Project Management

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How will you complete the project....

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Ganesh Kumar Program Manager Bangalore., Karnataka, India
Hi Team,
Have you encountered a scenario, wherein the project budget has exhausted, yet, you have to continue the project all the way to completion. One reason could be in a fixed price project, the estimation itself was incorrect, spent on unavoidable resources/procurements. Its a point of total assumption.

How did you proceed on that project? What were the learnings from such project?

In case a similar question was asked earlier, and if you are aware of it, please share the link.
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Peter Rapin Subject Matter Expect; Project Delivery| Independent Consultant Ontario, Canada
Apr 17, 2020 1:49 PM
Replying to Ganesh Kumar
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Hi Peter – while the budget is exhausted and quite possible everyone is informed – am also referring to point of total assumption ( seller as consumed all the contract fees and will bear all the cost to complete it) from pmbok – as a reference, as to what would you do and the measures you would take to continue on the project.
It is not clear from which perspective you are looking at this - as Owner PM or Contractor PM.
Either way you have to undertake a comprehensive risk assessment.

From the owner's perspective there is a significant risk that the contractor will not have the financial capacity to complete the work or desire to complete the work. You also have to prepare yourself for contract claims and quality issues.

From a contractor's perspective in addition of facing bankruptcy you have to recognize the possibility of owner's claim of breach of contract with damages, loss of reputation, staff termination.

Either way - get ready for court.

I just don't see how a project can get to this point where one morning you get out of bed, recognize you're out of funding, the jobs not done and realize you have to do something.
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Diksor Makur Tx, United States
Right now we change our vision and start to use agile methods and trying do sprint
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anton stephanov engineer| saab Gibraltar
I think it is important to have a balanced score card approach to projects that brings in various metrics to keep track of the various drivers. You have perhaps failed to identify at a much earlier stage that you are headed towards this situation. How do you plan to raise funds? Do you have buffer equity or is a lender willing to extend a bridge loan, if your current lenders would permit it? Does the project have a guarantor or a tangible assets that can be offered as collateral? Would the current lenders be willing to have a charge on receivables and extend the loan? You may find it difficult to secure funds if you are in the service sector. A typical example of a similar case in your country and sector would be Navgas.

It is difficult but proper to follow a plan in a disciplined manner. For this to happen an organisation needs to have the requisite culture that starts from the top and takes years to develop.
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anton stephanov engineer| saab Gibraltar
Apr 11, 2020 3:21 PM
Replying to NIKHIL VIDWANS
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I think it is important to consider the circumstances in which the project reached this situation. I tend to think such a situation is possible probably because of an Act of God. If that was indeed the case, the project can be recovered with fresh baselines and CCB approvals. Most contracts would have the Force Majeure clause.
On the other hand, it would be very difficult to retrieve the project if several initial indications of baseline variations were missed or any acts of omission or commission were subsequebtly detected. This would most likely severely shake the customer's faith in the project team's ability to deliver. In this case, I suppose a negotiated project closure may be the only way ahead - alongwith considerable reputation costs. A very unfortunate situation indeed.
Please first explore ways to secure funds. Considering you offer services, it may be difficult.
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Amr Abd El Azim United Arab Emirates
Dear Sir ;

Mainly this happens when their is no monitoring & controlling on Scope ; Time & Cost.

You need to do the following once you take the lead of such project:
1- Identify at what phase the project (Design ; FAT ; Site activities)
2- Stick to have the gate exits from phase to another ()
Check with the Project team for Documents approval status ; FAT Reports ;....)
3-Meet with the customer and understand his feedback of current project and how you can support him
4-Check Financial status of the Project (Budget ; Job to date cost ; Estimate to complete cost ; Estimate at completion cost ; Invoicing status)
5-Implement the change management process in case your customer is deviating from scope and stick to this.
6-Explore opportunities from current scope to improve project Margin
7-Keep close monitoring and controlling of the project activities (Timesheet posting ;Material Procurement ; Material Warranty ;...)
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