2

Identifying and Selecting Projects

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 Chapter Concepts

How projects are identified and selected

A project charter
Outsourcing projects using a request for proposal
The proposal solicitation process

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 Learning Outcomes

Discuss how projects are identified

Explain how projects are prioritized and selected
Identify and describe at least eight elements of a
project charter
Prepare a project charter
Prepare a request for proposal

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the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
 Project Management Knowledge Areas from PMBOK® Guide

Project Integration Management

Project Procurement Management

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the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
 Project Identification
Start of Initiating phase
Recognize need, problem, or
opportunity
Various ways for identification
 Organizations strategic planning
 Response to unexpected events
 Group organized to address a
need
Important to clearly identify need
to determine if worth pursuing
Use decision making process to
prioritize and select project with
greatest need

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the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
 Project Selection
Evaluate needs, costs,
benefits
Determine which are
projects
Select project
 Develop criteria
 List assumptions
 Gather data
 Evaluate each opportunity

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 PROJECT SELECTION

Develop criteria
 They can be quantitative and qualitative, tangible and
intangible
 QUANTITATIVE could be financial, such as an increase in
sale or a reduction in cost.
 There are also intangible benefits associated with a
project, such as the improving the company’s public image
or employee moral.

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 Develop criteria

For example :
 If a pharmaceutical company has identified several
potential projects to develop new products, it might
evaluate each potential project against the following
criteria:
 Anticipated sale volume
 Increase in market share
 Establishment of new product
 Competitors reactions
 Risks
 Regularly approval etc…

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the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
 List assumptions

For example
 If one project is to build an on site day care center for
children and elderly relatives of company employees , one
assumption might be that the company would be able to a
bank loan to build such a center.

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the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
 Project Charter

Purpose Possible Elements

Provides sponsor approval Project title Milestone
Purpose schedule
Commits funding for the Description Key assumptions
project Objective Constraints
Success criteria Major risks
Summarizes key conditions or expected Approval
and parameters benefits requirements
Funding Project manager
Establishes framework to Major Reporting
develop baseline plan deliverables requirements
Acceptance Sponsor designee
criteria Approval
signature

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the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
 Project charter

Project title
 Should be concise and create a vision for the end result of
the project
 For example
 Customer relationship management system
 Install wind farm to support energy needs of bioprocessing facility
in Europe.

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the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
 Purpose

Summarize the needs and justification for the project

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the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
 Preparing a Request for Proposal

Decision made to outsource to external resource

Comprehensively describe project requirements
 Includes need, problem, or opportunity description
 Allows contractors to develop a thorough proposal
 Facilitates the development of evaluation criteria
May be communicated informally or formally, in
writing or verbally

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 Description

It may include the description of major tasks or work

elements…
For example
 For a project to develop and launch new food product the
major work elements may be Concept development,
feasibility assesments , ingredient selection, prototype
development

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 Objective

Is a statement of what is expected to be

accomplished. The end product or deliverable. The
expected completion time,
Example
 An objective might be to launch a new website in eight
months for an amount not to exceed $100,000

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 Success criteria or expected benefits

Indicates the outcomes or expected benefits that will

result from implementation of the project
For example
 Reducing the waiting time for patients in the emergency
room by 40 percent

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 Guidelines for Developing an RFP
State project objective or purpose State type of contract
Provide a statement of work State payment terms
Include customer requirements State schedule and key
State deliverables the customer milestones
expects List format and content
State acceptance criteria instructions
List customer supplied items Indicate due date
State approvals required Include evaluation criteria
Include level of effort or funds
available

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 Funding

Indicates total amount of funds the sponsor

authorizes for the project.

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 Major deliverables

Are the major end products or items that are

expected to be produced during and at the
completion of the performance of the project
For example
 Concept sketches for a new zoo
 A website
 An electronic medical records system

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 Acceptance criteria

Describe the quantitative criteria for each major

deliverable that the sponsor will use to verify that
each deliverable meet certain performance
specifications and are the basis for the sponsors
accepting that the deliverable is indeed done
correctly and meets the sponsor expectations.

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 Milestone schedule

Is a list of target dates or times for the achievement

of key events in the project timetable

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 Key assumptions

Include those that the project rationale os

justification is based on such as a new medical device
will receive approval from the regulatory agency

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the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
 Constraints

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 Soliciting Proposals

Solicitation Conditions
Notify potential contractors Requirements are sometimes
 Identify selected group in communicated verbally instead of
advance to send copy via a formal RFP
 Advertise in selected journals, All RFPs start with identification
newspapers, or websites of a need, problem, or
opportunity
Maintain competitive
situation
 Provide equal information to
all bidders
 Hold bidders’ meeting to
answer questions
© 2012 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
 Critical Success Factors
The need must be clearly defined before preparing a request for proposal (RFP).
When selecting a project from among several needs or opportunities, the decision should be
based on which project will provide the greatest overall benefits compared to its costs and
possible consequences.
Having a well-understood evaluation and selection process and a well-rounded committee
will increase the chances of making the best project selection decision.
Establish quantitative project success criteria, or expected benefits.
A good RFP allows contractors to understand what the customer expects so that they can
prepare a thorough proposal that addresses the customer’s needs and requirements.
A request for proposal should include a statement of work, customer requirements, expected
deliverables, and the criteria by which the customer will evaluate proposals.
An RFP should provide instructions for the format and content of contractor proposals so
that the customer will be able to make a consistent and fair comparison and evaluation of all
the proposals.
Customers must be careful not to provide information to only some of the contractors
because it would give these contractors an unfair competitive advantage in preparing their
proposals.

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 Summary
The initiating phase of the project life cycle starts with recognizing a need, problem, or
opportunity for which a project or projects are identified to address the need.
Sometimes organizations identify several or many needs but have limited funds and people
available to pursue potential projects to address all of those needs. In such cases, the
company must go through a decision-making process to prioritize and select those projects
that will result in the greatest overall benefit.
Project selection involves evaluating potential projects and then deciding which should move
forward to be implemented.
Once a project is selected, it is formally authorized using a document referred to as a project
charter, sometimes called a project authorization or project initiation document.
In some cases, an organization does not have the expertise or staff capacity to plan and
perform the project or major portions of the project, and therefore decides to have the
project completed by an external resource (contractor) and prepares and RFP.
Once the RFP has been prepared, the customer solicits proposals by notifying potential
contractors that the RFP is available.
Not all project life cycles include the preparation of a written request for proposal by a
customer and subsequent submittal of proposals from contractors. Some endeavors move
from the initiating phase, where a project is identified and selected, into the planning and
performing phases of the life cycle.
© 2012 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from
the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.