1. Resource Planning & Management Associates, LLC

2. Project Management, Reporting, and Controls Resource Planning & Management Associates, LLC

3. Key Risks / Controls 1. Strategy, Organization & Administration Undefined roles & responsibilities Undefined or inappropriate delivery strategy Undefined or inappropriate contract vehicles Inadequate policies and procedures Inadequate prudence documentation 2. Cost Management Program budget overruns Inaccurate program budget estimates Inability to predict and manage cost overruns Inadequate project reporting Inability to reconcile and account for project cost 3. Procurement Management Lack of standardized or appropriate project contracts No value engineering Inadequate solicitation planning processes Inappropriate contract management 4. Project Controls and Risk Management Major risks not identified and managed No business justification for major decisions Inadequate change control and pricing 5. Schedule Management Program schedule overruns Inability to determine schedule performance Contractor claims and disputes 6. Fraud Risk Assessment Employee fraud External (vendor or subcontractor fraud) Misappropriation of assets (theft) Corruption (bribery) Environmental and safety risks

4. Focus for Today ► Procurement Management ► Contract Management and Compliance ► Cost Management and Reporting ► Risk Management Resource Planning & Management Associates, LLC

5. Procurement Management ► Grant Covenants – Create an Abstract  Key Requirements? ► Disadvantaged firms? ► Prevailing wages? ► Project Delivery Requirements?  Fixed Price?  Time and Materials? ► Time limits on funds expenditures?  Utilize a checklist to ensure that any covenants are covered in the procurement process Resource Planning & Management Associates, LLC

6. Procurement Management ► Establish clear-cut selection criteria on the front end and then utilize a scorecard to document the vendor selection process:  Licensing & Insurance  Financial Performance & Capabilities  Bonding  Criminal Matters – Civil Suits  Project Experience, Qualifications  Safety Record Resource Planning & Management Associates, LLC

7. Procurement Management Resource Planning & Management Associates, LLC

8. Procurement Management Resource Planning & Management Associates, LLC

9. Procurement Management Resource Planning & Management Associates, LLC

10. Procurement Management Resource Planning & Management Associates, LLC

11. Procurement Management Resource Planning & Management Associates, LLC

12. Contract Management ► Prior to signing  Use the Grant Abstract to align contract(s) to any specific covenants or requirements.  Review T’s & C’s ► Are allowable and unallowable costs clearly defined?  Home office overhead, travel costs, markups, printing, etc. ► How are contract changes/modifications going to be handled? ► Invoice issuance and certification? ► Schedule management issues? Liquidated damages? ► Insurance and Bonding Requirements Resource Planning & Management Associates, LLC

13. Contract Management  Review T’s & C’s Cont’d.. ► Reporting Requirements? Frequency? ► Submittals?  Utilize submittal schedules ► MAKE SURE YOU INCLUDE AN AUDIT CLAUSE  Develop a Contract Abstract: ► Timing and Frequency for:  Reporting  Submittals – Schedule, Payroll Certification, Lien Waivers  Invoices ► Key Clauses ► Cost Provisions serve as basis for invoice checklist Resource Planning & Management Associates, LLC

14. Contract Management Resource Planning & Management Associates, LLC

15. Cost Management ► Invoice Analysis  Create a checklist from the Contract Abstract ► Scan for Unallowable Costs ► Confirm Overhead Rates and Profit Rates are correct ► Check for Markup on Markup, Markup On Sales Taxes, Etc. ► Contract Lien Waivers Submitted? ► Prevailing Wage and Certified Payrolls Included?  Provides evidence of due diligence and puts the contractor/vendor on notice that costs are being reviewed carefully.  Large projects ($50M+), consider conducting a full-blown contract audit at 30% and 80%. Resource Planning & Management Associates, LLC

16. Cost Management Resource Planning & Management Associates, LLC

17. Cost Management ► Change Order Management  Confirm that the change is legitimate  Identify and track the source of the change ► Costs may be recoverable ► Information should be tracked for future supplier evaluations  Prepare independent “blind” cost estimates prior to reviewing vendor’s specific proposal ► Provides an objective basis for negotiation ► Demonstrates due diligence on the part of the governing agency  Confirm that proposed change is calculate in accordance with contract T’s & C’s Resource Planning & Management Associates, LLC

18. Cost Management Resource Planning & Management Associates, LLC

19. Cost Management ► Cost Performance Monitoring  Insist on bi-weekly or monthly project schedule updates from your staff and/or vendors  Need to move beyond…. Budget – Actuals - Open Commitments = Cost to Finish  Use Earned Value Analysis to tie project schedules to costs ► How much work was planned to have been done at any given point in the project? ► What is the budgeted cost of that work? ► How much work has been done to date? ► How much of the budget has been expended? Resource Planning & Management Associates, LLC

20. Project Budget Resource Planning & Management Associates, LLC

21. Budget to Actual Resource Planning & Management Associates, LLC ► This only provides us with a partial picture

22. Budget Burn Rate Resource Planning & Management Associates, LLC ► Now we realize we’ve got a significant problem. We’ve pretty much burned the construction budget but we’re only about 80% of the way through the work.

23. Estimate to Complete Resource Planning & Management Associates, LLC ► It looks like we’re going to end up about 20% over budget on construction cost. ► Doing this analysis provides early warnings as to where the project is headed.

24. Risk Management ► Establish a Risk Identification Process  Determine the Participants ► Project Managers ► Financial/Accounting personnel ► Vendor Reps ► Stakeholder/ Constituent Reps  Define risk categories ► Political ► Physical ► Logistical/Procurement ► Financial ► Design / Construction Resource Planning & Management Associates, LLC

25. Risk Management  Identify potential risks ► Project team brainstorming ► Constituent surveys, interviews, workshop ► SWOT Analysis  Analyze the Risk ► Qualitative Analysis  Prioritize ► Quantitative Analysis  What’s the probability that this risk will occur?  What will the impact be in Dollars  What will the impact be in Time?  What will the impact be in other areas? ► Reputation, credibility, public safety, etc… Resource Planning & Management Associates, LLC

26. Risk Management  Identify and Chose a Risk Response Strategy for SIGNIFICANT Risks ► Elimination or Avoidance ► Transfer - Insurance, Hedging, Contracting, etc.) ► Mitigation – Are actions available that will minimize impact on cost, schedule, quality, or objectives? ► Acceptance – Generally chosen if costs of mitigation outweigh the benefits  Monitor ► Assigned to a responsible party to document, monitor, and provide periodic status reports  Report ► Needs to be an integral part of the management cycle Resource Planning & Management Associates, LLC

27. Risk Management Resource Planning & Management Associates, LLC

28. Risk Management Resource Planning & Management Associates, LLC

29. Robert Stickney, Principal Resource Planning & Management Associates, LLC 2439 Nashville Avenue New Orleans, LA 70115 Voice: 504.621.2927 Email: rstickney@rpm-associates.com Resource Planning & Management Associates, LLC