PROJECT ADMINISTRATION
Project Accounting
The
Relevant body’s accounting department
performs accounting functions for the project including:
§ Developing the fiscal
year budgets for the project
§ Recording and
reporting expenditures in the Relevant body’s
accounts
§ Review and payment of
contractor invoices
§ Management of project
cash flow.
The
total project budget typically spans multiple project years. The Relevant Body
accounting works with project staff to develop the fiscal year budgets as part
of the Relevant body’s annual budget. In
addition to being by fiscal year, the accounting project budget is broken down
by the Relevant body’s chart of accounts
as opposed to the WBS breakdown used for project control. For these reasons a
Relevant Body that relies only on accounting information to manage project
costs (that is fiscal year and chart of account based) and does not create a
project cost control system (that is project-to-date and WBS
based ) finds that cost data appropriate for accounting controls is not helpful
from a project cost management
point of view.
Similarly, accounting records project expenditures by the Relevant body’s chart of accounts and report the results
against the fiscal year budgets. In setting up procedures to process project
transactions the project manager should give careful consideration to ensuring
that costs are coded by both their WBS
and accounting codes so that they can be processed through both the cost
control and accounting systems.
The
project team is responsible for reviewing consultant and contractor invoices to
confirm that the
services or work invoiced has been acceptably
completed. Accounting’s role is to review the invoices to confirm that they are
computed accurately, that the charges billed are contractually eligible, and
that the charge rates and/or prices are consistent with the contract terms.
Following review, accounting is responsible
for paying the invoice having made
adjustments for retainage and any disallowed
charges.
Accounting,
through its treasury function, manages
the cash flow for the project. Accounting works with the project team to
project both the near and long term cash flow requirements for the project so
that funds are made available for project expenditures without tying up the relevant
body’s cash. Accounting invests funds raised for the project that are not
immediately required in a mix of short and long term investments based on the
cash flow projections.
Administrative
Support
Administrative support
involves providing the project office facilities and clerical/administrative
staff. Wherever possible a project team works most effectively when the team
members, including both institute staff and their consultants, can be
co-located in the same project office. Large projects can justify the cost of
setting up a special project office for this purpose.
As the demands of a project
change as the project moves through its phases, it is desirable to select
administrative support staff who thrive on variety and are flexible to take on
a range of administrative tasks where the workloads can vary from day to day.
PROCUREMENT AND CONTRACT ADMINISTRATION
The methods of solicitation and selection allowed within
the governmental (PWD & LGED-valid for
Bangladesh)
contractual sphere & Specifications
should be followed.
# The Relevant Body’s should have a complete, adequate,
and realistic specification.
# Two or more responsible bidders are willing and able to
complete.
# The procurement lends itself to a firm fixed price
contract and the selection can be made primarily on the basis of price.
# No discussion with bidders is needed after
receipt of offers.
Professional
Services
Contract
Types
To
contract for professional services, there are two main methods:
A)
Procurement by Competitive Proposal/Reques
for (RFP).The competitive proposal method of
procurement is normally conducted with more than one offerer (e.g..,design consultant ,design manager )
B) Procurement of
Architectural and Engineering Services (A&E).
When contracting for A&E services, you will need to use competitive proposal
procedures based on the Government Act Other types of services considered
A&E services include program management, construction management,
feasibility studies, preliminary engineering, design, surveying, mapping, and
services which require performance by a registered or licensed architect or
engineer. This "qualifications
based procurement method" can only be used for the
procurement of A&E services.
Contract
Provisions
When procuring for professional
services, the project manager will need to coordinate with The Relevant Body’s
contracting officer. When developing the contract provisions he and the
contracting officer should review the Government Act & Specification and determine the
provisions that apply to the particular procurement. Finally, he will also need
to make sure The Relevant body’s
required terms and conditions
(clauses, etc.) are included in the advertisement. This will allow the A&E
firm to address these terms and conditions as part of the proposal. Any
exceptions taken by the A&E firm to terms and conditions should be included
in the price proposal only, as this recognizes that contract terms involve risk
allocation and therefore cost.
Procurement
Process
The procurement process for
professional services is a multi-step process. The following are the key steps
that occur in the process.
# Name
selection committee with specific expertise needed for performing the contract.
# Determine
short-list of qualified firms based on the submitted qualification statements.
The short-list should be appropriate in size for adequate
competition and should consist of those firms that have a reasonable chance of
getting the award.
# Request
technical proposals. If the project manager determine to require detailed
technical proposals after the short-list has been determined,
he will need to establish the evaluation criteria to be used in selecting the successful contractor and to advise the firms of the criteria
in requested RFP. Criteria would normally involve past performance, technical criteria, and key personnel.
# Evaluate
the technical proposals. The selection committee will review the submitted
technical proposals within the criteria that were set forth
in the RFP.
# Oral
presentations by A&E firms.
If the selection committee feels that oral presentations are needed, they
should be scheduled with the short-listed
firms. It is important that the actual project managers are being proposed by
the short-listed firms assigned to the project.
# Final
rank of firms. After the technical evaluation and oral presentations (if held),
the selection committee will finalize the ranking of the firms.
# Once
an agreement is reached on the highest qualified firm, that firm is then
requested to submit a cost proposal for negotiation of a contract.
Construction
Contracts
The traditional approach has
been to have a detailed design completed for the entire project prior to
soliciting bids from construction contractors. This is known as design/bid/build (D/B/B).
This D/B/B approach
requires that a detailed design package of the entire project be complete
before bids are solicited from construction contractors. For the procurement of
contractors, the most common method of procurement is Procurement by Sealed Bids/Invitation
for Bid. Bids are publicly solicited and a firm-fixed-price contract (lump sum
or unit price)
is awarded to the responsible bidder whose bid, conforming to all the material terms and conditions
of the bids, is the lowest in price.
Contract
Provisions
Construction contracts
require certain provisions which are unique to that activity..
# Bonding
– Construction contracts require
contractors to furnish three types of bonds-bid bonds, payment bonds, and
performance bonds
# Liquidated
damages –Liquidated Damages contains
guidance on the use of liquidated damages clauses.
# Differing
Site Conditions –
Guidance on administering the Differing
Site Conditions & Specifications
for Construction clause
will be discussed later.
# Insurance
– Insurance
discusses an approach to insuring construction project contractors known as
Owner Controlled Insurance Programs, which has proven to be an effective method of insuring
the contractor teams involved in construction projects.
# Warranties
– Obtaining acceptable warranty documents in a
timely manner from contractors has been historically difficult. No contractual
incentive has existed to motivate contractors to supply the required
warranties. Grantees may wish to consider making the submission of an
acceptable warranty form a condition of product or system acceptance in order
to motivate contractors to furnish the required form. Grantees might also
include the warranty forms as a fixed-price line item in the contract for
payment purposes, thus giving the contractors a strong motivation to supply the
required forms.
# Contract
Closeout – Closeout of
construction contracts will require certain documentation unique to these
contracts, such as lien waivers, as-built drawings, etc.
When
developing the contract provisions for sealed bid procurement, the project
manager along with the Relevant Body's contracting officer should
review the mandatory procurement standards and determine the provisions that
apply to the particular procurement.
Procurement Process
The
procurement process for construction is a multi-step process. The following are
the key steps that occur in the process.
# Prepare
Notice – Describe the project’s requirements completely, clearly, accurately,
and unambiguously. The notice must also include all documents furnished to all
prospective bidders for the purpose of bidding.
# Publicize
Notice – The notice must be publicly advertised and distributed to prospective
bidders. The amount of time after publication and distribution of the notice to
prepare and submit their bids and prior to the time and date set for opening of
bids is important.
# Submission
of bids – Sealed bids are submitted to management team of institute by bidders
by the time and place stated in the invitation. Bids are publicly opened at the
time and place described in the invitation.
# Contract
Award – A fixed price contract will be awarded to the responsible bidder whose
bid, conforming to the terms and conditions of the notice is the lowest in
price.
Equipment
and Supplies
Contract Types
For
the procurement of equipment, you will need to perform a lease
versus purchase analysis to determine the most economical
approach. The analysis should be appropriate to the size and complexity of the
procurement. While it is usually more economical to purchase equipment than to
lease it, this is not always true, however, especially when highly complex
equipment is involved and there are issues of maintaining the equipment or
having trained personnel who are competent to operate the equipment.
Contract Provisions
When developing procurements for equipment
and supplies, You as project manager, along with the contracting officer must
be aware of local or state labor laws, when developing the solicitation
document and contract. In addition, the contract officer should carefully
coordinate the insurance provisions with their insurance department or legal
specialists. Requirements might include coverage for commercial general
liability, auto vehicle insurance, workers compensation, and perhaps, a special
railway protective policy. The Relevant body’s
insurance specialists should determine specific coverage requirements
and amounts.
Third
Party (Utility) Agreements
The
development of a project typically requires the project manager to perform
coordination with utility companies regarding the relocation of utilities and
associated reimbursement to the utility. Utilities are defined as a "privately, publicly,
or cooperatively owned line, facility, or system
for producing, transmitting, or distributing
communications, cable television,
power, electricity,
light, heat,
gas, oil,
crude products, water,
steam, waste,
stormwater not connected with highway drainage, or any other similar commodity, including
any fire or police
signal system or street lighting system,
which directly or indirectly serves the public."
Once the preliminary initial utility alignments have been
identified, you as responsible person should initiate discussions with the
utility regarding the development of the utility agreement. The scope of the
utility relocation must be determined as well as the responsibility for costs
of the relocation. As part of this discussion, determine:
# The
utility's policy for relocating its own utilities or if it wants the relocation
performed under the relocation activities of the project.
# Who
is responsible for the relocation costs. Only actual allowable, allocable, and
reasonable costs are reimbursable. If costs are to be covered by the Institute,
determine what these costs are up front, and begin negotiations. The costs of
the relocation are not always borne by the Agency. Cost sharing must always be
considered as a feasible alternative.
# If
a utility elects to improve, change, rearrange, or otherwise enhance its
facilities beyond that which currently exists, the manager should obtain separate
estimates to identify the cost difference between the improved adjustment and
the adjustment that is comparable to the existing facility.
The
ideal situation is to have signed agreements and all utilities relocated prior
to the general contractor receiving a notice-to-proceed on the main project. If
this is not possible, all affected utility facilities need to be shown in the
project documents and relocation will be made concurrent with the construction
activities. Coordinating the availability of the project site with the
project's general contractor and the utility will be very important :
# Conduct
a utility pre-construction meeting.
# Monitor
the relocation work.
# Provide
oversight of progress. Any slip in the schedule of the utility relocation will
have an effect on main construction project's schedule.
Note : Inspect the utility relocations to ensure that all work
is performed according to the Relevant Body's expectations.
(To be Contd.......)
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