Introduction
The Agile Methodology for managing software development was created fifteen years ago. The As Bid – As Built project management system evolved but its root concepts were presented in a few papers thirty years ago. The As bid – As Built methodology was designed for managing linear and unit cost construction projects. The premise of this paper is that with minor exceptions that are specific to software design, the major concepts of Agile and As bid – As Built are interchangeable. The essence of As bid – As Built can be traced to Earned Value Project Management (Earned Value Project Management M). Earned Value Project Management M was developed fifty years ago. The point is that sound principals in the practice of project management may be restated and put into new terms a such as scrum, sprint, and timeboxed, nevertheless, the fundamental concepts remain unchanged. It seems that each generation has to rediscover these concepts and put them into their own terminology in order to make them “sticky” for current users.
Origins of As Bid – As Built Project Tracking
A small team working for Henkels & McCoy developed the As Bid – As Built methodology for managing construction projects decades ago and the methodology was based on a system known as “Nitty Gritty” tracking. It was a few years later before I “discovered” the Earned Value Project Management (Earned Value Project Management M) methodology even though it was developed in the 1960’s by the Navy for building submarines or aircraft carriers.
The key to the As Bid – As Built and the Earned Value Project Management methodologies is the continual comparison of expectations developed in the bidding process with the tracking of the actual productivity during the project execution. This concept must be further defined as the tracking of actual units of work performed compared to the scheduled units of work to be performed in the bid schedule and the actual cost of each unit of work performed. Methods that do not integrate the budgeted cost of units of work performed with the actual cost of a unit of work performed are almost meaningless, and may actually be misguiding as a method of evaluating actual project performance.
Of course, the goal of both methodologies is to maximize net profits by delivering the project in at least on-time, on budget, and in scope. Less time and cost, and increased scope (if that’s possible) are even better. What As Bid – As Built and Earned Value Project Management tracking accomplishes is the closest to real-time identification of when a project starts showing substandard performance and to the extent possible, in which task or part of the work. Assuming that the bid or proposal for the work has been successfully replicated in the contract documents as the Scope of Work and the Work Breakdown Structure, then these two documents represent the definition of the successful project.
Enter Agile Management
This list of principles or pillars was copied from Wikipedia under the topic of “Agile Construction”.
- Labor productivity and measurement
- Job scheduling and planning
- Procurement management
- Prefabrication (components or parts already enssembled by the supplier, reducing time and complexity of the task)
- Reduction of labor composite rate (the cost of the worker to the company per unit of time)
- Estimation accuracy and improvement
- Project financial management
Everything on this list and more was already baked into the As Bid – As Built method of project performance tracking and therefore was included in its predecessor, the Nitty Gritty (manual)[1] system decades ago.
The As Bid – As Built methodology obviously begins during the bidding and proposal stage, before the project is won or assigned. Many of the principle pillars of AM must be evaluated, considered, and decided during the bidding or proposal development stage. The term “Agile Construction Management” indicates that the projects are of a commercial nature, but an “internal” construction project that isn’t bid still needs to have a budget and schedule. Preparing a commercial proposal requires the team to make estimates, assumptions, and decisions about everything activity in the project that has a cost, or takes time to perform, and most activities obviously have both attributes. Also, every piece of “material” (capitalized or expendable) that will be required for the work must be procured, and the logistics of getting the material to the work site at the proper time must be figured out during the bidding or proposal stage. It follows then that these activities must be evaluated and the results integrated into the bidding/proposal process, and that is the same in the As Bid – As Built method:
- Labor productivity and measurement
- Job scheduling and planning
- Procurement management
- Estimation accuracy and improvement
- Project financial management
The Project Execution Plan
The next step in the management process won’t take place until the bid is won, or the project proposal is approved. In the As Bid – As Built system this is where we take all of those estimated productivity, schedule projections, procurement logistics and a pile of other tactical planning assumptions and assemble them in a Project Execution Plan (PEP). The PEP is the instruction book for making the scope, cost, and schedule assumptions into a real project, and what to do when the As Built part doesn’t go the way it was planned in the As Bid phase.
The Project Management Body of Knowledge (PMBOK by Project Manager Institute) and many other sources of Project Management knowledge provide excellent outlines and instructions for creating a well-planned and executable Project Execution Plans (PEP). The outlines available are comprehensive and will guide you through the topics and subject matter necessary to create a comprehensive PEP. What I will point out is that productivity, measurement, scheduling, planning, procurement, etc. will all be covered and a great deal more in the PEP. A comprehensive PEP will even include how the financial matters should be handled on the project. This section will consider cash flow, progress invoicing & payments, project close out and final payment including retention if it was withheld.
Other Pillars
Two of the “pillars” not previously addressed in this paper are:
- Prefabrication (components or parts already enssembled[2] by the supplier, reducing time and complexity of the task)
- Reduction of labor composite rate (the cost of the worker to the company per unit of time)
The person in the position of Procurement Manager should be planning to “buy out” the materials and equipment once the contract or letter of intent is issued. It is only logical that a “Buyer” will explore any opportunities to reduce the costs of material and equipment, including prefabrication strategies. That’s just good project management practice.
Labor rates are a bit trickier – or not. In many situations in the heavy and utility construction industries, the labor force is unionized, or there may be a prevailing wage requirement on government contracts. That situation pretty much dictates the labor rates. Where neither of those conditions exist, the project team may take on a campaign of reducing labor costs after the fact. Perhaps the people doing the estimating in the bidding stage may have used “heavy numbers” in order to build owner’s equity into the estimate, and the kickoff stage would be a good place to segregate these savings. Owner’s equity must be identified at the project kickoff stage and be taken out of the budget for project tracking purposes.
In Conclusion:
My analysis of Agile Construction Management compared to As Bid – As Built and Earned Value Project Management indicates that there are no significant differences at the concept level. Agile Construction Management based on the “pillars” is a good but a bit fuzzier than the other methods that have considerable more structure, particularly in the development and execution of a comprehensive PEP that includes all of the pillars of the Agile system and more.
Therefore, I conclude that a Project Manager that is inculcated in the practices of As Bid – As Built and/or Earned Value Project Management M will be more than capable of managing projects or programs in a manner that will meet or exceed the Agile Project Management constraints and expectations.
[1] The Nitty Gritty system of project tracking was the basis for the As Bid – As Built methodology, but was a totally manual method using hand prepared and executed paper spreadsheets in the days before Excel and the PC.
[2] Spelling in Wikipedia
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