Project scheduling ORIGINAL WORK/ MUST HAVE Associates or better BA

Table of Contents Project Outline 3 Cost, Schedule, and Technical Performance Management 5 Cost Techniques 5 Critical Path 7 Management of Small Projects 9 Turbine Supply Agreement (TSA)-Small Project Schedule 9 TSA Critical Path View 10 Acquisition Project Guidelines 14 Updated Project Plan Schedule 14 Request for Proposal (RFP) 17 Summary and Background 17 Proposal Guidelines 17 Project Purpose and Description 18 Project Scope 18 Request for Proposal and Project Timeline 18 Budget 19 Bidder Qualifications 19 Proposal Evaluation Criteria 19 Vendor Criteria 20 Vendor Update Process Flow 21 Costing Methods and Tools 22 Earned Value Management System 23 Overall Cost and Schedule Performance 24 References 25

DTE Energy has been challenged by the State of Michigan and the Federal Government, as well as other energy producers, to meet certain energy requirements. One of these requirements is to increase the percentage of energy produced by renewable means or “Green” energy. DTE Energy embarked on many projects including solar and wind generation projects to meet this requirement.

DTE Energy’s Wind Park project will be constructed in the “Thumb” region of Michigan consisting of the erection of 30 1.7 GE Turbines producing a total of 50 MW of renewable energy. The collection system will consist of two circuits connecting the turbines to the Pinnebog Substation.

In addition to the construction of the wind turbines and collection system, the Wind Project will include the renovation of the Pinnebog Substation to handle the connection of the new turbine generated power. Part of this renovation is the manufacturing and purchase of specific transformer designed to specific specifications of the 50MW that will be produced by the wind turbines. The risk involved is if for any reason the wind park is not built the transformer cannot be used in any other DTE project due to the specific rating the transformer was manufactured.

The Wind Park Project consists of an EPC contract to a construction firm with experience in building wind parks, owner’s engineer contract for design and permitting, and a sub-contractor to perform the electrical work required. Another high dollar contract is the Turbine Sales Agreement (TSA) that must be executed by mid-December with GE for the purchase of the 30 Wind Turbines. After that December date, the number of turbines cannot be adjusted or cancelled. The TSA contract alone represents over $30M with specified payments.

The Wind Park Project cannot begin construction until late April 2016 due to local Frost Laws, which prohibit the movement of heavy equipment until weather permitting to lesson damage to roads and farmland. The entire 30 Turbine Park must be operational (COD date) by December 2016. If for any reason, the COD date “slips” into 2017 DTE Energy loses a substantial tax incentive from the State of Michigan as well as will fail to meet the renewable energy goal thus incurring penalties and loss of $500K deposit with the State of Michigan for failing to provide the required 50 MW of energy to the grid.

Cost estimation is part science and technique to develop an accurate project total cost, and is based on many acceptable practices to determine and evaluate the cost of a project.

The Techniques used by DTE Energy’s Cost Estimator are:

Expert judgment – Utilizing the personal experience and knowledge of the estimator to obtain cast date relevant to the project (Project Management Skills, 2015). The Wind Park Project is the third wind park built by DTE Energy. The estimator will allocate unique factors specific to the project based on that experience. .

Analogous estimating - The use of that historical data to accurately paint the cost picture for the current project. This technique was used early on in the estimating process (Project Management Skills, 2015).

Bottom-up estimating - The estimate of individual work packages throughout the project, which are then rolled up to determine overall cost of the project (Project Management Skills, 2015).

Vendor analysis - by comparing the bids of different vendors serves as benchmark for what the project might cost (Project Management Skills, 2015). This technique was initially used at the bid process, which happened almost two years ago.

Acquisition Component

Transformer Build 8-May-15

Owner’s Engineer 6-Jun-15

EPC Contract Awarded 15-Sep 15

Electrical Sub Contractor 15-Sep-15

TSA Contract 14-Dec-15

A part of the Wind Project is the Turbine Supply Agreement, which in itself is a small project. The TSA is an acquisition agreement from a vendor to supply the wind turbines for the Wind Project. The bid process, due to its specialty is limited to those vendors who can not only manufacture the required number of turbines, but also show flexibility in delivery to accommodate DTE Energy’s project schedule.

Below is break out of the TSA Schedule showing the steps required to initiate the TSA, complete through delivery, and close out of the TSA agreement. In reality, the winning vendor was General Electric for 30 Turbines with a total contract value of $60M. By small project standards, the dollar amount is large, but the project itself is a small project based on components, resources, and delivery time.

All projects process through the five stages of the PMBOK process groups: initiating, planning, executing, monitoring, and controlling and closing. The process stages help define and outline the major phases of a project as they relate to the entire project.

Initiation Phase – The Initiation Phase is started by the creation of a Charter –where the project and scope are defined for the project. The schedule will begin to be developed once a project charter has been approved. Along with the schedule, a Project Management Plan will be created and approved detailing how the project will be managed according to DTE Energy’s project management processes. Project Maturity Model in incorporated to guide the Project Manager through the required steps of the business process – the process is called “Gates” . Gates 1 and 2 represents the Initiation Phase, and those Gate deliverables are tracked in the company’s ePat systems.

Planning Phase – A more detailed project schedule is achieved during this stage and outlines the required steps to obtain a vendor. The Bid Proposal is detailed in this phase with cooperation and negotiations between, the Buyer, Contract Manager, Legal, and the vendor’s representative. The completion of this phase is marked by a signed TSA agreement contract that meets DTE’s approval. PM will complete “Gate 3” once all deliverables in ePat are met.

Execution Phase- the Execution Phase is where the turbines are manufactured, transported, Inspected on site, and prepared for construction. Another major event is the payment schedules to the vendor, which is monitored by the project schedule by the use of milestones. These payments are contractually obligated based on the vendor’s process in providing the wind turbines. Completion of these deliverables the project has passed through “Gate 4”.

Monitor and Controlling Phase – The schedule is evaluated and reports are prepared. The reports include the Critical Path, the overall project schedule, plan of the week (which proved a two week look ahead so work tasks can be physically monitored), and the Slipping Report which identifies the activities that are showing a negative variance based upon the baseline of the project which was captured in the Planning Stage. The PMP is re-evaluated and updated to ensure the plan relates to the project, which further drives the monitoring and control of the project. Gate 5 is achieved once all the deliverables are attained ePat for this gate.

Project Close –Out is the hardest of all the gates to complete. All invoices for payments must be received and acknowledged by the vendor. Purchase Orders must be closed, and a review of the contract obligations are met as per the contract and reviewed by legal. The PM has significant work ensuring all the required parties sign and document the entire project requirements. Lessons Learned are captured and entered into the company’s database so others can view all the lessons learned on this project to assist if another project of likeness is to be done gives that team a look ahead at what issues might arise.

The entire project life cycle process is evaluated on a weekly basis by the Project Manager Supervisor, where all gate deliverables are recorded and reviewed. The PMMM Report tracks when a deliverable is scheduled to be completed, when it actually was completed, and if completed out of sequence. For example, if all Purchase Orders were statused as completed but the “Identify PO’s was not completed that would show that the project is out of process. Although the project itself was completed without issues not following the established processes will cause an alarm to management. A breach of process can be attained if a “Decision Document” was approved and signed to eliminate a particular step that was not needed prior to project entering a particular gate.

DTE Energy is currently accepting proposals to engineer, plan, and construct a 50 Megawatt wind park in the “Thumb” Region of the State of Michigan. The wind park will be the first wind park construction project for DTE Energy. The wind park is being constructed in order to meet the State of Michigan’s Renewable Energy Plan.

The purpose of the is Request for Proposal (RFP) is to solicit proposals from various Engineering/ Construction firms with prior wind park construction experience who can best meet DTE Energy’s performance criteria in a fair evaluated bid process.

DTE Energy Co. (NYSE: DTE) is a diversified energy company involved in the development and management of energy-related businesses and services nationwide. Our largest operating subsidiaries are DTE Electric and DTE Gas. Together, these regulated utility companies provide electric and/or gas services to more than three million residential, business and industrial customers throughout Michigan. Our electric and gas utility businesses have each been in operation for over a century. We have leveraged that wealth of experience and assets to develop a number of non-utility subsidiaries, which provide energy-related services to business and industry nationwide.

DTE Energy Headquarters is located in Downtown Detroit, Michigan with a primary service area of covering Southeast Michigan.

Proposals will be accepted until Midnight EST December 20, 2015. An agent representing the company’s submittal must sign all proposals. No proposals will be accepted after the expiration of the proposal date and time limits.

If any part of the proposal must be further outsourced to additional contractors or subcontractors that organization’s name and information must also be contained with the proposal along with the portion of the proposal that organization will be conducting.

All cost must be itemized in U.S. dollars with a complete break out and explanation of all fees and costs.

Contract terms and conditions will be negotiated to the RFP bid proposal winner. These terms are subject to DTE Energy’s Legal Department concurrence on all contracts and negotiated aspects of the contract.

(Sharp, 2015)

The purpose of this project is as follows:

State and Federal laws to produce a certain percentage of energy from renewable sources have been mandated DTE Energy. The construction of the Wind Park is a major investment for DTE Energy to achieve this goal. The ultimate goal is to provide 50MW of wind energy to the Penn Substation

Project Description:

DTE Energy is seeking construction firm with prior wind park construction experience to engineer, plan, and construct a 50MW wind park in the “Thumb” region in the State of Michigan.

The Project will construct 30 1.7MW G.E. Wind Turbines across three counties in the State of Michigan with associated collection lines as well as upgrades to the Penn Substation to handle the extra energy produced by the wind turbines.

The scope for the project includes all design, development, permitting, micrositting, and construction of 30 1.7 MW G.E. Turbines, the collection lines associated with those turbines as well as all access roads and Penn Substation upgrades.

The selected bidder will meet or exceed all DTE Energy Company’s Safety, Quality and performance standards and policies

The selected bidder will be responsible for all electrical procurement items concerning the collection system as well as the requirements for the Penn Substation transformer upgrades.

DTE Energy will provide 30 G.E. 1.7 MW wind turbines and special transformer to be configured and installed by selected bidder in the Penn Substation upgrades.

Request for Proposal Timeline:

All proposals in response to this RFP are due no later than Midnight EST December 20, 2015.

Evaluation of proposals will be conducted January 4, 2016 thru January 8, 2016.

The selection decision for the winning bidder will be made no later than January 9, 2016

Upon notification, the contract negotiation with the winning bidder will begin immediately. Contract negotiations will be completed by January 28, 2016.

Notifications to bidders who were not selected will be completed by January 9, 2016.

Project Timeline:

Limited Notice to Proceed needed by February 2, 2016

Engineering Start February 15, 2016

Construction Start May 3, 2016

Completion Date December 19, 2016.

All proposals must include proposed costs to complete the tasks described in the project scope. An itemized list of all procurement and long lead items with cost should be incorporated into the overall cost estimation.

All costs and fees should be clearly identifiable in the proposal.

Bidders should provide the following items as part of their proposal for consideration:

· Description of experience in planning, engineering, and constructing of a wind park of at least 50MW.

· List of how many full time, part time, and contractor staff in your organization

· Provide company safety record as recorded with MIOSHA and OSHA.

· Anticipated resources you will assign to this project (total number, role, title, experience)

· A full commissioning plan with power curve and noise testing criteria

· Timeframe for completion of the project

· Project management methodology

DTE Energy will evaluate all proposals based on the following criteria:

· Overall proposal suitability: proposed solutions meet scope and project performance

· Organizational Experience: Bidders will be evaluated on their experience as it pertains to the scope of this project including prior wind park construction experience.

· Meeting Deadlines: Bidders will be evaluated o meeting tight timeline and scoped projects.

· Value and cost: Bidders will be evaluated on the cost of their solution(s) based on the work to be performed in accordance with the scope of this project

· Technical expertise and experience: Bidders must provide descriptions and documentation of staff technical expertise and experience.

All proposals need to be submitted to the below address Midnight December 20, 2015.

DTE Energy

1 Energy Plaza

Detroit, MI 48027

("Request for Proposal Template - Free RFP Template," n.d.)

(Sharp, 2015)

(Sharp, 2015)

Project schedules will be updated by COB every Friday with a Data Date of the upcoming Sunday to conform to DTE Project Management Office processes. Included in the update will be a narrative report describing the overall schedule health with separate reports of the projects critical path, use of lag, use of constraints, list of activities that were complete since last update with a list of task that are currently in progress

Project Schedule

Update

DTE Accepts Updates

DTE Review

Issues Identified sent for redo

Send to DTE for Review

Create Required Reports/Layouts

Update Tasks

Move Data Date

DTE Rejects

OK

TBD

TBD

TBD

Project Management Skills. (2015). Project Cost Estimating Tools and Techniques. Retrieved November 23, 2015, from http://www.project-management-skills.com/project-cost-estimating.html

Request for Proposal Template - Free RFP Template. (n.d.). Retrieved from http://www.projectmanagementdocs.com/project-documents/request-for-proposal.html

Sharp, J. (2015), Contracts and procurement. Unpublished manuscript, Colorado Technical University, Colorado Springs, CO