3 assignments in 1 Due ASAP

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Identifying and Selecting Projects

2

(Premium)

Teaching Strategies

• The first vignette reinforces the need for a stakeholder engagement when proposing a project, planning the solution, and execution. Have students describe the positives and negatives of stakeholder engagement.
• The second vignette reinforces that desired characteristics can be included in the RFP. Engaging students in a conversation of how to include desired characteristics in an RFP and how to evaluate those characteristics will help to reinforce the concepts related to RFP and proposal development.
• Have the students read the case studies in class and answer the questions in groups of three or four. Next, select five participants to act out the group activity. This is an excellent way to stimulate class discussion and interest. This is a good case study to do right before you lecture on this chapter and then again after you lecture on the chapter. The difference in responses “before” and “after” will reinforce the topics covered.
• Ask your students whether they have ever seen an RFP or written an RFP.
• Ask your students to identify situations in the real world that would require an RFP. Ask them to describe in detail what the RFP might look like.

Optional Supplemental Activities

• This is a good time to get your students to start reading some of PMI’s publications—either on-line or printed. These articles are typically very readable and might relate to something that interests them. Have each student read one such article and prepare a one-page summary. If time permits, have each student discuss his or her article in class.
• Have students find a Request for Proposal on the Web and evaluate it against the guidelines in this book.
• Have a certified Project Management Professional make a presentation to the class and answer questions about the value of certification.
• Show the class a copy of the PMI Guide to the Project Management Body of Knowledge (PMBOK® Guide). Have students examine the sections on project integration management and project procurement management.

*

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Chapter Concepts

How projects are identified and selected

A project charter

Outsourcing projects using a request for proposal

The proposal solicitation process

Chapter Concepts

This chapter discusses the initiating phase of the project life cycle. Based on the material in this chapter, students will become familiar with:

• How projects are identified and selected
• A project charter
• Outsourcing projects using a request for proposal, or RFP
• The proposal solicitation process

*

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Learning Outcomes

Discuss how projects are identified

Explain how projects are prioritized and selected

Identify and describe at least eight elements of a project charter

Prepare a project charter

Prepare a request for proposal

Learning Outcomes

After studying this chapter, students should be able to:

• Discuss how projects are identified
• Explain how projects are prioritized and selected
• Identify and describe at least eight elements of a project charter
• Prepare a project charter
• Prepare a request for proposal

*

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Project Integration Management
Project Procurement Management

Project Management Knowledge Areas from PMBOK® Guide

Project Management Knowledge Areas from PMBOK® Guide

Concepts in this chapter support the following Project Management Knowledge Areas of

A Guide to the Project Management Body of Knowledge (PMBOK® Guide):

Project Integration Management

Project Procurement Management

*

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Procurement to Achieve Single-Team Strategy

Procurement BAckground

Differential methods for public/private partnerships on new construction

Traditional methods for refurbishments

Regional requests to increase efficiency

One Region’s Project

• Local group
• Good stakeholder engagement
• Large enough to complete project
• Flat organization
• Focus on delivery
• Performance agreement
• Single-team strategy

Vignette A: Procurement to Achieve Single-Team Strategy

Launched in 2004, Building Schools for the Future (BSF) included the project goal to build new schools and refurbish existing schools such that each of the secondary schools in the United Kingdom was updated or new. The plan was to design new learning spaces and include the latest technology to meet the 21st-century standards for education.

• Background information about the procurement process
• Differential methods for public/private partnerships for new construction
• Traditional procurement for refurbishments
• Developed regional requests instead of single school buildings
• One Region’s project
• Local group with good stakeholder engagement
• Large enough to be able to complete project
• Flat organization structure
• Focused on delivery
• Had performance agreement for more customer engagement
• All stakeholders and project members had a single team strategy

Have students discuss the risks and benefits of having increased stakeholder engagement and public/private partnerships when selecting contractors for public projects.

*

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Can Safety Mindedness Be Selected in a Contractor?

Background

• 500 vehicles and pieces of equipment
• Repair, use, maintenance, and fueling
• All departments’--fire, police, public water, parks and recreation, education, and administration
• Parts room inventory over $300,000 with many obsolete parts

Key Objectives

• Increased productivity for operations and technicians
• Increased on demand availability of parts
• Reduced downtime
• Reduced paperwork
• Improved monitoring
• Reduced administration
• Eliminated inventory and inventory control (especially obsolete parts)

Vignette B: Can Safety Mindedness Be Selected in a Contractor?

Construction projects are fraught with hazards. Sites include large equipment, moving parts, shifting earth, or high places. Occupational accidents in the Chinese construction industry resulted in the death of more workers than any other industry including coal mining, and, worldwide, the construction industry is responsible for having the highest occupational injury rates

• Are there articular traits of management companies that would result in fewer accidents and reduced deaths due to occupational injuries?
• Project safety culture
• High-speed rail projects
• Number of occupational injuries and deaths
• Outcomes
• Occupational fatalities occur even though emphasizing accident prevention and introduced occupational health and safety provisions
• Found a misalignment of management commitment and subordinates’ actions
• Not disseminate to project teams
• Lack of safety leadership
• Key findings
• Demonstrated socialized characteristic behaviors including altruism, safety core value communication, support for employees with safe work habits, responsibility and accountability for safety incidents, and identification of safe practice
• Project manager training programs in the companies with fewer occupational injuries emphasized these socialized charismatic behaviors
• Project teams for the owners’ organizations as well as the subcontractors’ organizations with lower incidence reports of injuries and fatalities maintained effective communication channels within the teams and with stakeholders

Have students discuss how to include in the RFP the characteristics desired in a contractor. The researchers in the vignette found that Safety mindedness can be a selection criteria element. How would they create an evaluation to measure the desired characteristic?

*

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Project Identification

• Start of Initiating phase
• Recognize need, problem, or opportunity
• Various ways for identification
• Organizations strategic planning
• Response to unexpected events
• Group organized to address a need
• Important to clearly identify need to determine if worth pursuing
• Use decision making process to prioritize and select project with greatest need

Project Identification

• The initiating phase of the project life cycle starts with recognizing a need, problem, or opportunity for which a project or projects are identified to address the need.
• Projects are identified in various ways:
• During an organization’s strategic planning
• As part of its normal business operations
• In response to unexpected events
• The result of a group of individuals deciding to organize a project to address a particular need
• It is important to clearly define the need. This may require gathering data about the need or opportunity to help determine if it is worth pursuing.
• Sometimes organizations identify several or many needs, but have limited funds and people available to pursue potential projects to address all of those needs. In such cases, the company must go through a decision-making process to prioritize and select those projects that will result in the greatest overall benefit.

*

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Project Selection

• Evaluate needs, costs, benefits
• Determine which are projects
• Select project
• Develop criteria
• List assumptions
• Gather data
• Evaluate each opportunity
• Combine “gut” feelings and quantitative information to make decision

Project Selection

• Project selection involves evaluating various needs or opportunities and then deciding which of those should move forward as a project to be implemented.
• The benefits and consequences, advantages and disadvantages, plusses and minuses of each opportunity need to be considered and evaluated. They can be quantitative and qualitative, tangible and intangible. Each person's decision will be a combination of quantitative evaluation and "gut" feelings based upon experience.
• The steps in project selection are:
• Develop a set of criteria against which the opportunity will be evaluated. For example:
• Alignment with company goals
• Anticipated sales volume
• Increase in market share
• Establishment of new markets
• Anticipated retail price
• Investment required
• Estimated manufacturing cost per unit
• Technology development required
• Return on investment
• Human resources impact
• Public reaction
• Competitors’ reaction
• Expected time frame
• Regulatory approval
• Risks
• List assumptions that will be used as the basis for each opportunity.
• If an opportunity is to build an on-site day care center for children and elderly relatives of company employees, one assumption might be that the company would be able to obtain a bank loan to build such a center.
• Gather data and information for each opportunity to help ensure an intelligent decision regarding project selection.
• It may be necessary to gather some preliminary financial estimates associated with each opportunity, such as estimated revenue projections and implementation and operating costs.
• In addition to gathering hard data, it may also be necessary to obtain other information, such as opinions and reactions from various stakeholders who would be affected by the opportunity.
• Evaluate each opportunity against the criteria.
• Once all the data and information has been collected, analyzed, and summarized for each opportunity, it should be given to all the individuals responsible for performing the evaluation. It is beneficial to have several individuals involved in the evaluation and selection decision in order to get a variety of viewpoints. These individuals will combine the collected data with their gut feelings regarding the project when making their decision.

*

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Describe the positives and negatives for this development project.

Student Discussion

This figure depicts a project evaluation and selection form used to evaluate three possible projects.

Have students describe the positive and negatives for possible scenarios for a development project.

*

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Possible responses to Student Discussion

Positives

All projects will be evaluated on common criteria

Project A gets to market in the least time

Project B gains the greatest market share

Project B has highest ROI

Projects A and C have high chance of success

Negatives

Prices for each project have great differences; implying that each has a different level of effort for the project solution

Project B has high risk and medium chance of success

Project C may not be accepted globally

Project B may put the company reputation at risk if the technology does not work as expected

Describe the positives and negatives for this development project.

• Project development is rarely clear-cut. It usually involves weighing a series of pros and cons. In this example, there are many potential positives and negatives.
• Positives:
• All projects will be evaluated on common criteria
• Project A gets to market in the least time
• Project B gains the greatest market share
• Project B has highest ROI
• Projects A and C have high chance of success
• Negatives:
• Prices for each project have great differences, implying that each has a different level of effort for the project solution
• Project B has high risk and medium chance of success
• Project C may not be accepted globally
• Project B may put the company reputation at risk if the technology does not work as expected

*

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Project Charter

Purpose

• Provides sponsor approval
• Commits funding for the project
• Summarizes key conditions and parameters
• Establishes framework to develop baseline plan

Possible Elements

• Project title
• Purpose
• Description
• Objective
• Success criteria or expected benefits
• Funding
• Major deliverables
• Acceptance criteria

• Milestone schedule
• Key assumptions
• Constraints
• Major risks
• Approval requirements
• Project manager
• Reporting requirements
• Sponsor designee
• Approval signature

Project Charter

Once a project is selected, it is formally authorized using a document referred to as a project charter, sometimes called a project authorization or project initiation document.

• This document serves a number of purposes.
• Provides sponsor approval to go forward with the project
• Commits the funding for the project
• Summarizes the key conditions and parameters for the project
• Establishes the framework for developing a detailed baseline plan for performing the project
• The project charter includes many possible elements, including the ones seen on this slide.
• Project title
• Purpose
• Description
• Objective
• Success criteria or expected benefits
• Funding
• Major deliverables
• Acceptance criteria
• Milestone schedule
• Key assumptions
• Constraints
• Major risks
• Approval requirements
• Project manager
• Reporting requirements
• Sponsor designee
• Approval signature

*

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Examine the project charter and comment on
- the completeness of the
information
- possible evaluation
criteria

Student Discussion

The figure on this slide depicts a project charter. This is an extract from the entire charter you will find in the text. Have students review the parts of the project charter and comment on the completeness of the information and how it could be developed from the statements in an RFP and the evaluation criteria for the project.

*

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Possible responses to Student Discussion

Completeness of information

Describes the project that needs to be addressed

Lists requirements, constraints, assumptions, and risks

An RFP could be developed from the charter’s information

Possible evaluation criteria

Meets the purpose

Cost

Reduces delivery costs by 26% the first year

Experience

Risks

Appropriate instructional strategies

Examine the project charter and comment on

Completeness of the information

Possible evaluation criteria

Examine the project charter and comment on the completeness of the information and how it could be developed from the statements in an RFP and the evaluation criteria for the project.

• Completeness of information:
• Describes the project that needs to be addressed
• Lists requirements, constraints, assumptions, and risks
• An RFP could be developed from the charter’s information
• Possible evaluation criteria:
• Meets the purpose
• Cost
• Reduces delivery costs by 26% the first year
• Experience
• Risks
• Appropriate instructional strategies

*

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Preparing a Request for Proposal

Decision made to outsource to external resource

Comprehensively describe project requirements

Includes need, problem, or opportunity description

Allows contractors to develop a thorough proposal

Facilitates the development of evaluation criteria

May be communicated informally or formally, in writing or verbally

Preparing a Request for Proposal

• If an organization does not have the expertise or staff capacity to plan and perform the project or major portions of the project, outsourcing the work to an external resource (such as a contractor) is a good choice.
• An RFP helps the organization decide which contractor to use.
• The purpose of preparing an RFP is to state, comprehensively and in detail, what is required, from the customer’s point of view, to address the identified need.
• A good RFP allows contractors or a project team to understand what the customer expects so that they can prepare a thorough proposal that will satisfy the customer’s requirements at a realistic price.
• It should be noted that in many situations a formal RFP might not be prepared; the need is instead communicated informally, sometimes orally, rather than in writing.
• This is often the case when the project will be implemented by a firm's internal staff rather than by an external contractor.

*

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Guidelines for Developing an RFP

• State project objective or purpose
• Provide a statement of work
• Include customer requirements
• State deliverables the customer expects
• State acceptance criteria
• List customer supplied items
• State approvals required

• State type of contract
• State payment terms
• State schedule and key milestones
• List format and content instructions
• Indicate due date
• Include evaluation criteria
• Include level of effort or funds available

Guidelines for Developing an RFP

Following are some guidelines for drafting a formal request for proposal to external contractors:

• The RFP must state the project objective or purpose, including any rational or background information that may be helpful to contractors so that they can prepare thorough and responsive proposals.
• An RFP must provide a statement of work (SOW). An SOW deals with the scope of the project, outlining the tasks or work elements the customer wants the contractor or project team to perform.
• The RFP must include the customer requirements, which define specifications and attributes. Requirements cover size, quantity, color, weight, speed, performance, and other physical or operational parameters the contractor’s proposed solution must satisfy. The customer may also use these requirements as acceptance criteria.
• The RFP should state what deliverables the customer expects the contractor to provide. Deliverables are the tangible items that the contractor is to supply. Deliverables could include periodic progress reports or a final report as well as a final product.
• The RFP should state the acceptance criteria the customer will use to determine if the project deliverables are completed according to the customer’s requirements.
• The RFP should list any customer-supplied items.
• The RFP might state the approvals required by the customer.
• Some RFPs mention the type of contract the customer intends to use. It could be fixed price, in which case the customer will pay the contractor a fixed amount regardless of how much the work actually costs the contractor. (The contractor accepts the risk of taking a loss.) Or the contract might be for time and materials. In this case, the customer will pay the contractor whatever the actual costs are.
• An RFP might state the payment terms the customer intends to use. The customer may specify progress payments or pay when the entire project is finished.
• The RFP should state the required schedule for completion of the project and key milestones. It might only state a completion date, or it might give a more detailed schedule.
• The RFP should provide instructions for the format and content of the contractor proposals. Instructions might state the maximum number of pages, the number of details the customer wants the contractor to show regarding the costs, and other specifications.
• The RFP should indicate the due date by which the customer expects potential contractors to submit proposals.
• An RFP may include the evaluation criteria that will be used to assess proposals from competing contractors.
• Criteria might include: the contractor’s experience with similar projects; the technical approach proposed by the contractor; the schedule; or the costs.
• In rare cases, an RFP will indicate the funds the customer has available to spend on the project. Contractors can then submit proposals that are appropriate to that level of funding.

*

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Examine the RFP example. What additional questions need to be answered?

Student Discussion

This figure depicts a request for proposal. The image here depicts an extract from the RFP in the text.

Have students review the parts of the RFP and list any additional questions they would have. These are the types of questions that would be submitted in RFP clarification meetings.

What additional questions still need to be answered?

*

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Possible responses to Student Discussion

Will AJACKS supply the names of the firms to be surveyed?

What manufacturing industries are the target?

What marketing information already exists?

What are the page limitations for the proposal and supplemental information?

What is an acceptable return rate on the survey?

Examine the RFP example. What additional questions need to be answered?

The figure depicts a request for proposal. What additional questions need to be answered?

Some sample questions are:

• Will AJACKS supply the names of the firms to be surveyed?
• What manufacturing industries are the target?
• What marketing information already exists?
• What are the page limitations for the proposal and supplemental information?
• What is an acceptable return rate on the survey?

*

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Soliciting Proposals

Solicitation

• Notify potential contractors
• Identify selected group in advance to send copy
• Advertise in selected journals, newspapers, or websites
• Maintain competitive situation
• Provide equal information to all bidders
• Hold bidders’ meeting to answer questions

Conditions

• Requirements are sometimes communicated verbally instead of via a formal RFP
• All RFPs start with identification of a need, problem, or opportunity

Soliciting Proposals

Once the RFP has been prepared, the customer solicits proposals by notifying potential contractors that the RFP is available.

• One way for customers to notify potential bidders is by identifying a selected group of contractors in advance and sending each of them a copy of the RFP.
• Another approach is to advertise in business newspapers and on websites that the RFP is available.
• For example, federal government organizations advertise their RFPs in Commerce Business Daily.
• Business customers and contractors consider the RFP/proposal process to be competitive.
• Customers should be careful to provide the same information to all interested contractors.
• Business or government customers may hold a bidders’ meeting to explain the RFP and answer questions from interested contractors.
• Not all project life cycles include the preparation of a written RFP. Some bypass the proposal steps and move right into planning and performing the project.
• There are other projects in which requirements are not written down in a formal RFP, but are communicated verbally to several providers or suppliers (contractors).
• Although projects can vary from very formal and businesslike to highly informal, all RFPs start with the identification of a need, problem, or opportunity.

*

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Critical Success Factors

The need must be clearly defined before preparing a request for proposal (RFP).

When selecting a project from among several needs or opportunities, the decision should be based on which project will provide the greatest overall benefits compared to its costs and possible consequences.

Having a well-understood evaluation and selection process and a well-rounded committee will increase the chances of making the best project selection decision.

Establish quantitative project success criteria, or expected benefits.

A good RFP allows contractors to understand what the customer expects so that they can prepare a thorough proposal that addresses the customer’s needs and requirements.

A request for proposal should include a statement of work, customer requirements, expected deliverables, and the criteria by which the customer will evaluate proposals.

An RFP should provide instructions for the format and content of contractor proposals so that the customer will be able to make a consistent and fair comparison and evaluation of all the proposals.

Customers must be careful not to provide information to only some of the contractors because it would give these contractors an unfair competitive advantage in preparing their proposals.

Critical Success Factors

• The need must be clearly defined before preparing a request for proposal (RFP).
• When selecting a project from among several needs or opportunities, the decision should be based on which project will provide the greatest overall benefits compared to its costs and possible consequences.
• Having a well-understood evaluation and selection process and a well-rounded committee will increase the chances of making the best project selection decision.
• Establish quantitative (measurable) project success criteria, or expected benefits.
• A good RFP allows contractors to understand what the customer expects so that they can prepare a thorough proposal that addresses the customer’s needs and requirements.
• A request for proposal should include a statement of work, customer requirements, expected deliverables, and the criteria by which the customer will evaluate proposals.
• An RFP should provide instructions for the format and content of contractor proposals so that the customer will be able to make a consistent and fair comparison and evaluation of all the proposals.
• Customers must be careful not to provide information to only some of the contractors because it would give these contractors an unfair competitive advantage in preparing their proposals.

*

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Summary

The initiating phase of the project life cycle starts with recognizing a need, problem, or opportunity for which a project or projects are identified to address the need.

Sometimes organizations identify several or many needs but have limited funds and people available to pursue potential projects to address all of those needs. In such cases, the company must go through a decision-making process to prioritize and select those projects that will result in the greatest overall benefit.

Project selection involves evaluating potential projects and then deciding which should move forward to be implemented.

Once a project is selected, it is formally authorized using a document referred to as a project charter, sometimes called a project authorization or project initiation document.

In some cases, an organization does not have the expertise or staff capacity to plan and perform the project or major portions of the project, and therefore decides to have the project completed by an external resource (contractor) and prepares and RFP.

Once the RFP has been prepared, the customer solicits proposals by notifying potential contractors that the RFP is available.

Not all project life cycles include the preparation of a written request for proposal by a customer and subsequent submittal of proposals from contractors. Some endeavors move from the initiating phase, where a project is identified and selected, into the planning and performing phases of the life cycle.

Summary

• The initiating phase of the project life cycle starts with recognizing a need, problem, or opportunity for which a project or projects are identified to address the need.
• Sometimes organizations identify several or many needs but have limited funds and people available to pursue potential projects to address all of those needs. In such cases, the company must go through a decision-making process to prioritize and select those projects that will result in the greatest overall benefit.
• Project selection involves evaluating potential projects and then deciding which of these should move forward to be implemented.
• Once a project is selected, it is formally authorized using a document referred to as a project charter, sometimes called a project authorization or project initiation document.
• In some cases, an organization does not have the expertise or staff capacity to plan and perform the project or major portions of the project, and therefore decides to have the project done by an external resource (contractor) and prepares and RFP.
• Once the RFP has been prepared, the customer solicits proposals by notifying potential contractors that the RFP is available.
• Not all project life cycles include the preparation of a written request for proposal by a customer and subsequent submittal of proposals from contractors. Some endeavors move right from the initiating phase, where a project is identified and selected, into the planning and performing phases of the life cycle.

*

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Chapter Questions

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Question 1

It is important to thoroughly study the problem or opportunity in order to develop a quality RFP and/or quality solution.

If the need is not clearly defined, you cannot expect the proposed solutions to be clearly defined either.

Why is it important to do a thorough and detailed job of needs identification?

1. Why is it important to do a thorough and detailed job of needs identification?

• It is important to thoroughly study the problem or opportunity in order to develop a quality RFP and/or quality solution.
• If the need isn’t clearly defined, you cannot expect the proposed solutions to be clearly defined either.

*

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Question 2

Answers will vary from student to student.

Answers should contain a description of why the student identified the need, problem, or opportunity.

Describe a situation in your life in which you performed needs identification.

2. Describe a situation in your life in which you performed needs identification.

• Answers will vary between students.
• Make sure that students adequately defend their responses and that they contain a description of why the student identified the need, problem, or opportunity.

*

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Question 3

In reality, too many projects are started that should never have been.

It is wise to take the time to decide which plans to address identified needs, problems, or opportunities should go forward as a project before you start working.

Why is it important to select the right project before you begin working?

3. Why is it important to select the right project before you begin working?

• In reality, too many projects are started that should never have been.
• It is wise to take the necessary time to decide which plans to address identified needs, problems, or opportunities should go forward as a project before you start working.

*

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Question 4

A four-step process is recommended:

1) Develop a set of criteria against which the opportunity will be evaluated

2) List assumptions that will be used as the basis for each project

3) Gather data and information for each project

4) Evaluate each opportunity against the criteria

Describe how a business selects which projects to work on when there are numerous projects that could be done.

4. Describe how a business selects which projects to work on when there are numerous projects that could be done.

A four-step process is recommended:

1) Develop a set of criteria against which the opportunity will be evaluated

2) List assumptions that will be used as the basis for each project

3) Gather data and information for each project

4) Evaluate each opportunity against the criteria

*

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Question 5

Student responses will vary.

Responses should include the elements of a project charter that describe the outcomes of the student's project with enough clarity for the contractor to deliver an approved product at the end of the project.

Which elements of a project charter would you use to help plan if you have a project that does not require a project charter? Why?

5. Which elements of a project charter would you use to help plan if you have a project that does not require a project charter? Why?

• Student responses will vary.
• Responses should include the elements of a project charter that describe the outcomes of the student's project with enough clarity for the contractor to deliver an approved product at the end of the project.

*

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Question 6

There are many possible answers to this question.

Some examples might include an RFP for a new billing system, an RFP for a comprehensive management training program, an RFP for a new heating system for a major office building, etc.

Responses should include a description of an activity that cannot be completed by the organization or is better completed by an external resource or contractor.

Give examples of situations in which a business might develop a request for proposal.

6. Give examples of situations in which a business might develop a request for proposal.

• There are many possible answers to this question.
• Some examples might include an RFP for a new billing system, an RFP for a comprehensive management training program, an RFP for a new heating system for a major office building, etc.
• Responses should include a description of an activity that cannot be completed by the organization or is better completed by an external resource or contractor.

*

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Question 7

There are many possible answers to this question.

Some examples might include an RFP for a new in-ground pool, a new deck, or a new house. These may or may not be written.

Responses should include a description of an activity that cannot be completed by the person, or that is better completed by an external resource or contractor.

Give examples of situations in which an individual might develop a request for proposal.

7. Give examples of situations in which an individual might develop a request for proposal.

• There are many possible answers to this question.
• Some examples might include an RFP for a new in-ground pool, a new deck, or a new house. These RFPs may or may not be written.
• Responses should include a description of an activity that cannot be completed by the person, or that is better completed by an external resource or contractor.

*

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Question 8

If a business did not quantify the benefits of a solution in advance, it might discover that the costs of the solution exceed the benefits.

In addition, because most businesses have limited resources, they must prioritize their projects based on the expected benefits.

Why is it important for a business to try to quantify the expected benefits of implementing a solution to a problem?

8. Why is it important for a business to try to quantify the expected benefits of implementing a solution to a problem?

• If a business did not quantify the benefits of a solution in advance, it might discover that the costs of the solution exceed the benefits.
• In addition, because most businesses have limited resources, they must prioritize their projects based on the expected benefits.

*

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Question 9

A statement of work should define the scope of the project and outline the tasks or work elements to be performed.

The SOW should be very precise.

What should be contained in a statement of work?

9. What should be contained in a statement of work?

• A statement of work should define the scope of the project and outline the tasks or work elements to be performed.
• The SOW should be very precise.

*

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Question 10

The RFP must include the customer requirements, which define specifications and attributes. Requirements cover size, quantity, color, weight, speed, performance, and other physical or operational parameters that the contractor’s proposed solution must satisfy.

These requirements must be very precise because this is what the contractor will use as a guideline as he or she develops the proposal and/or solution; the customer may also use it as acceptance criteria for the project.

What is meant by customer requirements? Why must they be precise?

10. What is meant by customer requirements? Why must they be precise?

• The RFP must include the customer requirements, which define specifications and attributes. Requirements cover size, quantity, color, weight, speed, performance, and other physical or operational parameters that the contractor’s proposed solution must satisfy.
• These requirements must be very precise because this is what the contractor will use as a guideline as he or she develops the proposal and/or solution; the customer may also use it as acceptance criteria for the project.

*

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Question 11

It is important to state the approvals required during the project so the final solution matches what the customer expects.

Examples might include: reviewing the design specifications for a house before construction begins, reviewing a prototype user interface for a new software system before coding begins, etc.

Examples will vary and should include projects of a sufficient complexity level where changes as the project advances could result in higher costs.

Why would an RFP state the approvals that will be required during the project? Give some examples.

11. Why would an RFP state the approvals that will be required during the project? Give some examples.

• It is important to state the approvals required during the project so the final solution matches what the customer expects.
• Examples might include: reviewing the design specifications for a house before construction begins, reviewing a prototype user interface for a new software system before coding begins, etc.
• Student examples will vary and should include projects of a sufficient complexity level where changes as the project advances could result in higher costs.

*

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Question 12

Instructions ensure that all proposals have a standard form and are thus easier to evaluate and compare.

If instructions were not followed, one proposal might be 5 pages and another might be 50 pages. One might include technical specifications and another might not.

Why would a customer give contractors instructions in the RFP to submit their proposals according to a standard format?

12. Why would a customer give contractors instructions in the RFP to submit their proposals according to a standard format?

• Instructions ensure that all proposals have a standard form and are thus easier to evaluate and compare.
• If instructions were not followed, one proposal might be 5 pages and another might be 50 pages. One might include technical specifications and another might not.

*

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Question 13

Answers will vary from student to student.

Responses should include the guideline elements as the elements are appropriate for the need, problem, or opportunity defined by the student.

Develop an RFP for a real-world project such as landscaping the grounds surrounding a nearby business office, building a deck for your house, or holding a big graduation celebration. Be creative in specifying your needs. Feel free to come up with unique ideas for the RFP.

(This RFP will be used to provide the basis for the development of a proposal in Chapter 3 questions.)

13. Develop an RFP for a real-world project such as landscaping the grounds surrounding a nearby business office, building a deck for your house, or holding a big graduation celebration. Be creative in specifying your needs. Feel free to come up with unique ideas for the RFP.

• Answers will vary from student to student.
• Responses should include the guideline elements as the elements are appropriate for the need, problem, or opportunity defined by the student.

*

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Request for Proposals

Internet Exercises

Internet Exercises

The Web Exercises can be a very valuable part of this course. You should assign these exercises to your students as homework or complete them with them in a computer lab.

*

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Internet Exercises

Many RFPs are available on the Web that address needs, problems, and opportunities.

Some RFPs will be very short and others many pages long.

Use the guidelines to evaluate an RFP for its strengths, weaknesses, and missing aspects.

Revisions to the RFP should clarify the information and provide enough detail for the development of proposals that will address the need of the RFP.

Using your favorite Web search engine, perform a search for “requests for proposals.”

For an RFP that was found

What company developed the RFP, and what is the company looking to accomplish?

What are the strengths and weaknesses of the RFP?

What is missing from the RFP?

How should the RFP be revised?

Search for suggestions for developing an RFP. How does this compare to the chapter’s suggestions?

Download a software system for developing an RFP. Describe how it works.

Internet Exercises

• Here you find a listing of various Web exercises for this chapter that involve investigating and evaluating a Request for Proposal found on the Web. Examination of RFPs found on the Internet could inform students about how to develop their own RFP and help to reinforce the elements of a clearly written RFP.
• Many RFPs are readily available on the Web that address needs, problems, and opportunities.
• Some RFPs will be very short and others many pages long.
• Use the guidelines to evaluate an RFP for its strengths, weaknesses, and missing aspects.
• Revisions to the RFP should clarify the information and provide enough detail for the development of proposals that will address the need of the RFP.

*

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

A Midsize Pharmaceutical Company

Case Study 1

Case Study #1: A Midsize Pharmaceutical Company

This case study involves an owner and Chief Executive Officer of a midsize global pharmaceutical company who states that profits for the year are expected to be $2,000,000 more than anticipated. She asks her three key managers to get together to develop a prioritized list of potential projects and then to meet with her to “sell” her on their ideas. A fourth manager also has some ideas for how to use this extra money.

Group Activity

This is an excellent way to stimulate class discussion and interest. Take a few minutes and have some students act it out in class.

• Select five course participants to play the roles of Jennifer, Julie, Tyler, Jeff, and Joe. After Jennifer and Joe leave the room, have Julie, Tyler, and Jeff role-play (preferably in front of the remaining class) a meeting in which they discuss their proposed projects and develop a prioritized list to “sell” to Jennifer.
• After Jennifer and Joe re-enter the room, have all five participants role-play a meeting with Jennifer in which Julie, Tyler, and Jeff try to sell her on the prioritized list of projects and Joe promotes his agenda.
• Have the class discuss what took place. What positions did the players take? How was the final decision made? What was the final decision?

*

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Case Study 1
Question 1

She has identified an opportunity. She has $2,000,000 of unexpected profits that she would like reinvest in the company. In this case, she is soliciting proposals from her internal managers.

She should state comprehensively, and in detail, what she expects in the proposals including several of those items discussed in this chapter (due date for proposals, format required, evaluation criteria to be used, etc.).

In this case, the RFP may or may not be in written form. She should then evaluate each proposal submitted based on the stated criteria.

How should Jennifer go about making her decision?

1. How should Jennifer go about making her decision?

• Jennifer has identified an opportunity. She has $2,000,000 of unexpected profits that she would like reinvest in the company. In this case, she is soliciting proposals from her internal managers.
• She should state comprehensively, and in detail, what she expects in the proposals including several of those items discussed in this chapter (due date for proposals, format required, evaluation criteria to be used, etc.).
• In this case, the RFP may or may not be in written form. She should then evaluate each proposal submitted based on the stated criteria.

*

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Case Study 1
Question 2

Among other things, information on cost and benefits should be collected.

Costs should include one-time and on-going expenses.

Additional data such as specific tasks and timeframes is also needed

What kind of additional data or information should she collect?

2. What kind of additional data or information should she collect?

• Among other things, information on cost and benefits should be collected.
• Costs should include one-time and on-going expenses
• Additional data such as specific tasks and timeframes is also needed.

*

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Case Study 1
Question 3

Each proposal should include the cost and anticipated benefits of the project.

At a minimum, it should also include the tasks to be performed, the resources used, and a schedule

What exactly should Jennifer require the others to submit in the way of proposals?

3. What exactly should Jennifer require the others to submit in the way of proposals?

• Each proposal should include the cost and anticipated benefits of the project.
• At a minimum, it should also include the tasks to be performed, the resources used, and a schedule.

*

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Case Study 1
Question 4

At this point, it is too early to tell.

Jennifer must evaluate each of the proposals based on the established criteria and then select the proposal or proposals that provide the greatest benefit to the company.

Responses should include a description of each person's position and additional information that Jennifer would need to evaluate their response. The responses should include why or why not Jennifer would fund the projects based upon the student's experiences and interpretation of the projects.

What do you think Jennifer should do with the $2,000,000? In explaining your answer, address the concerns and positions of Julie, Tyler, Jeff, and Joe.

4. What do you think Jennifer should do with the $2,000,000? In explaining your answer, address the concerns and positions of Julie, Tyler, Jeff, and Joe.

• At this point it is too early to tell what should be done with the money.
• Jennifer must evaluate each of the proposals based on the established criteria and then select the proposal or proposals that provide the greatest benefit to the company.
• Responses should include a description of each person's position and additional information that Jennifer would need to evaluate their response. The responses should include why or why not Jennifer would fund the projects based upon the student's experiences and interpretation of the projects.

*

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Transportation Improvements

Case Study 2

Case Study #2: Transportation Improvements

This case involves a large but sparsely populated county that has a fairly mountainous terrain. Various road projects are being discussed.

Group Activity

Ask each course participant to individually answer the first case question. Then divide the course participants into groups of three or four to discuss the case questions. Each group must select a spokesperson to present its answers to the entire class.

*

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Case Study 2
Question 1

Various options can be used, as discussed in this chapter.

The criteria should be defined in advance of evaluating the projects. Explain why the particular criteria was selected to evaluate the projects.

What criteria should Zachary use to evaluate the projects?

1. What criteria should Zachary use to evaluate the projects?

• Various options can be used, as discussed in this chapter.
• The criteria should be defined in advance of evaluating the projects. Encourage students to explain why they chose particular criteria to evaluate the projects.

*

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Case Study 2
Question 2

Zachary has to make assumptions regarding the safety to the entrance outside of Big John’s superstore, the need to widen and repair Elk Mountain Road, and the condition of County Route 1045 and the bridge.

Each of Zachary's assumptions needs to be evaluated.

What assumptions should he make?

2. What assumptions should he make?

• Zachary has to make assumptions regarding the safety to the entrance outside of Big John’s superstore, the need to widen and repair Elk Mountain Road, and the condition of County Route 1045 and the bridge.
• Each of Zachary's assumptions needs to be evaluated.

*

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Case Study 2
Question 3

Surveys and various types of research methods could be used to gather data related to the assumptions in the case study.

What data and information should he gather and how should he go about gathering the data and information?

3. What data and information should he gather and how should he go about gathering the data and information?

Surveys and various types of research methods could be used to gather data related to the assumptions in the case study.

*

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Case Study 2
Question 4

The four step project selection process is a possible way to evaluate the three projects.

After he has evaluated each project against the evaluation criteria, how should he decide the priority of the three projects?

4. After he has evaluated each project against the evaluation criteria, how should he decide the priority of the three projects?

This is a great opportunity to get the class to walk through the four step project selection process. Split the class into groups and have the students compare the outcomes and suggestions developed in each group with the others.

*