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PUBLIC PROCUREMENT BEST PRACTICE GUIDE of 145

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Public Procurement Directorate TABLE OF CONTENTS

1-01-2008

TABLE OF CONTENTS

TABLE OF CONTENTS............................................................................................. 1

CHAPTER 7: PROJECT MANAGEMENT........................................................... 4

7.1 INTRODUCTION ............................................................................................... 4

7.2 THE PROJECT MANAGEMENT CONTEXT ............................................................ 6

7.2.1 The Project Management Processes...................................................... 6

7.2.2 Project Stakeholders .............................................................................. 6

7.2.3 Organizational Structure......................................................................... 7

7.3 INITIATING PROCESSES ................................................................................. 10

7.4 PLANNING PROCESSES ................................................................................. 11

7.4.1 Development of Activities Schedule.......................................................12

7.4.1.1 Application of Work Breakdown Structure .........................................13

7.4.1.2 Identification of the Activities.............................................................18

7.4.1.3 Determination of activities’ sequence and dependencies ..................20

7.4.1.4 Estimation of Activities/ tasks duration ..............................................22

7.4.1.5 Scheduling of Activities .....................................................................24

7.4.2 Development of Resource Plan .............................................................30

7.4.2.1 Identification of types and quantities of resources.............................31

7.4.2.2 Development of Resource Schedule.................................................34

7.4.2.3 Assignment of resources to project activities/ tasks ..........................34

7.4.3 Development of Cost Plan.....................................................................36

7.4.3.1 Identification and estimation of costs.................................................37

7.4.3.2 Development of Cost Schedule.........................................................40

7.4.3.3 Estimation of cost per activity/ task ...................................................42

7.4.4 Development of Quality Plan .................................................................42

7.4.4.1 Definition of quality criteria and standards to achieve........................43

7.4.4.2 Establishment of quality assurance and control processes and techniques ........................................................................................47

7.4.5 Development of Issue Management Plan ..............................................48


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7.4.6 Development of Change Management Plan ..........................................52

7.4.7 Development of Risk Plan .....................................................................53

7.4.7.1 Updating of Risk Log.........................................................................53

7.4.7.2 Development of Risk Management Plan ...........................................55

7.4.8 Development of Acceptance Plan..........................................................58

7.4.8.1 Establishment of criteria & standards for the acceptance of the deliverables.......................................................................................59

7.4.8.2 Formalization & documentation of the deliverable acceptance process .........................................................................................................59

7.4.9 Setting up Performance Indicators.........................................................63

7.4.9.1 Establishing the Performance Indicators ...........................................64

7.4.9.2 Establishing the process for monitoring the Performance Indicators .67

7.4.10 Development of Communication Plan....................................................67

7.4.10.1 Identification of stakeholders.............................................................68

7.4.10.2 Determination of Stakeholders’ communication needs......................68

7.4.10.3 Define communication strategy.........................................................70

7.4.10.4 Completion of Communication Plan/Matrix........................................71

7.4.11 Reviewing the Project Planning Phase ..................................................72

7.5 EXECUTING & CONTROLLING PROCESSES ...................................................... 74

7.5.1 Schedule Management..........................................................................75

7.5.1.1 Record progress of activities and tasks.............................................76

7.5.1.2 Update the Activities Schedule..........................................................76

7.5.1.3 Identify and resolve schedule problems ............................................78

7.5.2 Resource Management .........................................................................79

7.5.2.1 Record resource progress.................................................................80

7.5.2.2 Update the Resource Schedule ........................................................82

7.5.2.3 Identify and resolve resource allocation problems.............................83

7.5.3 Cost Management .................................................................................86

7.5.3.1 Record actual costs (or expenses)....................................................86

7.5.3.2 Update the cost schedule..................................................................88

7.5.3.3 Identify and resolve cost problems....................................................89

7.5.4 Quality Management .............................................................................90

7.5.4.1 Monitoring of the quality assurance activities implemented by the Contractor .........................................................................................91


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7.5.4.2 Organizing and implementing Deliverable Quality Review ................93

7.5.5 Issue Management................................................................................94

7.5.6 Change Management ............................................................................95

7.5.7 Risk Management .................................................................................96

7.5.7.1 Risk Monitoring .................................................................................96

7.5.7.2 Risk Control ......................................................................................97

7.5.8 Acceptance Management......................................................................98

7.5.9 Communication Management................................................................98

7.5.9.1 Execution of Communication Plan/ Distribution of information...........99

7.5.9.2 Reporting Project’s Performance ....................................................100

7.5.10 Reviewing the Project Execution & Control Phase...............................103

7.6 CLOSING PROCESSES ................................................................................. 105

7.6.1 Performance of Administrative Closure ...............................................105

7.6.1.1 Identifying Follow-on Actions ..........................................................106

7.6.1.2 Ensuring that all the deliverables have been accepted....................106

7.6.1.3 Completing and archiving all project information .............................106

7.6.1.4 Disbanding the resources used in the project..................................108

7.6.1.5 Updating the CVs of the human resources involved in the project...108

7.6.2 Conduction of Project Evaluation Review ............................................108

7.6.2.1 Conduct Project Evaluation.............................................................108

7.6.2.2 Prepare the Project Evaluation Report ............................................113

7.6.3 Conduction of post-project review........................................................114

7.6.4 Reviewing the Project Closure Phase..................................................114

7.7 SYNOPSIS OF PROJECT MANAGEMENT ACTIVITIES......................................... 116

7.7.1 Project Management Activities in case that the Project is implemented

with own resources (in-house production) ...........................................117

7.7.2 Project Management Activities in case that the Project is implemented by

a Contractor ........................................................................................129


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Public Procurement Directorate CHAPTER 7: PROJECT MANAGEMENT

1-01-2008

CHAPTER 7: PROJECT MANAGEMENT

7.1 INTRODUCTION

Generally, procurement is part of the Project life cycle, so its processes are closely related to

those of Project Management and they follow the restrictions set by the project framework.

In case that a project is implemented exclusively by external resources (resources that are

not owned by the public Contracting Authority), procurement may be perceived as “the

project” and as such it passes through all phases of project life cycle. In any case people

involved in public procurement need to know how a project is managed throughout its whole

life cycle.

The aim of this Chapter is to introduce the reader into the basic principles of Project

Management while presenting various tools and techniques required for delivering success

to a project. In this perspective the guidance and tools provided consist a general

methodology1 that will facilitate the Contracting Authorities, and specifically the Project

Managers, in:

• Planning, monitoring and controlling the parts of the project which are implemented

with own resources (in-house production)

• Planning a project that will be implemented by external resources in order to be

clearly specified in the tender documents

• Managing the tendering process itself

• Monitoring and controlling the contractor’s performance against the predefined

project plan

It should be noted that the following subchapters comprise a basic reference to the Project

Management and as such is neither comprehensive nor all inclusive. However, it examines

all managing processes for the whole Project’s life cycle that is from project initiation2 to

project closure.

1 The present methodology was elaborated taking into account many widely used methodologies and

guidebooks in Project Management, such as PRINCE2, PMI’s PMBOK Guide, NYS Project

Management Guidebook, APM Methodology, EU Project Cycle Management Guidelines, MS Project

2000 (online & offline help).

2 Project Initiation is briefly presented in this Chapter for enabling the reader to form a complete view

of the activities that take place during the whole project life cycle. Analysis of the activities to be

performed and specific guidance is provided in Chapter 1.


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There are hundreds of different definitions regarding the meaning of Project Management.

Regardless of how the various definitions are phrased, they are all based on a common

ground, which is the way you manage processes in order to undertake a project successfully

in terms of scope, time, money and resources. In this context, if we would like to give a

general definition of Project Management we could say that:

“Project Management is the application of skills, tools, techniques and processes to

plan, coordinate, implement, monitor and control a project successfully”

It is important to note that many of the processes within project management are iterative in

nature. This is mainly due to the existence of and the necessity for progressive elaboration in

a project throughout the project life cycle. This means that the more you know about your

project, the better you are able to manage it.

Apart from the tools, methods, techniques and processes, an effective project management

requires organisational support, as well as teams as building blocks.

The project management process, as happens with any other process, receives certain

inputs (business need, problem or opportunity) and constraints (time, cost, quality,

technical aspects, social, political and environmental conditions, legal restrictions, etc.) and

by applying the appropriate mechanisms (techniques, tools, equipment, organisation,

human resources, etc.) it produces specific output (project deliverables). The following

diagram illustrates the project management process.

Project Management

Constraints

Mechanisms

Input OutputProject Management

Constraints

Mechanisms

Input Output

Figure 7-1: The Project Management Process

A good project management discipline will not eliminate all risks, issues and surprises, but

will provide standard processes and procedures to deal with them and help prevent the

following:

1. Projects finishing late, exceeding budget or not meeting customer expectations

2. Inconsistency between the processes and procedures used by different projects

managers

3. Unorthodox way of delivering success to a project through high stress levels,

significant amounts of overtime and based solely on the goodwill of some individuals

4. Project management seen as not adding value and as a waste of time and money


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5. Unforeseen internal or external events impacting the project

7.2 THE PROJECT MANAGEMENT CONTEXT

7.2.1 The Project Management Processes

There are two different lifecycles that work in conjunction with one another throughout the

course of every project: the project life cycle which has been presented in Chapter 1

(subchapter 1.3) and the Project Management Life Cycle. While the project processes may

be different for specific products and services, the project management processes will

always be the same regardless of the project processes being employed. However, both

processes overlap and interact throughout the project. For example, the project

implementation schedule cannot be developed in the absence of some basic understanding

of how the deliverables are produced.

Project management processes can be organised into four main groups of one or more

processes each:

• Initiating processes (refer to subchapter 7.3)

• Planning processes (refer to subchapter 7.4)

• Executing & Controlling processes (refer to subchapter 7.5)

• Closing processes (refer to subchapter 7.6)

There are links between the process groups in the sense that the outcome of one is usually

an input to another. In addition, the process groups are overlapping activities that occur at

varying levels of intensity throughout each phase of the project and not one-time events.

The project management processes that are applicable to most projects, most of the time,

are described in this chapter, except from the initiating processes which are analytically

presented in Chapter 1.

7.2.2 Project Stakeholders

Project stakeholders are individuals, groups of people, organizations or firms that affect or

are affected directly or indirectly, positively or negatively by the process and the outcomes of

the project.

Generally, there are many ways to group the stakeholders. Two of the most common are the

following:

a. According to the impact they have on the project:

� Those who are directly related to the project, such as project manager,

project team members, funding agency, customer, users, suppliers and

subcontractors.

� Those who exert influence over the physical, technological, commercial,

financial, socioeconomic or political conditions, such as technical chambers,


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political parties, environmental agencies, citizens, NGOs and financial

institutions.

� Those who have a hierarchical relationship to the project, such as

government authorities at local, regional and national levels.

� Those individuals, groups and associations, who have vested interests,

sometimes quite unrelated to the project, but who see it as an opportunity to

pursue their own ends.

b. According to their relative ability to influence the project:

� Those who are controllable

� Those who are influencable, and

� Those who need to be appreciated

The project management team must identify the stakeholders, determine their requirements

and then manage and influence those requirements to ensure a successful project.

Managing stakeholder expectations is difficult task because stakeholders often have different

objectives that may come into conflict. For example: the Manager of the IT department who

has requested a new MIS may desire low cost, the system architect may emphasize

technical excellence and the software development contractor may be most interested in

maximizing its profit.

In general, differences between or among stakeholders should be resolved in favour of the

customer. This does not, however, mean that the needs and expectations of the other

stakeholders should be discharged. Finding appropriate resolutions to such differences can

be one of the major challenges of project management.

7.2.3 Organizational Structure

The structure of an Implementing Agency often constraints the availability of or terms under

which the resources become available to the project. There are different types of

organizational structures:

� Functional organization: The functional organization, shown in Figure 7-2 is a structure

where authority rests with the functional heads; the structure is sectioned by

departmental groups. Staff members are divided to groups (e.g. financial, planning, public

relations, engineering, legal etc) according to their specialized knowledge. Some of these

groups can be further subdivided into smaller functional groups. For example, the

Engineering Department may be further subdivided into Mechanical Engineering and

Electrical Engineering Units.


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Head of the Department

(Functional Manager)

staff

staff

staff

staff

staff

staff

staff

staff

staff





Head of the Implementing Agency

(blue boxes represent staff of the Departments engaged in the project activities)

Project

Coordination



staff

staff

staff

staff

staff

staff

staff

staff

staff






(blue boxes represent staff of the Departments engaged in the project activities)

Project

Coordination

Figure 7-2: Functional Organization

The main advantage of this organizational structure is that each functional group has

complete control over its segment of the project, enforcing in this way the application of

standards across projects.

The disadvantages of the functional organization are that of speed, flexibility and

communication when attempting cross–functional projects. Since in a functional

organization the work is divided between the departments, any query or request must be

passed among department heads for approval, causing in this way delays. In addition,

the responsibility of managing the project is shared among the functional managers

(head of the departments) and this may cause lack of ultimate responsibility for project

management.

This type of organizational structure is generally considered the least effective for

implementing and managing projects.

� Projectized organization: The projectized organization, shown in Figure 7-3, is a

structure where the focus is on teams with cross functional expertise. Most of the

organization’s resources are involved in project work; team’s mission is to complete the

project. All team members working for a specific project have one clear superior, the

Project Manager and they all refer to him/ her.


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Project Manager

staff

staff

staff

staff

staff

staff

staff

staff

staff

Project Manager Project Manager


(blue boxes represent staff engaged in the project activities)

Project

Coordination

Project Manager

staff

staff

staff

staff

staff

staff

staff

staff

staff

Project Manager Project Manager



Project

Coordination

Figure 7-3: Projectized Organization

The main advantages of the projectized organization are speed and flexibility. Since the

experts are concentrated within the team and fully committed to the project, it is easier to

react to changing requirements and complete the project on time. Responsibility for the

success of the project is clearly identified and lies on the Project Manager.

The main disadvantage of the projectized structure is the high resource costs, since the

organization often has to hire extra staff with certain expertise in order to implement

different projects simultaneously. In addition this type of structure burdens the

administrative overhead since there may be periods where not all project teams are

occupied.

� Matrix organization: This structure is a blend of functional and projectized

organizations. In the matrix structure (Figure 7-4), the personnel engaged in the project

activities belongs to one or more functional units (departments). For project related

issues the project team members (staff) report to the Project Manager, who is

responsible for the timely completion of the project activities. For business related issues

the project team members report to the corresponding functional managers. Once the

implementation of the project or part of their work has been completed, they are returned

to the control of the functional manager for reassignment. The person who is assigned to

play the role of Project Manager for a specific project is not necessarily one of the

functional managers, but it can be a single staff member possessing the appropriate skills

and competencies.

The Project Manager in the matrix structure cooperates with the functional manager to

establish the resource requirements and plan their utilization on the project as well as to

make the necessary revisions during the project’s implementation progress.


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Project

Coordination

Head of the Department (Functional Manager)

staff

staff

staff

staff

staff

staff

staff

staff

Project Manager




(blue boxes represent staff engaged in the project activities)Project

Coordination


staff

staff

staff

staff

staff

staff

staff

staff

Project Manager





Figure 7-4: Matrix Organization

The main advantage of the matrix organization is that it retains the benefits of both

functional and projectized structures. It also facilitates the effective resource allocation to

different projects.

For these reasons, the matrix structure is considered as the most effective structure for

implementing and managing projects and therefore is widely used.

The main disadvantage of the matrix structure is the potential for conflict between the

Project Manager and the functional manager regarding the resource assignment, since

the functional manager has to staff multiple projects with the same experts.

7.3 INITIATING PROCESSES

Initiating processes take place in the first phase of the project life cycle. More specifically,

during the Project Initiation phase, a business problem or opportunity is identified and a

Business Case which provides alternative solutions is defined. Prior, during or after the

development of the Business Case, a Cost/ Benefit Analysis and a feasibility study are

usually conducted to identify the alternative with the maximum net benefit and investigate the

likelihood of each solution option addressing the business problem. As an outcome of the

Business Case a final recommended solution is put forward. Once the recommended

solution is approved, the Executive and the Project Manager are appointed in order to

participate in the preparation of the “Project Fiche”, which outlines the scope, objectives,

activities, structure, budget, implementation schedule, risks, constraints and assumptions of

the project. When the Project Fiche is approved, the remaining members of the Project

Management Team are appointed.

The description of the specific initiating processes, the order in which they are undertaken,

as well as guidance on how to perform each of them, are analytically presented in Chapter 1.


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Guidance on establishing the appropriate project organization structure (roles and

responsibilities) is also provided in Chapter 1.

7.4 PLANNING PROCESSES

As it has been stated in Chapter 1, Project Planning is the second phase of the project life

cycle and starts as soon as the Project Fiche has been signed by the representatives of the

Project Owner. The management processes that are undertaken during this phase include

the planning of all the elements/ parameters of the project so to be ready for implementation.

In this perspective, the following plans must be developed:

• Project Plan. It consists of the:

o Activities Schedule (definition of activities and tasks sequence, time

scheduling),

o Resource Plan (determination of the labour, equipment, material needed in

each task/stage) and

o Cost Plan (identification of the internal and external costs and their

occurrence in time)]

• Risk Plan. It highlights the possible risks and actions to mitigate them

• Quality Plan. It sets the quality targets for the project deliverables and defines the

processes for quality assurance and control.

• Issue Management Plan. It defines the process for identifying, assessing and

resolving issues related to the project.

• Change Management Plan. It defines the process for managing requests for

changes that have a direct impact on project’s scope, cost, schedule or quality.

• Acceptance Plan. It sets the acceptance criteria for the project deliverables and

defines the processes for executing the acceptance tests.

• Communication Plan. It refers to the information to be distributed to the

stakeholders and the methods that can be used for this distribution.

Besides, the Planning Processes may involve the establishment of performance

indicators to be used later during the Execution & Control phase to report project

performance or/and in the Closure phase to evaluate overall project performance and assess

the post-project achieved benefits.

Planning is a repeatable and iterative process. Every time that new information becomes

available or adjustments are made, all the above plans should be updated.

The planning processes that should be undertaken during the second phase of the project

life cycle are presented in the following figure.


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Development

of Activities

Schedule

Development

of Cost Plan

Development

of Quality

Plan

Development

of Resource

Plan

Development of Project Plan

Development

of Change

Management

Plan

Development

of Risk Plan

Development of

Communication

Plan

Development of

Acceptance

Plan

Establishing

Performance

Indicators

Development

of Issue

Management

Plan

Development

of Activities

Schedule

Development

of Activities

Schedule

Development

of Cost Plan

Development

of Cost Plan

Development

of Quality

Plan

Development

of Quality

Plan

Development

of Resource

Plan

Development

of Resource

Plan

Development of Project PlanDevelopment of Project Plan

Development

of Change

Management

Plan

Development

of Change

Management

Plan

Development

of Risk Plan

Development

of Risk Plan

Development of

Communication

Plan

Development of

Communication

Plan

Development of

Acceptance

Plan

Development of

Acceptance

Plan

Establishing

Performance

Indicators

Establishing

Performance

Indicators

Development

of Issue

Management

Plan

Development

of Issue

Management

Plan

Figure 7-5: The Planning Processes

7.4.1 Development of Activities Schedule

Activities Schedule is the backbone of every project and is essential for a successful

outcome. It gives all personnel involved in the project common understanding of what is

required, how this will be achieved, when it will be achieved and who will be responsible for

the successful outcome of each activity. In addition project plan defines a baseline for

monitoring and control the project implementation progress.

In order to develop the Activities Schedule, the following steps should be followed (Figure 7-

6):

• Application of Work Breakdown Structure in order to subdivide the major

project deliverables into smaller, more manageable component based on the

project scope

• Identification of the activities needed in order to produce the project deliverables

and if necessary breaking down the activities into more manageable tasks which

can then be assigned to individuals

• Determination of activities’ sequence (i.e. in what order should related activities

be undertaken?) and dependencies (i.e. is the activity dependent on the start up

or completion of any other activity?)

• Estimation of activities/ tasks duration

• Scheduling of activities by defining the start up and completion dates of each

activity/task.

Application of

Work Breakdown

Structure

Estimation of

activities/

tasks duration

Identification

of the activities

Determination

of activities sequence &

dependencies

Scheduling of

activities

Application of

Work Breakdown

Structure

Estimation of

activities/

tasks duration

Identification

of the activities

Determination

of activities sequence &

dependencies

Scheduling of

activities

Figure 7-6: Steps to be followed for the development of the Activities Schedule


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7.4.1.1 Application of Work Breakdown Structure

Work is effort performed by people to transform or create products, to solve identified

problems or to satisfy specific needs. Just as the Implementing Agency hierarchically

structures the people who perform work, so the work breakdown structure hierarchically

structures the products/ deliverables to be produced.

In order to use the work breakdown structure as a framework for structuring the technical

objectives of a project –in addition to its use as a management tool for cost and schedule

control- it is important that the work breakdown structure be product–oriented. Its elements

should represent identifiable work products whether they are goods, equipment, software,

data, infrastructure elements or service products.

Work Breakdown Structure3 is a deliverable–oriented grouping of project

components that organizes and defines the total scope of the project. It is based on

the principle of subdividing the major project deliverables or subdeliverables into smaller,

more manageable components until the deliverables are defined in sufficient detail to support

development of project activities (planning, executing, controlling and closing). In order to

proceed with this analysis, you should follow the steps presented below4:

1. Identify the major deliverables of the project, including project management. The

major deliverables should always be defined in terms of how the project will

actually be organized.

2. Decide if adequate cost and duration estimates can be developed at this level of

detail for each deliverable. In case that for some deliverables you estimate that

there is not adequate detail, you should proceed with further analysis (step 3). For

the deliverables that you estimate that no further analysis is needed, just try to

verify the correctness of the analysis (step 4).

3. Identify constituent components of the deliverables. Constituent components

should be described in terms of tangible, verifiable results to facilitate performance

measurement. As with the major components, the constituent components should

be defined in terms of how the work of the project will actually be organized and

accomplished. Repeat step 2 on each constituent component and check whether

further analysis is needed.

4. Verify the correctness of analysis.

� Are the lower level items both necessary and sufficient for the completion of

the analysed item? If not, the constituent components must be modified.

3 The WBS was initially developed by the United States defense establishment, and is described in

Military Standard 881B as follows: “A work breakdown structure is a product oriented family tree

composed of hardware, software, services, data and facilities…….[it} displays and defines the

product(s) to be developed and /or produced and relates the elements of work to be accomplished to

each other and to the end product(s)”.

4 PMBOK Guide 2000 Edition

Icon1310.ico


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� Is each item clearly defined? If not the descriptions should be revised.

� Can each item be appropriately scheduled and budgeted? If not, modifications

are necessary to provide adequate management control.

The Project Work Breakdown Structure usually contains at least three levels of

analysis. In case of large projects the levels of analysis could be more.

A WBS is normally presented in chart form as illustrated in the following examples. The first

example refers to the Public Procurement Directorate’s project aiming to improve the

implementing capacity of the Cypriot Authorities in applying the new European Legislative

Package. The second example refers to a public work project, dealing with the construction

of a wastewater treatment plan and the third one to a project dealing with the development of

software which will automate the process execution of a certain Implementing Agency.

Example 7-1: WBS of the Project “Improving the Implementing Capacity of the Cypriot

Authorities”

Project: “Measures to develop the implementing capacity of the Cypriot Authorities in applying the European Public Procurement legislative package”.

The Project, as it has been presented in Chapter 1 (subchapter 1.5.5.1), consists of three Components:

Component 1: Improving the implementing capacity of the Cypriot Authorities

Component 2: Harmonization of legislation

Component 3: e-procurement study.

For the purposes of this Chapter of the Guide we will assume that each of the above mentioned Components is a Project itself, which will be contracted out separately from the others.

In order to prepare the Work Breakdown Structure of the 1st

Project “Improving the implementing capacity of the Cypriot Authorities”:

• You have to identify the major deliverables of the project (project management has to be included as one of them)

The major Deliverables are:

o Project Management

o The Action Plan for the PPD in order to be ready to undertake its new role

o The Public Procurement Best Practice Guide

o Training

• You have to decide if adequate cost and duration estimates can be developed at this level of detail for each deliverable.

For all the deliverables there is not adequate detail, so decomposition is needed.

• Identify constituent components of the deliverables

o For Project Management:

� Inception Report

� Progress Reports

� Final Report

� Evaluation Report

o For the Action Plan:


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� Proposal for PPD’s new role and responsibilities

� Analysis of individual actions to be taken

� PPD’s internal procedures manual

o For the Public Procurement Best Practice Guide:

� Chapter 1 of the Guide dealing with Project and Procurement Initiation

� Chapter 2 of the Guide dealing with Procurement Strategy

� Chapter 3 of the Guide dealing with the Preparation of Tender Documents

� Chapter 4 of the Guide dealing with the Evaluation of the bids and award of tenders

� Chapter 5 of the Guide dealing with the Negotiated Procedure

� Chapter 6 of the Guide dealing with the Implementation of the contract and contract management

� Chapter 7 of the Guide dealing with Project Management tools and techniques

� Web – based solution for the Guide

� Code of Ethics in Public Procurement

o For the Training:

� Training Strategy

� Training Programme

� Training Material

� Training courses/ seminars

• Repeat the previous step on each constituent component and check whether further analysis is needed.

Further Analysis is needed only in case of the Training Courses/ seminars, since there are three discrete groups of trainees (with different number of participants each) and PPD wants to monitor the cost of training for each group. The new decomposition leads to:

− Training courses for future trainers

− Training courses for main purchasers

− Training courses for other staff involved in public procurement.

Consequently the WBS of Project 1 should be as follows:


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0. Improving the implementing capacity

of theCypriot Authorities

3. Pubic Procurement Best Practice Guide

4. Training

3.1 Ch.1: Project & Procurement Initiation

3.2 Ch.2: Procurement Strategy

3.3 Ch.3: Preparation of Tender Documents

3.4 Ch.4: Evaluation of the bids & award of

tenders

3.5 Ch.5: Negotiated Procedure

3.6 Ch.6: Implementation

of the contract & contract Management

3.7 Ch.7: Project Management

3.8 Web-based solution for the Guide

4.1 Training Strategy

4.2 Training Programme

4.3 Training material

4.4 Training courses/ seminars

2. Action Plan

2.1 Proposal for PPD’snew role & responsibilities

2.2 Analysis of individualActions to be taken

2.3 PPD’s internal

procedures manual

1. Project Management

1.1 Inception Report

1.2 Progress Reports

1.3 Final Report

1.4 Evaluation Report

3.9 Code of ethicsin public procurement

4.4.1 Training courses

for future trainers


for main purchasers

4.4.3 Training courses for other staff involved

in public procurement

0. Improving the implementing capacity

of theCypriot Authorities

3. Pubic Procurement Best Practice Guide

4. Training

3.1 Ch.1: Project & Procurement Initiation

3.2 Ch.2: Procurement Strategy

3.3 Ch.3: Preparation of Tender Documents

3.4 Ch.4: Evaluation of the bids & award of

tenders

3.5 Ch.5: Negotiated Procedure

3.6 Ch.6: Implementation

of the contract & contract Management

3.7 Ch.7: Project Management

3.8 Web-based solution for the Guide

4.1 Training Strategy

4.2 Training Programme

4.3 Training material

4.4 Training courses/ seminars

2. Action Plan

2.1 Proposal for PPD’snew role & responsibilities

2.2 Analysis of individualActions to be taken

2.3 PPD’s internal

procedures manual


1.1 Inception Report

1.2 Progress Reports

1.3 Final Report

1.4 Evaluation Report

3.9 Code of ethicsin public procurement


for future trainers


for main purchasers

4.4.3 Training courses for other staff involved

in public procurement


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Example 7-2: Sample Work Breakdown Structure for the construction of a wastewater plant

Project: Construction of a Wastewater Treatment Plant

0. Wastewater

Treatment Plan

1. Design 2. Construction

1.1 Civil Drawings

1.2 Architectural Drawings

1.3 Structural Drawings

1.4 Mechanical Drawings

1.5 HVAC Drawings

1.6 Plumbing Drawings

1.7 Instrumentation

Drawings

1.8 Electrical Drawings

2.1 Headworks

2.2 Aeration Basin

2.3 Effluent Pumping Station

2.4 Air-Handling

Building

2.5 Sludge Building

Level 0

Level 1

Level 2

0. Wastewater

Treatment Plan

1. Design 2. Construction

1.1 Civil Drawings

1.2 Architectural Drawings

1.3 Structural Drawings

1.4 Mechanical Drawings

1.5 HVAC Drawings

1.6 Plumbing Drawings

1.7 Instrumentation

Drawings

1.8 Electrical Drawings

2.1 Headworks

2.2 Aeration Basin

2.3 Effluent Pumping Station

2.4 Air-Handling

Building

2.5 Sludge Building

Level 0

Level 1

Level 2


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Example 7-3: Sample Work Breakdown Structure of an IT project

Project: Development of a software to be used for the automation of an Implementing Agency’s processes

As it is shown in the above presented examples, WBS elements are usually numbered. The

box in the first level should always have the number 0. The boxes at the first level could be

numbered 1, 2, 3 …… Number 2.1 refers to the first box in level 2. Similarly as you go down

to lower levels the numbers could be 3.1.1, 3.1.2…….., 3.2.1, 3.2.2…….etc.

7.4.1.2 Identification of the Activities

Simply identifying products/ deliverables may be insufficient for scheduling and control

purposes. The activities implied in the delivery of each of the products/deliverables need to

be identified to give a fuller picture of the plan’s workload.

For this purpose a step by step approach for the preparation of a detailed activity

schedule can be followed.

The first step of this approach is to list the Main Activities. In order to do this use as basis

the WBS you have developed. Identify all the activities required to create the products or

develop the deliverables that have been identified and presented in level 1 and then list

them. The list of Activities should normally include management activities as well.

The second step is to Break Activities down into Manageable Tasks. The purpose of

breaking activities down into tasks is to make them sufficiently simple to be organized and

managed easily. Normally the tasks identified should lead to the products/ deliverables

presented in the WBS in level 2.

You have to be careful in getting the level of detail right. The most common mistake is

to break the activities down into too much detail. The subdivision should stop as soon

1.1 Planning

1.2 Meetings

1.3 Administration

2.1 Software

2.2 User Documentation

2.3 Training

Program

Materials

0. Software product


2. Product

Requirements

3.1 Software 4.1 Software

3.2 UserDocumentation


3.3 Training

Program

Materials

4.3 Training

Program

Materials

3. Detail Design 4. Development

5.1 Software

5.2 User

Documentation

5.3 Training Program

Materials

5. Integration & Testing

Level 0

Level 1

Level 21.1 Planning

1.2 Meetings

1.3 Administration

2.1 Software


2.3 Training

Program

Materials

0. Software product


2. Product

Requirements

3.1 Software 4.1 Software

3.2 UserDocumentation


3.3 Training

Program

Materials

4.3 Training

Program

Materials

3. Detail Design 4. Development

5.1 Software

5.2 User

Documentation

5.3 Training Program

Materials

5. Integration & Testing

Level 0

Level 1

Level 2


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as you have sufficient detail to estimate the time and resources required to implement the

work.

The major difference between subdivision here and in the development of the WBS is that

the final outputs here are described as activities and not as deliverables.

When using the WBS to identify which activities are needed, the Project Manager may find

out that has forgotten to incorporate one deliverable in the WBS or that the deliverable

descriptions have to be corrected to indicate the exact outputs of the project. In this case the

WBS must be updated.

It is noted that as has already been described the WBS and the Activity List are being

prepared sequentially; first the WBS and then the Activity List. However, sometimes

it is convenient to develop them simultaneously.

Example 7-4: Identification of activities for the Project “Improving the implementing capacity of

the Cypriot Authorities”

Project: “Improving the implementing capacity of the Cypriot Authorities”.

After the preparation of the Work Breakdown Structure (refer to 7.4.1.1) of the Project dealing with the improvement of the implementing capacity of the Cypriot Authorities, the Activities leading to the defined outputs must be identified.

In order to prepare the Activities List:

• You have to identify the major activities leading to the major deliverables of the project

The major Activities are:

o Implementation of Project Management processes

o Compilation of the Action Plan for the PPD in order to be ready to undertake its new role

o Compilation of the Public Procurement Best Practice Guide

o Training design and execution

• You have to break these activities down to tasks.

o Implementation of Project Management processes:

� Design and production of a comprehensive work programme

� Monitoring and Control the Project’s Progress

� Closing the Project

� Evaluation of the Project

o For the Action Plan:

� Formulation of proposal for PPD’s new role and responsibilities

� Identification of all individual actions and compilation of an action plan

� Preparation of PPD’s internal procedures manual

o For the Public Procurement Best Practice Guide:

� Compilation of Chapter 1 of the Guide (Project and Procurement Initiation)

� Compilation of Chapter 2 of the Guide (Procurement Strategy)

� Compilation of Chapter 3 of the Guide (Preparation of Tender Documents)

� Compilation of Chapter 4 of the Guide (Evaluation of the bids and award of tenders)

� Compilation of Chapter 5 of the Guide (Negotiated Procedure)

� Compilation of Chapter 6 of the Guide (Implementation of the contract & contract

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management)

� Compilation of Chapter 7 of the Guide (Project Management tools and techniques)

� Development of Web – based solution for the Guide

� Compilation of Code of Ethics in Public Procurement

o For the Training:

� Training Strategy development

� Training Programme Preparation

� Preparation of Training Material

� Delivery of Training

• Repeat the previous step on task and check whether further analysis is needed.

Further Analysis is needed only in case of the Delivery of Training, since there are three discrete groups of trainees (with different number of participants each) and PPD wants to monitor the cost of training for each group. The new decomposition leads to:

− Training of trainers

− Training of main purchasers

− Training of other staff involved in public procurement.

7.4.1.3 Determination of activities’ sequence and dependencies

Once the Activities have been identified and broken down to smaller components, they must

be related to each other to determine the activity sequencing (order in which the activities

should be undertaken) and dependencies (which activity must be completed before the start

up of another activity).

This can best be described with an example. Implementing training in the Public

Procurement Best Practice Guide to 100 main purchasers from the Cypriot Contracting

Authorities has as prerequisites the following: Completion of the compilation of the Best

Practice Guide, Formulation of the Training strategy, Development of the Training

Programme and Preparation of the training material. The sequence dictates that the

preparation of training programme and training material comes before the training delivery;

while dependencies include the fact that training cannot start until the Contracting Authority

approves the training material. Dependencies may also occur between activities that will be

undertaken by the same person (i.e. a trainer who is assigned to provide training both to

future trainers and to main purchasers may not be able to complete both tasks at the same

time).

Dependencies can be distinguished in the following types:

• Mandatory dependencies: Mandatory are those dependencies that are inherent in

the nature of the work (e.g. on a construction project, the walls can not be built and

plastered until after the foundation has been laid)

• Discretionary dependencies: Discretionary dependencies are those defined by the

Project Management Team. Normally the Project Management Team has a good

knowledge of the thematic area in which the project refers and besides is aware of


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any unusual aspect of the project that oblige the application of a certain

implementation sequence

• External dependencies: External dependencies are those derived by non-project

activities (e.g. software testing depends on the delivery of the hardware by an

external supplier).

Any schematic display of the logical relationships of project activities is called Project

Network Diagram. There is more than one technique to construct a Project Network

Diagram (Precedence Diagramming Method, Arrow Diagramming Method and Conditional

Diagramming Methods). Besides, it may be produced manually or automatically by using

specialised computer software. In the following paragraph the Precedence Diagramming

Method is presented, since is the one used by most of the project management software

packages (e.g MS Project, Primavera Planner).

According to this method, the Activities are presented as boxes and their dependencies

as arrows. There are four types of dependencies but only one is the most commonly

used, the Finish to Start. More specifically, the types of dependencies are:

• Finish to Start (FS): In this case the work of the successor can not start until when

the work of the predecessor has finished

• Finish to Finish (FF): In this case the completion of the work of the successor

depends on the completion of the work of the predecessor

• Start to Start (SS): In this case the initiation of the work of the successor depends on

the initiation of the work of the predecessor

• Start to Finish (SF): In this case (it is rarely used) the completion of the work of the

successor depends on the initiation of the predecessor.

A typical diagram drawn using the Precedence Diagramming Method is presented in the

following scheme:

Start

A B C

Finish

D E F

Start

A B C

Finish

D E F

Figure 7-7: Project Network Diagram using the Precedence Diagramming Method.

It should be noted that nowadays such types of diagrams are prepared quite

automatically by using specialized software. All types of dependencies between the

activities are being “declared” when producing the time schedule and they are automatically

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presented as connecting arrows on the Gantt chart. In this perspective, the Project Network

Diagram itself is not something compulsory, but the activities’ sequence and dependencies

must be identified, since they are necessary for the activities scheduling.

Example 7-5: Activities’ sequence and dependencies for the Project “Improving the

implementing capacity of the Cypriot Authorities”


Following the identification of the Project Activities (refer to 7.4.1.2) their sequence and dependencies must also be identified.

• The Development of the Web based solution for the Public Procurement Best Practice Guide should not start until when the compilation of all the Chapters of the Guide has been completed

• The preparation of Training material should not start until when the compilation of all the Chapters of the Guide has been completed

• The training delivery should not start until when the compilation of all the Chapters of the Guide has been completed and until when the training material has been prepared.

• The training of main purchasers and other staff involved in public procurement should not start until when the future trainers have been trained.

In case that you would like to present the above mentioned dependencies in a diagram form, you should conclude to a diagram like this:

7.4.1.4 Estimation of Activities/ tasks duration

Activity duration estimating is the process of making a realistic quantitative assessment of

the likely number of work periods that will be required to complete an activity.

Start

Design & production

of a comprehensive work programme

Monitoring & control

the project’s progressClosing the project

Finish

Training StrategyDevelopment

Training Programme

Preparation

Preparation of Training material

Compilation of Ch.1

Formulation of proposalfor PPD’s new role &

responsibilities

Identification of all Individual actions &

Compilation of an action plan

Preparation of PPD’sInternal procedures

manual

Evaluation of

the project

Training of trainers

Training of main Purchasers

Training of other staff involved

In public procurement

Compilation of Ch.2

Compilation of Ch.3

Compilation of Ch.4

Compilation of Ch.5

Compilation of Ch.6

Compilation of Ch.7

Development Of the

web-based solution

Compilation

Of Code of Ethics

Start

Design & production

of a comprehensive work programme

Monitoring & control

the project’s progressClosing the project

Finish

Training StrategyDevelopment

Training Programme

Preparation

Preparation of Training material

Compilation of Ch.1

Formulation of proposalfor PPD’s new role &

responsibilities


Compilation of an action plan

Preparation of PPD’sInternal procedures

manual

Evaluation of

the project

Training of trainers

Training of main Purchasers



Compilation of Ch.2

Compilation of Ch.3

Compilation of Ch.4

Compilation of Ch.5

Compilation of Ch.6

Compilation of Ch.7

Development Of the

web-based solution

Compilation

Of Code of Ethics


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The estimate is often progressively elaborated and more accurate. To ensure that the

estimates at this stage are realistic, those of the project team who are more familiar with the

nature of the specific activity and those who have the necessary technical knowledge or

experience (by participating or managing similar activities/ projects in the past) should be

consulted.

The inputs that are necessary for the activity duration estimation are:

• The Activity List (refer to 7.4.1.2)

• Constraints and assumptions

• The Resource requirements (refer to 7.4.2). The duration of most activities is

influenced by the number of the resources assigned to them and by the skills and

capabilities they possess. Normally, a senior consultant working full time can be

expected to complete a certain activity in less time than a junior consultant, also

working full time. Besides, two people from an Implementing Agency working

together in a specific task are expected to complete it in half the time it takes to each

of them individually. It has to be noted that although the number of the resources

assigned to each task is a significant input for the activity duration estimating, there

are cases in which the activity duration estimation is mainly based on historical data

and experience from the implementation of previous similar projects. In these cases

the activities’ duration is predetermined and the number of resources needed to

carry out the activities is defined accordingly.

• Historical information. This refers to data available at the project files of similar

projects concerning the actual duration of their activities. It refers also to information

available to databases like how long it takes concrete to cure, how long it usually

takes a Ministry to respond to certain types of request, how long it takes for a law to

be voted etc.

• Identified risks. The project team may choose to incorporate an additional time

period (usually called as reserve time) to the activity duration as recognition that one

or more of the identified risks may occur. This time can be a percentage of the

estimated duration or a fixed period.

Example 7-6: Estimation of activities/ tasks duration for the Project “Improving the

implementing capacity of the Cypriot Authorities”


Following the identification of the Project Activities (refer to 7.4.1.2), of their sequence and dependencies (refer to 7.4.1.3), the duration of the activities and tasks must be estimated.

The estimation will be based on the actual duration of previous similar activities [e.g formulation of Action Plans, development of training strategy, training in legal aspects and in new processes (best practices)]. Especially for the compilation of the Best Practice Guide, the estimation of the time needed could be based on the volume of similar Guides developed by other countries or even on their experience (how long it took to them to prepare such Guides).

An indicative estimation of the Activities’ duration is:


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Activity Duration (working days)

Design and production of a comprehensive work programme 24

Monitoring and Control the Project’s Progress 433

Closing the Project 9

Evaluation of the Project 7

Formulation of proposal for PPD’s new role and responsibilities

21

Identification of all individual actions and compilation of an action plan

65

Preparation of PPD’s internal procedures manual 57

Compilation of Chapter 1 of the Guide (Project and Procurement Initiation)

45

Compilation of Chapter 2 of the Guide (Procurement Strategy)

54

Compilation of Chapter 3 of the Guide (Preparation of Tender Documents)

88

Compilation of Chapter 4 of the Guide (Evaluation of the bids and award of tenders)

44

Compilation of Chapter 5 of the Guide (Negotiated Procedure)

55

Compilation of Chapter 6 of the Guide (Implementation of the contract & contract management)

65

Compilation of Chapter 7 of the Guide (Project Management tools and techniques)

44

Development of Web – based solution for the Guide 53

Compilation of Code of Ethics in Public Procurement 51

Training Strategy development 57

Training Programme Preparation 28

Preparation of Training Material 70

Training of trainers 15

Training of main purchasers 43

Training of other staff involved in public procurement. 63

7.4.1.5 Scheduling of Activities

Scheduling follows estimates of the time for each activity and is a very crucial step in the

Planning Phase since a plan can only show the feasibility of achieving its objectives when

the activities are put together in a schedule that defines when each activity will be carried

out.

In order to proceed with scheduling you need the following inputs:

• The Activities’ sequence and dependencies (refer to 7.4.1.3).

• Activity duration estimates (refer to 7.4.1.4)


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• Resource requirements and resource availability (refer to 7.4.2). The number of

people who will be available to do the work should be established. Any specific

information like names, percentage availability, and availability in certain periods

starting from …and ending at…. should also be noted. For preliminary schedule you

may only need to know that X senior consultants will be available in a certain time

period, whereas in the final schedule you need to know exactly who these senior

consultants will be.

• Assumptions

• Constraints. There are two major categories of time constraints that you should

consider during schedule development. First, imposed dates on activity starts or

finishes which can be used to restrict the start or finish to occur either no earlier than

a certain date or no later than a specified date (e.g in case of projects co-funded by

the EU (target 2) for the present programming period must be completed before the

next programming period starts). Second, the project owner or the project

stakeholders may request that a certain deliverable be completed by a specified

date

• Milestones. Milestones are key events that provide the basis by which the project

implementation will be monitored and managed. The simplest milestones are the

dates estimated for completion of each Activity, for submission of deliverables, or for

getting approval by the client (acceptance of the product produced).

• Time leads and lags: There are cases that a dependency between two activities

may require specification of a lead or lag to accurately define the relationship. (e.g.

the compilation of Chapter 3 of the Public Procurement Best Practice Guide

concerning the preparation of the tender documents may start 10 days before the

completion of Chapter 2 dealing with the procurement strategy. Accordingly, a two

week delay (lag) may be necessary between the completion of the training material

and the training delivery).

There are many different approaches to scheduling. The steps can either be done manually

or a computer tool (software) can be used. Project Management Software (like Microsoft

Project, Primavera etc) is widely used to assist with schedule development.

The project schedule includes at least the start and finish dates of each activity and

their duration (in days, weeks, months, etc). It can also include information concerning

the responsible for the implementation of each action. It may be presented in summary form

or in detail; graphically or in a tabular form. More specifically, the following formats are the

ones most commonly in use:

• Bar charts, also called Gantt Charts5., A Gantt chart focuses on the sequence of

tasks necessary for the completion of a certain project. Each activity/task is

represented as a horizontal bar on an X-Y chart. The horizontal axis (X axis) is the

time scale over which the project will be implemented. Therefore, the length of each

5 The Gantt chart was first developed by Charles Gantt in 1917


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activity/task bar corresponds to the duration of the activity/task or the time

necessary for its completion.

Arrows connecting the activities/tasks represent the relationship between the

activities/ tasks they connect.

The Gantt chart is an excellent tool for quickly assessing the status of a project,

therefore is suitable for management presentations, for status reports and for

communicating information regarding the progress of a project to all stakeholders.

The Gantt chart can be developed using Software Packages like MS Project,

Primavera Project Planner (P3), Project Scheduler (PS8), etc.

• Project Network Diagrams with dates. This format shows the activities’ sequence

and dependencies as well as the start and finish date of each activity. A project

network diagram is often referred to as a PERT chart.

PERT6 chart, is a network-based aid for planning and scheduling the many

interrelated tasks in a large and complex project. Common Software Packages like

MS Project, Primavera Project Planner (P3), and Project Scheduler (PS8) can

create a PERT chart from a Gantt chart.

PERT charts are more complicated than the Cantt charts and should be avoided in

management presentations.

• Milestone charts. This type normally presents the defined milestones, that is the

start and completion dates of the production of the deliverables.

6 PERT was developed in the late 1950’s for the U.S Navy’s Polaris project having thousands of

contractors.


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Example 7-7: Gantt and PERT charts for the Project “Improving the Implementing capacity of

the Cypriot Authorities”


Using MS Project to prepare the Time Schedule for the above mentioned project (and especially for the Activities 2 “Compilation of an Action Plan for PPD”, 3 “Compilation of the Public Procurement Best Practice Guide” and 4 “Training design and execution”), we can have the following types of charts.

Gantt chart.

As mentioned above, this chart shows the activities and tasks to be performed, the prerequisites and dependencies between them, the start and finish date as well as the duration of each task. The time scale on the top can be easily changed and therefore in case of projects having a duration of a few months the units of the major time scale could be months while the unit of the minor scale could be weeks or days.

PERT chart

In this chart each activity is being presented as a non-rectangular parallelogram, whereas the tasks are presented as rectangular parallelograms. Each task presents its duration, start and ending date.

The tasks shown in red line indicate which the critical path is and therefore these are the tasks that must be completed in time for the project to finish on schedule. Definition of the critical path and guidance related to its use and importance is given in the following paragraph.


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In case that instead of using a Software Package to produce the charts, you decide to do it manually, you will end to a graph similar to the following:

In Annex 7-1/ Sheet “Activities Schedule” a tool for preparing a project schedule in

excel format is presented. In addition a completed example (for the Project “Improving

the implementing capacity of the Cypriot Authorities) is also presented in the Sheet “Activities

Schedule Example”. This tool is used for developing a “baseline schedule”, as well as for

tracking the activities’ progress during the project implementation period (refer to 7.5.1).

Critical Path

The critical path is the series of tasks that dictates the calculated finish date of the project.

That is, when the last task in the critical path is completed, the project is completed. If it is

important for a project to finish on schedule, special attention should be given to the tasks on

the critical path and the resources assigned to them.

Each task on the critical path is a critical task. In a typical project many tasks have some

slack and can therefore be delayed a little without affecting the project finish date. Those

tasks that cannot be delayed without affecting the project finish date are the critical tasks.

A task becomes critical when it meets any one of the following conditions:

• There is zero slack on the task

• It has a Must Start on or Must Finish on date constraint

• It has a finish date that is the same or beyond its deadline date.

Start

Design & production

of a comprehensive

work programme

Monitoring & control the project’s progress

Closing the project

Finish

Training Strategy

Development

Training Programme

Preparation

Preparation of

Training material

Compilation

of Ch.1

Formulation of proposal

for PPD’s new role & responsibilities


Compilation of

an action plan

Preparation of PPD’s

Internal procedures manual

Evaluation of the project

Training

of trainers Training of main

Purchasers



Compilation of Ch.2

Compilation of Ch.3

Compilation of Ch.4

Compilation of Ch.5

Compilation

of Ch.6

Compilation

of Ch.7

Development Of the

web-based solution

Compilation

Of Code

of Ethics

10/10/05 10/11/05

11/11/05 10/07/07 10/7/07 20/7/07 20/7/07 30/7/07

11/11/05 11/12/05 12/12/05 12/3/06 12/3/06 30/5/06

11/11/05 12/1/06 13/1/06 13/4/06 13/4/06 13/6/06 11/10/06 23/12/06

11/11/05 20/1/06

11/11/05 25/1/06 25/1/06 26/5/06 26/5/06 26/7/06 26/7/06 10/10/06

11/11/05 30/1/06 1/9/06 10/10/06 10/10/06 15/1/07 20/1/07 10/2/07 11/2/07 11/4/07 12/4/07 9/7/07

Start

Design & production

of a comprehensive

work programme

Monitoring & control the project’s progress

Closing the project

Finish

Training Strategy

Development

Training Programme

Preparation

Preparation of

Training material

Compilation

of Ch.1

Formulation of proposal

for PPD’s new role & responsibilities


Compilation of

an action plan

Preparation of PPD’s

Internal procedures manual

Evaluation of the project

Training

of trainers Training of main

Purchasers



Compilation of Ch.2

Compilation of Ch.3

Compilation of Ch.4

Compilation of Ch.5

Compilation

of Ch.6

Compilation

of Ch.7

Development Of the

web-based solution

Compilation

Of Code

of Ethics

10/10/05 10/11/05

11/11/05 10/07/07 10/7/07 20/7/07 20/7/07 30/7/07

11/11/05 11/12/05 12/12/05 12/3/06 12/3/06 30/5/06

11/11/05 12/1/06 13/1/06 13/4/06 13/4/06 13/6/06 11/10/06 23/12/06

11/11/05 20/1/06

11/11/05 25/1/06 25/1/06 26/5/06 26/5/06 26/7/06 26/7/06 10/10/06

11/11/05 30/1/06 1/9/06 10/10/06 10/10/06 15/1/07 20/1/07 10/2/07 11/2/07 11/4/07 12/4/07 9/7/07

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Because of the important relationship between critical tasks and the project end date, the

Project Manager must always be cognizant of the critical path and understand how it is

affected when tasks are being modified to resolve over allocations, costs are being adjusted,

the scope is being revised or changes are made to the Project Schedule.

Microsoft Project defines a task as critical if it has zero days of slack, but the user of the

Software Package (the Project Manager) can change the definition of a critical task. For

example he can define a task as critical if it has one or two days slack. This can be helpful if

the Project Manager wants to be alerted to tasks becoming critical when there are still one or

two days of buffer. The critical path is shown in both Gantt and PERT charts produced by

Software Packages. In case of MS Project, the critical path is being highlighted when using

the Detail Gantt view or the Network Diagram view (PERT).

If the Project Manager wishes to bring in the project finish date, he needs to bring in

the dates of the critical path tasks. This is also known as “crashing”. In order to do this,

the Project Manager can:

• Shorten the duration of a task on the critical path

• Change a task constraint to allow for more scheduling flexibility

• Break a critical task into smaller tasks the implementation of which can be assigned

to different resources

• Revise the dependencies between the tasks to allow more flexibility in scheduling

• Schedule overtime

• Assign additional resources to work on critical paths.

However, the Project Manager has to be aware that if he brings in the dates of the primarily

critical path, a different series of tasks could become the new critical path. In this case this

new series must be tracked and monitored very closely to ensure the expected/desired finish

date.

In Annex 7-2 guidance7 on how to find the critical path of a project without using a

Software Package is being provided.

7.4.2 Development of Resource Plan

The Resource Plan identifies the physical resources that are needed to complete the project

successfully and schedules their usage during the project implementation period. Obviously,

in order to develop a resource plan, every activity and task should have been identified.

Generally, the resource planning should be performed in parallel with the development of the

activities schedule, since the determination of the resource requirements affects directly the

estimation of the activities/ tasks duration (refer to 7.4.1.4).

In order to develop the Resource Plan, the following steps should be followed (Figure 7-8):

7 Part of Chapter 11: PERT for Project Planning and Scheduling from “Practical Optimization: a Gentle

Introduction” written by Professor John W. Chinneck, Carleton University, Canada’s Capital University

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• Identification of what types of resources (labour, equipment, material) and in what

quantities are required in order to perform project activities and tasks

• Development of Resource Schedule by estimating when and for how long each

resource is going to be utilised

• Assignment of resources to specific project activities and tasks

Assignment of resources to

project activities/tasks

Identification of types and quantities of resources

Development of

Resource Schedule







Development of

Resource Schedule

Development of

Resource Schedule

Figure 7-8: Steps to be followed for the development of the Resource Plan

For simple projects the development of a Resource Plan may be limited to entering only the

resource name against the project activity on the Activities Schedule. However, for larger and

more complex projects, a detailed resource plan should be completed to ensure that the

resource allocation is both accurate and appropriate.

It should be noted that the assignment of sufficient resources – both in terms of

quantity and appropriateness – is a critical factor for the successful outcome of the

project. The assignment of less human resources than actually needed to perform certain

activities/ tasks, as well as the assignment of resources who do not possess the appropriate

skills and expertise to perform their duties, are two of the most common reasons for project

failure.

There are various software packages in the market, such as MS Project and

Primavera Project Planner (P3), which can be used to develop, monitor and control a

detailed resource plan. However, for the purposes of this Guide a simple tool for

developing a resource plan is provided in Annex 7-1 (in excel format) in order to be used

by people who do not possess or are not competent in using the relative commercial

software. The tool consists of two Sheets: one used for the preparation of the “Resource

Schedule” and the other for the assignment of resources to project activities/ tasks, named

as “Resources vs. Activities”. This tool can be used also for tracking resource usage

during the project implementation period (refer to 7.5.2).

The following paragraphs describe analytically the steps to be followed in order to develop a

Resource Plan.

7.4.2.1 Identification of types and quantities of resources

Once the Work Breakdown Structure (WBS) has been applied and the project activities have

been identified, you are ready to identify the types (labour, equipment, material) and

quantities of the resources needed to implement the project.

In order to identify the resource requirements the following steps should be followed:

1. Review the project scope and activities/ tasks list in order to identify the project’s

requirements for people, equipment and material resources.

2. Gather historical information from old project files, databases and from people who

have worked on similar projects, regarding what types and numbers of resources

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were required for performing similar work on previous projects, as well as the duration

of the relative tasks.

3. Consider how resource quantities, capabilities and quality affect the duration of

the activities/ tasks. The duration of most tasks is influenced by the number of

resources assigned to them. In most cases, particularly for production tasks, two

resources can complete a task in half the time it would take for a single resource.

Similarly, a resource working half time on a task will typically take about twice as

much time as the same resource working full time. However, in other instances, for

example for design tasks, adding resources does not guarantee that the duration will

decrease. The duration of most tasks is also influenced by the capabilities and

experience of the resources assigned to them. For example, a team member with five

years experience can typically be expected to complete a task in less time than one

with two years experience.

As you collect information about the project in hand and other similar projects,

continue to refine the duration estimates for the project tasks (refer to 7.4.1.4). The

accuracy of the duration estimates is closely related to the accuracy of your resource

requirements.

4. Identify the resource types and quantities needed. Once you have collected all

the necessary information, identify the types of resources and the quantities needed

for each. Generally the resources are distinguished in three main categories:

� Labour (or Human Resources): It is not necessary at this stage of the project to

be identified by name, but the professional qualifications and the type of skills

required for carrying out an activity/ task should be identified. For example, there

is no need to specify that Mr. X will be used to elaborate the detail design for the

construction of a bridge, but you could say that one civil engineer with relative

experience in bridge construction projects is required. Do not forget to identify the

necessary resources required to perform the project management tasks, such as

the Project Manager, Quality Manager, etc.

Usually the quantity of a labour resource is measured by using the term Full

Time Equivalent (FTE). One FTE indicates one person that will work 8 hours per

day for 5 days per week. Respectively 0,5 FTE indicates one person that will

spent half of his full time in the project. Another frequent measure of labour usage

is the man-months (mm) or the man-days (md) or the man-hours (mh) that the

resource is going to be used. For example, if you determine that for the

implementation of a specific task 3 mm of an architect are needed, it means that

this person will spend 3 months x 20 (or 21 or 22) days = 60 md = 480 mh for the

implementation of this task.

� Equipment: You have to list the equipment that will be used for the performance

of works (e.g. excavators, cranes), the delivery of services or supplies (e.g.

classrooms for the conduction of training seminars, lorries for carrying supplies

and warehouses for storing supplies), as well as for carrying out supportive

actions like project and procurement management (e.g. computers, software

packages, photocopiers).


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The quantity of equipment resources is defined either by the number of units

(e.g. 3 computers, 1 projector, 2 classrooms). In case of external equipment

resources and especially when these will be leased or rented, it is important to

define their usage time (e.g. rent an excavator for three days, rent a special

machine tool for some hours, book a classroom for one week, etc.).

� Material: You have to list the material that will be used for the production of the

deliverables. For example in case of a building construction project, materials like

bricks, cement, steel, cables, paints will be used. Or in case of a training delivery

project, materials like paper for printing the training material and blank CDs for

distributing the training material to participants will be used. In addition, material

that will be used for project management and procurement management activities

should also be listed (e.g. paper for printing the tender documents, posters to be

used for publicity actions of the project, etc.)

The quantity of material resources is defined using the appropriate

measurement units for each material. For example, 50 m of cable, 5 tn of cement,

50 kg of plastic paint, 5.000 sheets of printing paper, 100 blank CD-Rs, etc.

5. Ask for an expert’s judgment. Once you have identified the types and quantities of

resources you should present the resource requirements to an individual expert or a

group of experts in order to assess them and advise you for their suitability and

appropriateness. Such expertise and specialised knowledge may be acquired either

from other units within the agency (e.g. technical unit, HR unit) or/and by external

consultants or/and by professional and technical associations or/and by industry

groups.

6. Examine the adequacy of resources. Regardless of whether the project will be

implemented with own resources (in-house production) or it will be contracted out to

an economic operator through a tendering process, you have to examine the

sufficiency of the internal resources, because even in the second case (outsource

production) you will need to involve internal resources for performing the project

management tasks in order to monitor and control the contractor. The sufficiency of

internal resources (i.e. those resources owned by the Implementing Agency) should

be examined both in terms of quantity, as well as in terms of skills, experience and

expertise with relation to project requirements. Taking into account the result of

adequacy examination, as well as the organisational policies regarding staffing and

the rental or purchase of supplies and equipment you should decide whether there is

a need to acquire external resources. If for example there is a need to use a legal

advisor in performing some activities and there is not such an expert in the Agency’s

staff, you will need to hire an external advisor, or if for example there is a need of

classrooms for conducting training seminars and the Agency doesn’t own any

classroom or the classrooms it owns are used for another project that given period, it

will have to rent them either from another agency or from a private entity.


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7.4.2.2 Development of Resource Schedule

After receiving an expert’s judgment assuring you that the type and quantities of the

resources that have been identified are appropriate for achieving the project goals and

objectives it is time to estimate when and for how long each resource will be utilised in order

to develop the Resource Schedule.

In order to achieve this you should look at the starting and finishing dates of the

activities and tasks in which each of the resources will be used, since at the end of the

day the most important thing is to achieve effective and on time completion of all planned

activities and tasks. For example, in a building construction project where you will need the

architect for the elaboration of the architectural study, you have to advise the Activities

Schedule for finding out when and for how long this task will take place, in order to estimate

the corresponding period that the architect will need to be engaged in the project. For the

same project the building equipment & material will mainly be used in the construction stage,

so you have to schedule them according to when that stage will take place. Undoubtly, there

are resources that will be used in more than one phases of the project or in more than one

activities/tasks, like for example the Quality Manager, who is responsible for managing and

assuring quality in all the phases of the project. In these cases you should estimate the

whole duration for which the resource will be engaged.

The tool provided in Annex 7-1/ Sheet “Resource Schedule”, apart from scheduling

the resources, it can also be used to schedule any travelling that may be associated

with the labour resources. In this way, you will be able to monitor scheduled travelling during

the Execution & Control phase and keep track of its relative costs by using the tool provided

in Annex 7-1/ Sheet “Cost Schedule”.

The Resource Schedule developed in the planning phase is usually called “Baseline

Resource Schedule”, since it will be used during the project execution phase for

tracking progress by viewing the variances between the baseline estimates and the actual

data (refer to 7.5.2).

7.4.2.3 Assignment of resources to project activities/ tasks

Once you have estimated when and for how long each resource will be needed in the project

you have to assign them to specific activities/ tasks of the project in order to complete the

development of the Resource Plan.

When assigning resources to activities/ tasks you should take into account the

following factors in order to build a more effective Resource Plan:

• Availability of resources. The most important factor for deciding which resource

will be assigned to what activity(ies)/ task(s) is the potential availability of the

resources in the periods the corresponding activities/ tasks will take place. This is

especially important for the internal resources and mainly for the human resources,

since it’s rare for the employees of an Implementing Agency to be assigned only to

one project from start to finish with no additional responsibilities outside the scope

of a single project. For this reason you should ask the functional manager or the

head of the unit, who is directly responsible for the management of the certain

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employee you want to assign to the project, about his/her planned engagements in

other projects or activities of the Implementing Agency. Having examined his/her

availability for the specific period and after receiving the relative approval from

his/her superior you are able to assign him/her to one or more activities/ tasks. Do

not forget that availability doesn’t refer solely to the resource start and end dates in

the project, but it refers also to the amount of time that the resource is able to

devote to the project, i.e. whether the resource is working part or full time on the

project and whether his/her availability changes at any point.

The availability of external resources is something that is examined and managed

by the respective Project Manager of the contractor. What you have to do in this

case, as a representative of the Implementing Agency, is to define the quality

characteristics, quantities and required effort from these resources, as well as the

time periods in which these resources will be engaged in the project and include

them in the Terms of Reference and in the terms of the contract.

As general guidelines you should consider the following:

� Be realistic about the availability of resources. Allowance should be

made for official non-working days, holidays and time that people will

spend on non-project activities.

� Assign busier resources on tasks that cannot be performed by other

resources.

� Consider assigning additional resources on tasks in order to prevent or

alleviate overallocation.

� Use underallocated resources to help relieve the overallocated ones.

� Plan for contingencies in order to be prepared for potential situations.

For example “What if I don’t have 3 Visual Basic programmers in June?” or

“What if my only environmental engineer quits or becomes disabled before

his critical assignment to Environmental Impact Assessment Study task in

mid-July?” These potential situations can be identified by a vigorous risk

analysis, based on past experience and perceptive forecasting. You may not

be able to forecast specific events, but you can note that the possibility

exists. You can ask “What does it do to the schedule and what is the

potential impact on my resource plan?” Even if you don’t have to take any

actions at this time, you should be prepared to facilitate the specific resource

solution when and if the potential need arises. For this reason alternative

resources or/and skills should be identified and evaluated; outsourcing

candidates should be contacted and evaluated; trigger dates for action

decisions should be determined and auto alarms set up; potential scope

adjustment options should be evaluated.

• Cost of resources. Apart from being effective in terms of schedule, the Resource

Plan should also be effective in terms of cost, since the cost of the resources has

usually a great contribution to the overall cost of the project.


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In this perspective you should try to:

� Assign more expensive resources to tasks that cannot be performed by

less expensive resources, so that you obtain the maximum return from the

use of resource.

� Assign less expensive resources to as many tasks as possible to keep

the project within budget limitations, but without putting in danger the

successful outcome of the task.

• Capability of resources. The more familiar you are with resource capabilities, the

more efficiently and effectively you can assign resources to tasks. Concerning the

human resources you need to understand their background, experience, skills and

capabilities. Concerning the equipment you have to be familiar with their operation,

performance and maintenance. As far as materials are concerned you need to

know their quality characteristics, their suitability for purpose and the rate of

consumption.

In this perspective you should try to:

� Assign the most efficient resources to critical tasks, to ensure that your

schedule does not slip.

� Use the resources with the higher quality or the more effective

resources on high-risk tasks or tasks that require the highest level of

quality.

The tool provided in Annex 7-1/ Sheet “Resources vs. Activities”, apart from

assigning resources to project activities/ tasks, it can be used also to assign any

travelling that may be associated with the performance of the activities/ tasks. In this way,

you will be able to monitor scheduled travelling per activity or task during the Execution &

Control phase and keep track of the their contribution to the cost of each activity/ task by

using the tool provided in Annex 7-1/ Sheet “Costs vs. Activities”.

7.4.3 Development of Cost Plan

The Cost Plan includes an estimate and a schedule of the costs that will be incurred in order

to complete the project activities and tasks. The Cost Plan is usually prepared after the

development of the Activities Schedule and the Resource Plan, since it requires input from

both of them. Based on the information now known about the project as a result of Project

Planning activities (i.e. more detail and greater accuracy regarding project activities, tasks

and durations, a more detailed understanding of the resources required to perform the work

and their associated costs), the Project Manager can refine the budget required to complete

the project. This is particularly important when a project or some of its components are

planned to be performed under contract (i.e. through a tendering process), since in this case

the value of the contract should be accurately estimated in order to be included in the relative

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tender documents. The cost planning is also very important in case that the project is

implemented with own resources (in-house production), since the establishment of a realistic

and accurate cost plan will help you to effectively monitor costs during the execution and

monitoring phase in order to stay within budget.

In order to develop the Cost Plan, the following steps should be followed (Figure 7-9):

• Identification and estimation of costs that are expected to be incurred in the project

• Development of Cost Schedule by estimating when each of the costs will be

incurred

• Estimation of cost per activity/ task

Identification and estimation

of costs

Development of Cost Schedule

Estimation of

cost per

activity/ task


of costs


of costs

Development of Cost ScheduleDevelopment of Cost Schedule

Estimation of

cost per

activity/ task

Estimation of

cost per

activity/ task

Figure 7-9: Steps to be followed for the development of the Cost Plan

For simple projects the development of a Cost Plan may be limited to entering only the

overall cost against the project activity on the Activities Schedule. However, for larger and

more complex projects, a detailed Cost Plan should be completed to ensure that the overall

expenditure is both accurate and appropriate.

There are various software packages in the market, such as MS Project and

Primavera Project Planner (P3), which can be used to develop, monitor and control a

detailed cost plan. However, for the purposes of this Guide a simple tool for developing a

cost plan is provided in Annex 7-1 (in excel format) in order to be used by people who do

not possess or are not competent in using the relative commercial software. The tool

consists of two Sheets: one used for the preparation of the “Cost Schedule” and the other

for the estimation of cost per activity/ task, named “Costs vs. Activities”. This tool can be

used also for tracking financial progress during the project implementation period (refer to

7.5.3).

The following paragraphs describe analytically the steps to be followed in order to develop a

Cost Plan.

7.4.3.1 Identification and estimation of costs

The identification of the various costs is closely related to the resource requirements

of the project (refer to 7.4.2.1), since the greatest percentage of the project’s overall

cost consists of the costs of the resources needed to complete the project activities. When

developing a Cost Plan, apart from the costs of all resources that will be charged to the

project, you should also take into account travel costs, administrative costs and contingency

costs. More specifically, the basic types of costs, which are usually incurred in a project, are

the following:

• Costs of resources: This type of costs include the following subcategories:

o Labour costs: They are costs associated with labour resources (both internal

and external ones). They include salaries, wages or any other kind of

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remuneration provided to people who are assigned to perform one or more

activities of the project.

o Equipment costs: They are costs associated with the purchasing, renting or

leasing of equipment, as well as with the operation/ using and maintenance of

the equipment (operating costs). In case that the equipment resources are

internal, there are no purchasing, renting or leasing costs, but only operating

and maintenance costs.

o Materials costs: They are costs associated with the purchasing or usage of

materials.

• Travel costs: They are costs associated with any travelling that may be required

in the scope of the project. They include transportation costs (e.g. flight tickets, taxi

fees, car fuel, parking fees, etc), accommodation costs (e.g. hotel rooms,

apartments, etc.) and any daily allowances (e.g. lunch/ dinner, entertainment).

• Administrative costs or overheads: They are costs associated with the

performance of administration and coordination activities. Examples of such costs

are: office supplies (e.g. printing paper, envelopes, labels, etc.), postage or

delivery costs, costs for utilities (e.g. electricity, water, telecommunication), clerical

and administrative salaries and wages, legal and insurance fees, memberships in

technical and professional organisations.

• Contingency costs: They are costs which, based on past experiences, are known

to be regularly encountered but difficult or impossible to estimate at the time the

plan is prepared. These costs may result from incomplete design, unforeseen and

unpredictable conditions, risks or uncertainties within the defined project scope.

The reason that they are included in the Cost Plan is to reduce the risk of budget

overrun. Contingency costs may be either built into the above costs or listed as a

separate category.

After identifying the various costs it is time to estimate the value of each cost. Depending on

the way that they are estimated/ calculated the resource costs can be distinguished into

three categories:

• Rate-based costs: They are costs of resources that depend on the amount of

work to be done (in case of labour or equipment) or on the consumption quantities

(in case of materials). In order to estimate the rate-based resource costs you

should first estimate the cost per unit and then multiply it by the number of units to

calculate the total value of each cost. In case that unit rates (e.g. staff cost per

hour or per day, rent cost of facility per day or per month, bulk material cost per kg

or per m3) are not known or predetermined, then they have to be estimated. The

estimation of unit rates can be made using historical information like records of

previous projects, commercial cost-estimating databases and project team

knowledge, but in order to be more realistic and accurate they should be based on

recent data.

• Per-use costs: This category applies mainly for equipment costs and

circumstantially for material costs. The per-use costs are one-time costs that are


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assigned each time the resource is used and do not depend on the amount of work

to be done. For example, rental equipment might have a delivery or setup charge

every time it is used, in addition to an hourly charge. Another example of per-use

cost is the amount that has to be paid to the licensor of a material (e.g. specialized

software with per-use license) each time the material is used.

• Fixed costs: They are costs that remain constant regardless of the task duration,

the work performed by a resource, or the number of assigned resource units. A

rate-based resource cost may increase when a task takes more time, but a fixed

cost does not. For example, if a consultant is paid hourly and is scheduled to

complete a task in five days, but the task takes seven days, the consultant will be

paid more than planned. If the consultant is paid a fixed amount for the work, then

the cost will be the same no matter how long the task takes.

Fixed costs can be assigned to a task in addition to rate-based resource

costs. For example, if the performance of a task requires a machine that

has to be purchased, the cost of purchasing that machine is a fixed cost, while the

operating cost of this machine is a rate-based cost.

For the estimation of the rest costs (except from the costs of resources) you can

apply the following general guidelines:

• Travel costs consist of a fixed part (transportation costs) and a variable part (per-

diem costs i.e. accommodation, lunches/ dinners, etc.). So, in order to estimate the

total cost of a travel you need to know the exact destination in order to estimate

the transportation costs and its duration in order to estimate the per-diem8 costs.

The estimation of the travel costs is not always an easy exercise and requires

experience from previous projects in order to be in a position to predefine how

many travels and of what duration will be necessary in the scope of a particular

project. For this reason, you should always reserve an amount in the contingency

costs in order to cover unscheduled travels.

• Administrative costs or overheads (facilities and administration, rent, electricity,

depreciation, telephone, etc.) are indirect costs that cannot be identified to a

specific project or function. However, these are actual costs that are incurred by an

entity. They are usually determined as a percentage of salaries and wages or as a

percentage of total direct costs. A commonly used method to estimate the

overheads is by dividing the yearly sum of all administrative costs with the yearly

sum of the “productive time”9 of the entity’s employees. In this way you can

8 If you want to have an indication of per diem rates (cost/day) you can visit the website of European

Commission http://ec.europa.eu/comm/europeaid/perdiem/index_en.htm where you can find an

updated a list of maximum per diem rates per country. The list has been developed to be used in the

framework of EC-funded external aid contracts and in case of missions requiring an overnight stay

away from the base of operations for Europeaid contracts.

9 The “productive time” is the days or hours spent by the employees on production work, excluding any

non-working time (holidays, weekends, regular leave, sick leave, etc.).

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calculate an administrative cost rate (€/hr or €/day) specific for your entity, which

can then be multiplied by the scheduled labour time (hours or days) for the

particular project in order to calculate the total administrative cost of the project.

Another method that will lead to more accurate results but is more difficult to apply,

is to estimate the administrative costs that are expected to be incurred during the

project period and then apportion them to the project by taking into account the

number of employees and the amount of facilities that will be engaged in the

project.

• Contingency costs: The traditional method to estimate contingency costs is to

consider them as percentage (%) of the total cost based on experience and past

data. Another method which is more rational and reliable is to determine the

contingency costs as alternative/ different percentages (%) to each major element

of cost (e.g. labour, equipment, material, travels), based on the concept that each

element has its own uncertainty. These deterministic methods work effectively for

simple projects under stable conditions. For more complex projects that involve

great uncertainties, more advanced methods of calculation should be used, such

as quantitative risk analysis, method of moments, Monte Carlo Simulation, etc.

Once all elements of costs have been estimated, you can easily estimate the overall cost of

the project by summing up all the individual costs.

It should be noted that the estimated overall cost of the project should not exceed

in any case the approved budget. Any refinements of the budget as a result of the

cost estimating process are allowed only if they don’t cause an overrun of the budget. For

example, the review of cost estimates may bring up the need to make adjustments to the

cost totals or/and reallocations of costs between activities. These adjustments of cost

estimates should be done with respect to the overall budget of the project.

7.4.3.2 Development of Cost Schedule

After you have estimated all costs, you have to estimate when these costs are expected to

be incurred during the project implementation period and develop the Cost Schedule.

In order to determine when the resource costs will be incurred you should look at

the Resource Schedule to find out when each resource is planned to be used. In case

that you are using a commercial software like MS Project to develop the Project Plan, the

cost schedule will be prepared automatically based on the schedule that you would have

previously prepared for the usage of resources and the assignment of resources to specific

tasks/ activities. The only thing that you have to do in this case is to assign cost rates and

cost per-use to each of the resources and then define the cost accrual method. Usually,

there are three available options for determining when the costs will accrue. You can either

select a cost to accrue at the start of a task (it is preferred when you have a lump-sum

amount payable at the start) or at the end of a task (it is preferred when you are holding

payment until the work is finished) or you can select the prorated method according to which

the cost is distributed over the task’s duration and the cost accrual is based on the

completion percentage of a task. It should be noted that per-use costs always accrue at the

start of a task.


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In case that you are not using specialised software for developing the Cost Schedule,

all the above actions should be made manually.

The accrual of fixed costs depends on the schedule of the activities to which they

are assigned. For example, the costs associated with a travel will be incurred within the

timeframe of the activity or task in the framework of which the travel will take place. Another

example is the cost for catering services that will accrue within the timeframe of a training

seminar. As with resource costs, you can select the fixed costs to be incurred at the start or

finish of a task or you can select the prorated accrual method.

As far as the administrative costs are concerned, they are either evenly distributed

over the project’s duration or they are incorporated in the labour costs following in this

way their distribution in time.

The exact time that contingency costs may accrue cannot easily be determined,

since they are unpredictable costs. Therefore they are either incorporated (as a

percentage) in the other categories of costs or more frequently they are kept undistributed

and if/when they eventually accrue they are subtracted from the estimated total amount in

order to track variances.

Based on the developed Cost Schedule, you can prepare the Cost Baseline Graph

that will be used to measure and monitor cost performance during the project

execution phase (refer to 7.5.3.3 and to Annex 7-11: Guidelines on Earned Value Analysis).

The Cost Baseline graph is usually displayed in the form of an S-curve as illustrated in Figure

7-10.

Cumulative costs

Time

Cost Baseline

Cumulative costs

Time

Cost BaselineCost Baseline

Figure 7-10: Typical display of a Cost Baseline Graph (S-curve)

The above graph represents the cumulative project costs in the time. In order to prepare this

graph you need to create an intermediate table that will sum, for each time period of your

schedule (week or month), the planned costs, and calculate the cumulative cost for each

period (week or month). A simple Excel graph will then enable you to generate your Cost

Baseline Graph.

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7.4.3.3 Estimation of cost per activity/ task

Apart from identifying when the various costs are likely to occur, it is also important to identify

the cost of undertaking each activity/ task laid down in the Activities Schedule.

As with the development of the Cost Schedule this can be done very easily and

without much effort if you are using commercial software like MS Project. In this case the

estimation of cost per activity/ task is done automatically by the software, provided that you

have assigned:

1. Resources to project activities/ tasks (refer to 7.4.2.3)

2. Cost rates and cost per-use to each of the resources (refer to 7.4.3.2), and

3. Fixed costs to project activities/ tasks (refer to 7.4.3.2).

In case that you are not using specialised software you have to perform these actions

manually or even better by using an excel spreadsheet to speed up the calculations.

Once you have estimated the cost of each activity/ task you should review the total

cost in order to verify that it falls within your budget. If the total cost does not

meet your budget, you may need to examine each individual task's costs and each

resource's task assignments to see where costs can be reduced. As a result of this process

you may come up with revised Resource and Cost Schedules or even with a revised

Activities Schedule, since time, costs and resources are interrelated. This means that

applying changes to one of them will cause respective changes to the others.

7.4.4 Development of Quality Plan

The success of a project is typically measured in terms of the achievement of “time, cost and

quality” targets. As “time and cost” targets are addressed in the Activities Schedule and Cost

Plans respectively (refer to 7.4.1 and 7.4.3), you need now to develop the Quality Plan which

means to outline the “quality” targets and identify the methods that will be used to assure that

the quality targets will be achieved for this project.

To create a Quality Plan the following steps should be undertaken:

• Definition of quality criteria and standards to achieve

• Establishment of quality control processes and techniques

Definition of quality criteria & standards to

achieve

Establishment of quality control processes &

techniques


achieve


achieve


techniques


techniques

Figure 7-11: Steps to be followed for the development of the Quality Plan

The Quality Plan is being developed by the Project Manager or the Quality Manager,

depending on whether the quality assurance and control responsibilities will be delegated to

a third party.

The Quality Manager except of preparing the Quality Plan should have the following

responsibilities:

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• Ensuring that quality targets are defined for each deliverable and for the

management process

• Establishing quality control activities to control the quality of the deliverables actually

produced by the Contractor

• Monitoring and evaluating the quality assurance activities

• Implementing quality control processes and identifying quality deviations

• Reporting the quality status to the Project Manager

In order to perform efficiently the Quality Manager should:

Checklist 7-1: Characteristics that the Quality Manager should possess

Have experience in quality management or be familiar with methodologies, tools and concepts

in quality management. Depending on the scale and complexity of the current project the

minimum experience required to undertake this role successfully must be outlined

Have a good understanding of the industry within the current project is being undertaken

Be able to direct and manage the quality reviewers

Have excellent analytical and report writing skills

Be effective communicator.

7.4.4.1 Definition of quality criteria and standards to achieve

The objective of this step is to determine the quality required for the products of the project.

At the outset , quality targets should be set for each Deliverable, which will be used

to ensure that the deliverable produced by the Contractor meets the requirements

defined by the Contracting Authority.

In this perspective quality targets can be defined by:

• Describing the product/ service/ infrastructure in detail. A well organized,

comprehensive description of the product/ service/ construction provides a blueprint

to follow as well as a reference point, which you can compare with actual

accomplishment

• Stating the functional requirements of a product/infrastructure or by defining

and if possible quantifying the characteristics that the product/ service/

infrastructure should possess in terms of:

o Performance

o Accuracy

o Practicability

o Security

o Compatibility

o Reliability

o Maintainability


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o Expandability

o Clarity

o Cost

o Implementation date, etc.

• Considering and adopting any standards that are specific to the product/

service or infrastructure provided by the project. Industry wide standards exist

for many products and services, e.g. for construction, for automotive, for health and

safety as well as for aerospace, building code software, electrical/ electronics,

government/ military, medical, petrochemicals, quality, telecommunications, welding

& metals, etc.

Example 7-8: Quality targets for the purchasing of notebooks

Example 1: The Department of Information Technology Services (DITS) decides to purchase, 400

notebooks for various governmental departments and governmental services. In order to deliver

notebooks that will satisfy the users’ needs, DITS has to set quality targets. In this perspective,

some of the quality targets that could be set are:

RAM Technology DDR SDRAM or DDR2 SDRAM and ECC

Screen type TFT

Screen max resolution 1024 X 768

Graphic subsystem with max resolution

1024 X 768

Graphic subsystem with max number of colours

16 millions

Ethernet Supporting 1000Mbps Ethernet

Wireless LAN Supporting IEEE 802.11b/g

USB Port At least 2 USB ports v.2.0

Keyboard To be in compliance with standard ISO/IEC 15412 with permanent Greek / Latin characters

Weight Max weight 3.0 Kg (including all devices)

Certifications Compliant with Low Voltage Directive 73/23/EEC

Certifications Compliant with Electromagnetic radiation Directive 89/336/EEC and 92/31/EC

Certifications EPO Energy Star compliance

Certifications IT ECO Declaration

Example 7-9: Quality targets for the “Preparation of Public Procurement Best Practice Guide”

Example 2: PPD decides to proceed with a tendering process in order to enter into a contract with a

Consulting Company for the preparation of a Public Procurement Best Practice Guide.

Indicative “quality targets” that PPD should set for the Guide are:


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• The Guide should provide guidance for the effective application of best practices for the procurement of services, supplies and works.

• The Guide should address the complete procurement process from the point of identification of needs, contract management up to and including the disposal of assets making special reference to the efficient use of procurement procedures.

• The Guide should be practical and help to the standardisation and structuring of business documents so that certain routine steps in the purchasing process be automated

• It should also provide model tender documents and model contracts for supplies, services and works in order to contribute to the establishment of more uniformity in the tendering environment

• The Guide should address to all Cypriot Contracting Authorities regardless of their experience, effectiveness and the volume procured by them

• The Guide should cover at the least the following topics:

o Definition of needs/ requirements of the project

o Market assessment

o Plan the procedure for establishing the procurement strategy

o Establish the procurement strategy

o Formulation of requirements

o Writing specifications and preparation of Terms of Reference

o Selection of tenderers in the restricted, negotiated and competitive dialogue procedures and eligibility criteria in the open procedure

o Establishing evaluation strategy

o Definition of evaluation clauses

o Evaluating the tenders

o Award the contract

o Project and contract management

• The Guide should be in alignment with the EC Directives on public procurement and the national laws that are transposing these directives, but it is not intended just to repeat them

• The Best Practice Guide should be delivered both in hard copy format as well as in electronic format (CD ROM and Web based toolkit)

• The Guide should be written in both English and Greek language.

It should be mentioned that in order for a Contracting Authority to deliver products,

services or infrastructure that really satisfy its needs, apart from defining explicitly the

quality targets, special care should be taken during the preparation of the Tender Documents

to ask from the economic operators to describe in their proposal the Quality policy10 or the

10 Quality policy is the “overall intentions and direction of an organization with regard to quality, as

formally expressed by top management (International Organization for Standardization. ISO 8402

1994. Quality Management and Quality Assurance, Geneva, Switzerland: ISO Press).


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quality management system11 that they possess as well as the quality Assurance processes

that intend to apply if they are awarded the contract. In cases of public works projects, or

projects for the provision of project management services the Contracting Authorities should

also ask that the economic operators who participate in the tendering process must hold an

ISO or equivalent standard certification.

If the Contractor possess a quality policy and a certain quality management system, these

can be adopted unaltered for use during the project. However, if the Contractor lacks of a

formal quality policy or quality management system, then he will need to develop a quality

policy and processes for quality assurance, especially for the project.

Quality assurance activities focus on the processes being used to manage and deliver

the solution and can be performed by the Project Manager or the Quality Manager of

the Contractor or by an external project resource (e.g. quality auditors).

Types of techniques used by the Contractors to assure the quality of their deliverables

include:

• Skilled staff: Using skilled staff will directly affect the quality of the deliverables

produced. Appropriately skilled staff should have the knowledge, skills and

experience required to undertake the tasks defined in the Project Plan and achieve

the level of quality desired

• Peer Reviews: A peer review is a thorough review of a specific deliverable conducted

by members of the Contractor’s Project Team who are day-to day peers of the

individuals who produced the work. During the meetings the quality issues found are

discussed and actions that have to be followed in order to correct the quality issues,

prior to presenting the deliverable to the Contracting Authority, are being assigned to

certain individuals. It is estimated that peer reviews can provide the Contracting

Authority with confidence that the project is “on track” and likely produce a deliverable

which meets its requirements. Therefore, it is in the discretion of the Contracting

Authority to decide whether to ask the Contractor to submit the Peer Reviews Reports

as an attachment to the respective Deliverable

• Use of Templates: The use of templates provides guidance to the project team

members and therefore ensures both improvement of productivity level and of quality

• Checklists: Checklists capture and communicate the quality standards that must be

met by the targeted activity. In this perspective they can be proved to be helpful for

the project team members who participate at the execution of the specific activity

• Small tasks: Breaking down activities into small and more manageable tasks except

for ensuring better control provide also finer level of quality control. By establishing

11 Quality Management system refers to the organization's structure for managing its processes - or

activities - that transform inputs of resources into a product or service which meet the organization's

objectives, such as satisfying the customer's quality requirements, complying to regulations, or

meeting environmental objectives.


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quality criteria for each task and verifying each task along the way, many more

opportunities are being provided to detect quality discrepancies as early in the project

as possible.

7.4.4.2 Establishment of quality assurance and control processes and techniques

After having set the quality targets, the Contracting Authority should plan the quality

control activities to be employed during the implementation of the project, in order to

verify that the deliverables meet the quality targets established during the planning process

and that the Contractor performs according to the submitted Quality Plan.

The most known and frequently used technique for quality assurance and control is the

review. Review includes activities such as measuring, examining and testing

undertaken to determine whether results conform to requirements. Review can be conducted

at any level (e.g. the results of a certain activity are reviewed or the final product is

inspected). Depending on the type of the final product (e.g. software, study, training material,

training execution, a bridge etc) the review can take different forms. For example, in case of

a software the review can be a beta version testing; in case of an IT system the review can

take the form of a hardware compatibility test; in case of a road the review can take the forms

of an on-site inspection and laboratory tests (e.g. for asphalt).

During the Quality Planning process, the Contracting Authority should define the techniques

to be implemented to assure and control the quality of each deliverable of the project as well

as of the management processes, when and how often these techniques will be used and by

whom. In this perspective a Contracting Authority may decide to hold:

• Deliverable Reviews after the completion and submission of each deliverable by

the Contractor in order to ensure that the deliverable is built according to the

specified design

• Documentation Reviews for all management documentation every three months

immediately after the submission of Progress Reports by the Contractor.

Example 7-10: Quality Control Plan for the Project “Improving the implementing capacity of the

Cypriot Authorities”

Example: Project “Improving the implementing capacity of the Cypriot Authorities”.

The main Deliverables that have to be produced are:

o The Action Plan for the PPD in order to be ready to undertake its new role

o The Public Procurement Best Practice Guide

o Training

Besides the Contractor has the responsibility to perform the management of the project.

(Analytical project description (activities) is being presented in 7.4.1.2)

The Quality Control Plan that PPD should develop could be as follows:


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Technique to be used

Description Frequency Responsible/ Participants

Deliverable reviews

• The Project Manager asks from the project team members who are assigned to work as quality reviewers to read carefully the Deliverable, check the completeness and correctness of the topics presented, identify deficiencies and comment on possible improvements.

• After the individual review of the Deliverables all the reviewers will be met in order to discuss their findings and submit to the Project Manager their individual reports

• The Project Manager has to take all the reports into consideration and produce the Quality Review Report that has to be submitted to both the Project Steering Committee and the Contractor

After the submission of each Deliverable

Project Manager

Quality Reviewers

Documentation Reviews

• After the submission of the Progress Report by the Contractor the Project Manager and the Project Steering Committee reviews it to ensure that all the information needed are included and that every change to the activities schedule or resource plan is adequately documented and therefore justified.

Every three months – after the submission of the Project Progress Report by the Contractor

Project Manager

Project Steering Committee

A template of a Quality Plan is being presented in Annex 7-3.

7.4.5 Development of Issue Management Plan

The Issue Management Plan describes how issues will be captured, tracked and prioritized

during the project life cycle, as well as how and when issues will be escalated for resolution.

Project Issues are usually problems that may be raised at any time during the project by

anyone with an interest in the project or its outcome. Indicative examples of project issues

are:

• A project team member will start working for the project later than it was initially

planned

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• Severe thunderstorm is predicted in Larnaca where the new airport is being

constructed

• One of the team managers is transferred to another Contracting Authority

• The Project Manager on behalf of the Contractor is taking another job.

• The Contracting Authority and the contractor share different views of the project

scope

Issues that remain unresolved are likely to become major problems resulting in the

need for initiating a change control process. It is therefore, very important to have an

issue escalation and management process in place, and to execute this process before

change control procedures become necessary.

During the Planning Phase, the Project Manager has to develop the Issue Management Plan

which will be used from this point till the end of the project to ensure that every issue is

formally resolved.

The Issue Management Plan describes how project issues will be:

• captured

• communicated

• documented

• prioritized

• escalated

• reviewed and finally

• resolved

by defining the issue management process to be followed, the documentation to be used, as

well as the roles and responsibilities of all human resources involved in the process.

The Issue Management Plan may include the following:

Table 7-1: Typical contents of the Issue Management Plan

• Issue Management process: It refers to the process that will be used to perform issue

management on the project.

Indicative issue management process, which can be used in almost all projects, is the

following:

Step 1: Identification of Project Issues

− Any member of the Project Team or the Project Management Team (Issue Originator)

who identifies an issue applicable to a particular aspect of the project (e.g. time,

scope etc), completes an Issue Form (template is provided in Annex 7-4) and

forwards it to the Project Manager.

Step 2: Register Issue

− The Project Manager reviews all Issue Forms and examines whether each issue

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identified is applicable to the project and has an impact on its implementation.

− If the issue is considered “related to the project” the Project Manager registers it in the

Issue Log (template is provided in Annex 7-5) and assigns to it an ID. The Project

Manager evaluates also the level of issue’s impact on the project and decides

whether its resolution will be of high, medium or low priority.

Step 3: Assign Actions to resolve issues

− The Project Manager can proceed with issue handling only when the consequences

of the resolving actions are not expected to go beyond the tolerance margins that

the Project Steering Committee has set for the project or when the issue itself is

inside his/her authority limits. In these cases, the Project Manager may decide:

o to assign actions for the issue resolution to certain project team members

o to raise a project risk if the issue is likely to impact the project in the future

o to raise a change request (or ask the Contractor to raise a change request) if the

issue results in the need for a change to the project/ contract

o to close the issue if this is not impacting the project anymore

− In case that the consequences of the resolving actions are expected to go beyond the

tolerance margins or when the issue itself is outside the authority limits of Project

Manager, the latter escalates the issue to the Project Steering Committee for deciding

about the resolving actions.

− The Project Steering Committee reviews the issues registered and after a discussion

during which the Project Manager recommends actions, decides either to:

o Adopt Project Manager’s recommendations and assign actions for the issue

resolution to certain Project Team Members or to the Project Manager, or

Note: It must be noted that in case of projects implemented by contractors, a

recommendation could be to ask the contractor to take actions for resolving an

issue that was originated by his performance.

o to raise a project risk if the issue is likely to impact the project in the future, or


issue results in the need for a change to the project/ contract, or

o to close the issue if this is not impacting the project anymore.

Step 4: Scheduling and Implement Actions for issue resolution

− The Project Manager schedules the implementation of the actions assigned by him or

by the Project Steering Committee. He/ She also informs the people who have been

assigned to implement the issue resolution actions on what exactly they have to do

and when.

− People assigned to perform each scheduled action, do so.

Step 5: Monitoring and controlling Issue Resolution Actions

− The Project Manager:


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o monitors the implementation of each issue resolution action and reviews its

success

o updates the Issue Log by writing down the implementation date of the issue

resolution action

o communicates the results of the action taken to the Project Steering Committee

• Issue Management Documents: It refers to the documentation used to identify, track

and control issues related to the project.

Indicative management documents which can be used in almost all projects are the

following: Issue Form (the document which is completed by a member of the project

team in order to inform the Project Manager for a new issue) and Issue Log (Issue

Register). The template for Issue Log is provided in Annex 7-5, while the Issue Form is

provided in Annex 7-4.

Normally the Issue Form includes:

− Name of the Project

− Description of the issue

− Description of the issue’s impact

− Proposal for issue resolution actions

− Section for approval.

• Roles and Responsibilities. It refers to the roles and responsibilities of all human

resources involved in the identification, review and resolution of project issues.

Indicative roles and responsibilities are:

Issue Originator

The issue originator identifies the issue and reports it to the Project Manager, so he is

responsible for:

− documenting the issues he/ she identified (refer to Issue Form – Annex 7-4) and

− submitting the Issue Form to the Project Manager for review.

Project Manager

The Project Manager is responsible for:

− reviewing all Issue Forms submitted by the issue originators

− registering all issues in the Issue Log

− determine and assign resolution actions (only in cases that the consequences of the

resolving actions are not expected to go beyond the tolerance margins that the

Project Steering Committee has set for the project or when the issue itself is inside

his/her authority limits)

− presenting the identified issues and the recommended actions to the Project Steering

Committee (in all other cases)

− communicating the decisions made by the Project Steering Committee to the people

who are assigned to perform the resolution actions

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− monitoring the progress of the resolution actions assigned and update the Issue Log


The Project Steering Committee is responsible for:

− reviewing all issues presented by the Project Manager

− allocating issue resolution actions

7.4.6 Development of Change Management Plan

Every aspect of the project defined during the Project Initiation Phase or during the Project

Planning Phase has the potential to change. Project change can be generally defined as

any adjustment or modification to the formally documented (e.g. in the Project Fiche,

ToRs, Contract, Project Plan, etc.) aspects of the project, such as cost, scope, schedule

or resources.

Although a change may occur throughout every project phase, the need for change is usually

discovered during Project Execution Phase, as actual work on activities/ tasks is being

performed. It is during Execution Phase that the Contractor may discover that his original

effort estimates were not accurate and will result in more effort being required to complete

his work. It is also during the Execution Phase that the Contracting Authority may realize

that, despite their efforts to thoroughly describe the project scope, objectives and expected

outcomes in the Tender Documents (and specifically in the ToRs) and though the successful

tenderer has fully understood the Terms of Reference, the product being produced is not

exactly what they need.

In order to handle any need for change that may arise throughout every project phase

without negative effect on the project outcome, an effective change management

plan should be developed during the Project Planning Phase. More specifically, the items

that must be defined during the Planning Phase are presented in the following table.

Table 7-2: Items that the Change Management Plan should define

It should be noted that the term change management usually refers to changes

affecting the contract. However, a Change Management Plan should be developed,

� Identification of those authorized to request a change from the Contractor.

� Definition of the process to be followed for initiating a request for change, analyzing the

request and assessing the impact of change on project’s cost, scope, schedule and

quality, approving the change request, and implementing the approved change.

� Identification of the person or group of people, who will be responsible for analyzing,

reviewing and approving the request for change.

� Definition of the timeframe (number of working days) allowed for a change request to

be approved or rejected

� Design of the documentation to be used for requesting and registering a change


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even in case that the project is implemented exclusively by internal resources in order to

formulate the framework under which extension of the total duration of a project or

amendment of the budget will be asked if this is proved to be necessary.

7.4.7 Development of Risk Plan

During the Project Initiation Phase - as it has been stated in paragraph 1.5.3.5 (Chapter 1) -

the risks that might affect the potential project must be identified and their characteristics

must be documented in both the Project Fiche and the Risk Log. This is the first formal

milestone in the risk management process when the Project Owner examines any known

risks that seem to threaten the project viability and decides whether to proceed with the

project approval or not. The risks identified in this phase may be such risks as impending or

mooted legislation, policy changes, staff re-organisation etc.

During the Planning Phase, the Project Manager must review the list of risks initially

identified for the project to determine if all these risks remain applicable. In addition he must

identify new risk variables that may have been introduced due to analytical planning of the

project, provide a set of actions to be taken to both prevent the risk for occurring and reduce

the impact of the risk in case that it eventuates.

Furthermore, the Project Manager must define the Risk Management Process which will be

used from this point until the end of the project to ensure that every risk is formally:

• Identified

• Quantified

• Monitored

• Avoided, transferred or mitigated.

The Risk Planning involves the following steps (Figure 7-12):

• Updating of Risk Log

• Development of Risk Management Plan.

Updating of Risk Log

Development of Risk Management

Plan




Plan


Plan

Figure 7-12: Steps to be followed for the development of the Risk Plan

7.4.7.1 Updating of Risk Log

Review of the risks already identified & identification of new risks

As it has been stated above, the Project Manager must review all the risks identified during

the Project Initiation Phase in order to identify if all of them remain applicable. Since Project

Planning Phase has already started and Project Manager is participating in Activities

scheduling, in Resource, Cost and Quality Planning, he/she should be considerably more

knowledgeable about the project and therefore more able to predict possible risks.


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Furthermore, as a result of planning the project and adding detail to the Project Brief, new

risks may also come to light. The identification and scheduling of the activities needed in

order to produce the project deliverables may reveal a new level of complexity and

interdependencies to the project, possibly producing more risk. Similarly, defining resource

requirements may call for resources with unique skills whose availability may be diminishing.

Furthermore, assumptions made for planning purposes usually involve a degree of risk. For

example if the date that a key person will be available is uncertain, the Project Manager may

assume a specific start date for planning purposes but the uncertainty still exists and may

affect the real start date of a specific activity.

The above mentioned are only a few examples of how risks in a project evolve over time.

Therefore, the Project Manager has to update the existing list of risks (Risk Log) by adding

new risks that were identified during the planning process. As in the Project Initiation Phase,

the Project Manager should consider both internal (events the Project Manager can directly

control) and external (events that are outside of the direct influence of the Project Manager)

risks.

It should be mentioned that once again, data and experiences from previous projects

may provide excellent insight into potential risk areas and ways to avoid or mitigate

them. If the Implementing Agency/ Contracting Authority has previously implemented similar

projects and has a list of risks that faced during them, the Project Manager should consider

all potential risk elements included in this list.

Evaluation of new risks

The Project Manager evaluates each new risk in terms of the likelihood of its occurrence and

the magnitude of its impact (refer to Risk Assessment in Subchapter 1.5.3.5).

Definition of preventive and contingency actions

Determining actions to reduce threats to the project’s objectives (also known as “Risk

Response Planning”) is essential for the project’s success. These actions must be

appropriate to the severity of the risk, cost effective, agreed by all parties involved and

assigned to certain responsible persons.

The actions that could be taken break into the following types:

• Prevention: Risk prevention refers:

− to risk avoidance (doing things differently (changing the project plan) and thus

removing the risk, where it is feasible to do so or

− to the reduction of the likelihood of an identified risk .

Risks identified in the early stages can be avoided or reduced (in likelihood) by e.g.

clarifying requirements, adding resources, extending the duration of the project,

improving communication, adopting a familiar methodology for the implementation

instead of a new one, avoiding unfamiliar contractors etc.


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• Transference: Risk transfer is seeking to transfer the responsibility of managing the

risk to a third party; it does not eliminate it.

Risk transfer is typically used in the context of a government agency passing the risk

to a contractor. PPP, PFI and concession contracts are typical examples of risk

transfer from the public to the private sector.

In addition, use of a fixed – price contract may transfer risk to the contractor

whereas a cost reimbursable contract leaves more of the risk to the Contracting

Authority, especially in case that the project’s design is not stable and mid project

changes occur.

• Acceptance: Risk acceptance indicates that the Project Steering Committee

decides to tolerate the risk perhaps because nothing can be done at a reasonable

cost to mitigate it, or because is unable to identify any other suitable response

strategy or because the likelihood and impact of the risk occurring are at an

acceptable level.

• Contingency: These are actions planned and organized to come into force as and

when the risk occurs.

It should be noted that when you complete the Risk Log you should consider both risk

acceptance and risk transferring as preventive actions and thus describe them in the

relative column (refer to Annex 1-6).

7.4.7.2 Development of Risk Management Plan

The Risk Management Plan describes how risk identification, qualitative and quantitative

analysis, response planning, monitoring and control will be structured and performed during

the project life cycle. It is being developed mainly by the Project Manager and the Team

Managers who have the responsibility to manage the risk planning and execution activities.

In theory, any risk identified during the life of the project will need to be formally managed

according to the Risk Management Plan. Without a formal Risk Management Plan in place,

the objective of delivering a solution “within time, cost and quality” may be compromised.

The Risk Management Plan may include the following:

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Table 7-3: Typical contents of the Risk Management Plan

• Risk Management process: It refers to the process that may be used to perform risk

management on the project.

Indicative risk management process which can be used in almost all projects is the

following:

Step 1: Raise Risk

− Any member of the Project Team or the Project Management Team (Risk Originator)

identifies a risk applicable to a particular aspect of the project (e.g. timescales,

quality, resources, deliverables, cost etc). He/She immediately completes a Risk

Form and forwards it to the Project Manager.

Step 2: Register Risk

− The Project Manager reviews all Risk Forms and examines whether each risk

identified is applicable to the project and impacts on the project objectives and targets

specified in the Project Fiche and the Time, Resource, Cost and Quality Plan.

− If the risk is considered “related to the project” the Project Manager registers it at the

Risk Log and assigns to it an ID. The Project Manager evaluates also the severity of

the risk (likelihood that the risk will occur and effect on project objectives if the risk

occurs) and decides whether the level of “impact” and “likelihood” assigned by the

Risk Originator is “correct”.

Step 3: Assign Risk Preventive/ Contingency Actions

− The Project Manager informs the Project Steering Committee that severe risks have

been registered in the Risk Log and asks for a meeting with them.

− The Project Steering reviews the risks registered and after a discussion during which

the Project Manager recommends preventive/ contingency actions, decides to:

o Adopt Project Manager’s recommendations for preventive/ contingency actions

and assign them to certain Project Team Members or to the Project Manager

Note: It must be noted that in case of projects being implemented by contractors,

an approved preventive action could be to ask from the contractor to take actions

like: to replace specific resources from its team due to inefficient performance, to

implement two activities in parallel so to close the project in time etc.

o define other risk contingency actions than the ones proposed by the Project

Manager and assign them to certain Project Team Members or to the Project

Manager

o Raise a change request if they estimate that a change to the project is required to

mitigate the risk

o Close the risk if they estimate that the risk is no longer likely to impact on the

project

Step 4: Scheduling and Implement Preventive/ Contingency Actions


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− The Project Manager schedules the implementation of the preventive/contingency

actions assigned by the Project Steering Committee. He/ She also informs people

who have been charged to implement the risk actions on what exactly they have to do

and when.

− People assigned to perform each scheduled action, do so.

Step 5: Monitoring and controlling Preventive/ Contingency Actions

− The Project Manager:

o monitors the implementation of each preventive/ contingency action and reviews

its success

o updates the Risk Log by writing down the implementation date of the preventive/

contingency action

o communicates the results of the action taken to the Project Steering Committee

• Risk Management Documents: It refers to the documentation used to identify, track and

control risks to the project.

Indicative risk management documents which can be used in almost all projects are

the following: Risk Form (the document which must be completed by a member of the

project team in order to inform the Project Manager for a new risk) and Risk Log (Risk

Register). The template for Risk Log is being provided in Annex 1-6, while the Risk

Form is provided in Annex 7-6.

Risk Forms are used during the Project Execution & Control Phase. They are completed

by any project team member who identifies a risk and they are forwarded to the Project

Manager for review. The Project Manager determines whether the information provided in

the form is adequate and if not he/she asks for more information to be provided.

Normally the Risk Form includes:

− Name of the Project

− Description of the risk identified

− Rating of risk likelihood and impact

− Proposal for preventive and contingency actions

− Section for approval.

• Roles and Responsibilities. It refers to the roles and responsibilities of all human

resources involved in the identification, review and mitigation of risks within the project.

Indicative roles and responsibilities are:

Risk Originator

The risk originator identifies a risk and reports it to the Project Manager, so he is

responsible for:

− identifying risks,

− documenting them (refer to Risk Form – Annex 7-6) and

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− submitting the Risk Form to the Project Manager for review.

Project Manager


− reviewing all Risk Forms submitted by the risk originators

− registering all risks at the Risk Log

− presenting the identified risks and the recommended actions to the Project Steering

Committee

− communicating the decisions made by the Project Steering Committee to the people

who are assigned to perform preventive/ contingency actions

− monitoring the progress of the preventive/ contingency actions assigned

− evaluating the results of the performed preventive/ contingency actions


The Project Steering Committee is responsible for:

− reviewing all risks presented by the Project Manager

− allocating risk preventive/ contingency actions

Project Team

The project team members are responsible for undertaking all the actions delegated to

them by the Project Steering Committee.

7.4.8 Development of Acceptance Plan

Acceptance is defined as obtaining agreement form the Contracting Authority that the

deliverables produced by the Contractor during the project implementation phase meet the

criteria set by the Contracting Authority. To ensure timely acceptance of the deliverables, the

Contracting Authority and the Contractor’s decision makers should agree on pre-determined

acceptance criteria. Which are these criteria and by which process the compliance of the

deliverables with them will be checked, are two issues that must be documented in the

Planning Phase of the project (Acceptance Plan).

The Acceptance Plan is a key document within the project. It is being developed after the

development of the Activities Schedule, Resource Plan and Quality Plan since it takes input

from them. It serves as a guide throughout the Monitoring and Control Phase for the project

team members who are assigned to perform acceptance tests as well as for the Project

Manager who is responsible for the acceptance management.

In order to develop an Acceptance Plan the following steps should be followed:

• Establishment of criteria and standards for the acceptance of the deliverables

• Formalization and documentation of the deliverable acceptance process.

Establishment of criteria & standards for the acceptance of deliverables

Formalization & documentation of

deliverable acceptance process








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Figure 7-13: Steps to be followed for the development of Acceptance Plan

7.4.8.1 Establishment of criteria & standards for the acceptance of the deliverables

As stated above, the Contracting Authority should at the outset establish the criteria

that the final product must meet before been accepted. These criteria vary according

to the type of final product. Indicative examples are the following:

• Target dates

• Major functions

• Appearance

• Performance levels

• Ease of use

• User friendliness

• Running costs

• Reliability

• Security

• Capacity

• Potential to be recycled

• Low energy consumption

It should be noted that the quality targets set for each deliverable during the

development of the Quality Plan (refer to 7.4.4.1) are normally part of the overall

acceptance criteria of the final outcome.

7.4.8.2 Formalization & documentation of the deliverable acceptance process

In addition to acceptance criteria, the Project Manager and the Executive as representative

of the Contracting Authority must agree on, formalize and document the deliverable

acceptance process. The Acceptance process must be described in the contract and/or in

the Project Initiation document in order to be agreed between both parties. The items that

must be defined are:

• The number and identity of the project team members who will review the

deliverables before final approval is sought. The reviewers must be experts who

know in detail the subject matter of the deliverable.

• The Acceptance Management process by which deliverables produced by the

project are reviewed and accepted. An example of acceptance management

process suitable for services project is being presented below. More examples and

analysis of IT systems acceptance process will be presented in Chapter 6 (Contract

Management).

• The number of working days in which deliverables must be either approved or

rejected by the Contracting Authority. When defining the period for deliverable

review, the Contracting Authority must consider that the process is iterative and may

take more time than the initially estimated.


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The amount of time for deliverable acceptance must be included in the

Project Schedule.

• The number of times a deliverable can be resubmitted to the Contracting Authority

for approval.

When a Contracting Authority does not approve a certain deliverable but asks

for modifications, corrections etc, it is very important to explain the reasons

for not approving the deliverable, enabling thus the Contractor to address them

when resubmitting.

It should be also noted that when the number of iterations exceeds the

number defined in the Acceptance Plan (and therefore in the Contract),

further work on the deliverable will require a change request.

Example 7-11: Acceptance Management Process for the Project “Improving the implementing

capacity of the Cypriot Authorities”

Example: Project “Improving the implementing capacity of the Cypriot Authorities”.

This is a Service Project and the main Deliverables that the Contractor has to produce are:

o Action Plan for the PPD in order to be ready to undertake its new role

o Public Procurement Best Practice Guide

o Code of Ethics in Public Procurement

o Training strategy for people involved in public procurement

o Training Programme and material

o Training courses

In addition, the Contractor has the responsibility to perform the management of the project and thus submit interim progress reports as well final and evaluation report.

(Analytical project description (activities) is being presented in 7.4.1.2)

The Acceptance Management Process could be the following:

The Deliverables submitted by the Contractor are distributed to predetermined reviewers accompanied

by the acceptance criteria and relative guidance on the acceptance process. Each reviewer makes

his/her comments and then the comments of all reviewers form the basis of discussion in a review

meeting. A list of errors, discrepancies and recommendations is formulated as a result of the review

process. This list is communicated to the Contractor in order to proceed with the necessary

adjustments/ modifications and submit the revised version of the deliverable to the Contracting

Authority. After assuring that the criteria for the acceptance of the deliverable are fully met, the Review

Board prepares a report introducing the acceptance of the deliverable by the Project Steering

Committee. The later after studying the report decides whether the deliverable will be accepted or not.

In case of a confirmative decision, a formal Approval Form is completed and signed.

Further details on the acceptance management process are provided below:

a. Preparation of the review meeting

In this step the following tasks are carried out

• Nomination of the Review Board

Ideally the Review Board will be nominated at the beginning of the Project, at least the Chairman and


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some reviewers who will participate in all the reviews should be nominated. If this has not been done,

the Board must be nominated prior to the Deliverable being available for review.

• Arrange Review Meeting

The Review Meeting should be held at a time and location convenient for the members of the Board

and the Representatives of the Contractor. In order to allow Reviewers time to carry out their individual

reviews, while maintaining project momentum, the Review Meeting must be held not less that five (5)

or more than ten (10) working days after the issue of the Invitation Letter. The exact time and location

is normally arranged by the secretary on behalf of the Chairman.

• Issue the Review Invitation Letter

The invitation letter confirms the composition of the Review Board and the time and location that the

review meeting will take place. The invitation letter is addresses to the members of the Review Board

(accompanied by the necessary documentation and guiding notes for the Reviewers) and the

Contractor’s representatives.

b. Individual review

This step takes place between the issue of the Review Invitation Letter and the Review Meeting a

period of 5-10 working days. The following points should be noted:

• During this period each reviewer examines the deliverable to identify errors and issues. He may

well obtain assistance of other members of his department. Errors are defined as items which

require correction and which are not likely to be contested. Issues are defined as points which

may require amendment of the Deliverable by the Contractor or require further clarification or

discussion to confirm exactly what is wrong. Typically a Reviewer will raise an issue when he is

not certain that the Deliverable requires amendment or the amendment required appears to be of

some significance.

• Issues and Errors Lists compiled by the reviewers have to be submitted to the Chairman of the

Review Board a few days before the Review Meeting, so he can establish a preliminary view of

the volume and significance of the deficiencies in the Deliverable.

• The chairman will normally discuss the Errors and Issues Lists with the Contractor’s

Representatives before the meeting to enable them to make any necessary preparations and to

get a further view of significance of any potential deficiencies.

• If there is sufficient time, the Chairman may ask the Secretary to compile a consolidated list of

issues to assist in the smooth running of the Review Meeting.

c. Review Meeting

The Review Meeting is held at the time and location stated in the Review Invitation Letter and is

attended by all members of the Review Board and the representatives of the Contractor. It is worth

mentioning the following:

• The aim of the Review Meeting is to identify deficiencies in the Deliverables and not to decide

solutions. Solutions are decided by the team who has prepared the Deliverable.

• The Chairman is responsible for controlling the meeting

• It is normal practice for the Errors Lists to be accepted by the Review Board without further

consideration, unless the Contractor’s Representatives wish to dispute any of the errors identified.


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• The Review Board will normally discuss each issue raised by the Reviewers in the order that they

occur within the Deliverable. The discussion will clarify whether the issue is:

o A deficiency in the Deliverable

o A misunderstanding or otherwise not requiring action

• It is open to the Chairman at the outset, or at any time during the meeting, to decide that the

volume and/or significance of deficiencies identified in the Deliverable is such that the Deliverable

cannot be accepted in its present form and must therefore be re-worked and re-submitted for

review. In that case the meeting will stop and the errors and issues list will be passed to the

Contractor.

• In most cases the Deliverable is accepted, subject to the correction of the deficiencies noted in the

Follow-up Action List.

• Deficiencies identified by the Reviewers and agreed in the review meeting will be dealt in the

following ways:

o Minor deficiencies will be noted for correction by the Contractor without further checking

o Significant deficiencies will be noted by the Chairman on a Follow-up Action List. The

Chairman will assign responsibility for signing-off successful rectification of the deficiency to

the Reviewers and will agree with the Contractor a suitable timescale.

d. Follow-up Action

Assuming that the Deliverable will be accepted after proceeding with the necessary corrections, the

following action should be taken:

• Immediately after the Review Meeting the Chairman will complete the Follow-up Action List and a

Result Notification and distribute them to the Contractor and the members of the Review Board.

• The Contractor’s responsible for the production of the Deliverable and his team will work to rectify

the deficiencies listed on the Follow-up Action List. Once they are rectified they arrange for the

nominated reviewers to inspect the Deliverable and to sign-off the noted deficiencies. If the

Reviewers are not satisfied that the deficiency has been corrected the work must be repeated until

the Reviewer is satisfied. The Contractor should proceed up to maximum three iterative

submissions of each deliverable.

• Once all deficiencies listed in the Follow-up Action List have been signed-off, the Contractor will

resubmit the Deliverable for official approval.

e. Final Approval

• After assuring that the criteria for the acceptance of the deliverable are fully met, the Review

Board prepares a report introducing the acceptance of the deliverable by the Project Steering

Committee.

• The later after studying the report decides whether the deliverable will be accepted or not. In case

of a confirmative decision, a formal Approval Form is completed and signed.

A template of the Acceptance Plan is being presented in Annex 7-7. Icon1310.ico


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7.4.9 Setting up Performance Indicators

To be able to monitor a project’s implementation and judge its performance against the

objectives and targets set, it is necessary to use a set of indicators, which might be decided

during the Planning Phase, so that data on them can be collected. Indicators are usually

quantitative measures but may also be qualitative observations. They define how

performance will be measured along a specific scale, without specifying a particular level of

achievement. The various levels of indicators are as follows12:

• Financial indicators are used to monitor progress in terms of the commitment and

payment of the funds available for the project in relation to its cost.

• Output indicators relate to activity. They are measured in physical units (eg.

Length of road constructed)

• Result indicators relate to the direct and immediate effect brought about by a

project. They provide information on changes to, for example, the behaviour,

capacity or performance of direct beneficiaries. Such indicators can be of a physical

nature (reduction of journey times, number of successful trainees, number of road

accidents etc) or of a financial nature (e.g. decrease in transportation cost)

• Impact indicators refer to the consequences of the project beyond the immediate

effects on its direct beneficiaries (effects occurring after a certain lapse of time but

which are nonetheless directly linked to the action taken).

Financial and output indicators can be used to monitor the progress of a project

while the result and impact indicators can be used to evaluate the project’s

outcome at the post – project period.

Example 7-12: Possible indicators for a major infrastructure project (e.g. road construction)

Description Indicators

Output Construction of road Implementation:

Financial: cost

Physical: km constructed

Result Reduced journey time

Reduced transport cost

Time savings in min

Cost saving (%)

Specific impact Increased flows of persons and goods Traffic flows

Using the indicators defined above, one can also measure concepts such as effectiveness

and efficiency.

• Effectiveness compares what has been done with what was originally planned i.e. it

compares actual with expected or estimated outputs, results and/or impacts

• Efficiency looks at the ratio between the outputs, results and/or impacts and the

inputs (particularly financial resources) used to achieve them.

12 “Indicators for monitoring and evaluation” - European Commission -Directorate General XVI


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The Table that follows shows the complementarity between indicators and the measurement

of effectiveness and efficiency.

Table 7-4: Complementarity between indicators and measurement of effectiveness and

efficiency

Indicators Effectiveness Efficiency

Operational objective Financial/ physical output

Actual/planned output Output compared to cost

Specific objective Result Actual/planned results Result compared to cost

Global objective Impact Actual/planned impacts Impact compared to cost

In order to plan the use of performance indicators both for monitoring the progress of the

project and for evaluating it, the Project Manager has to follow the following steps:

• Establishment of the Performance Indicators

• Establishing the process for monitoring the performance indicators.

7.4.9.1 Establishing the Performance Indicators

At the outset you must define monitoring and evaluation indicators.

There are usually many possible indicators for any desired outcome, but some of

them may be more appropriate and useful than others. Consequently instead of

selecting the indicators that first come to your mind, it is suggested to first prepare a list of

possible indicators and then go back again and assess these indicators against a set of

selection criteria (e.g. to be objective, direct, adequate, quantitative, practical, reliable etc).

Normally, the indicators selected must have the following characteristics:

• They must be relevant to the basic objectives of the project

• They must be few and meaningful

• The data required to compile the indicators must be easily available and obtained in

a timely way and at a reasonable cost

• To the extent possible, performance indicators should allow the quantitative

measurement of progress, result or impact. However, for some project objectives

(for instance capacity building) it may be necessary to develop qualitative indicators

to measure success, which should still allow credible monitoring.

To create the initial list of possible indicators, the Project Manager can organize a

brainstorming meeting with all the project team members, to take consultation from

experts in the field of intervention or/and cooperate with other entities which implement

projects with similar subject and therefore may have used in the past similar indicators.

The table that follows provides a few examples of performance indicators for different fields

of activity/ intervention and for different market sectors. Although it is not exhaustive, it could

give you ideas for setting up a performance measurement system.


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Table 7-5: Examples of Performance Indicators

Fields of intervention Output Result Impact

Renovation and development of villages and protection and conservation of the rural heritage

• m2 of village

squares renewed

• m2 of roads

renewed

• number of buildings renewed

• number of inhabitants living in the vicinity of renewed areas

• number of enterprises installed in the renewed areas

• gross/ net employment created or safeguarded after 2 years (number and % of total jobs)

• % inhabitants wishing to stay in the area in the next 5 years

Training • % of total training scheduled successfully accomplished (training hours, participants, training material, topics of interest etc)

• Positive evaluation results of trainees

• Positive evaluation results of trainers

• High participation rate in training programs

• % trainees successfully completing the training courses (men/ women)

• Reduction of errors made by the trainees on job after six months

• Increase of the trainees’ productivity after one year

Transportation infrastructure

(Railway)

• Km of high speed railway constructed

• % degree of railway network completed

• Time saved (journey time X number of users)

• Increase of number of destinations served by the railway system

• Increase in flow of passengers/ freight after one year (%)

• Environmental impact (% decrease/ increase)


(Motorway)

• Km of motorway constructed

• Number of tunnels constructed

• Number of overpass junctions constructed

• Increase of speed average

• Decrease of travel time


• Increase in traffic flow of vehicles after one year (%)

• Increase in safety (number of traffic accidents after one year or % decrease of accidents after one year)


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(Ports)

• m2 of new port

constructed or upgraded

• Reduction of waiting time of ships before docking

• Reduction of turnaround time of vessels

• Reduction of turnaround time of road vehicles

• Increase number of shipping lines calling in the port

• Increase in traffic flow of passengers/ vehicles/ freight after one year (%)


• Increase in safety (number of traffic accidents after one year or % decrease of accidents after one year)

Information and Communication technology

• Number and % increase in digital telephone lines

• Length of broad band network (optical fiber) installed (Km)

• Number of internet hosts per 1000 habitants

• Reduction of number of network failures

• Number of services created (internet access)

• Increase of the number of ISDN subscriptions per 1000 inhabitants

• Increase of the total hours of connection to Internet per month

• Increase of the total hours of connection to Internet per month (after 6 months)

Energy infrastructure • Km of electric power/ gas distribution network constructed/ upgraded

• Km of new/upgrade lines/pipes

• Increase of estimated number of users

• Reduction in energy costs (€/KWh)

• % change in environmental impact in terms of increased or decreased pollution (CO2, SO2, NOx…)

Construction of new fishing ports

• Port capacity constructed (number of boats, tonnage)

• Number of portside built

• Average turnaround time of vessels

• Tonnage of vessels using the port after one year

• Catch landed (tons/year/species)

• Surface area of port side units rented

• Value added generated in the port area

• Gross/net employment created after 2 years (number)


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7.4.9.2 Establishing the process for monitoring the Performance Indicators

After having defined the indicators to be used in order to monitor the progress of the project

and/or to evaluate the project, the principal aspects of the monitoring process have to be

defined.

At the outset the data sources for each performance indicator should be investigated and

defined. In most cases a reliable system for collecting the requisite data must be developed

in a timely fashion. Many output indicators are derived from records kept by the Contracting

Authority or/and its Contractor at project files (e.g. km of road constructed, number of people

trained etc). For result or impact indicators, (e.g. increase in traffic flow of passengers/

vehicles/ freight one year after the construction of a new port), the Contracting Authority may

need to collect data from external sources as well (e.g. the information system of the new

port).

Next, the Project Manager should define how the data collected should be processed, initially

interpreted and then presented to the Project Steering Committee, the Funding Agency and

to other stakeholders. In case that the impact analysis is too complicated, assistance from

outside experts should be asked.

It should be noted that in case of EU funded projects, the Contracting Authority is

obliged to prepare and submit electronically two types of reports. The first one is

being submitted every three months and is supposed to monitor the work and financial

progress of the project. The second one is being submitted every month and includes only

financial information/data for each subproject.

Templates of the above mentioned reports can be found at the official web site of Planning

Bureau (http://www.planning.gov.cy – Structural Funds section – OPS).

7.4.10 Development of Communication Plan

Project Communication is the exchange of project specific information. Effective

communication with all stakeholders is absolutely fundamental to project success and

therefore it is necessary to plan it during the Project Planning Phase.

Communication Planning is the process for the determination of information and

communication needs of the stakeholders relative to the progress of the project. It aims to

give answers to the following questions:

• Who needs what information?

• When do they need the information?

• Who delivers the information?

• How should the information be delivered?

The output of this process is the Communication Plan/Matrix.

In order the Project Manager (with the help of the Team Managers and/or project team

members) to develop the Communication Plan, he/she should follow the following steps:

• Identification of stakeholders


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• Determination of stakeholders’ communication needs

• Definition of communication strategy

• Completion of Communication Plan/Matrix

Identification of

stakeholders

Determination of

stakeholders’communication

needs

Definition of

communication

strategy

Completion of

Communication

Plan/Matrix

Identification of

stakeholders

Determination of

stakeholders’communication

needs

Definition of

communication

strategy

Completion of

Communication

Plan/Matrix

Figure 7-14: Steps to be followed for the development of the Communication Plan

7.4.10.1 Identification of stakeholders

The term “stakeholder” is used in this section to define the person or entity within or outside

the project requiring regular information about the project.

In order to identify the “communications stakeholders” you should first review the

Project Organization defined in the Project Brief (refer to 1.5.3.4) and then think of the

individuals or organizations who are actively involved in the project or whose interests may

be positively or negatively affected as a result of project execution or successful project

completion. Once you have identified the stakeholders who may require information during

the project, you should prepare a list of them and record their contact details (address,

telephone number, fax number, e mail address etc).

Examples of “communications stakeholders” are:

• Project Owner

• Implementing Agency

• Contracting Authority

• Funding Agency

• Project Steering Committee

• Project Manager

• Project Team Managers

• Project team

• Planning Bureau

• Procurement Manager

• End users

• Other beneficiaries

7.4.10.2 Determination of Stakeholders’ communication needs

For each of the stakeholders identified above, determine what their communication

needs are. In order to do this, you need the following information:

• Project Organization and stakeholder responsibility relationships

• Entities, disciplines, departments and specialties involved in the project

• How many individuals will be involved in the project and at which locations


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• External information needs (e.g. communication with the media).

Depending on the specific characteristics of each stakeholder and its individual

priorities, there are three general categories of communication needs.

• Awareness: This refers to the dissemination of information that people want to

know or that may need for their jobs. Awareness can be achieved by organizing

awareness building sessions that people are invited to attend, by putting project

information on the website etc. This kind of communication is particularly important

with regard to the end users of the project deliverables. Keeping the end users

aware of what the project is aiming to deliver, helps them to realize and understand

the anticipated benefits (e.g. introduction of new technology that will facilitate them

in performing their duties, construction of an infrastructure that will improve the

quality of their lives, etc,), minimizing in this way the probability of reacting

negatively towards the project implementation.

• Understanding: This refers to the need that specific stakeholders have a sound

understanding of the purpose and the progress of the project in order to take

decisions

• Commitment: This category applies mainly to the Project Steering Committee, the

Project Owner and Funding Agency which are invited in certain stages of the Project

life cycle to show their commitment

Indicative examples of communication requirements for some stakeholders that are present

in almost every project are as follows:

Table 7-6: Typical examples of communication requirements for different stakeholders

Stakeholder Requirement


• Project status information (schedule, budget and scope)

• Detailed knowledge of important risks and issues

• Information regarding proposed project changes (for approval)

Project Manager • Project status information (schedule, budget and scope)

• Detailed knowledge of all risks and issues

• Detailed knowledge of all change requests

• Understanding of current project deliverables’ quality

Quality Manager • Progress of each deliverable against quality standards and criteria set

• Detailed understanding of all quality issues for resolution

Project team members • Status of the activities and tasks they have been asked to perform

• Awareness of events which may affect their ability to undertake their role

End users • Awareness of the anticipated benefits from project implementation in relation to their activities and duties

• Understanding of the functionality, operation and usage of the end product

XXXXX •


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YYYYY •

7.4.10.3 Define communication strategy

After having clearly identified the stakeholders and their communication needs, it is

necessary to determine the message(s) to communicate to them, the frequency at

which they will be informed and the format in which the message will be communicated to

them.

There are a variety of communication methods and technologies to deliver project

information, like:

• Meetings

• Workshops

• Brief conversations

• Written documents

• Newsletter

• Letters

• E mails

• Immediately accessible databases

• Websites

• Telephone calls.

• Teleconference

• Site visit

Since the effectiveness of communicated information is as important as the information itself,

it is crucial to determine which method is most effective for each stakeholder. You can do this

by assessing the advantages and disadvantages of each method, the percentage of the

stakeholders that can be reached through each method, and the ability to obtain feedback

through each method.

For example:

• Meeting communications include project team meetings and focus groups.

Meeting is a two-way communication format, because it provides the ability to

provide information and to obtain feedback. It is best suited for specific targeted

messages, such as project progress or critical issues.

The main advantage of meetings is the ability to reach a large number of

stakeholders with focused and targeted messages. The main disadvantages of

meetings are that they can be time-consuming, travel might be required, and they

can sometimes be difficult to schedule for maximum attendance.

• Electronic communications include e-mail, online portals, and digital dashboards.

Electronic communication can be a two-way communication format. It is best suited

for broad content, non-controversial announcements, instructions, and updates to a

focused group of stakeholders. The main advantage is that it is an inexpensive and


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a quick communication method. The main disadvantage is that some people might

not have access to such electronic means of communication.

• Multimedia communications include presentations, demonstrations, and training

sessions. The ability to obtain feedback is limited. It is best suited for specific,

targeted messages, focused intervention, and critical issues. The main advantages

are that it is a mass distribution method and that it has the ability to reach a large

number of external stakeholders. The main disadvantage is that staff supporting this

effort must be available.

7.4.10.4 Completion of Communication Plan/Matrix

After the definition of the Communication strategy, the Project Manager has to complete a

Communication Plan/Matrix that integrates the "who, what, when, and how" of the

communication process.

A communication plan/matrix includes the type of information being communicated, the

objective of the communication, the frequency that the information is distributed and the

method used to communicate the information.

An important aspect of the Communication Plan is the planning of performance

reporting, that is to say, the determination of when the Progress and Status Reports

will be submitted, what information they will include, who will be responsible for their

preparation and how they will be exchanged (e.g. via regular mail, via e-mail, etc.). The

frequency of Progress Reports depends on the duration, complexity and special

requirements of a project, as well as on whether it is implemented with own resources or by a

Contractor. In most of the cases where the Progress Reports are prepared by the Contractor,

they should be submitted every three months (or in some cases every month) to enable the

Project Manager of the Contracting Authority to keep regular track of the project’s progress.

The Status Reports, which are prepared by the Project Manager to present the status of the

project to key stakeholders, including the Project Steering Committee, the Project Owner and

the Funding Agency, are usually prepared with the same or less frequency than Progress

Reports (i.e. quarterly or biannually), since they require input from them. More detailed

information on performance reporting, and specifically on Progress and Status Reports, is

provided in section 7.5.9.2 “Reporting Project’s Performance”.

The Project Manager should take ownership of the Communication Plan/Matrix, that is to

say, he will be responsible for verifying that communication is taking place and that it is

effective.

The communication strategy represented by the Communication Plan/Matrix needs to be

flexible to allow for the resolution of issues that arise, as well as changes in process or policy

that often occur after a major project is completed.

A template of the Communication Plan/Matrix is being presented in Annex 7-8.

Furthermore in the same Annex a completed Communication Plan/ Matrix is

presented in order to facilitate the understanding on how it should be completed.

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7.4.11 Reviewing the Project Planning Phase

This subchapter presents a summary Checklist that can be used for reviewing the

activities of the Planning Phase in order to ensure that all requirements of the phase

are met.

Checklist 7-2: Reviewing the Project Planning Phase

A/A Critical Questions Yes No N/A

Development of Activities Schedule

1. Have the major project deliverables been subdivided into smaller more manageable components?

2. Have the activities needed to produce the project deliverables been identified?

3. Have the activities’ sequence, dependencies and constraints been determined?

4. Has the duration of each activity/ task been estimated?

5. Have the start up and completion dates of each activity/ task been defined?

6. Has the baseline Activities Schedule been developed?

7. Has the critical path been identified?

Development of Resource Plan

8. Have the types of the resources required in order to perform project activities and tasks been identified and quantified?

9. Have the exact time and the duration that each resource will be utilised, been estimated?

10. Has the baseline Resource Schedule been developed?

11. Have the resources been assigned to specific activities/ tasks of the project?

Development of Cost Plan

12. Have all the types of costs expected to be incurred in the project been identified?

13. Have the costs expected to be incurred been estimated?

14. Is there an estimation on when each cost is expected to be incurred?

15. Has the baseline cost schedule been developed?

16. Has the cost of undertaking each activity/ task laid down in the Activities Schedule been estimated?

Development of Quality Plan

17. Have the quality targets to be achieved by each deliverable been defined?

18. Have the quality assurance and quality control processes to be employed during the implementation of the project been established?

19. Have quality assurance roles been assigned to project team members?

20. Has the Quality Plan been compiled?

Development of Issue Management Plan

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21. Has the process to be used for issue management been defined?

22. Have the documents to be used for raising and registering an issue been designed?

23. Have the roles and responsibilities that will be involved in the issue management process been defined?

Development of Change Management Plan

24. Has the process to be used for change management been defined?

25. Has the form to be used for requesting a change been designed?

26. Have the roles and responsibilities that will be involved in the change management process been defined?

Development of Risk Plan

27. Have potential risks affecting the project been identified?

28. Have the characteristics of the identified risks been documented in the Risks Log?

29. Have the identified risks been evaluated in terms of the likelihood of their occurrence and the magnitude of their impact?

30. Have preventive and contingency actions for each possible risk been defined?

31. Has the process to be used for risk management been defined?

32. Have the responsibilities of risk identification, evaluation and mitigation been assigned to project team members?

Development of Acceptance Plan

33. Have the criteria and standards for the acceptance of the project deliverables been established?

34. Has the process of performing acceptance tests been defined and documented?

35. Has the responsibility of performing the acceptance tests been assigned to certain project team members?

Establishing Performance Indicators

36. Have performance indicators been established for evaluating the progress and the achieved benefits of the project?

37. Has the process for measuring performance indicators been defined?

Development of Communication Plan

38. Have the stakeholders requiring regular information about the project been identified?

39. Have the communication needs of the identified stakeholders been determined?

40. Has the Communication strategy been developed?

41. Has the Communication Plan/ matrix been completed?

42. Have the Performance Reporting procedures (i.e. Progress & Status Reporting) been planned?


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7.5 EXECUTING & CONTROLLING PROCESSES

Executing and controlling processes are the management processes undertaken in the third

and longest phase of project management life cycle, where most resources are applied. It is

the phase during which the deliverables are produced and presented to the Contracting

Authority for acceptance. To ensure that the project’s requirements are met, the Project

Manager monitors and controls the activities, resources and costs that are required for the

production of the deliverables throughout the execution phase. In this phase all the plans,

schedules, procedures and templates that were prepared during the Planning phase are

utilized to ensure that the project proceeds as planned. In this perspective, the following

management processes are undertaken (Figure 7-15):

• Schedule Management: It is the process during which the actual progress of the

activities and tasks is being tracked and if needed corrective actions are taken to

bring tasks, activities or the whole project back on schedule.

• Resource Management: It is the process during which the actual progress of

resources’ work is being tracked and if needed corrective actions are taken to

resolve resource allocation problems.

• Cost Management: It is the process during which the actual costs are tracked

against estimates and if needed corrective actions are taken to keep costs within

budget.

• Quality Management: It is the process by which the quality of the deliverables is

assured and controlled, using the relative techniques and applying the Quality Plan

developed in the previous phase.

• Issue Management: It is the process by which issues related to the project are

formally defined, assessed and resolved.

• Change Management: It is the process by which changes to the project’s scope,

deliverables, timescales or resources are formally defined, evaluated and

approved prior to implementation.

• Risk Management: It is the process of keeping track of the identified during the

Initiation and Planning Phases risks, monitoring residual risks and identifying new

risks, ensuring the execution of Risk Plans (preventive and contingency actions)

and evaluating their effectiveness in reducing risk.

• Acceptance Management: It is the process by which the produced deliverables

are reviewed and accepted by the Contracting Authority according to the

Acceptance Plan.

• Communication Management: It is the process by which information is

distributed to project stakeholders according to the Communication Plan and

project’s performance is reported.


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Schedule

Management

Cost

Management

Quality

Management

Change

Management

Resource

Management

Risk

Management

Acceptance

Management

Communication

Management

Issue

Management

Schedule

Management

Cost

Management

Quality

Management

Change

Management

Change

Management

Resource

Management

Risk

Management

Acceptance

Management

Communication

Management

Issue

Management

Issue

Management

Figure 7-15: The Executing & Controlling Processes

7.5.1 Schedule Management

Schedule Management (or Schedule Control) is the process during which the actual

progress of the activities and tasks is being tracked and if needed corrective actions are

taken to bring tasks, activities or the whole project back on schedule.

During the Planning phase, a baseline was established for the Activities Schedule. This

baseline will be used as a starting point against which performance on the project will be

measured. It is one of many tools that the Project Manager can use during Execution &

Control to determine if the project is on track.

The steps that are undertaken to manage the Activities Schedule are the following:

• Record progress of activities and tasks by exchanging status information with

your Project Team Members and the Management Team of the contractor.

• Update the Activities Schedule on a regular basis to ensure that the project is on

track.

• Identify and resolve schedule problems that may affect the project’s finish date.

Identify and resolve schedule

problems

Record

progress of

activities & tasks

Update the Activities Schedule


problems


problems

Record

progress of

activities & tasks

Record

progress of

activities & tasks



Figure 7-16: Steps to be followed for managing the Activities Schedule

As it has been already mentioned (refer to 7.4.1.5), there are various software

packages in the market (e.g. MS Project, Primavera Project Planner) that can be

used for developing, monitoring and control a project schedule. However, for the purposes of

this Guide the simple tool presented in Annex 7-1/ Sheet “Activities Schedule” can be

used also for tracking project progress during the Execution & Control phase.

The following paragraphs describe analytically the steps to be followed in order to manage

the Project Schedule.

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7.5.1.1 Record progress of activities and tasks

In order to record project progress there are several steps that you have to follow:

1. Save or update a baseline schedule, if you haven't already done so in the planning

phase. This will enable you to compare the information in your baseline schedule to

your up-to-date schedule later in the project and will help you to identify and solve

discrepancies.

2. Decide the way you are going to collect progress data. The most common

method to collect progress data is to exchange task status information with your

Project Team Members or/and the Management Team of the contractor using the

communications mechanisms documented in the Communication Plan (refer to

7.4.10). Usually, the status information has the form of a progress or performance

report and is exchanged by using either electronic (e.g. emails, intranet) or traditional

(e.g. post mail) means. However, for small projects you may decide to collect the

project status data yourself (i.e. manually). In this last case, you could actively collect

data by phoning your sources or going door to door to interview them or you could

ask your sources to fill out a form and give it to you. In any case you have to collect

data from the sources of the information. For example, to update start and finish

dates, collect actual dates from the resources who are assigned to tasks. To collect

cost data, you may need to get actual costs from accounting personnel.

3. Decide which project information you want to track and update. For instance,

you might want to update only task start and finish dates and task completion

percentages (this is the case when you haven’t assigned resources to tasks) or you

may want to update also time spent by the resources, as well as costs (this is the

case when you have assigned resources to tasks).

4. Decide how often you will collect project information and how often you will

update the project schedule. For example, are you going to collect information and

update your schedule once a week or once a month or once every three months?

Selecting a frequency that is convenient and fits into your schedule increases the

likelihood that you will collect project status information timely and you will have an

up-to-date schedule.

After deciding which items you want to track as well as the tracking method, you can start

tracking the project’s progress by incorporating the most up-to-date information into the

Activities Schedule.

7.5.1.2 Update the Activities Schedule

Using the information collected, the Project Manager tracks the actual work done against the

tasks and updates the Activities Schedule accordingly. It is recommended that the Activities

Schedule is updated on a regular basis (i.e. once a week or once every two weeks or at

maximum once a month), since frequent updates to the schedule not only save time in the

long run, but they also allow the Project Manager to quickly identify potential problem areas.

Small shifts on individual tasks that may seem unimportant, they might cause significant

variances to other dependent tasks if corrective actions are not undertaken promptly.


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The date on which the Activities Schedule is updated to reflect the actual progress until that

moment, is called Status Date. The status date depends usually on the date that the

Progress Report is submitted, since it is used to reflect the progress of the project according

to most recent (updated) information.

In order to update the Activities Schedule there are several steps that you should

follow:

1. Update actual start and finish dates to see whether a task or activity has started

or finished later or earlier than planned, as well as the impact that this shift may

have on resources and the overall project schedule. In case that a task is

interrupted you should indicate when work will continue on the remaining portion of

the task.

2. Update the actual duration to indicate how long it actually took or it will actually

take to complete a task or activity. This update may be done automatically provided

that you have updated the actual start and finish dates.

3. Indicate which tasks have not started yet, which are in progress and which

are 100% complete.

4. For those tasks that are in progress, update the percentage of completion to

indicate how much progress, in terms of duration, has been made up to status

date. Be aware, however, that the percentage of completion, the actual duration

and the remaining duration are interdependent quantities. This means that if you

update one of them, the values of the other two will change.

5. Update actual work (only if resources have been assigned to tasks) to indicate

how much work has actually been accomplished on a task up to status date.

When updating the Activities Schedule is very important to create a new copy of the

schedule and maintain an archive of each version. In this way, you will never lose

the history of the project and you will also have a copy of every schedule for audit purposes.

After updating the schedule, do not forget to notify the appropriate stakeholders

for any modification to the schedule information that was judged as necessary.

Besides, be aware that schedule updates may require adjustments to other aspects of

the project plan, such as resource and cost schedules.

Schedule updates may result to revisions of the approved (baseline) project

schedule. This applies in case that the updating of specific tasks (i.e. critical tasks)

causes changes to start or finish dates of the project. These changes may come up as a

result of the change management process. If you find that actual project progress is so

different from the baseline estimates and thus any comparison between the two is

meaningless, rebaselining (i.e. save a new baseline for the Activities Schedule) may be

needed to provide realistic data to performance measurement. However, care must be taken

before rebaselining, because historical data will be lost. It is recommended that rebaselining

should only be used as a last resort in controlling the schedule. Instead new target schedules

should be the normal outcome of schedule revision.

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7.5.1.3 Identify and resolve schedule problems

Each time you update your schedule you should review it to identify problems or potential

problems with task schedules. Identifying problems will allow you to take corrective actions to

bring expected future schedule performance in line with the baseline schedule and take care

of any issues that may affect the project’s finish date.

Since schedule is changing constantly you have to analyze it each time you correct

and refine it. In order to identify schedule problems it is suggested that you take

following steps:

1. Check if the project’s finish date has changed by viewing differences between

the baseline and currently scheduled end date of your project.

2. Find out why the project’s finish date is delayed by examining the following:

a. Critical Path: Delays of critical tasks extend the finish date of the project, so

make sure that adjustments you make to the project schedule don't

adversely affect the critical path.

b. Task Dependencies: Unnecessary or inaccurate task dependencies can

cause your project to finish later, so review the dependencies of critical

tasks to ensure that they are both accurate and necessary.

c. Task Constraints: Unnecessary constraints can limit the flexibility of your

schedule by forcing tasks to start on certain dates or use all available slack.

Thus, try to eliminate unnecessary constraints and schedule tasks based on

their durations and dependencies.

3. Find out which tasks are delayed or incomplete by comparing baseline start and

finish dates with the actual ones.

After you have identified problems in your schedule you should take some actions to resolve

them. Before you try to put tasks back on schedule, it is recommended that you save a

backup copy of the initial schedule, so that you can refer to it as you are making changes

that may affect other tasks or resources.

In order to solve problems and keep schedule on track you can either change

specific settings on tasks that affect their duration and their relationships to other

tasks or change the way that resources are assigned to tasks. More specifically, you can

take the following actions:

• Shorten a task duration, when this is possible, is the simplest way to get your

schedule back on track, especially if this task is critical.

• Change task dependencies to make sure that all tasks are logically related to

each other. For example, changing a task that starts after another task to start at

the same time can help bring in the finish date of the project.

• Set overlap or delay for tasks. Overlapping tasks that are on the critical path or

delaying a noncritical task so that a resource can work on another, more critical

task will help you saving time and keep schedule on track.


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• Change the constraint to a task that doesn’t need to start or finish on a specific

date to start or finish as soon as possible, especially if this task is on the critical

path.

• Modify the project or resource calendar to change the timing and the duration of

tasks on which the resources are assigned and potentially shorten the overall

duration of the project.

• Assign additional resources to tasks to decrease the durations of tasks and

shorten the length of the project (if these tasks are on the critical path).

• Replace a resource with another if this will help tasks to finish earlier. The

replacement of a resource may be deemed as necessary if you want to resolve

overallocations, reduce costs, increase efficiency or improve quality.

• Increase the time that a resource spends on a critical task to decrease the

duration of that task if the duration is not fixed but effort-driven13.

• Improve the performance of labour resources by training them, providing them

with better tools to do their job and applying effective HR management. This is

especially important in case that there not other resources available to help.

After making changes to resolve your schedule problems, do not forget to:

• Evaluate the impact of these changes on other projects with dependencies in your

project.

• Communicate these changes to the stakeholders and rest team members.

7.5.2 Resource Management

Resource Management is the process during which the actual progress of resources’ work

is being tracked and if needed corrective actions are taken to resolve resource allocation

problems.

During the Planning phase, a baseline was established for the Resource Schedule (refer to

7.4.2.1). This baseline will be used as a starting point against which resource progress will

be measured. In this way the Project Manager will be able to monitor resource allocation and

its impact on schedules and budgets, as well as to take the necessary actions to ensure that

the project is on track.

The steps that are undertaken to manage the Resources are the following:

• Record resource progress by calculating the total time actually spent by labour

and equipment resources and the actual consumption of material resources to

undertake the project activities/ tasks.

13 Effort-driven is a task the duration of which shortens or lengthens as resources are added or

removed from it, while the amount of effort necessary to complete the task remains unchanged.


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• Update the Resource Schedule on a regular basis to ensure that the resource

progress is on track.

• Identify and resolve resource allocation problems to get the best performance

and results from resources and to ensure that the overall project schedule won’t be

affected.

Identify and resolve resource

allocation problems

Record resource progress

Update the Resource Schedule


allocation problems


allocation problems





Figure 7-17: Steps to be followed for managing resources

As it has been already mentioned (refer to 7.4.2), there are various software

packages in the market (e.g. MS Project, Primavera Project Planner) that can be

used for developing, monitoring and control a resource schedule. However, for the purposes

of this Guide the simple tool presented in Annex 7-1/ Sheets “Resource Schedule” and

“Resources vs. Activities” can be used also for tracking project progress during the

Execution & Control phase.

The following paragraphs describe analytically the steps to be followed for an effective

resource management.

7.5.2.1 Record resource progress

In order to record the progress of resources’ work there are several steps that you

have to follow:

1. Save or update a baseline resource schedule, if you haven't already done so in

the planning phase. This will enable you to compare the information in your

baseline resource schedule to your up-to-date resource schedule later in the project

and will help you to identify and solve resource allocation problems.

2. Decide the way you are going to record resource progress. Depending on the

specific requirements of each project, as well as the type of the contract with the

economic operator (in case that project implementation is outsourced) there are

different ways for tracking resource progress:

• If you haven’t assigned resources to activities/ tasks, you won’t be able to

track actual work and you will have to manually update the percentage of the

work performed on a particular task, its actual duration and actual start and

finish dates (refer to 7.5.1.2).

• If you have assigned resources to activities/ tasks but you don’t need to

track the work of each resource (this is the case where you have a lump sum

contract and the payment of the contractor does not depend on the actual time

spent by his resources), you can collect information (from your Project Team

Members or/and the Management Team of the contractor) on the aggregate

work performed on each activity/ task and update manually the percentage of

work complete and the remaining work.

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• If you have assigned resources to activities/ tasks and you need to track

the work of each resource assigned to each task (this is the case when you

have a fee-based contract and the payment of the contractor depends on the

actual time spent by his resources or when there is a so great need to stay

within budget or on schedule that you have to track separately the work of each

resource) you have to collect information on the actual time spent by labour and

equipment resources and on the quantities used for material resources.

3. Decide which resource information you want to track and update. For instance,

you might want to track only the time spent by labour resources and the time that

equipment resources were used (e.g. in case of a service delivery project) or you

may wish to track also the time spent by labour resources on travels (e.g. in case

that travel costs are a great percentage of the overall budget and need to be

tracked accurately). Or in case of construction projects you will probably need to

track the used quantities of material resources, apart from labour and equipment

resources.

4. Decide how often you will collect information about resources’ progress and

how often you will update the resource schedule. For example, are you going to

collect information and update your resource schedule once a week or once a

month or once every three months? Selecting a frequency that is convenient and

fits into your schedule increases the likelihood that you will collect resource

progress information timely and you will have an up-to-date resource schedule.

After deciding which resources you want to track, as well as the tracking frequency, you can

use the following methods to record progress depending on the type of the resource:

Recording time spent by labour resources

The most common method for recording the time spent by labour resources

undertaking project activities/ tasks is through a completion of a Timesheet.

Timesheets exist in various forms, including paper based, spreadsheet or software-based

formats. For the purposes of this Guide a template of a Timesheet is provided in Annex 7-

9. It should be noted that this template can be modified to meet the monitoring requirements

of a specific project.

Regardless of the method used to capture time spent, time must be recorded at an

agreed level of detail as defined upfront by the Project Manager. Usually, time spent

is recorded in work days, since the cost per day (€/day) is the most frequently used rate for

labour resources. However, in case that a resource cost is measured on an hourly basis

(€/hr), it may be more suitable to record the total hours spent by the resource in a day to

perform the assigned activity/ task.

In order to obtain more accurate timesheet information, you should ask project staff to

record time in their timesheet as they undertake each task, instead of waiting till

the end of the reporting period. Timesheets must be submitted by each member of the

Project Team (or by the Management Team of the contractor in case of a fee-based contract)

to the Project Manager for approval on a regular, pre-determined basis. Usually, timesheets

are submitted on a monthly basis.

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The Project Manager prior to approving each timesheet will have to:

• Confirm that the activities/ tasks undertaken were those identified and agreed in

the Resource Plan

• Confirm that the staff member was in fact the resource allocated to the specific

activities/ tasks

• Judge if the outcome of the activity/ task is reasonable and justifies the time spent

Based on the above information, the Project Manager will either approve the timesheet or

request further information/ clarification from the project staff member prior taking the final

decision or decline the timesheet and raise a staff issue.

The data from the approved timesheets are then recorded in the Resource Schedule which is

updated to reflect the actual time spent by the resources against each task.

Recording usage of equipment and material resources

The most common method to collect data for equipment and material usage is to exchange

status information with your Project Team Members or/and the Management Team of the

contractor using the communications mechanisms documented in the Communication Plan

(refer to 7.4.10). The status information is usually provided in a form of a progress report.

However, for construction projects you have to collect the respective data either by

conducting on-site inspections by yourself or by asking the supervising engineers to submit

performance metrics, which include analytical information about the usage of equipment and

the quantities of materials utilised in the performance of the various activities/ tasks.

7.5.2.2 Update the Resource Schedule

Using the information collected in the previous step (i.e. timesheets, metrics, etc.), the

Project Manager tracks the actual work done by each resource during the reporting period

against the tasks and updates the Resource Schedule accordingly. It is recommended that

the Resource Schedule is updated on a regular basis and if possible with the same

frequency as the Activities Schedule (i.e. using the same status date). Frequent updates to

the Resource Schedule not only save time in the long run, but they also allow the Project

Manager to quickly identify potential resource allocation problems. Small variances from the

scheduled work that may seem unimportant, they might cause significant problems in

project’s progress and variances at the Activities Schedule if corrective actions are not

undertaken promptly.

In order to update the Resource Schedule there are several steps that you should

follow:

1. Update actual start and finish dates to see whether a resource has started or

finished working later or earlier than planned, as well as the impact that this shift

may have on the activities schedule.

2. Update the actual time that labour resources have spent on tasks based on the

approved timesheets to find out if it exceeds the budgeted time planned.


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3. Update the actual time that equipment resources were used in the various

tasks to find out if it exceeds the budgeted time planned.

4. Update the actual quantities of material resources that were used in the

various tasks to find out if they exceed the budgeted quantities planned.

5. Update the actual time spent for travels to find out if it exceeds the budgeted

time planned.

6. Estimate whether the time spent by labour resources, the time that the

equipment was used and the quantities of the materials used for performing

the tasks, justify the actual work progress on those tasks.

7. Estimate how much of the planned time (for labour & equipment) and planned

quantity (for material) is left to be used on each task and examine whether it is

sufficient for the completion of the remaining work. It should be noted that if a task

has been marked as 100% complete, no further time can be allocated against it for

the duration of the project.

When updating the Resource Schedule is very important to create a new copy of the



After updating the schedule, do not forget to notify the appropriate resources for

any modification to the schedule information that was judged as necessary and

affects their assignments. Besides, be aware that Resource Schedule updates may

require adjustments to other aspects of the project plan, such as Activities and Cost

Schedules.

7.5.2.3 Identify and resolve resource allocation problems

Each time you update your Resource Schedule, you should review it to identify problems or

potential problems with resource allocation. Identifying resource allocation problems will

allow you to take corrective actions to ensure that the resources are optimally assigned to

tasks in order to get the results you want.

Since Resource Schedule is changing constantly you have to analyze it each time

you correct and refine it. In order to identify resource allocation problems it is

suggested that you take following steps:

1. Review the assignments of resources to project activities/ tasks to make sure

that all activities/ tasks are sufficiently covered and that the most appropriate

resources are assigned to perform each activity/ task (refer to 7.4.2.3).

2. Check for overallocated14 or underallocated15 resources to ensure that neither too

much nor too little work has been assigned.

14 Overallocated is a resource that is scheduled to work more than the available time it has for.


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3. Review the variances between a resource’s planned and actual work to make

sure that the work on the project is progressing as you expected, since it is very

important to effectively balance workloads over time and distribute work among

resources. For example, if you find out that a resource has spent more time to do the

work than initially expected, this means that there might be a change in the scope of

the task or a change in the quality of work the resource is doing or finally that the

resource is not efficient enough.

4. Review cost variances per resource or per task, since unexpected costs can

signal a change in scope or quality that should be addressed. For example, an

unexpected cost overrun on a task assignment can indicate that more work was

needed for performing the task than expected or that the resource was unable to

complete the work planned and may need to be replaced.

After you have identified resource allocation problems you should take some actions to

resolve them in order to get the best performance and results from resources. Before you try

to resolve allocation problems, it is recommended that you save a backup copy of the initial

resource schedule, so that you can refer to it as you are making changes that may affect

other resources or tasks.

The process of managing resources’ workloads to fix overallocations is called

Resource Levelling. In order to resolve resource overallocations you can take the

following actions:

• Delay an assigned task until the resource has the time to work on it. Try to

delay a task that is not on the critical path and has lower priority than others.

Besides, if you want to add delay without changing the finish date of other tasks or

the project finish date, review available slack and add delay less or equal to that

slack time.

• Control the resource availability throughout the life of the project. Generally,

there are three ways to control a resource’s availability in order to complete all the

assigned work on time: a) Increase the resource’s working days and times by

changing the resource calendar (i.e. reduce days off or time off) b) Change the

date that a resource is beginning to work on the project or the date that a resource

is leaving the project c) Increase the percentage of resource’s availability in the

project. For example, you can change the availability of a resource in a given time

period from 50% to 80% or 100%, provided that this is possible taking into account

its other engagements.

• Assign overtime work to resources to shorten the duration of a task (if it is

effort-driven) and meet short-term deadlines. In this case you have to ensure that

overtime costs can be afforded by the available budget.

• Reduce scope on a task to eliminate the overallocation for the resource assigned

to it. If you reduce scope, the task’s duration and the amount of required work will

15 Underallocated is a resource that is working less time than its full capacity.


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decrease. However, make sure that the change still reflects realistic time

requirements for the task.

• Interrupt work on a task when you have two tasks that occur simultaneously in

the schedule and use the same resource. In this case you can split one of the

tasks so that part of the work occurs before the other task starts and then begins

again when the other one finishes.

• Assign an additional resource to divide the work on a task between a resource

already assigned to the task and another resource(s).

• Replace a resource with another one that is better able to complete the task on

time (e.g. faster or larger equipment or a human resource with more available

time).

• Remove assignment from an overallocated resource if a) there are other

comparable resources assigned, b) you have an underallocated resource who has

time to work on the project, c) there is another resource available which is more

cost-effective.

In order to resolve resource underallocations you can take the following actions:

• Control the resource availability throughout the life of the project. If a

resource is not needed as much as you had planned you can a) decrease the

resource’s working days and times by changing the resource calendar in order to

lower your project costs as well, b) change the date that a resource is beginning to

work on the project or the date that a resource is leaving the project c) decrease

the percentage of resource’s availability in the project. For example, you can

change the availability of a resource in a given time period from 100% to 80% or

50%, so that it can be used in other projects.

• Increase a task duration (if scope on a task has increased), which will also

increase the amount of required work, to eliminate the underallocation of the

resource assigned to it.

• Assign additional tasks to an underallocated resource to reduce the workload

of another overallocated resource.

After adjusting resource assignments you should check the critical path to ensure

that the finish date of the project was not extended and that non-critical tasks haven’t

become critical without any serious reason. You should also review the project costs to

ensure that they don’t exceed the planned budget. If you have reassigned tasks among

resources, make sure that these changes haven’t created additional overallocations or

underallocations for other resources. Besides, if the same resources are also assigned to

work on other projects, you should check the impact that these changes might have on

the other projects. Finally, do not forget to inform the affected resources about the

adjustments you have made to their assignments.


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7.5.3 Cost Management

Cost Management (or Cost Control) is the process during which the actual costs are

tracked against estimates and if needed corrective actions are taken to keep costs within

budget.

During the Planning phase, a baseline was established for the Cost Schedule (refer to

7.4.3.2). This baseline will be used as a starting point against which financial progress will be

measured. In this way the Project Manager will be able to monitor cost variances and their

impact on schedules and resources, as well as to take the necessary actions to ensure that

the project stays within budget.

The steps that are undertaken to control Costs are the following:

• Record actual costs (or expenses) based on resource and schedule progress,

as well as on current cost rates.

• Update the Cost Schedule on a regular basis to ensure that the financial

progress is on track.

• Identify and resolve cost problems to ensure that the project stays within

budget.

Identify and resolve cost

problems

Record actual

costs (or expenses)

Update the Cost

Schedule


problems


problems

Record actual

costs (or expenses)

Record actual

costs (or expenses)

Update the Cost

Schedule

Update the Cost

Schedule

Figure 7-18: Steps to be followed for managing costs

As it has been already mentioned (refer to 7.4.3), there are various software packages

in the market (e.g. MS Project, Primavera Project Planner) that can be used for

developing, monitoring and control a cost schedule. However, for the purposes of this Guide

the simple tool presented in Annex 7-1/ Sheets “Cost Schedule” and “Costs vs.

Activities” can be used also for tracking costs during the Execution & Control phase.

The following paragraphs describe analytically the steps to be followed for an effective cost

management.

7.5.3.1 Record actual costs (or expenses)

In order to record the actual costs (or expenses) which accrue during the project’s

lifecycle, there are several steps that you have to follow:

1. Save or update a baseline cost schedule, if you haven't already done so in the

planning phase. This will enable you to compare the information in your baseline cost

schedule to your up-to-date cost schedule later in the project and will help you to

identify and solve cost problems.

2. Record resource costs (labour, equipment and material costs) by using the

information from the updated resource schedule (i.e. approved timesheets for labour

resources, actual usage time of equipment and actual quantities of materials) and

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applying the appropriate cost rate to calculate the actual costs. In case that some

resources involve “per use” cost you should collect information from the responsible

staff members about the actual number of uses of each resource in order to calculate

the total costs. Finally for the resources which involve both “rate-based” and “per use”

cost, you should calculate the two cost components separately and then add the two

figures to calculate the total cost.

3. Record travel, administrative or incidental costs (or expenses) by using an

Expense Form, which should be completed by the project members to request the

payment of an expense (or cost) on the project (or by the Contractor in case that the

contract includes provision for reimbursable expenses) and submitted to the Project

Manager for approval. It is recommended that in case of projects implemented with

own resources, the Expense Forms are completed on a regular basis (e.g. once

every two weeks or once a month) to enable the Project Manager to monitor the

financial progress of the project. In case that the Expense Forms are completed by

the contractor then they should be asked together with the progress reports (usually

every three or six months) or as a separate financial report.

The Project Manager prior to approving each Expense Form will have to:

• Confirm that the activities/ tasks for which the expense occurred are those

identified in the Activities Schedule and assigned to the specific resource

according to the Resource Plan.

• Confirm that the incurred expense was initially budgeted and included in the

Cost Plan.

• Judge if any unbudgeted expenditure is necessary, fair and reasonable and if

he/she has the authority to approve such expenditure. If the expenditure

exceeds his/her approval limits then it may require the approval of the

Project Steering Committee or even the approval of the Funding Agency.

Based on the above information, the Project Manager will either approve the expense

or request further information/ clarification from the person submitting the Form prior

taking the final decision or decline the expense (or part of it) and raise an issue with

the person submitting the Form.

The data from the approved Expense Forms are then recorded in the Cost Schedule

which is updated to reflect the actual costs occurred by the resources against each

task.

For the purposes of this Guide a template of an Expense Form is provided

in Annex 7-10. It should be noted that this template can be modified to meet

the tracking requirements of a specific project.

4. Decide which costs you want to track and how much detail you want in the cost

information. For instance, in case that the project is implemented by a contractor

you may not want to track any associated travel or administrative costs incurred by

the contractor, unless there is a relative provision in the contract for reimbursable

costs. However, even if you want to track such costs, you may not need so much

detail like: analytical description of each expense, attached invoices for every single

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expense, etc. In this case it may suits you to collect information on total amount per

type of cost (e.g. Travel Expenses = €2.000, Administrative Expenses = €800, etc.).

5. Decide how often you will collect information about incurred costs and how

often you will update the cost schedule. For example, are you going to collect

information and update your cost schedule once a week or once a month or once

every three months? Selecting a frequency that is convenient and fits into your

schedule increases the likelihood that you will collect actual costs information timely

and you will have an up-to-date cost schedule.

7.5.3.2 Update the cost schedule

Using the information from the updated resource schedule (i.e. working time of labour

resources, usage time of equipment, quantities of materials) and the actual cost rates, as

well as the information from the approved expense forms, the Project Manager tracks the

actual costs that occurred during the reporting period against the tasks and updates the Cost

Schedule accordingly. It is recommended that the Cost Schedule is updated on a regular

basis and if possible with the same frequency as the Activities Schedule (i.e. using the same

status date). Frequent updates to the Cost Schedule not only save time in the long run, but

they also allow the Project Manager to quickly identify potential cost problems. Small

variances from the planned cost that may seem unimportant, they might cause significant

problems in project’s progress or even a budget overrun if corrective actions are not

undertaken promptly.

In case that you are using specialised software for tracking project’s progress, the

updated Cost Schedule will be prepared automatically by the program, using the

information of the updated activities and resource schedules (refer to 7.4.3.2). The only thing

that you have to do in this case is to check whether your initial estimates for the cost rates

and the costs per-use are still valid or you have to use updated values. Obviously, the

approved travel, administrative or other incidental expenses that incurred during the reporting

period, have to be entered manually in the Cost Schedule. It should be mentioned that each

time the activities and resource schedules are updated, the program apart from updating the

actual costs; it updates also the remaining costs (i.e. the estimated costs that are expected to

be incurred for a task, resource or assignment).

In case that you are not using specialised software for tracking project’s progress, the

above actions should be performed manually, using the information from your

updated schedules and probably an excel spreadsheet to speed up the calculations.

When updating the Cost Schedule is very important to create a new copy of the



After updating the schedule, do not forget to notify the appropriate stakeholders

for any modification to the cost information that was judged as necessary and affects

their assignments. Besides, be aware that Cost Schedule updates may require

adjustments to other aspects of the project plan, such as Activities and Resource

Schedules.

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In special cases, cost schedule updates may result to changes to the approved cost

baseline (budget updates). These changes may come up in response to scope

changes. If you find that actual costs are so different from the baseline estimates and

thus any comparison between the two is meaningless, rebaselining (i.e. save a new

baseline for the Cost Schedule) may be needed to provide realistic data for measuring cost

performance. However, care must be taken before rebaselining, because historical data will

be lost. It is recommended that rebaselining should only be used as a last resort in

controlling costs. Instead new cost performance targets should be the normal outcome of

schedule update.

7.5.3.3 Identify and resolve cost problems

Each time you update your Cost Schedule, you should review it to identify cost problems or

potential problems. Identifying cost problems will allow you to take corrective actions to

ensure that you will complete the project within the approved budget.

Since Cost Schedule is changing constantly you have to analyze it each time you

correct and refine it. In order to identify cost problems it is suggested that you take

following steps:

1. Review the baseline, actual and remaining costs to identify whether the project

will or will not stay within budget.

2. Review cost variances per type of cost or per task to find out when and where the

actual costs exceed or are less than the budgeted ones.

3. Find which types of costs are already over budget. Perform the same exercise

with the tasks’ cost to find out if you need to make any reallocation of resources (or

costs) to stay within budget.

4. Perform Earned Value Analysis (EVA) to get reliable answers to the questions “Is

there enough money left in the budget to complete the project?” and “Is there enough

time left in the schedule to finish the project on time?”. EVA is the most commonly

used method for measuring project performance. It indicates how much of the budget

should have been spent, in view of the amount of work done so far and the baseline

cost for the task, assignment or resources. More details on how to perform Earned

Value Analysis are provided in Annex 7-11.

After you have identified cost variances that occur over time, you should take corrective

actions to keep costs within budget. Before you make any major changes, it is recommended

that you save a backup copy of the initial cost schedule, so that you can refer to it as you are

making changes that may affect costs of other resources or tasks.

In order to get an overview of options that are available keep costs under control, you

have to consider how quality affects costs. The changes that you will make in your

schedules to stay within budget depend mainly on your priorities. For instance, you could

choose to sacrifice quality by using less expensive resources (e.g. people with less

experience and skills, equipment with less operational power, materials of lower quality, etc.)

or by removing some of the tasks you meant to accomplish. Alternatively, you could choose

to spend a little more money on quality resources, under the thought that those resources will

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complete the task or project in significantly less time and probably with less total cost.

Regardless of the actions you decide to take to reduce costs, you have to examine their

effects on tasks, resources and quality of the deliverables. You may also need to discuss the

effect of these actions on quality with the appropriate stakeholders.

In order to keep costs within budget you can take the following actions:

• Replace, remove or adjust the resources assignments to reduce the cost of

tasks. When you've made new assignments or changed existing assignments, you

need to communicate these changes to the resources who are assigned.

• Reduce rates of resources (if this is possible), who are assigned to tasks that are

in danger of exceeding their budget. This can be possible only if you have included

profit or overhead in the cost rate.

• Assign per-use costs more efficiently. This can be achieved, for instance, by

combining tasks (i.e. let them run together), which involve the use of a resource

with a per-use cost.

• Reduce or remove overtime work to eliminate overtime costs. Have in mind that

when you reduce or delete overtime work, the duration of the task may be longer.

• Reduce unnecessary fixed costs. For example, you can cancel a travel that is

not so important for the progress of the work or reduce the number of project staff

that was scheduled to travel.

• Reduce the scope by shortening a task's duration or by deleting tasks that can be

omitted. You may also need to remove resources when reducing scope, keeping

the cost of resources down.

Once you have taken actions to optimise the costs, you have to examine their

effects on:

• Critical path to verify that the adjustments you made didn’t affect it adversely.

• Project dates and costs to verify that the adjustments you made do not

jeopardise important dates or other costs.

• Resource allocation to verify that the adjustments you made do not cause any

overallocations or underallocations

• Other projects to verify that the adjustments you made do not jeopardise other

projects.

7.5.4 Quality Management

Quality Management (or Quality Control) is the process by which the quality of the

deliverables is assured and controlled, using the relative techniques and applying the Quality

Plan developed in the previous phase.

During the Planning phase, the quality criteria and standards for the project deliverables

were set, the requirements for established (by the Contractor) quality management and

assurance systems were defined and included in the Tender Documents and finally the


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quality control process to be followed by the Contracting Authority were established. During

the Execution & Control Phase, the Contracting Authority monitors if the Contractor

implements the quality assurance activities that the later has described in his offer while in

parallel monitors the quality of the deliverables submitted by the Contractor.

The steps that are undertaken to control Quality are the following:

• Monitoring of the quality assurance activities implemented by the Contractor

• Organising and implementing deliverable quality reviews.

Monitoring of the quality assurance

activities

implemented by

the Contractor

Organising & Implementing deliverable

quality review

Monitoring of the quality assurance

activities

implemented by

the Contractor

Organising & Implementing deliverable

quality review

Figure 7-19: Steps to be followed during the Quality Management

7.5.4.1 Monitoring of the quality assurance activities implemented by the

Contractor

Depending on the quality assurance activities that the Contractor is supposed to

implement, the Project Manager should:

• Examine the Peer Review Report (refer to 7.4.4.1) that normally has to be

attached to the Deliverable concerned and check whether all the information

needed are included.

• Study the Progress Reports prepared by the Contractor and examine whether the

Contractor updates regularly the Project Schedule. If the project timeline is not on

track, the Project Manager has to determine why this happens and take immediate

action to remedy the problem.

• Use a checklist to ensure that all the quality assurance activities defined in the

Contractor’s offer (and consequently in the Contract and in the Project Kick off

document (or Inception Report) are being implemented. This process helps the

Project Manager to monitor what is being done well, to identify real or potential

issues and to suggest ways of improvement. It is recommended to perform this

process regularly during Project Execution and Control Phase and of course at the

end of the project.

The questions listed below are indicative of what the Project Manager may

ask to check the consistency between what the Contractor promised and

what actually performs.

Checklist 7-3: Checklist for monitoring whether the Contractor implements the Quality

Assurance activities defined in the Contract

PROJECT MANAGEMENT PROCESS & DELIVERABLES

Does the Contractor produce progress reports on the agreed intervals that contain all the recommended components from the Tender Documents?

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Is the project scope clear in the Project Inception Report? (is it clear as to what is “in” and “out” of the scope?

Is the Project Schedule defined sufficiently to enable the Project Manager to monitor the task execution?

Was a project baseline established?

Is the project schedule maintained on a regular basis by the Contractor?

Has the Contractor prepared a Resource Plan?

Has the Contractor described at the Inception Report the quality standards for the project and the quality assurance and control activities he is going to perform?

Does the Contractor perform the quality assurance activities he is supposed to?

Has the contractor identify and prioritize possible risks of the project?

Has a mitigation plan been developed for each?

If any risks events have occurred to date, was the risk mitigation plan executed successfully?

Have all the Project Management deliverables been approved by the Project Steering Committee?

DELIVERABLES

Do the deliverables produced so far meet the Contracting Authority’s needs?

Do the deliverables produced so far meet the objectives set in the Project Fiche and in the Tender Documents?

Do the deliverables produced so far achieve the quality standards defined in the Quality Plan?

It should be mentioned that except from monitoring the implementation of quality

assurance activities by the Contractor the Project Manager should also examine

whether all the management activities planned to be implemented by the Contracting

Authority’s Project Management Team in order to ensure qualitative project implementation,

are actually performed. In this perspective, the Project Manager should use a similar to the

above presented Checklist, consisting of questions like the one that follow.

Checklist 7-4: Checklist for monitoring whether the Project Management Team implements the

Quality Assurance activities defined in the Quality Plan

PROJECT MANAGEMENT PROCESS

Have you identified and assigned the appropriate resources for the performance of project management activities?

Is the schedule progress being monitored regularly to ensure that the project is on track?

Is the resource and financial progress being monitored regularly to ensure that there are not any resource allocation problems and the project is within budget?

Does the project organization ensure that decisions are taken in the appropriate management level?

Does the Project Management Team take actions to mitigate risks?

Are regular project team meetings conducted? Are minutes of meeting kept and disseminated after the meeting?

Are there any quality review mechanisms in place?

Are there any quality reviews being performed according to the plan?


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Have Change Control Process been established and applied?

Has an Acceptance Management Plan been established and applied? Does it describe explicitly the process to be followed to accept or reject deliverables?

Are all the stakeholders aware of their involvement in the project?

Does the Communication Plan describe the method to be used for communicating with all the stakeholders? Does it also indicate the frequency of the communication?

Is the Project Progress Report being reviewed by the Project Steering Committee?

7.5.4.2 Organizing and implementing Deliverable Quality Review

A Deliverable Quality Review is a structured process designed to assess the conformity of

the deliverable against the quality criteria that have been set in the Quality Plan.

There are three basic steps in a quality review, the activities of which are described

below:

• Preparation

o Confirmation that the product is ready for review

o Definition of the date the review will take place

o Confirmation of the availability of the reviewers

o Making the product/ deliverable available for inspection by the reviewers. In

case that the deliverable is a printed document e.g a study, a draft law, a

guide etc, a copy of the deliverable and its description should be distributed to

reviewers

o Assessment of the product/ deliverable against predefined quality criteria by

each reviewer and detection of suspected errors or deficiencies

o Preparation of a list with the suspected errors and deficiencies

• Review Meeting or Preparation of list which incorporates the comments of all

reviewers. Depending on the volume of comments and concerns, a review meeting

can take place or the Project Manager can study the individual lists with the

comments prepared by the reviewers and prepare a new one which incorporates

the remarks of all reviewers.

In case that a review meeting takes place, the following activities should be

implemented:

o Discussion, clarification and agreement on each of the points raised by the

reviewers

o Agreement on which points will be incorporated at the final Quality Review

Report

o Agreement on the follow up actions needed for each agreed deficiency

o Agreement on the content of the final Quality Review Report

• Follow up


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o Notification to the Project Steering Committee and the Contractor of the

Quality Review Result.

In case of construction projects, the most important decisions regarding the quality of

a completed facility are made during the design and planning phase. The Contractor

normally submits to the Contracting Authority a plan for the project implementation through

which the component configurations, work and material specifications as well as functional

performance are defined and agreed. Quality control in construction typically involves

insuring compliance with minimum standards of material and workmanship (contained in the

above mentioned work and material specifications) in order to insure the performance of the

facility according to the design. In this framework, quality reviewers of the Contracting

Authority have to check the reports prepared by the Contractor during the execution of the

project and they might also perform on-site inspections. Besides, random samples of

materials can be tested in specialized laboratories to insure compliance.

A template of the Deliverable Quality Review Form is being presented in Annex 7-

12. Furthermore in the same Annex a completed form is presented in order to

facilitate the understanding on how it should be completed.

7.5.5 Issue Management

Issue Management involves capturing, reporting, resolving, escalating and tracking issues

that occur as a project progresses in accordance with the Issue Management Plan (refer to

7.4.5).

Anyone involved in the project can and should inform the Project Manager of

identified issues. It is the responsibility of the Project Manager to foster an

environment where communicating issues is strongly encouraged. If individuals are fearful of

communicating issues the resulting effect on the project can be extremely serious.

The Project Manager should capture and track issues as soon as they arise using the Issue

Log. Once a description of a new issue has been logged, the Project Manager should

estimate the potential impact that the issue could have on the project. Based upon potential

impact the Project Manager must prioritize the issue in relation to all other open issues. The

goal of issue management is to resolve all problems completely and promptly, but in reality

the issues with the highest priority should be addressed first.

It should be noted that the urgency and the importance of a project issue are not the

same thing. The Project Manager must deal with urgent project issues quickly,

whereas with important issues comprehensively.

The Project Manager or the Project Steering Committee (depending on the limits authority to

handle issues) may decide either:

o to assign resolution actions, or

o to raise a project risk if the issue is likely to impact the project in the future, or


issue results in the need for a change to the project/ contract, or

o to close the issue if this is not impacting the project anymore.

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The Project Manager should monitor the implementation of the resolution actions and

update the Issue Log (refer to Annex 7-5) to reflect what has occurred. As issues

are closed their status should be changed to “closed” and the name of the person who

resolved the issue, as well as the closure date should be documented.

The Project Manager should review periodically the Issue Log to identify the issues

that have not been resolved till that moment. All open issues should be reviewed and

discussed at the next status meeting since unresolved issues are one of the most important

reasons for project failure.

7.5.6 Change Management

Change Management is the process by which changes to the project’s scope, cost,

timescales or resources are formally defined, evaluated, approved prior to implementation

and finally controlled.

The change management process that is recommended to be used by the

Contracting Authorities in case of projects being implemented with internal resources,

is the following:

• One of the individuals authorised to be a requestor identifies a requirement for

change to any aspect of the project and completes a Change Request Form

(Template is provided in Annex 7–13), which is then submitted to the Project

Manager.

• The Project Manager registers the change request in the Change Log (Template

is provided in Annex 7-14) and assigns to it an ID.

• He/she then analyzes the request, examines its complexity and whether the

change is feasible or not. He/She also assesses the full impact of the change to

the project and defines in detail the change requirements, costs, additional

resources needed and risks.

• The Project Manager based on the analysis performed, recommends to the Project

Steering Committee the acceptance or reject of the change and documents this

recommendation on the Change Request Form.

• The Project Steering Committee, which is responsible for approval, reviews the

available information and taking into consideration the project manager’s

recommendation decides whether to approve or reject the change requested. The

decision is recorded in the minutes of meeting which are validated in the next

meeting of the Project Steering Committee.

• In case that the change request has been approved, the Project Manager must

incorporate the effect of the change into the appropriate Plan (e.g. in the Activities

Schedule and the Resources Plan if the whole duration of the project is prolonged,

in the Cost Plan if the budget has been changed etc) and update the Change Log.

The above presented process can similarly be followed in case of projects being

implemented by Contractors. However, in case of projects contracted out by

Ministries or Services or Departments of Ministries or Independent Offices or Independent


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Service of the Republic of Cyprus (where Regulation 115/2004 applies), there are three

competent bodies to handle the change requests depending on the limits of authority granted

to each one of them (refer to Annex 7-1516):

• the Coordinator in Charge or the Competent Official (the Project Manager)

• the Departmental Committee for Variations and Claims and

• the Central Committee for Variations and Claims

Since change management is a basic aspect of contract administration, analysis of the

provisions of Regulation 115/2004 will be provided in Chapter 6 “Contract

Management”.

7.5.7 Risk Management

Risk Management ( or Risk Monitoring and Control) is the process of keeping track of the

risks identified during the Initiation and Planning Phases, monitoring residual risks and

identifying new risks, ensuring the execution of Risk Plans (preventive and contingency

actions) and evaluating their effectiveness in reducing risk.

The steps that should be undertaken to manage risks are the following:

• Risk Monitoring

• Risk Control

Risk Monitoring Risk Control

Risk Monitoring

Risk Monitoring Risk ControlRisk Control

Figure 7-20: Steps to be followed for managing the risks

7.5.7.1 Risk Monitoring

As the project matures, the risks change. Anticipated risks may disappear while new ones

emerge. Therefore, the Project Manager must continually look for new risks, reassess old

ones and re-evaluate risk mitigation actions.

More specifically, the purpose of risk monitoring is to:

• Determine if identified risks have occurred and risks responses have been

implemented as planned

• Evaluate if the planned risk response actions were as effective as expected and so

estimate if new actions should be developed

16 The table listed in Annex 7-15 is the Annex I of the Regulation 115/2004. In case that the

limits of authority, as defined in the Regulation 115/2004, change, the limits referred in Annex

7-15 should be replaced by the new limits that will come into force.

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• Examine if some of the initial identified risks are no longer valid

• Identify if the risk probabilities have changed; the expected level of impact is

different or the date of impact may be sooner or later than the original anticipated

• Make sure that the preventive/ contingency actions planned to be performed still

make sense in the context of the latest project developments and that these

actions are assigned to the appropriate in terms of skills and position, project team

members

• Determine if risk exposure has changed from its prior state and then analyze the

new trends

• Identify if new risks that were not previously identified have arisen or even worse

occurred

In order to perform successfully risk monitoring the Project Manager should regularly

perform formal project risk reviews and risk response audits and then update the

Risk Log (refer to Annex 1-6).

In project risk reviews the whole Project Team should be involved since every team

member has his own expertise and knowledge raised via his participation at the

implementation or management of specific tasks and activities. All the risk review findings

(changes to risks prioritization, risk disappear, new risks, actions taken etc) should be

registered in the Risk Log thus updating it.

The risk response audits examine the effectiveness of the risk response in avoiding or

mitigating risk occurrence. Implementation of risk control actions may not eliminate the

identified risks but reduce their impact or probability. In this case all the risks must be

reassessed so that the new most important risks be identified and prioritized to be controlled.

7.5.7.2 Risk Control

Risk control refers to the implementation of the preventive or contingency actions defined in

the Risk Plan, to the development of alternative strategies for risk mitigation or even to the

replanning of the project.

When a predefined risk occurs the Project Manager must normally invoke the Risk

Management Plan and implement the actions described there. There are generally

three possibilities:

• The risk occurs as expected and the risk control actions defined in the Risk

Management Plan are proven adequate for dealing with it.

• The risk occurs in a different manner and consequently the risk control actions

must be modified appropriately

• A new unexpected risk is revealed, so the Risk Management Plan must be

updated to define and describe the appropriate actions for mitigating it.

It should be noted that during the entire risk management process, the Project

Manager should be especially vigilant regarding the effect on the project’s scope,

cost, schedule and quality. With the appropriate contingency plans established, many risks


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may not affect the above mentioned basic parameters of the project. However, when a risk

event occurs that threatens one or more of these parameters, the Project Manager must

determine the actions to be implemented in order to protect the project’s integrity. In this

perspective, a change request may be issued which has to be managed formally according

to the predefined Change Management process (refer to 7.5.6 and Chapter 6).

7.5.8 Acceptance Management

Acceptance Management is the process by which the produced deliverables are reviewed

and accepted by the Contracting Authority according to the Acceptance Plan.

The aim of the Acceptance Management is to ensure that project deliverables meet the

acceptance criteria and thus closely fit the needs defined in the Business Case and Project

Fiche and incorporated in the Tender Documents.

Since acceptance management is a basic aspect of contract administration, analysis

of the provisions of Regulation 115/2004 (articles 22 and 23) as well as guidance

concerning the application of best practices in Acceptance Management by the rest

Contracting Authorities apart from those of the central government, will be provided in

Chapter 6 “Contract Management”.

7.5.9 Communication Management

Communication Management is the process by which information is distributed to project

stakeholders according to the Communication Plan and project’s performance is reported.

During the Planning phase, a Communication Plan/Matrix was developed (refer to 7.4.10) to

describe which type of information will be distributed and how project communications will

occur during the Project Execution phase. However, as the project progresses, events may

occur that will alter the way information is accessed or change communication requirements.

Therefore, the Project Manager, with the help of Project Team members, should regularly

review the initial Communication Plan and update it whenever it’s necessary to retain it

applicable to the project.

The main processes that are undertaken in the framework of communication management

are the following:

• Execution of Communication Plan and distribution of information.

• Reporting project’s performance by collecting and disseminating information to

stakeholders regarding the current (and future) status and progress of the project.

Execution of

Communication

Plan/ Distribution

of information

Reporting

Project’s

Performance

Execution of

Communication

Plan/ Distribution

of information

Execution of

Communication

Plan/ Distribution

of information

Reporting

Project’s

Performance

Reporting

Project’s

Performance

Figure 7-21: Processes undertaken in the framework of Communication Management

The following paragraphs describe analytically the processes to be undertaken for an

effective communication management.

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7.5.9.1 Execution of Communication Plan/ Distribution of information

During project execution the Communication Plan is implemented so that required

information is made available to the appropriate stakeholders at the appropriate times and

new communication requests receive a prompt response. Following the Communication Plan

ensures that all stakeholders are aware of their communication responsibilities. The more

information stakeholders have regarding a project or deliverable, the less likely last minute

conflicts, changes or complaints will affect the project.

Communication is a bi-directional process used to exchange information. On the

one hand the Project Manager has to provide required information to the Project

Team members and appropriate stakeholders on a timely basis and on the other hand the

Project Team members and the stakeholders must provide required information to the

Project Manager. In this perspective, it is very important that both sides (sender & receiver)

exercise good communication skills. The sender of information is responsible for making the

information clear, unambiguous and complete, so that the receiver can receive it correctly

and understand it properly. The receiver, in turn, is responsible for making sure that the

information is received in its entirety and understood properly.

The overall project communication can be improved by adhering to the following

communication guidelines:

• Base communication strategies on stakeholder needs and feedback

• Ensure that communication is shared in a timely manner

• Promote an open, honest and face-to-face communication

• Create an environment where project team members and other stakeholders can

constructively exchange information and ideas

• Remember that communication is a two-way process. Listen as well as deliver the

message.

• Involve senior management when appropriate

• Coordinate communication with project milestone events, activities and results

• Conduct regular reviews and assessments of the Communication Plan

• Take advantage of existing information retrieval systems, communication

mechanisms, and opportunities

Project information can be retrieved from various types of systems, such as manual filing

systems, electronic databases and project management software. Information can be shared

using a variety of communication mechanisms that were defined during the Planning phase

and documented in the Communication Plan. These mechanisms may include project

meetings, status and progress reports, hard-copy document distribution, electronic mail, etc.

While executing the Communication Plan, the Project Manager must be aware of how

information will be used by the stakeholders and whether the plan is effective. The


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Project Manager must be flexible and ready to modify the plan if it doesn’t work as expected

or if the communication needs change, as the project progresses and information on its

performance is updated.

7.5.9.2 Reporting Project’s Performance

Performance reporting involves collecting, processing and communicating information to

key stakeholders, regarding the performance of the project. Performance reporting can be

conducted using various tools and techniques, most of which have been already described in

the previous paragraphs. The most widely used techniques for performance reporting are:

• Performance review meetings that take place to assess the project’s progress

or/and status.

• Variance analysis which is about comparing actual project results (in terms of

schedule, resources, cost, scope, quality and risk) against planned or expected

ones.

• Earned Value Analysis (EVA) used to assess project performance in terms of

time (schedule) and cost (or resources). For more information on EVA refer to

7.5.3.3 and the Annex 7-11.

• Financial and Output Performance Indicators used to measure financial and

physical progress of the project (refer to 7.4.9)

Information of project’s performance is usually communicated via Progress Reports and

Project Status Reports which are described in the paragraphs below.

The use of a Progress Report

The Progress Report is a document prepared by the Project Team members (in

case of in-house production) or by the Management Team of the Contractor (in case

that the implementation of the project is totally outsourced) to provide regular feedback to the

Project Manager regarding the progress of the project. Progress reports should be submitted

on a regular basis to enable the Project Manager to update the Activities Schedule, identify

any schedule problems or potential problems and act proactively for their resolution.

Progress Reports are usually asked to be submitted every two weeks or every month, when

the project is implemented with own resources. However, in case that the project is

implemented by a Contractor, the progress reports are usually asked every three or six

months. Generally, a Progress Report should include the following information:

Table 7-7: Typical contents of a Progress Report

� Reporting period to which it refers

� Project Title

� Project Manager’s name

� Authors of the report (or name of the contractor if applicable)

� Date of submission

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� Project synopsis (i.e. project goals and objectives, expected results, project activities,

duration, etc.)

� Project progress in the reporting period (i.e. activities/ tasks executed, actual work

accomplished, deliverables submitted, deviations for baseline schedule, estimation of the effort

required to complete activities/ tasks)

� Work programme for the following reporting period (i.e. activities/ tasks to be executed,

deliverables to be submitted, schedule estimates for key milestones, etc.)

� Updated/ revised Activities Schedule showing the percentage of work completed so far and

the estimated start or finish dates for activities/ tasks.

Note: Depending on the specific monitoring requirements of the project, the Progress Report may

include also additional information regarding resources and costs. For example, if you have a

fee-based service or work contract with an economic operator (Contractor), you will need to gather

information regarding the actual time spent by labour resources. So, in that case you should ask the

Contractor to attach the relative timesheets. Another example could be when you want to track

actual costs incurred by the resources, where you have to collect information on time spent labour

resources, usage time of equipment resources, used quantities of materials, travel or any other

incidental expenses.

It should be noted that in case of small projects with only few team members, the

Progress Report can be substituted by personal judgment and observations of the

Project Manager or by day-to-day discussions with the team members on the progress of the

deliverables. On the contrary, in case of large and complex projects, where progress

reporting is an important aspect of communication management, the Progress Reports

should be formally submitted to the Project Manager by the Team Manager(s) (or by the

Contractor), who have to prepare them by collecting the relative progress information from

individual team members.

The use of a Project Status Report

The Project Status Report is a document prepared by the Project Manager - using the

information provided by the Progress Reports - to present the status of the project to key

stakeholders, including the Project Steering Committee, the Project Owner and the Funding

Agency. Depending on the duration and size of the project, as well as on specific

communication requirements of the Project Owner or/and the Funding Agency, the Status

Report can be prepared monthly, quarterly or biannually. Usually, Status Reports are

prepared with the same or less frequency than Progress Reports since they require input

from them.

The aim of the Project Status Report is to:

• Provide an overview of project’s progress up to date

• Ensure that the key stakeholders are regularly informed on the progress of the

project

• Inform the key stakeholders about issues that require immediate action or

resolution

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Generally, a Project Status Report should include the following information:

• Overall status of the project

• Status of Activities Schedule

• Status of Resource Schedule

• Status of Cost Schedule

• Status of Quality and Acceptance of Deliverables

• Status of Risks

• Status of Issues

• Recommendations to the recipients of the report about actions or decisions that

they should take in order keep the project on schedule or bring it back on

schedule, to keep costs within budget, to mitigate or eliminate risks or to close any

pending issues.

• Work programme and objectives for the next reporting period

Other documents that can be attached to the Status Report are: Status Gantt Chart, Notes of

meetings, Quality Review Reports, Deliverable Acceptance Forms, Risk Log, etc.

For the purposes of this Guide, a generic template of a Project Status Report is

provided in Annex 7-16. It should be noted that this template can be modified to meet

the reporting requirements of a specific project.

Make sure that you include only summarised information which is relative to the

recipients of the Project Status Report. In case of large projects several other reports

may be generated over the project execution period, which can focus on specific

management processes providing more detailed information on a certain topic. For example,

the Quality Manager may prepare and submit to the Project Manager on a monthly basis a

report with the results of the performed quality reviews. Or the Project Manager may have to

submit an analytical Financial Report to the Funding Agency on a quarterly basis to inform

them about the financial progress of the project and the percentage of funds’ absorption

(mainly applicable in case of EU funded projects).

Normally, the Status Report becomes the point of discussion for the Status

Meeting, which is a regularly scheduled event, where the Project Manager presents

the status of the project to the Steering Committee (and maybe to the Project Owner or /and

the Funding Agency). In these meetings the Project Manager can invite members of the

Project Team who have expertise in a certain area of the discussion. It is, however

recommended that the Project Manager invites periodically the Project Team to review the

status of the project, discuss their accomplishments and communicate any issues or

concerns in an open, honest and constructive forum. On large projects where gathering the

entire team is not always possible, the Project Team members can be represented in the

meeting by the respective Team Manager(s), who can communicate the status of their team

work since they have a better insight into the day-to-day activities of their team members.

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7.5.10 Reviewing the Project Execution & Control Phase


activities of the Execution & Control Phase in order to ensure that all requirements of

the phase are met.

Checklist 7-5: Reviewing the Project Execution & Control Phase


Schedule Management

1. Is the progress of the activities/ tasks being recorded?

2. Is the Activities Schedule being updated regularly?

3. Is the Activities Schedule being reviewed to identify problems or potential problems with task schedules?

Resource Management

4. Is the resource progress being recorded?

5. Is the Resource Schedule being updated regularly?

6. Is the Resource Schedule being reviewed to identify and resolve resource allocations problems?

Cost Management

7. Are the actual costs (expenses) being recorded?

8. Is the Cost Schedule being updated on a regular basis?

9. Is the Cost Schedule being reviewed to identify and resolve cost problems?

Quality Management

10. Are the quality assurance activities implemented during the execution of the project being monitored?

11. Are the deliverable quality reviews being organised and conducted regularly?

12. Are the results of the deliverable quality reviews being documented?

Issue Management

13. Are project issues being formally identified and raised?

14. Is issue management process being applied when necessary?

Change Management

15. Are changes to project’s scope, cost, deliverables, timescales or resources being formally identified and requested?

16. Is change control process being applied when necessary?

Risk Management

17. Are the risks being monitored according to the processes defined in the Risk Plan?

18. Are the risk mitigation actions being evaluated in terms of their effectiveness?

19. Are the preventive or contingency actions defined in the Risk Plan being applied?

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Acceptance Management

20. Are the produced deliverables being reviewed and accepted according to the Acceptance Plan?

Communication Management

21. Is information being distributed according to the Communication Plan?

22. Are Project Status Reports being prepared regularly by the Project Manager?

23. Are Project Progress Reports being prepared and submitted regularly to the Project Manager?

24. Is the project’s progress and performance being communicated?


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7.6 CLOSING PROCESSES

Closing processes are the management processes undertaken in the last phase of the

Project Life Cycle. Their purpose is to evaluate the project implementation and results,

gather and document lessons learned and best practices to be applied in similar future

projects, plan any post project review required and finally arrange the archiving of project’s

records. In this perspective the following processes must be undertaken (Figure 7-22):

• Administrative closure: It is the process during which all project records are

collected and archived and all the resources provided to the project are being

released.

• Project Evaluation Review: It is the process during which the project is being

evaluated (did the project achieve what it was intended to? What worked well and

what didn’t? Was the project management’s quality good? etc)

• Post–project review: It is the process during which the benefits achieved by the

project’s products are being assessed after a period of use.

Normally the post–project review occurs outside the project. However, for

the completeness of the presentation it is described as part of the Project

Closure phase, since it is closely related to the project’s outcomes.

Performance

of

Administrative

Closure

Conduction of

post-project

review

Conduction of

Project

Evaluation

Review

Performance

of

Administrative

Closure

Performance

of

Administrative

Closure

Conduction of

post-project

review

Conduction of

post-project

review

Conduction of

Project

Evaluation

Review

Conduction of

Project

Evaluation

Review

Figure 7-22: The Closing Processes

7.6.1 Performance of Administrative Closure

During this process the Project Manager has to:

• Check whether there are any unfinished business at the end of the project and

document them in a Report called Follow on Action Recommendations

• Ensure that all the deliverables of the project have been produced, accepted and

approved by the appropriate organization structure (e.f. Acceptance Committee,

Project Steering Committee etc)

• Complete and archive all project information

• Notify all involved parties that the project is to be closed and therefore the

resources committed are being disbanded

• Update the CVs of the human resources involved in the project and evaluate their

performance.

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Identifying

follow – on

actions

Ensuring that all

the deliverables

have been

accepted

Completing &

archiving all

project

information

Disbanding the

resources

used in the

project

Updating the CVs

of the human

resources

involved

Identifying

follow – on

actions

Ensuring that all

the deliverables

have been

accepted

Completing &

archiving all

project

information

Disbanding the

resources

used in the

project

Updating the CVs

of the human

resources

involved

Figure 7-23: Steps to be followed during the administrative closure of the project

7.6.1.1 Identifying Follow-on Actions

The aim of this step is to identify actions required following the project.

At the close of the project there may be a number of actions left pending. For example, there

may have been a number of requests for change that the Project Steering Committee

decided not to implement during the project but that were not rejected; not all expected

products may have been handed over or a product may have been delivered with problems.

All pending issues regardless if they may lead to new projects or improvement to the

products of the current project during its operational life, as well as risks that may

affect the product in its useful life should be recorded in a document called “Follow – on

action recommendations”. In this document except of presenting any “unfinished business”

the Project Manager should include recommendations for actions to be undertaken by the

operational support group.

7.6.1.2 Ensuring that all the deliverables have been accepted

Before the Project Manager recommends the closure of the project, he/ she must ensure that

all the expected results have been achieved and that all products/ deliverables have been

produced, tested and approved.

7.6.1.3 Completing and archiving all project information

Throughout the course of the project, the Project Manager should have maintained a project

archive. As the project progressed, the purpose of the archive was to create a central point of

reference for all project materials to be used by anyone involved in the project. Once the

project comes to an official close, the archive provides an audit trail documenting the history

and the evolution of the project.

During Project Closure, the Project Manager should examine whether the

correspondence exchanged, the project management documentation (like project

plan, risk plan, quality plan, acceptance plan, Risk Log, Acceptance forms, Project status

reports, Project Evaluation Report etc), the project related material, the deliverables (e.g. in

case of studies, training material, draft of laws, procedures manual etc), change request

forms, approvals and decisions taken have been indexed. If any of the above mentioned

material is missing, the Project Manager should try to find and file it. The archive must be in

both: electronic and hard copy forms.

Project Archive apart from permitting future audit of the project’s actions and performance, it

may be useful to future project managers and of course to those who later may carry out post

project review in order to assess achievement of the benefits claimed in the Business Case.


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The following list presents the typical contents of the project archive:

Checklist 7-6: Material concerning the project that must be included in the project’s archive

Project Material

Business Case

Cost Benefit Analysis (if applicable)

Feasibility Study (if applicable)

Project Fiche

Project Fiche for EU funding (if applicable)

Approval for EU funding (if applicable)

Tender Announcement (if applicable)

Tender Documents (if applicable)

Contract (if applicable)

Activities Schedules (baseline and updates)

Resource Plan (baseline and updates)

Cost Plan (baseline and updates)

Quality Plan

Risk Plan

Risk Log

Acceptance Plan

Communication Plan

Inception Report (if applicable)

Project Progress Reports

Project Status Report

Expense Forms (if applicable)

Timesheets (if applicable)

Invoices and payments

Quality Review Reports

Acceptance Forms

Change request forms

Letter of approval or rejection of change

Minutes of meetings

Correspondence, including decisions, memos, letters etc

Deliverables (if applicable)

Project Evaluation Report

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7.6.1.4 Disbanding the resources used in the project

During this step the Project Manager recommends to the Project Steering Committee

that the resources that were working for the project can be released and that the

support infrastructure can also be withdrawn. He/ She also prepares notification to any

parties identified in the Communication Plan as needing to be told about the project closure.

Before sending the project closure notification the Project Manager needs confirmation by

the Steering Committee.

7.6.1.5 Updating the CVs of the human resources involved in the project

During the course of the project, Project Team members most likely improved their

skills and qualifications or obtained new ones. The investment made in improving an

individual’s skills should not be lost. The Project Manager is responsible to ensure that the

CVs of the project team members have been updated to include the reference of the project

they participated, description of their exact role and finally any skills newly developed. As it is

obvious up to date CVs may become invaluable to future Project Managers when attempting

to staff appropriately their projects.

Finally, the Project Manager in cooperation with Team Managers (if the project

organization includes this role) must evaluate the performance of each of the Project

Team Members and then document their judgment by completing a relative form. This

evaluation form can then be submitted to each Project Team Member’s supervisor in order to

be used as input to performance appraisals.

7.6.2 Conduction of Project Evaluation Review

During this process the Project Manager evaluates the product produced, the project

management processes and in addition he/she gathers accumulated experience, best

practices and performance trends in order to communicate them via the Project Evaluation

Report.

In order to conduct the Project Evaluation Review the Project Manager has to:

• Conduct project evaluation

• Prepare the Project Evaluation Report

Conduct

Project

Evaluation

Prepare the

Project

Evaluation

Report

Conduct

Project

Evaluation

Conduct

Project

Evaluation

Prepare the

Project

Evaluation

Report

Prepare the

Project

Evaluation

Report

Figure 7-24: Steps to be followed for Project Evaluation

7.6.2.1 Conduct Project Evaluation

In this step the Project Manager has to assess how well the project fulfilled its objectives, the

effectiveness of the project management processes and how well the project has performed


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against its Project Initiation Document including the originally planned cost, schedule, quality

and tolerances.

At the outset, the Project Manager has to evaluate the project performance and the product’s

effectiveness, that is to identify:

• The level of actual achievement of each of the benefits identified in the Business

Case

• The level of actual achievement of each of the objectives identified in the Project

Fiche (and/or in the Terms of Reference if the project was contracted out)

• Any deviations to the intended scope of the project as this was described in the

Project Fiche (and/or in the Terms of Reference if the project was contracted out)

• If all the deliverables have been produced and whether they meet the quality

targets and the acceptance criteria set in the Planning Phase

• If the actual time, cost and quantity of resources utilised exceeded the original

estimations.

Then, the Project Manager has to evaluate: a) the Project Conformance that is to identify

whether or not the project conformed to the processes defined in the Planning phase and b)

the performance of the project team.

In order to evaluate the project performance and conformance, the product

effectiveness and the performance of the project team, the Project Manager can use

as guide the following list of questions. It should be noted that though special care has been

given to create a list that can be used in almost all projects, it may need modifications to

apply to the specific characteristics of certain projects.

Checklist 7-7: Checklist for evaluating the project after its completion

Questions Y/N Comments17

PROJECT PERFORMANCE

Did the project achieve the benefits identified in the Business Case?

To what extent did the project achieve the objectives and goals stated in the Business Case?

How well did the scope of the project match what was defined in the Business Case and Project Fiche?

Were there any deviations in the project schedule?

Did the project finish as scheduled?

Were the initial resources assigned to the activities/ tasks sufficient for their

17 In this column the Project Manager can determine what worked well and what could have been

done better. In addition he/ she can provide recommendations for similar future projects.

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implementation?

Did the project finished within budget?

Do the deliverables of the project meet the needs stated in the Business Case, Project Fiche (or Terms of Reference)?

Did the deliverables achieve the quality targets set in the Quality Plan?

Did the deliverables meet the acceptance criteria set in the Acceptance Plan?

How satisfied are you personally of the outcome of this project?

COST, SCOPE, SCHEDULE & QUALITY MANAGEMENT

Was a clear activities schedule outlined in the Project Plan?

Was the activities schedule re-baselined regularly during the implementation of the project?

Were estimates outlined in the Resource Schedule detailed enough?

Were all expense types identified in the Cost Plan?

Were all the expenses adequately quantified in the Cost Plan?

Were invoices and receipts kept for expenses incurred?

Were clear quality targets identified?

Was the quality plan effectively applied during the execution of the project?

How effective were the quality review processes?

Was there any product quality deviations recorded?

Were quality improvement actions actually undertaken?

ISSUE MANAGEMENT

Were the issue management processes properly used to manage issues?

Were all issues effectively managed?

Have all the open issues been closed?

CHANGE MANAGEMENT

Were the change management processes properly used to manage changes to cost, schedule, scope or quality?

Were all approved changes implemented


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according to the appropriate procedures?

Were all changes applied prior to project closure?

Have cost, schedule, scope or quality changes been effectively managed?

RISK MANAGEMENT

Were all important project risks identified early in the project?

Were the team members effectively involved in the risk identification and risk control processes?

How well did the Risk Management Plan work?

How accurate were the risk probabilities defined in the Risk Log?

Was a clear mitigation plan outlined for each risk identified?

How well were the risks managed?

Were all risks recorded within the Risk Log?

How effectively was the Risk Log reviewed and updated?

Was the project affected by unforeseen risks?

ACCEPTANCE MANAGEMENT

How well were defined the acceptance criteria for each deliverable?

Were acceptance management roles formally defined?

How effective was the acceptance management process defined in the Acceptance Plan?

Were all planned acceptance tests undertaken adequately?

Was the time allocated for reviewing the deliverables (in order to be accepted) sufficient?

How well prepared was the Project Management Team to accept the deliverables?

Was an Acceptance Form completed for each deliverable?

Have all the deliverables produced been accepted by the Contracting Authority?

COMMUNICATIONS MANAGEMENT

Did the Communications Plan clearly identify the target audience, message and methods to be used?


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Were the project team members meetings conducted regularly and effectively?

Was the Project Steering Committee kept regularly informed about the progress and the status of the project?

Were the Project Steering Committee’s meetings conducted regularly and effectively?

How well did the Communications Plan worked?

Was there a clear escalation path for urgent project matters?

Was the communication with stakeholders adequate and effective?

Was the project progress regularly communicated?

How useful was the content and format of the Project Status Report?

PROJECT IMPLEMENTATION

How well did any support tools work?

Have any training actions taken place in order to familiarize the project team with the management processes to be used? Was this training adequate?

How effectively were issues managed on the project?

Were all project decisions clearly documented and communicated?

Was the project perceived to be a success?

PERFORMANCE OF THE PROJECT TEAM

Was the project organization the appropriate one?

How effective was the Project Manager?

How effective was the Project Steering Committee?

How effective was each of the project team members in executing his responsibilities?

Did all the project team members have good understanding of the project and of their own role?

Depending on the size and type of the project, as well as on the structure of the

Implementing Agency/ Contracting Authority the Project Manager could choose to

take into consideration the views of the Project Team members, the Project Owner and other

stakeholders concerning how successful the project and its end product(s) have been. In

order to receive feedback from them, the Project Manager can prepare a questionnaire with


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the above questions and ask the internal and external stakeholders to complete it,

expressing in writing their opinions/ assessment. Alternatively, the Project Manager instead

of conducting a written survey, he/she could conduct it in person or over the telephone.

In case of projects that have been contracted out, the Project Evaluation Review is

normally being conducted by the Contractor. More specifically, the Contractor uses as

input the Tender Documents, the contract, the inception report, all the project management

plans (project plan, risk plan, quality plan, communications plan etc), the progress reports

and the formal approvals of the deliverables to assess both the project’s performance and

the products’ effectiveness. The results of the evaluation are normally presented in a Report

called Project Evaluation Report, which is considered as one of the most important

deliverables of the project. During the evaluation process the Contractor may involve other

key stakeholders, such as the Project Management Team of the Contracting Authority, in

order to present a more objective assessment.

In case that result performance indicators have been set, the Project Manager should

measure them during the closure phase and present their values in the Project

Evaluation Report.

Lessons Learned

The process of Project Evaluation Review is also a good opportunity for looking back

at the planning and execution phases of the project and track management and

quality procedures, forms, techniques and tools that were used, which either made a

significant contribution to the project’s achievements or caused a problem. As soon as the

Project Manager has identified these procedures, tools and techniques, he/ she should

include a Lessons Learned section in the Project Evaluation Report, which will give answers

to the questions: “What should be done differently next time?”, “Which items can be of use in

future projects?”. In this perspective, the Lessons Learned section will not only benefit the

current project team but it might be very useful to Project Managers and team members of

other projects being currently implemented or even those that may be starting in the future.

It is recommended to create a Lessons Learned Log at the start of the project. A note

should be added every time that the project management team:

• spots certain procedures that when exercised improve the production of a

deliverable or streamline a process

• improves the standardized templates

• performs management, specialist or quality procedures which lead to failure

In this way, at the project closure phase, the Project Manager will only have to correlate all

the notes taken and include them in the Project Evaluation Report.

7.6.2.2 Prepare the Project Evaluation Report

After having conducted the Project Assessment Review, the Project Manager has to

prepare the Project Evaluation Report. In the report, the Project Manager filters the

information gleaned from the review he has executed and/or from the discussion or survey


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he conducted with the internal and external stakeholders and organizes it according to the

categories described in 7.6.2.1.

The Project Evaluation Report comments on the project performance, the effectiveness of

the product in meeting the needs identified in Business Case (or the needs of the Contracting

Authority identified in the Terms of Reference in case of contracted out projects), the

effectiveness of the project management and the performance of the project team. In

addition, it documents the lessons learned and best practices to be used in future projects.

Once prepared, the Project Evaluation Report has to be distributed to the Project Steering

Committee and then submitted (and possibly presented) to the Management Team of the

Implementing Agency and to the Funding Agency.

A template of the Project Evaluation Report is provided in Annex 7-17. In this

template guidance is also included on how to complete each section of the report.

7.6.3 Conduction of post-project review

Many project products should be re-examined after a period of use to check the

achievement or not of the benefits expected. For example, when you implement a

business process reengineering project you will have to wait for a few months after the

completion of the project in order to identify e.g. whether the administrative costs have been

reduced and the productivity has been increased. Similarly, when you run a project for the

expansion of the railway network you have to wait a year or more in order to realize whether

the number of passengers served by it is increased and the traffic in the respective highways

and roads has been diminished.

If this is the case, a recommended date should be defined for conducting the post project

review. Besides a plan should be prepared which should define the following:

• What benefits will be measured (Note: These benefits should have been previously

defined in the Business Case)

• How the achievement of these benefits will be measured (Note: Usually the

achievement of the benefits is measured using Impact Indicators, that have been

established during the Planning Phase (refer to 7.4.9)

• Who will carry out the measurements (it is not necessary to name certain

individuals but you could describe the required skills).

7.6.4 Reviewing the Project Closure Phase


activities of the Project Closure Phase in order to ensure that all requirements of the

phase are met.

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Checklist 7-8: Reviewing the Project Closure Phase


Administrative Closure

1. Have any follow on actions been identified?

2. Have all the project deliverables been accepted?

3. Is all the project information collected and archived?

4. Have all parties that were involved in the project been notified about the project closure?

5. Have the resources that were utilised during the implementation of the project been released?

6. Have the CVs of the project team members been updated with their role in the project and the skills they obtained?

Project Evaluation Review

7. Has a project evaluation review been performed?

8. Has a Project Evaluation Report been prepared?

9. Has the Project Evaluation Report been distributed to the appropriate stakeholders?

10. Have lessons learned been identified and documented?

Post Project Review

11. Is a post project review necessary to identify if the expected benefits have been achieved?

12. Have the benefits to be measured been defined?

13. Has the methodology/ technique to be used for measuring the achievement of the expected benefits been determined?


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7.7 SYNOPSIS OF PROJECT MANAGEMENT ACTIVITIES

The aim of this subchapter is to summarise all the management activities that should be

performed throughout the project life cycle in order to facilitate the personnel of the

Contracting Authorities, who are involved in the project management process, to undertake

their role easily and effectively. The following sections present the activities that should be

performed under each project phase by providing also a brief description for each activity,

the respective roles of the Project Manager and any other involved personnel, reference to

the relative subchapters and sections of the Guide which provide guidance on how to

perform each of the activities, as well as the tools to be used for performing each activity,

including any related checklists, templates, forms, reports and spreadsheets that should be

completed by those involved in the performance of the activity.

Although the majority of public projects are implemented by economic operators

(“Contractors”), there is the possibility that some small-scale projects are implemented using

internal resources (i.e. resources owned by the Contracting Authority). In this perspective,

the following sections present a synopsis of project management activities and involved roles

for both cases.


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7.7.1 Project Management Activities in case that the Project is implemented with own resources (in-house

production)

A/A Phase/ Activity Description Role of Project

Manager Other roles

Guidance is provided in …

Available Tools

1 PROJECT INITIATION PHASE

Checklist 1-6: Reviewing the Project Initiation Phase

1.1 � Needs identification/ assessment This activity involves the analysis of the problem, the collection of necessary information, the identification of needs and the formulation of project ideas.

- The Management of the Contracting Authorities is usually responsible for identifying the needs and formulate the project ideas

Subchapter 1.4.1 � Tool 1-1: Creating a “Problem Tree”

� Tool 1-2: Tool for gathering information to be used for needs assessment

1.2 � Setting priorities This activity involves the prioritisation of candidate projects in order to select the one or more to be implemented first.

- High level decision makers are responsible for prioritising projects

Subchapter 1.4.2 � Tool 1-3: Decision Matrix (Completed example in Annex 1-1)

� Tool 1-4: Questionnaire for rating projects in order to prioritise them (Completed example in Annex 1-1)

1.3 � Appointment of the project design team This activity involves the appointment of the project designers, who will be provided with the key elements of the project idea in order to proceed with the design of the project.

- The Management of the Contracting Authorities is responsible for appointing the team of project designers

Subchapter 1.4.3 -

1.4 � Development of Business Case This activity involves the development of the Business

- � The Project Design Team in

Subchapter 1.5.1 � Annex 1-2: Business Case


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Case, which is the document outlining the justification for the start-up of the project. More specifically, this activity involves:

� Detailed definition of the problem

� Analysis of the potential options

� Identification of the preferred solution by applying Cost/ Benefit Analysis and/or Feasibility Study

� Approval of Business Case

� Examination of alternative ways of funding

cooperation with the representatives of the Project Owner are responsible for preparing the Business Case and examining the alternative ways of funding

� External Consultants are usually assigned to elaborate the Cost/ Benefit Analysis or/and the Feasibility Study

� High level decision makers (usually from the Project Owner) are responsible for giving approval to the Business Case

Template

� Annex 1-3: Guidelines on Cost/ Benefit Analysis

� Tool 1-5: Typical Contents of a Feasibility Study (& Example 1-4)

1.5 � Appointment of the Executive and Project Manager

This activity involves the appointment of the Executive of the Project Steering Committee and the Project Manager, so that the “Project Fiche” can be prepared and decisions can be taken.

- Project owner is responsible for the selection of the Executive and the Project Manager

Subchapter 1.5.2 � Checklist 1-1: Characteristics that the Executive should possess

� Checklist 1-2: Characteristics that the Project Manager should possess


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� Checklist 1-3: Summarised checklist for the selection of the Executive and Project Manager

1.6 � Establishment of Project Fiche This activity involves the preparation and compilation of the Project Fiche, which is a document that describes the project’s scope objectives, main activities, deliverables, organization, roles and responsibilities, provisional budget, possible risks, assumptions and constraints. Moreover, it is the activity during which the procurement needs are defined and documented. Actually, the approval of this document indicates the agreement of the Project Owner, Contracting Authority and Funding Agency to support the project implementation.

Responsible for the preparation and completion of the Project Fiche

The Executive supports the Project Manager in the establishment of Project Fiche

Subchapter 1.5.3 � Annex 1-4: Project Fiche Template (& a completed example)

� Annex 1-5: Project Fiches for EU funding (templates from the Planning Bureau’s website)

� Tool 1-6: Calculating the Provisional Project Budget & Determining the Funding Sources

� Checklist 1-4: Risk identification

� Annex 1-6: Risk Log Template (& a completed example)

� Tool 1-7: Risk Rating Matrix (presenting also the “risk tolerance line”)

1.7 � Project approval During this activity the Project Manager presents the Project Fiche and any

Responsible for presenting the Project Fiche and

� The Project Owner is responsible for

Subchapter 1.6.1 -


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other supportive documentation to the superior level of the Project Owner and asks for approval. In case of EU funded projects the Project Fiche must be approved also by the Competent Bodies (national & EU).

asking for approval approving the Project Fiche

� The national and EU Competent Bodies are responsible for approving the Project Fiche in case of EU funded projects.

1.8 � Appointment of the remaining members of Project Management Team

This activity involves the appointment of the Project Steering Committee members (except the Executive), the Team Manager and Quality Assurance Manager (where appropriate).

Cooperates with the Executive for the appointment of the remaining members of the Project Management Team

� The Executive (in cooperation with the Project Manager) is responsible for the appointment of the remaining members of the Project Management Team

Subchapter 1.6.2 � Checklist 1-5: Summarised checklist for the selection of the remaining members of the Project Management Team

2 PROJECT PLANNING PHASE


2.1 � Development of Activities Schedule This activity involves the development of the Activities (Baseline) Schedule through the application of Work Breakdown Structure, the identification of activities, the determination of activities’ sequence and dependencies, the estimation of activities/ tasks duration and the definition of their start and finish dates.

Responsible for the development of the Activities Schedule

- Subchapter 7.4.1 � Annex 7-1/ Project Plan Tool.xls/ Sheet “Activities Schedule”

� Annex 7-2: Guidance on how to find the Critical Path of a Project


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2.2 � Development of Resource Plan This activity involves the development of the Resource Plan through the identification of the physical resources (labour, equipment, and material), the assignment of the resources to project activities/ tasks and the scheduling of their usage during the project implementation period.

Responsible for the development of the Resource Plan (i.e. responsible for preparing the Resource Baseline Schedule and assigning Resources to Activities/ tasks)

- Subchapter 7.4.2 � Annex 7-1/ Project Plan Tool.xls/ Sheet “Resource Schedule”

� Annex 7-1/ Project Plan Tool.xls/ Sheet “Resources vs. Activities”

2.3 � Development of Cost Plan This activity involves the development of the Cost Plan through the identification and estimation of costs, the development of Cost (Baseline) Schedule and the estimation of cost per activity/ task.

Responsible for the development of the Cost Plan (i.e. responsible for preparing the Cost Baseline Schedule and estimating the cost per activity/ task)

- Subchapter 7.4.3 � Annex 7-1/ Project Plan Tool.xls/ Sheet “Cost Schedule”

� Annex 7-1/ Project Plan Tool.xls/ Sheet “Costs vs. Activities”

2.4 � Development of Quality Plan This activity involves the development of the Quality Plan through the definition of quality criteria and standards for the deliverables that will be produced and the establishment of quality control processes and techniques.

Responsible for the development of the Quality Plan (in case that a Quality Manager hasn’t been assigned)

� The Quality Manager is responsible for the development of the Quality Plan (in case that such a role exists in the project organization structure)

Subchapter 7.4.4 � Annex 7-3: Quality Plan Template

2.5 � Development of Issue Management Plan This activity involves the determination of the process according to which the issues related to the project will be formally identified,

Responsible for the development of the Issue Management Plan

- Subchapter 7.4.5 � Annex 7-4: Issue Form Template

� Annex 7-5: Issue Log


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assessed and resolved

2.6 � Development of Change Management Plan This activity involves the determination of the process according to which the requests for changes that have a direct impact on the project’s scope, cost, schedule or quality will be formally identified, assessed and resolved

Responsible for the development of the Change Management Plan

- Subchapter 7.4.6 -

2.7 � Development of Risk Plan This activity involves the updating of Risk Log by reviewing the risks already identified and by identifying and evaluating new risks, as well as the development of Risk Management Plan (i.e. definition of risk management process, design of relative documents, determination of roles and responsibilities)

Responsible for updating the Risk Log and developing the Risk Management Plan

� Team Managers assist the Project Manager for the development of the Risk Management Plan

Subchapter 7.4.7 � Annex 7-6: Risk Form Template


2.8 � Development of Acceptance Plan This activity involves the development of the Acceptance Plan through the establishment of criteria & standards for the acceptance of the deliverables and the formalization & documentation of the acceptance process.

Responsible for the development of the Acceptance Plan

- Subchapter 7.4.8 � Annex 7-7: Acceptance Plan Template

2.9 � Setting up Performance Indicators This activity involves the establishment of performance indicators and

Responsible for the establishment of performance

- Subchapter 7.4.9 -


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the process for monitoring them.

indicators and the definition of the monitoring process.

2.10 � Development of Communication Plan This activity involves the identification of the stakeholders, the determination of their communication needs, the definition of communication strategy and the completion of Communication Plan/ Matrix.

Responsible for the development and completion of the Communication Plan/ Matrix.

- Subchapter 7.4.10

� Annex 7-8: Communication Plan Template (& a completed example)

3 PROJECT EXECUTION & CONTROL PHASE


3.1 � Schedule Management or Schedule Control This activity involves the recording of activities’ and tasks’ progress, the updating of Activities Schedule and the identification and resolving of schedule problems.

Responsible for:

� tracking and updating the Activities Schedule

� identifying and resolving schedule problems

� Team Managers (or/and Project Team Members) provide activity/ task progress data to the Project Manager

Subchapter 7.5.1 � Annex 7-1/ Project Plan Tool.xls/ Sheet “Activities Schedule”

3.2 � Resource Management This activity involves the recording of resource progress, the updating of Resource Schedule and the identification and resolving of resource allocation problems.

Responsible for:

� tracking & updating the Resource Schedule and the sheet “Resources vs. Activities”

� approving the Timesheets submitted by the Project Team Members (if this

� Team Managers (or/and Project Team Members) provide resource progress data to the Project Manager

� Project Team Members complete their Timesheets and submit them to the

Subchapter 7.5.2 � Annex 7-1/ Project Plan Tool.xls/ Sheet “Resource Schedule”


� Annex 7-9: Timesheet


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is applicable)

� identifying and resolving resource allocation problems

Project Manager for approval (if this is applicable)

Template

3.3 � Cost Management or Cost Control This activity involves the recording of actual costs (or expenses), the updating of the Cost Schedule and the identification and resolving of cost problems.

Responsible for:

� tracking & updating the Cost Schedule and the sheet “Costs vs. Activities”

� approving the Expense Forms submitted by the Project Team Members (if this is applicable)

� identifying and resolving cost problems

� Team Managers (or/and Project Team Members) provide resource progress data to the Project Manager

� Project Team Members complete the Expense Form each time they make an expense related to the project and submit it to the Project Manager for approval (if this is applicable)

Subchapter 7.5.3 � Annex 7-1/ Project Plan Tool.xls/ Sheet “Cost Schedule”


� Annex 7-10: Expense Form Template

� Annex 7-11: Guidelines on Earned Value Analysis

3.4 � Quality Management This activity involves the application of quality control processes as defined in the Quality Plan. During this activity the project deliverables are reviewed in order to ensure that they meet the quality targets and standards defined in the Quality Plan.

Responsible for the application and monitoring of quality control procedures (in case that a Quality Manager hasn’t been assigned)

� The Quality Manager is responsible for the application and monitoring of quality control procedures (in case that such a role exists in the project organization structure)

Subchapter 7.5.4 � Annex 7-12: Deliverable Quality Review Form (& a completed example)


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� The Quality Reviewers are responsible for reviewing the project deliverables and assessing their conformity against the predefined quality criteria

3.5 � Issue Management This activity involves the application of the issue management processes that were defined in the Issue Management Plan

Responsible for assessing raised issues, updating the Issue Log and assigning resolution actions

� Project Team Members can raise issues by completing the Issue Form and submitting it to the Project Manager

Subchapter 7.5.5 � Annex 7-4: Issue Form Template


3.6 � Change Management or Change Control This activity involves the application of the change management processes that were defined in the Change Management Plan

Responsible for:

� assessing the request for change and the impact of change on the project

� recommending the acceptance or rejection of the request to the Project Steering Committee

� updating the Change Log

� Authorised Project Team Members can make a request for change

� Project Steering Committee is responsible for approving or rejecting the change requests

Subchapter 7.5.6 � Annex 7-13: Change Request Form Template

� Annex 7-14: Change Log Template

3.7 � Risk Management This activity involves the application of risk monitoring and control processes that were defined in the Risk

Responsible for:

� monitoring existing risks and identifying new

Project Team Members:

� can raise risks by completing the

Subchapter 7.5.7 � Annex 1-6: Risk Log Template (& a completed example)


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Management Plan. risks by applying risk reviews and risk response audits

� updating the Risk Log

� implementing risk control actions

� assessing the effectiveness of the preventive and contingency actions and if needed updating the Risk Management Plan

Risk Form and submitting it to the Project Manager

� can participate in the risk review meetings

� implement the preventive and contingency actions assigned to them by the Project Manager

� Annex 7-6: Risk Form Template

3.8 � Acceptance Management This activity involves the reviewing or testing of the deliverables against predefined criteria in order to decide whether they can be accepted or not.

Responsible for managing and coordinating the acceptance procedures

� The Acceptance Committee runs the acceptance tests and based on the results it decides whether to accept or reject the deliverables.

Subchapter 7.5.8

&

Chapter 6 “Contract

Implementation & Contract

Management”

-

3.9 � Communication Management This activity involves the distribution of information to project stakeholders according to the Communication Plan and the reporting of project’s performance.

Responsible for:

� implementing the communication actions according to the Communication Plan

� reviewing the Communication Plan and updating in case that the

The Team Managers (or/and Project Team Members):

� prepare the Progress Reports and submit them to the Project Manager

� may participate in the Status Meetings

Subchapter 7.5.9

� Table 7-7: Typical contents of a Progress Report

� Annex 7-16: Project Status Report Template


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communication needs change

� preparing the Project Status Report to present the status of the project to key stakeholders (e.g. Project Steering Committee, Project Owner)

4 PROJECT CLOSURE PHASE


4.1 � Performance of Administrative Closure This activity involves the following:

� Identification of follow-on actions

� Checking that all the deliverables have been accepted

� Completing and archiving of all project information

� Disbanding of the resources used in the project

� Updating the CVs of Project Team Members

Responsible for managing and coordinating the administrative closure.

� Project Steering Committee confirms the project closure before it is announced to the project stakeholders

� Team Managers cooperate with the Project Manager to evaluate the performance of the Project Team Members and ensure that their CVs are updated

Subchapter 7.6.1

� Checklist 7-6: Material concerning the project that must be included in the project’s archive

4.2 � Conduction of Project Evaluation Review This activity involves the evaluation of project’s performance, conformance (i.e. whether the implementation of the project

Responsible for conducting the Project Evaluation and preparing the Project Evaluation

� The Team Managers (or/and Project Team Members) provide feedback

Subchapter 7.6.2

� Checklist 7-7: Checklist for evaluating the project after its completion


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was in accordance with the processes defined in the Planning Phase) and effectiveness, as well as the preparation of the Project Evaluation Report.

Report to the Project Manager concerning the project evaluation

� The Project Steering Committee reviews the Project Evaluation Report

� Annex 7-17: Project Evaluation Report Template

4.3 � Conduction of post-project review This activity involves the re-examination and review of project outcomes a period after the end of the project in order to check whether the expected benefits have been achieved or not.

Responsible for:

� developing a plan for the conduction of the post-project review

� conducting the post-project review (if this is not assigned to a third party)

- Subchapter 7.6.3

-


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7.7.2 Project Management Activities in case that the Project is implemented by a Contractor

It should be noted that when the project is implemented by a Contractor, most of the core management activities are performed by the management

team of the Contractor (e.g. the development of the Plans, the reporting of project’s performance, the preparation of the Final Evaluation Report, etc.).

However, even in this case, the Project Management Team is responsible for managing the project on behalf of the Contracting Authority, as well as for

monitoring and controlling the Contractor’s performance. The following table presents the project management activities throughout the whole project

life cycle and distinguishes the role of the Contractor’s Project Management Team in performing these activities from that of the Project Management

Team of the Contracting Authority.

A/A Phase/ Activity Description

Role of the Contractor’s

Project Management

Team

Role of the Contracting

Authority’s Project Management Team


Available Tools

1 PROJECT INITIATION PHASE

Checklist 1-6: Reviewing the Project Initiation Phase

1.1 � Needs identification/ assessment This activity involves the analysis of the problem, the collection of necessary information, the identification of needs and the formulation of project ideas.

- The Management of the Contracting Authorities is usually responsible for identifying the needs and formulate the project ideas

Subchapter 1.4.1 � Tool 1-1: Creating a “Problem Tree”

� Tool 1-2: Tool for gathering information to be used for needs assessment

1.2 � Setting priorities This activity involves the prioritisation of candidate projects in order to select the one or more to be implemented first.

- High level decision makers are responsible for prioritising projects

Subchapter 1.4.2 � Tool 1-3: Decision Matrix (Completed example in Annex 1-1)

� Tool 1-4:


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Questionnaire for rating projects in order to prioritise them (Completed example in Annex 1-1)

1.3 � Appointment of the project design team This activity involves the appointment of the project designers, who will be provided with the key elements of the project idea in order to proceed with the design of the project.

-

The Management of the Contracting Authorities is responsible for appointing the team of project designers

Subchapter 1.4.3

-

1.4 � Development of Business Case This activity involves the development of the Business Case, which is the document outlining the justification for the start-up of the project. More specifically, this activity involves:

� Detailed definition of the problem

� Analysis of the potential options

� Identification of the preferred solution by applying Cost/ Benefit Analysis and/or Feasibility Study

� Approval of Business

- � The Project Design Team in cooperation with the representatives of the Project Owner are responsible for preparing the Business Case and examining the alternative ways of funding

� External Consultants are usually assigned to elaborate the Cost/ Benefit Analysis or/and the Feasibility Study

� High level decision makers (usually from

Subchapter 1.5.1 � Annex 1-2: Business Case Template

� Annex 1-3: Guidelines on Cost/ Benefit Analysis

� Tool 1-5: Typical Contents of a Feasibility Study (& Example 1-4)


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Case

� Examination of alternative ways of funding

the Project Owner) are responsible for giving approval to the Business Case

1.5 � Appointment of the Executive and Project Manager

This activity involves the appointment of the Executive of the Project Steering Committee and the Project Manager, so that the “Project Fiche” can be prepared and decisions can be taken.

- Project owner is responsible for the selection of the Executive and the Project Manager on behalf of the Contracting Authority

Subchapter 1.5.2 � Checklist 1-1: Characteristics that the Executive should possess

� Checklist 1-2: Characteristics that the Project Manager should possess

� Checklist 1-3: Summarised checklist for the selection of the Executive and Project Manager

1.6 � Establishment of Project Fiche This activity involves the preparation and compilation of the Project Fiche, which is a document that describes the project’s scope objectives, main activities, deliverables, organization, roles and responsibilities, provisional budget, possible risks, assumptions and constraints. Moreover, it is the activity during which

- � The Project Manager is Responsible for the preparation and completion of the Project Fiche

� The Executive supports the Project Manager in the establishment of Project Fiche

Subchapter 1.5.3 � Annex 1-4: Project Fiche Template (& a completed example)

� Annex 1-5: Project Fiches for EU funding (templates from the Planning Bureau’s website)

� Tool 1-6: Calculating the


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the procurement needs are defined and documented. Actually, the approval of this document indicates the agreement of the Project Owner, Contracting Authority and Funding Agency to support the project implementation.

Provisional Project Budget & Determining the Funding Sources

� Checklist 1-4: Risk identification


� Tool 1-7: Risk Rating Matrix (presenting also the “risk tolerance line”)

1.7 � Project approval During this activity the Project Manager presents the Project Fiche and any other supportive documentation to the superior level of the Project Owner and asks for approval. In case of EU funded projects the Project Fiche must be approved also by the Competent Bodies (national & EU).

- � The Project Manager is responsible for presenting the Project Fiche and asking for approval

� The Project Owner is responsible for approving the Project Fiche

� The national and EU Competent Bodies are responsible for approving the Project Fiche in case of EU funded projects.

Subchapter 1.6.1 -

1.8 � Appointment of the remaining members of This activity involves the appointment of the Project

- � The Executive in cooperation with the

Subchapter 1.6.2 � Checklist 1-5: Summarised


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Available Tools

Project Management Team Steering Committee members (except the Executive), the Team Manager and Quality Assurance Manager (where appropriate).

Project Manager is responsible for the appointment of the remaining members of the Project Management Team

checklist for the selection of the remaining members of the Project Management Team

2 PROJECT PLANNING PHASE


2.1 � Development of Activities Schedule This activity involves the development of the Activities (Baseline) Schedule through the application of Work Breakdown Structure, the identification of activities, the determination of activities’ sequence and dependencies, the estimation of activities/ tasks duration and the definition of their start and finish dates.

Responsible for the development of the Activities Schedule (for the Project)

� The Project Manager reviews the Baseline Activities Schedule prepared by the Contractor and may recommend changes or modifications. Then he/she presents it to the Project Steering Committee for approval

� The Project Manager develops a schedule for tracking the management activities that should be carried out by the Contracting Authority

� The Project Steering Committee is responsible for approving the


� Annex 7-2: Guidance on how to find the Critical Path of a Project


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Baseline Schedule, since it will be used during the implementation phase for monitoring projects’ and contractor’s performance.

2.2 � Development of Resource Plan This activity involves the development of the Resource Plan through the identification of the physical resources (labour, equipment, and material), the assignment of the resources to project activities/ tasks and the scheduling of their usage during the project implementation period.

Responsible for the development of the Resource Plan (i.e. responsible for preparing the Resource Baseline Schedule and assigning Resources to Activities/ tasks)

� The Project Manager is responsible for assigning internal resources to management activities and preparing a Schedule for the usage of these resources.

� The Project Steering Committee is responsible for approving the assignment of internal resources to management activities and the Resource Schedule prepared by the Project Manager



2.3 � Development of Cost Plan This activity involves the development of the Cost Plan through the identification and estimation of costs, the development of Cost (Baseline) Schedule and

Responsible for the development of the Cost Plan (i.e. responsible for preparing the Cost Baseline Schedule and estimating the

� The Project Manager is responsible for preparing a Schedule for the internal costs and estimate the internal cost per activity/task (if this is


� Annex 7-1/ Project Plan Tool.xls/ Sheet


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the estimation of cost per activity/ task.

cost per activity/ task)

applicable)

� The Project Steering Committee is responsible for approving the internal cost estimations and the Cost Schedule prepared by the Project Manager (if this is applicable)

“Costs vs. Activities”

2.4 � Development of Quality Plan This activity involves the development of the Quality Plan through the definition of quality criteria and standards for the deliverables that will be produced and the establishment of quality control processes and techniques.

Responsible for the development of the Quality Plan

� The Project Manager or the Quality Manager (if such a role exists in the Management Team of the Contracting Authority) should review the Quality Plan prepared by the Contractor

Subchapter 7.4.4 � Annex 7-3: Quality Plan Template

2.5 � Development of Issue Management Plan This activity involves the determination of the process according to which the issues related to the project will be formally identified, assessed and resolved

- � The Project Manager is responsible for the development of the Issue Management Plan

Subchapter 7.4.5

&



Management”/ Handling Problems

� Annex 7-4: Issue Form Template



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2.6 � Development of Change Management Plan This activity involves the determination of the process according to which the requests for changes that have a direct impact on the project’s scope, cost, schedule or quality will be formally identified, assessed and resolved

- � The Project Manager is responsible for the development of the Change Management Plan (unless the change management process is defined in a relative legislation)

Subchapter 7.4.6

&



Management”/ Change Control

-

2.7 � Development of Risk Plan This activity involves the updating of Risk Log by reviewing the risks already identified and by identifying and evaluating new risks, as well as the development of Risk Management Plan (i.e. definition of risk management process, design of relative documents, determination of roles and responsibilities)

Responsible for updating the Risk Log and developing the Risk Management Plan

� The Project Manager should define the process for managing risks that lie in the responsibility area of the Contracting Authority

Subchapter 7.4.7 � Annex 7-6: Risk Form Template

2.8 � Development of Acceptance Plan This activity involves the development of the Acceptance Plan through the establishment of criteria & standards for the acceptance of the deliverables and the formalization & documentation of the acceptance process.

- � The Project Manager, in cooperation with the Acceptance Committee, is responsible for the development of the Acceptance Plan

Subchapter 7.4.8 � Annex 7-7: Acceptance Plan Template


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Available Tools

2.9 � Setting up Performance Indicators This activity involves the establishment of performance indicators and the process for monitoring them.

- � The Project Manager is responsible for the establishment of performance indicators and the definition of the monitoring process

Subchapter 7.4.9 -

2.10 � Development of Communication Plan This activity involves the identification of the stakeholders, the determination of their communication needs, the definition of communication strategy and the completion of Communication Plan/ Matrix.

Responsible for the development of the Communication Plan, which should include the communication activities for which the Contractor is responsible (i.e. Progress Reports to the Contracting Authority, internal review meetings, Formal Review Meetings with the Contracting Authority, etc)

� The Project Manager is responsible for the development of a Communication Plan, which should include the communication activities for which he/she is responsible (i.e. Project Status Reports to the key stakeholders, Status Meetings, Acceptance Review Meetings, etc)

Subchapter 7.4.10

� Annex 7-8: Communication Plan Template (& a completed example)

3 PROJECT EXECUTION & CONTROL PHASE


3.1 � Schedule Management or Schedule Control

This activity involves the recording of activities’ and tasks’ progress, the updating of Activities Schedule and the

Responsible for:

� tracking and updating the Activities

� The Project Manager monitors and reviews the Updated Schedules prepared by the Contractor and



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Available Tools

identification and resolving of schedule problems.

Schedule

� identifying and resolving schedule problems (in some cases in cooperation with the Project Manager of the Contracting Authority)

may propose actions for resolving the identified schedule problems (sometimes by consulting also the Project Steering Committee)

� The Project Manager tracks and updates the Schedule for the management activities that he/she prepared in the Planning Phase

3.2 � Resource Management This activity involves the recording of resource progress, the updating of Resource Schedule and the identification and resolving of resource allocation problems.

Responsible for:

� tracking & updating the Resource Schedule and the sheet “Resources vs. Activities”

� identifying and resolving resource allocation problems

� submitting the completed Timesheets to the Project Manager of the Contracting Authority for approval (if this


� approving the Timesheets submitted by the Contractor (if this is applicable)

� approving the Timesheets submitted by the Project Team members of the Contracting Authority (if this is applicable)

� tracking & updating the Resource Schedule and the sheet “Resources vs. Activities” that he/she developed during the Planning Phase (for



� Annex 7-9: Timesheet Template


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Available Tools

is applicable) the internal resources)

� identifying and resolving internal resource allocation problems

3.3 � Cost Management or Cost Control This activity involves the recording of actual costs (or expenses), the updating of the Cost Schedule and the identification and resolving of cost problems.

Responsible for:

� tracking & updating the Cost Schedule and the sheet “Costs vs. Activities”

� identifying and resolving cost problems

� submitting the Expense Forms to the Project Manager of the Contracting Authority for approval (if this is applicable)


� approving the Expense Forms submitted by the Contractor (if this is applicable)

� approving the Expense Forms submitted by the Project Team members of the Contracting Authority (if this is applicable)

� tracking & updating the Cost Schedule and the sheet “Costs vs. Activities” that he/she developed during the Planning Phase (for the internal costs)

� identifying and resolving internal cost problems



� Annex 7-10: Expense Form Template

� Annex 7-11: Guidelines on Earned Value Analysis

3.4 � Quality Management This activity involves the application of quality

Responsible for the implementation of

� The Project Manager or the Quality

Subchapter 7.5.4 � Annex 7-12: Deliverable


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Available Tools

control processes as defined in the Quality Plan. During this activity the project deliverables are reviewed in order to ensure that they meet the quality targets and standards defined in the Quality Plan.

the Quality Plan Manager (if such a role exists in the Management Team of the Contracting Authority) monitors the quality control processes of the Contractor in order to ensure that they are performed according to the Quality Plan

� The Project Manager or the Quality Manager (if such a role exists in the Management Team of the Contracting Authority) is responsible for assuring quality in the performed management activities

� The Quality Reviewers are responsible for reviewing the project deliverables and assessing their conformity against the predefined quality criteria. (Note: Quality Review is usually part of the acceptance

Quality Review Form (& a completed example)


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Team




Available Tools

management process)

3.5 � Issue Management This activity involves the application of the issue management processes that were defined in the Issue Management Plan

Responsible for raising issues and implementing resolution actions

� The Project Manager is responsible for assessing raised issues, updating the Issue Log and assigning resolution actions

Subchapter 7.5.5

&



Management”/ Handling Problems

� Annex 7-4: Issue Form Template


3.6 � Change Management or Change Control This activity involves the application of the change management processes that were defined in the Change Management Plan

Responsible for:

� making a request for change

� updating the plans that are affected by the approved change


� assessing the request for change and the impact of change on the project

� approving or rejecting requests for change that lie in the limits of his/her authority

� recommending the acceptance or rejection of the request to the Competent Organs (e.g. Departmental or Central Committee for Variations & Claims)

� updating the Change Log

Subchapter 7.5.6

&



Management”/ Change Control

� Annex 7-13: Change Request Form Template

� Annex 7-14: Change Log Template

� Annex 7-15: Limits of authority of the Competent Bodies for approving the change requests (according to the Reg. 115/2004)


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3.7 � Risk Management This activity involves the application of risk monitoring and control processes that were defined in the Risk Management Plan.

Responsible for:

� monitoring existing risks and identifying new risks by applying risk reviews and risk response audits

� updating the Risk Log

� implementing risk control actions

� assessing the effectiveness of the preventive and contingency actions and if needed updating the Risk Management Plan

� The Project Manager reviews the updated Risk Log and monitors the risk management & control processes applied by the Contractor to ensure that all the identified risks are handled effectively

� The Project Manager is responsible for managing risks that lie in the responsibility area of the Contracting Authority

Subchapter 7.5.7 � Annex 1-6: Risk Log Template (& a completed example)

� Annex 7-6: Risk Form Template

3.8 � Acceptance Management This activity involves the reviewing or testing of the deliverables against predefined criteria in order to decide whether they can be accepted or not.

- � The Project Manager is responsible for managing and coordinating the acceptance procedures

� The Acceptance Committee runs the acceptance tests and based on the results it decides whether to

Subchapter 7.5.8

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accept or reject the deliverables.

3.9 � Communication Management This activity involves the distribution of information to project stakeholders according to the Communication Plan and the reporting of project’s performance.

Responsible for:

� implementing the communication actions according to the Communication Plan

� reviewing the Communication Plan and updating it in case that the communication needs change

� preparing the Progress Reports and submit them to the Contracting Authority


� implementing the communication actions according to the Communication Plan that he/she prepared during the Planning Phase

� reviewing the Communication Plan and updating it in case that the communication needs change

� reviewing the Progress Reports submitted by the Contractor and present them to the Project Steering Committee for approval

� preparing the Project Status Report to present the status of the project to key stakeholders (e.g. Project Steering Committee, Project

Subchapter 7.5.9

� Table 7-7: Typical contents of a Progress Report

� Annex 7-16: Project Status Report Template


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Owner)

The Project Steering Committee is responsible for approving the Progress Reports submitted by the Contractor

4 PROJECT CLOSURE PHASE


4.1 � Performance of Administrative Closure This activity involves the following:

� Identification of follow-on actions

� Checking that all the deliverables have been accepted

� Completing and archiving of all project information

� Disbanding of the resources used in the project

� Updating the CVs of Project Team Members

Responsible for managing and coordinating the administrative closure.

� The Project Manager is responsible for managing and coordinating the administrative closure on behalf of the Contracting Authority

� Project Steering Committee confirms the project closure before it is announced to the project stakeholders

� Team Managers cooperate with the Project Manager to evaluate the performance of the Project Team Members and ensure that their CVs are

Subchapter 7.6.1

� Checklist 7-6: Material concerning the project that must be included in the project’s archive


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updated

4.2 � Conduction of Project Evaluation Review This activity involves the evaluation of project’s performance, conformance (i.e. whether the implementation of the project was in accordance with the processes defined in the Planning Phase) and effectiveness, as well as the preparation of the Project Evaluation Report.

Responsible for preparing the Project Evaluation Report and submitting it to the Contracting Authority

� The Project Manager, the Team Managers and the Project Team Members can provide feedback to the Contractor concerning the overall project performance in order to incorporate it in the Evaluation Report

� The Project Steering Committee reviews the Project Evaluation Report

Subchapter 7.6.2

� Checklist 7-7: Checklist for evaluating the project after its completion

� Annex 7-17: Project Evaluation Report Template

4.3 � Conduction of post-project review This activity involves the re-examination and review of project deliverables/ products/ outcomes a period after the end of the project in order to check whether the expected benefits have been achieved or not.

- � The Project Manager is responsible for developing a plan for the conduction of the post-project review.

� The Contracting Authority may have to conduct the post-project review if it is not assigned to a third party.

Subchapter 7.6.3

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tools-chapter 7 en

Documents

development of quality

development of cost

development of resource

development of risk

development of cost

project management processes

project activities tasks

project management context