Procurement Contracts and Statement of Work

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Contents Introduction 3 The current financial state at NearlyFree.com 4 Cost estimation for the work packages 5 Failure Points for Nearly.Com 6 The Turnaround project 6 1. Total Cost of Ownership (TCO) 7 2. Return on Investment (ROI) 7 3. Contingency Reserves 8 4. 3-Points estimation 9 Conclusion 11 References 13 Appendix A: Initial Summary for 14

Organizational project management is a unique role that management takes to get to a new level and accomplish a required strategy to achieve perfect milestones (Carlson 2019). NearlyFree.com is a company that strives to enhance the professional skills of its employees and works following the recommended project aspects. However, there is a failure in training employees due to poor planning and challenges associated with the measurable aspects. Ideally, there is the need to focus on the critical solutions and enhance the recommended standards in applying some of the criteria for change. As an LLC Company, the role of a project manager is to assess the project failures of such a company and ensure that a quality turnaround is made to help meet the required deliverables. Additionally, through reasonable financial reserves, contingency management is recommended for such a company to meet its needs and enhance operational competence.

NearlyFree.com has challenges managing its projects and meeting the required objectives, something that needs to be changed and addressed effectively. Ideally, the crucial role involves working on the critical protocols of change and ensuring that the right processes are applied in making things work as required. By percentage, 43% of the initial budget is not accounted for. The failure is raising the alarm for a change in the management to help reshape the measurable project requirements, which is critical and ideal in emphasizing the crucial roles as required. The necessary objectives of the project management are to tailor the needs of the company to fit the budget and meet the deadline using an appropriate work breakdown structure (WBS) (Murthy 2020).

For the project, there is an analysis of current financial performance and a project forecast in making things work as recommended. Ideally, the emphasis and critical role of the company is to work on the essential procedures and ensure that the measurable impacts are followed for the company to meet the original project requirements and deadlines. Finally, the report contains a review of the Total Cost of Ownership (TCO), Return on Investment (ROI) for the project, and cost estimation for the contingencies in the general project management.

The estimation techniques employed in the financial valuation of NearlyFree.com revealed that the project budget overran the estimated value. The budget is extremely high, and there is a need to focus on a higher quality aspect that makes sense of the protocols and procedures. From the original estimation, the training and orientation of new employees at NearlyFree.com were $25 000. Initially, the cost of the project was $23,300, which is a significant increase. From the current financial state of the project, a total of $30,380 is seen to be a considerable challenge. The cost overrun of the project is $8,080, which is a substantial show of contingencies that NearlyFree.com incurred. The poor financial decisions trailed the company behind in terms of the practical aspects that need to be addressed through a thorough planning scheme.

From the analysis of the project budget estimation, the management used analog techniques to determine the costs. The challenge is the inadequate quality budget and cost overruns that require an adequate address to implement the various aspects. Some of the significant difficulties involve incurring heavy project management burdens and reduced competence in handling the multiple project requirements and ideals.

The organization's project managers messed up in various ways, especially regarding the need to change several budget constraints to meet the requirements. Orientation of the new employees requires a precise approach such as 3-D estimation techniques to help make things work and be within a reasonable margin. Some of the significant points of 3-D estimation that needs to be taken into consideration include:

a) The best guess (BG) is that every member of the project should perform at least 100 times to make the task get accomplished within the right time.

b) A pessimistic guess (P) whereby the estimate could consider the majority of negative factors that reduce the competence of the team members for the project.

c) A guess that is optimistic (O) whereby all the positive risks in the project are taken into account considering the diverse aspects associated with the key deliverables, which is necessary and quality.

With a 3-D approach in financial estimation, NearlyFree.com would have had a fruitful process that is key for project management and reducing the cost overruns. The level of accuracy is on another level which makes sense and enhances the critical protocols in accomplishing the significant policies for a vital integration and effective management of the various cost-related issues.

The work packages are crucial in cost estimations, especially for the work packages. Work breakdown structure is an essential tool for qualitative estimation and determination of the various values that matter in terms of the nature of crucial projects. For a proper estimate of the costs, the work breakdown structure (WBS) follows multiple steps, including the following:

1) Listing the deliverables that require the highest level scope.

2) Breaking down the high-level requirements into major categories that can be delivered.

3) The primary deliverables are broken into specific activities.

4) A complete scope review of the packages to ascertain the completeness of the scope and working on fundamental aspects is critical and crucial in addressing the significant interventions and critical issues as required.

For NearlyFree.com, there was a challenge in the estimation since the deliverables were not carefully considered. For the deliverables, there should be specific aspects in making things work and quality interventions implemented to make the right focus choices as required. However, the four steps were applied, but the level of objective specificity created the challenge that needed a focus on things that do matter.

The project that NearlyFree.com initiated had significant failing aspects due to challenges of poor planning that reduced the objective competence. Some of the primary reasons for failures include the following:

a) Significant task cost discrepancies between actual cost and the estimated budget.

b) The work breakdown structure (WBS) used by NearlyFree.com lacked some of the required deliverables hence reducing the competency expected for the project.

Some of the deliverables were ignored from the work breakdown structure, and the delay resulted in an extra cost worth $11,740. With the challenge and significant cost issues, the organizational project seems to fail due to the threat of poor planning and lack of precision in the statement of important objectives for the project that ought to be implemented.

The project is already collapsing, and the need to revive the original energy is a crucial issue worth noting. Significantly, the need to change the tactics should encompass a change in strategies and policies. The key deliverables, therefore, include the following components for salvation to be accomplished:

1. Checking the Total Cost of ownership.

2. Inclusion of Return on Investment (ROI) calculations.

3. Having adequate contingency reserves.

4. Use of 3-D points in the estimation of project costs.

As a concept in project management, the total cost of ownership includes the purchase price for the assets, including the high operational costs (Sarmento 2020). Considering the vital factors, there is the need to ensure that a correct estimation is applied for successful financial analysis. For NearlyFree.Com, there is an aspect of TCO that must be addressed considering the various contingencies and deficiencies in the managed projects.

A holistic approach is recommended to turn around the project and ensures that ideal practices get implemented, which is critical. Necessarily, NearlyFree.com needs to consider costs such as software used in training, training charges, and elements used in training and accomplishing the significant deliverables, which is critical (Sarmento 2020). For the organization, the TCO is expected to have a value below $27,133.33 based on the 3-D point estimations employed for the project.

Return on investment is a calculation done to help in determining the various costs and profits of a project venture (Kevin 2017). Any project should have a positive ROI since the significant goal of venturing into the various activities is to multiply the multiple earnings.

The NearlyFree.com project is estimated to bring some profit upon completion since there is a significant aspect of the major deliverables. Ideally, the focus and critical emphasis on the quality and essential processes entails working on the main elements of change while promoting the profit base (Kevin 2017). The projected cost for the organization is $30,380.With the new budget being at $27,133.33, there is a significant saving of $3,246.67 that is launched. An emphasis on savings brings the return on investment upon the project turnaround.

Contingencies are risks in businesses that are unknown. A contingency reserve is, therefore, an amount of money saved to help in catering for emergencies. For NearlyFree.com, the contingency reserve financial aspect is a recommended aspect in making the risks managed the right way (Dash 2018).

By using the concept of probability, allocation of the contingency reserve depends on nature and significant aspects. Therefore, the necessary processes follow the proper procedures and ensure that perfection is accomplished, making reasonable methods be within the standards and ideals of savings (Dash 2018). With the HR and other administrative costs at NearlyFree.com, a relative aspect associated with the contingency reserve is regarded as a required protocol in helping make the processes work as per nature and critical solutions, which is quality and effective.

The percentage calculations are 90%, 75% and 50% which totals to $5000. The following is a calculation of the major contingency reserves:

· A 90% of $2,777 which is $2,500.

· A 50% of $2,500 which gives $1,250.

· A 75% of $3,750 giving $1,250.

The reserves are good for protecting the organization against the risks associated with the project contingencies listed. In the orientation of the new employees, contingencies may arise, and based on the budget, a reserve may be recommended to cushion the organization from such a risk.

The three major points in project cost estimation are optimistic, pessimistic, and actual, which are ideal (Roseke 2018). For NearlyFree.com, the project risk estimation is possible through precision and measurable aspects associated with the budget and standard processes to ensure that accuracy are made possible.

The three-point estimation has a specific formula which is  E=(a+b+m)/3 (Roseke 2018).

For this formula, E stands for estimated project cost; a is the optimistic value of the project, m is the most likely value of the project, and b is the pessimistic value.

The following is a calculation for proposed project budget that is free of the contingencies:

After consideration of the project expenses, budget and contingency reserves, the total project cost requirement is $32,133.33. For the organization, such a value is regarded as a perfect estimation for the project which solves the challenges.

In conclusion, NearlyFree.com can have good project management, especially when significant cost measures are applied in helping accomplish the major objectives. The success of project management relies on the necessary protocols of change and working on the key impacts of change, making sense. With contingency planning and implementation of ideal practices, the need to foster a good strategy that includes an enhanced and fundamental metric is key. The reduced cost of the project based on planning is considered one of the perfect interventions for changing the course of project planning and execution. The turnaround process must entail a perfect calculation technique with good formulation metrics that helps in accomplishing better deliverables for success and related measures, which is ideal and quality.

Carlson, R. (2019, October 25). How to Do a Budget Analysis for Your Business. Retrieved from The Balance Small Business.

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