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Project Management

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Broad Contents

Characteristics of a Project Proposal

Preparation for Future Proposal

Proposal Effort for Specific Proposals

Proposal Efforts

Typical Engineering, Procurement and Construction (EPC) Proposal Contents

Modifications to the Standard Proposal

13.1 Characteristics of a Project Proposal:

The more important characteristics of a project proposal are:

1. Proposal projects are high priority, short duration efforts. They must be completed to the

owners schedule requirement regardless of the work load and other demands on the

contracting organizations.

2. The owner’s specifications for the preferred payment method must be adhered to, at least in

the basic proposal. Alternates which offer benefits to both parties may be suggested for the

owner’s consideration.

3. The owner frequently will specify a particular format for the proposal and for presentation

of the requested information.

4. The owner may express a clear preference as to the location where the project work will be

done. The engineering company may suggest alternate arrangements that give the owner a

more cost effective project without sacrificing the required contract. The base proposal

however, must be as responsive as possible.

5. The owner may have a preference, openly expressed or merely implied, for the construction

labor arrangement. If this preference has not been made clear in the Request for Proposal

(RFP) or in the discussions with the owner, it should be determined at the earliest possible

time in the proposal effort so that the proper construction program may be planned.

6. A proposal project requires forming a team of the representatives for sales, project

management, technical and support functions. Many of these have responsibilities over and

above the proposal project. These work loads must be considered and respected insofar as is


7. Proposal projects are normally costed against corporate overhead and therefore will be

tightly budgeted and be closely monitored by senior management.

13.2 Preparation for Future Proposal:

Because of the price restraints and the repetitive nature of much of the data used in proposals, it

is helpful to collect as much as possible of the proposal information in advance. This is

especially true for the following areas:

• Proposal project manager should be identified in advance. In a company with a significant

continuing proposals load, a group may be formed consisting of former project managers

with verbal skills and the proper personality to allow them to function in the pressure


cooking environment of proposal preparation. These individuals must have a high tolerance

for working under tight schedules, stringent budgets, with borrowed personnel, and being

the object of continual criticism which is not always constructive.

A proposal publication staff should be in place to be fully effective. These individuals

should have skills in editing, use of word processing and reproducing equipment, as well as

graphic art capability. They should be able to work effectively with the masses of material

in various stages of progress to assure that all of it comes together according to the


A technical information data base including the full range of the type of projects offered by

the company, including feasibility studies, engineering projects, as well as full scope

projects for various types of facilities.

Standard scope of services should be developed that can be readily customized for the

particular project on word processing system. Much of the particular information of various

projects is quiet similar and only requires bringing it into conformance with owner’s

requirements or with those of particular facility of location.

The company should have developed comprehensive definitions for the various levels of

efforts associated with producing cost estimates of various accuracies. This is particularly

important for developing proposals for feasibility studies.

Work plans should also be developed for the various basic types of projects. These can be

of general information which can then be modified to conform to the plans for the specified

project under consideration.

A data bank is helpful to standardize commercial terms and conditions together with listing

that define those costs included in overhead and those which are not. This is particularly

important in reimbursable contracts to control charges to the standard check list and the

resultant changes in the reimbursable unit cost.

Qualification material should be updated frequently in several different standard formats

such as:

  • Project performance data, schedule and cost
  • Descriptions of past projects
  • Resumes of key personnel
  • Write ups on support areas such as:
    • Project Controls
    • Procurement Procedures
    • Material Management
    • Quality Assurance Practices

• Typical write ups should be prepared in advance for various other parts of the proposal.

These will be modified to suit the Request for Proposal (RFP) or inquiry document. Among

other these writings include:

  • Introduction
  • Project Organization
  • Schedule
  • Project Controls
  • Compensation

13.3 Proposal Effort for Specific Proposals:

Preparation of the proposal may start as soon as there has been a positive indication that the

company will be included in the bid list and preliminary information is available on the project.

Early efforts would include:

• Preliminary assignments for the anticipated proposals would be made based upon the

schedule for the Request for Proposal (RFP) release and the due date of the proposal. These

assignments would include the proposal project manager, the project manager proposed to

head the project, and the proposal publication and technical support personnel. In addition,

the lead estimator, the lead scheduler, technical personnel, procurement and construction

representatives as indicated by the nature of the effort would be selected.

• The preliminary proposal plan schedule and budget should be blocked out. The proposal

plan would define the outline of the proposal and the preliminary assignment of the work.

The schedule would indicate dates for completion of the preliminary draft, job hours and

cost estimates, the final draft dates, the necessary dates for approval, and the publication

and delivery dates.

• A rigorous assessment should be made of the technical aspects of the project to identify the

company’s strengths and weaknesses. Immediate and specific actions should be planned to

boost capability where this is required and to develop the personnel and background

information to cover these critical areas.

When Request for Proposal (RFP) is received, it is reviewed and a bid/no bid decision is made.

13.4 Proposal Effort:

1. Assignment of Proposal to Team Members:

As soon as decision to bid has been confirmed, the assignment of team members is


2. Kick-Off Meeting:

The project manager calls a kick-off meeting, at which the time task assignments and

the corresponding schedules are made. At this meeting, technical, legal and

compensation considerations are reviewed and assignments of responsibilities are made.

3. Preliminary Review of the Proposal Text:

All material is typed on word processor, with margins for easier editing. Typed drafts

should be checked carefully against the original draft to assure that nothing has been

inadvertently omitted.

4. Final Review:

When text is essentially in final form and all changes have been incorporated, it is

submitted for review of operations management and for final legal review. All major

changes from this last text review should be flagged so that the signoff should be

obtained quickly.

5. Publication and Signoff

6. Delivery of the Proposal


13.5 Typical Engineering Procurement and Construction (epc) Proposal Contents:

Following is the summary of the typical contents of cost reimbursable proposal for Engineering,

Procurement and Construction services.

1. Introduction and Summary:

The Request for Proposal (RFP) conditions are summarized and general approach to the

work by the contractor is indicated.

2. Project Description:

This material is largely taken from the Request for Proposal (RFP). It may also include

information that has been obtained by site visits, during pre-bid conference, and in other

contacts with the owner of other knowledgeable sources.

3. Scope of Services:

This section details the services the owner will provide. It includes the services that will

be performed and the documents that will be produced. All services should be well

defined, not opened, even in reimbursable proposals. All of the documents that are to

be furnished as part of the services of the contractor should be listed in detail. A brief

description of what each will include should also be provided.

4. Work Plan and Schedule:

The project work plan is developed in response to the stated objectives of the owner or

as defined by the sales representatives and the objectives of the contracting firm for the

specific proposal. It may be presented in graphic form for showing the interrelationship

between various activities.

5. Project Organization:

This describes the proposed project organization, and details the responsibilities of each

of the key member of the project team. An organization chart depicting the proposed

project team will be drawn. The interface with the supplier of technology should be

carefully defined, and the technical review responsibilities should be carefully defined.

6. Estimates, Hours, Costs:

All of the information presented in the previous sections of the proposal must be taken

into account in preparing the estimates of work. The cost estimates will include salaries

of all technical and non – technical personnel, as well as indirect costs such as travel,

communication, computer use and reproduction.

7. Compensation:

After the estimates have been reviewed, the commercial terms are finalized by adding

those discretionary figures such as burdens, contingencies, overlays and fees required

by the format of the bid. This information is presented in the compensation section of

the bid.

8. Qualifications:

The qualification section of the proposal contains all relevant material arranged in

proper manner to strengthen confidence as to the contractor’s capability in the mind of

the owner’s management. It must always be reviewed to ensure that the information

presented is accurate, pertinent and forceful.

13.6 Modifications to the Standard Proposal:

Many owners have a very specific format which requires that the contractor depart from a

standard proposal format. It is best to follow the specified format as it will help to simplify the

proposal evaluation process in the owner’s office.

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