Troubled project turnaround and forensics

Troubled project
turnaround and forensics
• Significant overpayment of Fixed
Price, Time and Material, Unit
Price, Cost Plus, or Guaranteed
Maximum Price (GMP) contractual
agreements as compared to budgeted amounts
• Substantial increase in program or
project costs, with little management understanding of what is
causing those increases and no coherent plan to prevent further losses
Capital projects can be extremely
complex and involve many risks
and challenges such as labor
constraints and productivity
issues, delayed delivery of critical
materials and equipment, and
unanticipated site conditions
resulting in potential claims for
time extensions and additional
costs. Owners need to manage
sometimes vulnerable supply
chains while effectively managing
risk and change throughout
execution to align with commercial
project delivery strategies.
Although many owners have made
an effort to improve capital project
performance, too many projects
still fail to deliver on cost, schedule
or quality goals.
To manage these project delivery
challenges, project owners need
to focus on identifying and
mitigating the risks that derive
from the project requirements and
the chosen delivery method. When
issues emerge, rapid action to get
the project back on track is needed
to limit the impact of performance
events and avoid the potentially
significant financial consequences
of project failure.
PwC can help your organization identify
and address the challenges inherent
in your capital project delivery model.
Our solutions assist owners of troubled
projects in developing an overall project
diagnosis and roadmap to restoring the
health of your project so you can better
manage cost, scope, schedule and quality risks.
The evaluation process
Issue. Capital project oversight may
not be optimally structured, aligned or
present. Key symptoms might include:
• Potential risks not identified or
strategies developed on how they
might be mitigated
Action. Through technical and financial document review and interviews
with your project management team,
PwC can quickly identify the critical
causes of your project delivery challenges and recommend actions to position your company to mitigate their
potential financial implications including identifying opportunities for cost
recovery. In developing enhancements
to the project delivery framework to
be applied through completion of the
project, we would examine the following types of issues:
• Cost Management. We will assess
your financial management processes including scoping, estimating,
and budgeting, payment application
development and processing, cost
variance analysis and reporting,
and contingency management. We
will help you establish a robust cost
to complete model that provides
realistic and reliable cost projections to test remaining funding, and
contingency levels—an essential
function to avoid surprises.
• Schedule Management. We will
assess your schedule management
processes including critical path
method (CPM) schedule development, schedule logic activity and
dependencies, schedule revision
procedures including time extension requests, time impact analysis
and activity level variance reports,
likelihood of obtaining key milestones and deliverable dates, and
project schedule integration techniques and effectiveness.
• Procurement and Contract
Management. We will assess your
procurement and contract management processes including supply
chain management and procurement planning, solicitation planning, source selection, prequalification and selection criteria and
contract negotiation and administration. We also can perform contract compliance assessments.
• Project Controls. We will assess
your overall approach to project
controls, including earned value
analysis and deviation reporting,
scope management and change
control, issue and risk management,
environmental, health and safety,
project security, permitting and
regulatory compliance.
• Changes, Claims and Disputes.
We will evaluate the validity of
existing change orders and claims,
develop change order and claim defenses, support dispute resolution,
and position you to better mitigate
the impact of future disputes.
• Organization and Administration.
We will assess your policies and
procedures relating to project
initiation, authorization, delegation of authority, organizational
roles and responsibilities, document and records management, and
executive reporting.
Impact. Benefits of using PwC’s troubled project turnaround and forensics
solution may include the following:
As capital project delivery becomes increasingly
complex, PwC is leveraging the extensive experience
and expertise of its industry professionals to help
our clients deliver the value that their shareholders
expect from major infrastructure investment.
• Identification of high risk
items requiring immediate
management focus
• Added confidence in the team’s ability to achieve project forecasts
• Enhanced claims preparation and
response strategies, and increased
success in alternative dispute resolution forums
• Identification and recommendation of cost reduction, avoidance, or
recovery opportunities
• Collection of lessons learned and
development of actionable recommendations for managing and
mitigating project risks
PwC offers a number of other key project solutions for consideration:
• Capital Planning and Portfolio
Management/ Optimization
• Capital Project Governance
and Controls
• Capital Project Management
• Capital Project Regulatory Support
• Capital Project Technology
• Capital Project Infrastructure Deals
• Construction Project Audits
• Real Estate Advisory
• Tax Diligence and Structuring
• Identification and remediation
support of ineffective or missing
policies, procedures or controls
• Identification and remediation
support of deviation from better
practices and inefficient techniques
being utilized by the project management team
Contact us to discuss the complexities
of your project and co-develop a custom
approach for your organization.
Contacts
Peter Raymond
Capital Projects & Infrastructure
US Leader
McLean, Virginia
+1 703 918 1580
[email protected]
Daryl Walcroft
Capital Projects & Infrastructure
San Francisco, California
+1 415 498 6512
[email protected]
Stephen Lechner
Capital Projects & Infrastructure
San Francisco, California
+1 415 498 6596
[email protected]
Ralph Roam
Capital Projects & Infrastructure
Philadelphia, Pennsylvania
+1 267 330 2241
[email protected]
Anthony Caletka
Capital Projects & Infrastructure
Houston, Texas
+1 713 356 5871
[email protected]
Combining engineering, project controls, and business acumen PwC’s
capital projects and infrastructure professionals serve the entire life cycle of
acquiring, financing, investing in, planning, designing, procuring, constructing/implementing, commissioning, operating and maintaining complex
greenfield or brownfield capital assets, programs or portfolios. Our professionals have industry experience as project managers, designers, engineers
(civil, environmental, structural, mechanical, electrical, industrial, and
nuclear), construction managers, critical path method (CPM) schedulers,
cost analysts, construction attorneys and accountants.
www.pwc.com/us/capitalprojects
Certain services are not permitted for audit clients and their affiliates.
©2013 PricewaterhouseCoopers LLP, a Delaware limited liability partnership. All rights reserved. PwC refers to the US member firm, and may sometimes refer to the PwC network. Each member
firm is a separate legal entity. Please see www.pwc.com/structure for further details. This content is for general information purposes only, and should not be used as a substitute for consultation
with professional advisors. Solicitation AT-14-0031