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Document Code No.: CON 7-9-3 (AEP)
Department/Issuing Agency: DES / FBOD / Procurement and Contract Services
Effective Date: March 1, 2014
Approved: /s/ Dow Constantine
Type of Action: Supersedes CON 7-9-2 (AEP), May 25, 2009

Signed document (PDF, 349KB)



1.0           SUBJECT TITLE:      Capital Project and Contract Planning and Management

1.1       EFFECTIVE DATE: 10 days after approval

1.2       TYPE OF ACTION: Supersedes CON 7-9-2 (AEP) “Capital Project and Contract Planning Management” dated May 25, 2009

1.3       KEY WORDS: Capital Projects, Contract Planning Management

2.0       PURPOSE:     To establish policies governing key elements of the CAPITAL PROJECT and CONTRACT planning and management process to enhance overall CAPITAL PROJECT delivery effectiveness. This policy applies to professional, architectural/engineering (A/E), and construction contracts.

3.0       ORGANIZATIONS AFFECTED:    All Executive Departments, Offices and Agencies.

4.0       REFERENCES:

4.1       CON 7-5-2 (AEP) Contract Closeout.

4.2       CON 7-7-2 (AEP) Procurement for Capital Projects.

4.3       CON 7-8-2 (AEP) Change Order/ Amendment Administration.

4.4       CON 7-10-2 (AEP) Project Control Officer.

4.5       CON 7-13-1 (AEP) “Introduction to Construction Management Policies and Procedures.”

4.6       CON 7-14-1(AEP) Design Management.

4.7       CON 7-18 (AEP) Review of Design and Construction Contract Management Practices.

5.0       DEFINITIONS:

5.1       See CON 7-13-1 (AEP) Appendix A “P&P Defined Terminology. All words that appear in CAPS are defined terms that are found in the Defined Terminology Appendix.

6.0       POLICIES:    

CAPITAL PROJECT PLANNING AND MANAGEMENT

6.1       All CAPITAL PROJECTS shall include an initial planning process to develop the CAPITAL PROJECT SCOPE. This should include an analysis of organizational needs, stakeholder input, consideration of constraints, and the definition of general project requirements. The level of detail for this planning process should be based on the size and complexity of the CAPITAL PROJECT.

6.2       Implementing Agency (IA) shall develop a PROJECT MANAGEMENT PLAN for each CAPITAL PROJECT. Guidelines for development of the PROJECT MANAGEMENT PLAN and elements to be included shall be documented in the IA’s Project Management Manual.

6.3       All CAPITAL PROJECTS shall have appropriated budgets prior to the beginning of the PLANNING PHASE for a CAPITAL PROJECT. IA shall include adequate contingency amounts during budget formation. The PROJECT MANAGER is responsible for monitoring and controlling PROJECT COSTS to ensure that costs do not exceed appropriated amounts, are in accordance with applicable policies and procedures, and are properly substantiated by IA DOCUMENTATION.

6.4       All CAPITAL PROJECTS shall have a PROJECT schedule. The PROJECT MANAGER is responsible for developing, reviewing and managing the CAPITAL PROJECT schedule from the PLANNING PHASE through FINAL DESIGN, IMPLEMENTATION and PROJECT CLOSEOUT PHASE to ensure that the CAPITAL PROJECT is completed in the time required to meet the needs of the end users.

6.5       Each IA shall have a standardized process for planning, identifying, analyzing, and developing a RISK REGISTER to understand and respond to potential CAPITAL PROJECT risks when implementing CAPITAL PROJECTS. This process shall be documented in the IA’s Project Management Manual.

6.6       All CAPITAL PROJECTS shall have and use an established document management system to ensure that project information is organized and readily accessible. 

6.7       Each IA shall establish regular management reporting to provide the status of each CAPITAL PROJECT and the capital program as a whole. The IA shall provide regular reports to the Implementing Agency Director (IAD) or designee to ensure that management is adequately informed about the status of all CAPITAL PROJECTS.

CAPITAL CONTRACT PLANNING AND MANAGEMENT

6.8       All CAPITAL PROJECT CONTRACTS shall have the necessary APPROPORIATION prior to CONTRACT execution. IA shall include adequate contract contingency amounts during budget formation. The PROJECT REPRESENTATIVE is responsible for monitoring and controlling CONTRACT costs to ensure that costs do not exceed CONTRACT amount as amended, are in accordance with applicable policies and procedures, and are properly substantiated by IA DOCUMENTATION.

6.9       All CAPITAL PROJECT CONTRACTS shall have a CONTRACT schedule. The PROJECT REPRESENTATIVE is responsible for reviewing and monitoring CONTRACT schedules from CONTRACT execution through CONTRACT CLOSEOUT to ensure that the CONTRACT is completed as planned and in the time required to meet the needs of the end users.

6.10     The PROJECT REPRESENTATIVE is responsible for ensuring that CONTRACTOR and/or CONSULTANT work performed is within the contracted SCOPE OF WORK. Any work outside the SCOPE OF WORK must be procured separately or have an approved PROCUREMENT WAIVER for emergencies as defined in KCC 2.93.080.

6.11     The PROJECT REPRESENTATIVE is responsible for managing the CONTRACT to ensure compliance with CONTRACT terms and conditions, receipt of deliverables and completion of scope within the CONTRACT price and within the CONTRACT schedule.

6.12     The IA shall conduct a QUALITY CONTROL process throughout the life of the CONTRACT to ensure that CONTRACT results satisfy the needs of the County and end users.  Each IA shall define the QUALITY CONTROL process in their Project Management Manual.

6.13     The County shall pay for all services rendered on a timely basis in accordance with obligations described in the CONTRACT documents and State law.

6.14     The County shall resolve disputes in a timely basis in accordance with the procedures described in the CONTRACT documents.

6.15     On all CONSTRUCTION SERVICES CONTRACTS estimated at $10 million or more, a construction management firm shall be retained, unless, at the written request of the IAD, this requirement is waived in writing by the Executive Audit Committee (EAC) and the Deputy County Executive. The IAD’s request to waive this requirement must be based on the IA’s demonstration that the construction can be effectively managed by County forces, consistent with best industry practices. The construction management firm shall be distinct from the architectural/engineering firm performing engineering services during construction.

            6.15.1  The services which the construction management firm may provide include but are not limited to:

  1. Establish and maintain documentation retention and tracking system;
  2. Review, analyze and provide feedback on all construction schedules, including, but not limited to, schedule changes caused by CHANGE ORDERS;
  3. Provide independent cost estimates for all CHANGE ORDERS;
  4. Assist project staff in the review and negotiation of CHANGE ORDERS;
  5. Perform constructability reviews;
  6. Perform value engineering reviews and/or
  7. Review and recommend approval of progress payment.

7.0       PROCEDURES:

Action By:      Implementing Agency (IA)

7.1       To ensure that CAPITAL PROJECTS are managed consistently and that control requirements are met, IAs PROJECT MANAGER shall develop a written PROJECT MANAGEMENT PLAN for planning, executing, monitoring, and closing each CAPITAL PROJECT in accordance with the IA’s Project Management Manual. Based on the PROJECT’s cost and level of complexity, the level of detail for the PROJECT MANAGEMENT PLAN may vary.

7.2       The minimum information that should be included in the PROJECT MANAGEMENT PLAN includes the following:

7.2.1    PROJECT purpose, objectives, and needs;

7.2.2    Primary users;

7.2.3    General Description of PROJECT;

7.2.4    Detailed description of services and activities to complete the PROJECT, including description of activities to complete the work and the deliverables for each activity;

7.2.5    Detailed written cost ESTIMATE to complete the written SCOPE OF WORK;
  1. At a minimum, the budget should include an ESTIMATE of design cost, construction cost, County labor and administration, and contingency allowance. Based on the PROJECT’s cost and level of complexity, the level of detail for the PROJECT budget may vary.
  2. It is the PROJECT MANAGER’s responsibility to oversee and monitor the PROJECT budget after it has been established by the IA. The PROJECT MANAGER and PROJECT REPRESENTATIVE must ensure that all changes, including CONTRACTS, CONTRACT CHANGE ORDERS/AMENDMENTS, purchase orders, County labor, and miscellaneous charges are within the PROJECT’s budget, in accordance with terms and conditions, and are properly substantiated prior to authorizing them for processing.
  3. The PROJECT MANAGER shall establish and manage contingency levels for each CONTRACT, as well as for the overall PROJECT, in compliance with the IA’s Project Management Manual.

7.2.6    Detailed PROJECT schedule based on design and implementation requirements to complete the SCOPE OF WORK. Based on the PROJECT’s cost and level of complexity, the level of detail for the schedule may vary. Basic scheduling information requirements shall be defined in the IA’s Project Management Manual.

7.2.7    Identification of BASELINE PROJECT targets for design scope, schedule and budget shall be established when there is enough technical information available to allow a reasonable basis for performance measurement. BASELINE PROJECT targets should be established when 30% to 40% of design is complete, depending on the PROJECT.

7.2.8    If the CONSULTANT chosen for final design is not the preliminary design CONSULTANT, the PROJECT MANAGEMENT PLAN shall include a process for reconciling differences, if any, when 30% to 40% design is complete.

7.2.9    A plan establishing cost controls, including, but not limited to (1) identifying a process for managing design changes during the FINAL DESIGN PHASE and maintaining costs within BASELINE construction target; (2) a process requiring the IA’s approval of any design change that may result in exceeding the BASELINE construction target before incorporating into the design, and (3) tracking the drawdown of contingency including risk management cost.

7.2.10  A process for updating scope, schedule, cost and risk at design intervals or milestones.

7.2.11  A plan for cost estimating requirements to include: formats and level of detail required; a reconciliation process to use when BASELINE construction target and design estimates are at variance; and, value engineering or other processes to consider scope revisions to control cost, as applicable to the CAPITAL PROJECT or CONTRACT.

7.2.12  IA’s process for notification to the IA DEPARTMENT DIRECTOR when the BASELINE PROJECT target is at significant risk of being exceeded.

7.2.13  A RISK ASSESSMENT and management process. This process should include the following steps and provide for different types of PROJECTs:

  1. Risk Identification: Determine the potential risks for each CAPITAL PROJECT.
  2. Risk Qualification: Identify those significant risks that need further quantification and action.
  3. Risk Quantification: Analyze and evaluate each risk to assess and quantify the range of potential impacts to the PROJECT, and
  4. Risk Response: Determine action steps to enhance opportunities and reduce threat to PROJECT objectives for significant risks.

7.3       Each IA shall prepare and utilize CAPITAL PROJECT status reports in conformance with the IA’s Project Management Manual.

7.3.1    Depending on the PROJECT COST, schedule, level of complexity, and information needs of IA management, the level of detail for CAPITAL PROJECT status reporting may vary. Basic information that should be included in the CAPITAL PROJECT status report includes;
  1. costs incurred,
  2. budget status (unexpected budget vs. estimated balance to complete),
  3. CHANGE ORDERS/AMENDMENTS,
  4. CAPITAL PROJECT schedule,
  5. contingency, and
  6. Any variances between planned vs. actual CAPITAL PROJECT performance.

7.4       Each IA shall develop and utilize a formal document indexing system to manage and maintain PROJECT information on a consistent basis throughout the CAPITAL PROJECT, and in conformance with the IA’s Project Management Manual. The system should include, but not be limited to:

  1. File index,
  2. PROJECT contact list (key contact, phone #’s, etc.)
  3. Budget and schedule,
  4. PROJECT planning information,
  5. Correspondence,
  6. CONSULTANT CONTRACT and AMENDMENTS,
  7. CONSULTANT invoices,
  8. CONTRACTOR bids,
  9. CONTRACTOR CONTRACT and CHANGE ORDERS,
  10. CONTRACTOR Application for Payment,
  11. Meeting notes/ meeting minutes,
  12. Permits, and
  13. PROJECT closeout.

8.0       RESPONSIBILITIES:

8.1       IAs are responsible for developing a PROJECT MANAGEMENT PLAN for each CAPITAL PROJECT in accordance with these policies and procedures.

8.2       IAs are responsible for planning and managing CAPITAL PROJECTS and CONTRACTS in accordance with these policies and procedures.

9.0       APPENDICES: None