Are Capital Projects Used on a Continuous Basis Vs Limited Life Cycle

Executing Small Capital Projects

RT-161 Topic Summary

RT 161

Overview

Successful small project execution is important as 40-50% of industry capital budgets are spent on small projects. The average CII company plant spends $25 to $30 million on small capital projects.

Small projects, as defined by this research, are projects with a total installed cost range of $100,000 to $2,000,000. Small projects are typically focused on increasing production capacities, improving product quality, improving efficiencies, and maintaining plant functionality for continued operation and production.

Small project success can be achieved by:

Front end planning that incorporates project checklists
Core project teams that can improve schedule and decrease the funding approval cycle
Standard written processes specifically geared to small projects
Maintenance projects that are combined with a small capital projects program
Alliances and preferred supplier agreements

Key Findings and Implementation Tools

1 : Executing Small Projects

This research found 6 items key for executing small projects: (RS161-1, p. 4)

Checklist used in Front End Planning
Teams with core management groups for small projects perform better
Perform concurrent maintenance work along with small project workload
Small project managers have career path opportunities similar to large project managers
Written standard processes improve schedule performance
Alliances or preferred contractor arrangements contribute to better project performance

2 : Large Project Processes Not Effective

Large project delivery processes cannot be scaled down to small projects delivery effectively. Factors that contribute include:

(RR161-11, p. 1)

The compressed project life cycle reduces team effectiveness.
Measures of large project success may not be appropriate.
Small projects are likely to experience "expertise" gaps and not achieve optimal solutions due to smaller number of staff.
Small projects often get placed into low organizational priority or "low visibility" positions. This effects staffing decisions, resource allocation, and the "participation" level of upper management.
Small project documentation processes become excessive or cumbersome if they try to emulate large project processes or inadequate if no formal process is established.

3 : Small Project Characteristics

Small projects are typically characterized by: (RR161-11, p. 2)

Cost of administration as a proportion of the work is much greater than larger projects
Complexity of a typical project (built work environment) is much lower
Short duration (one to three months)
Limited quantities of materials and labor but may be special in nature
Higher uncertainty (unspecified or tentatively specified)
Limited formal documentation
Diversity in size, value and complexity
Occurrence in active environments with require minimal disruption and have high hazard exposure

4 : Same Spend, Different Execution

Small projects are different when compared with large projects for same capital spend, essentially less dedicated resources for multiple small projects as illustrated in Table 2.2.

(RR161-11, p. 9)

5 : Funding and Execution Time Comparisons

Project funding approval and execution time is significantly shorter for small projects versus large projects. Most projects, other than government projects, are executed in 300 days or less. (RR161-11, p. 51)

6 : Project Identification and Funding Differences

Project components; determination of need, selection of design team, procurement, construction and commissioning are developed differently in small project environment. The key difference is the owner's project identification and funding process. Small projects typically compete for funding, with other small projects, while large projects are funded as a singe stand-alone entity. (RR161-11, p. 56)

7 : HSE Still a Key Focus

Health/Safety and Environment risks are the same for both large and small projects.
(RR161-11, p. 26)

8 : Front End Planning Top Execution Priority

The objective of front-end planning is the same regardless of the size of the project: to finalize, fix and communicate project scope. Front end planning is the one single category that generates most small project issues in execution. (IR161-1, p. 1)

Reference: (IR161-1)

9 : Key Success Factors

The top 4 success factors identified in the research survey are nearly identical to the top factors found in literature. (RR161-11, p. 74)

Cost or budget performance
Schedule performance
Functionality
Customer satisfaction/Quality

10 : Specialized Project Checklists for Small Projects

Specialized project checklists are widely used, and effective. Typically viewed as a reminder list of major elements used in planning and executing a project including: (RR161-11, p. 27)

Project Definition checklist (scope of work definition)
Project Definition Rating Index (PDRI), a Construction Industry Institute tool, to rate the level of scope development prior to funding request
Business Case Checklists describing the basic need and priority
Checklist for Engineering & Construction Cost Estimate covering discipline specific (mechanical, electrical, civil, and etc.) site conditions, regulatory issues, and coordination issues
Project Delivery Strategy Guideline that describes scope; environmental, safety and health issues; schedule; design; procurement requirements; resource considerations, construction requirements, communications requirements, startup; commissioning and project close out
Project Initiation Checklist defining all the project details

11 : Implementation Tool #1

IR 161-2, Small Projects Toolkit

This resource contains a wide variety of proven practical tools, and practices organized by project phases. The objective of the toolkit is to provide key differences between small project and large projects practices during each project phases.

Front End Planning
Design
Procurement
Construction
Startup and Commissioning
People
Small Project Organizations
Processes
Small Project Control
Contracting
Safety, Health, and Environment
Technology and information systems

RT-161

Key Performance Indicators

Improved cost, Reduced project growth, Improved schedule, Improved quality, Improved performance/achieved success

Research Publications

Factors Impacting Small Capital Project Execution - RR161-11

Publication Date: 05/2002 Type: Research Report Pages: 182 Status: Reference

Small Project Execution - RS161-1

Publication Date: 11/2001 Type: Research Summary Pages: 14 Status: Tool

Small Projects Toolkit - IR161-2

Publication Date: 07/2001 Type: Implementation Resource Pages: 106 Status: Tool

Manual for Small (Special) Project Management - SP13

Publication Date: 07/1991 Type: Special Publication Pages: 88 Status: Archived Tool

Supporting Resources

Education Materials

Executing Small Projects - Instructor's Guide - EM161-21

Publication Date: 08/2003 Type: Education Module Pages: 0 Status: Supporting Product

Executing Small Projects - Participant Handbook - EM161-21A

Publication Date: 08/2003 Type: Education Module Pages: 0 Status: Supporting Product

Presentations from CII Events

Session - Executing Small Capital Projects

Publication Date: 07/2001 Presenter: Gareth Williams Betchel Number of Slides: 25 Event Code: AC01

Session - Recent Small Project Benchmarking Data

Publication Date: Presenter: Number of Slides: 12 Event Code: PIW406

Session - Small Project Execution Owner Perspective

Publication Date: Presenter: Number of Slides: 13 Event Code: PIW406

Session - SMALL PROJECT EXECUTION

Publication Date: Presenter: Number of Slides: 6 Event Code: PIW406

Session - Small Projects-Contractor

Publication Date: Presenter: Number of Slides: 9 Event Code: PIW406

Session - Small Projects-ACTIVE/ECI Study

Publication Date: Presenter: Number of Slides: 11 Event Code: PIW406

Session - Effective Small Project Execution

Publication Date: Presenter: Number of Slides: 18 Event Code: PIW1009

Keywords

Small Project Execution, Front-end Planning, Project Checklists, Maintenance Projects, Small Project Written Processes, Preferred Supplier Agreements, Program Management, Small Project Organization, Continuous Improvement, Change Management, Project Controls, rt161

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Source: https://www.construction-institute.org/resources/knowledgebase/knowledge-areas/Project-Program-Management/Topics/RT-161