Project planning within the energy sector (part 3 of 3)

This post is part three of a three part series on project planning within the energy sector.  Part one provides an introduction and some context, and bit on why project planning is important.  Part two looks at some of the considerations when planning a project within the public sector; mostly about how to go about procuring consultants to carry out the works.  This post looks at project planning within the private sector; from the perspective of an energy consultant.  Similar principles apply for contractors or suppliers responding to a request for proposals, but I typically wear a consultant’s hat.

Private sector project planning

While there are overlaps between project planning principles in the public and private sector, the focus of a consultancy (in particular) is very different from that of a project manager procuring the services of a contractor.  In general, a consultant is responding to the specifications developed by the client – outlined in a request for quotations, tenders, proposals etc.  They sit on the other side of the fence, and are now looking at the statement of works that someone else has developed, with a critical eye.

Deciding to go ahead with a project

Depending on how much work is out there, projects will typically be pursued if they are deemed to be sufficiently low risk with a good probability of making a profit.  The organisation should be capable of carrying out the stated statement of works, they should have resources available to do the works, be familiar with working in the project location (particularly if the project is to be carried out somewhere remote and/or in a different country) and the overall project focus should align with their corporate strategy.  The client should have a decent reputation, and should be likely to be able to pay invoices.

Responding to tender or proposal requests, or even short quotation requests, can be incredibly time consuming and therefore costly for a consultancy, and so this initial assessment of the call for submissions is very important.  How long will it take to prepare a bid submission?  Who is going to prepare the bid and how much does their time cost?  Does the overall project revenue potential merit preparing and submitting a bid?  And is the consultancy likely to win the bid?  Are there likely to be loads of competing bids?  All of these factors should be considered, and if the result of this go/no-go assessment comes out with an answer of ‘go’, you then move on into the preparation of bid submission.

Preparing the scope of works and associated quotation and schedules

Projects differ; there’s no getting around that, and this post would be infinitely long if I tried to cover all project types and permutations.  So I assume here that the client requires the services of a consultant, and that the consultant is required to provide a scope of works, for a fairly fixed or predictable price.  Other projects may allow the consultant to work on a time basis, which moves a lot of the scope risk onto the client, but for the purposes of this post, we’ll assume that the consultant is expected to give some sort of assurance as to how much the services for a piece of work will cost.

With that in mind, a client’s request for quotations/tenders etc will typically include a required statement of works, that may or may not be at a fairly high level of detail.  They will generally ask for the consultant to provide a methodology that will be followed, with the associated price, and expecting completion date(s).

Some clients may not have prepared this at all or (unfortunately) don’t really know what they are asking for, and will request the consultant to develop this on their own scope of works, based on their experience in the sector, their understanding of the overall project requirements and intended project outcomes.  There should have been some discussion with the client at least, to inform this understanding.

Regardless of how much information is forthcoming from the client, this means is that the consultant is typically required to drill down into the detail of what tasks and activities need to be completed during the project’s execution, when this should be done by and by whom, and how much this will cost.

The 75MW solar PV facility I worked on in De Aar, South Africa.  This was a big scope of works, with loads of assumptions and exclusions.
The 75MW solar PV facility I worked on in De Aar, South Africa. This was a big scope of works, with loads of assumptions and exclusions.

Defining the assumptions and exclusions

If the required statement of works has been thoroughly thought out by the client and is fleshed out in the procurement documents then developing the scope and methodology in the bid can be fairly straight forward.  Each task is included and costed accordingly, and laid out in a proposed project schedule.  If there is no statement of works provided, the consultant will need to give more time to developing the tasks and activities that need to be carried out, and costing these.

Regardless, the scope of work provided to the client should be clear, unambiguous and logical.  And what becomes increasingly important, particularly in bids that have a fixed price attached, or penalties associated with missed deadlines, are the associated assumptions and constraints.  This is where I’ve ended up spending a lot of my time on bid submissions, and they can make all the difference.

Spelling out your assumptions helps the client to understand how you have interpreted what they require, what kind of information or input you’ll require from the during project execution, how much information or documentation you’ll be required to review, what other external dependencies exist (e.g. receiving consents or comments from project stakeholders), how much time has been allocated to tasks outside of the consultant’s control, etc.  The consultant’s contract price and project schedule is developed accordingly, and any change in the assumptions may lead to a change in the price or completion date.  These assumptions are not necessarily fixed, they can be discussed further or negotiated with the client, but they give a basis of understanding for the tasks and activities listed in the scope of work, and protect the consultant from disputes arising from a lack of information or clarity.

Similarly, the consultant should also be explicit in what activities or functions are not included in their scope of works.  For example, the consultant may state that they are not responsible for any activities relating to the preparation or submission of any applications for project licences or consents.  This means that this activity has not been included in the overall project price, and if the client requires that the consultant carry out this work, it will be in addition to the stated scope of works.  There should also be a blanket statement somewhere saying that if it’s not in the scope of works, it’s considered to be an exclusion.

Exclusions, as with assumptions, protect the consultant from the client misunderstanding the intention of the stated scope of works, and protect the consultant from the dreaded scope creep.

A good amount of time should be given to thinking about what is not included.  If the consultant has a good understanding of the sector, and of the tasks and activities that are required for the type of project, they will have a good idea of what type of additional activities could be required that may not be listed in the statement of works, but may be expected by the client regardless.

Besides the above, other important project planning activities would apply.  Who will work on the project, and what kind of rate are they on?  What type of quality control activities will be in place to ensure the work is carried out properly?  What risks exist in the project and how will they be avoided or mitigated?

project planning upon appointment

If the bid is successful, and you are appointed, the next stage of project planning begins.  A kick off meeting with the client is always a good idea.  You contact your team to let everyone know how much of their time will be required and when.  You may receive project documentation and information from the client and you’ll probably set up the system for managing and filing said documentation and communications.

A pause here, before you set off on actually carrying out the project work, to confirm with the client as to the overall methodology, project tasks, communication strategies, reporting expectations etc, is recommended.  Particularly if all communication to date been limited to the content of your bid submission.  Any questions before we kick off?  Anything unclear in our scope?  Anything unreasonable in our assumptions?  Do you need any activities listed in our exclusions put back in (with an associated price adjustment)?  Have we misunderstood anything you’ve expected of our us in your statement of works?

Right, let’s get going then.