lecture

Marian College of Architecture & Planning

AR18O4 CONSTRUCTION MANAGEMENT

Semester 8 | Feb 2020

Agenda for the day

contents
i. Project Controlling
 Budget vs cost method
 Earned Value of project method
 Cost vs Schedule method
ii. Project monitoring
 Claims and Delay Analysis
 Expediting the project
 Duration vs Cost trade off
 Optimization
Project Controlling

controlling
Project controlling is a project management function that involves comparing actual performance
with planned performance and taking appropriate corrective action (or directing others to take this
action) that will yield the desired outcome in the project
types

3 TYPES
1. ACTUAL COST vs BUDGET METHOD
2. EARNED VALUE METHOD
3. COST Vs SCHEDULE METHOD
Project Controlling

ACTUAL COST vs BUDGET METHOD

Budget vs cost control includes the detailed estimation of costs, the setting of agreed budgets, and
control of costs against that budget

Goals
 Determine the income and expenditure profiles for the work
 Develop budgets and align with funding
 Implement systems to manage income and expenditure

STEPS
Project Controlling

EARNED VALUE OF PROJECT METHOD

Earned Value is an approach where you monitor the project plan, actual work, and work completed

value to see if a project is on track. Earned Value shows how much of the budget and time

should have been spent, considering the amount of work done so far.

1. PLANNED VALUE : Planned Value (PV) is the authorized budget assigned to

3 KEY TERMS

work to be accomplished for an activity. It cn be calculated before doing the

work
2. ACTUAL COST: Actual Cost (AC) is the total cost actually incurred in
accomplishing work performed for an activity
3. Earned Value (EV) is the value of work performed expressed in terms of the
approved budget assigned to that work for an activity
Project Controlling

COST AND SCHEDULE PERFORMANCE

The cost/schedule performance measurement technique is used to measure and give visibility to cost
and schedule variances from the original plan

STEPS
The following aspects are calculated
 Budgeted Cost of Work Scheduled (BCWS)
 Budgeted Cost of Work Performed (BCWP)
 Actual Cost of Work Performed (ACWP)

Following this Cost Performance and Schedule performance is

assessed to find variation from original baseline plan
Project Controlling
Project Monitoring

monitoring
Project Monitoring refers to the process of keeping track of all project-related metrics
including team performance and task duration, identifying potential problems and
taking corrective actions necessary to ensure that the project is within scope, on budget
and meets the specified deadlines. It is the overseeing of all tasks and keeping an eye
on project activities to make sure the implementation of the project is as planned
techniques

MONITORING TECHNIQUES
1. CLAIMS & DELAY ANAYSIS
2. EXPEDITING THE PROJECT
3. DURATION vs COST TRADE OFF
4. OPTIMIZATION
Project Monitoring

EXPEDITING A PROJECT
Expedition is done to avoid DELAYED DELIVERY OF MATERIALS, products or equipment prevents your
project from being completed on time and on budget

EXPEDITION ESSENTIALLY INVOLVES :

 Checking of goods for their delivery progress and quality
 Checking for quality, safe packaging, arrival times, its storage, exact specification that was agreed upon
between the supplier and customer etc. to ensure smooth operation of the site and thereby meeting the
targets.

QUALITY CONTROL or QUALITY check is a part of expediting the project

OPTIMIZATION
• Optimization includes adjusting a process so as to alter some specified set of parameters without violating
some constraint. The most common goals are minimizing cost and maximizing throughput and/or efficiency.
• This is one of the major quantitative tools in industrial decision making. It essentially involves finding the
most preferred alternatives and the decision making for the same.
 Finding an alternative with the most cost effective or highest achievable performance under the given
constraints, by maximizing desired factors and minimizing undesired ones
Project Monitoring

CLAIMS & DELAY ANALYSIS

Delay Analysis is an investigation into what has caused the project to run late and who is responsible
for the delay events.
Delay analysis is performed in three steps:
1. Investigation Phase (evidence collection)
2. Description Phase (analysis of facts collected during phase one)
3. Presentation of the case to an arbitrator or jury to prove the claim

TYPES OF DELAYS
types of delays

4 TYPES OF CONSTRUCTION PROJECT DELAYS- based on their origin

1. EXCUSABLE COMPENSABLE (CAUSED BY THE OWNER)- Eg: owner initiated changes in work; architect or engineer
supplied designs which are defective; work site is not available to the contractor in timely manner, etc.
2. EXCUSABLE BUT NOT COMPENSABLE (NEITHER THE CONTRACTOR'S NOR THE OWNER'S FAULT) - Eg:
unusually severe weather conditions, etc.
3. NEITHER EXCUSABLE NOR COMPENSABLE (CAUSED BY THE CONTRACTOR OR ITS SUBCONTRACTOR)- Eg:
failure of the contractor to mobilize work crews and start the work in timely manner; improperly allocating labor, material,
and other resources; lack of coordination of subcontractors, etc.
4. CONCURRENT (DELAY CAUSED BY MULTIPLE FACTORS)
Project Monitoring
CLAIMS & DELAY ANALYSIS
COMMON CAUSES FOR DELAYS IN CONSTRUCTION PROJECTS
1. Errors and omissions in the contract documents:

 Missing information.
 Not having a phasing plan in the bid documents when the site work has to be done in phases.
 Conflicting information that need design revisions.

2. Contractor caused delays for reasons under their control:

 Not having enough labor force on site.

 Contractual problems between the prime contractor and subcontractors.
 Cash flow issues.
 Lack of proper planning and management of the project.

3. Delays for reasons beyond the contractor or owner’s control:

 Strikes
 Out of state manufacturer’s shut down.
 A subcontractor going out of business in the middle of the project.
 Unusual weather conditions.

4. Owner caused delays for reasons under their control:

 Scope changes.
 Limiting contractor’s access to parts of the site.
 Cash flow.
 Late processing of contractor’s requests for clarifications and change orders.
 A higher level political factor that impacted the project’s progress.

5. Personality conflicts between the project’s team.

 Unfortunately, sometimes this factor results in the team making things difficult on site that cause delays. In this case each party
blames the other for the delay.
Project Monitoring
CLAIMS & DELAY ANALYSIS
TYPES OF DELAY ANALYSIS
1. AS-PLANNED VS. AS-BUILT METHOD : In this method the dates and durations of selected

activities shown on the as-planned schedule with the actual dates and durations on an as-

built schedule are compared. The difference between them is considered to be the delay on

the job

2. IMPACTED AS-PLANNED METHOD : In this method the excusable delays (or delays where

time extension is owed to the contractor) are listed and the extended duration to the relevant

activities are identified. This difference is considered the delay.

3. GLOBAL IMPACT METHOD

4. NET IMPACT METHOD

5. AS-PLANNED “BUT-FOR” METHOD

6. COLLAPSED AS-BUILT “BUT FOR” METHOD

7. WINDOW ANALYSIS METHOD

8. AS-BUILT METHOD

9. CONTEMPORANEOUS METHOD
Project Monitoring

CLAIMS
Delay claims require significant documentation. When claims arise in projects, the party with the most
complete documentation will have a tremendous advantage. It is difficult and sometimes impossible to establish
and prove a claim without good documentary evidence

DOCUMENTS TO BE MAINTIANED FOR CLAIMS

1. CORRESPONDENCE- All mails, letters, written notices, time extension permissions etc between the project authorities
and the concerned parties (contractor/ vendor etc.)
2. DAILY REPORTS - Daily reports, log books, journals, equipment logs or labor logs etc. that helps determine chronology
documentation

of events, progress of work, manpower and equipment on site.

3. PAYROLL RECORDS AND DELIVERY RECEIPTS- Proofs of all payments carreid out, delivery receipts for materials,
services etc.
4. REQUISITIONS: Requisitions are pay applications will typically show work completed at specific times on the
project
5. SCHEDULES: Baseline or "as planned" schedules that show what the owner and contractor really planned as a
schedule for the project in the beginning.
6. BID DOCUMENTS, ESTIMATES AND JOB COST ACCOUNTING: Bid documents, including estimates, to show
costs expected by the contractor. Job cost accounting records created during the project to show the actual
costs incurred at various stages of the project for comparison to bid estimates or change order estimates
7. PHOTOGRAPHS: Photographs and videos should be taken regularly on any project
AR18O4 CONSTRUCTION MANAGEMENT

Thank You