Friday, August 12, 2011

What did you know and when did you know it?

In a recent report, suggested by Glen Alleman, I read this:
We probed into if and when companies utilize Schedule Risk
Assessment (SRA) within their projects. More than one third
of companies indicated they did use SRA when submitting
proposals. This is interesting because there seems to be
no benefit—in fact there could be a major liability—to
publishing schedule risk during the proposal phase. If a
firm were to analyze its own risk and make pricing or bid
decisions based on that analysis, it would be applicable to
the Truth In Negotiations Act (TINA) and could be required
to be submitted with the bid, damaging the firms chance of
winning. As a result, many firms simply forgo this step during
the proposal phase

The picture below illustrates the statistics:


As a former PMO director that had a portfolio of about 20 - 30 defense projects going at any one time, and writing a dozen proposals a year for replenishment, I can say that what you read and see above is more the case than not. For the last forty years, the mantra of "what did you know and when did you know it" informs much process and decision making.

I used to quip: "the test is whether it will look good on the front page of the Washington Post". If not, don't write it down.

Nevertheless, the need for a SRA, as well its cost counterpart, led me to develop my ideas [in the last century, to put a time frame on it] of the project balance sheet. The idea here is a simple one in concept: there is always a tension between the business side and the project side because they come at things differently. The business, being optimistic, under values risk; the project, being conservative, over estimates cost and schedule.

In the proposal stage, the business wants to win, and at the same time the project may wonder if the business can afford to win. More than once, I remarked: "OMG, we won. What do we do now?"


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1 comment:

  1. John,
    Thanks for the mention. At NAVAIR, NASA, DOE EM and NSSA, and several other agencies, it is now mandated that the SRA be submitted with the proposal and the proper schedule and cost margins from that SRA (RISK+ and @Risk for Project provide both) be part of the Management Volume and the "credibility that the program can be executed as proposed."

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