1. Young Professionals Committee (YPC) Texas State University Ingram School of Engineering April 18 th, 2012

2. 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.

3. 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!

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

5. SPEAKER INTRODUCTIONS

6. 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

7. 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)

8. 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

9. 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

10. INTRODUCTION TO AACE & YPC

11. 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

12. Discounted Membership For Students Cost Engineering Journal (Digital Copy) Education and technical skills at Seminars and Annual Meeting Preparation for Certification Benefits of Membership

13. 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 Up http://www.aacei.org/mbr/student.shtml

14. Average Salary 1-5 yrs. Experience

15. 2010 Average Industry Base Salary

16. 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

17. Certified Cost Consultant (CCC) / Certified Cost Engineer (CCE) EVPEVP PSPPSP CEPCEP CFCCCFCC Level of Detailed Exam Content Certifications Explained

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

19. 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

20. YPC Value Proposition Why YPC? – Growth In Capital Projects – Aging Workforce – Training – Networking – Development Opportunities

21. 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

22. PROJECT CONTROLS CAREER PATHS

23. 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

24. Useful Analogy Cost Schedule Risk Estimating Direction Change

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

26. INDUSTRIAL ENGINEERING AND PROJECT CONTROLS

27. 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

28. 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)

29. 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

30. 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

31. SCHEDULING FUNDAMENTALS AND APPLICATIONS

32. 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

33. 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

34. Scheduling Fundamentals Source: AACE Total Cost Management Framework

35. Scheduling Application #1 Forensic Schedule Analysis The Investigation Of The Durations And Causes Of Project Delays

36. Why Schedule Analysis? Time Is Money Recovery Of Delay Damages Is Dependent On Proof Of Delay

37. Delay-Related Damages Contractor 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

38. Typical Work Flow Identify Actions, Inactions, Or Events Which Caused Delays Determine Liability Identify Impact On Costs/Damages Quantify Actual Project Delays

39. 4 Days 5 Days 4 Days Drywall Rough In Walls Plumbing Electrical 3 Days Start Finish As-Planned Duration = 13 Days

40. 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 Finish Drywall Rough In Walls Plumbing Electrical Start 2 Days

41. Quantify Actual Project Delays Planned Duration : 13 days Actual Duration: 15 days Delay: 2 days 4 Days 5 Days 3 Days 4 Days Finish 2 Day Delay Drywall Rough In Walls Plumbing Electrical Start Float 3 Days

42. 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.”

43. 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.”

44. 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.

45. Calculate Damages What will be the most likely classification for the damages incurred by our contractor?

46. Delay-Related Damages Contractor 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

47. Calculate Damages Extended Field Overhead Overhead ComponentDaily 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

48. Azure Slides Placeholder for actual claims example if time permits

49. 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

50. Scheduling Application #2

51. 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

52. 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

53. CONCLUSION

54. Conclusion “A bad system will defeat a good person every time.” – W. Edwards Deming IIE Student Organization – April 18 th, 5-6pm – Topics Discussed: Resume Writing On-Line Presence Internships/Jobs Interviewing Techniques