Mini Case: "Auditing a Troubled Project at Atlantic States Chemical Laboratories", answer the following three questions: 1. Was this a good use of the audit concept? 2. What was the major problem in this project? 3. In spite of the recommendation, ASCL had already had a "problem project" list and system in place. Why is that you think it may not have caught this particular project? Will the new procedure do any better?

Rectangular Snip 520 CHAPTER 12 / PROJECT AUDITING Project Management in Practice Auditing a Troubled Project at Atlantic States Chemical Laboratories Atlantic States Chemical Laboratories (ASCL) received . There was excessive involvement of the liaison a contract from an entrepreneurial firm, Oretec, to officer in the management of the project, includ conduct a unique type of chemical analysis on special ing frequent changes of direction. alloys they had created in their own laboratories in the . Ongoing project management decisions and interest of identifying potentially successful commer- changes were not documented by ASCL, nor cial alloys. The contract emphasized quality of the effort communicated to the client. and speed of continuing laboratory analyses. The con- 2. Analysis of Client's Criticism (about half of the tract duration would be open-ended, with payment at the monthly rate of $100,000. The liaison officer from criticisms were valid, details described). Oretec would have access to ASCLs laboratory work 3. Further Points of Note: for observation. . The commercialization processes proposed by As work progressed, the liaison officer became more ASCL have, in fact, been successfully used in involved in the project, pressuring the team to alter their similar instances. The client's tests indicating approach and skip the usual repeat-verification proce- their unacceptablety are incorrect. dures in the interest of time. On two occasions, the ASCL . The reports provided by ASCL and criticized by team devised an analysis indicating that a commercially the client as incomplete were redirected by the successful product could be produced. The liaison offi liaison officer to be prepared quickly and cer was gratified with the effort and asked for sugges informally. The reports of project analysis suc- tions on how to produce the product commercially. cess would not have been understandable to the However, tests at Oretec indicated that these approaches client's management, only to technical person- would not work. As the project midpoint passed, the nel or the liaison officer. pressure for more and faster analyses increased even . ASCL management gave insufficient guidance/ more, with the liaison officer becoming more belligerent support to the project leader in his relations with and difficult to please. Soon thereafter, the president of he client ASCL received a letter from Oretec voicing a number of 4. Recommendation: Establish a formal procedure for complaints and terminating the contract effective imme- identifying high-risk projects at the contract stage diately. Puzzled by the unexpected displeasure of their and then monitor them carefully for deviations from client with no indication of trouble on the project from plan. The factors contributing to making this a high- internal sources, the president requested a comprehens risk project were inadequate funding, insufficient sive audit of the project. time, low chance of success, an unsophisticated The audit reported the following: client, and excessive access to ongoing project 1. Overview Points: activities by the client. . The original approach to the project was sound but was altered by the client's liaison officer; Questions: nevertheless, significant findings were still made. 1. Was this a good use of the audit concept? . The analyses themselves were conducted 2. What was the major problem in this project? properly. 3. In spite of the recommendation, ASCL had already There were several analytical successes during had a "problem project" list and system in place. the project (each identified). Why do you think it may not have caught this . Commercialization was not ASCL's responsibil particular project? Will the new procedure do any better? ity but the client's, even if ASCL suggested some possible processes. Source: J. Meredith, consulting project