3.1. Unexpected Obstacle
Scenario Continuation
After submitting your Monte Carlo analysis, the General Manager compiled all the project documents you created so far and packaged them into a full CapEx proposal for corporate leadership. Known for being highly risk-averse when it comes to schedule delays, he pushed for contingency funding at the P90 level to ensure the project stayed on track.
Five days later - right on schedule - the response came back: the project was officially approved with the contingency funding in place. Total project budget assigned includes both the estimated cost from your Cost Baseline Diagram and the contingency estimate from your Monte Carlo analysis.
The next day, the Plant Manager sets crews in motion to prep the facility. At the same time, you file the permit applications and schedule inspections with regulatory agencies, keeping the paperwork moving while the paint booth made its way to the site.
A few days pass, and everything seemed to be on track. The funding was secured, the schedule intact, and the path ahead clear - until the team was suddenly faced with an unexpected obstacle:
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Obstacle: Fire Marshal Adds Equipment Requirement
On day 7 of the “Apply for permits, schedule inspections” activity, the fire marshal informs the team during a facility inspection that a new Double Check Detector Assembly (DCDA) is required for backflow prevention of the proposed sprinkler system. This was not previously scoped, and installation must be completed before final approval of the sprinkler permit.
- Estimated cost impact:
- +$8,000 (DCDA, installation materials)
- +$2,000 (installation labor)
- Schedule impact:
- 10 days to order parts
- 5 days to install
The fire marshal informs you of an alternative option: Installing a dry chemical suppression system instead of a sprinkler system. This would be slightly more cost-effective, but parts will take much longer to arrive. Permit fees remain unchanged, as the dry chemical permit costs the same as the sprinkler permit.
- Estimated cost impact:
- +$8,000 (Dry chemical suppression system, installation materials)
- +$1,000 (installation labor)
- Minus the originally budgeted sprinkler installation costs
- Schedule impact:
- 25 days to order parts
- 2 days to install
Actions required:
- Evaluate both options and submit a change request for your selected path
- Reallocate tasks on the Gantt chart to accommodate new dependencies
- Update the cost baseline diagram to account for cost differences
Obstacle: Paint Booth Logistics Delay and Alternative Option
The paint booth vendor notifies you that due to logistics issues, the originally ordered booth will be delayed by an additional 30 days, beyond the original 30-day estimate.
As an alternative, they offer a different model in stock that:
- Can be delivered in 21 days (i.e., 9 days sooner than the original planned delivery date)
- Is $10,000 more expensive
- Slightly more energy efficient
Actions required:
- Evaluate both options and submit a change request for your selected path
- Reallocate tasks on the Gantt chart to accommodate new dependencies
- Update the cost baseline diagram to account for cost differences
Obstacle: SCAQMD Permit Hold – Detailed Building Plans Required
On day 7 of the “Inspect Facility, Apply for Permits” activity, the
South Coast Air Quality Management District (SCAQMD) places your permit
application on hold. Inspectors are requesting detailed building plans
showing the location of the paint booth’s exhaust, to verify it is at least
500 feet from any residential or school property. This requirement was not
flagged in the initial review.
- You call up your preferred civil engineering firm, who gives you a quote of $3,000 for the plans, and guarantees a 7 day turnaround.
- Wendy, your contact at SCAQMD tells you that they can approve the plans in 7 days upon submission.
The contractor in charge of installing the paint booth hears about this - they mention that they have an in-house engineer
who can prepare the drawings at a lower cost, though with a longer turnaround.
- They offer to do the work in-house for $1,500, and guarantee a 21 day turnaround.
- Approval from SCAQMD is still guaranteed in 7 days upon submission.
Actions required:
- Evaluate both options and submit a change request for your selected path
- Reallocate tasks on the Gantt chart to accommodate new dependencies
- Update the cost baseline diagram to account for cost differences