High PerformanceHelping a federal agency to achieve better capital program performance through improved controls and governance |
Abstract
Analysis of existing internal processes and protocols of a large federal agency’s facility construction program provided opportunities for enhanced internal project controls and increased performance, ultimately resulting in meaningful cost savings for the agency.
The Challenge
A federal agency, responsible for managing the equipment procurement and associated facilities construction of a more than $1.5 billion program, provides funding for hundreds of projects across the U.S. The federal agency is responsible for distributing these funds to dozens of state authorities, contractors, equipment vendors, and system integration consultants. Additionally, the federal agency is also subject to certain reporting mandates and other obligations to enhance its processes to mitigate previously identified Government Accountability Office issues and identify cost savings.
How We Helped
The Capital Projects Consulting team of Deloitte Financial Advisory Services LLP conducted a capital program governance analysis which was focused on nine key control points including project budgeting, invoice review, change order management, cost tracking, and schedule management. The engagement team first analyzed the contractual documents governing the program. Then the team created case studies of completed and on-going projects in a manner designed to better understand the general level of compliance with the contracts, to identify the types of challenges encountered in each project, and to uncover opportunities for improved governance and controls. The team also developed detailed process maps to document processes, facilitate enhanced internal communications, and identify potential process enhancements.
Solution
Our Capital Projects Consulting team identified several areas where process improvements could result in cost savings as well as assisted the agency in utilizing leading industry practices to mitigate known and unknown risks. For example, enhanced invoice review processes often lead to potential savings of up to $10 million in improper payments on projects with approximately $300 million in project costs. Significant savings may also be realized through closer management of contingency and increased use of just in time delivery. Subsequently, the client requested a deeper analysis of master scheduling – a means of gaining visibility of performance across a program and which can serve as an effective tool for project management.
