The Operating Cycle

The management cost and control system (MCCS) takes on paramount importance during the operating cycle of the project. The operating cycle is composed of four phases:

• Work authorization and release (phase II)

• Cost data collection and reporting (phase III)

• Reporting: customer and management (phase V)

These four phases, when combined with the planning cycle (phase I), constitute a closed system network that forms the basis for the management cost and control system.

Phase II is considered as work release. After planning is completed and a contract is received, work is authorized via a work description document. The work description, or project work authorization form, is a contract that contains the narrative description, organization, and time frame for each WBS level. This multipurpose form is used to release the contract, authorize planning, record detail description of the work outlined in the work breakdown structure, and release work to the functional departments.

Contract services may require a work description form to release the contract. The contractual work description form sets forth general contractual requirements and authorizes program management to proceed.

Program management may then issue a subdivided work description form to the functional units so that work can begin. The subdivided work description may also be issued through the combined efforts of the project team, and may be revised or amended when either the scope or the time frame changes. The subdivided work description generally is not used for efforts longer than ninety days and must be "tracked" as if a project in itself. This subdivided work description form sets forth contractual requirements and planning guidelines for the applicable performing organizations. The subdivided work description package established during the proposal and updated after negotiations by the program team is incrementally released by program management to the work control centers in manufacturing, engineering, publications, and program management as the authority for release of work orders to the performing organizations. The subdivided work description specifies how contractual requirements are to be accomplished, the functional organizations involved, and their specific responsibilities, and authorizes the expenditure of resources within a particular time frame.

The work control center assigns a work order number to the subdivided work description form, if no additional instructions are required, and releases the document to the performing organizations. If additional instructions are required, the work control center can prepare a more detailed work-release document (shop traveler, tool order, work order release), assign the applicable work order number, and release it to the performing organization.

A work order number is required for all in-house direct and indirect charging. The work order number also serves as a cross-reference number for automatic assignment of the indentured work breakdown structure number to labor and material data records in the computer.

Small companies can avoid this additional paperwork cost by going directly from an awarded contract to a single work order, which may be the only work order needed for the entire contract.

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

Get My Free Ebook


Post a comment