Acceptance and Flowdown<br />A formal acceptance is signed by an “authorized” representative (usually the project manager ...
The Contract drives the Project<br />674-2435<br />Scope<br />Flowdown<br />Funding<br />Flowdown<br />Contract<br />Proje...
The Contract drives the Project<br />674-2435<br />Scope<br />Flowdown<br />Funding<br />Flowdown<br />Contract<br />Proje...
?<br />Cost Planning<br />Scope Planning<br />
?<br />Cost Planning<br />Scope Planning<br />$<br />Cost Planning = Matching authorized funds with authorized work to mak...
Basis of<br />Estimate<br />(BOE)<br />Work<br />Breakdown<br />Structure<br />Distributed Budget<br />Work <br />Order<br...
Basis of<br />Estimate<br />(BOE)<br />A cost estimate is prepared.<br />The estimate is converted into a project budget, ...
Basis of<br />Estimate<br />(BOE)<br />A cost estimate is prepared.<br />The estimate is converted into a project budget, ...
Closing the Loop between Work and Funding <br />5.	The WBS is used to define both the Control Accounts and the Work Packag...
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3 pm3 c_1%20-%20developing%20the%20cost%20plan

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3 pm3 c_1%20-%20developing%20the%20cost%20plan

  1. 1. Acceptance and Flowdown<br />A formal acceptance is signed by an “authorized” representative (usually the project manager or contracts)<br />this must be “flowed down” internally in order to authorize project work via an internal purchase, sales or work order comprising:<br />“Statement of Work” for authorized amount = Contract SOW (CSOW)<br />Contract Price – which forms the “Contract Price” used to derive the eventual budget (Week 4)<br />Eventually, these contractual requirements will be reflected in the project planning documents through to the lowest level<br />Control Accounts will be set up to contain the budgetted “Contract” price (Cost Planning)<br />Issues project work orders to flow down the authorized scope (Scope Planning)<br />
  2. 2. The Contract drives the Project<br />674-2435<br />Scope<br />Flowdown<br />Funding<br />Flowdown<br />Contract<br />Project work is driven by some form of “Contract”<br />Formal contracts are usually established with external customers<br />“Informal” contracts are/should be established with “internal” customers, and may simply be memo’s, work orders, or an e-mail<br />These Contracts “evolve” into the top level program instructions through a process that involves:<br />Reviewing the “proposed” contract requirements<br />Preparing a response<br />Negotiating and accepting the final contract<br />“Flowing down” the final contract into the project<br />At each step, the contract contains two distinct elements:<br />The “work to be performed”, or Scope<br />The resources (funds, equipment, staff) to be provided to pay for performance and profit <br />Contract<br />Review/<br />Proposal<br />Cost<br />Estimate<br />Scope Planning<br />NContract Negotiations<br />Contract<br />SOW<br />Contract<br />Price/<br />Program<br />Budget<br />Program<br />Work<br />Order<br />Control<br />Accounts<br />
  3. 3. The Contract drives the Project<br />674-2435<br />Scope<br />Flowdown<br />Funding<br />Flowdown<br />Contract<br />Project work is driven by some form of “Contract”<br />Formal contracts are usually established with external customers<br />“Informal” contracts are/should be established with “internal” customers, and may simply be memo’s, work orders, or an e-mail<br />These Contracts “evolve” into the top level program instructions through a process that involves:<br />Reviewing the “proposed” contract requirements<br />Preparing a response<br />Negotiating and accepting the final contract<br />“Flowing down” the final contract into the project<br />At each step, the contract contains two distinct elements:<br />The “work to be performed”, or Scope<br />The resources (funds, equipment, staff) to be provided to pay for performance and profit <br />Contract<br />Review/<br />Proposal<br />Cost<br />Estimate<br />Cost Planning<br />NContract Negotiations<br />Contract<br />SOW<br />Contract<br />Price/<br />Program<br />Budget<br />Program<br />Work<br />Order<br />Control<br />Accounts<br />
  4. 4. ?<br />Cost Planning<br />Scope Planning<br />
  5. 5. ?<br />Cost Planning<br />Scope Planning<br />$<br />Cost Planning = Matching authorized funds with authorized work to make things happen<br />
  6. 6. Basis of<br />Estimate<br />(BOE)<br />Work<br />Breakdown<br />Structure<br />Distributed Budget<br />Work <br />Order<br />Control Accounts<br />
  7. 7. Basis of<br />Estimate<br />(BOE)<br />A cost estimate is prepared.<br />The estimate is converted into a project budget, usually through contract negotiation.<br />The budget is divided into control accounts.<br />The control account budgets are “distributed” to fund the scope which has been assigned to Work Packages to create the “distributed budget”<br />Project<br />Budget<br />Cost Estimating<br />Distributed Budget<br />Control Accounts<br />
  8. 8. Basis of<br />Estimate<br />(BOE)<br />A cost estimate is prepared.<br />The estimate is converted into a project budget, usually through contract negotiation.<br />The budget is divided into control accounts.<br />The control account budgets are “distributed” to Work Packages to create the “distributed budget”<br />Project<br />Budget<br />Cost Estimating<br />Distributed Budget<br />Control Accounts<br />Cost Budgetting<br />How do we know which Work Packages to distribute the budgets to?<br />
  9. 9. Closing the Loop between Work and Funding <br />5. The WBS is used to define both the Control Accounts and the Work Packages being authorized. <br /> Because of this common link, funds in the distributed budget “line up” with Work Packages, so that<br />Budget and Work Packages may be connected and used to authorize work through a “Work Order” form<br />Cost Estimation<br />Cost Budgetting<br />Work Authorization<br />

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