Contract Integration on Rail Transit Projects

 

On rail transit projects with multiple design and construction contracts, a key project management function is Contract Integration.  

Typically, a contract has specific performance milestones for delivering services and furnishing systems, products and tangible assets to complete the work.  The work activities, durations and sequencing of predecessor and successor work are defined in the detailed contract schedule, which is used to report progress and determine payments to the contractor.    

When multiple contracts are executed under a single project with a fixed budget and end date, the interfaces between contracts is critical to organizing and monitoring the work to ensure it is executed in the same manner as-designed.   A Project Manager (PM) or designated Integration Manager will define the specific interfaces between the contracts, identify the activities that are linked to the interfaces, and create a Contract Integration Plan (CIP).   The CIP, which is a supplement to the Project Management Plan (PMP), is used by the PM to monitor and maintain the sequence of contract progress and manage risks that impact the overall project schedule. 

Contract integration is a cross-functional management activity that connects knowledge of processes, input/outputs, and tools and techniques from several areas of PMI’s Construction Extension to Project Management Body of Knowledge, such as Scope Management, Time Management and Risk Management.  

In rail transit construction, contract integration can be performed by any one of several members of the project team, including PM and staff, Contract Officer/Manager, Scheduler and Risk Manager.  However, contract integration requires the team acquire a thorough understanding of:

• Procurement methods and durations
• Scope and contents of the contract documents
• Timing of work progress relative to other contracts
• Likely means and methods by contractors to meet the performance requirements of the contracts
• Interfaces created by the scheduled sequence of the contracts.  

While the PM will assign the responsibility to a single team member, the entire project team should be aware of the function and the key markers that will be established to monitor the interfaces between contracts. 

The scopes of contract packages are developed for execution in a certain sequence to achieve project scope realization by the time the last contract is completed.   The planned sequence of construction contracts is heavily dictated by the physical reality of the project environment, available means and methods, and the space within the project envelope.   Those physical considerations will determine the key interfaces between each contract as well as a confidence level that the project plan and schedule can be properly executed.    

A simple method to implement contract integration on a project is to:

A)        Identify and describe the interfaces between contracts.    PM will manage the development of the contract documents.  Based on the contract scope and performance requirements, PM will prepare a simple statement such as Contract A for the system must complete submittals before Contract B for the equipment foundation is awarded so the weight and loading of the system equipment and the footprint can be finalized for constructing the foundation.   The Interfaces may include contracts under other projects that are adjacent to the Project envelope. 

If part of a Program, the interfaces may include connections to predecessor and successor projects.  An example interface is -  Contract E for the Control Center can not be completed until Contract D for the fiber Optic Network under another project is completed and available to connect into the Control Center.  

B)        Create a Master Project Schedule (MPS) with milestones or constraints linking the contracts to specific activities and dates.    PM will create an Integration Management Plan (IMP) that describes the interface and the connected contracts.   PM will assure the interfaces are shown in the MPS and that they are properly link in the approved detailed contracts schedules for each contract.   The interfaces will create specific connections to activities in each project contract and as needed, interfaces to specific milestones in contracts on other project adjacent to the Project envelope.   As the MPS is updated for progress, changes in activities dates may show variances between milestone dates and forecast milestone dates.   

C)        Establish the monitoring methods, schedule variance metrics and triggers, and the frequency for assessing any impacts to the dates based on progress updates or changes to the contract schedules.   PM will define the integration management responsibility in the PMP and incorporate the MPS milestones interfaces into the Risk Management Plan (RMP).   This may be discussed at monthly progress meetings, quarterly updates for the risk management plan, and at PMO Quality Management System Meetings.      

D)        Describe the mitigation for impacts to milestones or constraints created by contractors’ progress that varies from the planned schedule.   PM will create a CIP that describes the interface and the connected contracts and the actions required to address schedule variance for interface dates.  As the CIP identifies interfaces, the RMP will be updated for the risk that contract interfaces are changed along with qualitative judgment on probability and impact.   As theses risks are triggered, PM will lead the development of solutions, analyze the solutions and alternatives, assess threats and opportunities to other contracts and projects, and select/present to PMO the best value decision.  Due to critical nature of construction schedules, the solution development process should be completed within the PM’s progress reporting period.     

E)        Prepare a response action for solutions that require changes to contract milestones.  PM will develop the response action for the RMP, which will detail the cost, schedule and scope impacts from the triggered risk.    Interfaces with contract schedule variances that can not be mitigated will require changes in project end-date.   Under the RMP, the PM will execute the response plan, which will implement changes to cost, schedule and scope on the affected contracts, and as needed, to the Project and to any other projects with interfaces.

TIP:  Before developing the CIP, ensure that the project has developed the prerequisite project documents such as Project Charter, PMP, and a Procurement Plan/Contract Packaging Plan 

TIP:   Contracts can include labor agreements for work conducted by the Owner’s in-house labor forces, which are governed by Owner’s collective bargaining agreements with the unions with jurisdiction for the work.  

TIP:   Before validating the project schedule and milestones and finalizing the CIP, obtain the Owner’s organizational process and forms to support the proposed procurement acquisition and delivery methods for authorizing work by contractors and in-house forces.  

TIP:    The responsibility for contract integration maybe best handled by the PM with support from a Scheduler or Project Coordinator providing monthly updates on key marker activities in the Master Schedule.

TIP:   Best value decisions should not seek to reduce the project scope or create dramatic changes in a Program.  However if it does, a thorough review of interfaces should produce a Lessons Learned that may include updating the planning and executing of projects and the packaging and sequencing of contracts.