STANDARD OPERATING PRACTICES & LIMITATIONS TO ACHIEVE

OBJECTIVES
VOLUME-II

NATIONAL ENGINEERING SERVICES PAKISTAN PVT.LTD

 PREAMBLE TO VOL-II

In addition to Volume-I which profoundly covers the inception stage of the Project
involving the tasks majorly composed of feasibility studies, Project Preparation and
Approval, Volume-II covers some of the tasks from the initiation process group and
emphasizes on the tasks related to the Project Life cycle.
In realistic practice the project life cycle is presumed to start from the project awarding
stage. However, there are certain pre-requisite tasks and objectives that are required to
be achieved at the department’s and Consultant’s end which conforms to the tasks and
objectives of the initiation and Planning Process groups of the standard Project
Management Body of Knowledge Standard.
It is a well-established fact that the standard Project Life Cycle consists of the following
steps i.e. initiation, planning, executing, controlling & closing. However, research has
shown that Professional Services life cycle is somewhat different and complex than that
of standard Project Life cycle, which in this case involves the professional services of
the Consultant. The phases of this cycle involves the stages as, Business Sell Phase,
Plan Phase, Deliver Phase, Account and Bill Phase, Analyze Phase.
In conformity to the above standards the tasks pertaining to the initiation process groups
involves the formation of Technical Sanctioning of the Project, Setting up Contracts
Administration i.e. (Contract Preparation, Tender Preparation, Bid Preparation, and
Evaluation & Award), Preparation of Tender Design, Preparation of Bill of Quantities,
Preparation of Tender Level Construction Plans, Preparing Man-Months Based
Consultancy Plans, Change Management i.e. (Variations etc.), Project Monitoring and
Controlling, Project Closing, DLP phase tasks etc.
In order to address the exponentially changing criticality of decisions, author was
assigned the task under the promising leadership of Managing Director NESPAK, to
document the key outlines of tasks and limitations that being the Consultant all the
concerned individuals should take into consideration. The narrative of this document is
expected to help the individuals in understanding the chronological sequence of
activities especially the limitations from the inception stage of the project till closing.
The following documents have been majorly referenced while preparation of this
document.
a) Manual for Development Projects, Planning Commission
b) Punjab Planning Manual, Planning and Development Department GoP, May,2015
c) Fidic Conditions of Contract (1992, 1999)
d) PPRA Punjab Procurement Regulatory Authority Rules, 2014
e) PMBOK Project Management Body of Knowledge Fifth Edition
f) Project Control System For Construction Projects by GoP, Version-02 Directorate
General Monitoring and Evaluation, Planning and Development

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 INDEX
Sr. No. Description Page No.
1. INTRODUCTION AND BACKGROUND
1.1 Standard Operating Procedure/Practice (SOP)
1.1.1 The Ways in Which SOPs Tackle the Variables
1.2 Development Planning Concept
1.3 Public Sector Development Programme (PSDP)
1.4 Planning institutional regime
1.5 Planning Commission
1.5.1 P&D Board
1.5.2 Functions of the P&D Board

2. FEASIBILITY STUDIES AND PREPARATION OF PC-II

ABBREVIATIONS
DEFINITIONS
2.1 Project Formulation
2.2 PC-I,II,III,IV & V Proformae
2.3 Pre-feasibility and feasibility studies and Subsequent Preparation of PC-II
2.3.1 PC-II Proforma
2.3.2 Pre-feasibility study
2.3.3 Feasibility study
2.4 Preparation/Processing of PC-II
2.4.1 Appointment or Provision of Consultants at Feasibility Stage
2.4.2 Project Appraisal/Feasibility Analysis
2.4.2.1 Components of Appraisals/Feasibility Analysis
2.4.2.1.a Technical appraisal
2.4.2.1.b Social and environmental appraisal
2.4.2.1.c Economic and Financial Feasibility
Economic Analysis
Financial Feasibility Analysis
2.4.2.1.d Organization and Management Appraisal
2.4.3 Overall Quality Review

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 Sr. No. Description Page No.
3. PROJECT PREPARATION & PREPARATION OF PC-I
ABBREVIATIONS
DEFINITIONS
3.1 Project Preparation by the Consultants
3.1.1 Appointment of Consultants for Project Preparation, Detailed Designing
and Tender Documents.
3.1.1.1 Steps to Engage Consultant
3.1.1.1.a Expression of Interest / Pre-qualification
3.1.1.1.b Request for Proposal (RFP) for Consultancy Services
3.1.1.1.c Consultant Selection Methods
3.2 Tasks to be Performed Prior PC-I
3.2.1 Concept Design
3.2.2 General Scope of Works
3.2.3 Works to be Executed/ Statement of Work
3.2.4 Specifications of Works
3.2.5 Formation of Rate Analysis
3.2.5.1 Purpose of Rate Analysis
3.2.5.2 Pre-Requisite for Rate Analysis
3.2.5.2.1 Productivities
3.2.5.2.2 Cost of Material
3.2.5.2.3 Cost of Labor
3.2.5.2.4 Cost of Equipment
3.2.5.2.5 Overhead Charges
3.2.5.2.6 Contractor’s Profit
3.2.6 Engineer’s Estimate/ Cost Estimates
3.2.6.1 Preparing Engineer’s Estimate
3.2.6.2 Considerations for Preparation of Engineer’s Estimate
3.2.6.3 Estimating Methods
3.2.6.3.a Actual Cost Approach
3.2.6.3.b Historic Data Approach
3.2.6.3.c Combination Approach
3.2.6.4 Confidentiality of the Engineer's Estimate
3.2.6.5 Accuracy of Engineer's Estimate
3.2.6.6 Revised Cost Estimates
3.3 PC-I Proforma
3.3.1 Other PC Proformas

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 3.3.2 Components of PC-I

4. PROJECT APPROVAL
ABBREVIATIONS
DEFINITIONS
4.1 Approval stage
4.2 Project Approving Bodies
4.2.1 National Economic Council (NEC)
4.2.2 Executive Committee of National Economic Council (ECNEC)
4.2.3 Economic Coordination Committee (ECC) of the Cabinet
4.2.4 Central Development Working Party (CDWP)
4.2.5 Provincial Development Working Party (PDWP)
4.2.6 Departmental Development Sub-Committee (DDSC)
4.2.7 Departmental Development Working Party (DDWP)
4.3 Multi-stage process of approval for projects
4.4 Administrative Approval
4.4.1 Re-appropriation of Funds

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 Professional Services Project Life Cycle?

The key difference between the standard Project Life Cycle and the Professional services Project Life
Cycle is that the standard life cycle lacks fluidity and feedback between projects. The standard project
life cycle model consists of four very distinct project phases that have deliberate start and end points.
That is, once a project is completed, tools are archived, resources are sent to new projects, the job is
closed out, and then the entire process starts over.

The standard, linear life cycle model is not adequate for the complexity of projects in professional
services. The reason this model is inadequate is because it fails to account for the human capital
component that exists at professional service organizations. Due to the human capital component at
professional service organizations, there must be a holistic, infinite, and cyclical life cycle that exists
throughout the entirety of the project. Human capital refers to the fact that professional services rely on
resource expertise for profits. Therefore, it is required for clients and resources to sync and agree on
goals, processes, and deliverables throughout the entirety of the project. Trying to achieve project
success without constant feedback or communication between client and resource would be impossible.
This is why professional services require a life cycle that includes time to analyze, reflect, and forecast
accordingly.

The Professional Services Life Cycle vs. the standard Project Life Cycle?

The standard project life cycle has endured throughout the years despite the growing complexities
surrounding project management. However, the complexities involved in PSO projects have reached a
critical point where a new life cycle model is required for success. Someone who is part of a
professional services team who follows the standard project life cycle runs the risk of making the same
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mistakes during the following project. This is because there is no feedback loop or learning from past
mistakes between the completion of one project and initiation of the next.

Why does a Professional Services Organization require a new life cycle for project
management?

1. Professional Services teams need something more tailored to them.

2. Services organizations typically operate on a cycle.
3. Human capital.
4. Constantly selling services.

What are the phases in the Professional Services Project Life Cycle?

The Project Phases Involved:

 Phase 1: The Sell Phase

 Phase 2: The Plan Phase
 Phase 3: The Deliver Phase
 Phase 4: The Account & Bill Phase
 Phase 5: The Analyze Phase

Phase #1: The Sell Phase

The Sell Phase begins when professional services are first demanded by clients—that is, the sell phase
occurs before business is won. This phase is unique to the professional services project life cycle
because the standard project life cycle does not start until a project kicks off. Professional services,
however, require a pre-project phase to organize the complexities typically associated with professional
service projects.

The first phase of the standard project life cycle (Conceptualization) differs from the Sell Phase because
it fails to prepare your team for upcoming challenges, blocks, or inadequacies involved in project
completion. Conceptualization allows project managers to kick off a project, but a Sell Phase requires
team members to be more forward thinking. Professional Services organizations require this type of
forward thinking because they have numerous, complex projects occurring simultaneously. Because
professional services projects require forecasting prior to kickoff, it is increasingly important that your

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team has visibility into sales related activity in the CRM system. This allows them to account for change
and properly estimate and allocate resources to the appropriate tasks prior to winning the deal.

Adequate forecasting is required to determine the feasibility and profitability of a project, client, or
resource. Professional service organizations can not just “kick off” a project. Rather, they must
adequately forecast the scope, the required resources, the profitability, and the feasibility of client
demands. Without adequate time to pre-plan, PSOs would blindly take on projects even if they were low
on resources, had too many projects occurring, or would not profit from a certain client. Allowing
project managers the time to forecast and estimate success during the Sell Phase means less mistakes or
blocks will occur during the project execution. The less blocks or conflicts during a project’s execution
is directly related to increased profits.

Steps involved in the Sell Phase:

 Opportunity management.
 Project scoping.
 Bid management.
 Contract negotiations.
 Forecasting.

Advantages of the Sell Phase:

 Newfound visibility into project delivery.

 Increased and meaningful communication between teams.
 Enhanced customer relations.
 Ability to sell more services at a time.

Phase #2: The Plan Phase

The Plan Phase is focused on scheduling and staffing projects at a professional services organization.
The Plan Phase gets underway once a project contract has been signed and resources are beginning to be
allocated across tasks. Not to be confused with the standard life cycle “Planning Phase,” the professional
services “Plan Phase” requires a bit more time and attention from team members. A project plan is
determined and resources slowly begin to be allocated across tasks or responsibilities. A professional
services organization is typically juggling nearly hundreds of resources, consultants, contractors, or part-
timers, and these employees can not just be assigned to tasks or projects on an ad-hoc basis. For a PSO
to properly plan a project, extensive soft resource planning is required before-hand to ensure all tasks
have an available resource. Some projects are simple enough where only a resource or two is required.
However, the projects at PSOs are typically much more extensive, and require in depth resource
planning. Without proper allocation during the plan phase, most projects are doomed from the start.

Steps involved in the Plan Phase:

 Project plan definition.

 Resource planning.
 Resource scheduling.
 Task assignment.
 Timeline development.
 Milestones.
 Capturing expectations.
 Measures of success.

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Advantages of the Plan Phase:

 Increased accuracy with resource allocation, budgeting, and timelines.

 Insights into past projects to learn from successes or failures.
 Resource manager visibility into what resources are currently allocated (aka: who is
already soft or hard scheduled to a task and who is available to work?).
 Reduced wasted costs once associated with inaccurate resource and project planning.

Phase #3: The Deliver Phase

The Deliver Phase is also referred to as the execution phase of the project. During this phase, the plan
that was previously developed is set into motion and all resources and tools are moved to their respective
duties. As changes or conflicts arise, project managers must manage the risk associated with such noise.
That is, if a project is going over budget or past its deadline, it is the project manager’s responsibility to
track such risks throughout the delivery phase to ensure there will be no surprises down the line. The
standard project life cycle accounts for change management but fails to recognize the numerous moving
parts that can affect the success of a complex project. Professional services have more variables
typically involved in a project, and these variables require a more in-depth and responsive delivery
phase than what we see in typical project life cycles.

Steps involved in the Deliver Phase:

 Executing plan.
 Completing tasks.
 Managing risk.

Advantages of the Deliver Phase:

 By managing risk during the project, costs associated with conflicts are greatly reduced.
 The visibility into a project’s status allows quicker delivery times, resulting in more
satisfied clients and customers.
 Having the ability to manage change while the project is being executed reduces the
risk of a failed, over budget, or late project.
 The team is more efficient when they know all the potential variables associated with
any given project.

Phase #4: Account & Bill

The Account & Bill phase is dedicated to recognizing revenue and financial opportunities. This is a
unique phase that does not exists in the standard life cycle description. The standard life cycle goes from
the Execution Phase directly to the Termination Phase. Professional services teams must keep track of
the return on investment when they sign on to projects. Without a phase dedicated to accounting,
financials, and invoices, many project managers fail to recognize the true cost of a project. As mentioned
previously, the sheer size of professional service organizations put them at a greater risk for an
avalanche effect - when one project goes wrong, all associated resources are affected and ultimately
other projects begin to feel the burden of one mistake. By taking note of the costs associated with each
phase of project delivery, as well as the costs associated with certain tools, resources, or practices—a
service organization can actually forecast project costs with great accuracy. This ultimately allows a
PSO to sign on to only the most profitable projects which would increase margins and ultimately boost a
company’s bottom line.

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Steps involved in the Account & Bill Phase:

 Project accounting.
 Contract management.
 Invoicing.
 Collection.

Advantages of the Account & Bill Phase:

 The ability to consistently monitor the status of the project’s budget.

 Ample time to identify areas of financial opportunities or extra profit.
 Invoices are accurate, timely, and are based upon actual hours worked rather than
guesstimates.

Phase #5: The Analyze Phase

The Analyze Phase was created specifically to better serve the complexities within PSOs. This phase
only exists in the postmortem phase of the standard four-step project life cycle model. This is an issue
because project, client, or resource feedback is typically not useful after projects are completed. Unlike
the standard life cycle, the Professional Services Life Cycle includes analysis before the project has
closed and before it starts.

This phase primarily involves managing performance and looking to the future for trends and
forecasting using business intelligence data. This phase acts like a feedback loop to provide teams and
organizations with data from completed projects in hopes to better prepare for the future. The lack of an
analysis phase is the most critical distinction between the Professional Service Life Cycle and the
standard Project Life Cycle. The standard life cycle fails to recognize the importance of business
intelligence and metrics as a way to measure success. Without a phase that allows for reflection,
involved processes can never be optimized or even enhanced. Professional services organizations require
a moment of reflection between one job and the next, because other clients demand a number of the
same variables.

If a certain task is executed well, or if a task is not executed in a cost-effective manner, it is time to take
note of both your successes and failures and adjust process or practice to reduce the chance that they
occur again with a new client. Due to the fact that professional services teams tend to have more projects
occurring simultaneously, they also have more resources spread across tasks, as well as higher costs
associated with mistakes. Without an Analyze Phase, professional services teams would run the risk of
making the same mistakes.

This phase typically includes:

 Analyzing key metrics.

 Calculating margins.
 Measuring utilization.
 Forecasting people, resources, tools.
 Forecasting trends and future needs.

Advantages of the Analyze Phase:

 Ample time to reflect on project success and failures and better plan for future clients
and projects.
 Ability to use key performance metrics to track resource efficiency from the project
inception to completion.

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  Using metrics to enhance process and practice.
 Visibility into utilization rates and ability to adjust for cost-efficiency.

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