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MLS Group

DIY SOS style project in Bridlington

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Mr Mullin 66, is known to be a very kind and giving man, he cared for his mother who had Alzheimer’s whilst at the same time holding down a full time job. But when he was made redundant, and lost his mother at the same time, he fell into a downward spiral of depression.

The home he had lived in with his parents for over 40 years fell into a state of disrepair and neglect and too embarrassed to invite anyone in, he always met his family members away from the house.

It was when Mr Mullin was taken ill into hospital with kidney trauma that his family found out how bad the property had become. Rich Evans (pictured right), Mr Mullin’s nephew explains:

“My Uncle has always been a very kind and caring man, putting others’ needs before his own, but we had no idea how unhappy he had become, as we were never invited to his home and instead would meet him in other places, so none of us had any idea how bad the conditions had become inside his home.”

“When he went into hospital, my sister and I had to gather some belongings for him and upon entering the house, were shocked with what we found. His back door was broken and wide open, he had no running water and with a huge hole in the roof, the cold and damp had badly affected the entire property.”

“My friend of 30 years, Toby Coldecott (pictured left), is one of the managers at project management firm, MLS Group and he said would visit the house to see the extent of the works needed.”

“Between our family members and some money my Uncle had saved, we have managed to pay for the works to be completed, but knowing the desperate situation we were in, MLS Group said they would take care of the entire project at cost. In all honestly, we couldn’t believe it. Having already shown a number of separate trades people around the house, the job was going to be a nightmare for us to manage and it would cost a fortune, money that neither my Uncle or our family could afford. But MLS Group manages entire projects, including the design, the budget and full construction and they told us not to worry about a thing, they would plan, manage and deliver!”

The MLS Group team has entirely stripped the property out, back to bare bricks and will be replacing the floors, flooring, kitchen, bathroom and fully decorating the two bedroom terrace property.

Mike Lingard Smith, Managing Director of MLS Group says:
“When Toby approached me about his friend, I knew we had to help. Mr Mullin’s situation had spiralled out of control and before he knew it, was living in a poor state, all the while managing to keep his affairs to himself. I just thought, this could happen to anyone, a series of tragic incidents have led to Mr Mullin’s decline and through no fault of his own he had lost his way in life.”

The property will be fully refurbished at the end of February when Mr Mullin will be moving back in. We look forward to showing the finished result.

Partnership with Porcelanosa – global ceramics specialist

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We are delighted to announce our commercial partnership with Porcelanosa, the global bathroom, kitchen and tile supplier.

This means that MLS Group has the ability to take the project off your hands, do the complete interior design package and the fit out, using our dedicated designer at Porcelanosa who works on our projects.

Porcelanosa has also just announced the availability of a new and exciting material which they have developed in-house – KRION™.

This material consists of two-thirds natural minerals combined with a low percentage of high resistance resins which provide its unique characteristics: the absence of pores make it anti-bacterial, hard-wearing, resistant, durable, easy to repair, low maintenance and easy to clean. Due to its zero percent absorption, KRION™ can also be used in sensitive areas such as operating theatres and an array of health facilities.

Mike Lingard Smith, Managing Director of MLS Group says:
“Porcelanosa offers a fantastic product range and we are thrilled to have developed a relationship with them giving us a dedicated designer on our team.”

“Plus KRION™ is a real game changer as it has a one hundred per cent anti-bacterial function which lasts throughout its lifetime, plus it can be moulded into any shape and looks fantastic from a design point of view.”

“I think this is the product our industry has been waiting for and we are delighted to be chosen by Porcelanosa to offer it exclusively to our clients.”

MLS Group revealed as main shirt sponsor of Hull Kingston Rovers

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MLS Group is the brand new main shirt sponsor for Hull Kingston Rovers’ return to the Betfred Super League in 2018 and will feature proudly on the front of the Robins’ home and away shirts next season, as KR returns to the top flight after automatic promotion was secured courtesy of a fifth straight win in the Super 8’s Qualifiers.

MLS Group’s Managing Director, Mike Lingard Smith is a life-long Rovers supporter. The partnership with the Club first began earlier this year when it became the sponsor of the MLS Group Colin Hutton Stand at KCOM Craven Park and has now progressed to become the club’s main shirt sponsor making MLS Group one of the Robins’ most prominent partners.

Mike said: “This is an exciting opportunity to work even more closely with the club during what will be an important season in 2018.”

“We’ve come a long way over these past six months since we first sponsored the Colin Hutton Stand and it’s a testament to the hard work of everybody connected to Hull KR and the kind way they’ve welcomed us into the Rovers family that we wanted to increase our sponsorship so quickly.”

“Although we had already agreed the deal regardless of what competition the team were playing in next year, I couldn’t be more delighted to see Rovers back where they belong in Super League and that increases the potential benefits for us as the main shirt sponsor as well.”

Hull Kingston Rovers CEO Mike Smith added:

“Twelve months ago, Michael and his team had no involvement with the club from a commercial aspect, although he has obviously been a supporter for a long time on the terraces. To go from that position to becoming a major stand sponsor, which in itself put them amongst our most valued and prestigious partners, and then onto being our main shirt sponsor within six months is unprecedented.”

“It really does help to put us in a strong position commercially and I’d like to take this opportunity to thank everybody at MLS Group for their ongoing and ever increasing support.”

Earned Value Management (EVM)

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A simple example of Earned Value Management in action.

The Plan

A team is tasked with planting trees on a new housing development.

– 30 batches of 20 trees (600 trees)
– Budgeted cost per tree £2.90 (£2.50 per small tree / 40 pence for slow release fertiliser)

Total budget = £1740

Day 1

– 70 trees were planted (the team hit a patch with stones that had to be removed before the trees could be planted)
– Total cost was £350 (a special machine was required to remove the stones which cost £147 for the day)

Simple EVM calculation:

– Earned Value = 70 trees planted x £2.90 = £203
– Budgeted Cost = 100 trees planned per day x £2.90 = £290
– Actual Cost = 70 tress planted x £2.90 + £147 for the machine = £350

Think about cost

The team have spent £350, but they should only have spend £203. The CV (Cost Variance) can be calculated as follows; EV-AC (Earned Value – Actual Cost).

The team is over budget and have spent 58% more budget than anticipated. This is the CPI (Cost Performance Index).

Think about schedule

The team are at the end of day 1, but they should only be a three quarters through the day. The SV (Schedule Variance) can be calculated as follows; EV-BC (Earned Value – Budgeted Cost.

The team is late and have only performed 70% of the work planned. This is SPI (Schedule Performance Index).

The consequences

Extending the Actual Cost into the future gives us the end result if we do not modify the performance of the project.

BAC (Budget at Completion) = £1740

EAT (Estimate at Completion) = £3000

Cost over = the difference between the BAC and EAC.

Planned Finish = 6 Days

EAC Finish = 8.57 Days

Project Slippage = the difference between Planned Finish at EAC

– If the team continue at this rate, they will need £3000 (Cost EAC) and 8.57 days (Schedule EAC) to finish the work.
– If the team want to finish on budget, they need to work at 104.3% of the originally planned performance (Planned remaining budget/Actual remaining budget).
– If the team want to finish on time, they need to work at 106% of the originally planned performance (Actual remaining work/Planned remaining work)

Technical Terms

In real life, the elements calculated above have slightly difference names:

– The Actual Cost is usually ACWP (Actual Cost of Works Performed.
– The Planned Cost is usually BCWS (Budgeted Cost of Work Scheduled)
– The Earned Value us usually BCWP (Budgeted Cost of Work Performed)

Summary

Mitigate Risk – Increase Efficiency

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In a world filled with individuals and corporations who have become “lawsuit happy” and very cost focused, it can be extremely challenging to keep up with the complicated and ever-changing legal landscape of the construction industry. The high value and high risk factors which are associated with construction projects, paired with the wide and varied supply chain involved, all increase the probability of both cost and schedule variations not to mention possible legal trouble and other complications.

Therefore, it is essential that property owners, developers and contractors all recognize potential problems before they arise and take measures to legally avoid them. Here we’ll examine four common issues and identify how MLS Group can help you mitigate these risks.

Problem Area #1: Failure to Keep Contracts Consistent

Interestingly enough, written contracts are not actually legally required between owners and contractors. In spite of this, a written contract is nearly always executed between these two parties to establish a payment agreement, scope of work, and establish liability. Most general contractors will need to enlist the help of subcontractors for trade-specific projects such as electrical packages, plumbing, fire safety features, etc. All too often, an agreement is reached between contractors and subcontractors that is not consistent with the written contract established between owners and contractors.

Solution

Thanks to MLS Groups integrated business model, we work within our own supply chain and partners to deliver full projects under existing framework agreements. This ensures standardisation throughout the entire supply chain and simplifies the project structure and delivery for the client.

Problem Area #2: Failure to Document Project Changes

It is very rare for a construction project to make it from start to completion without requiring any changes be made to the original plan. No matter how well contractors, subcontractors, and owners work together, a verbal agreement to make changes or adjustments is never enough.

Solution

MLS Group has a change management procedure which require a RFC (Request for Change) Form to be completed and issued for approval. This allows the change to be reviewed and the impact to the schedule and budget assessed before a decision is made. Because of our integrated business model, we are able to quickly asses and advise on the impact due to a streamlined communication plan and stakeholder management.

Problem Area #3: Failure to Document Project Expectations

Throughout initial stages and negotiations, many promises may be made and expectations may be verbally agreed upon. It’s important for all parties to remember that a verbal agreement is not set in stone, and that anything not expressly included in the final written contract is not binding.

Solution

At the start of the project there will always be a ‘project kick off meeting’ where a success criteria is drafted, agreed issued to all stakeholders. The project is then measured against this criteria. Should a RFC be approved the project will be re-baselined subject to an amended success criteria where relevant.

Problem Area #4: Payments Terms & Delay’s

When dealing with multiple contracts, sub-contractors and contractors on a project you will often have varied payment terms. There is on occasion issue’s relating to payment milestone type contracts, work not being complete within budget or to schedule or sometimes administration issues which can lead to late payments and in the extreme, contractors stopping work.

Solution

MLS Group ‘One Team’ approach allows for simplified invoicing for the client. This means the client received one set of terms, one contract and one detailed invoice. Allowing all party’s to stay focused on the successful delivery of the project. It offers better oversight for the client and management team, improved communication and better coordination of activities.

Contract Management

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Before discussing the topic of contract management, I think it is beneficial to briefly cover 3 diffent types of PMOs and their meaning.

Project Management Office – Project Management Offices are typically set up for large projects where they help the project managers in collecting timesheets, collating status reports and financial data, tracking deliverables, coordinating issues and risks etc.

Program Management Office – Program Management Offices are generally setup at project level where there are serval projects running under a program. Program Management Offices support program managers, project managers and project teams. They collate project relevent data from the projects team, ensure process aherence, collating reports from project managers and creating reports for senior executives/project sponsors, identifying projects dependencies and coordination between projects within the program.

Portfolio Management Office – Portfolio Management Offices are generally setup at Business Unit level to ensure the business unit projects are aligned to the overall business objectives. They facilitate business prioritisation of projects. Benefit realisation and value management also form part of the Portfolio Management Office responsibilities. The Portfolio Management Office supports the senior management and business leaders with portfolio management activities.

MLS Group provide complete PMO solutions covering each of these types of PMO and provide a free consultation to help you understand your needs.

In this post, I describe contract management from the project manager’s point of view.

Usually, there are two or more different legal entities or parties involved in the project, normally in customer / contractor or contractor / sub-supplier relationships. These different parties need to sign a contract before starting implementation phase of a project.

In larger projects with a customer / contractor relationship, on the side of the contractor, a proposal team will own the project management process in definition and planning phase until the contract is signed. – A PMO can undertake these responsibilities along with the implementation of the contract. They will manage and take responsibility for the implementation and closure of a contract.

What is a contract?

A contract is any agreement between two or more parties where one party agrees to provide certain deliveries or services, and the other party agrees to pay for those deliveries or services.

How do we get a contract between two parties?

In extreme cases, it just takes an offer by a company and the simple acceptance of that offer by the customer, and we have a contract. Typically, we will see some negotiation going on between the two parties before one of them accepts the last offer of the other party. However, since it is so easy to end up in a legally binding contract situation, the first step, generally the offer by the company has to be prepared very carefully.

Even for smaller projects we usually need more than two parties to contribute. So, another important aspect is, how many different parties we need and how the contractual structure should look like.

What is contract management?

Contract management is a continuous process, starting with analysis and evaluation of the customer’s inquiry, and carrying on until contract closure, upon fulfilment of all contractual obligations.

This process overview indicates that contract management activities seem to belong to the responsibilities of the project manager and the whole project team. In fact, they do; however, in larger projects where we have large contracts it is best practice to involve a full-time contract manager who brings in his professional experience, takes responsibility for that process, and ensures the contribution of all team members.

Contract preparation comprises analysis and evaluation of the other parties’ requirements, a clear statement of our own requirements, and negotiation in order to reach agreement between the involved parties. After signing the contract, upon handover, the team needs to analyse the contract in order to ensure that they understand what has been signed and needs to be implemented. When preparing and signing a contract in definition and planning phase, we anticipate how we want to implement the required project results, and fix this anticipation in our planning documents. This means that all our project planning is based on assumptions on how the project environment will develop over implementation and closure phase. As a simple matter of life, these assumptions can turn out to be wrong: certain conditions can change, or certain events can happen so that changes or deviations of the plans and of the contract become necessary. Thus, it would be helpful to prepare the project plans and the contract in a way so that those necessary changes can be implemented with mutual agreement of all involved parties.

As a first tool for contract management, we integrate a change management process into the contract.

As an essential result of this change management process we only execute a change to the contract upon successful negotiation and mutual agreement of a change order.

Under certain circumstances (e.g. different interpretations of technical, commercial, or other contractual requirements) this mutual agreement cannot be reached, but the execution of a change takes place anyway, in order to be compliant with higher prioritized project requirements or goals. This we call a claim situation, and we need to integrate a claim management process as a second tool for contract management into the contract.

The following picture reflects the general claim management process.

Obviously, claim settlement is the tricky part and needs further explanation.

There are several steps of escalation which we can integrate into the contract as a third tool of contract management. These are the claim settlement or dispute resolution methods.

(1) Negotiation between the two contract parties: In most claim situations, we will be able to settle the case after negotiating with the other party.

(2) Independent expert opinion: The contract parties agree to call a neutral third party for determination of specific contract elements, their interpretation, and an expert opinion on the case.

(3) Executive tribunal or mini-trial: This is a process, sometimes called ‘mini-trial’, in which the parties make formal but abbreviated presentations of their best legal case to a panel of senior executives from each party, usually with a mediator or expert as neutral chairperson. Following the presentations, the executives meet (with or without the mediator or expert) to negotiate a settlement on the basis of what they have heard.

(4) Dispute review board: The dispute review board is a ‘standing’ adjudication panel used in major construction contracts. This board is normally appointed at the beginning of the project and stays in close touch with it, adjudicating disputes as they arise.

(5) Conciliation or mediation: Conciliation and mediation are similar. Conciliation refers to a process in which the third party takes a more activist role in putting forward terms of settlement or any opinion on the case between the two parties. While in mediation, the third party provides support to the parties during their negotiation but does not interfere with the content of the case or its settlement.

(6) Adjudication: In this process a neutral third-party, the adjudicator, makes summary binding decisions on contractual disputes without following the procedures of arbitration.

(7) Arbitration: This is a formal process, agreed by the parties, regularly with three arbitrators who are neutral and independent. They make a final and binding decision as first instance. On average, the process duration is two to three years. It follows the arbitration clauses set by the International Chamber of Commerce (ICC), Paris, and it requires the support of external lawyers.

(8) Court trial: After arbitration as first instance, we usually can go for a formal court trial as second and then third instance.

Steps (1) through (6) are not legally binding, but increasingly difficult to ignore or reject. Due to the duration and formal character, arbitration and court trial are the most expensive ways to settle claims. Therefore, it is worthwhile to discuss carefully with the other party before signing the contract which of the first 6 steps could be integrated into the contract.

The best claim is no claim

This statement seems to be obvious. If possible we follow the change management process for most of the deviations which we cannot avoid. This requires a common understanding of the contract and the underlying project planning between the contract parties. However, as mentioned above, there might still remain some claim situations.

Fundamentals of a successful claim

For a successful claim, the contractual basis is essential.

The second building block consists of the records of events and their analysis in terms of impact.

In order to define the claim strategy the following questions can be helpful:

– What relationship to our contractual partner do we want to keep?
– What are the policies of our other involved or affected business units?
– How does the claim correspond to the project goals?
– How does the claim correspond to our general business goals?
– Who needs to be involved?

My presentation of contract management can only reflect the basics of the matter. For more details you can contact MLS Group directly who can review your needs and provide advice on the most appropriate action.

This blog post was written by MLS Group CEO and Project Consultant Michael Lingard Smith.