Comments
Transcript
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