Avoiding nasty commercial surprises

Abacus Tips 18 Jul 2017 by Abacus

Nail the scope

It is critical that the scope is fully understood by both parties to ensure the smooth running of a contract. Ideally, this should happen during the tender process, although this isn’t always practical.

There are various contract forms that attempt to deal with more ambiguous scope such as reimbursable or target cost.

Whichever contract scenario exists, it is imperative that following contract award, project and contract change control is managed robustly by both parties.

A detailed understanding of the project scope is essential to ensure accurate management of the budget and expectations on both sides of a contract.

Addressing the project risk profile so that all potential impacts are understood is also important.

We at Abacus prefer to be involved in a project from the outset, ideally throughout the tendering phase of the contract to ensure that the processes and tools are in place to manage for the best possible outcome: a quality project delivered on time and to budget.

Don’t gold plate the design

Tight budget constraints and enthusiastic engineering are often opposing forces on projects.

The next rule of thumb sounds incredibly straightforward, but it’s surprising how often it doesn’t happen:

“Build to a design that you can afford and stick as closely to it as possible.”

Early involvement of Abacus enables us to work with the client and contractor to ensure that the design is nailed to the agreed scope and that any changes are properly costed and are absolutely necessary.

Get your programme right and robustly managed from cradle to grave

There are many projects where the programme is treated as a loose guide with a commencement date and a completion date and anything goes in between!

Projects can be managed this way but I have not yet seen this approach deliver any project to budget or to time.

Robust management of the programme is critical to success and Abacus can assist in managing this aspect of project controls, reporting progress and earned value accurately so that delay and inefficiency and risk can be mitigated.

The truth, the whole truth and nothing but… accuracy

The old saying (politely put) is that you put rubbish in and you get rubbish out. Accuracy of data is fundamental.

It’s an obvious statement to make but often during the lifecycle of a project, due to the challenge and complexity of the work, data used can be outdated, sometimes to the point of meaninglessness.

This can be programme related, or associated with labour and resources forecasting; cashflow forecasting; cost reporting; record keeping or with poor project and contract administration.

Getting Abacus embedded in to your project early safeguards against this. We can manage the whole shooting match across the gambit of project controls and post contract administration. Abacus can use the client’s own systems and use best practice to ensure accuracy of the forecast data.

We have the expertise to analyse and report issues and put in place plans to mitigate problems to deliver the best solution for our client.

Get your head out of the sand

Ideally Abacus prefers front end involvement, but at times there are projects that get into difficulty and need help midway to get the project and contract administration back under control.

The first step on the road to project recovery is to admit that you have a problem. Get your head out of the sand and get on the case. Abacus can assist in that recovery.

All complex projects have variations to scope that exceed original budgets; all complex projects suffer delays and inefficiency; all complex projects have matters that require resolution.

Recognising and accepting that these things happen, Abacus has the experience and expertise to manage and resolve difficult contract and project scenarios.

We often work with parties who have reached an impasse, helping to facilitate and negotiate a win-win outcome.

“I have worked with Abacus for many projects over the last ten years and due to their professionalism always choose to employ them where possible.”
Programme Director – Alstom

Integrate and collaborate

On complex projects and within large organisations, a silo-mentality exists, sometimes it is a result of geography: out of sight – out of mind.

Often, it is a consequence of poor communication or a fallout of a blame culture that engenders fear. When the majority of day to day correspondence is via email, it means integration between the employer and the supply chain is limited.

At Abacus we endeavour to break down the silo and get parties talking, bringing everyone back to the main aim of a project: to complete on time , on budget and to scope.