Managing major capital projects: lessons learned from Milwaukee's 3rd district police station and data communications center.Major capital improvement projects are usually accompanied by great anticipation, from the moment the project concept is first revealed until the ribbon ribbon, relatively narrow width of woven fabric edged with selvage. Ribbons have been used for centuries as girdles, headdresses, and badges and for ornamentation. is cut and the project is completed. As architectural renderings Architectural rendering, or architectural illustration, is the art of creating two-dimensional images showing the attributes of a proposed architectural design. Traditional rendering techniques are taught in a "master class" practice (such as the École des Beaux-Arts), where and models of the completed project are presented to the public, local officials and the media speak of the needs that will be fulfilled ful·fill also ful·fil
tr.v. ful·filled, ful·fill·ing, ful·fills also ful·fils
1. To bring into actuality; effect: fulfilled their promises.
2. by the project and the benefits it will provide to the community. And while general cost estimates are normally provided, little, if any, attention is normally paid to the risks of substantial cost overruns Noun 1. cost overrun - excess of cost over budget; "the cost overrun necessitated an additional allocation of funds in the budget"
cost - the total spent for goods or services including money and time and labor or even project failure.
Most local government public works departments Many governments worldwide have had departments or ministries referred to as the Public Works Department either formally or informally.
In Australia: -
New South Wales -
Such was the case when the City of Milwaukee Milwaukee (mĭlwŏk`ē), city (1990 pop. 628,088), seat of Milwaukee co., SE Wis., at the point where the Milwaukee, Menominee, and Kinnickinnic rivers enter Lake Michigan; inc. 1846. set out to build a new district police station and public safety data communications data communications, application of telecommunications technology to the problem of transmitting data, especially to, from, or between computers. In popular usage, it is said that data communications make it possible for one computer to "talk" with another. center. Because of scope creep The continual enhancement of the requirements of a project as the system is being constructed. Scope creep occurs frequently in information systems development and is often responsible for going way over budget when the changes occur in the coding and testing stages rather than in the , cost overruns, and project delays, one city alderman ALDERMAN. An officer, generally appointed or elected in towns corporate, or cities, possessing various powers in different places.
2. The aldermen of the cities of Pennsylvania, possess all the powers and jurisdictions civil and criminal of justices of the requested that the comptroller conduct a management audit of the project. This article reviews the findings of that audit, highlighting what went wrong and why and recommending specific actions local governments can take to avoid the problems experienced by Milwaukee. (1)
In 1993, the police chief and his managers identified two increasingly urgent needs: (1) the need to replace and relocate re·lo·cate
v. re·lo·cat·ed, re·lo·cat·ing, re·lo·cates
To move to or establish in a new place: relocated the business.
v.intr. an aging, inadequate police station in District 3 on the near north side and (2) the need to replace failing, unreliable data and phone communications and defendant identification systems. In 1996, the two projects were combined into a single project. The project ultimately expanded to include a new multi-level parking structure, an enhanced 911 system, two separate computer-aided Computer-aided- or Computer-assisted- is a prefix that hints to the use of a computer as an indispensable tool in a certain field, usually derived from more traditional fields of science and engineering. dispatch A dispatch or dispatches can refer to:
Taking place or located away from the site, as of a particular activity: an off-site waste treatment operation.
Four city departments--the Police Department, the Fire Department, Public Works public works
Construction projects, such as highways or dams, financed by public funds and constructed by a government for the benefit or use of the general public.
Noun 1. , and City Development--were involved in carrying out the project. City Development was to negotiate with existing property owners to acquire the site. Public Works was to administer To give an oath, as to administer the oath of office to the president at the inauguration. To direct the transactions of business or government. Immigration laws are administered largely by the Immigration and Naturalization Service. the building construction and communications, and oversee the work of private vendors. The Police Department was to make final scope decisions and oversee the work of City Development and Public Works. The Fire Department was to work with the Police Department on shared user needs.
Public Works retained a construction manager to review the work of the general contractor A general contractor is an organization or individual that contracts with another organization or individual (the owner) for the construction of a building, road or any other execution of work or facility. , including any proposed change orders. Building construction began in 1999. As the project proceeded, a multi-level parking structure adjacent to the main building was added, as were the installation of emergency generators and the renovation of a radio shop at locations far removed from the project site. The building and parking structure were completed in late 2001.
In the end, Milwaukee had constructed a state-of-the-art police station and data communications center. According to according to
1. As stated or indicated by; on the authority of: according to historians.
2. In keeping with: according to instructions.
3. the Police Department, the newly installed technology will significantly improve police response times and overall public safety operations. However, as of October October: see month. 2003, certain technology components, including the computer-aided dispatching systems, were not fully operational. Moreover, the original 1994 project budget of $20.8 million had ballooned bal·loon
a. A flexible bag designed to be inflated with hot air or with a gas, such as helium, that is lighter than the surrounding air, causing it to rise and float in the atmosphere.
b. to an estimated $64.1 million by the end of 2003, leading to serious concerns about the city's ability to effectively manage major capital projects.
WHAT WENT WRONG
The final audit report, released in October 2003, found significant weaknesses in virtually every area of project management--project planning and definition, project budgeting, and ongoing oversight
Oversight may refer to:
Timeline may refer to:
Cost estimates for major pieces of the project were often not supported by adequate documentation or analysis. The original budget estimate reflected the costs of two separate building projects, not a combined project, while little attention was paid to estimating the cost of the technology components. Even though major scope expansion decisions were made throughout the course of the project, the budgeting process provided little if any opportunity for the Common Council to make meaningful "go-no go" decisions.
No city department took responsibility for controlling project costs. The general construction contract was let prior to the city acquiring control of the project site, leading to delays and some avoidable contractor costs. AS the project proceeded, cooperation problems arose among city departments. The building and technology components of the project were never properly coordinated. The Police and Fire departments could not reconcile their respective dispatching needs, necessitating separate dispatching systems that cost $12 million more than the joint dispatching plan. Although the Police Department ultimately assumed control of the technology components of the project, this was initially a source of disagreement between the Police Department and Public Works. There was no mechanism in place to resolve such disagreements as they arose during the project.
Public Works contracted for a construction manager for the project. Although the construction manager's contract was well done, the department in many cases failed to enforce the contract requirements. Project accounts were not properly structured, preventing the issuance of timely, accurate financial reports. Aside from periodic verbal briefings, senior management did not receive regular financial status reports, and there were no formal reports on the physical completion status of the project.
STRENGTHENING PROJECT MANAGEMENT
The purpose of the audit was not only to identify what went wrong during this particular project, but, more importantly, to recommend steps for improving project management in the future. The audit recommendations included four major changes to be applied to large capital facility and information systems development projects:
1. Formalize project budget proposal requirements
2. Revise ordinances to clarify project authority and responsibility
3. Prepare a memorandum of understanding A Memorandum of Understanding (MoU) is a legal document describing a bilateral or multilateral agreement between parties. It expresses a convergence of will between the parties, indicating an intended common line of action and may not imply a legal commitment. in advance of complex projects
4. Institute and enforce project status reporting standards
The overriding (programming) overriding - Redefining in a child class a method or function member defined in a parent class.
Not to be confused with "overloading". goal of these changes is successful, on-time, and on-budget projects. The balance of this section discusses in some detail each of the four major recommendations.
Formalize project budget proposal requirements. To properly evaluate proposed projects, the city must have a set of well-defined well-de·fined
1. Having definite and distinct lines or features: a well-defined silhouette.
2. parameters that promote meaningful assessment and comparative analysis. What follows is a checklist of essential information that is to accompany any future capital project budgets proposed by city departments.
* Statement of project scope. The statement of project scope is a complete description of the proposed project that defines what is and what is not part of the project. Specific work products (deliverables) that will result from the project should also be identified.
* Statement of needs and expected benefits. The statement of needs and expected benefits justifies why the project should be funded. The statement should quantify Quantify - A performance analysis tool from Pure Software. to the extent possible the needs that will be met and the benefits that will be realized by the project. Industry standards and other relevant supporting documentation should be included.
* Cost estimate. This is perhaps the most critical element of the project budget proposal. The cost estimate should include not only an estimate of all financial and non-financial project costs, but also an explanation as to how the estimate was developed. The cost estimate often involves the work of consultants and engineers, and should include any supporting documentation.
* Funding sources. All sources of project funding Project Funding reflects the overall financial analysis and entails the analysis that is needed in order to get the financial means approved and funds made available to be able to perform the discipline of project management. must be identified, and together they must be sufficient to pay for the entire project. The approval status of any non-city grant funding sources should be specified.
* Project work plan and schedule. The work plan should describe the sequence and schedule of major work tasks, highlighting interim or "milestone" deliverables over the course of the project. The work plan should also identify the units and personnel responsible for each of these deliverables, as well as an estimate of the resources required to complete them.
* City department responsibility matrix. The responsibilities of each city department involved in the project should be outlined in detail, including any use of outside vendors. Procedures for coordinating the work of different departments and for resolving conflicts should also be specified.
* Statement of project assumptions. All significant assumptions underlying the various components of the project proposal should be identified. Examples include estimated bid prices, labor rates, key staff and materials availability, subsoil subsoil
Layer (stratum) of earth immediately below the surface soil, consisting predominantly of minerals and leached materials such as iron and aluminum compounds. Humus remains and clay accumulate in subsoil, but the teeming macroscopic and microscopic organisms that make conditions, private financing, completion of allied project components, timing of land acquisition, etc.
* Application of city standards. Any city government standards (such as those related to engineering, office or operating space, data processing data processing or information processing, operations (e.g., handling, merging, sorting, and computing) performed upon data in accordance with strictly defined procedures, such as recording and summarizing the financial transactions of a , data security, etc.) to be applied to the project should be identified and explained.
* Project risk profile. The project proposal should identify any inherent risks and explain how those risks might affect the city's ability to successfully complete the project on time and within budget.
When the project budget proposal cannot be reliably completed as outlined above because of the project's magnitude or complexity, the effort should be divided into two or more project phases, each funded sequentially se·quen·tial
1. Forming or characterized by a sequence, as of units or musical notes.
se·quen over two or more years. For example, a large building project could be funded for design only in year one, followed by construction funding in year two after all of the design work has been completed and evaluated. The design would provide the information on construction features, benefits, quantities, and cost needed for an informed construction funding decision for year two. Where both design and construction approval are required in the same budget year, the Council could decide to appropriate an amount estimated to complete both design and construction, but only release design funds initially. Contingent upon Adj. 1. contingent upon - determined by conditions or circumstances that follow; "arms sales contingent on the approval of congress"
contingent on, dependant on, dependant upon, dependent on, dependent upon, depending on, contingent a favorable fa·vor·a·ble
1. Advantageous; helpful: favorable winds.
2. Encouraging; propitious: a favorable diagnosis.
3. review of the completed design, construction funding would be released later in the year.
Revise city ordinances to establish citywide standards and assign responsibilities accordingly. City departments whose needs are the driving factor behind a major capital project should have overall responsibility and accountability The traceability of actions performed on a system to a specific system entity (user, process, device). For example, the use of unique user identification and authentication supports accountability; the use of shared user IDs and passwords destroys accountability. for that project. Sponsoring departments are in the best position to define project functions, features, and requirements, and to control project budgets. As such, they should assume overall responsibility for project success and cost.
Furthermore, existing city standards must be applied consistently to capital projects. Common Council ordinances and policies assign to specific departments certain responsibilities for building construction and information technology projects. By ordinance A law, statute, or regulation enacted by a Municipal Corporation.
An ordinance is a law passed by a municipal government. A municipality, such as a city, town, village, or borough, is a political subdivision of a state within which a municipal corporation has been , Public Works has responsibility for the design and construction of city buildings and municipal communication systems. However, the audit found that Public Works did not assume these responsibilities for the district police station project, playing more of a supporting role supporting role n → second rôle m
supporting role n → ruolo non protagonista to the Police Department. There was no indication that Public Works imposed standards on the design and construction of the new building or its communications systems In telecommunication, a communications system is a collection of individual communications networks, transmission systems, relay stations, tributary stations, and data terminal equipment (DTE) usually capable of interconnection and interoperation to form an integrated whole. .
The audit recommended that the city modify current ordinances to:
* Reassign to the sponsoring department the overall responsibility for and control of a budgeted major capital project.
* Assign to Public Works the responsibility for establishing and enforcing engineering design and materials standards for capital projects, as well as office space standards, bid letting, and code compliance.
* Retain in the Information Technology Management Division the responsibility for establishing and monitoring information systems standards, including security standards (subject to more stringent industry standards applicable to specific city information systems).
Prepare a memorandum of understanding in advance of complex projects. The fact that the district police station project was behind schedule and over budget can be blamed to some degree oil the lack of coordination among city departments. To improve coordination and cooperation, the audit recommended that participating departments consider entering into a written memorandum of understanding outlining their responsibilities. In effect, this is an intra-governmental contract among departments. The memorandum of understanding should be completed prior to the commencement of the project and should address the following issues:
* Assign responsibilities for each major project activity, including change order approval and processing.
* Specify the documentation needed to support billing by city departments and outside contractors outside contractor n → contratista m/f independiente .
* Outline a formal method of dispute resolution among all parties.
Institute and enforce project status reporting standards. The principal objective of project status reporting is to provide timely, meaningful information on the financial and physical completion status of a project against the project plan, budget, and schedule. For Milwaukee's district police station project, senior management did not receive regular and reliable project status reports. Project managers held daily progress meetings, but did not regularly report to the Common Council, the Police Department, or the Fire Department.
The audit recommended that the Budget and Management Division establish project status monitoring standards and guidelines guidelines,
n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. for use by city departments managing capital projects. Under these guidelines, the department sponsoring the project would be responsible for status reporting over the course of the project. Reporting on both financial and physical completion status would be provided periodically throughout the course of the project--weekly for day-to-day day-to-day
1. Occurring on a routine or daily basis: the day-to-day movements of the stock market.
2. project managers and monthly or bi-monthly for elected officials. Ideally, a "roll-up roll-up
A master limited partnership in which a number of existing limited partnerships are pooled into a single partnership. " concept would be applied to status reporting, allowing stakeholders Stakeholders
All parties that have an interest, financial or otherwise, in a firm-stockholders, creditors, bondholders, employees, customers, management, the community, and the government. to view project status at different levels of detail. Exhibit 2 is a checklist of the key features of an effective project status reporting system.
Exhibit 2: Key Features of an Effective Project Status Reporting System 1. Includes all costs associated with the project, including all in-house and outside contractor/vendor costs. 2. Provides formal periodic reports to management. Frequency depends on level of management responsibility. Reporting frequency generally ranges from weekly to monthly and is in addition to day-to-day project status meetings. 3. Includes an executive summary status report at least monthly for top management and elected officials. This report should provide the following information: * Current financial and physical completion status * Progress over the last reporting period * Problems encountered since the last report and how those problems were or are being addressed * Planned activities and accomplishments over the coming reporting period 4. "Roll-up" reporting in which project status information is available at various levels of detail, from component-specific information (for example, the status of masonry work) to a summary of all project work segments for top management and elected officials. 5. "Critical path" scheduling and monitoring techniques to continuously identify those tasks that, if delayed, will affect the overall completion date of the project. 6. Comparisons of project budget apportioned over the expected project life versus actual expenditures to date, and total project budget versus estimated cost at completion. Such comparisons should be provided for the total project and for major project work segments. 7. Frequent on-site examination by city management to monitor adherence to city design, materials, and quality standards, and to determine the actual extent of physical completion for each project component or work segment. Such information is used to provide reliable estimates of physical completion versus budget expended. 8. Utilize American Institute of Architects chart of accounts for all major construction projects. This will minimize confusion when bids are prepared and work is charged against the project. 9. Accurate, timely accumulation and application of all project charges to: * The project's cost accounting and billing system * The proper city capital project budget line items * The city's financial accounting system
Various project management software aids are available to assist in developing a reliable status reporting system. The key is to lay out a plan and schedule for each major project component, then closely monitor component spending and physical completion status against that plan. While the government's financial system can provide the necessary information on the project's financial status, physical completion can only be measured with the aid of ongoing estimates of work remaining by each responsible component manager. These completion estimates should be verified ver·i·fy
tr.v. ver·i·fied, ver·i·fy·ing, ver·i·fies
1. To prove the truth of by presentation of evidence or testimony; substantiate.
2. with frequent on-site on-site
Done or located at the site, as of a particular activity: on-site monitoring of a production run; an on-site film shoot. examinations by independent government engineer-observers.
The audit concluded by recommending that prior to the commencement of any capital project, the sponsoring department should establish an appropriate set of project accounts consistent with the American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Institute of Architect's standard chart of accounts for construction projects, if applicable. Project accounting should include all project expenditures and revenue sources. The audit also emphasized the importance of establishing procedures to ensure the timely reconciliation of project activity and budget balances to the city's financial system.
POSTSCRIPT The de facto standard page description language (PDL) in the graphics arts industry as well as in commercial printing. Developed by Adobe, many printers and most imagesetters support PostScript by having a built-in PostScript interpreter.
The sheer complexity of this project and the variety of city and private sector entities involved made the prospect of completing the facility on time and within budget a significant challenge. Still, the project budgeting and management failures noted in the audit caused substantial avoidable costs and delayed the completion of the project for many months.
After the audit was released in October 2003, the Common Council's Finance and Personnel Committee discussed the audit findings and recommendations. The police chief, budget director, and public works commissioner responded by letter, and the commissioner and budget director further commented on the audit findings and recommendations before the Committee. These officials largely agreed with the major audit findings, including the lack of control over scope. The Common Council passed a resolution adopting the audit's major recommendations and directing the affected departments to make the necessary policy, procedure, and system changes.
While local situations will no doubt vary, the technical and organizational complexity Organizational Complexity may refer to:
(2) In data entry operations, to compare the keystrokes of a second operator with the data entered by the first operator to ensure that the data were typed in accurately. See validate. physical completion status. Finally, because change and unforeseen problems are inevitable during these types of projects, procedures should be established beforehand to deal with issues as they arise. Properly implemented, the reforms discussed in this article can be expected to enhance a government's ability to deliver major capital projects on time and on budget.
Exhibit 1: Chronology of Increases in Project Scope and Cost ($ millions) Date Activity 1994 New MPD 3rd District Police Station proposed 1994 Convert old station to Data Communications Center Dec 96 MPD states intent to combine 3rd District Station and Data Communications Center in single building Feb 97 MPD updates project estimate Sep 97 DPW proposes alternatives at 46th and Lisbon Avenue Apr 98 DPW updates estimate for 49th and Lisbon Avenue Oct 98 DCD updates site acquisition estimate Dec 98 DPW consultant updates estimate, including staff parking Sep 99 DPW consultant pre-construction bid estimate Oct 99 MPD estimates Radio Shop upgrade 1999 MPD estimates emergency generators at the police administration building 1999 MFD proposes 2000 budget for technology Late 99 Additional cost for PAB generators Early 00 Additional cost for site acquisition May 00 DPW updates Radio Shop estimate Late 00 MFD proposes additional 2001 technology budget Mar 01 DPW updates Radio Shop estimate Jut 01 Architect estimates adding open-records facility. 00-01 Additional cost for new building 00-01 Additional cost for infrastructure work Jan 02 MPD and MFD decide to develop separate computer-aided dispatch systems 2002 MFD proposes additional 2003 technology budget 2003 Additional cost for Radio Shop renovation 02-04 Additional cost for MPD technology Date Cost Total Cost 1994 $8.8 $8.8 1994 $12.0 $20.8 Dec 96 -- $20.8 Feb 97 $9.6 $30.4 Sep 97 $1.4 $31.8 Apr 98 $0.5 $32.3 Oct 98 $0.4 $32.7 Dec 98 $4.0 $36.7 Sep 99 $0.9 $37.6 Oct 99 $0.3 $37.9 1999 $1.2 $39.1 1999 $1.5 $40.6 Late 99 $0.7 $41.3 Early 00 $0.9 $42.2 May 00 $0.8 $43.0 Late 00 $2.5 $45.5 Mar 01 $0.3 $45.8 Jut 01 $0.3 $46.1 00-01 $6.2 $52.3 00-01 $2.6 $54.9 Jan 02 -- $54.9 2002 $2.5 $57.4 2003 $1.0 $58.4 02-04 $5.7 $64.1
(1.) The entire audit report, including department comments, is available on Milwaukee's Web site (http://www.ci.mil An Internet address domain name for a military agency. See Internet address.
(networking) mil - The top-level domain for entities affiliated with US armed forces. .wi.ns/citygov/comptrol/ 3rdDistrictFinalAuditReport.pdf).
MICHAEL DAUN n. 1. A variant of Dan, a title of honor. is director of financial services The examples and perspective in this article or section may not represent a worldwide view of the subject.
Please [ improve this article] or discuss the issue on the talk page. for the Office of the City of Milwaukee Comptroller W. Martin Morics.