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Integrated Change Control#

At GTE, we value integrity in all that we do. When it comes to delivering a project, we follow our integrity charter value by delivering what we say we will deliver. The scope of a project should be well thought out, and thoroughly estimated to cover all possibilities before the work commences so that change is controlled from the onset, and the need to burden the client with surprises and variation requests is avoided so far as is possible.

Nonetheless, changes can occur. The key control in mitigating reputational damage, cost overruns, and/or failure to deliver is in openly, and transparently communicating change to the relevant stakeholders.

Project change will generally manifest as an impact to scope, schedule, cost, or a combination of two or more of these elements. GTE manages any change under an integrated approach that assesses the impact to all project parameters which extend beyond just the above dimensions. These parameters include:

  • Scope,
  • Cost,
  • Schedule,
  • Quality,
  • Risks,
  • Resources, and
  • Customer satisfaction.

There will be instances in which a high-level assessment of the change across these parameters suggests a need to review the project feasibility from an overall risk perspective to GTE. Considering risk across the areas used in initially assessing potential projects may be useful and could potentially lead to extreme cases GTE proposes that the client abandon the project or award the work to others, such as where the technical requirements evolve significantly to be beyond GTE's capabilities.

Change Events#

As an example, the impact of an increase in the project scope is not a simple exercise of assessing the cost and schedule impact. The additional work may increase resource loadings beyond capacity or result in additional risk to GTE that also needs to be considered. For this reason, any change to the project is assessed for impact using the same integrated approach.

The PM is accountable for ensuring that all changes are identified, assessed, and appropriately communicated. The project team is responsible for the identification of possible change events, and for communicating these to the PM and assisting with assessing the impact.

As an absolute minimum, any event that has the potential to result in additional costs to GTE or the client must be identified and formally communicated.

Note

Project cost should be considered independent of scope. Under reimbursable engagements, if GTE's forecasts indicate a project FAC that significantly exceeds the project BAC - regardless of whether the scope has changed or not - it will generally be apt to communicate a change event capturing the trending cost over-run at some point. The PM must use discretion and experience to determine at what point any forecast over-run is not recoverable, and communicate via change notice at this time.

More broadly, any change that has an impact of any kind on the client must be communicated by the PM to the client, at least so far as for the specific impacts that effect the client. Some impacts, such as costs to be absorbed by GTE, may be excluded from the communication where this is deemed appropriate.

There may be instances where all impacts of a project change will be absorbed by GTE, and in these instances it may be appropriate not to communicate the event to the client. The PM must ensure that the change event is fully assessed across the above project limitations and it can be confirmed that there is no auxiliary client impacts that may not be immediately evident and should actually be communicated.

Where a change event on a lump sum project has an associated cost impact to GTE that is not to be passed on to the client and is likely to exceed the remaining contingency on the project, the PM must prepare an Internal Change Communication and ensure this is presented to the Directors.

Change Communications#

The means for communication do not differ between fixed price and reimbursable projects. Regardless of commercial arrangement, formal communication of change is made using the following documents:

  • Change Notice (GTE-1005-CHN-001 does not exist yet)
  • Internal Change Communication (GTE-1005-ICC-001 does not exist yet)

Important

The Change Notice is a request for variation to the Approved Budget for the project. It is not a request for variation to the purchase order or contract value. This distinction is explicit on the Change Notice document.

Fixed Price / Lump Sum Work#

For a lump sum project, a Change Notice will typically be accompanied by a Variation Request, however there will be several instances in which this is not the case in alignment with GTE's desire to prioritise reputation and client relationships. In these instances, the PM may - in consultation with the Engineering Manager and/or Directors - determine that the Change Notice will be issued with the intention only to make the client aware of the change event. This situation - if managed appropriately - helps to derive goodwill, and may also reserve the future right to issue a Variation Request.

Reimbursable/Rates Based Work#

For a reimbursable project, typically where the change impact (particularly commercial) is small when considered against the overall project, it is likely that Change Notices will be issued independent of any Variation Requests. Under such commercial arrangements there is an opportunity to offset any negative impacts of a change event through positive performance of works not yet performed. GTE will always strive to deliver a project within the original time, budget, and quality constraints even with some (often inevitable) incremental scope change. The Change Notice procedure allows all change events - even including performance trends which forecast a general cost overrun - to be communicated as identified, without the need to request Variations.

Approved Change Notices will increase the Approved Budget, which may at times exceed the purchase order or contract value. Where approved additional budget cannot be - or is likely not to be - fully offset by the positive performance of other project works, a Variation Request will be required. The timing of this is at the PM's discretion but must occur well in advance of the consumption of available purchase order or contract value. Thus Variation Requests may be prepared periodically throughout the project, or at some time where the total invoiced amount for the project approaches the purchase order or contract value. The Variation Request will simply summarise the previously approved additions to budget and establish the additional purchase order or contract value required (which may not necessarily be the full sum of the approved additions).

Where a Change Notice is prepared for communication to the client, it will typically not be necessary to prepare an Internal Change Communication as well. In this instance, the Change Notice generally suffices for both external and internal communication. An exception to this situation may be where some impacts of the change are to be absorbed by GTE and not explicitly communicated to the client as part of the overall Change Notice.

Variation Requests#

Variation Requests are to be submitted to the client where there is a need to vary the purchase order or contract value, and are distinct from the communication of change events as detailed in the Change Comunication section.

Preparation of Variation Requests must be from the template GTE-1005-VAR-001 and will involve approval by at least one Director in accordance with the requirements for a Proposal as outlined in GTE-1002-POL-002.