Project Controls personnel, work processes, and systems provide management with performance
information required to effectively manage the project's budget, scope, schedule,
and risk. Proper implementation of estimating, cost control, and planning/ scheduling
principles enables coordinated development of work breakdown/coding structures, budgets,
schedules, analysis, forecasts/ trends, and reports to support project management
in achieving the project's cost and schedule objectives. Timely change management,
analysis, and trending help identify deviations from plans so that management can
make informed decisions on project performance and implement appropriate corrective
To accomplish this, Project Controls utilizes five organizing principles to align
skills and methodologies with project requirements, contract strategies and risk
1. Organizing and defining
• Identifying Contractual, Client, and Company requirements.
• Establishing the Work/ Cost Breakdown Structures.
• Establishing the Project Controls Execution Plan.
2. Planning and budgeting
• Establishing the project control levels and reporting plan.
• Developing and communicating the baseline costs/ schedules and their basis.
3. Monitoring execution status, performance measurement and reporting
• Accumulating and verifying actual commitments and expenditures.
• Performance Measurement - Identifying project status and progress measurement.
• Timely and accurate reporting/ communicating of status, changes, and trends.
4. Analysis, trending and forecasting
• Analyzing cost and schedule deviations, their causes and corrective actions.
• Identifying trends and forecast impacts.
• Contingency analysis and drawdown.
5. Change management
• Establishing and administering the Change Management Process.
• Controlling changes and adjustments to budgets and forecasts.
The above principles are further detailed below.
1.1. Organizing and Defining
The processes and methodologies employed here establish the basis of all future work
1.1.1. Identification of Project Requirements
The Project Manager ensures accessibility of the contract to the Project Controls
team to facilitate compliance of the Project Controls Execution Plan with the contract.
This establishes contractual parameters for cost, schedule, and financial reporting
and an understanding of contractual terms and conditions, client requirements and
expectations, contract/ execution strategies and reporting/ invoicing requirements
and their implications to the Project Execution Plan. A thorough understanding of
the project requirements ensures that the Project Controls team addresses management's
needs to control the work. Client requests for WBS or reporting requirements in conflict
with COMPANY's normal execution methods and systems must be brought to management’s
attention and any impacts must be assessed prior to agreement.
1.1.2. Subdivision of Work - Work Breakdown Structure (WBS)/ Cost Breakdown Structure
The establishment of the project WBS subdivides the project into manageable/ measurable
work segments where responsibility for execution can be assigned. It is often depicted
as a hierarchical tree of deliverables and services. Where necessary, considerations
for risk elements are incorporated. The WBS is the basis for quantification of project
scope in the estimating and scheduling processes and is a key interface component
of the Engineering, Construction, and Project Management deliverables, work processes,
and systems. In conjunction with the WBS development, the CBS is developed to provide
the levels of cost control deemed necessary to satisfy internal and external reporting
requirements. Development of the WBS/ CBS and the effective communication of this
coding structure to the project team are essential for effective management. The
Project Manager and the Execution Management team review and approve the WBS/ CBS
including the level of cost/ schedule control on the project.
1.1.3. Project Controls Execution Plan (PCEP)
Identifies the project specific plans to execute the project controls work processes,
systems, and addresses the staffing/ training requirements of the project. The focus
is on what we are planning to do, and how we plan on accomplishing it, rather than
a proposal level recap of sound project controls practices. The Project Manager approves
the Project Controls Execution Plan. The plan includes but is not limited to the
• Estimate Plan.
• Schedule Plan.
• Change Management Plan defining the change management process, forms, roles, and
responsibilities including an explanation of the budget types.
• Project coding structures.
• Project Reporting Plan - Standard reports, distribution and distribution frequency.
• Project Controls Systems to be used and the plan to interface them with other systems
and data sources.
• Cash Flow Plan.
• Risk Management/ Contingency Management Plan.
• Forecasting Plan including the quantity analysis effort.
1.2. Planning and Budgeting
Planning and budgeting begins with the implementation of the Project Controls Execution
Plan. It includes the setup of the project controls systems at the appropriate level
of control and the budget and schedule development and communication to the project
team. This phase establishes the Cost & Scheduling baselines and ensures that project
team execution is aligned with them.
1.2.1. Levels of Control
Level of control is defined as the selection of appropriate WBS/ CBS levels for storing
budgets, recording commitments and expenditures, identifying schedule activities,
progress measurement, and assigning discipline or craft responsibility. Risk management
may also dictate certain levels of detail in order to gain visibility of specific
risk elements. Reporting requirements also impact selected levels of control. It
is important to select appropriate levels of control in order to correctly configure
the Project Controls Systems and avoid duplication of detail stored in other systems.
The Cost, Schedule and Progress Measurement systems and work process are typically
at different multiple levels of detail and in accordance with WBS Structure.
1.2.2. Developing and Communicating the Project Baseline
Using scope documents, plans and code structures, the estimating process quantifies
project resource requirements and costs in accordance with the project WBS/ CBS structure.
Once approved, estimate data is loaded into the detail project schedule and along
with resource leveling methodologies, allows review of discipline/craft resource
availability. The result is a time-phased, resource loaded project schedule based
on activity sequence relationships, estimated activity durations, and planned resource
requirements, which establishes the planned progress curves. The estimate data is
also input in the cost and progress measurement systems. Reconciliation of the data
across these systems provides alignment in measuring deviations to the work plans
and budgets, as well as consistent reporting.
The Project Manager ensures that an estimating led "turnover" review of the project’s
Control Estimate is initiated and for ensuring the project team understands the elements
of the estimate, its basis, assumptions, and qualifications. The effective communication
of project baseline to the project team and their understanding of the basis, assumptions
and risk are essential for effective project control. The Control Estimate establishes
the budget baseline for performance measurement and Change Management processes.
The Change Management process relies on each project team member understanding project
scope and their deliverables in order to recognize deviations to the execution plan
and baseline, and communicate them to management.
The organizing, defining, planning and budgeting processes are critical for effective
project execution. They require teamwork, and need to be accomplished quickly following
project kickoff. The ability to define the specific deliverables and set the project
up correctly and get the project team into the execution phase with minimal changes
later is crucial to project success.
1.3. Monitoring, Performance Measurement and Reporting
During execution, the following processes occur simultaneously and in conjunction
with managing change, analysis and forecasting.
1.3.1. Commitment and Expenditure Accumulation
The project CBS structures at the appropriate level of control are used to validate
commitments and expenditures (labor, paid invoices, etc.) against budgeted costs
in the project Cost System. Verification of cost and revenue transactions are reconciled
with Financial and Time Entry systems to ensure an accurate and complete basis for
subsequent reporting and performance evaluations. Procurement commitments are also
verified against procurement system documentation. The Cost Specialist verifies and
assures that project costs and revenues are being reported accurately, completely
and against the correct project coding.
1.3.2. Project Status and Progress
Physical accomplishments for all tasks/ work packages are statused by milestone,
and linked by coding to a higher level control package, where the budgets are maintained.
Status and progress are normally recorded at the lowest level of detail and summarized
to the budget level where earned value is determined for each WBS/ CBS budget element
of measurable work.
1.3.3. Reporting and Communication of Project Status
Reporting requirements (specific reports, their timing/ frequency, the reporting
periods, and distribution) are established in the Project Controls Execution Plan.
Status, progress and accumulated commitments and expenditures all adhere to the selected
reporting periods. This provides for a consistent set of data from which to evaluate
performance. It is important that selected reporting periods are agreed to by all
project participants, so that consistency can be achieved, across Procurement, Financial,
and Project Controls functions. Any deviations in cutoff dates such as field payroll
cut-off requirements should be identified.
The Project Manager must approve the monthly Project Status Review Report (PSR) used
to communicate project, status, and issues to Senior Management. These reports support
and ensure formal assessment/ review of the project financial status, forecasting,
and profit recognition.
1.4. Analysis, Trending and Forecasting
Project Controls personnel analyze project performance by comparing plans and budgets
against current status and actual commitments and expenditures. The goal is to identify
deviations, their causes, and potential impacts and communicate them to project management
for corrective action.
1.4.2. Forecasting and Trending
Forecasting and trending efforts are vital to keeping project management informed
of the project’s health. They provide management with accurate assessments based
on performance to date, the work left to be performed and the associated resource
requirements. Forecasting and trending results should be validated against historical
data from similar projects to ensure accuracy within acceptable limits.
1.4.3. Management Notification
Significant impacts identified by the analysis, trending and forecasting are processed
by the Change Management Team and communicated to both Project Management and Project
Controls Department Management during the monthly Project Status Report.
1.5 Change Management
It is the Project Manager’s responsibility to implement and ensure execution of the
project's Change Management process of timely identification, communication, screening/
control, authorization, and implementation of changes and providing early warning
of potential trends. The timely quantification of the impact of change and the inclusion
in the Project Controls systems is necessary to provide management with accurate
project status and cost/ revenue forecasts upon which to make management decisions.
All changes must have management approval before release to budgets, schedules, and
progress measurement systems.
On lump sum projects work should not begin on any change order without client approval
of the change; specific exceptions require the approval of the Project Manager. If
the Client or JV partners are unresponsive in the approval or recognition of changes,
it is the Project Managers responsibility to request Operations Management support
and to ensure that the project team continues submitting the changes.
A cost database can be used to maintain multiple budgets, commitments, expenditures,
earned value progress, and forecast information at a project defined Cost Breakdown
Structure (CBS) in terms of quantities, work-hours, and costs.
1.6.2 Primavera P6/ Microsoft Project/ Deltek Open Plan/ Other
Scheduling should be via the use of a Critical Path Method (CPM) scheduling program
(as opposed to a simple Gantt chart). Furthermore the actual schedule should then
take advantage of this and be developed in a robust manner and complete logic (all
activities having relationships). The particular choice of scheduling software should
be tailored to the project, Company and Client’s needs, bearing in mind that each
scheduling software while similar it has distinctive advantages and disadvantages.
Sometimes the choice of the scheduling tool will be dictated contractually.
1.7. Project Controls Team
The Project Controls team will vary depending on the size and complexity of the project,
risk assessment, and client specific requirements.
Project Controls Manager - On major/ complex projects, the Project Controls Manager
leads and coordinates the Project Controls activities. Responsibility includes ensuring
the correct application and operation of controls systems in accordance with the
Project Controls Execution Plan, as well as initiating the organizing and planning/
budgeting activities at project kick-off. The Project Controls Manager reports to
the Project Manager, and is supported by the controls staff.
In the event the size of the project does not justify the assignment of a Project
Controls Manager, then these responsibilities will be shared by assigned Schedulers
and Cost Specialists. Leadership is expected to be provided by the senior of these
Project Scheduler - Establishes and operates the project scheduling, and progress
measurement systems in accordance with the Project Controls Execution Plan and selected
work processes. Responsibilities include participation in organizing and defining
efforts, as well as change management, analysis and forecasting. The primary focus
is on planning and coordination of project activities, performance, and progress
Project Cost Specialist - Establishes and executes the Cost Control Execution Plan
including the change management, forecasting and reporting processes, and systems.
Responsibilities include validation, monitoring, analysis and forecasting/ trending
of work-hours, expenditures, commitments, and performance against the baseline plan
and current forecast. The Cost Specialist is responsible for maintaining budget/
forecast integrity and reconciliation of the Cost System with the Time Entry and
Financial systems as necessary to ensure the integrity of the Cost System and reports.
Project Estimator – As required for specific projects either on a full time or a
part time basis for estimate development and/or oversight and estimation of scope
changes. Responsibilities include assisting the Project Controls Team with quantity,
workhour and cost summarization for estimates and changes and for risk development
Field Control Specialist - Field Control Specialists carry similar responsibility
as those defined above, but primary focus is the support of the construction effort
and site manager. Once the project moves to the field, the Field Cost and Scheduling
Specialists are responsible for the control activities at the site. They will report
to either the Site Controls Manager or the Technical Services Manager. They will
also report to the Home Office PCM as relates to controls methods, procedures, and
Site Quantity Surveyor - The Quantity Surveyor has responsibility to manage and execute
the quantity reporting and progress measurement function for the construction phase
of a project. Additionally, drawing take-offs and loading of take-off quantities,
quantity trending, variancing and quantity forecasting are elements of the Quantity