PM paper

Lavaearth2015

project.docx

Home >Business & Finance homework help >Management homework help >PM paper

Project Objective Rationale for Project Stakeholders Analysis Statement of Work: Risk Assessment Timeline Scope Statement Development WBS Structure WBS Dictionary Scope Baseline Maintenance Scope Change Deliverable Acceptance Scope and Requirements Integration Schedule Methodology Schedule Tools Schedule Reporting and Format Process Management Activity identification Activity sequencing Estimating resources Estimating effort and duration Schedule Reduction Rules for Performance Measurement Cost Reporting and Format Project Estimate Bottom-Up and Expert Judgement Approach Updating, monitoring and controlling Labor Outsourced Services Inspections and Permits Contingencies Earned Value Analysis and Report Appendix Exhibit 1. Budget chart Exhibit 2 Network Diagram Exhibit 3 Outsourcing Contract Exhibit 4 PERT Analysis Exhibit 5 Status Reporting Format Exhibit 6 EV Metrics at completion as well as time phased cashflow plan Exhibit 7 Closeout Checklist Exhibit 8 Project Flow Gantt Chart Exhibit 9 Project Schedule Exhibit 10 Resource Loading Exhibit 11 Crashed Schedule References

Project Objective

This project will transition the SMS LAB Engineering helicopter production line from its current location in Barstow, CA to a newer and more centralized location, just south collocated with a local regional airport in Aerial Acres, CA. The move will be completed in 6 weeks (42 calendar days), safely and with a cost not to exceed $1.1 million.

Rationale for Project

There is a business need to move the helicopter production line from its current facility that is 50 miles from the flight test center to a newer location more centralized to the overall organization’s operations. Once the new location is operational there will be a realized savings in lease costs, reduced risk, and reduced transportation costs of moving the helicopters to the flight test center.

Currently the lease for the building where the production line is located is ending and the organization has decided to not renew due to budgetary constraints and have opted to centralize operations.

Stakeholders Analysis

The stakeholders that are involved with the movement of the helicopter production line from the Barstow facility to the new Aerial Acres facility are spread amongst the entire company. The stakeholders will be evaluated and classified using a power/influence grid method. It is important to be able to keep all participant levels of the project informed and with this grid evaluation, status updates and meetings can be tailored to the requirements of that specific group of stakeholders.

As depicted in the grid evaluation there are four main groups of stakeholders. All have different levels of power and participation/influence over the execution and overall outcome of the project. Upper management has high power but not as much influence as the middle managers because the middle managers will be actually working hands on with the project move while upper management will just be given updates as the project progresses. The hourly workers have little power about making decisions but their participation in the project will be high thus their influence will be high. The support staff has little power or influence as to the outcome of the project. Aircraft customers are not directly involved in the move but because of delivery requirements they have a vested interest to have the move be successful.

Project updates will be disseminated to the stakeholders weekly in face-to-face meetings due to the close geographical location of all parties involved. The general weekly meetings will be kept to a brief slideshow updating the following:

· Show progress in the network diagram/Gantt chart

· Critical upcoming deliverables

· Budget and questions

Project managers will provide additional information to stakeholders if questioned pertaining to the following as well:

· Project status reports

· Changes in scope

· Gating decisions

· Action items

· Deliverable issues

· Team status meetings

· Accepted request changes

· Milestone reports

Statement of Work:

The project scope will achieve the following deliverables:

· Research hangars available for new location

· Develop production impact and forecasting plan

· Acquire lease ownership of new facility

· Develop floor layout plan to maximize efficiency

· Prepare office space for administrative duties

· Relocate shop equipment

· Relocate shop personnel

· Relocate office equipment

· Relocate office personnel

· Prepare hangar space for production work

· Close out work in progress if possible

· Transition all work in progress, to new facility, if unable to close out

· Fit-up tests and Trial runs at new facility

· Start of work at new facility

· Finalization of turnover of old facility

Risk Assessment

There are a number of risks associated with a project of this nature due to the planning and infrastructure requirements of a helicopter production line.

· Failure to meet customer delivery schedule due to interference relating to the move

· Risk of aircraft damage during movement from old to new location

· Risk of damage to major tooling and work platforms during move

· New facility may not have required floor plan/ infrastructure required of the production line

· Risk of not obtaining building codes and occupancy certifications in time so as to not impact planned production

Timeline

The production line move will be fully operational by June 26, 2017 which is six weeks from the start date.

Scope Statement Development

The scope of the project is to relocate SMS LAB Engineering helicopter production line; to include (1) production line equipment, (2) production line personnel, (3) management office equipment, (4) management office personnel, and (5) current work being fabricated from Barstow, CA to Aerial Acres, CA within six weeks (42 calendar days) and at a cost not to exceed $1.2M. Total delay in production schedule not to exceed 15 business days.

WBS Structure

Below is the WBS structure for the project. Exhibit 2 in the appendix contains the network diagram related to this WBS.

1. Facility (Major Deliverable #1)

1.1. Potential Locations

1.2. Risk assessments

1.3. Chosen Location

1.4. Lease

2. Facility Layout (Major Deliverable #2)

2.1. Development of production floorplan

2.1.1. Outline of equipment layout

2.1.1.1. Outline of build positions

2.1.1.2. Flow map of build processes

2.2. Development of office layout blueprint

3. Facility Readiness - All Permits obtained (Major Deliverable #3)

3.1. Equipment

3.1.1. Electrical equipment

3.1.2. HVAC system

3.1.3. Security system

3.1.4. Communications and network system

3.2. Operational permit

3.3. Building code inspections

3.4. Certificate of occupancy

3.5. Environmental clearance

4. Administrative department move

4.1. Office Equipment

4.2. Office Personnel

4.3. (Office) IT Network

5. Production department move

5.1. Production Equipment

5.2. Production Personnel

5.3. (Production) IT Network

6. Production at new facility (Major Deliverable #4)

6.1. First article inspections

6.2. Fit-up tests

6.3. First Run

6.4. Production evaluation

6.5. Lessons Learned

6.6. Production approved

6.7. Start of Production

7. Final Closeout old facility (Major Deliverable #5)

7.1. Restoration to acceptable conditions

7.2. Unused equipment

7.3. Property turnover and end of lease

WBS Dictionary
WBS Code	Element Name	Definition	Responsible Organizational Unit
1	Facility	Facility lease obtained	Management
1.1	Potential Locations	Find three potential hangar/facility locations and define their characteristics	Management
1.2	Risk Assessments	Review of the risks associated with each of the facilities	Management and Operations
1.3.	Chosen Location	After review of the facilities, a decision must be made on which to select to lease	Management
1.4.	Lease	Lease is obtained for the selected facility	Management
2.	Facility Layout	Completion of all blueprints and layout plan	Management and Operations
2.1	Floor Production Plan	Development of the production facility layout	Management and Operations
2.1.1	Outline of equipment layout	Outline of equipment layout	Management and Operations
2.1.1.1	Outline of build positions	Outline of build positions completed	Operations
2.1.1.2.	Flow Map of build processes	Flow map of build processes completed for maximum efficiency in production	Operations
2.2	Office Layout Blueprint	Some equipment must be outsourced for moving between locations.	Management
3	Facility Readiness	Facility Readiness including all necessary permits having been obtained	Operations
3.1	Equipment	Installation of all equipment	Operations
3.1.1	Electrical Equipment	All electrical equipment installed	Operations
3.1.2	HVAC system	HVAC systems installed	Operations
3.1.3	Security System	Security System installed	Operations
3.1.4	Communications and Network System	Communications and network systems installed	Operations
3.2	Operational Permit	Operational permit obtained	Operations
3.3	Building code inspections	Building code inspections passed	Operations
3.4	Certificate of occupancy	Certificate of occupancy obtained	Operations
3.5	Environmental Clearance	Environmental clearance received	Operations
4	Administrative department move	Completion of Administrative department move	Management and Operations
4.1	Office equipment	Relocation of office equipment	Operations
4.2	Office personnel	Relocation of office personnel	Operations
4.3	IT Network	IT verification of network and office equipment readiness	IT Staff
5	Production department move	Completion of production department move	Operations
5.1	Production Equipment	Relocation of Production Equipment including aircraft in work completed	Operations
5.2	Production Personnel	Relocation of Production Personnel completed	Operations
5.3	IT Network	IT verification of network and office equipment readiness	Management and Operations
6	Production at new facility	Start of Production at new facility	Management and Operations
6.1	First article inspections	Completion any first article inspections required after moving tooling to a new address	Operations
6.2	Fit-up tests	Fit-up test with all machinery and moving parts	Operations
6.3	First Run	First production run on test item completed	Operations
6.4	Production Evaluation	Production evaluation on test run product	Operations
6.5	Lessons Learned	Review of Lessons learned during test run	Management and Operations
6.6	Production Approval	Management buyoff on approval to commence commercial production	Management
6.7	Production	Start of commercial production	Operations
7	Final Closeout of Old Facility	Final Closeout of old facility	Management
7.1	Restoration to acceptable conditions	Clean floors, Repair and repaint as necessary	Operations
7.2	Removal of Unused equipment	Removal of any unused equipment at old facility	Operations
7.3	Property turnover and end of lease	Property turnover and end of lease	Management and Operations

Scope Baseline Maintenance

· Scope will be maintained by following the WBS strictly

· Meet the 15-day delay requirement by adjusting production schedule in advance. Contingency plan includes overtime work to meet this requirement.

· Scope will be closely monitored, especially in the facility readiness section where review of documents submitted for permits is out of the team’s hands.

Scope Change

· If the six-week time frame is in jeopardy then budget increases could be considered to facilitate meeting the time deadline.

· Float will have to be included in the timeline to account for the external risk during review of documents to obtain permits. If the float is used up then the team will have to increase costs by working overtime in areas such as the production and office building movement of personnel and equipment to make up for the lost time.

Deliverable Acceptance

Major deliverables will be satisfied when:

· Facility acquisition- a new facility is under contract with a completed risk assessment.

· Layout - a functional flow for production is laid out and with required build positions and support staff.

· Facility readiness - all infrastructure improvements are completed.

· Production restarts - all basic tests are complete, (every build position is populated and runs through a full statement of work).

· Old facility close out -

· all materials and equipment are removed and floors are cleaned.

Scope and Requirements Integration

· There is a requirement to leave the old facility due to an expiring lease, the scope outlines how to fulfill this requirement. Furthermore, more specific requirements are added including movement of office, production equipment, and personnel into the new office as well as closing and completing the turnover of the old facility.

· There is a requirement to maintain a production schedule to meet expectations of customers. The scope accounts for how to meet this by defining within the WBS the tasks required. Additionally, contingency plans are included to ensure this requirement is met.

· The scope also mentions a not to exceed cost. This requirement maybe sacrificed in order to meet the lead-time on this project if it falls behind.

Schedule Methodology

Critical Chain Method would suit the project as most activities are sequential, with a few possible parallel paths, (this could include moving admin while production infrastructure is being built or beginning production at the new facility while the old facility is being prepped for closeout). The buffers referenced in the PMBOK (P. 178) would be an appropriate way to manage delays based on permitting or infrastructure improvements.

Schedule Tools

Crashing - Approving overtime as needed to make up delays that would jeopardize customer delivery requirements.

Fast tracking - The initial schedule is primarily run in series, but there are opportunities to run actions in parallel, (eg. moving admin while production infrastructure is being worked and beginning production at the new facility while the old one is being prepped for close out). The critical feature here would be resource availability. As an option, contracting additional help during this phase may provide the project team with the needed extra resources for an added cost.

Schedule Parameters

Level of Accuracy:

Units of Measure:

Control Thresholds:

+\- 5% (2 workdays) deviation from activity cost estimates.

8 hour workdays,

M-F for Staff.

Admin:

$35/hour regular $52.50/ hour OT Technician:

$25/hour regular

$37.50/hour OT

A comparison of planned costs to actual costs, if the 5% variance of the original cost baseline is reached the contingency reserve fund will be activated to bring the project back on schedule.

Schedule Reporting and Format

A summary schedule bar chart will be used to report the progress of the project. The size of the project lends itself to this style will make identifying bottlenecks in process more obvious.

Process Management

· Activity identification

· A comprehensive activity list will be used in identifying specific activity attributes, to include predecessors, successors, logical relationships, level of effort (LOE), resources required, and list project milestones. (PMBOK, 2013, p.153)

· Activity sequencing

· The method used for activity sequencing will be by precedence diagramming to logically relate activities as predecessors or successors. Specifically a start to finish (SF) logical relationship.

· Estimating resources

· The expert judgement of personnel from each department section in a Bottom-Up estimating at the work package level.

· Estimating effort and duration

· The tools and techniques for estimating activity effort and activity duration will be based on the expert judgement of personnel from each department section, to determine duration in days and what the level of difficulty an activity requires, example, Administrative personnel, will estimate how many days will be needed to have the computers up and running for shipping and receiving. We will also apply analogous estimates based on similar past activities to determine schedule durations.

Schedule Reduction

One option to reduce schedule time by fast tracking would major deliverables 2 and 3, relating to facility layout and facility readiness respectively, to be worked by an outsourced firm. The plan for this outsourcing is to set up an agreement with an architectural firm that if familiar with the scope and type of project such as moving a modern production line. The firm chosen is JK and Associates Architects, (JKAA) due to their expertise and track record in this specialty. See exhibit 3 in the appendix for a copy of the contract to be signed by JKAA and SMS Lab. This is one example of how outsourcing on this project would be developed. More in depth discussion of outsourcing can be found in the Outsourced Services section.

Several techniques for schedule compression should be considered. Those activities along the critical path will impact the target deadline and so only those will be initially considered for diversion of funds from the contingency reserves in the case of crashing or fast tracking a critical path activity.

The network may be reduced by creating the following start-to-start lags recommendations and thereby increasing the time buffer in case of unexpected delays, it is important to note that the lags do not affect the cost baseline, therefore it is the most cost effective method of reducing the duration of the project (Larson & Gray, 2014, p.319). The following lags could be applied:

· The risk assessment team could begin 1 day after the start for the potential locations and completed one day after al the potential locations have been vetted.

· The outlining of the build positions, outlining of the equipment layout, flow map for the build processes, and development of office blueprints could begin 1 day after the new location for the production facility is chosen.

· The office equipment and office personnel could begin on the same day.

Furthermore crashing all weekend activities along the critical path may be prudent to mitigate risks of delays and absorb the time gained (Larson & Gray, 2014). The weekends will be crashed utilizing rotating personnel shifts who will be receiving overtime at their respective overtime rates, covered by the contingency reserve. The recommendations will have the impact by reducing the project to completion within 33 days. It is important to note that this is a time-constrained project and the the crashing and introduced lags also will increase the risk of delays along the critical path; it is for this reason that the strategic decision of crashing activities early in the schedule will act as a time buffer in case needed. Exhibit 11 contains the crashed schedule.

Rules for Performance Measurement

The primary objective of performance management is to assist the project team develop a clearer understanding of how processes of decision making or procedures contributed to either a failure of a success in the past or the best ways in which a possible improvement can be key for future improvements (Taticchi, 2010).

Earned value management by percent complete will be applied and cost control accounts will measure performance after every major deliverable on the WBS. The cost baseline will compare against actual costs and variance will be measured. If there is any exceedance of the control threshold, a contingency reserve will be utilized to compress the schedule. (PMBOK, 2013, p.206) Project costs will not exceed $1.2 million and the production line will be relocated at capacity in 42 calendar days in accordance with the project scope (PMBOK, 2013, p.302)

Cost Reporting and Format

The project team fully acknowledges that through the use of project cost reporting they will develop clearer capabilities. Having project centered budgets, clearer planned costs, or even the actual costs for the project will assist on project progress updates.

The following will be used in defining the analysis of the project:

· fiscal year

· fiscal period of the project

· the object of accounting

· type of value

· element of the cost

The project team will then have the privilege of applying each of the individual filters and the key performance indicators (KPI) that are derived from the collected data on the costs.

Project Estimate Bottom-Up and Expert Judgement Approach

The project estimates depend on the rank and file who will be active on the work packages to get an idea of the level of effort and resources involved in both labor hours and costs. The estimates identified major areas of expenditures listed below to complete the project on time and within budget:

· Labor

· Outsourced Services

· Inspections and Permits

· Contingencies

Each WBS will be evaluated and a corresponding budget amount will be attributed. WBS’s will be evaluated under the following constraints:

· Aggregation of costs. (Cumulative total of WBS totals)

· Analysis of the reserves (determined from managers and cost uncertainty will be developed and be considered as part of the overall budget)

· Judgement by the experts (The cost aggregation of the work packages and expert judgement of departmental heads, along with rank and file technicians will determine the cost estimates in a Bottom-Up approach. (PMBOK, 2013, p.211))

· Historical relationships (The expert judgement of personnel in the knowledge areas will be guidance for determining level of effort required per activity, duration and costs)

The following will be the recommended outputs from the process of budget development:

· Requirements for project funding.

· Necessary updates to the documents for the project.

· A proper baseline for the project.

· Baseline that is time-phased.

Updating, monitoring and controlling

The following documents will require updating to help monitor the project status and be subject for review and approval, (PMBOK, 2013, p.216)

· activity cost estimates

· baseline schedule

· baseline costs

· baseline risks

· risk register

· change requests

· change log

A change control panel made up of the project manager and senior management will meet to monitor the expenditure of funds. Any increase to the budget may only be approved through the perform integrated change control process. (PMBOK, 2013, p.99)

In the process, the anticipated key outputs include:

· Updates of the plan.

· Change to the requests, providing the reports on the progress and the status of the project.

· Registering of the risks and any gate decisions associated.

There is an example of the status reporting format in the appendix exhibit 4 . This format addresses earned value(EV) of the project in the form of EV metrics and an explanation and interpretation of the data.

Labor

Labor costs for the project are estimated to be $300,000 for admin staff and $405,000 for production technicians based on admin staff at an hourly rate of $35/hour and production techs at a rate of $25/hour. This will account for $705,000 of the $1.1M budget, or 64% of the budget.

Outsourced Services

· Architectural Plans & Layouts 80,000

· Subcontractors Electrical $60,000

· Subcontractors HVAC $60,000

· Subcontractors IT Communication Network $50,000

· Subcontractors Security System $40,000

· Aircraft Transportation $20,000

· Equipment Transportation $10,000

· Administrative Office Transportation $10,000

Totaling $330,000 or 30% of project costs.

Inspections and Permits

Analogous estimates have provided an estimation of the various costs during the subcontractor stages of the project along with the Inspection and Permit process.

· Deposits 20,000

· Inspections 25,000

· Permits 20,000

· Totaling $65,000 or 6% of project costs.

Contingencies

Extra fund for resolving schedule conflicts through techniques of schedule compression with fast tracking activities and or crashing an activity, will require a fund for mitigating unforeseen issues quickly and keeping the critical path on schedule. Totaling $183,400 or 15% of project costs for overtime labor costs paid at a rate of time and a half, $30/hour average administrative rate and $37/hour for the production line technicians. (Larson & Gray, 2014, p.133)

Earned Value Analysis and Report

At the conclusion of the project the final earned value was calculated based on the final actual budget reports and a 100% completion rate for the project overall. This final report is different from the weekly status reports due to the nature of being at the end of the project. The forecasted earned at completion (EACf) and the percent complete index (PCIC) are not relevant at project completion. They were replaced with estimated time to completion (ETC), used for calculations, and scheduling performance index (SPI). Below is the table of calculated results:

PV	EV	AC	SV	CV	BAC
1100000	1100000	1082900	0	17100	1082900
ETC	VAC	EAC	CPI	PCIB	SPI
0	17100	1082900	1.015791	1.015791	1

The cost performance index (CPI) reflects the under budget condition by being greater than 1. This is seen in the raw data of the actual cost (AC) being less than the planned value (PV) and is also indicated in the percent complete index (PCIB) being greater than 1, (this is only a condition that occurs when the project is complete and under budget). The cost variance (CV) and variance at completion (VAC) show that the project came in under budget by $17,100. The SPI being equal to 1 indicates that the project was completed on schedule. Overall this project was very well managed and was able to meet scheduling demands as well as budget constraints.

Appendix

Exhibit 1. Budget chart

Exhibit 2 Network Diagram

https://drive.google.com/open?id=0ByTM21plWOqsMzdqWjdmXzVIMXM

Exhibit 3 Outsourcing Contract

Architect Contract Between SMS LAB Engineering Inc.

and JK and Associates Architects

This Architect Contract is made effective as of (MMM DD), 2017, by and between SMS LAB Engineering Inc ("SMS LAB") of 321 Clearlake Road, Barstow, California 92327, and JK and Associates Architects ("JKAA") of 68 Mack Road, Santa Maria, California 93455.

DESCRIPTION OF SERVICES. Beginning on (MMM DD), 2017, JKAA will provide to SMS LAB the Architect's services described below and in the attached Exhibit A (collectively, the "Services"). Architect's services shall include all architectural, site planning, and engineering services in connection with the shell and core design for the Project and without limiting the generality of the foregoing, will include the following

Schematic Design Phase: Services provided by the Architect in Schematic Design Phase of the construction include:

a. Reviewing the Project furnished by the Client

b. Ascertaining the requirements of the Project.

Design Development Phase: Services provided by Architect in Design Development Phase of the construction include:

a. Preparing construction documents containing drawings other documents to fix and describe the size, character of the Project as architectural, structural, mechanical, electrical materials and other elements based on approved Schematic Design Phase.

b. Advising Client on preliminary estimate of construction cost.

Construction Documents Phase: Services provided by Architect in Construction Documents Phase of the construction include:

a. Preparing documents drawings setting forth the detailed requirements based on the approved Design Development Documents.

b. Advising Client on construction cost.

c. Helping Client for approval of governmental authorities.

Bidding or Negotiation Phase: Architect, following the Client's approval of the construction documents assist the Client in obtaining bids or negotiated proposals and assist in awarding and preparing contracts for the project.

Construction Phase-Administration of the Construction Contract: Architect shall provide general conditions for construction. Architects service commences with the award of the Contract and terminates at the issuance to the Client, of the final certificate for payment. Architect shall not have control over or charge of and shall not be responsible for construction means and methods, techniques, sequences or procedures or for safety precautions and programs in connection with work, since they are contractor's responsibility. Architect can inspect and reject work if not compiled with project.

ADDITIONAL SERVICES. Architect shall provide additional services in connection with the planning and design of the project. Project representation beyond basic services, selecting project representatives, evaluating substitution by contractor, providing serviced due to changes in project, revision of documents with the approval of Client.

PAYMENT. Payment shall be made to SMS LAB Engineering Inc., 321 Terminal Road, Aerial Acres, California 93523. SMS LAB agrees to pay the sum of $80,000.00 as follows:

Event Payment Amount

Major Deliverable #2 $40,000.00

Major Deliverable #3 $40,000.00

In addition to any other right or remedy provided by law, if SMS LAB fails to pay for the Services when due, JKAA has the option to treat such failure to pay as a material breach of this Contract, and may cancel this Contract and/or seek legal remedies.

COMPENSATION FOR ADDITIONAL SERVICES. In addition to the payments made to the Architect, Client shall pay Architect for any additional services provided by the Architect.

CLIENT'S RESPONSIBILITIES. Client shall provide full information regarding requirements for the project. Client shall establish and update overall budget. Client shall furnish legal requirements for the construction.

TERM. This Contract will terminate automatically upon completion by JKAA of the Services required by this Contract.

WORK PRODUCT OWNERSHIP. Any copyrightable works, ideas, discoveries, inventions, patents, products, or other information (collectively the "Work Product") developed in whole or in part by JKAA in connection with the Services will be the exclusive property of SMS LAB. Upon request, JKAA will execute all documents necessary to confirm or perfect the exclusive ownership of SMS LAB to the Work Product.

CONFIDENTIALITY. JKAA, and its employees, agents, or representatives will not at any time or in any manner, either directly or indirectly, use for the personal benefit of JKAA, or divulge, disclose, or communicate in any manner, any information that is proprietary to SMS LAB. JKAA and its employees, agents, and representatives will protect such information and treat it as strictly confidential. This provision will continue to be effective after the termination of this Contract.

Upon termination of this Contract, JKAA will return to SMS LAB all records, notes, documentation and other items that were used, created, or controlled by JKAA during the term of this Contract.

INDEMNIFICATION. JKAA agrees to indemnify and hold SMS LAB harmless from all claims, losses, expenses, fees including attorney fees, costs, and judgments that may be asserted against SMS LAB that result from the acts or omissions of JKAA and/or JKAA's employees, agents, or representatives.

NO MECHANIC'S LIEN. Architect shall not permit or suffer any mechanic's lien filed by any subcontractor, Consultant, laborer, or material vendor of Architect to remain upon the premises of Client, provided such lien arises from the execution of work included in this contract. Upon final payment due under this Contract, Architect agrees, for himself and his Consultants and subcontractors, that it will furnish to Client, upon request, such certificate or certificates as Client may require or desire, to the effect that no mechanic's liens or claims of Architect or its Consultants and subcontractors have arisen or are outstanding with respect to the Work and that there is, to the best of the Architect's knowledge, information, and belief, no basis for any future liens to be filed, but that if any such liens or claims are filed, Architect will defend and hold Client harmless against such liens.

WARRANTY. JKAA shall provide its services and meet its obligations under this Contract in a timely and workmanlike manner, using knowledge and recommendations for performing the services which meet generally acceptable standards in JKAA's community and region, and will provide a standard of care equal to, or superior to, care used by architect's similar to JKAA on similar projects.

DEFAULT. The occurrence of any of the following shall constitute a material default under this Contract:

a. The failure to make a required payment when due.

b. The insolvency or bankruptcy of either party.

c. The subjection of any of either party's property to any levy, seizure, general assignment for the benefit of creditors, application or sale for or by any creditor or government agency.

d. The failure to make available or deliver the Services in the time and manner provided for in this Contract.

REMEDIES. In addition to any and all other rights a party may have available according to law, if a party defaults by failing to substantially perform any provision, term or condition of this Contract (including without limitation the failure to make a monetary payment when due), the other party may terminate the Contract by providing written notice to the defaulting party. This notice shall describe with sufficient detail the nature of the default. The party receiving such notice shall have 14 days from the effective date of such notice to cure the default(s). Unless waived by a party providing notice, the failure to cure the default(s) within such time period shall result in the automatic termination of this Contract.

FORCE MAJEURE. If performance of this Contract or any obligation under this Contract is prevented, restricted, or interfered with by causes beyond either party's reasonable control ("Force Majeure"), and if the party unable to carry out its obligations gives the other party prompt written notice of such event, then the obligations of the party invoking this provision shall be suspended to the extent necessary by such event. The term Force Majeure shall include, without limitation, acts of God, fire, explosion, vandalism, storm or other similar occurrence, orders or acts of military or civil authority, or by national emergencies, insurrections, riots, or wars, or strikes, lock-outs, work stoppages. The excused party shall use reasonable efforts under the circumstances to avoid or remove such causes of non-performance and shall proceed to perform with reasonable dispatch whenever such causes are removed or ceased. An act or omission shall be deemed within the reasonable control of a party if committed, omitted, or caused by such party, or its employees, officers, agents, or affiliates.

ARBITRATION. Any controversies or disputes arising out of or relating to this Contract shall be resolved by binding arbitration in accordance with the then-current Commercial Arbitration Rules of the American Arbitration Association. The parties shall select a mutually acceptable arbitrator knowledgeable about issues relating to the subject matter of this Contract. In the event the parties are unable to agree to such a selection, each party will select an arbitrator and the two arbitrators in turn shall select a third arbitrator, all three of whom shall preside jointly over the matter. The arbitration shall take place at a location that is reasonably centrally located between the parties, or otherwise mutually agreed upon by the parties. All documents, materials, and information in the possession of each party that are in any way relevant to the dispute shall be made available to the other party for review and copying no later than 30 days after the notice of arbitration is served. The arbitrator(s) shall not have the authority to modify any provision of this Contract or to award punitive damages. The arbitrator(s) shall have the power to issue mandatory orders and restraint orders in connection with the arbitration. The decision rendered by the arbitrator(s) shall be final and binding on the parties, and judgment may be entered in conformity with the decision in any court having jurisdiction. The agreement to arbitration shall be specifically enforceable under the prevailing arbitration law. During the continuance of any arbitration proceeding, the parties shall continue to perform their respective obligations under this Contract.

ENTIRE AGREEMENT. This Contract contains the entire agreement of the parties, and there are no other promises or conditions in any other agreement whether oral or written concerning the subject matter of this Contract. This Contract supersedes any prior written or oral agreements between the parties.

SEVERABILITY. If any provision of this Contract will be held to be invalid or unenforceable for any reason, the remaining provisions will continue to be valid and enforceable. If a court finds that any provision of this Contract is invalid or unenforceable, but that by limiting such provision it would become valid and enforceable, then such provision will be deemed to be written, construed, and enforced as so limited.

AMENDMENT. This Contract may be modified or amended in writing, if the writing is signed by the party obligated under the amendment.

GOVERNING LAW. This Contract shall be construed in accordance with the laws of the State of California.

NOTICE. Any notice or communication required or permitted under this Contract shall be sufficiently given if delivered in person or by certified mail, return receipt requested, to the address set forth in the opening paragraph or to such other address as one party may have furnished to the other in writing.

WAIVER OF CONTRACTUAL RIGHT. The failure of either party to enforce any provision of this Contract shall not be construed as a waiver or limitation of that party's right to subsequently enforce and compel strict compliance with every provision of this Contract.

ASSIGNMENT. Neither party may assign or transfer this Contract without the prior written consent of the non-assigning party, which approval shall not be unreasonably withheld.

SIGNATORIES. This Agreement shall be signed on behalf of SMS LAB by SMS LAB Engineering Inc. Director, Director and on behalf of JKAA by JK and Associates Contract Manager, Manager and effective as of the date first above written.

Client:

SMS LAB Engineering Inc

By: ________________________________________

SMS LAB Engineering Inc. Director

Architect:

JK and Associates Architects

By: ________________________________________

JK and Associates Contract Manager

ID	Task	Completed? Yes/No
Operations
1	Is all of the equipment in the new facility functioning properly
2	Are there any tools/materials not unpacked or forgotten about
Management
3	Are all vendors/contractors work complete
4	Are all vendors/contractors paid
5	Have all customers been informed about the completion of the move
Facilities
6	Is the landlord satisfied with the condition of the old facility
7	Is there any material left in the old facility