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Do Private Sector Small To Medium Sized, Entrepreneurial General Contractors Comply With ANSI 748? If yes, how, if not, why not?

FEATURED PAPER

Dr. Paul Giammalvo, CDT, CCE, MScPM, MRICS 

Jakarta, Indonesia
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INTRODUCTION- 

Over the past year or two, there have been many debates, some of them quite heated, on one or more LinkedIn Forums as to whether the private sector, small to medium sized contractors, working on firm fixed price contracts using the traditional “Design>Bid>Build” delivery method do or do not use Earned Value in full or at least substantial compliance with ANSI 748, in accordance with the NDIA Intent Guide. (To be clear, “compliance” as used in this paper means “to comply with the [agency’s] implementation of ANSI 748”)  How private sector contractors use earned value management is sometimes derisively referred to as “Earned Value Lite”, but what this paper hopes to demonstrate that there are only a few differences in HOW the private sector contractors use earned value management (small letters) but how we use Earned Value Management is important to understand for those at the state or federal levels trying to improve the efficiency and effectiveness of Earned Value Management (capitalized).

The theme underlying many of these debates, is there are some (many?) of us who believe that the way the US Government uses earned value is too bureaucratic and focused on audits rather than on being proactive in managing the project, which is how entrepreneurial contractors use earned value. And given the rather abysmal failure rate of projects funded by local, state and federal government and given that save for Ben Bernanke’s printing presses, the US Government would be technically bankrupt, the premise of these debates and the rational for this paper is by looking at the differences between the way the Federal Government mandates the use of Earned Value Management compared to the way entrepreneurial contractors use earned value management, it MAY offer some ideas to the Federal and State governments on how better to use EVM as an effective project planning and execution management tool? And to be clear, the author fully understands and appreciates that “the public sector is not driven by the same financial motivation that drives behavior in the commercial world” but that doesn’t preclude the possibility that the way the private sector, entrepreneurial contractors use EVM cannot or will not provide ideas on how the public sector can or should be doing it. While contractors have a fiduciary obligation to our shareholders, government officials should have a fiduciary obligation to the taxpayers.

The author also realizes and recognizes that there are examples where the government has been flexible in their interpretation of ANSI 748 and the NDIA Guidelines to accommodate some of the suggestions being made in this paper.  But the point being made here is that some numbers of technocrats DO take the NDIA Guidelines literally and that there needs to be a scalable model and not just a one size fits all approach.

This paper is also not intended to be an attack on any person, agency or organization. The USA is in serious financial difficulty and “Business as Usual” is no longer an option. Clearly, what we are doing now is NOT working. This paper is written as a call to action by a concerned citizen to recognize there are problems and to look at the private sector entrepreneur’s for possible solutions.

For the purposes of this paper, “Small to Medium Sized” contractor is defined as companies with no single project valued at more than 20 million dollars and gross annual revenues of less than 100 million dollars.  Companies falling just short of the ENR top 400.  These companies were chosen because tend to be very entrepreneurial, often family based organizations.  They are not yet large enough to have created levels of bureaucracy or fiefdoms within their organizations.  Every process has a purpose and every process must be optimized to provide a return sufficient to pay for or offset the expense. Failure to do this will result in the contractor quickly being driven out of business.

More…

To read entire paper (click here)

About the Author       

PAUL-GIAMMALVO-bioflag-italyflag-usa-indonesiaDr. Paul D. Giammalvo, CDT, CCE, MScPM, MRICS

Jakarta, Indonesia

Dr. Paul D. Giammalvo, CDT, CCE (#1240), MScPM, MRICS, is Senior Technical Advisor (Project Management) to PT Mitratata Citragraha. (PTMC), Jakarta, Indonesia. www.build-project-management-competency.com.

For 20+ years, he has been providing Project Management training and consulting throughout South and Eastern Asia, the Middle East and Europe.  He is also active in the Global Project Management Community, serving as an Advocate for and on behalf of the global practitioner. He does so by playing an active professional role in the Association for the Advancement of Cost Engineering International, (AACE); Construction Specifications Institute (CSI) and the Construction Management Association of America, (CMAA). He also sat on the Board of Directors of the Global Alliance for Project Performance Standards (GAPPS), www.globalpmstandards.org, Sydney, Australia and is active as a regional leader in the International Guild of Project Controls. http://www.planningplanet.com/guild

He has spent 18 of the last 35 years working on large, highly technical international projects, including such prestigious projects as the Alyeska Pipeline and the Distant Early Warning Site (DEW Line) upgrades in Alaska.  Most recently, he worked as a Senior Project Cost and Scheduling Consultant for Caltex Minas Field in Sumatra and Project Manager for the Taman Rasuna Apartment Complex for Bakrie Brothers in Jakarta.  His current client list includes AT&T, Ericsson, Nokia, Lucent, General Motors, Siemens, Chevron, Conoco-Philips, BP, Dames and Moore, SNC Lavalin, Freeport McMoran, Petronas, Pertamina, UN Projects Office, World Bank Institute and many other multi-national companies and NGO organizations.

Dr. Giammalvo holds an undergraduate degree in Construction Management, his Master of Science in Project Management through the George Washington University and was awarded his PhD in Project and Program Management through the Institute Superieur De Gestion Industrielle (ISGI) and Ecole Superieure De Commerce De Lille (ESC-Lille- now SKEMA School of Management) under the supervision of Dr. Christophe Bredillet, CCE, IPMA A Level.  Paul can be contacted at [email protected].