Chunnel Project
Running head: Case Study 3: The Chunnel Project
Case Study 3: The Chunnel Project
University of Maryland University College
Project Procurement Management, Semester Fall 09, Section 9041
Professor Michael C. Hagerman
November 08, 2009
The Inception Stage
Rating Scale: 5—Excellent, 4—Very Good, 3—Good, 2—Poor, 1—Very Poor Project Management Area | Development Phase | Scope Management | 2 | Time Management | 4 | Cost Management | 2 | Quality Management | 3 | Human Resource Management | 5 | Communication Management | 2 | Risk Management | 3 | Procurement Management | 3 | Integration Management | 3 |
Procurement Management Rating Rationale
During the inception phase, the project was marred with project scope challenges. A project that was thought to be profitable turned out to be a large economic feat with large scope changes. Estimates to complete the project initially cost US $5.5 billion. Challenges with initial estimates came about as a result of insufficient time to adequately plan project or cost estimates. This resulted in project cost increase to US$14.9 billion. Eurotunnel entered into a construction contract with Transmanche Link (TML) that included a cost-plus-fixed-fee basis for tunneling, a lump sum for terminals, mechanical and electrical work, and a cost-plus-percentage-fee basis for rolling stock and major equipment. The complex planning process and time constraints of this large privately funded construction project led to errors in resources and risk allocation. These contractual errors increased the cost by an additional US$2.25 billion.
Even though the project members reviewed the initial risks for the tunnel, technical risks were accounted for but the team neglected to give the same in-depth review to the approval processes. Quality suffered due to the differences in each countries specification as was observed with the passenger doors not having the same width of the railway. These issues were resolved but not in a timely
Case Study 3: The Chunnel Project
University of Maryland University College
Project Procurement Management, Semester Fall 09, Section 9041
Professor Michael C. Hagerman
November 08, 2009
The Inception Stage
Rating Scale: 5—Excellent, 4—Very Good, 3—Good, 2—Poor, 1—Very Poor Project Management Area | Development Phase | Scope Management | 2 | Time Management | 4 | Cost Management | 2 | Quality Management | 3 | Human Resource Management | 5 | Communication Management | 2 | Risk Management | 3 | Procurement Management | 3 | Integration Management | 3 |
Procurement Management Rating Rationale
During the inception phase, the project was marred with project scope challenges. A project that was thought to be profitable turned out to be a large economic feat with large scope changes. Estimates to complete the project initially cost US $5.5 billion. Challenges with initial estimates came about as a result of insufficient time to adequately plan project or cost estimates. This resulted in project cost increase to US$14.9 billion. Eurotunnel entered into a construction contract with Transmanche Link (TML) that included a cost-plus-fixed-fee basis for tunneling, a lump sum for terminals, mechanical and electrical work, and a cost-plus-percentage-fee basis for rolling stock and major equipment. The complex planning process and time constraints of this large privately funded construction project led to errors in resources and risk allocation. These contractual errors increased the cost by an additional US$2.25 billion.
Even though the project members reviewed the initial risks for the tunnel, technical risks were accounted for but the team neglected to give the same in-depth review to the approval processes. Quality suffered due to the differences in each countries specification as was observed with the passenger doors not having the same width of the railway. These issues were resolved but not in a timely
References: Anbari, F. T., Giammalvo, P., Jaffe, P., Latavec, C. Rizwan, M., (n.d.). The Chunnel Project. Project Management Institute: Case studies in project management. Chen, Y., & Frame, J. D. (2006). Principles of contracting for project management (2nd ed.). UMT Press Fleming, Q.W. (2003). Project procurement management: Contracting, subcontracting, teaming. Tustin, CA: FMC. Floyd, L. (2004). Application of Appropriate Project Controls Tools for Contract Type. Cost Engineering, 46 (2)25-30, Retrieved October 24, 2009, from http://search.ebscohost.com Gray, F. C., Larson, W.E.,(2008). Project Management: The Managerial Process. (3rd ed.). New York, NY: McGraw-Hill Inc Kerzner, H, (2003). Project management: A systems approach to planning, scheduling and controlling (8th ED). New York, NY: John Wiley & Sons. Project Management Institute (2008). A Guide to the project management body of knowledge (PMBOK Guide) (4th ed.). Newtown Square, PA: PMI.