Budgeting Tips for Engineering Project Management
27 November, 2018 | Blog
When preparing proposals, many of you might wonder how much should be budgeted for project management. Here are a few tips.
When it comes to budgeting for engineering project management, the expected amounts can vary from 5% to 15% of the total project fees, which is a rather broad range.
Project management activities can differ from one manager to the next. Also, some client requests can affect the time spent on management, like supervising activities that are carried out by other suppliers or producing more detailed or more frequent management reports.
Here are the basic elements of what should be included in project management. Note that the activities listed, as well as the required effort, are for information purposes only and must always be assessed based on specific project needs:
Note that the time needed to prepare change notices must be estimated in the change notices themselves. Also, when a project is extended, a change notice should be presented to cover the extra management costs this would entail.
Coordination in each discipline and quality reviews should be part of the engineering deliverables. The same is true when preparing site visits and equipment reservations, which should be part of the site visit and not project management. However, coordination for travel as well as car and hotel reservations can be included in project management.
Other activities can be added depending on the mandate:
- Subcontractor management
- Personnel qualification with the client (e.g., for POVs, start-ups, personnel changes, etc.)
- Coordination of required site work training and HSE card validation.
- Travel coordination, particularly for international travel: visa, passport, etc.)
For proposals, feel free to include HSE fees in a separate item and clarify follow-up expectations: monthly reports, client meetings, minutes of meetings, etc. Sometimes, clients do not want project management as a separate budget item, so you have to split it up into each of the work packages.
Finally, for very small projects, the effort required to process files and coordinate with clients must also be estimated in the proposal.
This content is for general information purposes only. All rights reserved ©BBA