You have just been hired by a waste management company to starting a solid waste management program in India. The project will be on a build-operate-transfer basis and have a duration of 2 years. At close of the project, the program will be run by local authorities. The project has been sponsored by the World Bank and has been awarded to a large international consortium. Your company has been subcontracted to do this project along with 2 more contractor companies.
After the project scope was finalized, you developed a cost estimate of USD $5.5 million. The sponsor reviews your detailed costing sheets, and is concerned about the total cost figure. He tells you that the maximum allowable budget he can allocate for this project is USD $5 million. What should you do?
Ask for a reduction in scope.
Compress and reestimate the project.
Advise the sponsor that the project cannot be completed within the available budget.
Begin the project with the intention of requesting a budget increase at a later point in time.
The Agency, being Subcontractor, is looking for the huge opportunity of atleat 5Mn USD for this project.
The Sponsor has a Budget Constraint of 5Mn and this Subcontractor has quoted by 10% more than the budget anticipated which is not that big variation.
Therefore, I feel, he should relook into the estimate prepared and explore the possibililty of meeting the budgt constraint and if not, he can advise teh sponsor about stating the facts of its inability to execute on the budget constraint.
Scordo Answer B - Compressing and reestimating the project will provide the most realistic options for reducing the cost of the project. Requesting a change in budget or scope without fully analyzing the options, or simply moving ahead with plans to request additional funds in the future are violations of the PMI Code of Ethics. This code requires project managers to provide accurate, timely, and truthful project information at all times. [Reference - PMBOK 4th Edition, page 168 & PMI Code of Ethics and Professional Conduct, Page 2, 4, 5] [Prof. Responsibility]
bkthakkar
Mon, 04/22/2013 - 08:27
Permalink
The Agency, being
The Agency, being Subcontractor, is looking for the huge opportunity of atleat 5Mn USD for this project.
The Sponsor has a Budget Constraint of 5Mn and this Subcontractor has quoted by 10% more than the budget anticipated which is not that big variation.
Therefore, I feel, he should relook into the estimate prepared and explore the possibililty of meeting the budgt constraint and if not, he can advise teh sponsor about stating the facts of its inability to execute on the budget constraint.
On the given options, i would go for B
crushPMP
Mon, 04/22/2013 - 14:08
Permalink
C?
C?
sspawar
Mon, 04/22/2013 - 14:56
Permalink
DSponsor not telling to
D
Sponsor not telling to revise
project has already been awardrd.
I thnk option D also cover the option C.
y0zh
Mon, 04/22/2013 - 15:55
Permalink
I agree this is some kind of
I agree this is some kind of "Rita's" questions.
Scordo Answer B - Compressing and reestimating the project will provide the most realistic options for reducing the cost of the project. Requesting a change in budget or scope without fully analyzing the options, or simply moving ahead with plans to request additional funds in the future are violations of the PMI Code of Ethics. This code requires project managers to provide accurate, timely, and truthful project information at all times. [Reference - PMBOK 4th Edition, page 168 & PMI Code of Ethics and Professional Conduct, Page 2, 4, 5] [Prof. Responsibility]