for them to keep close watch on Acme’s activities.

Acme was encouraged to submit preliminary drawings as soon as possible (within three
months of contract signing), particularly for the design of the second phase equipment, so
that Sammy and the project team could determine their specific capabilities in that area. In
a little over eight to ten weeks after the official purchase order date, drawings started to
trickle into the engineering group. Unfortunately, the drawings that they were receiving
from Acme were mostly generic, illustrating systems that had been designed for previous
customers over a thirty year period. As expected, the Acme had a good knowledge of how
to uniformly and consistently prepare the products to the specifications of the initial phase,
and was able to provide a bill of materials which allowed the project team to design the
necessary main building as well as the large control room that would be needed.

During the next six months, the supplier submitted certified drawings of the system that
was designed to meet the specifications of the first phase. Although this was a very
complicated system from an electrical and electronic standpoint, the Acme design seemed
to be very logical and quite appropriate for a company that had been providing this type of
system for nearly forty years. At no time did the Project Manager or any member of the
project team have any qualms or express any serious doubts regarding Acme’s abilities to
successfully furnish this portion of the project.

Obvious Shortcomings

However, once the certified drawings for the second phase of the system started to arrive
and be reviewed, the project team quickly realized that the supplier had huge deficiencies in
its design, and Sammy immediately notified the Company Representative of his concerns.
As described earlier, there was a certain amount of expertise that was necessary in order to
achieve success for this phase of the product preparation. For instance, the pumps that
Acme was proposing were inadequate in volume and of a lower pressure than was needed
for a successful performance of the second phase. In addition the water nozzles on the
manifold rings that Acme planned to utilize surrounding the hot product were essentially
misdirected to the product; the PM and several of the project team knew from years of
experience that the nozzles had to be at a reasonably precise angle in order to function
properly and provide the optimum product. The analogy which was used was that of
chopping down a large tree with an axe; if using a chopping blow perpendicular to the
trunk, the tree may not fall anytime soon, whereas the use of an angular chop would much
more quickly cause the tree to fall. Once this penetration occurred, the hot product almost
immediately developed a much harder and tougher metallurgical structure; otherwise the
only thing that the water was accomplishing was to cool the product to a near ambient
temperature, thus having no effect on the product’s metallurgical properties.

The CR was very clear in his instructions, again informing the PM that his job was not to
design the system for the supplier, that Acme had refused the help that had been offered,
and that they would have to suffer the consequences if they should fail to perform per the
contract. The Project Manager felt that this was the incorrect approach by the company to a
potentially serious problem, and that both the company and supplier could stand to lose
financially. Although he voiced his objections about this company philosophy and expressed
some serious reservations, the PM and the project team continued on with the project.

Investigation Launched

Over the period of the first six months of the project the Project Manager had become very
well acquainted with the person who had been designated by the company to become the
Manager of Operations for the new facility. During the next few weeks, and owing to his
concerns as well as those of the PM regarding Acme’s abilities, they made arrangements to
visit the one North American plant which had Acme’s product preparation equipment
installed. Accompanying them on their visit were representatives from Executive
Management and also two Quality Control personnel. After two days of close observations
and review of the quality control records, the group came to the realization that the product
yields were considerably lower than what had been reported. The implication was that the
plant was losing a significant amount in terms of revenue and profit.

The company was immediately notified of this fact and launched an investigation into the
plant’s past and current activities. The PM felt personally exonerated that his concerns and
those of his associates regarding this supplier had been justified. Nevertheless, Acme
continued to insist that it was providing the design and equipment for the new facility
necessary to meet company specifications and production requirements. The company,
much to Sammy’s consternation, maintained its “…let them fail, we’ll sue them later”
attitude and refused to allow the Project Manager or any member of his project team to
offer the supplier any considerations for how to improve their systems. Conversely, the
Acme was insistent on its expertise and ability to perform, and continued to maintain its
attitude that it was fully capable of fulfilling its contract. Regardless of what issues the

19
Project Manager and his associate in Operations attempted to resolve, they were
continually met with resistance.

However, when the so-called phase 2 drawings began to be received and reviewed, the
project team quickly realized that the supplier had huge deficiencies in its design. Sammy
immediately notified the Company Representative of his concerns, which included
inadequate delivery systems and an exit system that would be very costly to operate and
maintain. The CR again informed the PM that his job was not to design the system for the
supplier, that Acme realized the importance of providing a system that would meet
company specifications, and that the terms and conditions of the contract with Acme were
clearly defined. The only thing left for the PM to do was to alert the company to any
potentially serious problems, and expressing his opinion that both the company and
supplier could stand to lose financially. Although he voiced his objections to this company
philosophy and expressed some serious reservations, the PM and project team were
directed to continue on with the project.

During the next few months Acme issued certified drawings to the engineering group
pertaining to the scope of the equipment which they would be supplying for the quench
system. Acme offered no parameters for transferring water from their pumps to their open
quench system, nor for any flow controls, pressure regulators, or safety shutoff valves.
Furthermore, their open quench system would allow water to be sprayed all over the
operating floor as well as torrents of water to infiltrate their high voltage electrical room.
Without any company knowledge the PM authorized the engineering group to design a
proper piping system from the pumps to the quench headers.

Warnings Were Not Heeded

The project continued on for the next several months, and except for some late deliveries by
one of the other major suppliers, went through a certification and startup phase without a
great degree of difficulty. Acme also completed delivery of the preparation equipment, and
that section of the new facility began operation as scheduled. However, Acme’s failings
began almost in the first minute of their operations, some of the unexpected but most of
them predictable. In the meantime the balance of the project had been completed
successfully and within budget and, following some change order approvals and other
necessary paper work, Sammy’s role as Project Manager was concluded. Although he
moved on to other activities, Sammy was continually contacted by the company’s
Operations and Engineering departments to help them resolve some of the ongoing
problems with Acme.
During the first few years of operation, Acme presumably did its best to satisfy the many
plant requests for improvement to its system. Gradually, the spirit of cooperation gave way
to animosity and the blame game. Providing the many system adjustments and tweaks
proved to be very costly to Acme; on the other hand, the company never realized the
potential value that a well designed system could provide. The company continued to be
plagued by low quality products that did not meet market specifications.

No Winners

Finally, after five years of heated verbal and written exchanges involving numerous trials
and negotiations with Acme, the company filed a long-anticipated lawsuit against Acme,
contending that Acme had cost them several million dollars in lost revenues. Although
litigation resolved some of the dispute, neither party was particularly pleased with the
ultimate judgment, and once again the biggest winners were the trialyers. However, Acme
was not required to pay for any damages that had occurred as the result of the company’s
inability to satisfy customer requirements. In addition, the legal team that was hired by the
company charged a substantial fee to prosecute the case for the company. Furthermore, the
company still has an inefficient and costly system, due in large part to the fact that they
were unwilling to work closely with the supplier. An obvious situation that should have
never gone to court ended up being a lose-lose situation for both parties.

Summary: The one person, Stuart, who was in the best position to resolve the situation,
had developed the attitude that the supplier should sink or swim on its own merits.
Conversely, the supplier Acme refused to accept any external support, and may have been
reluctant to accept any internal assistance as well. A number of mistakes were made,
including the supplier being awarded a contract based on promises rather than on
previous results, and the company being unwilling to offer any concrete solutions to the
supplier’s systems which were knowingly lacking.

Whether you are a salaried or contract employee, your position as Project Manager
demands that you be dedicated to the best interests of the company that is paying you,
no matter whether you are dealing with engineering firms, suppliers, contractors, or other
company employees.

As a PM you are obligated to offer your candid opinion on critical matters, and to have
both the knowledge and courage of your convictions. Should your employer choose to not
heed your advice or recommendations, you still are expected to move forward with the
project in the best professional manner possible. You will have demonstrated your
sincerity by showing your concern; maybe the project won't turn out the way you would
have hoped, but you at least maintained a positive outlook.

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B. Large and Multi-National Companies

There was an experience by a young Project Manager who was relatively new on the job.
Danny had been a supervisor at one of the company’s plants and, when the plant was
cutting back in production, was asked to transfer into the company’s central engineering
department. Within a few months of Danny’s transfer, his leadership qualities and his
abilities to motivate personnel were recognized by his superiors, and he was rather quickly
asked to manage four smaller projects. One of the projects was ongoing and had an initial
budget of $4.0 million, but was on trend toward a 50% overrun. Interestingly enough, the
original PM whose duties on this project Danny had assumed, had been promoted out of
the project management group and into another engineering sector. Another project that
had been assigned to Danny had just been approved by the company’s board of directors
for $8.0 million and was scheduled to begin immediately. However, the company had made
the decision to delay the second project pending the financial results of the first project
when it was further along and executive management could determine its cost impact on
the company as a whole.

Always Plan

During this delay, which turned out to be about six months, Danny provided a somewhat
unorthodox approach to project management. He analyzed both projects and then
proceeded to manage them as one project, even though they were at two different plants
which were 2,000 miles apart. He requested an Advance Authorization of $1.2 million for
the second project, which was within company guidelines, in order to proceed with the
necessary engineering to provide for long delivery equipment items and construction
drawings and specifications. He also had a $400,000 contingency alloted to the first project
(also within company guidelines as a Change in Authorization), thus bringing the budget of
the first project up to $4.4 million. Danny then, with the second project underway,
proceeded to analyze the cost structure of the first project in order to bring its costs more in
line with the original budget without sacrificing quality or any other production values.

He started by eliminating a new office complex and slightly expanding an existing office that
was only being partially utilized. He followed the same practices with an existing
maintenance shop and utility building, thus reducing projected costs by several hundred
thousand dollars. He had his engineering group rearrange and simplify the conveying
system, which eliminated several hundred feet of conveying equipment at a cost of more
than $1,000 per foot. While these activities had been developing, Danny had been in
conflict with some members of plant management regarding the actual construction of the
facility. The plant had awarded a “standing order” to a favored local contractor that had
been given an open order for most of the construction in the plant, including this new
project. Danny convinced Executive Management and most members of plant management
that all capital projects must be competitively bid, and that the favored local contractor was
welcome to submit a bid, along with the bids of at least two other local contractors. The
resulting competitive bids produced prices that were nearly one-half of what the favored
local contractor had estimated. The project met its startup date and, after all the agonizing
about it breaking the budget, the final cost was slightly less than $4.0 million.

Approval of 2nd Project

In the meantime the second project was progressing quite nicely – long lead equipment
items were either on site or were close to being delivered, and construction specifications
had been written, revised, and rewritten. In addition, all construction drawings had been
checked at least twice and were ready to be issued. When Danny received notification to
proceed with the second project, he and his project team were quickly able to secure
construction contracts and begin the actual field work. The construction companies that
were awarded the contracts on site already had available to them the necessary facility
equipment available, thus avoiding any costly construction delays that had plagued previous
projects of this type. The construction drawings had been issued in a timely manner,
allowing the various contractors to order their necessary construction materials and have
them also available for their crews. The original schedule had set aside 120 days from start
to finish of the project; the actual time for the project was 88 days. Owing to the availability
of the equipment and materials as well as to the accuracy of the drawings, there were no
registered delays, nor were there any Extra Work Orders written for the first time ever on a
project of this type. Primarily as the result of these savings in construction costs due to the
diligence of Danny and his project team as well as the overall planning, the total cost of the
project was slightly less than $6.0 million, for a net savings to the company of more than
$2.0 million.

For weeks afterward Executive Management would send other PM’s and engineers to
Danny’s office to hear his “words of wisdom” on how to bring their projects under budget
and within schedule. As Executive Management continued to assign him to larger and larger
projects, Danny never tired of repeating his philosophy: provide the engineering as early as
possible and have the equipment on site before the construction begins. This simple
philosophy meant that the Project Manager had to plan and prepare the work for which the
PM was responsible, but also to understand the needs and requirements of others engaged
in the project so that a successful conclusion could be achieved.

23
Summary: A quality Project Manager has a long list of objectives when starting or
assuming a project. Regardless of experience or longevity as a PM, that individual must
plan; that includes the budget, schedule, work force, plant or office management and
personnel, and the scope as presented. If a PM fails to take the necessary time to review
and plan a project, failure does unfortunately become an option. On the other hand many
projects have become successful when a Project Manager comes to understand the
nature of the project, listens to the wisdom of those who are involved, and moves
forward in a positive, direct but not contentious manner. As you may have noted from
previous case studies, other factors such as leadership and decision making are usually
very important, but none more so than planning.

C. Defining Decision Making

Joe was a small-town boy from a community about 30 miles south of Pittsburgh along the
Monongahela River. At the time when Joe was growing and developing into an athlete of
some renown, Donora’s only claim to fame was Stan Musial, the great baseball player for
the St. Louis Cardinals. Most of Joe’s family either worked or planned to work in the old
Donora Wire Works when the time came. Joe and his friends probably spent a lot of their
time playing the major sports of football, basketball and baseball, enjoying activities along
the wide river – especially in the summertime – and proclaiming that the future held
something better for them than the Wire Works. However, that was one decision that was
taken out of the hands of Joe and his friends – the plant shut down permanently in June of
1962 at just about the time that Joe and his buddies were entering peewee league football.
Although Joe did not have the greatest arm strength, the years of experience with his dad
had taught him so much about the game of football that he naturally became a quarterback
when he enrolled at Ringgold High School, a joint school district that was formed between
Monongahela City and Donora when the plants shut down and the population declined.

Major Decision

Joe was no slouch as an athlete, even though he came from a smaller school. He was a
Parade All-American in football in spite of his lack of arm strength, and was also an All-State
basketball player. Joe was recruited by several Division One schools, but his first choice of
where to accept a scholarship was at North Carolina State, since they had agreed that Joe
would be able to play both football and basketball. However, his boyhood idol was Terry
Hanratty from nearby Butler, PA, who had led Notre Dame to a national championship in
1966, and was then playing for the Pittsburgh Steelers.

Joe chose the romantic over the pragmatic, making a decision to accept a scholarship to
Notre Dame, where he had been recruited by Ara Parseghian. Joe was ineligible to play as a
freshman, but when Parseghian resigned at the end of the season, Joe had the option of
transferring to another school. Again Joe made a decision, preferring to stay at Notre Dame,
even with a new coach and several recruits ahead of him at the quarterback position. Joe
languished on the bench as an unknown entity for much of his sophomore year. Finally the
new coach Dan Devine called on Joe on two occasions when both games were seemingly
lost and Notre Dame was several touchdowns behind in the fourth quarter. All Joe did was
to complete touchdown passes and pull out the victories for the Fighting Irish. Coach Devine
still did not recognize Joe’s capabilities and Joe remained as the third team quarterback at
the end of the season.

Career Changing Decision

Preparing the next spring to battle for the starting position, Joe suffered a serious shoulder
injury and had to sit out his entire third season. Joe still had two seasons to play, but knew
that he was far down Coach Devine’s depth chart and might not ever have an opportunity
that he had dreamed about as a young boy. Nevertheless, he decided to rehabilitate his
separated shoulder, and worked hard to get back into playing shape. In his junior year he
was still listed as the third string quarterback and Notre Dame struggled to a 1-1 record. In
the third game of the year, the team fell behind by three touchdowns. With Notre Dame
losing its first and second team quarterbacks due to injuries, Coach Devine in desperation
inserted Joe into the game in a nothing-to-lose role. Instead of being resigned to lose, Joe
threw four touchdown passes in the fourth quarter and Notre Dame won the game.
Afterward Coach Devine somewhat reluctantly named Joe as his first team quarterback, and
he led them to a near perfect 1977 season, winning their last nine games. When Notre
Dame defeated Texas in the Cotton Bowl, they were crowned the national champions, thus
fulfilling one of Joe’s childhood goals.

Fulfillment

In spite of Joe’s many successes on the football field, he was not highly regarded by the
professionals, was rated as low as the sixth best collegiate quarterback when he graduated,
and was finally selected in the third round by the San Francisco 49ers. As a professional
quarterback Joe had to make numerous decisions on virtually every play. Obviously Joe
made many decisions, some bad but mostly good enough to win four Super Bowls, be the
25
Most Valuable Player in three of them, and be elected to the Pro Football Hall of Fame. Joe
is only one of two quarterbacks who have ever led their teams to both an NCAA
championship as well as a Super Bowl victory. Interestingly, the only other quarterback to
have done that grew up in a community 30 miles north of Pittsburgh and is also named Joe.

Summary: Decision making is also a way of life for a Project Manager, just as it was with
Joe. Although a small percentage of PM's come by these attributes naturally, the great
majority of PM's and other managers develop the necessary skills for true decision
making through personal experiences and instinct. Others may acquire it later in life
through diligence and effort, including study and training. Irrespective of how you have
managed to position yourself as a leader, know that leadership is one of the two or three
greatest qualities of a Project Manager. As you go through this course in Advanced Project
Management, you will note a few other important qualities for a PM, although none is
more important to the success of your project than strong leadership

III. Dealing with a Project Team

A. Matrix Organization
Jennifer was the only daughter in a Midwest family that included three brothers, two older
and one just a year younger. Her brothers played many different sports and, not surprisingly,
Jennifer became an outstanding athlete, usually being the first one chosen in a family pickup
game of football or basketball. She excelled on her high school basketball team and was
granted a full scholarship to a southern university with strong academic credentials. Jennifer
followed in the footsteps of an older brother and graduated with a degree in mechanical
engineering, was easily accepted into graduate school, and received her master's degree in
business technology one year later.

Jennifer received more than a few employment offers after getting her second degree, and
opted for a large manufacturing company that had a strong reputation for growth and for
promoting its management from within. Jennifer spent the first few years in the company’s
training program at their largest facility, followed by nearly three years as a Process and
Project Engineer. Finally Jennifer was assigned to one of the company’s medium-sized
expansion projects as the lead Project Manager, and was to be given guidance by a Senior
Project Manager on an as-needed basis.

First Significant Assignment

Jennifer had a pretty good idea who she wanted, or didn’t want, on her project team right
from the start. She was fortunate to have a Construction Manager with previous experience
and a solid reputation assigned to the project by the vice president of engineering. In
addition the lead civil engineer and primary mechanical engineer that she had selected
were both available and anxious to do all that they could to assist Jennifer in making her
project successful. However, she was stymied when she requested the personnel from the
Electrical and Process Control departments that had been suggested to her by her senior
advisor. Both departments were in demand throughout the company, and most of the lead
engineers in these departments were involved in ongoing and long term commitments.

Needless to say, these were two very critical areas of the project, and the overall success of
the project would depend in large part to the qualifications and quality of the personnel
chosen as the leaders in these two positions. As a new PM, Jennifer chose her dealings with
the managers of those departments cautiously but with determination. Being a team player
was ingrained in her DNA and personality, so that she understood that she could not dictate
company policy. She was expected to work within the established parameters of the
engineering department, so she addressed each of the two department heads individually.
In the case of the electrical department head, she was offered a younger, less experienced
engineer; however, the department head promised to monitor his progress and
performance, and to even replace him if the PM was not satisfied with his progress. When
the meeting with the head of the process control occurred, Jennifer quickly realized that she
was not going to be so cooperative. Her initial response to Jennifer was that all of her
people were extremely busy, and that no one would be available to assist on Jennifer’s
project for at least 2 ½ to 3 months.

Maintaining a Positive Outlook

Jennifer began her project as she had seen her mentor and other project managers do; she
scheduled a scope of work and planning meeting for the following Monday. The meeting
lasted no more than one hour, and was attended by the individuals who had been assigned
to her team as well as by two of the department heads with whom she had previous
discussions. The electrical department head offered his apologies for not attending the
meeting due to a prior commitment, but assured Jennifer that he would make himself
available in the future. Conspicuous by her absence was the process control department
head, who did not respond to the meeting invitation. However, an executive from upper
management was in attendance, and seemed quite pleased with the progress of the project
meeting.

As Jennifer had learned from her experiences in the project group, a Project Manager’s
primary responsibility is to define the initial project scope, budget and schedule for her

27
project team. After some brief introductions and her opening comments, Jennifer spent the
last forty minutes of the meeting asking and answering any questions. As the PM she made
a point of assuring them that they should notify her in the event that they encountered any
problems, and that the schedule for issuing deliverables was very important. She was asked
about the fact that there was no process control representative at the meeting, and she
advised the team that this matter was being addressed by her. In the meantime she
requested that each discipline stay within the guidelines of the original scope of work, and
that they design the facility within those parameters. The member of the mechanical group
then asked if there could be any flexibility in the final design. Jennifer displayed her
confidence in the project team by stating that the initial scope of the expansion could have
some flexibility in overall size and design, and that she would support their ideas and
efforts.

Jennifer continued to move the project forward, holding informative meetings each Monday
morning and issuing weekly progress reports to each team member, each department head,
and to some selected members of executive management. At no time did she offer any
criticism of anyone's individual performance, choosing to resolve any problems openly, but
to recommend any changes or modifications on a personal basis behind closed doors. The
project team and the department heads recognized her competence as a Project Manager,
and worked hard to help make their project a success. Her mentor gradually let loose of any
reins that he might have held over her originally and very quickly recognized that Jennifer
had the maturity of a much more experienced Project Manager. Nevertheless, she usually
accompanied the weekly progress report to the process control department head with a
short note highlighting some assumptions that she and the project team had made, always
indicating that she would be willing to make modifications if necessary.

Enthusiasm is Infectious

One Monday morning as Jennifer was beginning to start her second month on the project,
into the conference room walked the process control department head. She had with her a
3-ring binder filled with Jennifer's meeting minutes as well as several pages of personal
notes that she had been making regarding the project. About one-third of the way through
the meeting Jennifer asked her to comment on the progress of the project and to offer any
suggestions or recommendations. She was quite complimentary of the project team's
efforts thus far, and then gave the team some precise information that she had apparently
been developing, quite possibly since the first week of the project, but was only able to
finalize the data over the weekend. She handed out specification sheets for the Data Center,
which included numbers of work stations, servers and sizes, and the specification for the
Clean Room. She also answered questions from the team's electrical engineer regarding
recommendations for standby power and fire protection. Furthermore she offered some
suggestions regarding cyber security, an area that neither Jennifer or any of her other team
members had considered.

Jennifer soon realized that the department head had been following the project almost
since day one and had actually functioned as a part of her project team in absentia. The
department head closed out her participation in the meeting by stating that Joe, one of her
highly regarded engineers, would be available to work full time on Jennifer's project
beginning the following week. In the meanwhile she would try to make herself accessible
for any important issues that may arise.

Joe was in attendance at the next project meeting, had been almost completely versed on
the status of the project by his department head as well as a review of the PM's weekly
meeting minutes, and immediately proved his value to the project team's efforts. Jennifer
was now feeling that the project team was settled, and great progress was made over the
next four weeks. Final design parameters had been established, and bid packages were
being sent out almost on a daily basis to building and equipment suppliers.

Consistency Does Not Require Status Quo

However, the mechanical engineer that had been assigned to the project was suddenly
assigned to an emergency project in another location, again leaving a void that threatened
the project's continuity. Once again Jennifer was faced with a mid-project dilemma, which
she handled with maturity and competency. She requested a replacement for the engineer
that had been reassigned and was offered a younger engineer that had only been with the
company for less than one year. By this time Jennifer realized that the project team would
often go through changes in manpower due to reassignments and various other reasons
associated with a matrix organization, and would constantly be in a state of flux.

As the project passed through the purchasing phase and began its construction phase,
Jennifer was appreciative of the fact that the Construction Manager was a consistent and
steadying force for the project team and the project. He was an experienced hand who had
been involved with several company projects, large and small, over the past twenty years.
While he was respectful of Jennifer's directives, he did not hesitate to recommend a
contrary viewpoint on an issue, which Jennifer truly appreciated. One of the many
considerations that Jennifer, or any Project Manager, learns during the course of a project is
the importance of a quality Construction Manager.

Summary: Jennifer had been with the company for over five years, had carried out her
assignments effectively, and felt prepared to manage her first project. However, when you
are dealing with a matrix organization that is involved in numerous projects all over the
29
 country, selecting a project team can be difficult. To her credit Jennifer maintained a
positive attitude, working well with the team members who were assigned to her project.
She was very fortunate to have a strong Construction Manager assigned to her project
team, a valuable member of any Project manager's team. Her patience and attitude
afforded her the opportunity to receive a firm commitment as well as a comprehensive
package of information from an unexpected source, the department head of process
control. The company management always believed that Jennifer had the qualifications to
become a strong leader and manager; now she had proved that she also had the
necessary character.

B. Direct Supervision Team

Andy was in a unique position, whether or not he recognized the situation. He had just been
named as the Senior Project Manager for one of the corporation's largest-ever industrial
projects in the South. He was currently deeply involved with another somewhat smaller, but
similar, project in the Midwest. The new project had just been approved by the company's
Board of Directors, had a strict financial limit, and was expected to be on line and running at
close to full operation within two years. In fact, the project had assumed such importance that
Andy had been authorized to forego past practices of management jurisdiction and to report
directly to the Senior Vice President - Operations of the entire corporation. While Andy was
not too comfortable with this unusual arrangement, he did manage to maintain a relationship
with his normal tier of management personnel, notwithstanding the fact that his new project
was well into the ten figure range.

Choosing Your Replacement

One of the first items on the new Project Manager's agenda was whom should be chosen to
replace him as the PM on his current project. There was some question regarding who should
fill that position. The project that Andy was leading was, after all, the second largest capital
project in the corporation. Andy, with the assistance of the VP, considered several names,
including some in the central project management group, before deciding on Rob, a plant
engineer with a strong operating and technical background. Although this was somewhat of an
unconventional choice, Rob had made some valuable contributions to the project earlier. Rob
also had a reputation for his willingness to go into the plant and assist operations and
maintenance to solve problems. Rob proved to be an excellent choice as a replacement for
Andy.

Choosing Your Project Team

Once that decision was made, Andy's next order of business was to select an associate who
had similar values as Andy, had a strong work ethic, and could fill in as a moderator and
communicator when the Project Manager was occupied with numerous tasks. The job would
involve working with and motivating in-house engineers and designers as well as outside
engineering firms. In addition much travel would be involved to many different parts of the
globe, and several people throughout the corporation were given consideration for this
position. Andy and his boss were in complete agreement that Rick was the right person for this
position. Rick, a Senior Project Engineer in the engineering department, was extremely well
educated, was still relatively young despite having extensive international travel experience,
and had no particular family obligations. Andy and Rick worked very well together over the
next two years, and Rick's performance earned him a considerable promotion following
completion of the project.

As the PM Andy had the obligation to select a Construction Manager, and this critical position
proved to be one of the easiest to fill. Jack was already on site at the plant where the new
facility would be built. Although he had never managed construction on a project of this
magnitude, he had been at the plant for nearly twelve years. Jack had been involved with
numerous smaller maintenance and construction projects, knew the capabilities of the local
workforces, and had been involved with many of the regional and national construction
contractors. He and Andy and the other project team members worked closely together to
assure that the project would be completed in two years.

Once the key pieces of the project team were put together, Andy and his two associates moved
quickly to bring other quality personnel on board. They brought in young and vibrant engineers
such as Gary, Ralph and Ned to fill the roles of Lead Project Engineers. They solicited Sue and
Nelson from the corporate Purchasing Department to function as the project purchasing
agents for the project team in order to circumvent any red tape that is sometimes prevalent in
a large corporation. In this regard Andy realized that there would be some instances when he
and his project team would have to work with preferred and sole-source suppliers. In those
situations the Project Manager and his team would not have the time for the corporation's
customary three-bidder process. Nor had the corporate purchasing department been willing to
accept a higher bidder's proposal without a formal, written evaluation by the Project Manager
and his project team. Because of the size and scope of the project, the project team had to
justify the use of several particular suppliers which could supply products with a value that
would meet the overall criteria of the project.

To further support the team's fast track philosophy, Bill and his assistant were placed on the
project team to analyze the cost effectiveness of each major equipment item and to provide
daily financial guidance and updates. Needless to say, many of these assignments created

31
controversy with department heads and other corporate managers. However, the Senior VP
was firmly behind Andy's decisions, and constantly reminded the initiators of any complaints
that there was nothing more important than this project. Gradually the complaining died
down, and then stopped altogether.

Solutions and Communications

Andy truly believed that the project team had been chosen well and had great strength in all
areas. He was constantly reminded by a friend of his, who was director of personnel for the
corporation, that 10% of the people did 90% of the work. As the Project Manager he expected
90% of the project team to do 90% of the work, figuring that he could manage the other 10%.

One of the team's early obstacles was with the State Environmental Agency (SEA), which
restricted their relocation of a nearby creek, demanded numerous data on air and water
quality control, and even limited the amount of noise that could be made. Andy was really
fortunate to have included on the project team a civil engineer who was versed in the rules
and regulations of the EPA. She was able to prepare the necessary documents, have them
signed by the proper corporate executives, and to satisfy each of the restrictions. All of these
demands and limits were made in spite of the fact that the plant was on an industrial site and
the nearest house was more than three miles away. Andy and his project team complied with
every request by the SEA, responding clearly and quickly, thanks to her qualifications.

Andy held weekly meetings with his entire staff every Monday morning (when he was out of
town Rick or one of the other Senior Project Leaders chaired the meeting). These meetings
lasted no more than one hour, with the first half hour dedicated to status reports. The second
half hour was used to air complaints or gripes among the team members. Common among the
complaints as the project "came out of the ground" was that engineering was late with
drawings, or that purchasing should be expediting critical equipment. Just as common was that
construction was taking shortcuts with their installation practices. Andy tolerated a moderately
adversarial relationship among the project team members, but usually arbitrated any
contentious issues and resolved those issues or else had the conflicted parties schedule their
own meeting to achieve a resolution. Andy or Rick usually closed those weekly meetings by
reminding the Project Team members of their mission and objectives.

As the Project Manager Andy was more than willing to accept new ideas from such a highly
qualified group that he was managing. He encouraged each of them to be flexible and to use
originality, particularly if that meant saving time and or costs. For instance Andy attended a
critical process control meeting hosted by his Process Control Team Leader. Also in attendance
were two of the corporation's process control engineers as well as the manager of an outside
process control company and two of his staff. Andy suggested that this group could develop a
unique design for the facility which would allow the raw product to become a finished product
and shipped out the door without one button being pushed. In order to do that, the product
would have to travel over one mile, or about 5,500 feet, under a roof structure that
encompassed more than 22 acres. The group's first reaction was that it was impossible, but as
they discussed the possibilities, their next reaction was that this was indeed a challenge. The
group's decision when the meeting ended was that this was certainly something that they
could do. In retrospect the final facility allowed the product to travel almost 4,000 feet before
a button had to be pushed, but Andy had given that part of the project team a challenge that
resulted in the corporation saving millions of dollars.

Delegating Authority with Responsibility

As the project gained in momentum, the Senior Vice President requested that Andy and his
team prepare for a monthly status meeting that would be held on the first Monday of each
month. Numerous corporate executives were invited to this meeting to learn about the
progress of the project, and were also invited to tour the facility as it was being constructed. In
addition to the corporate president, who attended several of the meetings, the executive list
included the vice president of engineeringl, the vice president of commercial, and Mr. Lowell,
who was the vice president of finance. While most of the executives were content to listen and
learn about the status of the project, Mr. Lowell always reminded everyone in the meeting,
especially Andy and his team, that millions of dollars in federal and state tax credits were
dependent on achieving a successful project by a specific date. Andy usually chaired these
meetings, but he often had one of his Senior Project Leaders make significant presentations as
well as answer any direct questions. During the latter stages of the project, Andy was able to
ascertain that his Construction Manager as well as Bill, his financial services leader, seemed to
have an air of credibility that put the executives at ease.

Eventually Andy moved his staff of project engineers into different areas of the facility to
support his staff of construction engineers, using both groups to certify equipment installation
and operation, and to provide more firepower for the startup and fine tuning of the hundreds
of millions of dollars worth of equipment. This portion of the project was done in phases, and
was accompanied by significant and intensive training sessions with operations and
maintenance personnel. Nearly all of these sessions were directed by Andy and his Project
Team Leaders, with the ultimate result that the project was completed one month ahead of
schedule and nearly ten percent under budget. Incidentally, the corporation apparently
received all of the tax credits to which it was entitled.

Summary: Very few Project Managers will ever be involved in a project of the size that Andy
was fortunate to manage, or to even have the direct support of the Executive Vice President

33
of the corporation. Nevertheless, there are several lessons that a PM can learn, regardless of
the size of your project, when you are managing your own project team.

Andy kept his meetings short but consistent; he encouraged his project team to think
"outside the box", but he always reminded them of their purpose and ultimate mission.
While he advocated a somewhat adversarial relationship among his team members, he
never allowed any animosity to occur, being quick to arbitrate any serious disagreements.
And he encouraged each of his project team to be their own person, to offer solutions that
would make a positive impact on the project, and to express themselves in front of
corporate management.

C. Defining a Project Team

The six o'clock news had just come on the three major television networks, and people all over
the U.S. who were fortunate enough to have television sets were straining their eyes at the
black and white pictures which were being broadcast on the round screens. The early fall of
1957 had brought a surprise revelation from the other side of the world. The Russians (at that
time they were known as the U.S.S.R.) had earlier launched a rocket into the earth's
atmosphere, and it was carrying a Russian satellite known at that time with the name
"Sputnik" that was orbiting the earth at speeds of nearly 18,000 MPH.

America was shocked into action, and that was the beginning of a "space race" between the
Americans and the Russians that has essentially gone on to this day. NASA (National
Aeronautical & Space Administration) was created and began a series of programs that were
initially meant to catch up to the Russians. After a concerted effort by many engineers and
scientists, the U.S. was able to put astronaut Alan Shepherd into space in the summer of 1961,
and then to have John Glenn, also an astronaut and later a Senator from Ohio, orbit around the
earth three times in 1963, in preparation for lunar flights and landings. During the activities of
this initial space program, which was named Mercury, President John F. Kennedy made a speech
to Congress in May, 1961. In that speech he called for America to put a man on the moon and
have him return safely by the end of the decade, and NASA was off and running.

How to Get There

There was a great deal of uncertainty regarding methods for putting a man on the moon let
alone being able to have him return safely to earth. The second phase of the space program
was entitled Gemini. Its purpose was to place astronauts into an orbit around the earth in a
command module which they would then launch toward the moon. Once close enough to the
moon they would then send a lunar landing module down to the moon's surface, where the
astronauts would plant a flag, retrieve moon rocks and other souvenirs, and then return and
dock with the command module as it circumnavigated the moon. This now may seem like a
simple solution to a hugely difficult problem, but there were several ideas proposed over the
next twelve months before the decision was made on how best to land a man on the moon,
over many objections from within the Kennedy administration as well as from the NASA
administration. One of those alternatives included the construction of a spaceship, vis-a-vis
Startrek.

Apollo was the third and final phase of the moon landing project, and it culminated when the
Americans put the first man on the moon in July, 1969. That was an achievement of gigantic
proportions, and involved many engineers, scientists, contractors and project leaders, and was
the epitome of successful project management. The Apollo project lasted for about 11 years
and was occasionally fraught with tragedy. A fire on board Apollo 1 during a training exercise
took the lives of three astronauts.

Nine missions were planned to land men on the moon. Six were successful (11 and 12, 14
through 17), while the final two missions were cancelled due to budget constraints. The one
unsuccessful mission involved Apollo 13 and the actions of an impromptu project team in 1970,
which saved three lives and may have been one of the most remarkable accomplishments of
the Apollo program.

Launch

Apollo 13 was scheduled to be the third lunar landing in the Apollo program, and was launched
from Cape Canaveral on April 11, 1970. On board were James Lovell, the commander, Jack
Swigart, the Command Module Pilot, and Fred Haise, the Lunar Module Pilot. The two main
Saturn V rockets did not perform perfectly, but with some slight maneuvering they lifted Apollo
13 into an orbit 100 miles above and around the earth. Apollo 13 made 2 orbits around the
earth, then fired its third Saturn V booster rocket and headed for the moon. In the 56th hour of
the flight when Apollo 13 was approximately 205,000 miles beyond the earth's surface, and the
crew just had a live TV broadcast from the spacecraft.

"Houston, We Had a Problem"

Haise was in the process of powering down the Lunar Module, and flight control in Houston
requested that Swigart turn on the hydrogen and oxygen tank stirring fans in the Service
Module. About two minutes later the crew heard a loud bang, followed almost immediately by
variations in the electrical power and the firing of the attitude control thrusters. The crew's first
inclination was that a meteoroid had struck somewhere on the Lunar Module. However, within
a few minutes they quickly realized that an explosion had taken place in the Service Module, a

35
large separately docked module that provided power, oxygen, and water to the command
module, and was also responsible for removing carbon dioxide and other human waste.

Investigation later revealed that one of the two oxygen tanks had exploded because of an
electrical fire that had occurred due to a breakdown in the thermal insulation, and all the
oxygen for the fuel cells was depleted in about two hours. The crew did not panic, and
immediately shut down the emergency battery backup power system in the Command Module
in order to preserve it for reentry back to earth. This meant that the crew would have to move
into the Lunar Landing module for the nearly three day return flight back to earth, a premise
that had been discussed several years earlier, but had been discarded as being impractical. The
Lunar Module was designed to carry two men and support them for 1 1/2 days. It was now
being asked to carry three men and to sustain them for three days.

Project Teams Swing into Action

Ground Control in Houston, Texas immediately recognized that a safe return from a lunar
landing would be impossible under the circumstances, so Flight Director Gene Kranz gave the
order to abort the mission, and thus began a series of events that saved the three astronauts'
lives. The quickest abort plan was to use a direct trajectory by implementing the Service
Module propulsion system, and its operation was now questionable. In addition this plan
required the jettison of the Lunar Module, which was out of the question since the crew's
survival depended on their using the Lunar Module. Another option was to burn the Service
Module propulsion to depletion, then to jettison the Service Module. However, the Service
Module provided thermal protection to the Command Module's heat shield and needed to stay
docked to the Command Module as long as possible.

By this time Apollo 13 was less than one hour from the moon's gravitational field, and there
was also concern regarding the structural integrity of the Service Module. For these reasons
Director Kranz and his project team chose a circumlunar abort plan, which used the moon's
gravity to in a sense boomerang the spaceship and return the spaceship toward earth with a
catapult effect. A series of short propulsion system burns placed the spacecraft on an expedient
trajectory that would have it land in the Pacific Ocean, approximately ten hours sooner than if
its landing were to occur in the Indian Ocean.

Next Project Team Decision

The Lunar Module was powered by silver-zinc batteries and, although it carried enough oxygen
to support the three-man crew, other consumables such as electrical power and water were at
a premium. Considerable planning and experience were required by the crew, the flight
controllers, and all ground support personnel to assure the crew's safe return. In order to
maintain communications with ground personnel, the Lunar Module was powered down to the
lowest level possible, and an abort guidance system was used instead of the primary guidance
system in order to conserve even more power.

Life-Threatening Decision

Another problem involved the use of lithium hydroxide canisters for the removal of carbon
dioxide from the Lunar Module. The Command Module had an adequate supply of canisters,
but they were not compatible with those in the Lunar Module. Another project team
improvised a way to join the Command Module canisters, which were cone-shaped, with those
in the Lunar Module that had a cone shape, by drawing air through a tightly fitted return hose.

Project Team Help from an Astronaut

Still another problem that had to be solved to ensure a safe return was providing a complete
power-up of the Command Module, which had been completely shut down. Although this had
never been done in-flight, Flight Controller John Aaron and his project team, which included
grounded astronaut Ken Mattingly and several engineers and designers, devised a new way to
do this with the spaceship's limited power supply and the time factor.

Final Critical Project Team Solution

Finally, the last problem to be solved was figuring out how to separate the Lunar Module a safe
distance from the Command Module just prior to reentry into the earth's atmosphere. The
normal procedure was to use the Service Module's reaction control system to pull the
Command Module away from the Lunar Module, but the reaction control system was
completely useless due to the power failure in the Service Module; furthermore, the
inoperative Service Module would have to be released before the Lunar Module was undocked.
To solve this problem Grumman Aerospace Corporation called on a project team of engineers
and scientists from the University of Toronto.

Led by senior scientist Bernard Etkin, the six engineers on the UT team were asked to solve the
problem in twenty-four hours. Using their slide rules (this was pre-computer), the team
concluded that pressurizing the tunnel that connected the Lunar Module with the Command
Module just prior to re-entry would provide the crew with enough force to push the Lunar
Module a safe distance away from the Command Module. The pressure calculation was critical
because too low of a pressure would fail to provide sufficient separation, whereas too high
pressure would cause damage to the hatch and jeopardize the lives of the astronauts.

Re-entry, Splashdown, and Rescue

As Apollo 13 neared the earth's atmosphere, the crew first jettisoned the Service Module, using
the Lunar Module's reaction control system to pull themselves safely away from it. In doing so,

37
they took several photographs of the Service Module, which allowed for assessment of the
damages and future improvements of the fleet's other Service Modules. Then the crew
jettisoned the Lunar Module, using the procedure developed by the project team from the
University of Toronto. There was heightened tension by ground support personnel, as the usual
blackout period upon entering the earth's atmosphere of four minutes without communications
extended to almost six minutes.

However, the re-entry went smoothly and the Command Module splashed down in the South
Pacific Ocean, less than four miles from the recovery ship Iwo Jima. The total flight time was
almost exactly 6 days. The crew was safely on board the ship about 45 minutes later and in
good condition, thanks to their training and expertise, and thanks to the ingenuity and
capabilities of the many project leaders and project team members that were involved.

Summary: Arguably placing a man on the moon was the greatest achievement ever of
mankind. The United States of America, less than 200 years old, had accomplished what most
people felt was unachievable if not impossible. The effort, which had taken place over a
twelve year period, was the result of the concerted efforts of politicians, project leaders,
engineers, suppliers, and contractors.

The main difference between this gigantic achievement and the safe return of a crippled
Apollo 13 spaceship was time. The many valuable members of the diverse group that made
up the Apollo 13 recovery team had less than three days to bring a non-functioning spacecraft
safely back to earth from the moon's gravitational field. The success of this accomplishment,
particularly since this took place in the days before computers were established, was truly
marvelous. The end result was, undoubtedly, one of the greatest project team efforts of all
time.

IV. Negotiating with Insurance Companies

Sales orders were coming in at an almost frenetic pace, and the plant had increased its
capacity by nearly 35% in the past four months. The plant was operating around the clock
and seven days a week, with only an eight or ten hour shift each Sunday for maintenance
and to give some of the equipment and operators a short rest. The furniture business was
prospering nationally as well as globally, and Smith & Jones, one of the largest furniture
manufacturers in the world, was taking full advantage of the situation. In addition to their
core products, S&J had recently developed a bedding product that had received much
international recognition and could become one of their biggest sellers. This southern facility,
although one of the oldest plants in the company, was being hailed for its productivity and
was being heavily considered tor the company’s next large expansion project.

Call to Action

Then tragedy struck, and it struck very quickly. No one was sure how, but a cleaning tank
filled with a solvent solution exploded and went up in flames late one night. The flames shot
up high enough to ignite the roof structure, and before the local volunteer fire department
could arrive and eventually put out the fire, considerable damage had been done to a
significant portion of the building and most of the manufacturing equipment in that area.

Henry’s bedside phone rang at 2:30 a.m., and on the other end of the line was the president
of U.S. operations for Smith & Jones. Henry immediately sat up in bed, prepared for the
worst. As Chief Engineer for S&J, he had attended many meetings with the president, and
had had numerous conversations regarding the company’s expansion program. However, he
had never been called by the president in the middle of the night. The president quickly
allayed Henry’s concerns, assuring him that although a major fire had done significant
damage to their southern plant, there were no casualties nor was anyone injured.
Notwithstanding these assurances, the president strongly suggested that Henry visit the
plant as soon as possible, make a determination as to the damage assessment, and bring
the plant back into operation as quickly as possible.

That morning Henry was getting ready and, as he packed a small bag, called his office
assistant to make an airline reservation with an open ended return flight. As he sat in the
Atlanta airport waiting for his connecting flight (seems as though you have to go through
Atlanta to get to any city in the South), he formulated general plans for moving as quickly as
possible. Arriving at the plant later that morning, Henry assessed the situation and then
held a detailed meeting with the Plant Manager and key operating and maintenance
personnel.

After determining with the plant personnel what the scope of work entailed and visualizing
the fastest means to accomplish a restart, his first phone call was to Don. Don was a Project
Manager from a large multi-national engineering firm that had just completed an expansion
project at a similar plant in the mid-south. Henry’s second call was to his casualty insurance
agent at Fairhope Mutual (not their real name). The agent at FM assured Henry that he
would have an FM representative at the plant site very quickly.

39
Assistance from a Mini-Project Team

Don was on a plane that afternoon and met with Henry that evening. Henry expressed the
company’s need to bring the facility back into operation quickly, minimizing activities and
eliminating any time delays or time constraints. After Henry and Don visited the plant the
next morning and the smoke had literally cleared, they formulated a plan that they hoped
would have the plant reconstructed and operating in less than six weeks. The plan included
the utilization of used or borrowed or rehabilitated (where practical and probable)
equipment. The fire had destroyed three bays, so each bay of the building would be rebuilt
and the equipment repaired or replaced while the floor-based equipment in the other two
bays was being replaced. Each of the other two bays of the building would be rebuilt in the
same manner. Meanwhile the FM appraiser did not reach the plant site until four days after
their phone call from Henry.

Much of the destruction from the fire was electrical, so Don had two electrical engineers
and an electrical draftsman brought to the plant site to review existing electrical drawings,
and to modify any drawings which did not reflect the “as built” conditions before the fire. In
addition they were prepared to advise the electrical contractor immediately as well as to
prepare sketches and to assist the contractor as needed. There was no bidding – all
contracts were let on a time and material basis, and each contractor had performed a
service in the plant within the past two years.

Steel beams were brought in from as far away as Houston and Chicago, using “exclusive use
of truck” techniques to expedite deliveries. Two local steel fabricators were contracted to
manufacture replacements for the building columns and truss work that had been
destroyed in the fire. A building contractor from Birmingham was given the task of first
removing the burned out roofing and sheeting, then removing or repairing the damaged
columns, and replacing them as needed. Once the new or repaired columns were in place
and the trusses had been installed, the roofing went on first, followed by sheeting half way
down the building sides to minimize any interference from rain or wind.

Two mechanical contractors, working alongside plant maintenance personnel, were given
the assignment of replacing damaged spindles, roll housings and rolls, and conveyor
assemblies. Parts that could be repaired were reused, while spare parts were trucked in
from at least five other plants. Most of the AC motors and some of the DC motors were
replaced, but four or five of the DC motors had to be shipped to a repair shop in Atlanta to
be rebuilt.

Damage Assessment
The Fairhope Mutual appraiser arrived late on the third night after the fire, and spent the
entire morning assessing the damage that remained, reviewing the existing conditions as
well as the numerous color photographs which Don had insisted that Henry and the Plant
Manager take. That afternoon the appraiser met with Henry and the Plant Manager and
listed the things that FM would not cover in their program. For instance, their policy did not
have coverage for loss of revenue; this had been a foregone conclusion by S&J’s legal group.

However, the appraiser then itemized a long list of other exceptions in the casualty policy
that S&J never expected. Included in this list were such items as: all contracts had to have at
least two bids and selection would be at FM’s discretion; any work performed by plant
forces would not be covered; and, finally, that no work could begin until FM had put
together an estimate of total costs for repairs, which they would have in three or four days.
Needless to say, Henry and the Plant Manager were very unhappy with FM’s position,
relayed the results of the meeting to executive management, and were told to continue
with the repairs of the plant as had been planned.

Don had prepared a schedule that was monitored and followed very closely, and kept a
meticulous account of all outside contractors. Henry and the Plant Manager kept an
accounting of the plant labor force, and recorded each piece of equipment that could either
be salvaged, or repaired and reinstalled, or replaced with new or used equipment. Sections
of the fire-ravaged plant began to operate within four weeks, and the entire plant was back
into full operation within another week.

Meanwhile, the FM representative had come back to the company about one week after
the fire, had prepared another list of exceptions to their casualty coverage, and had offered
to reimburse S&J in an amount that was approximately half of the amount that Henry and
the Plant Manager had prepared. As the Project Manager, Don had also prepared a project
cost, which did not include actual costs for plant labor, but did summarize all building and
equipment repairs as well as his and the team’s engineering costs, including travel and living
expenses. None of these items were listed in the insurance company’s proposed settlement,
nor were they defined in the insurance fire and casualty policy.

Unsatisfactory Offer by FM

Executive management at S&J was extremely upset by the insurance company’s low offer
for a settlement figure and threatened to sue FM. The insurance company, confident in their
interpretation of S&J's casualty policy, requested that each company select an outside
representative to meet and try to resolve any dispute prior to S&J filing a lawsuit. Henry
made Don aware of this situation and asked if Don, as the PM, could intervene on behalf of
S&J as a representative in a preliminary arbitration-type hearing. He assured Don that

41
regardless of the findings by the two representatives, their conclusions would be taken very
seriously but would be non-binding. Don had experience negotiating with insurance
companies, and had also seen occasions when issues could not be settled, lawsuits had
been filed, and law firms were the eventual winners. Don agreed to represent S&J, but
asked that the meeting be delayed for two weeks in order to give him time to review all
repair bills and also the terms of the insurance policy coverage.

Don and his project team, with some aid from his office accountant, spent the next several
days documenting and assembling all costs associated with the repairs of the fire-damaged
facility. He also reviewed the insurance policy that the furniture company had with FM. Don
was surprised when he noted that the annual premium was so low, until he read what was
excluded from the coverage. As he had been told previously, there was no indemnification
for loss of revenue.

Furthermore, there was no stipulation that management salaries and labor wages were to
be paid during the period while the plant was idle. This would be, in Don's opinion, one of
the major sticking points of the negotiations with the insurance company. Although S&J was
not claiming any management salaries in their insurance settlement, there were several
hundred hours of labor wages in their claim. This portion of the claim also included a
substantial amount for overtime pay as well as for the cost of materials and either in-house
or rental equipment.

In addition the policy clearly defined that the insurance company would have authority to
approve all outside contractors, with the simple stipulation that the company could
recommend any contractors that had performed similar work at any of the company's plants
in the past ten years. Don did not believe that this would be an item of particular
contention, since the plant had a reputation for using the same contractors year after year,
nearly all of whom were usually the low bidders.

Negotiations Begin

During the two weeks while Don was gathering all of the cost factors associated with the
fire damage repairs and evaluating the insurance policy, there was a great deal of rhetoric
by both parties. Lawsuits were being threatened and counter-suits were being considered.
Even though the plant had had a very successful restart and was back to where it was before
the fire, the air was very heavy, and neither side was talking to anybody but their lawyers.

Don stepped into this acrimonious environment on the appointed day, determined to do his
best for the furniture company, but unwilling to compromise his ethics or values. As he sat
there in the plant conference room that morning, surrounded by financial documents and
makeshift photo albums, he still had a feeling of apprehension. Don was pleased to see only
one person appear at the meeting from the insurance company, and was even more pleased
when he discovered that the insurance company had sent a former construction
superintendent with many years of construction experience. However, Don soon realized
that this individual had been employed by FM as an expert witness on numerous occasions,
was completely versed in the rules and regulations of the insurance company, and that he
would certainly be no pushover.

FM Considerations Did Not Seem Practical

The first item that they discussed was the repair and replacement of the buildings. FM had
gotten bids from two fabricators for the building steel which were actually higher than the
prices that had been submitted by the furniture company. While the insurance company
numbers did include replacement columns and trusses, it did not include the many
thousands of pounds of purlins and girts and other support material. In addition FM was
proposing lighter guage material for the roofing and siding, and Don pointed out that this
was not replacement in kind as was stipulated in the policy documents. After about two
hours of back and forth deliberations, the insurance representative and Don agreed to add
slightly over $2 million to the present insurance company offer.

The next major item for discussion involved the repair and replacement of the operating
equipment that had been either damaged or totally destroyed in the fire. The insurance
company numbers were surprisingly close to the figures that Don and Henry had developed,
although for completely different reasons. FM was offering to replace all damaged
equipment with new, off-the-shelf equipment, whereas C&J had repaired much of the
damaged equipment and was asking for only about 2/3 of what was being offered.

However, the insurance company had prepared their estimate using a low bid outside
contractor instead of plant labor forces, which was about 2/3 of the value that he and Henry
had placed on that portion of the work. Lunch was brought into the conference room, and
during their lunch hour the two parties agreed that this issue would be a net zero
compromise.

The last major hurdle, which was the damage to the electrical systems, proved to be the
most difficult issue to resolve. FM had not really prepared and estimate for the electrical
system repairs, but rather had simply put a price tag of about ten percent on their overall
settlement offer. However, Don and his electrical team had prepared a very detailed
estimate, which included new control panels, motor starters, limit switches, solenoid
operators, and the like. This number alone for electrical equipment and setup was more
than FM was offering in their settlement figures.

43
Furthermore, Don had actual numbers from the electrical contractors (two were utilized in
order to expedite the work). Not counting an assist by the plant labor force to set the
electrical equipment and make the final adjustments, the actual cost that Don and his team
presented to the insurance company was nearly $2 million more than what the insurance
company had proposed. When the insurance company representative was presented with
this number for the electrical work that had been detailed by the electrical project team, he
asked to be excused from the meeting for a few minutes and headed for the nearest quiet
place to make a phone call.

Decision Time

The insurance company representative was gone for several minutes, finally returning to the
meeting with Don after about one hour. In his hand he held a piece of paper with several
numbers on it, which appeared to Don to be as the result of his phone conversation with
someone of importance at the insurance company. The numbers represented an offer by
FM for a settlement that was nearly 85% higher than their original proposal. While Don felt
that the offer was very fair, he realized that it was still more than $1 million below the
request by C&J and would require final approval by their executive management in order to
make it a binding agreement.

Don excused himself from the meeting and went to find Henry and the plant manager. He
presented the insurance company offer of settlement to them, reminding them that the
plant had been able to get back to full operation probably a month and a half sooner than
could have been expected if they had followed insurance company regulations and protocol.
As the result of expediting the reconstruction by that amount of time and being able to get
back into full production so quickly, they had likely been able to generate more than $2
million in revenue.

The two C&J personnel asked Don several questions related to the all-day meeting that he
had been in, finally asking him whether or not he thought that the settlement offer by FM
was fair. When Don stated that he thought it was very fair, the plant manager gave his
approval to the reworked settlement offer. He had apparently been authorized by the
furniture company to make the final decision on the insurance company offer, since they
were dealing with his plant,.

Don went back into the conference room, notified the insurance company representative
that the plant had accepted FM's offer, and reviewed with him the terms of payment. Two
weeks later the furniture company received a lump sum certified check from the insurance
company for the agreed settlement amount at their home office. Don was praised by the
furniture company for his professional efforts, the firm continued to receive additional
contracts from C&J, and Don was promoted to Division Manager at his engineering firm a
short time later.

Summary: The furniture company was fortunate to be able to recover from such a near-
devastating situation that occurred. Henry, the company's Chief Engineer, was obviously a
'take charge' person, but neither he nor anyone else in the company was apparently
aware of the limitations of their insurance policy.

While no one person or company can predict a fire to the extent that C&J experienced,
the company could have changed their policy coverage once they realized the importance
of their continuous operation. Calling on Don and his team was seemingly their best
course of action (after the fact) in lieu of filing a lengthy and costly lawsuit.

As the Project Manager Don utilized all the skills of a quality PM to assist in getting the
plant back into operation. Furthermore, he demonstrated his initiative and flexibility by
going beyond his personal responsibilities. By getting involved in other aspects of
reconstructing the fire-damaged areas, he thus made himself an invaluable asset to the
furniture company. Don's first-hand knowledge of the repair work involved as well as his
understanding of the limitations of the C&J insurance policy allowed Don to have favor
with the furniture company. Furthermore, his prior experience in dealing with casualty
insurance companies prepared him for the task and obviously saved the furniture
company several million dollars.

45
Advanced Project Management II

1. Which of the following items is least important when evaluating a proposal for engineering
services?

a) Total hours estimated to complete the project successfully.

b) List of prior experiences for each project team member.

c) Hourly rate charged by the engineering firm for a mechanical or electrical draftsman.

d) Previous similar projects performed by the engineering firm for that company.

2. Which characteristic is not conducive to a successful project?

a) Being flexible.

b) Having a teachable spirit.

c) Taking the initiative.

d) Being argumentative and contentious.

3. When Project Managers feel that they are being second-guessed by the management of the
engineering firm for whom they work, they should:

a) request a meeting with that firm's management to resolve any issues and to gain
their trust.

b) air their grievances to a client representative.

c) tell the project team members that their employer is being unreasonable.

d) be argumentative and stir up controversy.

4. Some common business mistakes that a Project Manager may be exposed to when working
with a young and ambitious engineering firm.

a) Employees that may lack certain ethical standards.

 b) Firm that tries to grow too rapidly and takes on greater financial burdens.

c) Firm that doesn't properly and meticulously evaluate its bids and proposals.

d) All the above.

5. One of the most important items to consider when a Project Manager assumes an ongoing
project is:

a) Where did the former Project Manager go?

b) What was the former Project Manager lacking and how could the project be
improved and better managed?

c) How much was the former Project Manager being paid?

d) Which of the project team members did not particular like the former Project
Manager?

6. When Bruce met with the executive management of the industrial company in an attempt to
salvage an already damaged project, what qualities did he not exhibit?

a) He was honest and sincere.

b) He was open to lines of communication.

c) He was objectionable and haughty.

d) He offered no excuses for past performance by the firm.

7. One of the biggest complaints which the client had about the former Project Manager was
that he:

a) did not get along well with his project team.

b) was uninformed about their industry and the client's objectives.

c) never visited the jobsite.

d) always took Friday afternoons off.

8. Which of these statements is false concerning a quality Project Manager?

a) A quality Project Manager should never accept an assignment unless the take home
pay is very high.

b) A quality Project Manager should always remain alert to new and greater
opportunities.

c) A quality Project Manager should be able to properly manage nearly any type of
project.

d) A quality Project Manager should always remain loyal to both the client and the
engineering firm.

9. Strong leadership in a Project Manager is considered:

a) a way of life.

b) a state of mind.

c) important to a successful project.

d)All the above.

10. As soon as Sammy realized that the process and ideas expressed by the management team
were different from his experiences, he should have:

a) Injected his own ideas and preferences in the meeting.

b) Expressed to the management team that he was confused.

c) Remained silent and listened closely to their explanation.

d) Turned in his notice and looked for another project.

11. Whenever the Project Manager is confronted with a situation whereby no single supplier
can furnish all of the equipment listed in the specification, the PM should:

a) Take the vendor's word that it can meet the specification.

b) Change the specification so that the vendor can be compliant.

 c) Segregate the specification into more than one specification so that vendors can be
compliant and experienced with the item(s) they are bidding.

d) Cancel the project.

12. What recourse does a Project Manager have when there is disagreement with a company
representative regarding expectations from a supplier?

a) Remind the supplier that it faces a potential lawsuit if it fails to meet the
specification.

b) Express your concerns to the company representative and validate your reasons, then
continue on with the project.

c) Try to find someone in the company above the company representative who may be
more sympathetic to your concerns.

d) Point out in your weekly status report that you disagree with the company
representative on this issue.

13. Irrespective of whether your ideas and philosophies are always accepted by the company
which a Project Manager represents, you are expected to:

a) adopt the company ideas without any questions.

b) show little or no interest when critical suppliers produce certified drawings.

c) continue to be dedicated to the best interests of the company that is paying you.

d) notify your project team members not to be concerned regarding the certified
drawings that they are receiving from the suppliers.

14. Although the company representative did not want the Project Manager to make any
corrections to Acme's design, Sammy did invoke a common sense initiative by:

a) changing the sizes of the pumps that were specified.

b) modifying the certified drawings that Acme had issued.

c) increasing the sizes of the cooling towers that were specified.

d) limiting the amount of damage that an open water system could cause.
15. One of the most important things that Danny accomplished while bringing the first project
within budget was to:

a) manifest significant changes in procedures over the objections of some of the plant
personnel.

b) follow the same practices as the previous Project Manager.

c) accept the idea that the project was over budget and that nothing could be done
about it.

d) be sensitive to any criticism if his unorthodox ideas did not work.

16. As the Project Manager, Danny received many accolades for bringing the second project
significantly under budget and well ahead of schedule. What secrets did he share with other
PM's regarding his success?

a) He planned the two projects as though they were one, and had no fear of failure.

b) He established a plan to bring both projects within budget, and was not intimidated
by circumventing past practices or plant personnel.

c) He wisely utilized the company procedure for advanced authorizations to order long
lead items and to have certified construction drawings prepared.

d) All the above.

17. Joe faced many decisions during his Hall of Fame career, beginning when he was a teenager
and extending through his college and pro football careers. What one thing would you think
most propelled Joe to the successes that he had?

a) He felt limited because he grew up in a small mill town.

b) He was satisfied to be on scholarship at a major university, even though he was a

third string quarterback.

c) Joe felt lucky to be drafted in pro football because of his weak arm strength, and
never expected to be more than a backup quarterback in the pros.

d) He never wavered in his desire to be the best that he could be and always had a
positive attitude
18. When dealing with a matrix engineering organization, the Project Manager should:

a) be able to dictate who will be on the project team.

b) expect the most qualified engineers and designers to be on the project team.

c) keep the department heads as well as the project team members apprised of the
progress of the project.

d) be resentful and discouraged when requested personnel are assigned to other

projects.

19. Jennifer proved that she was qualified to be a Project Manager because:

a) she went to college on a basketball scholarship.

b) she maintained a positive attitude in the face of adversity and developed a strong line
of communication with all who were involved in the project.

c) she established a sense of self-pity when things did not go her way.

d) she determined that PM's could not cope with the problems created by having a
project team that was constantly fluctuating.

20. Jennifer displayed her confidence in the project team by:

a) allowing them the flexibility to determine the overall size and design.

b) not showing concern for the missing process control engineer.

c) holding up the project whenever she did not have a complete project team.

d) all of the above.

21. One of the most important variables that helps to make a project successful is to:

a) be on good terms with the head of the purchasing department.

b) follow the guidelines and desires of the senior members of the project team.

c) have an experienced Construction Manager as a member of the project team.

d) be unwilling to accept inexperienced engineers on the project team.

22. Some of the principles that a Project Manager should follow when selecting his project team
members include:
a) picking your closest friends, because you can rely on them.

b) choose those personnel who have performed well for the Project Manager in the past.
c) interviewing those personnel in the corporate database that want to work on the new project and
make the most promises.
d) check with each department head to determine who has the lowest salaries.

23. Two very important steps that Andy took to accelerate the project were to:
a) Hold weekly status meetings with his project team and monthly meetings with executive
management.
b) Include experienced purchasing and environmental personnel on his project team.
c) encourage contractors to begin construction without certified drawings and to take short cuts.
d) work a standard 8-hour day and a 5-day week.

24. While Andy as the Project Manager bore the primary burden for the success of the project,
a) he delegated much responsibility as well as authority to his Project Team Leaders.
b) he relied heavily on the Executive Vice President whenever a crisis occurred.
c) he was quick to blame the project team members when things went wrong.
d) he often criticized the construction contractors when schedules weren't met.

25. Because Andy felt confident that he had selected a highly qualified project team, he was willing to:
a) allow them to alter the mission from time to time.
b) accept new ideas from them.
c) take short cuts if they could save the project money.
d) moved some of them into the field in order to watch over the others.

26. Not many projects that we encounter or in which we have involvement are life-threatening, but one
characteristic that enabled Gene Kranz, the Flight Director, to bring Apollo 13 to a safe return was that:
a) he knew exactly what to do and made all the decisions.
b) he followed all the written guidelines for what to do when a Service Module fails.
c) he called on the expertise of many project team members before making any critical decision.
d) he was anxious to determine what had caused the explosion on the Service Module.

27. What made the safe return of Apollo 13 such a remarkable achievement was that:
a) there were plans in place in the eventuality that there would be an explosion on the Service Module.
b) there was a limited amount of time in which the project team could react before the power was
completely drained.

c) they failed in their primary mission to land another man on the moon.
d) the Apollo 13 program was in trouble and probably would have been scrapped.
28. Although Henry, the Chief Engineer for the company, acted expediently and with resolve, he and
several of the company's management were derelict for:
a) not knowing that a fire would result in extensive damage to the plant facility.
b) not having their own fire department readily available should such an event occur.
c) not having an understanding of the limitations of the fire and casualty insurance policy.
d) not sending a company representative to Fairhope Mutual to review the policy with them.

29. Don, a Project Manager, was not expected to know about the list of exceptions contained in the
insurance policy. However,
a) his experience in dealing with accidents that caused considerable damage prepared him for the task
that he was asked to perform.

b) his detailed record of the actual work performed allowed him to offer an accurate account of the
activities necessary for the company to recover from the fire.

c) Don's use of a mini-project team of electrical engineers, and their production of drawings as well as
their record keeping of damaged electrical gear, proved to be a valuable asset during the final
negotiations with the insurance company representative.

d) all of the above are true.

30. Don's primary objective as a Project Manager was to:

a) negotiate a settlement for the company with the insurance company.
b) keep a meticulous record of all the material and equipment that was damaged in the fire.
c) get the facility back into operation as soon as possible.
d) show the company how important his engineering firm was to them.