ARTICLE IN PRESST. Williams et al. / International Journal of Project Management xxx (2009) xxx–xxx 5moving more <strong>to</strong>wards benefit and value, particularly followingthe introduction of QA1; whereas the UK side isfocused on the business case/value for money. In the Norwaylife-cycle, concept and strategy are chosen very early;the MoD has an even more extended life-cycle with veryearly gateways. For cost and time estimation, the OGCframework is complex, complete and detailed, the MoDframework has a high level approach linked <strong>to</strong> concreteguidelines; the Norwegian approach is more simplistic,with scant reference <strong>to</strong> time-planning. However it is theonly system that carries out full independent cost estimates.3. Four cases3.1. Norway defence case (Skjold)Information about this case came from semi-structuredinterviews, supported by a pre-supplied questionnaire, withsenior personnel involved in the project, and extensivestudy of the project and QA documentation. There is littlein the public domain about the details of how this projectwas operated, but there is a publically available report [19].The Skjold class Fast Patrol Boat (FPB) project encompassesthe construction of a new vessel, weapon systems,personnel training and logistics and support. The projectincludes building a series of six vessels. It is an exampleof a complex defence procurement project. From an overallperspective the Skjold project is currently on budget andschedule. None of the vessels has been delivered <strong>to</strong> theend user, but the construction phase is proceeding asplanned. The complexity of the decision-making process,the technology and the contractual arrangements proveda challenge for quality assurance in this case.Fast Patrol Boats have been a part of the NorwegianNavy strategy for a long time. In the early 1990s a need<strong>to</strong> update current vessels and start planning for the nextgeneration was identified. A pre-series vessel, HNoMSSkjold, was completed in 1999 as a separate project. Theprincipal decision <strong>to</strong> establish the Skjold class FPBs as apart of the Norwegian Navy was resolved in a broad politicalcompromise by the Norwegian Parliament in June2001. The recommendation from the Ministry of Defence,however, was not <strong>to</strong> pursue the Skjold project further. TheChief of Defence had, in the recent Defence Study 2000,concluded that the investment and operating costs of theproposed fleet of FPBs should not be prioritized, consideringother investments and current liabilities of NorwegianDefence.During the planning phase of this project the experienceof updating the previous class of vessels and the developmentand building of a pre-series vessel (the pro<strong>to</strong>type)was important. The result was a unique vessel, incomparable<strong>to</strong> any other. The pre-project documents were subject <strong>to</strong>a Quality Assurance 2 (QA2) in 2002. The QA2 concludedthat the project was well-planned, and prepared <strong>to</strong> go in<strong>to</strong>next phase. In 2003 the Norwegian Parliament finallydecided <strong>to</strong> execute the project. Again the Chief of Defenceappealed <strong>to</strong> Parliament not <strong>to</strong> make this decision but <strong>to</strong>wait for the next long-term plan the following year. Thisdid not happen and execution of the project began. Theprocess described here uncovers some weaknesses in thequality assurance at the time: The basic need for the project was not part of the QAassignment. This was not introduced until 2005, as apart of QA1. No independent cost estimation was done. The analysiswas based only on the project’s own cost data – primarilythe First Target Prize from the supplier consortium. The QA2 report (March 2002) comments that the documentproduced at the time was of good quality up <strong>to</strong> thestage of entering a contract, but was not prepared <strong>to</strong>enter the execution phase. There was no ‘‘Project ControlPlan” or steering document in place at the time ofthe QA2, so this was not controlled. The QA schemewas in its early phase, and practical procedures werenot commonly established until 2003. Due <strong>to</strong> ongoing negotiations, the QA consultants werenot allowed <strong>to</strong> access the suppliers’ personnel. This cutthem off from a prime source of information, and questionsthe whole timing of the QA2.These weaknesses were due <strong>to</strong> the governance frameworkbeing less than mature, and the special situation inwhich a unique, highly complex project was analysedwithin the context of a sensitive Defence sec<strong>to</strong>r. The qualityassurance documented here is representative of the time.The impact of the QA2 was less significant here. No significantchanges <strong>to</strong> cost estimates or schedule were made.The project organisation did not develop any new or speciallyadapted documents. The analysis did not identifyany new risk elements. On the contrary, the findings ofQA2 gave some reassurance that the project was well-formulated,and it is proceeding according <strong>to</strong> plan.The potential impacts were not considered here. Themost important aspect illustrated by this case is that nomatter how strong professional advice may be for, oragainst, a project, and whatever the result of extensiveuse of rational methods, the final decision is a politicalone. This is not altered by QA2 or any other controlinstrument.3.2. UK civil case (2MS)Information about this case came from semi-structuredinterviews, supported by a pre-supplied questionnaire, withsenior personnel involved in the project, and from anextensive review of the case archives held by the client. Inaddition, useful summaries may be found in public documents[20,21].The UK Home Office began a procurement process in1996 after a review of its accommodation concluded thatits existing estate needed <strong>to</strong> be refurbished. In 1998, theHome Office obtained three competing bids, proposingPlease cite this article in press as: Williams T et al.An investigation of governance frameworks for public projects in Norway and the UK. Int J Project Manage (2009),doi:10.1016/j.ijproman.2009.04.001
ARTICLE IN PRESS6 T. Williams et al. / International Journal of Project Management xxx (2009) xxx–xxxthe existing building at 2 Marsham Street (or 2MS) as temporaryaccommodation during the refurbishment. Anne’sGate Property plc (AGP), however, made a developedand costed variant bid for a new building at 2MS, and thisplan was adopted. Two bidders submitted further best andfinal offers. AGP’s bid turned out <strong>to</strong> be the winner. Extensiveprobing of the bid by the Project Team was undertaken,investigating the his<strong>to</strong>ry of the company andprevious similar projects, risk, the detailed resourced programme,and a Quantity Survey-type analysis of the price.The first Gateway Review of the contract was a Gateway 3,in January 2001, during the lead-up <strong>to</strong> placement of contract.This was only about eight months after the foundation of theOGC. The aims of the Review were, briefly, <strong>to</strong> confirm thebusiness case and benefits plan in the light of the final tender,<strong>to</strong> ascertain that the plan should deliver the specified outcomesand value-for-money, and <strong>to</strong> ensure controls were inplace. Outstanding issues were looked at in a SupplementaryGateway 3, with further issues arising later, and leading <strong>to</strong> aFurther Supplementary Gateway 3 in August 2001. At thispoint the Home Office was embarking on a relationship witha bidder who was very experienced and sophisticated. Havingexpert support was beneficial <strong>to</strong> the project.Analysis following advice taken from consultants andcorrespondence with the National Audit Office indicatedthat using the UK Private Finance Initiative would givethe best value. In March 2002, the Home Office signed a29 year contract with AGP for funding demolition, designand construction of the new accommodation on the site,<strong>to</strong>gether with provision of associated services. Because thisis a PFI project, the authors of this paper do not haveaccess <strong>to</strong> detailed time and cost estimates, although noincrease in price has been reported <strong>to</strong> date. However, it isinteresting that a Parliamentary enquiry later identified evidenceof optimism bias, in over-estimating reductions instaff numbers due <strong>to</strong> outsourcing, efficiency gains andchanges in working practices.During the contract, internal governance was managedthrough an ongoing Project Board, which decided whenGateways were <strong>to</strong> be held, and tracked the external governanceprocesses. Key risk areas or issues could be trackedhere, such as uncertainties in the numbers of staff actuallygoing in<strong>to</strong> the building. A Gateway 4 review was held inJanuary 2002, at the request of the Treasury – implyingthat they held a watching brief. This had fifteen specifiedpurposes, including <strong>to</strong> check that the current phase of thecontract was properly completed, that the business casewas still valid and unaffected by events – reflecting someof what a Gateway 0 might be expected <strong>to</strong> investigate –and looking at risks in particular. There was, in fact, morethan one Gateway 4, <strong>to</strong>gether with a separate PFI contractfor information technology provision in the building. However,the governance mechanism appears <strong>to</strong> have been singleproject-based, and the governance of this linked projectwas not clear.External governance operated through the Home OfficeAudit and Assurance Unit, and beyond this, <strong>to</strong> theNational Audit Office (NAO). The NAO came on the scenebetween contract signature and start of construction, andissued a favourable report in July 2003, particularly onthe nature of the PFI contract. The role of the NAO is<strong>to</strong> scrutinise public spending on behalf of Parliament, independentlyof Government, and their report was taken upby the key Parliamentary Accounts Committee (PAC).This Committee met in November 2003 <strong>to</strong> look in<strong>to</strong>value-for-money, including running costs, financing, numbersof staff and refinancing charges. The most senior membersof the Home Office and contrac<strong>to</strong>rs were called <strong>to</strong> giveevidence. The hard-hitting report made recommendationson under-forecasting of staff numbers, identification ofwider business benefits from the move <strong>to</strong> the new building,questioned a specific financing issue, and also posed a questionabout disposal of the existing estate. PAC reports aretaken extremely seriously by the Civil Service. This being avery visible public project, there was also considerableinterest generally within Parliament, and a succession ofParliamentary Questions were asked, some covering fundamentalissues about the project, but many concerningother, more detailed issues, only tangential <strong>to</strong> its success.The building handover was completed on time inJanuary 2005, amid considerable publicity. The HomeOffice then began paying AGP a monthly charge for thebuilding and services amounting <strong>to</strong> £311 million (net presentcost) over the life of the project.3.3. Norway civil case (IFI2)Information about this case came from semi-structuredinterviews, supported by a pre-supplied questionnaire, withsenior personnel involved in the project, and extensivestudy of the project and QA documentation. One publicallyavailable reference is a Statsbygg report [22].The IFI2 project includes the construction of a newbuilding for teaching, research and ICT operations in theDepartment of Informatics at the University of Oslo(UiO). The building’s planned gross area is approximately28,250 m 2 . The current base estimate for the building isNOK 1040 million, and the current <strong>to</strong>tal budget is NOK1080 million, based on 2006 price levels. The need fornew facilities for the UiO Department of Informatics wasexplicitly mentioned in a Government proposition <strong>to</strong> theNorwegian Parliament in 1998. The driving forces werethe Department for Informatics’ expressed needs for morespace, closely aligned with government strategies <strong>to</strong>strengthen research and higher education in ICT. In 1999the Research Council of Norway (NRC) ordered a designproposition for a new building, which was presented in2000. The initial plans included a 10,000 m 2 extension ofan existing building, financed by the Research Council ofNorway. The new facilities were <strong>to</strong> be rented by the Universityof Oslo. In 2001, following discussions on the levelof rent, Parliament decided <strong>to</strong> put the new building on thelist of prioritised state building projects. This meant 100%state funding of the new building and execution by Stats-Please cite this article in press as: Williams T et al.An investigation of governance frameworks for public projects in Norway and the UK. Int J Project Manage (2009),doi:10.1016/j.ijproman.2009.04.001
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3PrefaceThe research presented in t
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5Table of contentsPART 1 ..........
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7Summary/abstractThe work reported
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101 IntroductionProjects are increa
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collection and interpretation of th
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15normative agendas, in other words
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17world of projects. The choice of
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19Figure 3 Sources and dataThe proj
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21In line with Flyvbjerg (2006b), t
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233 Concepts and constructs of thep
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25by most BOKs and textbooks in pro
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274 Main topics covered by the rese
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294.2 Empirical indications from ex
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31Budget proposed by the Norwegian
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3330 %Difference (%) from the propo
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3520 00018 000Cost development from
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37In paper 9 (Magnussen 2009a) an a
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395 Conclusions and directions for
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41estimates must be implemented at
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43Klakegg, Ole Jonny, Terry William
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45List of government documents 11Fi
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47Part 2 - Papers1. Magnussen, Ole
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Paper 1Magnussen, Ole Morten, and K
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AbstractCost overruns and delays ar
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Cost effectiveness considerations:
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demonstrates another fundamental is
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Figure 1 The Extended Quality Assur
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Expected effects of the revised qua
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ReferencesBerg, Peder, Kilde, Halva
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International Journal of Project Ma
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O.M. Magnussen, N.O.E. Olsson / Int
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O.M. Magnussen, N.O.E. Olsson / Int
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O.M. Magnussen, N.O.E. Olsson / Int
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Paper 3Magnussen, Ole M., and Nils
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MANAGING THE FRONT-END OF PROJECTS:
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Olsson, Samset, Austeng and Lädre
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1995; Packendorff, 1995), mainly cr
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to a better way of managing the fro
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Figure 1 Basic structure of the ind
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from empirical investigations has b
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among organizations, not individual
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actors, the relationships are repro
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the network approach has been used
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established based on the views of i
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IHFJKGAELDMBCA - The focal projectB
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the NDEA. The communication strateg
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Directorate for Cultural Heritage (
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the project. The basic activity was
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assumed to be more important than o
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Another interesting observation was
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REFERENCESEngwall, Mats. 2003. No p
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- Page 136 and 137: Norway U.K. (MoD) U.K. (OGC)Charact
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- Page 150 and 151: highly complex and changing decisio
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- Page 192 and 193: ReferencesFlyvbjerg, B., Holm, M.K.