Tailoring for regulated, public-sector and commercial contexts

Some projects are shaped less by their size than by the rules around them. A regulator may set deadlines and technical standards that cannot be negotiated. Public money brings procurement law, open records and council approvals. A contract with an outside supplier brings two organizations, two sets of interests and often two project managers. Each of these changes how PRINCE2 should be tailored, usually by tightening some controls and making others more formal. This lesson uses Ridgeline Water's lead service line replacement project, which has all three.

The lead service line replacement project

Some older streets in Ridgeline's service area still have lead service lines: the small pipes that connect the water main to a building. Lead can dissolve into drinking water, especially after long periods of stagnation, and there is no known safe level of lead exposure for children. Ridgeline's inventory, built partly from the smart meter installation records, has identified about 2,400 lead or suspected lead service lines. The project will replace them over six years, 6.2 million for the utility-owned portions, with a program to encourage and help owners replace the private side at the same time.

In the United States, the EPA's Lead and Copper Rule Improvements, finalized in 2024, require most water systems to replace lead service lines within about ten years, with compliance beginning in November 2027 and a lead action level of 0.010 mg/L. Ridgeline's state primacy agency enforces the rule, and the utility's council has committed to a faster six-year program.

The executive is the general manager's deputy for operations, Grace Mbeki. The senior user role is shared by the director of water quality, who answers to the regulator, and the manager of customer service, who handles the homeowners. The senior supplier is the director of engineering, whose crews will replace about a third of the lines; the rest go to two contractors selected by public tender.

Regulation as a source of requirements

A regulator is not usually a member of the project board. It does not direct the project and it does not accept the project's products. But its rules shape almost everything. In PRINCE2 terms, regulatory requirements become part of the project product description and the quality criteria, regulatory deadlines become fixed points in the plans with zero time tolerance, and the regulator becomes a key stakeholder in the communication management approach. Project assurance includes someone who understands the regulations and checks compliance independently of the project manager.

A mandatory project still needs a business case. The question it answers changes: not whether to do the project at all, but which way of doing it gives the best value while meeting the obligations. Ridgeline's business case compares three options: replacing utility-side lines only, replacing both sides with owners paying for the private side, and replacing both sides with a utility grant covering half the private cost. The third costs more, but partial replacements can temporarily raise lead levels and leave homes still exposed, so it best meets the health objective. The business case is reviewed at every boundary like any other.

Hold points and stage boundaries

In regulated work, some decisions cannot be made until an outside body has approved something. Those approvals are hold points. Ana Costa's plan places stage boundaries just after the major ones, so that the board commits money only once the approval is in hand. The first delivery stage is a pilot of 120 replacements to prove the methods, the sampling protocol and the homeowner process before the full contracts are let.

total, pilot, years = 2400, 120, 6
per_year_capacity = {"utility crews": 160, "contractor A": 170, "contractor B": 170}
capacity = sum(per_year_capacity.values())
remaining = total - pilot
years_after_pilot = years - 1
needed = remaining / years_after_pilot
print(f"needed per year after the pilot: {needed:.0f}; planned capacity: {capacity}")
print(f"margin: {capacity - needed:+.0f} replacements a year")
done, by_year = pilot, []
for y in range(2, years + 1):
    done = min(total, done + capacity)
    by_year.append((y, done))
print("cumulative:", ", ".join(f"year {y}: {d}" for y, d in by_year))

needed per year after the pilot: 456; planned capacity: 500
margin: +44 replacements a year
cumulative: year 2: 620, year 3: 1120, year 4: 1620, year 5: 2120, year 6: 2400

The plan has a margin of about 24 replacements a year, which is thin. Owner refusals, access problems and winter weather will all eat into it. Because the compliance milestones have zero time tolerance, Ana proposes that the board hold a capacity reserve: an option in contractor B's contract to add a second crew for up to two years. Using the option is a board decision, but having it in the contract means the decision can be made quickly if the margin disappears.

Public-sector rules

Public bodies operate under rules that shape the commercial practice and the communication management approach. Procurement law requires open competition above set thresholds, fair evaluation and records that can withstand challenge. Council or board approvals are needed for contracts and budgets above delegated limits, and their meeting cycles affect the plan. Open records laws mean that board papers, highlight reports and emails can be requested by the public. Tailoring for public-sector projects usually adds time for approvals, formalizes evaluation and decision records, and writes reports on the assumption that they may be published.

Ridgeline's tenders follow the city's procurement code and state public bidding law, plus federal procurement standards where State Revolving Fund money is used. Council approves contract awards above the general manager's delegated authority, and its meeting cycle sets the earliest dates for each award. State public records law can reach any project record.

Customer and supplier: two views of one project

When an external supplier does a large part of the work, there are really two projects: the customer's project, which wants an outcome, and the supplier's project, which wants to deliver its contract profitably. PRINCE2 describes this as a customer-supplier environment. Each side may run its own project management, and the contract defines how they interact. The customer's project manager sees the supplier's work as work packages; the supplier's project manager sees the customer's requirements as the basis of their own project. Tailoring makes those views compatible.

For the lead lines, Ridgeline uses unit-rate contracts: the contractors are paid per completed replacement, with rates for different pipe lengths and surfaces. That fits the uncertain quantity, because the final count depends on owner participation and on how many suspected lines turn out to be copper. The commercial management approach sets out how the contracts and the work packages stay consistent, how payment links to accepted replacements (each needs photos, GPS location and a post-replacement sample) and how disputes are escalated.

Equity and the people side of a regulated project

Regulation sets the minimum, but the project's success depends on people. A lead service line can only be fully replaced if the property owner agrees to the private-side work, and owners differ enormously in their circumstances. Some are landlords with little interest in tenants' water; some are older homeowners worried about cost and disruption; some are newcomers who are still learning the main local language. The people element of the project is therefore tailored up. Ridgeline hires two community liaison officers, prints notices in the five most common languages in the affected streets, offers evening and weekend appointments and partners with a tenants' association.

The business case includes a target for the share of full (both sides) replacements, because partial replacements can temporarily raise lead levels. The board sets a tolerance on that measure: at least 85 % of replacements must be full replacements in each year, with a tolerance of 5 percentage points. When year 2 showed 81 %, still inside tolerance, the project manager reported the trend and the reason, landlords in rental streets, and the board approved a targeted landlord outreach campaign within the stage's change budget.

This is a good example of how the people element, sustainability and regulation interact. The regulation sets the deadline, the equity target protects health outcomes, and the people tailoring is what makes both achievable.