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23:09 Project Management- A Managerial... 420 CHAPTER 10 / MONITORING AND INFORMATION SYSTEMS C A S E THE PROJECT MANAGER/CUSTOMER INTERFACE E. Fillihen and J. L. Calley, Ir. Recie Brown. B&W Nuclear Service Company's Representative approached Stan Goodson, NLI's site (BWNS peeject manager for Nite Light and Power's manager, at the end of summer and explained that the Green Meadow plant, rudlected on the dilemma that had outage could be completed under the original terms plagued him for over a year. His team had completan in light of anticipated delays and increased work scorge, oulage fur Groen Meadow over a year ago last October Goudsen asked for a budget and a schedule and gave the The pject was ansinal designed as a fixedice 20-head for a lite and materials line. a class and an expande wape, hawever, Brown's fear delay was reall Firal, a forced the outage to be changed to a time and maleri Laboc Duy weekend. budging was completed and the als jobs with a final price that was significitly higher epipment was saged salaris pasible. The than the original contract price. Now it was December, of badging involved a series of tests, including site wall over a year after the completion of the age and Security and alphysies qualification, psychologi- the bill band still been puid in full. Insisting that it calment, les ground check fingerprinting and was not responsible for the stormous overrun, the wil drug screening. The utility did not want to accept SPIS'S ity refused to pay tax BWNS' Special Products and budging: il wanted to have its own sepurale process, Integrated Services ussion was charging. Brown knew which was quite time-consuming Second, because a that miscaining a good relationship with the customer delay in the chemical channelheid decontamination, the had to take pricity ever getting it will paid. three gelerates were det med over to SPIS geres nel an time. The first generator was turnover les days Background after the date promised. The second oee was turned over The Special Products and integrated Services Division reclclay be the thinine days after the (SPIS) ha be working with Nita Ligh Powet Recognizing that the cost of the work was going to (NLP) since 1983. Relatices with the utility remained exceed the exactament bewus of the willy's favorable since then as SPIS performed a wide vari- delay in turning over the generators, Brown, as project ety of services for NLP. In the summer last year. NLP TOUS mis to clarify the lion carly on and avere any problems on the road. First, sought a fixed price catch for work to be performed he requested that some of the SPIS personnelle seni by SPIS. The focus of the work was the immittent all refue ang curge scam-generator inspection, SPIS home while they were waiting for the other generators to representative worked with the utility to develop become available NLP officials reed weety the fixed price at which totalul approximately ing that the other two seam generators would be avail $500,000. The contract assumed that SPIS crews would ahle shortly and that the linkl crew need to be ready wark en three of the lilly's generis currently go as soon as they were available. Second, Brown sent There were, however, several early signs of porcen letters detailing the situation to the people identified on NLP's igal purchase ander as the utility's sens Tal problemes Regic Bull day even before aming on site in late August He expected tives. The only response was from ce-site personnel like the badging process to take onger than the time allot Goosen, who gave repeated that is STIS ted. Morconet.be SPS cam knew that it would need to contract had been switched to time and materials Tritill RWS 10 engines and technicians to relieve stress in the light-radius U-bands roms 1 and 21 and perform additional roll inspection, none of which stari the work. When the project was in full swing.close was ditempat at the time of the original request TO LINO BWNS persamel were on site. Although the cig. inal contract was for approximately $500,000 worth of "Copyrigh The Dadesh Stol Fendi work, the chal will came to over SISUUKKI. Ste there is alwa of the overrun was attributable to U bend stress relict CASE 471 and added plug inspection, all part of the expanded the cemaal office. As there was no indication that the se. Much of the oven, however, a chy procedures hat change the original case order was underutilization of the personnel who were on site wat sent to the central odlice ing for miles to the genes. The age W. completed 44 days after at began, 22 days longer than The Invoice ariginally anticipated in Exhibit) After the courage was completed a price estimate was exempled in November. It caled 51.600.000), achitional Green Meadow Purchasing Procedures services, werth an estimated S150.0X1, were provided at Cumplicating the run situation was the fact that the HO. The estimate was sent to Bill Junes autorical utility was in the process of converting is purchasing specialist who was Stan Goudsen's boss with a carbon procedures from a centralized to a decentralized gram way to Mel Carta in Purchasing. NIP personal's ini- The Contrat Administrative Group, located at NLP's tal reaction was that the estimate locked fie; because te headquarters, was originally responsible for all the tlity had caused the considerable delay, SPIS WIN initial contract negal issues such erilled to full reimbursenter as delays had beerly been handled by the on-site tech The release of the invoice estimate was followed nical people her the years the online purchasing by a meeting oxin bna Several representa cess had been quite sommal, however, especially gren tives from SPIS sat down with Stan Goodsen and some SPISX long-term relatoship with NLP Some years Technicians from the utility and end them with an 2. SPIS had. For example, completed a muhimillion initial invoice for the outage. Throughout the process Jolhar project al Green Meadow withoul any purchase SPIS's on-site penonnel dull extensively with Good- under whatsoever. Now, under the new procedures, the sem. Mayhew had been invited to the meeting bul did not individual garating plants would be responsible for und Ciren Mercw's Technical personnel agree handling the entire purchasing process. Unfortunately accept the invoice "as is" With NLP's inpur, the actual SPIS Wesleventely internet or the changes Will was sent in February Carter in the central office. Under NPL's new procedures, Lou Mayhew was The utility usually paid its bills within til dags. After Assignal to the on-site and Administration Camurday, Reggie Brown Nill had lead anything and He was to be SPIS's main us. He recognized, however, that in SPSS hat worked in beren a 23:23 Project Management- A Managerial... Roller pre Great Mew Without any purchase STESS-ile personnel dealt extensivdy with Gowl under whatsoever. Now, under the new procedures, the sem Mayhew had been invited to the meeting but did not individu galerating plants would he responsible for tend Cireen Meadw's Technical personnel agreed handling the entire purchasing process. Unfortunately accept the invoice" is. With NLP's inpir, the actual SPIS was never adequately in cemal of the changes hill wirelil in Februaryta Cater in the central otce. Under NL procedures, Lou Mayhew was The utility usually paid its hills within 60 days. After Assignal to the on-site Contact Adminishati Giup II days, Ressie Brown still not read anything and Ile was to be SPIS's main act boc contract nego was starting to generous. He recognized, however, this tiacions. Because the SPIS am had worked at Green the bill had been sent with volumes od paper work includ Meadow oela previous and was so ing the site sheds that had been signal daily G- the purchasing reorganization, at followed the same per sen and he was sure that the utility'shilling department scores it halusal Alilough SPIS por el was simply bowed down with no Newchess. knew that Mayhew existed because he had participated Brown decided to call the utility and inquire about the in the chical premations for both pre roes. Jebay he was assumed that there was no problem." both of those purchase onders had been signed downtown The utility eventually did send sume money. By this October, SPIS has received a cal of $1.2 million Exhibit The Project Manages-stomer serie Then, on October 17, Roger Ruberts, regional sales manager for SPIS, received a letter from ility Vice Timeline President Rus Clemons requesting a meeting On Octo AE Valokay from God to go be 1 Haberts and quali Dayle, maar of Con with a time-and-materials angement. tract Management, traveled to the Green Meadow plant September Til huden Alltra for a meeting. Reggie Brown on a field assignment, ennakheduled was umbke to send. Neither Robert Dinle knew delivered. None ready quite what to expec. September : Find to SMS Seene 21 Meno firm in de limite The Negotiations El authociation September 23 Second SPIS On the 26th, Kahits and Doyle met with three NLP Cho2 Third year to SPIS. ufficials. Sly Simmons, Lou Mayhew, and Mayhew's October 14 Ouage complete boss. Rick James. The committee from the wiility informed the SPS team that because the originale 472 CHALTER 20 / MONITORING AND INFORMATION SYSTEMS ment had been a fixed price contract, not only would the utility to pay any more money and the $16 mil- lion SPIS said it wed, but also the BWNS med Nita Light and Power 5300.000 plus there for the amount NLP had overpaid to date. Shocked, Roberts and Dal responded with the memo from Stan Garden thal veered the fixed price contract to one for time and materials. Mayhew simply kept puting and all tence. "The price is too high." From 9:00a.m. to 2:00 M, in an extremely frusting exchange all that wa accomplished was that the group finally greed that the cantadt wis on time and materials his Once thul agreement was reached, however, Mayhew alleged that SPIS hadded the project with people The group met again November 9. Althul meeting, Doyle and Roberts laid out the sitting pro pusal that was originally kexpled by Green Menu Then they cumpared with the job's actual staffing numbers, which were within two people of the jections. Duyle then pointed out that the promised protectie 21 tubes per hour, was also me as a roborated by the site sheets. The problem leading to the large are was the delay in the utility's relinquisi- ment of the generators. During this meeting. Doyle and Roberts also presented NLP officials with an invoice for $250,000 to cover some of the $31.000 in experts that were never charged on the first invoice, naging the total of the ulage lo roughly $1.850,000. Because they helieved that much of the impasse thus for was due to the 13 of technical understanding of the commercial reposentatives NLP sent to negotiate, Dayle, Klers, and Roman request Cireen Mesd uw's technical people be included in a thin meeting. The Technical people had to see the initial invoice "as is." All subsequent negotiations were conducted with cial sales in the Cat Adminis bo Group. These meetings were frustrating because the business group did not have a solid understanding of the technical aspects of the project and was there Tore, unsympathetic to SFIS rencang. During the third meeting. tbe ility's business representatives per portedly make a phone call to the technical people. SPAS laser found out from on-si penonnel, however, that the call was merely for show and that ito attempt was made to include the lachnical groep Very little Wireled during the third meeting. The utily's technical and com mercial por me logo deste invoice In December, %650.0001 was outstanding on the ball 151 850.000 in total charges - 1.200.000 previously puid) NLP officials offered S400.000, hringing SPIS's bocal received to $1.6 million. In deciding how to handle the shortfall, Dayk knew she had to balance the com peting interests of maximizing profit and manuring this konum customer relationship Term Ramlications The eventunut other serious ramifications for SMS's relatieship with Cirben Mecko NI.P's next project was a five-ulapo puckage wurth appeuximately 58 mil- lion. For this package, Green Meadow proposed all new terms and install Tavared the utility Following is proposal of other terms and conditions, SIISed more for almost 8 le and Brown Natal pushing Mayhow and James, who essentially responded, "Take it or leave it." In February, SPIS won all out with its proposal for be ic-outage package. Ils proposal won the technical staff's rec mendation and also led the best price. Green Meadow decided not to award a contract for all five alone. hower. but rather l aware the contact for the first April) outage only. Despite the SPIS peu pasal's technical and price advantages, NLP awarded the cutage in Westinghouse because the latter 2.greed to the utility's toms and conditions Word in the industry was that Westinghomehed per formed well on the April toxins in eight hours ahead of schedule. Westinghouse did, however, contest $1 million after completing the outage Given the events of the past year. Doyle and Brown knew that SPIS faced an uphill battle for the remain ing four outages. They reflected on the lessons they had leomes and woedered how they could apply them in order to put the relationship with Nusa Light and Puwer back on track. Advice fre Prnject Managers In reflecting on SPIS's experience with NLP, Jacqueline Duyle provided some advice for project managers It is crucial to know whathe authorized agent on site for the utility I thought Godse was suterized He ahviosly was. Always find who needs 10 know about ugress and deviations from plam Keep that per informed Given the kee-standing practice in the inch, would not have been feasible to stop work in the mid die Building a relationship with the wilty were years means that you agree to work thing out as pat nerx Twices com a daily or a weekly basis would have been a good idea in this case. 23:23 X Project Management- A Managerial... that covered the fixed-xice contrast one for lille and multials. Mayhew simply kept epeating ce son The overn had other serious raminations for SPIS'S Tence. The price is too high." From A .. 1o 2.0 relatives up with Green Mexiko NLP's most project 5m, in un panely frustrating exchange, all that was wia a tive-cutage package worth operoximately $ mil- 494 lian, For this pokage, Circe Mest pod w the contre was on a time and materials basis. Once terms and coeditions that stroegly favored the utility. lagic was reached however, Mayhew allege: Hallowing is praal of her terms and condicions ihai SPIS Flowder project with people SPES received no response for almost 8 months. Doyle The same group mes again on November 9. At that and Brown started pushing Mayhew and Jumes, who meeting. Deyk and Roberts laid out the staffine par essentially responded, "Takit ir kave it" in February posal thar was originally accepted by Green Meadow. SPIS went all out with its proposal for the five outage Then they compared with the job's actual statting package. Ils proposal won the technical stats to numbers, which were within two people of the pro ommendation and also offered the hest price. Green Meadow decided to louward contract for all live jeton Deyle then pointed out that the promised at once, however, but rather to award the contract for production rate, 20 tubes per hour.was also met as cor calcomed by the site sheets. The problem leading to the the first Apal) outage only, Tespite the SPIS - large overrun was the delay in the utility's relinguish posal's technical and price advantages, NLP awarded most of the generales. During the recting. Die and the montage to Westinghias because the latter greed Roberts als NLP allicials with an inice lor to the utility's terms and conditions. $250,000 to cover some of the SLO in expenses Word in the industry was the Westinghouder that were never chorgal on the link invoice, bringing the formed well on the April tage, coming in eight bours total cost of the outage to roughly 1.250,00 abcad of schalule Westinghww did, however, contest Because they believed that much of the impasse thus sl million ser completing the outage Given the events of the past year. Doyle und Brown tar was due to the lack of technical understanding the commercial entrives NLP wil in site, knew that SPIs fad an uphill battle for the tumain- Doyle, Roberts, and Brorati reguested that Green Mead ing four outages. They rellected on the less they had ow's technical people le included in a thin meeting. The leamed and woodered how they could apply them in technical peuple had agreed to accept the initial invoice ord to put the relationship with Nita Lagh and Power luck on track "as is" Allegations were excel with coermercial representatives, ie, the Contract Adminis Atsive for Project Manager In Go These molitex wae frusting bose the Itsiness group did not love a mercaning In reflecting an SPIS's experience will NLP, Julie of the technical aspects of the project and was there Dayle povided some advice for project managers. fare unsympathetic to SPIS's reasoning During the is crucial to know who the authorized aga on third meeting, the utility's business representatives pur- site for the utility. I thought Goodsen was cuterized. portically make a phee call to che technical pepk. Surs He ubrously was D. Always find out who needs to Inter rould out from an-site personnel, however, that the know our progress and deviations from plaza Keep call was merely for show and the attempt was made that person informed to include the technical group. Very little was resolved Given the key standing practice in the industry, at uning the thind meeting The utility's final would not have been fesihle to stop work in the mid- mercial people never met together to discuss the invoice. dle. Building a relationship with the utility over the In December 4500 was outstanding on the bill years means that you agree to work this out spel ($1,850,000 in total charges S1,200,000 previously ners. Lovcices on a daily or two weekly basis would pal) NLP afficials offered 400.000 bringing SPIS have gider in this 473 The biggest essem, though, was to send documents tien to, and in conce with the commercial per sunnel on a regular basis. This communication can be complicated by the tension that often exists between technical people and commercial people. So even though clay-In-day wwion with the site och nical prep apnean all be appointed to communicate with the business managers. Dayle also cal the villawing responsibilities of project management Know to the decision makers are Ask the night questions of the right people Control the stomer Get my for work formal Persevere Questions I. We di Finand RWNS la well in this site! What can have been de bester 2. W lucices casile Rowlinlerce with his efforts to work with the utility W skills does it take to be an effective interface with the end? Hihin ja siller BWNS t. In wlul ways the role will youder this so bescope creepsee Chaper 11 5. Is the customer alsays ightDo you think any or de Contreparing probleme series in the chaper way luvun here? & Steuil HWNS try In win luck NLP in this time? How could Brown eventually win hack NLP Prin Walshall bed? c