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									                          Project Management Procedure
SUBJECT:                                                             NUMBER:
       PROJECT DEVELOPMENT BUDGET                                                        PMO-3
                AND ESTIMATES
RESPONSIBILITY:                                                      EFFECTIVE DATE:
                          PROJECT MANAGER                                    July 1, 2008

                                                                     SUPERSEDES:


PMO DIRECTOR APPROVAL:                                     Original with signature on file in Project Management Office
                                                                  James S. Utterback, PMP
                                                                                 PMO Director



TASK:                Monitor and Update Project Budget and Estimates.

PURPOSE:             This procedure outlines the actions required to develop, update and monitor
                     the project development estimates and budget. The Project Manager, with
                     collaboration and support from Team Members, is responsible for the
                     development and management of the estimates and budget for Preliminary
                     Engineering, Right of Way and Construction throughout the entire project life
                     cycle. Estimates must be current, less than 90 days old and maintained in the
                     Project Cost Estimating System (PCES).

STEPS:               1. Develop estimate for PE, RW and CN phases as appropriate for
                        current milestone. Specifics for developing milestone estimates are
                        below.

                             •   The first Pre-Scoping stage estimate populates automatically in
                                 PCES from the Program Estimate entered by the Project Sponsor
                                 in the Project Pool at Project Initiation.
                             •   Scoping, Preliminary Field Inspection and Public Hearing Stage
                                 Estimates are developed using PCES. Team Members complete
                                 their respective worksheets in PCES; the Lead Design Engineer
                                 compiles the complete estimate and forwards it to the Project
                                 Manager.
                             •   No later than the Field Inspection Stage, estimates are developed
                                 by the Lead Design Engineer using TRNS.PORT and entered
                                 into PCES by the Project Manager.


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                          A. Request estimates and supporting documentation from Team
                             Members for the current milestone. Use the PM-104 to Request
                             Right of Way Estimates and the Action Item feature in iPM to
                             request estimates from Team Members in other functional areas.

                          B. Verify Team Member’s estimate worksheets are complete and
                             supporting documentation uploaded in iPM Documents as Category
                             ‘iPM Estimate Supporting Document’.

                          C. Upload estimates, select current milestone stage using drop-down
                             selection and recommend estimate in PCES.

                          D. For the Scoping Milestone Estimate: Upload, select and recommend
                             the Scoping Estimate in PCES after the Scoping process is complete
                             and the Scoping task in the iPM Project Schedule has actual dates.
                             The first scoping estimate uploaded after the Scoping task is
                             complete becomes the baseline estimate in the Dashboard and is
                             established at this time. Refer to the Scoping Procedure for a
                             complete description of the Scoping process.

                     2. Review and update estimates for PE, RW and CN Phases as
                        appropriate for current milestone.

                          A. Request estimates and supporting documentation from Team
                             Members for the current milestone, at the required 90-day intervals
                             between milestones, and if the project estimate changes significantly
                             between these updates. Use the PM-104 to Request Right of Way
                             Estimates and the Action Item feature in iPM to request estimates
                             from Team Members in other functional areas.

                          B. Verify Team Member’s supporting documentation is complete and
                             uploaded in iPM Documents as Category ‘iPM Estimate Supporting
                             Document’.

                          C. Upload estimate, select current milestone stage using drop-down
                             selection and recommend estimate in PCES.

                          D. If the updated project estimate results in a 10% increase or decrease
                             or a difference of $50,000, a PD-1 Request to Adjust Ad
                             Date/Estimate Form and Revision request generates automatically in
                             the Project Pool.

                          E. Submit and monitor the progress of the automated PD-1 and
                             Revision Request in the Project Pool.

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                          F. Complete and submit to Programming Division a PD-24 Transfer of
                             Funds Form if additional funds are needed due to an increase in the
                             estimate.

                          G. If the estimate does not change, document the date of review every
                             90 days by ‘re-selecting’ the estimate in PCES.

                     3. Monitor project estimates, expenditures and budget using iPM
                        Reports, MyiPM, PCES and FMSII.

                          A. Use the iPM Over Budget Report, the MyiPM feature or PCES to
                             identify projects that are in jeopardy and need immediate attention
                             due to expired estimates or over expenditures.

                          B. Use FMSII to ‘drill’ down to view detailed charges on the project.

                          C. If erroneous charges are found, contact responsible party for
                             correction.

                     4. Enter Award estimate. After the project is awarded, Scheduling and
                        Contract Division staff enters the specific award details in TRNS.PORT.
                        The Award Date and Estimate automatically populate to the appropriate
                        fields in the Project Pool. At this time, the ‘Edit’ button becomes
                        available for the Award Estimate in PCES.

                          A. Use ‘Edit’ Button to enter the Award estimate for each phase on the
                             Project.

                                 •   PE Phase – Select Expenditures as the estimate source.
                                 •   RW Phase – Select RUMS, PCES, Expenditures or Manual
                                     for the source.
                                 •   CN Phase – Select Manual or CERS as the estimate source.

                          B. Review and update per the 90-day requirement. Refer to the
                             Construction Budget Development and Management Procedure for
                             additional information related to managing the construction project
                             cost.
TOOLS AND                 iSYP
RESOURCES:                Project Pool and User’s Guide
                          PCES and User’s Guide
                          FMSII
                          TRNS.PORT
                          Construction Expenditure Report System CERS

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                          iPM (Action Items, Reports, MyiPM) and User’s Guide
                          PD-24 Request to Transfer Funds Form
                          PD-1/PD-24 Reference Guide
                          Request for RW Data (PM-104)
                          Guide to Local Administration of VDOT Projects
                          Project Management Body of Knowledge (PMBOK) - Chapter 7, Project
                          Cost Management.
                          VDOT Project Management Development Program Courses
                          Project Change Control Form (PM-102)
                          Risk Management Form (PM-103)

DELIVERABLES:        1. Current estimates in PCES (less than 90 days old)

DELIVERABLE               Estimates in PCES
SAMPLES:

DESCRIPTION:         The Project Manager, with input from Team Members, develops and
                     updates the project estimates and budget for all phases (PE, RW & CN) as
                     each project progresses through the phases of Initiation, Development,
                     Delivery and Closeout. The Project Manager manages the project estimates
                     and budget in the Project Cost Estimating System (PCES) throughout the
                     project lifecycle, updates the estimates at least every 90 days, at critical
                     project milestones and as needed if significant scope changes affect the
                     project estimate. Approved estimates are the official budget for the project
                     and are shown in the SYIP. Monitoring and updating estimates are critical
                     for the accuracy and preparation of the iSYP.

                     Team Members provide estimate data to the Project Manager, furnish all
                     support documentation and upload the documentation into iPM. The Project
                     Manager is responsible for requesting estimate data from Team Members.
                     The methods used by Team Members to provide the estimates are
                     determined by the Project Manager. For example, the Project Manager
                     could request each discipline lead to download and complete the estimate
                     worksheet, provide to the PM who summarizes and uploads in PCES or each
                     discipline provide estimates to the Lead Design Engineer to compile and
                     provide to the Project Manager to upload. Consultants working on projects
                     for VDOT have limited access to PCES and can upload estimates into the
                     ‘Pending Approval’ section of PCES for the Project Manager’s review and
                     approval. The Project Manager reviews and approves the Consultant’s
                     pending estimate, uploads and selects the estimate as ‘Recommended’ for
                     the appropriate milestone stage in PCES.

                     A 10% increase or decrease or a difference of $50,000 automatically
                     generates a PD-1 Request to Adjust Ad Date/Estimate Form and the

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                     Revision Request process in the Project Pool; the Project Manager submits
                     the Form and Request via the Project Pool to the District PMO and
                     Programming Division for approval. If a transfer of funds is necessary, the
                     Project Manager completes and submits a PD-24 Request to Transfer Funds
                     Form to the designated Programming Division Program Team Member. As
                     a final step, Programming Division approves the pending Project Pool
                     Revision Request and processes the transfer of funds in iSYP.

                     Developing Project Cost Estimates
                     Project estimates are developed for Preliminary Engineering, Right of Way,
                     and Construction phases. The Preliminary Engineering (PE) process is
                     defined by the Federal Highway Administration as “any engineering activity
                     executed preparatory to the letting of a contract for construction.”

                     PCES offers flexibility and several options for creating estimates. Estimates
                     are developed for each phase using workbooks in PCES or through a manual
                     process. When the workbook is used in PCES to create the estimate, a CEI
                     cost is automatically included in the estimate. Estimates developed manually
                     must have supporting documentation and an explanation of how the estimate
                     was developed. Team Members can create the RW phase estimates in
                     RUMS and PCES then extracts the latest RUMS estimate into the PCES
                     website and workbook. The Project Manager uses a dropdown list in PCES
                     to identify how the estimate for each phase was created and the source.
                     (PCES, Manual, RUMS, TRNS.PORT, Expenditures, etc.)

                     The Pre-Scoping Stage Estimate populates automatically in PCES from the
                     Program Estimate entered by the Project Sponsor in the Project Pool at
                     Project Initiation.

                     Scoping, Preliminary Field Inspection and Public Hearing Stage
                     Estimates - Request and obtain estimates and supporting data from Team
                     Members and use PCES to create, upload, select and recommend estimates
                     associated with the current stage of the project.

                     Field Inspection and Final Submission Stage Estimates - Request and
                     obtain estimates from Team Members and use TRNS.PORT to create the
                     estimate. The option to use TRNS.PORT is available in earlier stages of
                     project development but project estimates must be created in TRNS.PORT,
                     including the CEI costs no later than the Field Inspection stage. The Project
                     Manager then uploads, selects and recommends the estimate for the
                     appropriate stage of the project in PCES.

                     Award Stage Estimate – The Project Manager can not enter the Award
                     Stage estimate in PCES until the appropriate Award information has been

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                     entered into TRNS.PORT by Scheduling and Contract Division staff. After
                     the Award information is entered into TRNS.PORT, the Award Date and
                     Amount automatically populate the appropriate fields in the Project Pool.
                     At this time, the ‘Edit’ button for the Award Stage Estimate in PCES
                     becomes available. The Project Manager selects Expenditures as the source
                     for the PE phase and selects RUMS, PCES or Manual as the source for the
                     RW phase. The Project Manager has the option of selecting ‘Award’,
                     ‘CERS’ or ‘Manual’ for the CN Phase estimate. Selecting ‘Award’ will
                     populate the CN Phase estimate with the Contract Budget amount shown on
                     the Fund Distribution Sheet. Selecting CERS will populate the CN Phase
                     estimate with the Total Projected Expenditures in CERS. Selecting Manual
                     allows for an estimate to be entered manually.

                     Monitoring Estimates, Budgets and Expenditures
                     The Project Manager monitors the project budget and expenditures using
                     FMSII or iPM, Project Pool, and PCES where FMSII is the source of the
                     data. Several tools are available to assist the Project Manager in managing
                     and monitoring project estimates, budgets and expenditures. In iPM, the
                     Over Budget Report identifies projects where the expenditures have
                     exceeded the budget. The MyiPM feature recognizes the Project Manager’s
                     individual logon and displays projects assigned to them which are in
                     jeopardy and need immediate attention due to expired estimates or over
                     expenditures. PCES and applicable filters can also be used to generate a list
                     of projects that have expired estimates or expenditures that exceed the
                     estimate. The Action Item feature in iPM enables the Project Manager to
                     request estimates and information from Team Members. When the Project
                     Manager assigns an Action Item to a Team Member, the Team Member
                     receives an automated e-mail alert with a link to the action item. Action
                     Items are retained in iPM for historical purposes and serve as documentation
                     of the Project Manager’s and Team Members’ actions.

                     Allocation and Authorization of Funds
                     Preliminary Engineering expenditures for all projects accumulate under the
                     Preliminary Engineering Job Number (P-101). The Project Manager
                     establishes a job number in the Project Pool for each phase on the project.
                     When a project is established in the SYIP/SSYP, the Commonwealth
                     Transportation Board allocates funding based on priorities established by the
                     CTB Members/District Administrator. The Programming Division
                     authorizes funding according to the SYIP/SSYP scheduled authorization
                     dates for Interstate, Primary, Urban and Secondary projects. Programming
                     Division submits the PD-3 Funding Authorization Form to Fiscal Division
                     and the date and amount authorized are entered into FMSII by Fiscal
                     Division. Operations Planning Division authorizes funding for Maintenance
                     projects and submits an OPD-3 Form to Fiscal Division.

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                     PE is typically authorized for the full amount estimated. For federally
                     funded projects, the PE is authorized up to the amount approved by the
                     FHWA. Expenditures should not exceed the amount authorized. The
                     Project Manager closely monitors accumulated Preliminary Engineering
                     expenditures and if expenditures approach 90% of the authorized funding
                     and additional funds are needed, the Project Manager takes appropriate
                     action by updating the estimate in PCES, generating the automated PD-1
                     and beginning the Revision Request process.

                     Estimates for projects administered by localities may be developed by
                     parties other than VDOT. These estimates cannot be changed without their
                     concurrence. Regional Surface Transportation Program (RSTP) funds are
                     controlled and allocations are made by the Metropolitan Planning
                     Organization (MPO). Authorization to begin activities in each phase will
                     not be issued until the phase is fully funded. For additional information on
                     locally administered projects, refer to the Guide to Local Administration of
                     VDOT Projects.

                     Projects with capped funding include Revenue Sharing, Forest Highway,
                     Public Lands Highways Discretionary, Congestion Mitigation and Air Quality
                     (CMAQ), Safety, Enhancement and Surface Transportation Program (STP)
                     projects. When estimates for these projects exceed available funds, additional
                     funding must be provided by the Locality, the Metropolitan Planning
                     Organization (MPO), or other sources, or the project may be delayed. At
                     Submission Stage, the Project Manager reviews estimates and determines if
                     sufficient funds are available. The Programming Division verifies fund
                     availability.

                     Providing Estimates Prior to Advertisement Submission
                     If the estimate changes after the SYIP/SSYP update, the Project Manager
                     seeks approval from the appropriate District Preliminary Engineering Manager
                     or the District Construction Engineer before providing an estimate that differs
                     from the Programming Division’s SYIP to anyone outside of the Department.

                     Current Project Cost Estimates (including specific unit prices) may be
                     provided to Consultants under contract with VDOT (or under contract to a
                     locality on a VDOT project). Project Cost Estimates provided to anyone
                     outside of the Department are compiled using PCES.

                     The Project Manager coordinates responses to requests for Project Cost
                     Estimating System (PCES) information from outside of the Department with
                     the appropriate District Preliminary Engineering Manager, District
                     Construction Engineer, and the Office of Community and Public Relations.

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                     Responses are to be provided to the customer within five days of the
                     request.

                     Providing Estimates After Advertisement Submission to Construction
                     Engineer
                     After submission of plans to the Scheduling and Contract Division for
                     advertisement any inquiries regarding project estimates, from the press or
                     others outside the Department, are to be referred to the Scheduling and
                     Contract Division’s Estimate Engineer at (804) 786-2357. The Final
                     Construction Estimate prepared by the Scheduling and Contract Division for
                     evaluation of bids is not public information.




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