Project management issues

The most immediate challenge is completing the ships on time and on budget. The fact that the designs are being modified as the ships are constructed could create a number of problems, particularly in terms of the introduction of untried modifications once work has already started. Delays could also be a problem if there are only two yards building the ships then any delay at either yard could make it difficult to start work on the next ship and so the delays will become cumulative. The contract will undoubtedly contain penalty clauses for delays, but Flote should also monitor progress to ensure that any delays are factored into planning. Flote should aim to work with the shipyard in order to alleviate any delay. It may be possible to agree that a penalty payment will be set aside because a short delay will not be catastrophic or because the shipyard could use the funds more effectively to accelerate progress on the remaining ships.                                                                                                                                                                                                            Major projects like this often fail because of unnecessary changes. Changes could be motivated by the shipyards trying to sell more work or by Flote’s engineers being keen to try something new. Flote should have any proposals to modify or improve the design evaluated by experts in naval architecture or marine engineering to verify that they are likely to add value.                                                                                                                                                                                                    It may be possible to reduce the risks by negotiating a specific adjustment to the contract with the shipyard for each modification. That will give the shipyard an incentive to review the requested change very carefully and to keep the overall cost of making the change within the agreed limits.                                                                                                                                                                                                         The fact that there are two shipyards providing the work means that there could be very little incentive for either yard to share information with the other. Each yard could regard the information obtained from working on its assigned ships to be proprietary. That would lead to Flote losing some of the benefits of the potential improvements to the design. Flote should have its own staff at the shipyards monitoring progress and discussing changes to the design. Those employees can then take the initiative to pass on information to their counterparts at the other yard.

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