Young Professionals Committee(YPC)

Texas State UniversityIngram School of Engineering

April 18th, 2012

Safety Moment – Sun Exposure• Topic

– With Spring just around the corner, everyone’s anxious to get outside and enjoy the weather!

– Employers and workers need to remember that field workers are at a high risk of sun exposure

• Issue– Overexposure can cause skin

damage and cancer. Other side effects include:

• Heat stroke, exhaustion, cramps, and rashes

• Increased risk of injury as a result of sweaty palms, fogged up safety glasses, dehydration, etc.

Safety Moment • Precautions/Preventions

– Wear a hat to shade your head from the sun

• Should protect neck, face, and ears

– Wear a light-colored, long sleeve, breathable clothing

• Avoid synthetics

– Carry water with you at all times and drink at least every 15 minutes

• Avoid alcohol, caffeine, and sugar

– Take frequent breaks in shady/cool environment

– Adjust gradually to working in hotter environment

– Schedule most arduous work to cool parts of the day

– Wear sunscreen!

Agenda• Speaker Introductions• Introduction to AACE & YPC• Project Controls Career Paths• Industrial Engineering & Project Controls• Scheduling Fundamentals and Applications• Conclusion

SPEAKER INTRODUCTIONS

Speaker Introductions• Josh Rowan

– 8 Years Project Management / Controls Experience• Commercial Risk Management• Capital Cost Estimating & Control• CPM Scheduling

– Prior Work Experience• PricewaterhouseCoopers• Chicago Bridge & Iron• SNC-Lavalin Engineers & Constructors

Speaker Introductions• Josh Rowan (cont.)

– BS in Agricultural Development, Economics from Texas A&M University (May 2002)

– MBA in Finance (est completion December 2012)

– US Army Officer (2004-2008)

Speaker Introductions• Tanner Courrier

– 4 Years Forensic Claims Experience• Consulting in Complex Litigations• Construction and Government Contracts• Settlement Negotiations and Presentations

– AACE• Speaking in various industry forums• University Outreach• Event Planning

Speaker Introductions• Tanner Courrier (cont.)

– BS In Construction Management

– MBA In Process at UT Dallas

– NAHB Student Competition Team

– Certified Cost Technician, Certified Fraud Examiner, LEED Green Associate

INTRODUCTION TO AACE & YPC

Overview of AACE• 7000 Members Around The World

– 84 Countries• Top Contractors And Owners

– Bechtel, Flour, KBR, Jacobs, CB&I, Exxon, BP, Chevron, Duke Energy, NRG Energy

• Cooperative Agreements– American Society Of Civil Engineers

• Multiple Industries– Oil And Gas, Utilities, Civil Construction, Defense

Contracting

• Discounted Membership For Students• Cost Engineering Journal (Digital Copy)• Education and technical skills at Seminars and Annual

Meeting• Preparation for Certification

Benefits of Membership

Benefits of Membership

• Scholarship Program For College / University Students - More Than $40,000 Awarded Annually

• Virtual Library – Wealth Of Research Literatures• Mentoring Program• Networking And Contacts – Expand Your

Opportunities With Expansive AACE Members And Network

• Where to Sign Uphttp://www.aacei.org/mbr/student.shtml

Average Salary 1-5 yrs. Experience

$-

$10,000.00

$20,000.00

$30,000.00

$40,000.00

$50,000.00

$60,000.00

$70,000.00

2009 Base Salary

2010 Base Salary

$-

$20,000.00

$40,000.00

$60,000.00

$80,000.00

$100,000.00

$120,000.00

$140,000.00

AACE Certified

Not AACE Certified

2010 Average Industry Base Salary

• Entry-Level / Junior Certification– CCT (Certified Cost Technician)– Requirement: 4 Years Of Experience OR 4 Years Of

College-Level Academic.

• Professional Level Certification– CCE/CCC (Certified Cost Engineer / Consultant)– CEP (Certified Estimating Professional)– CFCC (Certified Forensic Claims Consultant)– EVP (Earned Value Professional)– PSP (Planning & Scheduling Professional)

AACE International Certification

Certified Cost Consultant (CCC) / Certified Cost Engineer (CCE)

EVP

PSP

CEP C

FCCL

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Certifications Explained

AACE Certification• http://www.aacei.org/educ/cert/CCT/

What is the YPC• The Young Professionals Committee Is A Group

Within AACE That Interfaces With The Board of Directors To Create Value And Offerings For Young Professionals

• YPC Gives You A Vehicle To Become A Leader In AACE And In Your Career

YPC Value Proposition• Why YPC?

– Growth In Capital Projects– Aging Workforce– Training– Networking– Development Opportunities

YPC Events • Annual Meeting Networking Event

– 2012 Annual Meeting in San Antonio– July 8-11, Marriott Rivercenter Hotel– 8 day passes for Texas State

• Website And LinkedIn Subgroup• Cost Engineering Profile Articles• Leadership Conferences• University Outreach• Mentoring Program• Impromptu Dinners and Social Events

PROJECT CONTROLS CAREER PATHS

Project Controls 101

• Project Controls Is That Element Of A Project That Keeps It On-Track, On-Time And Within Budget

• Cost, Risk, Quality, Communication, Time, Change, Procurement, And Human Resources

• Project Controls Can Be Responsible For Projects, Programs, Or Portfolios That Contribute To The Company’s Bottom-Line

Useful Analogy

Cost ScheduleRisk

Estimating Direction Change

Career Paths • Cost Engineer• Cost Estimator• Planner Scheduler• Claims Analyst• Project Risk Analyst• Project Controls Manager

INDUSTRIAL ENGINEERING AND PROJECT CONTROLS

Why Projects Fail• Projects fail for any number of reasons,

including but not limited to:– Ambiguous business case– Lack of upfront planning– Inadequate or untrained resources– Failure to properly integrate deliverables or data– Unrealistic schedules or estimates– Poor communication– Inability to meet contractual requirements

Industrial Engineering & PC• Industrial Engineering (IE) can address the root

causes of project failure• IE involves the study of how to manage/deploy

people, materials, equipment, etc. to most effectively/efficiently produce a product or deliver a service– How to coordinate equipment, materials, people to

achieve project objectives (i.e. project controls)

Industrial Engineering & PC• Critical Path Method (CPM) Scheduling

– Pre-requisite is up-front planning to identify work activities and sequencing

– Must understand which activities are critical and how much float is available for each

– Process improvement leads to lean project delivery• Linear Scheduling

– A scheduling methodology that can be applied to repetitive work:

• pipe laying, tunneling, road construction, high rise building construction

Industrial Engineering & PC• Cost Management and Earned Value

– Initially estimates inform project management on number of resources required

– Forecasts and trending can highlight when additional resources may need to be applied

– Cost variances can be identified and addressed• Risk Analysis and Simulation

– IE routinely creates models of how large processes should work and performs simulations

– Project business cases and contractual requirements should undergo sensitivity analysis

SCHEDULING FUNDAMENTALS AND APPLICATIONS

Scheduling Fundamentals• Schedule Planning and Development: Process

for planning the work over time in consideration of costs, time, resources, and risks.– Planning

• Define roles and responsibilities• Planning of time, costs, resources, tools, and methods

required for performance of each phase.

– Identify Activities• Translate work package scope into identifiable,

manageable activities

Scheduling Fundamentals– Develop Activity Logic

• Identify dependencies/relationships between activities

– Estimate Durations• Determine start and finish dates of activities, and resource

quantity, availability, and performance

– Establish Schedule Requirements• Establish project/contract time limitations, date

constraints, and other “milestones”

– Allocate Resources• “Load” resources within resource consumption limitations

– Optimize, Review, Validate, Document, Communicate, Submit, and Maintain

Scheduling Fundamentals• Source: AACE Total Cost Management Framework

Scheduling Application #1• Forensic Schedule Analysis

• The Investigation Of The Durations And Causes Of Project Delays

Why Schedule Analysis?• Time Is Money

• Recovery Of Delay Damages Is Dependent On Proof Of Delay

Delay-Related DamagesContractor•Extended Field Overhead•Extended Home Office Overhead•Price Escalation•Extended Financing Costs•Acceleration Costs

Owner•Lost Profit/Rent•Extended Financing Costs•Extended Management Costs•Liquidated Damages

Typical Work Flow

Identify Actions, Inactions, Or Events

Which Caused Delays

Determine Liability

Identify Impact On Costs/Damages

Quantify Actual Project Delays

Quantify Actual Project Delays

4 Days

5 Days

4 Days

DrywallRough In Walls

Plumbing

Electrical

3 Days

StartStart FinishFinish

As-Planned Duration = 13 Days

Quantify Actual Project Delays

Critical Path: Path With the Longest Duration Of All Paths Through the Project

Float

4 Days

5 Days

3 Days

4 Days

FinishFinish

DrywallRough In Walls

Plumbing

Electrical

StartStart

2 Days

Quantify Actual Project Delays

Planned Duration : 13 daysActual Duration: 15 daysDelay: 2 days

4 Days

5 Days

3 Days

4 Days

FinishFinish

2 DayDelay

DrywallRough In Walls

Plumbing

Electrical

StartStart

Float3 Days

Identify Causes Of Delay• Contractor Caused Delay: Located an email from

the Plumbing Foreman to the Project Manager

“Gary, we don’t have the right size pipe for this last run. The purchasing department ordered PVC and we need copper. We are stuck until the correct pipe gets delivered. Please get this ordered right away.”

Identify Causes Of Delay• Owner Caused Delay: Located an RFI from the

Contractor to the Owner

“There is a conflict in the west wall between Column Lines 3 and 4. We cannot fit our piping in the open space due to an HVAC plenum that has been previously installed. Please send a revised detail for this section.”

Determine Liability• We located a receiving report that showed that

the correct pipe showed up on site that same afternoon.

• We located a Field Change Directive from the Owner to the Contractor providing clarification on the drawing conflict. It was issued two days after the RFI and the contract stipulates a one day turnaround on RFIs.

Calculate Damages• What will be the most likely classification for the

damages incurred by our contractor?

Delay-Related DamagesContractor•Extended Field Overhead•Extended Home Office Overhead•Price Escalation•Extended Financing Costs•Acceleration Costs

Owner•Lost Profit/Rent•Extended Financing Costs•Extended Management Costs•Liquidated Damages

Calculate Damages• Extended Field Overhead

Overhead Component Daily Rate

Crane Rental $200.00

Portable Toilets $50.00

Cell Phones $10.00

Supervision $450.00

Total $710.00

Damages Calculation: 2 Days x $710 = $1,420

Azure Slides• Placeholder for actual claims example if time

permits

Scheduling Application #2• Using an integrated portfolio schedule to monitor

and improve cycle time• “As-Was” State

– Consisted of a number of separate planning tools which were not integrated

– No overall integrated schedule, so changes (e.g. permitting delay) not automatically cascaded to remaining elements

– Resourcing (crews, rigs, materials) done thorough separate planning (Excel) tools

– Logistics planning not optimized due to ever-changing well development

Scheduling Application #2

Scheduling Application #2• Project controls meet with stakeholders to

identify /document key activities and milestones– 7 categories: subsurface, land, HES, regulatory,

procurement, construction, well closeout• Interdependencies identified and a one well

schedule template was created; Portfolio schedule constructed around rig concept

• Specialized codes allow for tracking of key components by group– Procurement vendor, county name, land man, etc

Scheduling Application #2• Value Achieved

– Complex interdependencies modeled to find optimum development and spending pace that maintains lease acreage holding while efficiently allocating capital and field resources

– KPIs and metrics leveraged for improved operational and financial planning

– KPI and metric reporting at all levels of the value chain

– Thoroughly documented process flow– Evaluation of “what-if” scenarios

CONCLUSION

Conclusion• “A bad system will defeat a good person every

time.”– W. Edwards Deming

• IIE Student Organization– April 18th, 5-6pm– Topics Discussed:

• Resume Writing• On-Line Presence• Internships/Jobs• Interviewing Techniques