UNIT 3 - NATIONAL PROJECT MANAGEMENT

NATIONAL PROJECTS PLANNING & ALLOCATION

Any country's economy is made up of a variety of industries, such as heavy industry, goods
manufacturing, food production, service provision, tourism, and so on. In order to do so,
they all generate wealth in some way and compete for resources.

The National Public Projects Implementation System (NPPIS) encompasses the entire
ecosystem for implementing public projects in a specific country. It might be viewed as a
country-level extension of the Project Management Office concept.

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National Development Project Plans

Governments create national development plans and strategies based on their citizens'
perceived needs and interests.

National development plans, which typically have a 5- to 25-year horizon, define

 Desired Development Outcomes,

 Build consensus on obstacles and opportunities to achieving those outcomes,
 Define the role and contribution of various sectors and stakeholders in achieving
the outcomes, and
 Provide a strategic framework within which more detailed planning and budgeting
can take place at regular intervals.

Economic growth and job creation are typically prioritised in national development
programs, with the goal of reducing poverty.

Governments, for example, might set a long-term development vision that drives the
national society's economic and social growth ambitions over a 20-year period. (Refer the
image below)

Plan-Making

Plans should:

 Be prepared with the goal of contributing to the achievement of sustainable

development;
 Be prepared positively, in a way that is aspirational but achievable;
 Be shaped by early, proportionate, and effective engagement between plan makers
and communities, local organisations, businesses, infrastructure providers and
operators, and statutory consultees;
 Contain policies that are clearly written and unambiguous, so it is clear how a
decision was reached;
 Contain policies that are clearly written

Preparing & Reviewing Plans

All policies should be based on current and relevant evidence during their development
and evaluation. This should be sufficient and proportionate, with a strong focus on
defending and justifying the policies in question, as well as taking into consideration
important market signals.
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Local plans and spatial development strategies should be examined at least once every
five years to see if they need to be revised, and then changed as appropriate. Reviews
should be done no later than five years after a plan's adoption date, and should take
into account any relevant changes in national policy as well as changing
circumstances in the area.

Models for Analysing Resource Allocation Among National Projects

Asset Management or Needs Models; The use of bridge and pavement models in
resource allocation techniques, particularly for preservation projects, has a long history.
They employ a database for the state's system that includes current assets and use
patterns, as well as deterioration rates, project costs, user costs of degraded conditions,
and investment triggers (minimally tolerable conditions).

The current generation of models is intended to handle specific asset classes or

categories, and to either

 Advise funding levels to achieve user-defined system conditions, or

 Forecast system outcomes given user-defined funding levels.

Travel Demand Models;Travel demand models are referenced solely as inputs to other
programmatic decision-making resources and paradigms, and are not meant as
investment management tools by nature.

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Impact Models;Some states utilise impact models to examine the economic effects of
different allocation scenarios. Beyond needs and benefit models (which merely measure
and analyse the societal value of investment in various programmatic scenarios), impact
models examine

 How the economy might leverage various results to generate broader effects in
employment,
 Wage Income,
 GDP, and
 Business Sales.

Impact models are useful for comparing the economic consequences of a single project,
a group of projects within a program, or entire programs.

Summary

 The National Public Projects Implementation System (NPPIS) is a country's

ecosystem for carrying out public projects.
 National development programs usually prioritise economic growth and job
creation.
 Every five years, local plans and spatial development strategies should be examined
to see if they need to be altered, and then changed as needed.
 Reviews should be completed no later than five years after a plan's adoption date,
and they should take into account any significant changes in national policy.

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 CONTRACT AWARDS IN GOVERNMENT

Contract awarding is the process of evaluating and awarding a contract based on the bids (tender
offers) submitted during a procurement. Typically, at this point, the proposals' eligibility has been
determined.

So now it's just a matter of deciding which option is the best. There are numerous approaches to
this, all of which are clearly tied to the proposal process requested by procurement management.

Basis for Contract Award

Evaluation of the Best Value (BV)

The US government evaluates Best Value offers based on factors other than price and technical
grade. They are evaluated based on pricing, capability, capacity, and previous
performance. Price is either equal to or greater than the other elements. This allows higher-priced
proposals to be chosen above lower-priced proposals.

Lowest Price Technically Acceptable (LPTA)

Other than price, all other factors are rated as acceptable or undesirable, with no regard for higher
degrees of quality. When a contract is awarded under the LPTA, price is the deciding
factor. Contracts with the lowest price are chosen as awards for proposals that are regarded
technically acceptable and meet the minimal performance requirements.

Price Performance Trade Off (PPTO)

To arrive at an award choice, PPTO allows for a tradeoff between price and performance
considerations. It prefers contractors who have a track record of delivering high-quality products
and services on time and at a reasonable cost. Agencies do a cost-benefit analysis before ranking
ideas from lowest to highest. Only the cheapest proposals are taken into consideration.

Contract Grades in the US

When analysing government contract proposals, the US government utilises the following grades:

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Significant Strength: A proposal with this ranking significantly increases the likelihood of
successful performance or significantly contributes to exceeding contract criteria in a way that
adds value to the government.
Strength: A proposal significantly increases the likelihood of successful performance or
significantly contributes to exceeding contract criteria in a way that adds value to the government.
Weakness: A weakness in the proposal raises the chances of a failed contract.
Significant Weakness: A fault in a proposal significantly increases the risk of contract failure.
Deficiency: A proposal's material failure to meet a government requirement, or a combination of
significant flaws that raises the chance of contract failure to an intolerable degree.

UK bid challenges: challenging or defending direct contract awards in the context of

COVID-19

To fulfil the needs of the current crisis, public agencies, notably the NHS, are issuing a
considerable number of contracts directly, without staging a competition.

This is allowed under the procurement rules "insofar as is strictly necessary" when "the time limits
for the open or restricted procedures or competitive procedures with negotiation cannot be
complied with due to events unanticipated by the contracting authority."

In the current market, what should suppliers be doing to best position themselves to secure
contracts?

 Keep in touch with your current and potential clients: make sure you're talking to the people
who are making the purchases so they're aware of what you have to offer. This is especially
crucial when new requirements must be met (for example, to cater for homeschooling).
The procurement rules allow market testing as long as it does not distort competition.
 Maintain close contact with your compliance teams regarding any new or evolving
encounters with contractual authorities.
 Keep an eye on the trade press and procurement portals for information about impending
purchases.

Summary

 The process of awarding a contract based on bids (tender offers) received during a
procurement is known as contract awarding.
 There are several methods to this that are all obviously linked to the government's request
for proposals.
 Contractors with a track record of producing high-quality products and services are
preferred by the US government.
 A bid is a proposal that improves the chances of successful performance or contributes to
exceeding contract standards in a way that benefits the government.

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 FACTORS FOR PROJECT FINANCE

Project finance is a type of secured lending that is distinguished by complex but

balanced risk allocation arrangements.

Lenders extend credit, sometimes in the billions of dollars, to a newly formed, thinly
capitalised project company, whose core assets at the time of financial close are likely
nothing more than a collection of contracts, licences, and ambitious plans; hence the
emphasis on prudent risk analysis and allocation.

What is SPV?

An intermediary, known as a Special Purpose Vehicle, is formed to bridge the gap between
sponsors and lenders (SPV). The SPV's major responsibility is to oversee finance
procurement and management to ensure that project assets are not harmed as a
result of project failure.

Before a lender decides to finance a project, it's critical to identify and distribute all risks
that could harm the project to avoid future complications.

Critical Risk Factors

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Project Financing: Project Financing is appropriate for enterprises that require a large
amount of equity and debt, and it is commonly used in developing countries since it
promotes economic progress. This financing plan raises expenses while lowering
liquidity because it is more expensive than corporate loans. In addition, the projects
in this strategy are frequently exposed to Emerging Market Risk and Political Risk. The
project must also pay high fees to insure itself against these dangers.

Risk Allocation: As part of this financial plan, some of the project's risks are passed to
the lender. As a result, sponsors choose to use this financing option since it allows them
to reduce risk. Lenders, on the other hand, can benefit from a higher credit margin with
Project Financing.

Applicable for Multiple Participants: Because Project Financing frequently involves a

large-scale project, it is possible to assign multiple parties to take care of the project's
various parts. This ensures that the entire procedure runs smoothly.

At the End of the Project, asset ownership is decided: The Special Purpose Vehicle is
in charge of overseeing the project's progress and keeping track of the project's assets.
When the project is finished, the ownership of the project is transferred to the concerned
business in accordance with the loan terms.

Zero or Limited Recourse Financing Solution: Because the borrower does not own the
project until it is completed, lenders do not have to waste time or resources examining
the borrower's assets and creditworthiness. Instead, the lender may concentrate on the
project's viability. If the financial services company determines that the project will not
generate enough cash flow to repay the loan after completion, it can opt for limited
recourse from the sponsors.

Loan Repayment with Project Cash Flow: According to the terms of the loan in Project
Financing, the project's excess cash flow should be used to pay off the borrower's existing
debt. As the debt is gradually paid off, the financial services company's risk exposure is
reduced.

Better Tax Treatment: If Project Financing is used, the project and/or the sponsors may
benefit from a more favourable tax treatment. As a result, sponsors choose this structured
financing method for receiving cash for long-term projects.

Sponsor Credit Has No Negative Impact on Project: While this long-term financing
plan maximises a project's leverage, it also ensures that the sponsor's credit standing has
no negative impact on the project. As a result, the project's credit risk is frequently higher
than the sponsor's credit position.

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Summary

 Project finance is a type of secured loan characterised by complicated but well-

balanced risk allocation arrangements.
 It's vital to identify and disperse all risks that could impair a project before a lender
decides to finance it.
 Multiple stakeholders collaborate on a large-scale project when it comes to project
financing.
 It's feasible to delegate responsibility for the project's various components to
multiple parties.
 The borrower doesn't own the project until it's finished, and lenders don't have to
waste time or resources looking into the borrower's assets

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 FACTORS AGAINST EFFECTIVE PROJECTS & IMPLEMENTATIONS

Despite the availability of numerous resources, project management tools, training

materials, and adaptable techniques, businesses continue to waste millions of dollars
annually and struggle to address project management challenges and issues.

Scope Creep

For any project, scope creep is a natural and expected occurrence. There are situations
when it can be advantageous, but for the most part, the disadvantages outnumber the
advantages. One of the most difficult project management issues for both managers
and project teams is dealing with clients that don't know exactly what they want
and have imprecise needs.

Engaging with clients early in the project planning process will help you obtain a better
understanding of their needs and expectations.

Lack of Communication

Effective project management communication is critical to the project's success. To

guarantee that all stakeholders are involved in the process, you must have timely and
transparent communication techniques.

Miscommunication is especially hazardous to project teams since it interferes with

their ability to operate together. It can lead to disagreements among team members
and, as a result, the project may be delayed.

To keep everyone up to date, project managers frequently use various collaboration and
project management tools available on the market. Project collaboration technologies
not only make it easier for managers to carry out their responsibilities, but they also
offer greater project openness and team accountability.

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Clarity Of Project Goals

Clarity is one of the most critical needs for a project's success, and its absence causes a
slew of project management challenges. According to one survey, roughly 39% of
projects fail because they lack a project plan and a clearly stated project aim.

Popular goal-setting methods such as SMART and CLEAR can assist a project manager
in developing a set of successful goals right at the outset of a project. This can assist in
overcoming project management obstacles.

Budgeting

Financial concerns are regarded by most managers as one of the most significant
roadblocks to good project management. A manager can avoid a variety of frequent
project problems and aim for better and faster results by using effective cost
management.

To avoid cost overruns, it is critical to follow a good budgeting method and make
realistic assumptions.

Inadequate Skills of Team Members

A chain is only as strong as its weakest link, and project team performance is heavily reliant
on individual skill levels.

A successful project start plan will address the project's requirements as well as the
resources required to complete it. The human skill component is also included in these
sites.

Inadequate Risk Management

Project management requires foresight to foresee potential "what if" scenarios and
contingency measures. Projects rarely go according to plan because there are so many
factors that might lead to an infinite number of outcomes.

A project risk management system aids in detecting and reducing different sorts of
hazards. It is vital to have a backup plan in place. This strategy should include a list of
all risks as well as the course of action to be done if they occur.

Unrealistic Deadlines

Another project management difficulty that can negatively impair the quality of the final
output is having an unattainable deadline. Any good project manager understands the
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project team's capabilities and negotiates the project schedule by prioritising deadlines
and project tasks.

Velocity, which is the amount of work performed in a single sprint, is chosen

collectively in agile project management by taking feedback from all
stakeholders. This is done at the project's planning phase. Furthermore, the project
manager must keep track of deadlines on a regular basis.

Summary

 Businesses lose millions of dollars each year and have difficulty dealing with project
management challenges.
 According to one study, 39% of projects fail due to a lack of a project strategy and
a clearly stated project objective.
 Managers can more easily carry out their obligations thanks to project
collaboration technologies.
 Project management necessitates foresight in order to anticipate possible "what if"
scenarios and contingency plans.

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 FACTORS FOR SUCCESS IN NATIONAL PROJECTS

National projects have to be managed by keeping in mind several factors of law,

budget, environment and above all the impact on the people. The most critical success
factors are discussed below.

Awareness of and Compliance with Rules and Regulations; Compliance enforcement

aids the PM firm in preventing and detecting rule infractions, which protects the firm from
fines and lawsuits. The process of ensuring compliance should be continual. Many
businesses create a program to ensure that their compliance regulations are followed
consistently and accurately throughout time.

Pre-project Planning and Clarity in Scope; Time, money, and quality–the three
limitations of project management, or the 'iron triangle' –are used to measure a clearly
defined project goal and progress toward that goal. The project manager's job is to
finish the project on schedule, on budget, and according to the requirements. To
achieve the project's purpose, trade-offs between the three limitations are frequently
made.

Although the amount of time allowed to create the infrastructure and venues for
the London 2012 Olympics was set, the budget and quality might be modified to meet
the goal. If the schedule is shortened, more resources and a larger budget may be needed
to complete the project in a shorter amount of time.

Effective Partnering Among Project Participants; Stakeholder management is one of

the most important components of project management since it determines whether a
project succeeds or fails. Successful stakeholder management aids in the control or
prevention of scope creep, the delivery of project deliverables on time, and the mitigation
of issues that would otherwise cause the project to be delayed.

The District Assembly is established as a monolithic structure, with the responsibility

of the entire government to integrate political, administrative, and developmental support
in order to achieve a more equitable distribution of power, wealth, and geographically
dispersed development in Ghana, among other things.

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Stakeholders in local government projects in Ghana are numerous, with diverse and
occasionally conflicting interests and expectations, as is characteristic of most projects.

Staff from the relevant Metropolitan, Municipal, or District Assembly

(MMDA), beneficiary communities, traditional authorities, the contractor, the project
sponsor, the project team, suppliers, civil society organisations, and the relevant
government line agency are all stakeholders in local government projects.

External Monitoring and Control-

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A monitoring & evaluation system for public projects helps in many different ways as
follows:

 Understanding and enhancing the political, technical, and administrative aspects

of the implementation of projects, programs, and public policies (i.e., improving
spending quality).
 Demonstrating the scope and value of initiatives, programs, and public policies in
relation to the government's goals.
 Learning from the implementation, success, or failure of projects, programs, and
public policies in order to make evidence-based judgments. To put it another way,
we're trying to improve the quality of our decisions.
 Increasing citizen participation and accountability for resource allocation priorities,
as well as the progress and outcomes of initiatives, programs, and public policies.
 Interaction and conversation between territorial authorities are made easier.

Public Sector Policies on Projects Awards

The federal government of the United States is the world's greatest buyer of goods and
services. Military and civilian installations spend about $200 billion per year on everything
from advanced space rockets to janitorial services and cancer research.

Purchasing goods and services is done using defined procedures. For example, the
government does not make purchases in the same manner that a private household
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might. Instead, government contracting personnel follow Federal Acquisition Regulation-
compliant methods.

Contracting Methods

 Simplified Procedures; Simplified procedures necessitate fewer administrative

details, fewer layers of approval, and less documentation.

All government purchases over $2,500 but under $100,000 must be reserved for small
businesses unless the contracting officer cannot receive offers from two or more small
firms that are comparable on price, quality, and delivery, according to new procurement
reform law.

 Sealed Bidding; The sealed bid process is conducted through an Invitation For
Bid (IFB). An IFB typically contains a description of the product or service to be
obtained, instructions for making a bid, purchasing conditions, packaging,
delivery, shipping, and payment, contract provisions to be included, and the
bid date.

At the time specified in the invitation, each sealed bid is opened in public at the
purchasing office. Every bid is read out loud and recorded. The agency subsequently
awards a contract to the lowest bidder who is considered to be receptive to the
government's requirements.

 Contract Negotiation; When a government contract is worth more than $100,000

and necessitates a highly technical product or service, the government may submit
a Request for Proposal (RFP).

In a typical RFP, the government will require a product or service and ask prospective
contractors to propose how they plan to fulfil that request and at what cost. After they've
been filed, proposals in response to an RFP may be open to negotiation.

A Case study: Policies and Rules for projects financed by the European Bank for
Reconstruction and Development

When a government contract is worth more than $100,000 and necessitates a highly
technical product or service, the government may submit a Request for Proposal (RFP).

In a typical RFP, the government will require a product or service and ask prospective
contractors to propose how they plan to fulfil that request and at what cost. After they've
been filed, proposals in response to an RFP may be open to negotiation.

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Clients are obliged to generate and maintain papers and data relevant to the procurement
process and the administration of contracts following their award as part of their project
implementation duties for the Bank's evaluation.

 To ensure that the tendering process is carried out in compliance with agreed
processes, the Bank evaluates procedures, documentation, tender evaluation
reports, award recommendations, and final contracts.
 The documentation for big contracts must be examined by the Bank before they
are released.
 If the Bank determines at any point throughout the procurement process (including
after the contract has been awarded) that the approved tendering or contract
administration procedures were not substantially followed in any material regard,
the contract may be declared ineligible for financing.

Summary

 The federal government spends approximately $200 billion on goods and services
each year.
 Over $2,500 in government purchases must be kept for small enterprises.
 The government may issue a Request for Proposal when a contract is worth more
than $100,000.

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 PUBLIC SECTOR POLICIES ON PROJECT AWARDS

The federal government of the United States is the world's greatest buyer of goods and
services. Military and civilian installations spend about $200 billion per year on everything
from advanced space rockets to janitorial services and cancer research.

Purchasing goods and services is done using defined procedures. For example, the
government does not make purchases in the same manner that a private household
might. Instead, government contracting personnel follow Federal Acquisition Regulation-
compliant methods.

Contracting Methods

 Simplified Procedures: Simplified procedures necessitate fewer administrative

details, fewer layers of approval, and less documentation.

All government purchases over $2,500 but under $100,000 must be reserved for small
businesses unless the contracting officer cannot receive offers from two or more small
firms that are comparable on price, quality, and delivery, according to new procurement
reform law.

 Sealed Bidding:The sealed bid process is conducted through an Invitation For

Bid (IFB). An IFB typically contains a description of the product or service to be
obtained, instructions for making a bid, purchasing conditions, packaging, delivery,
shipping, and payment, contract provisions to be included, and the bid date.

At the time specified in the invitation, each sealed bid is opened in public at the
purchasing office. Every bid is read out loud and recorded. The agency subsequently
awards a contract to the lowest bidder who is considered to be receptive to the
government's requirements.

 Contract Negotiation:When a government contract is worth more than $100,000

and necessitates a highly technical product or service, the government may
submit a Request for Proposal (RFP).

In a typical RFP, the government will require a product or service and ask prospective
contractors to propose how they plan to fulfil that request and at what cost. After they've
been filed, proposals in response to an RFP may be open to negotiation.

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A Case study: Policies and Rules for projects financed by the European Bank for
Reconstruction and Development

When a government contract is worth more than $100,000 and necessitates a highly
technical product or service, the government may submit a Request for Proposal (RFP).

In a typical RFP, the government will require a product or service and ask prospective
contractors to propose how they plan to fulfil that request and at what cost. After they've
been filed, proposals in response to an RFP may be open to negotiation.

Clients are obliged to generate and maintain papers and data relevant to the
procurement process and the administration of contracts following their award as
part of their project implementation duties for the Bank's evaluation.

 To ensure that the tendering process is carried out in compliance with agreed
processes, the Bank evaluates procedures, documentation, tender evaluation
reports, award recommendations, and final contracts.
 The documentation for big contracts must be examined by the Bank before they
are released.
 If the Bank determines at any point throughout the procurement process
(including after the contract has been awarded) that the approved tendering
or contract administration procedures were not substantially followed in any
material regard, the contract may be declared ineligible for financing.

Summary

 The federal government spends approximately $200 billion on goods and services
each year.
 Over $2,500 in government purchases must be kept for small enterprises.
 The government may issue a Request for Proposal when a contract is worth more
than $100,000.

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 PUBLIC SECTOR POLICIES ON PROJECT MANAGEMENT

The public sector has a long history with project management.

Many governments have attempted to change key aspects of public organisations since
the 1980s in order to respond to mounting demand to cut expenditures while improving
the quality of public services.

As a result, there was a significant push toward revising procedures and structures in order
to adhere to principles of economy, efficiency, and effectiveness, as well as the application
of business aspects and initiatives aimed at modernising the public sector.

There are five current trends influencing project managers in the public sector:

 Managing Multiple Stakeholders: In the public sector, a project manager

frequently works with a number of stakeholders from several agencies.

“They need to employ a lot of negotiation, dispute resolution, communication, and

leadership skills because their projects may lack governance,” says Margareth Fabiola dos
Santos Carneiro, PMP, Rio de Janeiro, Brazil, vice chair of marketing for the PMI
Government Specific Interest Group (GovSIG).

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  Adapting to a Political Landscape: Lack of project continuity due to political
cycles and elections every two/five year is a particular problem. And when the
leaders shift, the first two tiers of leadership beneath them frequently change as
well. With those changes, there are normally a lot of changes in different positions,
so it's not uncommon for new individuals to abandon old initiatives and
begin afresh.
 Understanding Local Politics: Projects may be impacted by directives, policies,
procedures, and statutes. Project managers will need to employ people skills with
teams, negotiation and contracting, and business analysis after they have a
handle on everything, she says.
 Dealing With Public Scrutiny: Because what you do affects so many people, there
is a lot of interest in what you do. Failures attract a lot of attention because they
cause so much harm to so many people.

Because of open records and open government regulations, governments are unable to
conceal information in the same way that private businesses may, and your
accomplishments are not necessarily celebrated to the same extent.

 Dealing with a Pay Cut: Public-sector project managers are rarely paid as highly
as their private-sector colleagues, which can lead to a high rate of skill turnover.

Policy Framework

 Before project funding can be approved, a Business Case must be documented.

The Business Sponsor is in charge of completing the Business Case.
 A project's completed Business Case must be approved by the applicable Portfolio
or School delegation.
 After a Business Case is authorised, The Strategic Capital, Infrastructure and Project
Office (SCIP) creates a Project Proposal, which is subsequently approved with a
Project Charter.
 A Project Charter must be approved by the SCIP Office and endorsed by one of the
Deputy Vice-Chancellors, depending on budgetary resources.
 After the Project Charter has been approved, a Project Manager must be hired.
Project managers are paid from the project's operational money and must have
the necessary expertise, skills, and time to run the project.
 Projects require the Project Executive Sponsor to be a Deputy Vice-Chancellor for
the life of the project, from start to finish.
 During the planning phase of a project, a Steering Committee and a project team
must be formed under the supervision of a Project Manager.
 Reports on the budget, risk, and status must be delivered to the Project Executive
Sponsor and presented at Steering Committee meetings. These reports will be
presented at senior team and university committee meetings as necessary.
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  The Steering Committee must approve the project management, communication,
risk, and quality strategies.
 A business/user acceptability phase will be included in all initiatives.
 The project's closure will be decided by the Steering Committee, with input from
the Project Manager.
 SCIP will perform a Post Implementation Review to confirm that quality standards
were fulfilled throughout the project's implementation.

Summary

 In the public sector, there are five contemporary trends that are impacting project
managers.
 Political cycles and elections cause a lack of project continuity, which is a special
issue.
 Project managers in the public sector are rarely paid as well as their private-sector
counterparts.
 A Project Proposal is generated when a Business Case has been approved.

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 NETWORK PLANNING MODEL – PERT

The Program Evaluation Review Technique, or PERT, is a visual project planning tool that
aids organisations in analysing and representing activities, as well as evaluating and estimating
the time required to finish the project on schedule. PERT enables project managers to
establish start and finish dates, hence reducing project costs and timelines.

The US Navy developed PERT as part of the Polaris Project in 1958. They were tasked with
overseeing the Polaris submarine missile program. Around the same time, El DuPont de Nemours,
an American chemical company, developed a method called the Critical Path Method that was
quite similar (CPM).

Unlike CPM, which finds the longest path to completion, PERT provides you with three-time
estimations. While CPM is concerned with time, PERT is concerned with the time-cost trade-off.

Steps in PERT process

Step 1: Make a List of Precise Actions and Deadlines.

By listing all of your tasks in a table, you can obtain a clear picture of all of the stages, which you
can then expand upon by adding details like the sequence and time required to complete each
action.

Step 2: Establishing the Order of Events

While certain actions are simple to forecast, others may necessitate a more in-depth examination
to assist you in determining their order.

Step 3: Creating a Network Diagram

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You can display both serial and parallel actions in the diagram once you've set the sequence of
activities. Each action should be a node in the network, and arrows can be used to demonstrate
connections between them.

Step 4: Calculating the Amount of Time Required for Each Action

The capacity of PERT to deal with variability in activity completion time sets it apart from other
approaches. For each task, this model typically uses three time estimates:

 Optimistic Time : the time in which the action can be performed in the shortest possible
period.
 The Most Likely Time : the moment when the completion is most likely.
 Pessimistic Time : The amount of time it will take to finish the activity.

After you've found the time estimations, use the weighted average to compute the expected time
for each activity:

(Optimistic + 4 x Most Likely + Pessimistic) / 6 = Expected Time

Consider the case of constructing a cottage. The optimistic time to drill and plant the posts is 7
hours, the expected time is 10 hours, and the pessimistic time is 12 hours. The optimistic time is
counted once, four times for the most likely time, and once for the pessimistic time.

The total is then divided by 6, yielding a weighted average of 9,83.

Step5: Identifying the Critical Path.

A critical path is created by adding the timings for the activities and determining the longest way.
The whole amount of time required to finish the project is referred to as the critical path. If
activities outside the critical path speed up or slow down, the total project time does not change.
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PERT Terminologies

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Advantages of PERT

 An in-depth examination of the project's actions- You can gain a clear picture of the time
and budget required to complete the full project by looking at the activities separately and
in relation to one another.
 What-if analysis- It aids in the identification of all project-related possibilities and
uncertainties. You decrease the danger of project surprises by experimenting with different
combinations and selecting the most useful option. It also assists you in highlighting the
actions that require close attention.

Summary

 The US Navy created the Program Evaluation Review Technique (PERT) in 1958.
 PERT allows project managers to set start and conclusion dates, resulting in lower project
costs and timeframes.
 The total project time does not vary if activities outside the crucial path speed up or slow
down.
 PERT can help you acquire a clear picture of how much time and money you'll need to
finish a project.

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 CRITICAL PATH METHOD – CPM

The critical path method (CPM) is a project modeling technique created by DuPont's
Morgan R. Walker and Remington Rand's James E. Kelley Jr. in the late 1950s. Kelley and
Walker reminisced about the evolution of CPM in 1989.

The term "critical path" is credited to the creators of the PERT, which was developed about
the same time by Booz Allen Hamilton and the United States Navy. Between 1940 and
1943, DuPont designed and implemented the predecessors of what became known as
Critical Path, which contributed to the success of the Manhattan Project.

Critical Path Analysis is widely utilised in a variety of industries, including construction,

aerospace and defence, software development, research projects, product development,
engineering, and plant maintenance. This mathematical analysis method can be used on
any project with interdependent activities.

Steps in Critical path Method

 Specify Each Activity: The detailed characterization and identification of each task
or activity that makes up the project is the first step in the critical path method, or
CPM. This stage can also be referred to as the visualisation of each activity since a
graphic presentation of the activities that make up CPM is developed.
 Delineate Project Dependencies: The identification and characterization of
interrelated project dependencies is the next step in CPM. Some operations in any
project are contingent on the completion of others. A crucial step is to visually
portray dependent actions in the correct order.

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 The critical route technique involves the presentation of three questions on the
activities listed in step one:

 Which task or activities must occur prior to the completion of a certain task?
 Which task or tasks must be completed at the same time as this one?
 Which task is immediately followed by this one?

Create/Draw the CPM Network Diagram: The critical path analysis chart, or CPA, can
be generated after the primary actions and their dependencies have been identified. This
is sometimes referred to as a network diagram. The diagram is a graphic or visual
representation of the sequence of activities, plotted on the basis of interdependent
dependencies.

The critical route diagram, by the way, can be drawn by hand. That has traditionally been
the way a CPA network diagram has been depicted. However, there are user-friendly
software applications that produce the CPM network diagram in today's world.

Estimate Competition: Estimating the completion time of each project activity is the
fourth stage in the critical method path. When it comes to time units, there are no hard
and fast rules. They are fully reliant on the project. A smaller project is typically measured
in days, but a larger, more involved project is typically measured in weeks.

In CPM, time estimation is based on a three-point paradigm:

 The Best-case Scenario

 The Most Reasonable Estimate
 Estimate for the Worst-Case Scenario

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Summary

 Morgan R. Walker and James E. Kelley Jr. developed the critical route method in
the 1950s. Critical Path Analysis is used in a wide range of sectors.
 After the major actions and their dependencies have been determined, the critical
path analysis chart, or CPA, can be created.
 It's a visual representation of a series of activities arranged according to
interdependent dependencies.
 The fourth stage of the crucial method path is estimating the time it will take to
complete each project activity.

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 APPLICATION OF PERT AND CPM IN PUBLIC SECTOR

Large-scale project planning is critical to achieving the intended objectives, and managers should
employ the Critical Path Method to ensure an effective and successful project.

In the design of large-scale projects, the Project Evaluation and Review Technique (PERT)
is also vital and useful. This technique gives critical project information, such as the resources
required, time estimates for completing certain tasks, and required performance requirements. This
technique is commonly used in the public sector for project evaluation.

For What Applications in Government or Non-Profit Organisations PERT and CPM Being
Particularly Useful?

 In government resource planning, PERT can be employed in networking applications.

Other components at various levels of government are involved in government projects,
and they must work together to ensure the project's success.
 PERT can be used to avoid a wide range of resource usage and time variances. PERT
will allow for a well-connected and successful program with little variances in project
needs.
 The PERT technique can be used in government applications that entail construction
services for government structures.
 PERT is a significant technique that can be utilised in the planning, regulating,
monitoring, and evaluation of large-scale project execution. Large-scale projects
require a wide range of complicated and variable resources, such as time, labour, and
money.
 Non-profit organisations can utilise CPM in resource planning, which may include
project planning, which is analysing estimated service delivery costs during project
execution.
 CPM can be used by government project managers for scheduling, analysing, and
controlling their projects. This method will boost the likelihood of obtaining
satisfactory results.

A Case Study: The PERT Method in Logistic Management of Collective Passenger

Transport

Opole is a medium-sized city in Poland's Silesian Lowland, in the south-west. Opole is divided
into 29 districts, which are municipal administrative entities.
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The majority of public transportation in Opole is dependent on road travel. MZK Opole is in charge
of passenger transportation, and it now operates 18 daytime and 5 nighttime bus lines.

The municipality has guaranteed that residents can use public transportation to travel to any Opole
area. However, getting to the city suburbs may need a 30-minute to 60-minute delay.

A PERT-based model was applied to the current bus line no. 3 in order to optimise the
current way of conducting the bus service . It was feasible to recommend some optimising
solutions following the examination of areas that could be of crucial importance for the bus route.

The result of applying the PERT approach to the infrastructure of the bus service run thus far is an
answer as to when the bus will cover the route and with what likelihood.

The presented model allows for the optimization of current public transportation systems in cities
while also determining the actual journey time for a specific bus route based on normal distribution
and computed traffic likelihood.

The research study found that by using the PERT method to plan travel times for one bus line,
nearly 1.5 +/0.5 minutes could be saved on the selected route (given that there are 47 bus runs per
day, the total savings amount to 1 h and 10.5 minutes), which is a very good result, especially
considering that travelling the same route in a passenger car takes only 2 minutes less.

Summary

 The achievement of the planned objectives requires large-scale project planning.

 For managing large-scale projects, the Critical Path Method (CPM) and Project Evaluation
and Review Technique (PERT) are important tools.
 CPM is a project management tool that government project managers can use to schedule,
analyse, and control their projects.

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 CENTRALIZATION AND DECENTRALISATION

In any organisation, there are two ways of operation: centralization and decentralisation. There is
a hierarchy of formal authority in centralization for making all of the organisation's major
decisions.

Decentralisation also means that decision-making is delegated to the lower levels of the
organisation. Let's take a closer look at the differences between centralization and
decentralisation, as well as their benefits and other variables.

It's difficult to distinguish between centralised and decentralised project management. Pure
models are used by only a few companies. One unit may be centralised, another decentralised, and
a third accomplishes both inside the same corporation.

The following features are common in centralised organisations:

 Project managers make up the majority of this organisational unit.

 The group may additionally include project resources such as scrum masters, business
analysts, or testers; the organisation is dedicated to project management and delivery; and
 The company's leadership has project management expertise and training.

There could be dozens or hundreds of resources in a centralised project management

organisation. From novice project analysts to senior program managers, they have a diverse
workforce. They also use a mix of internal and external consultants and contractors.

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Project managers work in decentralised organisations as part of a functional organisation,
such as finance, marketing, or technology. These PMs may work as part of a small team or on
their own. The organisation's primary focus in this paradigm is not project management.

When selecting whether to centralise or decentralise project management, there are numerous
considerations to consider. There are two essential areas to think about:

 Value-Proposition Considerations: Clarify the projected advantage or value generated

from the organisational model; and
 Organisation and Structural Considerations: represent the realities of the organisation's
culture, size, and project complexity.

Value-Proposition Considerations

The benefits of centralization or decentralisation are outlined in the value proposition

considerations. Defining the expected outcomes can aid in the selection of the best model.

 Standardisation and Consistency: Standardisation, practices, and processes are easier to

build and sustain in centralised companies. Consistent procedures lead to a more
consistent experience and predictable results. Consistent procedures, according to the
PMI Pulse of the ProfessionTM, boost the likelihood of project success and minimise costs.

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The "one-size-fits-all trap" can befall centralised enterprises. Individual portfolios or programs
may require standards and practices that may not connect with or provide the flexibility necessary
by them.

 Transparency and Independence: Project managers working for a centralised

organisation often have more latitude to deliver an unbiased perspective. The sponsoring
or delivery organisations are not part of their management chain. PMs who are integrated
within functional teams, on the other hand, may feel less independent.
 Client Engagement and Concentration:Because they are members of the functional
team, decentralised project managers frequently have more domain knowledge. Because
they are assigned to the next project, which may be in a different section of the organisation,
centralised PMs do not have that same chance.

The following are some of the dangers that centralised organisations may face:

 Being too focused on process and tools,

 Lacking domain understanding, and
 Not offering incremental value are all examples of not being customer focused.
 Efficiency in Resource Allocation- Staffing the work efficiently is an important and critical
function in firms with many projects and project managers.

Economies of scale are available in centralised project management companies. They've

established procedures for staffing and managing resource requirements. They are more capable
of stretching their resource pool to accommodate partial resource allocations and demand
changes. They also have a pool of potential employees or contract workers in the pipeline.

 Cultural Compatibility: "Culture eats strategy for breakfast," as Drucker put it. The
decision to centralise or decentralise must be made in accordance with the culture of the
business. Attempts to align organisations that are incompatible with the culture will fail to
yield the desired results.

Summary

 It might be tough to decide whether a company should centralised or decentralised project

management.
 When working for a centralised organisation, project managers often have more leeway to
provide an unbiased viewpoint.

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 SPAN OF CONTROL IN PUBLIC PROJECT MANAGEMENT

The span of control is a management tool that attempts to define the maximum number
of people that a manager may effectively supervise.

Narrow Span of Control

Traditional organisational structures have a tight range of control, which is typically

bureaucratic and made up of multiple levels of administration. Managers have fewer
personnel under their supervision and work is generally specialised within a small
range of control.

Wide Span of Control

A large span of control means that a single manager is in charge of a larger number of
employees. The availability of information technology has recently allowed for greater
control spans.

As a result, businesses have been able to rely on technology to assist fewer middle
managers in managing larger groups of subordinates. With its demand for cost savings
and improved operations, this initiative delivers value.

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Many factors influence the range of control, including:

 Assets, work yards, and personnel are dispersed around the country. A supervisory
manager may have more trouble if these factors are dispersed more widely.
 Employees' abilities. Highly capable individuals require less supervision, allowing
managers to supervise a larger number of staff.
 Provides value to the agency. An organisation that wants to add value to its
personnel by training and developing new skills must devote management
resources to performance management.
 Tasks that are similar. The level of uncertainty and direct supervision necessary in
day-to-day operations is determined by the interval and similarity at which jobs
are performed. Frequently occurring jobs that are similar in nature frequently
have fewer variables and are easier to manage.
 The number of duties and tasks. New responsibilities for a management, such as
stakeholder meetings, committee memberships, and additional projects, can
reduce the ideal span of a manager.
 General themes that public works organisations can employ in this process:
 Governments are openly striving to enhance the ratios of span of control.
 Current research and practice point to higher ranges for span of control >10, which
appear to be increasing as technology and communications advance.

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  Any span of less than three should be justified, and a 1:1 span should be justified
much more so.
 Employee-to-supervisor ratios have been found to be successful, with larger ratios
for structured and pre planned tasks like independent technology workers and
lower percentages for specialised employees who require feedback and control.
 If company procedures and systems are efficient, the staff-to-management span
of control ratio can be increased. A limited range of management is required if an
agency is unstructured, lacking in skill sets, and requires guidance.
 Command and control leaders necessitate more layers, whereas management
using new technology-driven tools necessitates fewer.

A Case Study: Gaza

Regarding the topic of management span in the Gaza construction industry, the following
elements were discovered to have an impact on management span:

 Task Nature: Less supervision is required for routine, repetitive activities than for
more complicated, non-routine activities. It has been discovered that a manager
can supervise ten subordinates in everyday duties, whereas a foreman can manage
35 competent workers.
 Managerial and Supervisory Skill Levels: it has been found that a manager with
more experience than others can manage eleven subordinates, while an
experienced foreman can manage thirty workers.

Willingness and Competence of Subordinates: A foreman can manage up to 35

workers if they are competent and ready to work hard; if they are not competent and
unwilling to work hard for some reason, a foreman can manage up to 22 people.

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38
 WORK SPECIALISATION IN PUBLIC PROJECT MANAGEMENT

The subject of project management has matured into a working body of knowledge known as
PMBOK – Project Management Body of Knowledge – due to the importance of projects.

The PMI is in charge of creating and promoting the PMBOK. The PMP is a professional
certification program for project managers that is administered by PMI. So, if you want to learn
more about project management, start with PMBOK, and if you want to pursue project
management as a career, consider becoming a PMP.

What is PMBOK?

The PMBOK is a set of ten knowledge areas that cover everything you need to know about project
management:

Managing Integration: Projects have a variety of activities going on, and it's important to
maintain the "whole" thing moving together - integrating all of the many dynamics that occur.
Developing the project charter, scope description, and plan to guide, manage, monitor, and control
project change is what managing integration entails.

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Managing Integration: Projects must have a set parameter or scope, which must be broken down
and managed using a work breakdown structure (WBS). Planning, definition, WBS
construction, verification, and control are all aspects of scope management.

Managing Time and Schedule: Projects have a defined start and finish date. As a result, the
budgeted time must be managed according to a project timeline. Definition, sequencing, resource
and duration estimation, schedule formulation, and schedule control are all part of managing
time/schedule.

Managing Costs: Projects consume resources, thus it's important to balance the investment with
the goal of generating value (i.e., the benefits derived exceed the amount spent). Resource
planning, cost estimation, budgeting, and control are all aspects of cost management.

Managing Quality: Project management involves particular deliverables or work items. Project
objectives and performance requirements must be met by these deliverables. Quality assurance,
quality control, and quality planning are all aspects of quality management.

Managing Human Resources: Projects are made up of teams, and you must manage the project
team(s) throughout the project's life cycle. Finding the right people, monitoring their outputs,
and keeping them on track are all important aspects of project management. Human resource
management entails the planning, hiring, and development and management of a project team.

Managing Communication: Projects always involve a large number of people, not simply the
end users (customers) who directly benefit from the project's outcomes. This can include project
participants, project managers, and external stakeholders with a vested interest in the
project's success.

Managing Risk: Projects are often a discovery-driven process, revealing new client needs and
revealing key issues that were previously unknown. Unexpected occurrences can also occur in
projects, such as project team members departing, allocated resources unexpectedly altering, the
organisation becoming unstable, and the introduction of newer technology. There is a pressing
need to appropriately identify and manage diverse hazards.

Managing Procurement: Projects use outside vendors and contractors for a variety of services,
including the acquisition of equipment. Within the project life cycle, there is a requirement to
manage how vendors are selected and managed.

Managing Stakeholders: Every project has an impact on individuals and organisations, as well
as being influenced by them. A critical success component is identifying these stakeholders early
in the project, as they emerge and develop. Managing stakeholders entails identifying
stakeholders, their level of interest, and their capacity to affect the project, as well as
managing and controlling stakeholder relationships and communications.

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Summary

 The PMBOK is a collection of ten knowledge categories that encompass all aspects of
project management.
 PMI administers the PMP, a professional certification program for project managers.
 The planning, hiring, development, and management of a project team are all part of human
resource management.
 Identifying and controlling stakeholder interactions and communications is part of
managing stakeholders.


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 DEPARTMENTALIZATION IN PUBLIC PROJECT MANAGEMENT

A practice that divides activities into distinct departments is known as departmentalization. These
departments were developed so that responsibilities within the company might be undertaken by
specialists. It can be found in both private and public institutions.

Departmentalize also refers to an organisation's organisational structure, which comprises multiple

departments and jobs, as well as their interrelationships.

Objectives of Departmentalization

The following are the objectives of departmentalization:

 Controlling the situation

 Simplifying the company's operational process
 Bringing all of the specialist operations under one roof
 Increasing management efficiency and, as a result, the organisation's overall efficiency
 Defining roles and responsibilities, as well as, of course, accountability

Types of Departmentalization

 Functional Departmentalization: The company forms departments depending on the

functions that they do for the company in this type of departmentalization. For example,
you will direct all finance specialists to a finance department, and marketing specialists to
a marketing department, rather than vice versa.

The organisation benefits from functional departmentalization since it integrates expertise and
maximises efficiency and production.

 Geographic Departmentalization : Geographic departmentalization refers to how a firm

divides its departments along geographic lines. Multinational corporations have offices all
throughout the world, and they've organised their operations into divisions based on areas.
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The geographical departmentalization guarantees that the region's cultural, social, and political
needs are satisfied.

 Product Departmentalization; This departmentalization is ideal for a large organisation

that deals with a variety of items. It brings together all of the activities in a department that
are linked to product delivery and development.

When each product's manufacture, marketing, and handling are all important to the organisation,
product departmentalization becomes essential. It assigns complete responsibility to each product
and ensures specialised manufacturing facilities.

 Process Departmentalization: Process departmentalization is when a corporation

organizes its activities according to the manufacturing processes. To carry out their
operations and activities smoothly, the departments will require sufficient material and
labor.
 Customer Departmentalization: When a corporation focuses on the requirements and
wants of its customers, it forms departments for each class or type of client or customer.
Customer departmentalization is the term for this.

It focuses on customer satisfaction in order to boost a company's sales and brand image.

Advantages of Departmentalization

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  Departmentalization is a useful grouping that allows meaningful work to be
accomplished. It is simple to coordinate different tasks within the same department.
 Work is integrated as a result of departmentalization, which provides an economic
advantage.
 Departmentalization allows low-cost operations to take use of local characteristics.
 Simplifies training by focusing on specific skills and specialised training to boost
individual and company productivity.
 Departmentalization allows the business to profit from specialisation.
 Because the manager is given the authority to make autonomous judgments, there is a sense
of autonomy.
 It improves the likelihood of expansion and growth.

A Case Study: A Malaysian International Airline Company

An international airline that has recently completed a well-regarded corporate recovery program
(hereafter referred to as Co1).

The MD oversees the corporate PMO, which was created to handle governance and portfolio
management. It has been entirely tasked with overseeing all project deliveries in order to ensure
that the organisation's objectives are met.

The PMO for each Sub-Program was created with the same goal in mind, and it collaborates
closely with the Corporate PMO.

Summary

 Departmentalization is a practice that divides activities into various departments.

 These divisions were created so that the company's tasks may be delegated to specialists.
 Departmentalize also refers to the organisational structure of a company, which includes
several departments and jobs, as well as their interrelationships.
 Departmentalization in Public Project Management
 A practice that divides activities into distinct departments is known as departmentalization.
These departments were developed so that responsibilities within the company might be
undertaken by specialists. It can be found in both private and public institutions.
 Departmentalize also refers to an organisation's organisational structure, which comprises
multiple departments and jobs, as well as their interrelationships.

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CHAIN OF COMMAND AND FORMALISATION IN PUBLIC PROJECT MANAGEMENT

A chain of command is an organisational structure that outlines how each employee in a

corporation reports to each other. The founder, owner, or CEO would be at the top of
the chart, and those who report to them would be directly below.

Formalisation
The degree to which an organisation's policies, procedures, job descriptions, and rules are
written down and explicitly stated is known as formalisation. Structures that are
formalised have a lot of written rules and regulations.

45
These systems use written rules to manage employee conduct, leaving individuals with
minimal discretion to make decisions on a case-by-case basis. Formalisation has the
benefit of making employee behaviour more predictable.

Formalisation also influences company culture, such as whether employees must sign in
and out when entering and exiting the office, how many and how long employees are
allowed to take breaks, how and when employees are allowed to use company computers,
and how workers at all levels are expected to dress for work.

How do you establish a chain of command?

Top Level Managers: This layer, which is also known as senior management, includes
positions such as chief executive officer, chief financial officer, and chief operating
officer. Individuals at this level oversee the entire organisation, monitor the company's
overall health, define objectives and projects, make crucial high-level decisions, and
monitor the company's overall health.

Chairman of the board, president, director, vice chairman, and even the owner are
all positions that match this category.

Mid Level Managers: Employees at this tier report to the company's highest-ranking
executives. As a result, they're the first to carry out their bosses' orders,
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communicating and delegating larger company-wide initiatives to their direct
reports. One of their key roles is to ensure that teams perform efficiently by coaching
employees and reporting on the team's accomplishments to their superiors.

General managers, branch managers, regional managers, and department managers are
examples of positions that could fall under this category.

Front-Line Managers: Customer-facing positions are frequently filled by front-line

managers. These employees report to middle management, are involved in everyday
operations, and guarantee that their subordinates meet their objectives.

Some department heads, office managers, staff managers, key holders, supervisors, and
other positions fill this tier.

A Case Study: HYTEN CORPORATION

Hyten Company began as an automotive component company in 1982. During the Gulf
War, the business began producing military electronic components. Hyten continued to
prosper after the war.

Hyten grew to be one of the most important component suppliers for the Space Program,
but it refused to specialise.

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Hyten Corporation's Automotive Components Division uses an informal project
management approach. Each department is in charge of their particular functional area
of a given product development or project.

Projects have been common enough that a process for taking a new product from concept
to market has been devised. Each department is aware of its obligations and the
contributions it must make to a project.

A Case Study: Donegal County Council

Donegal County Council, as the local authority covering County Donegal (with the
exception of four Town Council areas), provides a wide range of services. Planning Control,
Social Housing, Road Maintenance and Improvement, Pollution Control, Fire Services,
Library Services, and Sanitary Services are examples of these services.

Donegal County Council's work has been separated into seven different directorates and
four levels of management (county manager, directors, divisional managers, and area
managers). Different levels of decision-making and responsibility are represented by the
four levels of management. The management roles and responsibility are another
important part of the design. Accountability was previously divided between professional
and technical work, administrative work, finance work, human resource work, and so on.

Each managerial job in the new structure is responsible for all areas of the work of the
employees for whom the manager is responsible. As a result, the new structure separates
managerial tasks from other grading jobs in the grading hierarchy.

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Summary

 A chain of command is an organisational structure that spells out how each

employee in a company reports to the others.
 The top of the chart would be the founder, owner, or CEO, with people who report
to them right below.
 Employee behaviour becomes more predictable as a result of formalisation.

End>

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