21 Mar The Large Government Organization’s Case Study
Date of Work: 1997 – 2012
PBSRG has worked with the following United States federal government organizations:
- U.S. Coast Guard (2003-2005.)
- U.S. Corps of Engineers (2007-2009.)
- U.S. Air Force (2007-2009.)
- Federal Aviation Administration (1997-1999, 2003-2005.)
- U.S. Army Medical Command (2004-2012.)
- General Services Administration (2009-2011.)
Federal government agencies objective is to stabilize society and not to create change and become efficient. Their personnel reflect this objective. Most federal government personnel are rule based, silo based, with an objective to ensure they are following the rules and maintaining their job. There is no incentive to change. However, with the downturn in the economy, efficiency has become more of just a buzzword. It has become a requirement. However, the masses cannot be reprogrammed or changed. At the same time, the visionaries have a propensity to leave this environment due to the slow rate of change, the non-transparent, non-accountable environment and the high rate of inefficiency. Federal agencies are top-down. Their method of doing work or expertise is making decisions, management, direction and control. The challenge is to implement a BV PIPS structure into an environment that replace many of their roles and is totally hostile to all of its concepts.
Federal Government Agency PIPS Implementation:
A federal government agency with a visionary brought PBSRG to implement the BV approach. The agency started testing the BV approach in 2006. The initial objectives were:
- Make the environment transparent.
- Transfer the control of the projects to the vendors.
- Educate the Large Government Organization (LGO) personnel on how to use the system to minimize their efforts.
- Educate the contractors on how to use the system to maximize their profit and minimize project cost and transactions (meetings, communications, and problems).
As the system was being implemented the following transpired:
- The high performance vendors used the system to improve their performance and their profit. One vendor tripled their profit by utilizing the system.
- Projects with problems were put on the Weekly Risk Report (WRR) and Risk Management Plan (RMP), and the issues were quickly resolved.
- The deviation rates on the projects which used the WRR and RMP decreased.
- 50% of the vendors participated in educating their personnel and implemented a form of the system on their projects.
- Over 50% of the agency’s personnel were interested in further education, including how to change their paradigm and use the BV approach in resolving problems.
- The agency was very satisfied with the performance of the contractors.
After these results were achieved in 2010, the visionary retired, and was replaced by non-visionaries who were control oriented. They quickly took down all the performance information, stopped all education, made the decision not to allow their personnel to use the best value approach, and restricted the PBSRG expert to maintaining the information system.
After over six years implementing a modified Best Value process (PIRMS) the following results can be concluded as shown in Tables 15.4 and 15.5.
- The owner and their representatives were the biggest source of project deviations.
- The BV structure minimized the cost and time deviations.
- The vendor performance was outstanding.
- Cost was minimized and within the budgets.
|Completed Projects||NTP 2007||NTP 2008||NTP 2009||NTP 2010||NTP 2011|
|# of Projects||110.00||129.00||122.00||92.00||27.00|
|Original Awarded Cost ($$)||$181,945,282||$177,275,551||$183,989,041||$107,091,486||$16,278,439|
|Final Awarded Cost ($$)||$193,881,007||$187,844,708||$192,602,961||$110,952,677||$16,352,909|
|Total Over Budget ($$)||$11,935,725||$10,569,156||$8,613,920||$3,861,190||$74,470|
|Total % Over Budget||6.56%||5.96%||4.68%||3.61%||0.46%|
|% due to owner||4.58%||5.59%||3.61%||2.36%||0.46%|
|% due to Designer||0.00%||0.14%||0.00%||0.21%||0.00%|
|% due to contractor||0.11%||-0.17%||-0.01%||0.08%||0.00%|
|% due to unforeseen||1.88%||0.40%||1.09%||0.96%||0.00%|
|Total % Delayed||51.56%||48.43%||36.77%||28.53%||3.31%|
|% due to owner||41.38%||39.96%||28.51%||16.53%||9.20%|
|% due to Designer||0.00%||0.49%||0.00%||1.32%||0.00%|
|% due to contractor||1.86%||-0.02%||1.29%||0.12%||-6.40%|
|% due to unforeseen||8.32%||8.01%||6.97%||10.56%||0.51%|
Table 15.4: Performance of Federal Agency by NTP
|# of Projects||619|
|# of Projects with Risk Management Plan (RMP)||305|
|# of Contractor Companies||12|
|# of Facility Locations||48|
|# of Owner Participants||300|
|# of Contractor Participants||161|
|$$ of Projects Tested||$1,027,534,878|
|Estimated Savings ($$)||$ 7,680,186|
|Estimated % Saved ($$)||0.75%|
|Estimated Savings (Days)||13,713.81|
|Estimated % Saved (Days)||4.25%|
Table 15.5: Summary Final Results of Federal Agency