Efficient Mega-Engineering (Part 3): preliminary studies

In my opinion, preliminary studies practically have only one single purpose: to optimize the ratio cost/benefit of the project; by “optimize”, I mean to make this ratio acceptable by the potential project funders; in the case of mega-projects, these funders are the governments. This is a long-term cycle (cycles are anyway the main ingredient of engineering and design) where you will have to find a preliminary design with benefits high enough to justify the cost.

The problem for a mega-project is that, at the beginning, you don’t have a single idea of its cost, even if you already know the main features of the design. Indeed, this kind of project involves new technologies, which are sometimes still in development, has a level of complexity with several layers of subsystems. Without in-depth analysis (which is not possible at the pre-design) you cannot estimate the price. What you have are references: other projects that can be compared with: Apollo, LHD, and so on. You have a feeling (but just a feeling, it is a question of flair) of the size and complexity of your project compared with the others, you have an idea of the benefits expected by your funders and you imagine an acceptable cost, yes you imagine it and you release it and you wait for the feedback. This is the first, long, step of the cycle. In this step, it is necessary to elaborate very good connections with funders and policy-makers because you have to find out what the acceptable cost is and to make the benefits of your projects interesting for the people with money and power; there is here almost no engineering (of course being a talented engineer gives credibility but being a talented politician is even more important).

During this cycle, you will have a feedback on your first figure: it will be negative: too high, of course, for the expected benefits. What you will have to find out is the cost and the benefits which are acceptable. Hard task, because it is influenced by the present and future economic and political situation, by the public perception of the project. Preliminary studies will have here a twofold use:  as a tool for lobbying (you will explore new designs which are more appreciated by the public, you will include technologies that are strongly supported by the industries of the governments you target) and as a tool to decrease the evaluated costs. This second use will mainly take the form of trade-off studies to show the pros and cons of different designs and the impact on the final budget.

This period of lobbying and negotiation, generally spanned on a decade (or more), will end, if succesful, with the opening of official requests for proposals by one or several governmental agencies: this is the sign that they acknowledge the potential interest of the project. And what is interesting in this part is that some money (but not much) starts to flow in the project. The principle is the following: the agency says: “well I have heard about a project with an interesting design, can you make some basic calculations to see if it is realistic and how much it costs, here are some bucks” and you answer “oh ok it does not look too bad (of course, it is your idea)  and in addition we have some background in the topic (of course, since you worked out the idea)”. And you start to formally develop your preliminary design: a clear work breakdown structure, you evaluate cost on each sub project, you develop several different designs so that the agency has the feeling that it will be the one to choose the best design, you prepare a roadmap and you anticipate the necessary spinoffs expected during the development of the project so that the agency has short-term milestones. To make things a bit more complicated, you are generally in competition with other groups (which try to prove that the project has no value and it would be better to work on their own projects) and the allocated budget is not enough to cover the costs of this phase.

This second cycle is interesting, because you now have a better idea of the cost expected by the funders but you also start to have a better idea of the REAL cost of the project. Indeed, in this preliminary studies, your team will start to dig in the different components to assess the cost of their development and you will be able to start to use economical models to obtain a realistic figure. And at this point you will realize that the real cost is far beyond the expected cost.

And what you  do now, will have an impact on the whole lifetime of the project, it will explain all its delays and even its failure. What you  do, after you have considered the gap between real and expected cost, is to ask your team to trim the design. By doing that, you will be sure that your project will have delays and flaws (thus extra costs) because the design you will propose in the end does not correspond to the one necessary to achieve the objectives. What is hidden behind “design trimming”, is something that most engineers do not understand: they have worked out a design, its cost and now the project manager comes and says: make a new design and less expensive. The art of trimming a design would need an entire post to be described (I will do that later); I (and a lot of my colleagues) have always thought it was an offence to the job of engineer and a sign of bad project management. I realize now (but I am not still completely sure) that it is a normal part of the project life and that it is not avoidable.  If you want your project to start, you have to accept a degraded design with an acceptable cost. The difference between a good and a bad project manager is the way you trim your design.

So, at the end of this second cycle, you have a design (good or not) and an acceptable price to pay. Now the project can start.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: