SCOPE CREEP 1 OF 8 THE DANGERS OF SCOPE

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SCOPE CREEP 1 OF 8 THE DANGERS OF SCOPE



Scope CREEP



































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The Dangers of Scope Creep



It’s not unusual for a good engineer to be asked to run a construction or design/build project. The moment the engineer begins to ‘run’ the project they have just put on the hat of a Project Manager (PM).


The PM skill set and knowledge areas are quite different from that of an engineer or architect. One of the key knowledge areas is known as Project Scope Management. An element of Scope Management is referred to as Scope Creep. Creep can wreck the project’s schedule and budget. Creep is particularly dangerous because, at the time Creep occurs, it does not appear to be important. The damage is only recognized after the fact.


Its important that we understand that there is a relationship between what we will call the Triangle of Truth or The Big 3. This will help us view scope in a greater context.

SCOPE CREEP 1 OF 8 THE DANGERS OF SCOPE





Operate under the assumption that a change in 1 will always effect the other 2



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If you are responsible for the management of a project you will discover that you have to manage the project's Scope, Schedule and Cost simultaneously. A common mistake that new project managers make is that they don’t realize the critical relationship between these three elements. As we move forward its important that we remember a fundamental assumption: In most cases a change in 1 will impact the other 2.


We can see the relationship between Scope, Schedule and Cost through the following example of Creep.


A key client has retained your firm to design and manage the construction of a commercial office building. During construction the client inspects the site with you. As the client walks a floor with modular offices he requests that you add a thermostat for a cluster of offices near the elevator. The requested thermostat, if not managed properly is the beginning of Creep.


On the surface it would appear to be a no brainer; give this important client the thermostat. The cost of the end device is minimal compared to the potential future revenue. In fact, that might be the correct solution. Prior to agreeing, however, you might want to look at what the request implies. In most design/build or design and construct projects the following events, with minor variations, usually occur.


  1. Your firm will direct the General Contractor (GC or Prime) to add the thermostat.


  1. The GC will issue either a Change Order or a request for a quotation for the proposed change to their Mechanical Sub-Contractor.






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  1. The Mechanical Sub-Contractor will, in turn. Pass on the GC’s request to their Controls (DDC) Sub-Contractor.



  1. The DDC Sub-Contractor will prepare a design Submittal delineating what specific work and materials will be installed.



  1. The DDC Sub-Contractor will include in the Submittal a Bill of Materials (BOM) and will subsequently obtain labor estimates from within their own company and their Electrical Sub-Contractor for the work associated with pulling the low voltage control wiring. The DDC Sub-Contractor has to, additionally, include the costs associated with developing the Submittal, modifying the acceptance test and having technicians check out the Electrician’s work.


  1. The DDC Sub-Contractor must include the cost of modifying the software to accommodate the additional ‘point’ the thermostat represents.


  1. The DDC Sub-Contractor must also include the cost of the thermostat, transducers and wire. Based on how they bid the original job they may have to include the cost of either DDC expansion modules or a new DDC controller.


  1. We have to remember that depending on what the contract and subcontract terms and conditions specify every party in the chain may mark up the cost.



We can begin to see how the requested thermostat is beginning to be a bit more complicated that we contemplated. One Creep component may be doable but as the scope continues to Creep the project cost can easily get out of control.

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If, by virtue of the Change Order, the amount of work has increased and the manpower has not it’s logical to assume that the schedule will have to be modified.


A construction schedule is like a musical symphony, some instruments play when others end, and some start a few beats after another have started. The heavy HVAC equipment is installed prior to finishing certain walls and doors. Sheet rock is in place before mounting the thermostats. Ductwork is put in prior to the acoustic ceiling. The point is that when an element of a schedule is extended it may well adversely impact other elements. In short, extending the time frame of one subcontractor’s work may hold up another.


Rest assured that as you begin holding up other trades for the additional thermostat, back charges and Change Orders will begin pouring in. Suddenly, you have become amazingly popular.


If you will not accept extending the duration of a task in your schedule you will, at minimum, have to accept the additional cost required to maintain the schedule due to overtime or manpower loading.


If, when we agreed to the client’s request, we did not contemplate the potential additional cost we may have created a serious problem. What if, for example, the DDC subcontractor has to upgrade the controller to accommodate the additional point at a cost of a few thousand dollars? We will end up having the most expensive thermostat known to mankind.


What if we did not contemplate the domino effect, during construction, of increasing the duration of a subcontractor’s task in the schedule? Instead of a symphony we will have noise!


The scope Creep due to the simple thermostat may well wreck both your schedule and your budget. We based the entire example assuming that the request for the additional end device was made at an opportune time.

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If your client’s request was made after the walls were painted and the ceiling tiles installed the Creep impact would place you in a world of hurt.


How than do we manage creep? We manage Creep by controlling changes to the project’s scope. Managing scope changes via a formal process of evaluating change orders is known as Configuration Management.


Before getting into Configuration Management we need to fully understand Scope. To understand Scope we have to know what and where it is.


A description of the project’s scope is usually found not in a single document but in a group of documents. These documents include formal contracts, subcontracts, specifications, drawings and any other document, which may be referenced. For example the drawings may show lights, the specifications define the characteristics of the lighting fixtures and further stipulate they meet UL standards. The relevant UL standards are as much a part of the scope as the symbol shown in the drawings.


If the world were perfect the scope defined in the contract(s) would be consistent with the drawings. The drawings, in turn, would be supported by the specifications. In short all the scope documents would back each other up. Unfortunately, it’s not a perfect world. In many cases the documents contradict each other.


The contradictions are clearly not intentional. We have to bear in mind those different parties author different documents. This is compounded by the fact that only rarely is their formal mechanisms to ensure communication and coordination between all the people involved with defining the project scope.


So what do we do? To fully understand the scope, when contradictions arise, we have to determine which document is controlling. Usually one of the documents, normally the contract,

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Contains language declaring itself as the controlling document. The contract may even contain a process for dispute resolution.


Remember, if a document is not signed or referenced by all parties it may not even be relevant. A firm or a contractor may issue a proposal or quotation in a letter. Typically the scope gets tangled when a contractor retains a subcontractor. The subcontractor will send out a quotation and the contractor will issue a purchase order. In too many instances the purchase order and the quotation don’t match. If the purchase order, for example, is accepted by the subcontractor any exceptions that the sub may have taken are no longer a factor!


Now that we finally understand the project’s scope is contained in a group of legally binding documents, one of which is controlling, allow me to complicate the issue.


The scope of the A/E firm is different than the scope of the GC and each subcontractor’s scope is different as well. For example, the scope of the company painting the interiors has nothing to do with the scope of the elevator contractor. As the project manager its not enough to know your firm’s scope, you must also understand the scope of the different contractors working on the project!


Scope Creep is eliminated when we have in place a formal process to evaluate proposed changes resulting in either approval or rejection. In the context of Project Scope Management this process is known as Configuration Management.


Lets look at a simplified Configuration Management procedure using the additional thermostat example.


Bearing in mind that your firm or the design/build contract awarded to your company may contain procedures to monitor and control change; the following steps contain one possible Configuration Management process.


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  1. When the client requests the additional thermostat the project manager should document that request. The documentation should, at minimum, include the following information: who made the request, time and date and a specific well-defined description.


In terms of the description, for example, its not enough to say, “The client requested an additional thermostat.” It must be as specific as possible. It should say something like: “The client requested a wall mounted thermostat between columns 25 and 26, at the same height as the other thermostats, to control the diffusers of the modular offices between columns 26 and 28. The schedule will not be extended for this additional end device” Do not assume that its location and purpose are understood by all the parties associated with the change (general contractor, prime mechanical, controls subcontractor, controls second tier electrical subcontractor).


You may wish to create a template form to document all scope change requests.



  1. The general contractor receives and logs the scope change form from the project manager. As the project manager, assuming the contract terms and conditions are not different, you may wish to establish a policy mandating the response time for all scope change requests.


  1. The general contractor must issue a documented bulletin, notice or quotation request to the appropriate contractor. In this example the prime mechanical.




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  1. When the GC replies with a defined cost the project manager, depending on your firm’s policies and the contract’s terms and conditions documents the decision to either approve or reject the proposed scope change.


At this point common sense kicks in. The project manager may accept the additional cost, without charging the client, if it’s good for business. On the other hand if unknown circumstances make the cost unacceptable.


  1. The project manager should close the loop with the client advising him that the requested change will be implemented.


  1. If an approved scope change impacts the schedule that should be reflected in a revised baseline schedule.


  1. If an approved scope change effects the project budget that should be reflected in a revised baseline budget.


  1. The GC should issue a document, confirming the approval, with or without a schedule revision, to any and all first second or third tier contractors that may have their work effected.


It is essential, and cannot be overemphasized, that the project manager clearly documents all the steps that are involved in the Configuration Management process.


Creep must be controlled as soon as the revision surfaces. This management should bear in mind the Triangle of Truth.


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