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Evolution of the Owner’s Role in Program Management – Activity: Budget (#8 in the series Evolution of the Owner’s Role in Program Management)
By Robert Prieto

Traditional Owner Role:

Budget requests including anticipated cash disbursements are prepared by the Program Level Executive and approved for Board Level submission by the “C”-Level Executive. Owner’s staff leads budget preparation in consideration of risk assessments performed.

Budget performance is tracked by the Owner’s staff at varying levels of detail. Such tracking is traditionally against individual projects or project phases and consolidated on a program basis.

Owner Role Under Program Management:

Budget request processes are fundamentally unchanged but build upon more robust and comprehensive risk assessments led by the Program Manager. Budget requests by the Program Manager are independently reviewed by the Owner’s staff as opposed to being developed by the Owner’s staff under more traditional approaches.

Overall budget performance assessment remains with the Owner organization with the Program Manager taking on a large portion of the day to day management and oversight of budget related performance consistent with those activities and program elements under his purview. Owner’s efforts related to activities managed by the Program Manager will require strengthened audit capability and assessment of programmatic trend analyses to be prepared by the Program Manager (examples include labor forecasts, material price forecasts and trends)

Program Manager’s Role Under Program Management:

Program Manager provides robust and comprehensive risk assessments; prepares budget requests that are independently reviewed by the Owner’s staff, budget performance assessment for activities under the Program Manager’s purview, audit of invoices and other expenditures of costs incurred, and augmented forecasting activities when compared to project based approaches.

Robert Prieto, Senior Vice President

Robert Prieto is senior vice president for Fluor, where he leads strategy for Fluor’s Industrial and Infrastructure group. Mr. Prieto focuses on the development and delivery of large, complex projects worldwide.

Prior to joining Fluor, Bob served as chairman of Parsons Brinckerhoff Inc. As head of PB’s board of directors, he was responsible for overseeing management performance, establishing top-level policies, and ensuring the firm’s continued long term success.

He is a member of the executive committee of the National Center for Asia-Pacific Economic Cooperation, a member of the board of directors of the Business Council on International Understanding, a member of the board of the Civil Engineering Forum for Innovation, and co-founder and member of the board of the Disaster Resource Network. He currently serves on the National Research Council’s committee framing the challenges on Critical Infrastructure Systems. Until 2006 he served as one of three U.S. presidential appointees to the Asia Pacific Economic Cooperation (APEC) Business Advisory Council (ABAC) and served as chairman of the Engineering and Construction Governors of The World Economic Forum and co-chair of the infrastructure task force formed after September 11th by the New York City Chamber of Commerce. He is also a member of the board of trustees of Polytechnic University of New York, and was previously selected as alumni of the year by its New York Chapter.

He has had an executive sponsorship role in the World Trade Center Transportation Hub; West Coast Rail Modernization; Train Protection and Warning System; Level 3 Communications Long Haul Network and Superconducting Super Collider.

Prieto holds a master of science in nuclear engineering from Polytechnic University of New York and a bachelor of science in nuclear engineering from New York University.

Fluor Corporation (NYSE: FLR) provides services on a global basis in the fields of engineering, procurement, construction, operations, maintenance and project management. Headquartered in Irving, Texas, Fluor is a FORTUNE 500 company with revenues of $14.1 billion in 2006. For more information, visit www.fluor.com.

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