PM CS 4 Alex Swenda

PM CS 4 Alex Swenda - greed and overconfidence. The fixed...

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Case Study 4 Alex Swenda MAN-435-OL009: Project Management Mentor: Mark Aglio
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1. Explain the challenge of producing accurate cost estimation when working in harsh geographical conditions. The Dulhasti Power Plant was set out to be built in the rugged environment between the Jammu and Kashmir provinces. The cost estimation was skewed as the bid for contract was under and the actual, realistic cost for completing the project was incredible. The French consortium who originally won the bid, did not consider extra avenues such as underdeveloped infrastructure, disorganized logistics, and the price for creating these items in the build site. Lack of knowledge of the geographical area and impatient planning has caused this project to stutter from the beginning. The cost estimation must be realistic, but also honest when bidding for the project. The negotiation between the French consortium and Indian government seemed to be fueled by
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Unformatted text preview: greed and overconfidence. The fixed cost strategy severely degraded the planning process, and variable cost and expedited costs were not considered. 2. The original bidding process favored the lowest project construction bids using a fixed price contract. What are the advantages and disadvantages to the Indian government when using this type of bidding process? How did it contribute to gross underbids and successive cost escalations? The only clear advantage that the Indian government benefited in thought was the lowest priced bid from the French consortium. Perception led to the small victory when the contract was received at fifty million dollars, but expedited costs such as logistics, security, and navigations of the geographical area has hindered the Dulhasti Power Plant project. The area also is known for battles between Pakistan and India which has caused the upward cost of security....
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This note was uploaded on 03/18/2012 for the course BUS 435 taught by Professor Smith during the Spring '12 term at Thomas Edison State.

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PM CS 4 Alex Swenda - greed and overconfidence. The fixed...

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