1 Quality in Contracting Dr. Tariq A. Aldowaisan; CSP, CQA, CQE, CQM/OE Gulf Lead Consultants Kuwait...
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Transcript of 1 Quality in Contracting Dr. Tariq A. Aldowaisan; CSP, CQA, CQE, CQM/OE Gulf Lead Consultants Kuwait...
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Quality in Contracting
Dr. Tariq A. Aldowaisan; CSP, CQA, CQE, CQM/OEGulf Lead Consultants
Kuwait Electricity & Water Contractors Conference & Exhibition 26 & 27 May 2010
2Copyright 2009 Gulf Lead Consultants. All rights reserved.
Agenda
• Quality Definition in Contracting• Supplier/Customer Dual Roles• Proactive vs. Reactive Quality in Contracting• Quality Cost Types in Contracting• Fishbone – Contract Success• Balanced PM in Contracting– SPO– BSC
3Copyright 2009 Gulf Lead Consultants. All rights reserved.
Quality Definition
• Quality is Meeting Customer Expectations.• In Contracting:– Meeting owner expectations– Meeting contractor expectations– Meeting other stakeholders expectations
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Supplier-Customer Dual Roles
• MEW Expectations:– Quality services and manpower.
• Meeting specifications• Competent manpower
– Projects completed on time.– Projects completed without – or with
minimal – variation orders.– Reasonable prices.
ContractorOwner (MEW)
Exp
ecta
tion
s
• Contractor Expectations:– Fair and quick handling of disputes and
claims. – Flexible and inviting prequalification
process (innocent till proven guilty!)– Timely information on future projects.– Timely payment of valid invoices.– Assistance to close quality and
performance gaps; e.g. advise, training, seminars, & field visits
5Copyright 2009 Gulf Lead Consultants. All rights reserved.
Proactive Quality
• Prequalification & short-listing– Criteria: Company Experience, Financial, HSE Credentials– Type I Error: rejecting when you should accept– Type II Error: accepting when you should reject– Challenge: how to encourage local, professional, new entrants
• Tendering (Preparation & Award)– Well-defined objective and scope of work with clear
deliverables– Selection of competent owner representative– Objective selection of winner
6Copyright 2009 Gulf Lead Consultants. All rights reserved.
Reactive Quality
• Contract Administration– Monitor compliance with objective/scope– Monitor compliance with schedule– Monitor compliance with budget– Review quality of deliverables• Material• Services
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Quality Cost Types in Contracting
Contractor’s Perspective
• Preventive– Audits of the effectiveness of
the quality system– Quality training
• Appraisal– Quality audits– Setup for test or inspection
• Internal failure– Material procurement costs– Rework labor and overhead
• External failure– Cost of field servicing and
handling complaints– Lost sales arising from a
reputation for poor quality
Owner’s Perspective
• Preventive– Choosing qualified resources– Quality training
• Appraisal– Follow-up through progress
reports– Review progress reports’
feedback• Internal failure
– Fixing errors in progress reports’ feedback
• External failure– Error in estimating/developing
overall project budget
10Copyright 2009 Gulf Lead Consultants. All rights reserved.
Quality Indicators in Contracting
• No. of prequalified contractors.
• No. of bidders.• No. of disputes/claims.• Average time & SD to process
claims• No. of variation orders.• Contractor performance
scores, i.e. less delays, more quality, more safety.
• Satisfaction scores among contractors.
• Satisfaction scores among MEW front-liners.
11Copyright 2009 Gulf Lead Consultants. All rights reserved.
Balancing Measures - SPO
• Structure/Process/Outcome
Structure Process Outcome
•No. of disputes/claims• Average time & SD to process claims•No. of prequalified contractors•No. of bidders•No. of variation orders•Contractor performance scores, i.e. less delays, more quality, more safety.
• Satisfaction scores among contractors• Satisfaction scores among MEW front-liners•Contractor performance scores, i.e. less delays, more quality, more safety.
• Ratio of resources to tenders issued• Percentage of credentialed employees• Resources training intensity
12Copyright 2009 Gulf Lead Consultants. All rights reserved.
Balancing Indicators - Balanced Score Card