Week 6 | RFP & Estimation

Request For Proposal (RFP)

Used to solicit quotes based on predefined specifications. Includes criteria for evaluating bids.

Types of External Project Funding

- Fixed Price

- Cost-Reimbursable

- Time & Materials

Fixed Price

Agreed-upon amount paid for project's product, service, or result

Cost-Reimbursable

Reimburses ACTUAL costs plus additional fees

-Cost-plus-fee

-Cost-plus-fixed-fee

-Cost-plus-incentive-fee

(Cost-Reimbursable) Cost-Plus-Fee

Reimburses all costs plus pays a fee equal to a percentage of the costs

(Cost-Reimbursable) Cost-Plus-Fixed-Fee

Reimburses all costs plus pays an agreed upon flat fee

(Cost-Reimbursable) Cost-Plus-Incentive-Fee

Reimburses all costs plus pays a fee if certain objectives/targets are met

Time & Materials

Reimburses costs of materials, and pays agreed-upon hourly or daily rates for labor

Client Project Funding

1) Scheduling

2) Budgeting

3) Estimation

4) Tracking

Project Scheduling Tools

- Gantt Charts

- Project Network Diagrams

Gantt Charts

- Simple, straightforward, and useful for communicating & monitoring project status

- Not good at showing relationships

Project Network Diagrams

-Activity of the Node (AON)

-Critical Path Analysis

-Precedence Diagramming Method (PDM)

Activity of the Node (AON)

Take tasks and time estimated for each step from WBS

Types of task schedules:

1) Predecessor

2) Successor

3) Parallel

Critical Path Analysis

Illustrates the longest path in the project network and is the shortest possible time in which the project can be completed

Precedence Diagramming Method (PDM)

Establishes whether (and if so, how) activities can be managed in PARALLEL. Useful in assigning lead time and lag time.

- Lead Time

- Lag Time

Lead time

Starting the next task before the first task is complete

Lag time

Buffer of time before the next task begins

(example: you have to wait a day before starting the next task)

Four Relationships of PDM

Finish-to-start: Next in sequence can't start until first one finishes

Start-to-start: Activities can start at the same time

Finish-to-finish: Activities finish at the same time

Start-to-finish: First one cannot finish until the next one starts

5 Cost Estimation Steps (Direct Cost)

1) Determine resources needed to perform work

2) Determine quantity of resources needed

3) Define cost of each resource

4) Calculate cost of each task / activity

5) Double check for overextended resources

Other Costs

- Sunk cost

- Indirect cost

- Learning cost

- Contingency (reserve) funds

Project Budgeting

Approved schedule & budget become the BASELINE PLAN. Progress is measured against this plan.

SWAG

Stupid, Wild Ass Guess

Project Estimation

- Guesstimating (aka SWAG)

- Delphi Technique

- Time Boxing

- Top-Down

- Bottom-Up

- Poker Planning

Delphi Technique

Involves multiple, anonymous experts. Each expert makes an estimate. Estimates compared.

- If close, can be averaged

- If not, do another iteration until consensus is reached

Time Boxing

A "box" of time is allocated for a specific activity, task, or deliverable.

- Often used on Agile projects

- Can focus OR demoralize a team based on effectiveness

Top-Down

- Top & middle managers determine overall project schedule and/or cost

- Lower level managers are expected to breakdown schedule/budget estimates into specific activities (WBS)

Bottom-Up

- Schedules & budgets are constructed from WBS

- Starts with people who will be doing the work

- Schedules & budgets are the aggregate of detailed activities & costs

Analogous Estimation

Form of SWAG; Develop estimates based on one's opinion that there is a significant similarity between the current project and others

Poker Planning

- Variation of Delphi Technique

- Uses a deck of cards that represents an estimate in days

- Moderator describes particular task, feature, deliverable, or user story to be estimated.

- Attempts to reach consensus in a few rounds of "play"

Project Monitoring

Project metrics fall under this

Project Metrics

OBSERVABLE & QUANTIFIABLE measurement of some attribute of the project.

Qualities of Good Metrics

- Understandable

- Quantifiable

- Cost-effective

- Proven

- High-impact

SMART

- Specific

- Measurable

- Actionable

- Relevant

- Time Based

6 Focuses of Project Metrics

- Scope

- Schedule

- Budget

- Resources

- Quality

- Risk