Ruger had a midstream oil and gas project that was in development. His colleague indicated he should get a data-base contingency assessment completed as required by his company’s stage-process. Having a relationship with the company but not with me, Ruger was referred to MS Consulting.
After trying my parametric contingency assessment approach, he said he will never do anything different. Here is why.
- It was easy, it took less 5 hours of his project’s team time.
- It was fast, from making his first call to getting his recommend contingency value and draft report was about a week.
- It was data-based and accurate. When he took these numbers for approval, there were no questions asked.
The data-based results were not what was hoping for. Data indicated he needed 18% cost contingency and 17 weeks of recommended float. This was a far cry from what the design consultant was saying who promised a class III estimate. Ug! He didn’t think his project was that high of risk and it turns out it was. While he wasn’t thrilled with the risk of his project, the report gave him specific things to work on during the next stage of project development to reduce its over all risk.
Actual 1st Assessment cost forecast ($ removed)
Actual schedule forecast – no where near a class III estimate!
Naturally, the project had some commercial hiccups (as they all do) and he was given more time to develop the project. With a skeleton team, Ruger spent that time running down the action-item suggestions in the contingency report.
Given the “bargain” cost of each parametric contingency assessment, Ruger scheduled a second assessment. A week later and Ruger has the results of his efforts.
1st vs 2nd cost contingency assessments – a huge improvement
1st & 2nd schedule contingency assessments: game changer!
Ruger did and was able to cut his contingency in half and decrease his schedule variance by 75%.
He walked away looking like a superstar.