Project Management View from Rail Transit Programs and Projects

This is the 14th in a series of discussions that is intended to prompt Project Teams to be aware of the entire contract document, including Information For Bidders (IFB), General Provisions/General Conditions/Terms and Conditions (GCs) and the Technical Requirements [Specifications and Drawings.] 

Part 14 of Know the Contract is Contract Completion/Closeout.   Closeout is the successor to all other work performed under the Contract and it is final set of activities between the Buyer and Seller.    While the requirements for Closeout may be scattered throughout the Contract document, the most important are described in the GC’s sections related to Schedule and Payments.   At this phase of the Contract, the Buyer’s Contracting Officer is the primary arbiter for determining that all requirements are met by the Seller and confirmed by the Buyer’s Project Manager.   

Part 6-Schedule Performance and Part 7-Progress & Milestone Payments of this series describe the content in the typical contract Form.   Satisfying these requirements precede completing the Closeout process and documentation, and includes substantiating completion of testing and start-up; training; delivering spare parts; submitting operation & maintenance manuals, software, as-built drawings, asset management data and warranty; and closure of all quality management  processes and deliverables. 

Regardless of the contracting method, such as Design-Bid-Build, Design Build and CM At Risk, the Closeout of the contract is governed by the GCs as well as any Special Conditions and terms negotiated for contract award.   The typical activities and topics include:

• Settling all change orders, requests for extension of time due to Buyer actions,  differing site conditions or claims for extra work and damages
• Reconciling all incentives payments and damage accruals from exceeding or delaying established milestone dates for completion of work
• Confirming receipt of all GC deliverables, including photographs, monthly progress reports and schedules, manpower utilization reports, certified payroll and prevailing wage records,  and prompt payment records.
• Resolving all claims, disputes, legal actions, or pending attorney actions between Buyer and Seller, including all contract issues with Seller’s subcontractors, vendors and suppliers
• Verifying all payments and release of retainage to prime contractor, subcontractors, vendors and suppliers 
• Processing all contract modifications and final contract amount
• Transferring all contract records in paper and digital format

During the Closeout phase, the Buyer may develop Lessons Learned from the Seller’s performance on the Contract.  The Lessons Learned will be utilized by the Buyer to consider changes in requirements as well as management processes and documentation on future Contracts.  Some of the topics from Lessons Learned may include:

• Effectiveness of the contracting delivery method and the Buyer’s and Seller’s organizational structure to support the work
• Realism in Buyer’s duration for contract milestones and effectiveness of incentives and liquidated damages
• Evaluation of Seller’s prime contractors, vendors and suppliers to meet the Buyer’s schedule deadlines
• Buyer’s and Seller’s risk threats and opportunities mitigated and realized during the Contract
• Change orders and claims encountered by Buyer that may be avoided by editing requirements in future Seller’s contracts.

TIP:  The responsible parties for Closeout are the Buyer’s Project Manager with support from the Buyer’s Contracting Officer and the Seller’s Project Manager with support from the Seller’s prime contracting/procurement official.

TIP:  While risking duplication of requirements, create a separate Division 1 specification covering the requirements and deliverables checklist for contract closeout.

TIP:   Most US contract Forms were written based on paper transactions throughout the Contract cycle.  Due to awareness of threats outside normal contract and project processes, security of products, deliverables and documentation is now part of controlling access to sensitive contract records.    As a result, EDMS has replaced paper documents and is used more effectively to segregate, store and restrict distribution of documents that contain sensitive information.      

TIP:  The use of electronic document control system (EDMS) has become a critical part of managing and executing the work at a project and contract level.   As a result, there may be a need to create requirements for content, format, compatibility and the transfer method of the Seller’s EDMS with the Buyer’s hardware, software and the organizational management of records.  

TIP:  Ensure Closeout requirements and terminology are well defined and are consistent with the process and requirements in the GCs.  Clarity of terms is essential for both the Buyer and Seller. 

TIP:  Buyer’s Contracting Officer should provide clear guidance to the Buyer’s Project Manager on the process, timeline and documentation required to satisfy the contract closeout.

At the expenses of Buyer’s input regarding comments, clarifications, and managerial integration, the mantra on Mega Projects – many that include Design Build (DB) delivery, is to stay out of the Seller’s way, reinforce the risk owned by the Seller and avoid negatively affecting the Seller’s Production, Schedule Progress and End Date.  

Projects using DB are also more susceptible to Buyer’s tendencies that replace the planned flexible collaboration with practices that minimize or soften Buyer’s feedback and that base decision making almost solely driven by perceived impact on Seller’s production metrics.  All while the Buyer retains the position that the Seller is proceeding at its own risk regardless of the Buyer’s review of submittals, schedules and execution plans.

Additionally, Mega Projects by virtue of size, cost, duration and impact to a community or region become highly influenced by executives, funding agencies, government officials, communities and advocacy groups.  The influencers may have their own biases and self interests to inject into the project environment through continuous affirmations on performance, such as “The project is on-budget, ahead of schedule and we are doing more work.”

Under this environment, managing projects or a program of projects will test the Buyer’s project management oversight and the strength of the Buyer’s project team and its strategy in managing the Seller.   The strength and resourcefulness in the management strategy will affect the Seller’s compliance with the contract and in meeting the Buyer’s quality expectations for the products and deliverables at project completion.

It may not be what you want but it’s on time and on budget

Metrics are tools for assessing progress and for determining areas at risk for compliance with requirements for scope, cost, schedule, quality and safety.  In order to implement project management plans, project teams identify and monitor Key Performance Indicators (KPIs.)   This is no different than the tools and techniques in Project Management Institute’s (PMI’s) Project Management Body of Knowledge (PMBOK.)   However, a large volume of metrics can distract teams from the main KPIs.  Additionally, it also absorbs scarce resources and time to report, explain variances and develop actions for correcting under-performance or for making decisions from over-performance.    

More so than any other project delivery method, DB projects are executed because of the benefits to the Buyer from the Seller’s use of innovative designs, alternative materials, unique means and methods, innovative use equipment and techniques, and the continuous implementation of aggressive scheduling for maximizing progress.   However, DB projects are dependent on minimal input from the Buyer and the Project Manager (PM.)   DB requires the Buyer to optimize basic management practices to avoid disrupting the Seller’s schedule.   This may limit PM’s time and actions from thorough assessments of the Seller’s submittals, work progress and KPI trends.  As a result, the focus on Production, Schedule Progress and End Date may overshadow the PMs diligent use of all the pertinent tools and techniques in project management including PMBOK knowledge areas and PMI’s practice standards.    

Its about the Project and the Buyer

Once this type modus operandi is demonstrated on a project, there is a high risk all silos in the Buyer’s project management organization will proceed in isolation and focus exclusively on their KPIs.   While Integration is an essential PMBOK Knowledge Area, it may be perceived as complicating processes and documentation, and therefore is a risk to scheduled progress by the Seller.   It also dilutes the PM’s role as known from PMI’s foundation standard and best practices for project management.   This creates an environment that works in favor of reporting uncontested metrics, and it ultimately fractures the Buyer’s authority and project management functions.  But it may benefit the influencers, stakeholders and political officials seeking to exclusively report  “The project is on-budget, ahead of schedule and we are doing more work.”

A PM’s assignment to a project includes a commitment to principles, due diligence and applying expertise to management processes and practices for all PMBOK Knowledge Areas:

Buyer’s, and their funding partners, expect PMs to be highly knowledgeable in project management and that he/she will oversee and continuously exercise effective managerial control, leadership and decision making across each Knowledge Area.   The ideal PM should have significant experience on similar projects and delivery methods and be highly aware of the interfaces and interdependencies between each area – aka Integration.    The Buyer must assure the selected PM is well rounded and highly skilled in adapting to the Buyer’s organization and the project business case   This avoids potential risks from limitations in the PM’s project experience and expertise, including familiarity with the delivery method and contracting approach.     

For the role of the project manager, PMI lists the following for knowledge and skills:

“The project manager is not expected to perform every role on the project, but should possess project management knowledge, technical knowledge, understanding and experience.  The project manager provides the project team with leadership, planning, and coordination through communications.  The project manager provides written communications (e.g. documented plans and schedules) and communicates in real time with the team using meetings and verbal or nonverbal cues.”

A PM that is a great communicator without strong experience of Integration with the other PMI Knowledge Areas may create blind spots.   If the PM exclusively focuses on particular areas, shortfalls in management effectiveness will quickly manifest in poor KPIs and missed milestones.  

On Mega Projects, the complexity of the Project team organization may create numerous dashboards and KPI metric tracing.  While an effective tool, the volume of dashboards may obscure critical information on project performance and critical factors and issues.  As a result, there is risk that project leadership misses trends in KPIs, which could otherwise be identified and managed with less dashboards but more targeted dashboard.           

If you see a performance shortfall do something

ANSI – American National Standard complements PMI-PMBOK:

“In addition to any specific technical skills and general management proficiencies required for the project, project managers should have at least the following attributes:

• Knowledge about project management, the business environment, technical aspects, and other information needed to manage the project effectively,
• Skills needed to effectively lead the team, coordinate the work, collaborate with the stakeholders, solve problems and make decisions,
• Attributes to develop and manger scope, schedules, budgets, resources, risks, plans, presentations and reports, and,
• Other attributes required to successfully manage the project, such as personality, attitude, ethics and leadership.

On the other hand, if trends are not recognized, PMs need to diligently review and monitor underperforming, high performing or stagnant KPIs, be prepared to decide on recommendations for action, and to executive implementation plans.   Eventually, PMs and project leadership will need to execute actions to improve poor and stagnant performance and to make decisions on opportunities from high performance.   

PMs have a unique role and set of competencies that are attained through education, life time learning, project experience, job responsibilities, and certifications and licenses. Cumulatively, the quality of the PM’s services and deliverables has a direct impact on project performance, including Production, Schedule Progress and End Date.   PMs and project teams with gaps in PMI Knowledge Areas will create unneeded risk throughout the project life cycle.  

Credibility and Obligation to Buyer and Profession

Regardless of the project delivery method, PMs that do not recognize the interfaces and interdependencies between PMI knowledge areas may create unnecessary risk to project success.   Project professionals are obligated to recognize shortcomings and plan accordingly to counter-balance the project team with needed Subject Matter Experts.  As project management professionals, Project Managers and team members must understand the standards for their performance on projects.  

PMI Code of Ethics for project practitioners is a global standard for project, program and portfolio management.  The Code, which applies to all practitioners including those that do not have PMI Certification, is available at PMI.org.

Below is an excerpt of the relevant sections:

2.1 Description of Responsibility

Responsibility is our duty to take ownership for the decisions we make or fail to make, the actions we take or fail to take, and the consequences that result.

2.2 Responsibility: Aspirational Standards

As practitioners in the global project management community:

2.2.1 We make decisions and take actions based on the best interests of society, public safety, and the environment.

2.2.2 We accept only those assignments that are consistent with our background, experience, skills, and qualifications.

2.2.3 We fulfill the commitments that we undertake – we do what we say we will do.

2.2.4 When we make errors or omissions, we take ownership and make corrections promptly. When we discover errors or omissions caused by others, we communicate them to the appropriate body as soon they are discovered. We accept accountability for any issues resulting from our errors or omissions and any resulting consequences.

2.2.5 We protect proprietary or confidential information that has been entrusted to us.

2.2.6 We uphold this Code and hold each other accountable to it.

3.1 Description of Respect

Respect is our duty to show a high regard for ourselves, others, and the resources entrusted to us. Resources entrusted to us may include people, money, reputation, the safety of others, and natural or environmental resources. An environment of respect engenders trust, confidence, and performance excellence by fostering mutual cooperation—an environment where diverse perspectives and views are encouraged and valued.

3.2 Respect: Aspirational Standards

As practitioners in the global project management community:

3.2.1 We inform ourselves about the norms and customs of others and avoid engaging in behaviors they might consider disrespectful.

3.2.2 We listen to others’ points of view, seeking to understand them.

3.2.3 We approach directly those persons with whom we have a conflict or disagreement. 3.2.4 We conduct ourselves in a professional manner, even when it is not reciprocated.

4.1 Description of Fairness

Fairness is our duty to make decisions and act impartially and objectively. Our conduct must be free from competing self interest, prejudice, and favoritism.

4.2 Fairness: Aspirational Standards

As practitioners in the global project management community: PMI Code of Ethics and Professional Conduct

4.2.1 We demonstrate transparency in our decision-making process.

4.2.2 We constantly reexamine our impartiality and objectivity, taking corrective action as appropriate.

4.2.3 We provide equal access to information to those who are authorized to have that information.

4.2.4 We make opportunities equally available to qualified candidates.

5.1 Description of Honesty

Honesty is our duty to understand the truth and act in a truthful manner both in our communications and in our conduct.

5.2 Honesty: Aspirational Standards

As practitioners in the global project management community:

5.2.1 We earnestly seek to understand the truth.

5.2.2 We are truthful in our communications and in our conduct.

5.2.3 We provide accurate information in a timely manner.

5.2.4 We make commitments and promises, implied or explicit, in good faith.

5.2.5 We strive to create an environment in which others feel safe to tell the truth.

TIP:  Buyer’s Standard Division 1 contract specifications for consultant services and for contractor products include Quality Management as a standalone requirement.   No less important are the requirements for project management by consultants and contractors.   Buyers should add specifications for project management requirements in contract documents.

TIP:   Project Management Institute (PMI) is a standards, education and certifying organization that was created to advance the profession of project management throughout the globe.  It is a primary source for project management requirements.   Its standards and practices are developed by professionals with a wealth of project experience throughout the globe and across all industries.

TIP:   Most Buyer’s contract proposal requirements provide a specific list of key persons and their respective qualifications and minimum experience on projects similar to the scope, value and duration of the contract scope.  During the Buyer’s evaluation of proposals, the Seller’s PM should be evaluated and followed by an interview along with other key persons. 

TIP:  Ignorance and poor project management skills are not against the law. But it may affect the Buyer’s future access to government and private funding for the project,   It is an obligation of the Buyers or their designee to adequately and diligently check qualification of companies and key personnel, and to diligently monitor the performance of consultants and contractors on projects.   Buyer’s can not be silent to consultants and contractors that do not meet the performance standards and technical requirements in the respective contracts.

TIP:  Projects will always have challenges.   Not all of them may be resolved and end with Buyer’s satisfaction to scope, schedule and budget – PMI Triangle.  During Lessons Learned processes, oversight consultants and project forensic professionals will focus on the adequacy, competence, and managerial effectiveness of the project management team, which can be the Buyer’s personnel or hired consultants.  

Unfortunately for more times than I can count, the term “turnover” [or "handover"] has become commonly used to describe a process for the Seller to transfer contract products to the Buyer.     Unless “turnover’ is defined in the Contract or clarified via Request For Information, the term is subject to arbitrary interpretation by Buyer and Seller.  

In Contracts that are part of my rail transit project experience, “turnover” is not defined but it may be analogous to requirements for Substantial Completion (SC) and to Final Completion (FC).  SC is the earliest date the Seller’s product meets its intended use by the Buyer.   FC is latest date for the Seller meeting all requirements for Buyer’s final acceptance of the Seller’s work.

Substantial Completion is a contractual milestone that consists Buyer acknowledging Seller completion of work minus punchlist (minor repairs and touch ups) and the completed work is suitable for intended use and operation by the Buyer.  Seller’s deliverables for SC includes Buyer’s review and acceptance of reports on all test and inspections, punchlist, closure of permits, issuance of certificate for occupancy/code compliance, completed submittals, and on resolution of Quality - Non Conformance Reports and Observations.  

Final Completion is a contract milestone that consists of Buyer acknowledging Seller completion of all construction and all technical and contractual deliverables.   Technical deliverables include Certificate of Construction Completion, Certificate of Construction Compliance, as-built drawings, O&M Manuals, warranty, training, software, spare parts, asset management.    Contractual deliverables include final change orders, final payment, waiver of liens, confirmation of all payments for vendors and subcontractors, and reports on certified payroll and other reports for use of disadvantages and small businesses. 

While not associated with “turnover”, Construction Completion is a contract milestone that consists of Buyer acknowledging Seller completion of the punchlist.  This also includes directing the Seller to submit its invoice request for final payment on the balance of the 100% EVM in the payment schedule previously approved by the Buyer. 

TIP:    Project participants need to use only terms that are clearly defined in the Contract, and diligently avoid creating ambiguity by introducing terms outside of the Contract.  

TIP:   Contract milestones dates, definitions and processes for Notice by Seller to Buyer on completing the work to meet the milestone are described in Provisions Related to Time.

TIP:   Contract payment definitions, deliverables and processes for Request by Seller to Buyer for payments are described in Provisions Related to Payments.  

TIP:   Requirements for technical deliverables are described in specifications that make up the technical portion of the Contract. 

TIP:   Requirements for deliverables content, format and timeframes for Seller’s submission and Buyer’s review are described in the Division 1 [general] specifications.  

TIP:   The Buyer’s Project Management Plan may be useful in establishing the activities, sequencing and timeframes for coordinating Seller’s delivery of spare parts and software.

Critical Components in General Conditions  -  Definitions

Originally posted in 2017, https://www.projectmanagement.com/blog-post/48070/Part-12-----Do-You-Know-the-Entire-Contract, Parts 1 -12 were tailored for Project Managers to know the various parts of a contract between a Buyer and Seller.    The information could be applied to contracts for purchased materials and furnished products.    At the time, the articles were focused on topics that were essential for Project Managers to contribute and take a lead role in developing the Contract, and to be best prepared for the post-award execution.     The previous articles covered:

1. Information For Bidders (IFB) – Due Dates
2. IFB – Company Qualifications
3. IFB – Key Personnel
4. iFB – Bid Requirements
5. General Conditions (GC) – Buyer Contacts
6. GC – Performance Schedule
7. GC – Progress and Milestones Payments
8. GC – Liquidated Damages
9. Specifications – Division 1
10. Specifications – Division 1
11. Special Conditions/Supplemental Terms and Conditions – Part A
12. Special Conditions/Supplemental Terms and Conditions – Part B

The Contract is the baseline for Buyers and Sellers to define, execute, manage, and closeout the work as part of a project.   No matter how much effort and time the Buyer uses to create the Contract, it will never be perfect and there will be times when the Buyer and Seller will have questions and uncover conflicts or ambiguity that will need to be resolved fairly.    As a result, the Contract normally includes a section in the General Conditions for Interpretation.   Among other items, this requirement indicates that when a conflict is discovered the more stringent shall apply, and as needed, the Seller shall notify the Buyer in writing of the specifics within a fixed period of days from when the Seller becomes aware of the conflict.

When clarity is required on contract requirements, there are several options available for bidders and   Sellers with the Buyer.

Pre-Bid/Proposal

During the bid/proposal period, bidders are required to present to the Buyer any questions or requests for clarification on the Contract requirements.   This includes identifying conflicts in the Contract Documents, which normally defer to the more stringent requirement. 

Following receipt of bidders’ questions, the Buyer will provide an answer and issue an Addendum to the Contract.   The Addendum becomes part of the Contract and they are distributed to all bidders registered for picking up proposal packages.  

Post-Contract Award

After the Contract is awarded to the Seller, all questions on conflicts in the requirements or on vague requirements will follow the Request For Information (RFI) process.  The Buyer’s RFI process will be presented to the Seller as part of several topics on administration and execution at the Contract Kick-Off Meeting.  

The RFI process follows a Buyer’s specific format and content for asking questions and requesting clarifications.   The duration for response will be established by the Buyer unless specific due date are identified by the Seller in the RFI.  

An often overlooked and under-developed is the General Conditions section for Definition.   This is usually ignored because the presumption is, if its not in the Definitions is because the details are provide in detail in other sections of the Contract.   However, this may not always be the situation.     

Critical Components in General Conditions  -  Definitions

The first action when questions on requirements arise with the Contract is for Buyer and Seller to review the entire Contract including the Definitions.   While this may not resolve the question, it may eliminate an unnecessary RFI. 

The Buyer’s response to the Seller’s RFIs become part of the Contract and they need to be managed, and as determined by the Buyer may result in changes to the Contract documents.   The Seller may also follow within notice of potential change if the Buyer’s RFI response can be substantiated as extra work not originally mutually understood at award of the Contract.

Some definitions are not in the Contract because they are assumed normal practice for executing contracts in a particular industry.  As noted in Part 6, the typical contract milestones are Notice to Proceed, Substantial Completion and Contract Completion.    For construction contracts, particularly in rail transit projects, the may be additional milestones and definitions needed to support the Buyer’s desired execution of the work.   As a result, the following definitions and milestones should be considered:

• Punchlist:    A list of minor touchups and repairs that do not restrict the Buyer’s use of work for its intended purpose.    The work on the list shall not include base scope not yet installed unless otherwise agreed upon by Buyer and Seller. 
• Operational Use:   Prior to Substantial Completion or Construction Completion, the Buyer’s critical business determines the need for use of a portion of the work.   
• Final Acceptance:   This is the condition when the Seller provides all deliverables regarding the work to achieve Final Acceptance such as as-built drawings, spare parts, O&M Manuals, Training, Software, Warranty, and Asset Management Construction Completion, and the Buyer acknowledges Acceptance, and takes responsibility for future operation and maintenance.
• Contract Construction Completion:  This is the contract level condition when the all construction is completed, including punchlist, certifications and demobilization, is completed and verified by Buyer’s final inspection and sign-off, and the Seller is able to demobilize personnel and equipment and no longer requires access to the work site from the Buyer.    The only remaining contract work is the administration of the closeout processes and documentation to achieve Contract Completion.
• Intermediate Construction Completion:    For contract scope that can be separated without interdependence with other scope, all intermediate work scope, including punchlist, certifications and demobilization, is completed and verified by Buyer’s final inspection and sign-off, and the Seller is able to demobilize personnel and equipment and no longer requires access to the intermediate scope work site from the Buyer.      
• Contract Substantial Completion:  This is the contract level condition when the work is completed by the Seller for use by the Buyer as intended.   The only remaining construction is the punchlist work. 
• Intermediate Substantial Completion:   For contract scope that can be separated without interdependence with other scope, the work is completed by the Seller to a condition the intermediate scope is suitable for use by the Buyer as intended. 
• Final Completion/Closeout:     This is the contract level condition when the all contractual, legal and administrative activities and deliverables are provided by the Seller and acknowledged by the Buyer, including the reconciliation of changes, payments and claims; release of liens and other contractual notices are completed; and the Buyer releases retainage withheld on payments.             
• Intermediate Final  Completion:   For contract scope that can be separated without interdependence with other scope, this is the condition the Seller substantiates reconciliation of changes, payments and claims; release of liens and other contractual notices for the intermediate scope are completed; and the Buyer releases retainage withheld on payments equated to work. 
• Delay:  This is a Seller’s formal Notice to Buyer presenting that a condition of the work, including unforeseen site conditions, limited work hours, lack of prescribed support from Buyer or adjustments in pre-award means and methods approved by the Buyer, has changed the Seller’s originals plans, and as a result, the Seller’s ability to achieve the original schedule milestones are impacted.
• Excusable Delay:  This a Buyer’s substantiation of a Seller’s Notice, regarding a delay that impacts original schedule milestones, and determination the Seller demonstrated reasonable and proactive attempts to mitigate the impacts, and it results in a contract modification to adjust the schedule milestones.
• Concurrent Delay:  This is a Buyer’s determination that the Seller’s Notice of delay is parallel to other excusable delays presented by the Seller and already granted by the Buyer during the same period.

TIP:     Definitions apply to the entire contract.   The content for terms and phrases in Definitions should not be repeated in other parts of the Contract.   This will avoid creating conflicts from duplicate but differing language.

TIP:    Definitions are the primary source for information when there is ambiguity in other sections of the Contract.    

On a recent bridge project, the infiltration of water through the decking to the roadway underneath was obvious.   A field visitor to the bridge after a heavy rain expressed dissatisfaction and suggested the bridge was like a car wash.   Another stakeholder sent a terse Email indicating an inspection was wasting people’s time because the waterproofing non-conformance was not corrected.   

Here is a project manager’s perspective on the three primary steps in the non-conformance process: 

Opening:         At this step, the contractor and quality group determined there is a non-conformance of the product/deliverables to meet the contract requirements.   A Non-Conformance Report (NCR) is created and distributed for engineer and quality group review.  (This can be preceded by an Observation, which is reviewed and confirmed to be a non-conforming condition.) 

Pending:          At this step, the contractor, engineer and quality groups agree on the required corrective action to resolve the described non-conformance.  Procedures and as needed, updated drawings or sketches are approved and ready for execution.    

Closing:           At this step, the contractor and construction manager agree the corrective action is completed and after testing, it is confirmed the work product/deliverables meet the contract.  Quality records are available to substantiate closing the NCR.

The NCR is an output for controlling non-conforming conditions on projects, which are based on contract requirements as well as industry standards by International Organization for Standards (ISO) and Project Management Institute (PMI).  The NCR is an integral part of a Project Quality Management System Plan (QMS) and the project approved Quality Manual from each consultant, contractor, vendor, manufacturer and independent testing agency. 

A sample contract might include the following QMS attributes, which can be customized to the contract scope such as design, construction, construction management and testing agency:

• Management Responsibilities
• Design [and/or Construction] Control
• Document Control
• Purchasing
• Supplied Items
• Product Identification and Traceability
• Process Control
• Inspection and Testing
• Inspection, Measuring and Test Equipment
• Inspection and Test Status
• Non Conformance
• Corrective Action
• Quality Records
• Quality Audits
• Training

While an NCR was written and the corrective action was agreed upon by the Engineer and product manufacturer regarding the bridge, there were delays in arranging the required work conditions for completing the corrective action.  Subsequently, the repair to the bridge waterproofing was not successful in resolving the drainage problem.  As a result, the same repair was scheduled for the future, which further increased the overall process duration.

There were no contract requirements or project level plans containing performance goals/durations for each step.    However, management for the contractor and PM oversight were questioning the number of open NCRs and the durations to closure.   Management perceived the durations for the NCRs were much too long.

The NCR process durations are a function of the work hours and conditions for each contract in a project.   As a result, each project and each contract may have different durations for the optimum project processes including NCRs. 

Factors affecting NCR durations:

• Proximity and access to the work location
• Priority of work by the Engineer and Quality team representatives
• Prescribed durations for response dictated by project document control goals
• Schedule for successor activities using the product and deliverable cited in NCR
• Conditions, including temperature, weather, and safe work environment, required for implementing the corrective action
• Availability of Independent Testing Agencies to physically confirm and generate a Report the corrective action are complete, successful and meet contract requirements.

Management of NCR performance should be based on historical data from previous experience with the process lifecycle provided by the Buyer’s organization on completed projects similar in scope, cost, schedule, complexity, contract types, and document control methodology.   Without prior experience, performance metrics may need to go through several trial periods based on the best estimate of the NCR work flow.

The estimated work flow should be developed, vetted and tested by the Buyer and Seller before implementing performance management/measurement of NCR durations.  An example for the NCR work flow and optimum activity timeframes for a rail transit project is below.  The process includes Field personnel identifying variances to requirements and  overseeing site work, Engineer to evaluate the NCR/Observation and determine the corrective action, Contractor to perform the corrective action and the Field personnel to confirm the corrective action meet requirements.  This example may be a useful framework across several industries.

Opening:         The activities in this phase are:

• Report observation to Quality group-Day 1
• Evaluate observation and determine if corrected by Construction group-Day 7 (NCR not required)
• Determine work was completed without correcting the variance to requirements-Day 14
• Initiate and complete NCR-Day 21

Pending:          The activities in this phase are:

• Submit NCR to Engineer for review-Day 22
• Conduct field inspection of conditions-Day 29
• Develop corrective action/contract change-Day 59
• Submit corrective action for Buyer review-Day 58
• Obtain Buyer approval on corrective action-Day 72

Closing:           The activities in this phase are:

• Notify Construction group to implement corrective action-Day 73
• Obtain materials and equipment for work-Day 87
• Complete corrective action work-Day 101
• Issue NCR confirming completion-Day 108
• Obtain Buyer approval on completion or work to requirements-Day 122

Accounting for the established review goals, processing time for document control, and the limited access to site locations, the optimum duration for NCR process = 122 days from initial Observation.   The potential metrics for monitoring performance are:   OPENING = 21 days from Observation.   PENDING = 51 days from NCR start.    CLOSING = 50 days from approval of NCR corrective action.

TIP:    PM should balance the work flow and activity timeframe to the specific project scope and durations common to the industry, the Buyer’s standard organization processes, and the review duration goals for document control/production.

TIP:    PM should evaluate the managerial and administrate effort by the Buyer and contractor to explain performance variances to goal durations, which may already be monitored and measurable by other means such as achieving contract and forecast milestones.  Typical milestones, including Substantial Completion, Construction Completion and Final Completion/Acceptance are dependent on closing NCRs and Observations. 

TIP:    Metrics and dashboards are proven management tools for monitoring project performance as well as organizational silos.  PM should assess the totality of the management dashboards so that the team, stakeholders, funding partners, community and political influencers remain focused on critical goals without distraction to tie up managerial resources explaining variances to goals on items that do not directly affect progress and achieving goals. 

TIP:    The performance on NCRs may not be as critical as other key indicators that more directly affect interdependencies on achieving operational use and final acceptance of the project product/deliverable by hard schedule dates and milestones.

TIP:   Project QMS and contractor/consultant Quality Manuals should clearly define the attributes for an Observation and Non Conformance.  Both work flows should provide checkpoints to eliminate nuisance and trivial items identified during routine in-progress inspections of work.  These items should be resolved by the Buyer’s and Seller’s supervision on-site.