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A Manual on Construction Project Management ~Purbanchal University) 2014
Chapt~r 1 .0 Introduction
1.1 Constructioil management as a discipline
Construction is. a process

.
of the building or assembling of
,., infrastructure. The construction
. project
. .
is related with the construction of infrastructure within the budget, time and quality. Essential
.planning, design and execution is required for the construction projects. There are various types of
construction like building construction, industrial construction, in:fi·astructure construction and
heavy construction.
As a discipline, Construction Project Management developed :fi·om different fields of application

including construction, engineering and defense. In tbe United States, the forefather of project
management is Henry Gantt, called the father ofplm1ning and control techniques, who is famously
known for his nse of the Gm1tt chm·t as a project managemeiit tool, for being an a.ssociate of·
.Freder.ick Winslow Taylor's theories of scientific management, and for his study ofthe work and·
mm1agement of Navy ship building. His work is the forermmer to many m.o9ern project
1nanagement tools including the work breakdown structure (WBS) and resource allotation.
The J 950s marked the beginning of the modem Project Mm1agenient era. Again, in the United
States, prior to the 1950s, pi·ojects were managed on an ad hoc basis using mostly Gantt Charts,
and informal techniques and tools. At that time, two mathematical project scheduling models were
. de~·eloped: (1) tl1e "Program Evaluation and Reviev\; technique" or PERT, developed by Booz~
Allen & Hamilton as patt of the United States Navy's (in COI\junction with the Lockheed
Corporation) Polaris .missile submarine progni:m; and (2) the "Critical Path Method" (CPl\·f)
developed in a joint venture by both DuPont Corporation and Remington Rand Corporation for
managing plant maintenance projects. These mathematical teclmiques quickly spread into many
private enterprises.
At the same time, teclmology foi' project cost estimating, cost management, and engineering
economics was evolving, with pioneering work by Hans Lang and others. In 1956, the American
Association of Cost Engineers (now AACE International; the Association for the Advancement of
Cost Engineering) was formed by early practitioners of project management and the associated
specialties of planning and scheduling, cost estimating, and cost/schedule control (project control).
AA CE has continued its pioneering work and in 2006 released the fixst ever integrated process for
portfolio, program mid project management (Total Cost Management Framework).
In 1969, the Project Management Institute (PMI) was formed to serve the interests of the project
management industry. The premise ofP:t\11 is that the tools and techniques of project management
sre common even among the widespread ap*lication of projects :fi·om the software industry to the
___ construction_inclnst:cy .. JnJ 98l,Jhe_ Pl\11 Bo1rd o£Dir_ectors_ant11Dxize_cUhe_d_eveJopment _of_ wbaL _____ _
has become A Guide_to t~1e Project M_anagentm B~dy ofKnowledge (PMBOK Gui~e), containing ·
the standards and gmdelmes of practice that p-e w1dely used throughout tl1e profess10n. ·.
I
The International Project Management As:so-:iation (IPMA), founded in Europe in 1967, has
1mdergone a similar development and instituted :.he IPMA Competence Baseline (ICB). The focus
of the ICB also begins with knowledge ;::s 2 :::~;::~:.:::dation, and adds considerations about relevant
Prepared By: Er. Subash K. Bhattarai (B.E C-.:: ?GDESD I MPA I MSc CM) I I Chapter 1.0

A Manual on Construction Project Management (Purbanchal University) 2014
experience, interpersonal skills, and competence. Both organizations are now pm'ticipating in the
development of an ISO project management standard
In general, Construction management is a diverse discipline focused on the delivery of projects
that compose the world's built environment. Included are the determination of project
requirements, management of design, procurement of materials, and management of the
construction of the project within cost, time, and design parameters.
In terms of money value output, the construction industry is the largest single production activity
in the most of developed countries. The construction industry is heterogeneous and enormously
complex. The major classifications of construction differ markedly from one another: residential,
commercial, industrial, and infrastructme, as well as specialties such as electrical, mechanical,
framing, excavation, and roofing.
Construction management is the study of how projects are conceived, designed, and built; the types
of materials and methods used; techniques for estimating the cost of con$truction; design and
contract law; construction accounting; oral and written communications; safety requirements;
project planning and project manageme1it.
1.2 Context of construction management
Constr~J;Ction management is the study and practice of managerial and technological factors in the
indnstt~Y of construction. This includes construction, the science of construction, construction
manag6h1ent and technology in construction. Construction management also refers to a business
re;:;res~;itation wherein a crew to a construction contract serves as a consultant to the construct,
hercby-_providing design and advice ofthe co11struction.
The education for construction management has a wide array of formats; these are the formal .
degree programs, on the job trainings, and. continuing education or professional development.
Examples of formal degree programs are two year associate degree programs, four year
baccalaureate degree programs and graduate degree programs.
Construction stakeholders J participants
The agencies supporting the construction industty include but are not limited to the
following
a. Construction business promoters like government bodies, public and ptivate enterprises for
real estate m1d industrial development, and other similar agencies.
b. Construction management consultant firms

A- 1... •t t=engmeenng.assocm.es---
. . . • t'
- -- -G-,----.MJ.Gl-1-I-ec _-------- ---- _______ _
d. Construction manpower recruiti11ei1t and training age1 1es
e. Construction materials developing, manufacturing, transportation and trading

firms
Prepared By: Er. Subash K. Bhattarai (B.E Civil I PGDESD I MPA I MSc CM) I j Chapterl.O

A Manual on Construction Project Management (Pui·banchal University) 2014
f. Construction plant and machinery manufacturing, distributing and repair and maintenance
organizations
g. Banking and financial i11stitutions
h. Risk insurance and legal services companies
1. Construction quality assurance and research and development establishment
J Contractors and contracting firms
Construction team (parties)
In general, there are three groups involve in the industry of construction; the owner, architect or
engineer or more known as the designer, and the builder or contractor. As th~se three groi1ps plan,
design and construct together, two contracts work between these groups. The .first contract is
known as the owner and designer contract. This first contract involves the planning, designing and
some possible factors of c;onstruction. The second contract is known as the owner and builder
contract. This contract involves the actual construction. On most cases, an indirect go-between
relationship exists among the designer and the builder because of these contracts.
A . . .
The h1~]o~· relation between these three pmiies are governed by the type of the contract and the
nature ~f the work. Client is investor who invest the money for the project. Tne consultant phys
the bricl~e between the payment to contractor and the owner. Basically according [0 1Lc;e r..arure of
role, th~relation between them can be divided into either two party system or u:rree pan:y s:;:•s:e::::r.L
_:-:-
,.,_,.
Prepared By: Er. Subash K. Bhattarai (B.E Civil I PGDESD I MPA I MSc CM) I I Chapter 1.0

·: .. ·: .
A Manual on ConstructionProject.Management (Purbanchal University) 2014.
Three party System (FIDIC)

Einployer
(Construction contract) (Consultancy agreement)

(Report, Notice,
Application)
(Supervision, Notice, lnstructio,

Determination, Approval)
Two party System (NCB, Japanese System etc.)
(Consultancy Agreement)
Employer
I Consultant J
Report
~ Administrator
(Construction (Supervision, Instrllction,

Contract) Determination, Approval)
Contractor
'{··
Client,
Client i~ also an employer of the construction project. Client may be owner, occupier, developer,
implen}~nting agencies etc. Client may be governmental department, ministry, a public
corpora:t'ion, private limited, NGOs, INGOs, an individual etc.
Client possess following roles and responsibilities in construction projects:
• Offer the project through tender notice

• Signs the letter of Acceptance.
• Prepares the contract agreement
• Approves the performance security.
• Ensures insurance is in accordance with the laws
• The Employer makes the advance payment (if any)
• Authorizes the Contractor to move on to the site.
• Makes payments (as per ru11ning bills) of the Contractor as certified
.. May authorize wo k to be completed by others if the contractor is in default.
· ··- ·- · · · Th_e_Employer-ca-" Te1:i11iliate-tlJ.e contfacnf-rthe-eveilt ofth.e-coil.tractoi' failih-gTcfperfotiiY-
or in ceitain othe circumstances defined in, and subject to, the law governing to the
contract.
• Should settle the disputes promptly in general if arises
·: ..
. A Manual on Construction Project Management (Purbai1chal University) 2014
Contractor
The contractor is one who carried construction works.
• Executes the works taking full responsibility of quality, timely completion and safety of
the work.
• He I She will set out the work, construct the wotk, carryout tests, care of works, rectify the
·defects, insure for the workmen, work and materials, insure the equipment, insure for third
part liabilities, take responsibility for the health and safety of the worker, maintain
specification, complete the work, conduct tests on work and hand over the project.
• After handing over, the Contractor is also responsible for maintenance of defects during
defects liability period.
Consultant / Engineer
An individual engineer/architect, an independent professional orgmii~ation, practicing consulting
firm, a government entity
• Design, research and 'investigation for design

• Prepare cost estimates at different stages
• Help client in preparation of Bid documents
• Help client in contractor selection procedures
" Quality, cost and time controlling
.. Supervise the works of contractor
" RepOiiing to the client
" Works as a client's representative-
~ Approval for the bills and guide the client for payment
Prepared By: Er. Subash K Bhattarai (B.E Civil I PGDESD I MPA I MSc CM) I I Clwpter 1.0

· AManual on Construction Project Managen1ent (Ptirbanchal Uriiversity) 2014
Components of construction management

Construction management is multifaceted task composed of different components as follows:
1. Physical space
2. Construction materials
3. Machines, equipment and tools
4. Human resources
5. Technology
6. Finance
Necessity of construction management

Construction management is essential to have proper coordination between agencies engaged on
the work and to check the following activities.
1. To effect economy in the cost of construction by adopting new teclmiques of construction

and supervision (to reduce construction cost)
2. Jo check the wastage ofmaterials and labors
3, 1 o arrange the cornpletion of the work in the minimum possible time duration
4. To improve the quality and speed of work by adopting modern equipment and machineries
5. J o have proper coordination betwee11 different agencies (stakeholders) invo lvecl in

~;onstruction project
Prepared By: Er. Subash K. Bhanarai (B.E Civil I PGDESD I MPA I MSc CM) I I Chapter 1.0
·A Manual oh Consfniction Project.Management (Purbanchal University) 2014
1.3 Characteristics of construction industry
Consttuction is an everlasting activity across the globe. From econ01nics angle, the construction
industry is that sector of economy that plans, design, constructs, maintains, alters and repairs
physical immobile structures and facilities like buildit1g complexes, transportation networks,
processi11g plants, 111anufactttring installations, power plants, traii.smission lines, ports and harbors,
water supply and sewerage disposals, and other utility works involving civil, mechanical,
telecommunication and other skills. It is an aggregate ofbusiness that are closely linked with the
physical constructions, repair and maintenance of buildings, infrastructure works and industrial
facilities involving application of various engineering skills.
Construction industry is.oi1e ofthe main contributors to the growth of the economy of a country.
It generates nearly half of fixed capital formation·, employs large Work force, and has national and
international markets. The construction industry undertakes wide variety of works spread over in
different regions. In general construction industry possesses following characteristics:
1. Involvement of many parties in delivering products

2. Design, construction and maintenance are undertaken by differe1it patties
3. The products are long lasting arid require routine maintenance
4. Difficult to deliver a prodilct because it involves huge amount of information processing,
fpisputes, ambiguities, therefore requires thorough management.
5 ..ftonstruction products are always initiated by clients, opposite to niost of the industries.
Clas:i[f/catiou oftlle consti·uctioit iitdustiy
Constn!Ction projects co.ri1e in many form with varying purposes. There is no simple method
classif)i''them. These projects can be categorized by nature of construction works, mode execution,
cost a:ndtime constraints, the inherent uncertainty (maturity level). Btoadlydepending upon nature
of construction facility, the major construction projects are:
I. Building or light construction
Building works include all type of buildings such as residential and commercial complexes,
educational and recreational facilities, hospitals and hotels, estates and offices, warehouse and
shelters. 'Building' constitute the largest segment of construction business. The building
business serves mankind by providing shelter and services for its habitation, educational,
recreational, social and commercial needs_ Th:c building works are mostly designed by the
Architect-Engineering firms and are financed by government, public and private sectors.
2. In:fias ructure construction project
These are capital intensive-and heavy equipmen:c uriented works, which involve nio merit of
large qua tity of bulk material like ear~11,. s::~~ ;]Tid concrete. These work include
canals, hi hways and airports, railways :m.2 cC::dg.:s oil/gas pipelines and tttmsmiss on lii1es,
7
large water supply and sewage dispos:::= ne::-:;'.'.:''ff"~,. d0cks and harbors, nuclear an thermal
power plant and other specialist cons:E::=5~·c '>':bich build up the infrastructure for the
s;;e.:ialist engineering firms.
Prepared By: Er. Subash K. Bhattarai .,~L=: ..:::.- lf':::I:F·~=; \llPA! iVISc CM) I I Chapter 1.0

A Manual on Construction Project.Managen1ent (Purbanchal University) 2014
3. Industrial construction projects
These works include construction of power generation, manufacturing, processing and

industrial plants like steel mills, petroleum refineries, consumer goods factories, industrial
works, utility services, arid human needs facilities. These works involve heavy investment and
are highly specialized. Industrial construction project are financed by government, public and
private enterprises
4. Special purpose construction related projects
These include environmental works, emergencies, remedial works, installation and

commissioning ofeq'uipment, and complex key operations
1.4 Domestic and Global Construction Market
The first engineering structure to be built in Nepal was an iron bridge over river Bagmati in 1850.
The first public water supply system was laid in Kathmandu valley during 1888- 1895. The royal
palace, the clock tower and the si1spension bridge on the river in Kathmandu were built during
these years. The first hydro-electric project at Pharphing was completed in 1911. The Raxaul-
Amleki]'ganj Railway line by M/s Martin and Co. Ltd of Calcutta and Dhursingh-Matatirtha
Ropeway by M/s Keyner Son and Co. of London, were constructed in 1926-1927. Other public
construttion works were d0ne departmentally by the central government.
The ne<y age of the Nepalese construction industry started only after 1951. The First Five Years
DeveloJ}ment Plan was stmied ii1 1956. After that, coi1struction activities in the country boostup
automatically. The Industrial Resolution, 1957 adopted by the govermnent of Nepal declared
construction as the 'Priority Sector' industry. As the priority sector, construction firms enjoy
income tax holiday along with other tax concessions for seven years :fi·om the date of incorporation,
a more liberal depreciation rate, capitalization of pre-investment expenditui"e, provision of foreign
exchange facilities etc. The first act which defined 'Contractor' was The Industrial Enterprises Act,
1974. It made provision for the classification and registration of contractors. According to this act
all construction firms must register themselves with the then Ministry of Works and Transpmi in
class A, B or C, contractors depending upon the technical manpower, value arid number of works
done, machinery and liquid assets available.
Some construction projects like 'Siddhartha Highway', 'Trishuli hydro power', and 'East· West
Highway' etc. were stmied in epal which were handled by Nepalese contractors for the first time.
After the completion of these roje~ts, Nepalese contractors began to appear _all()ver the c_oun:~ry
and started to take part in the development work. They developed their capital, managerial skill
and equipment simultaneously Till then construction act had not come into existence so Nepalese
construction industry could no develop so much as it should have been in the period ofPanchayat
system. After the restoration of the parliamentary democracy in 1989, Nepalese contractors got
some favorable condition to develop their capacity and got opportunities to take pari it1 several
-A Manual on Cm1struction Project Mariagement (PtirbanchaJUniversity) ·2014
construction projects. Nepalese contractors then came in position to do all kinds of natim1al
construction works as roads, buildings, dams etc. except niega projects.
At present, there are all together 3,25 class A, 374 Class B, 1347 Class C and around 15000 Class
D Contractors (according to FNCCI: renew of contractors registration 2013)
(Source,: FNCCI)
Role of Construction lndust1y in Nationitl Economy
Construction industry is one of the important sectors in any economy. Its contribution to the GDP
and employment is very significant and plays important role in the development of infi:astructure
that is essential for th~ development of all other sectors. In Nepal, more than 10 percent of the
GDP is contributed by the ,construction sector and is one of the largest employers. It is estimated
mat this sector is creating employment opportunities to more than one million people in the
country. Nepalese Contractors are now saving a huge amount of foreign cul'rency from its fl,ight
:,J abroad by foreign contractors. So it is contributing as export industries to the national econ01'hy.
Therefore any enhancement made to this sector will have positive impact on the national economy ..
::=. •Ceveloping countries about 60 percent of the national bndget is allocated on development works
si::Prfi.cant portion ofthe development budget is allocated to construction sector in Nepal.
. CIN!rf).r:-.r:::i'.::;ucture Domestic Market/Prospects of Nepalese Construction IndustJy:

:;c:,:spects or oppm1nnities of Nepalese construction industry in building infrastructures as
L Roads and Airports:
::JJe goal of economic development can only be achieved through the establishment of adequate
ZDi efficient transport facilities. Nepal has rugged topography about two third area of the country.
Hence, an efficient road network has become a challenge. Likewise Nepal is land locked com1.try.
E.::,wever, an improvement and extension of transportation network provides the oppmiunities to
,.::~.lJiw the economy. Nepal is still lacking sufficient road network. If road networks are extended,
~·~q1al can be "LandLink:ed" between India and China. From which it can reap the benefit oftransir· ·
;:cint between these countries. Similarly, for tourism industry, which is :regarded as one of the
=zjor source of foreign currency earning, many infi:astructures development in different pmis of
:.::C country including regional and international airports are the opportunities of the construction
.r:::C..:s:.:::y in Nepal. On the other hand, investment form the government in road sectot is low and is
.:rc 2.~1e to meet the requirements of the country and aspirations of the people. Hence, contractors
.e.:::.d. consultants can and have to play key role :in th:i regard to attraCt the private sector to make
:.:11:estments in the road sector following the Bui]t, 0 erate and Transfer (BOT) approach.
1. Irrigation and Hydropower:
-:\epal is second richest country after Brazil in its wa er resource and it has the great prospects in
generating hydroelectricity and constructing irrigation projects tlu·oughout the cotmtty. Although
Nepal has a large reserve of water resources, it is not able to utilize them properly. At the end of
FY 2070/71, the total peak demand is around 1176 (M\V) Provisional but the power production is

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A Mmiual on Construction Projec!Management (Purbarichal University) _2014 ·
less than the demand. Hydropower production is around 700 MW only, which is merely 0.8 5
pe1'cent of the total potentiality of 83,000 MW. So there is wider scope of hydro electricity market
inside the nation and the possibility of exporting to India as well.
The extension of irrigation facilities in the agricultural land can bring crop integration and crop
diversification, which can help to generate employment ai1d reduce poVerty. At present ot1ly 4 0
percent ofcultivated land is covered by round the year irrigation. If power supply generation and
irrigation is possible :fi·om the same project, it will be beneficial and cost effective. In this regard,
the feasibility studies of such projects are required to develop the Nepalese construct~on industry.
3. Real state and Housing
According to population census 2011, ~he growth rate ofpopulation is 1.35 petcent per ammm.
With the ·economic development of the country, the tendency or the flow of population is :fi·om
rural areas to urban areas. It requires better real state, housing, market complex, good hospitals,
schools and colleges. Still there are insufficient such facilities in Nepal. Though there are lots of
opportunities for local contractor on building real state a11d housing.
4. Public Private Partnership in infrastructure development
The government ofNepalliberalizes its policies after 1980's. Now governmenthas released the
act·Tel~ted to Build, Operate, Own and Transfer BOOT Act (PPP) - 2063, Road Sector Policy
1999, BOOT Regulation (PPP) - 2064, Hydropower Act ""': 1992, Public Infrastructure Build
Operaie and Transfer Policy - 2057, Private Investment in Infi·astructure Build and Operate
Ordinance- 2060. There is still some oppmtunity for the contractoi"s through Contractual PPP' s
as:
;o Build and Transfer (BT)

• Build, Operate and Transfer (BOT)
• Build, Operate, Own and Transfer (BOOT)
• Build Transfer and Operate (BTO)
• Lease, Operate and Transfer (LOT)
• Develop, Operate and Transfer (DOT)
PPP is regarded as the revolutionary approach towards infrastructure development which pulling
in resources, pulling in expertise, maximizing service delivery, magnifying scope opportunities
and creates the employment oppmiunities for the contractors also.
Prospective PPP projects now in Nepal.
Kathmandu - T erai Fast Track·

East-West Railway
Kathmandu-Terai Railway
KantiRajpath
Birgunj-Jitpur Roadway
Kathmandu Outer Ring Road
Janakpur-Jayanagar Railway
·: ..
Sitapaila-Dharke Roadway
Airpmis- Nijgadh,Pokhara, Bhairahawa
Dry ports
Truck Terminals
Bus Terminals
Cargo Complex at TIA
Cable Car and Ropeway
Road and Infrastructure Maintenance
Road Intersection
Sky Bridge
Sub Way
Flyovers and Interconnections
City Parking
In conclusion, there is huge task on constrnction of in:fi·astructure facilities, both basic as well as
developmental. Living between the two developing economies giants, who are accounted as the
fbture superpower of the World in next twodecades, and living at neighborhood ofBhutan, Nepal
is still searching and endeavoring to find lasting solution to reduce poverty. Time is rich to learn
lessons :fi:om the neighboring ~ountries and march ahead for real achi~vements, which will largely
dependupon development projects through construction industry.
'X·
· Jijtel·n~·tional export market

There ai·e more than 220 top international companies competing with each other for the global
construction tenders. Americans are in fi·ont of all of these construction companies. ln L~.e
intermi~ional market, building, transportation and petroleui11 activity constitutes the maj-e1r scope
of wot~~ with building topping the list.
Prepared By: Er. Subash K. Bbattarai (B.E Civil I PGDESD I MPA I MSc CM) I I Clwpter1.0

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Chapter 2.0 Construction Project Management

2.1 Definition of Project
A project is defined as a temporary endeavor undertaken to create a new product or service to

achieve specified objectives within the assigned resoUrces. A project is a mission. Projects are
usually a part of an overall strategic program. A prograi11 at the macro level comprises one or mo're
projects. Some examples of construction projects ii1clude:
• Constructing a building or facility.

• Developing a new product or service.
• Designing a new transportation system
• Research and development projects
• A training project
According to Harold Kerzner, a project is any series of activities and tasks that:
)> have a specific objective to be conzpleted within certain specifications
)> have defined start and end dates
)> . have funding limits
)> Consume resources
"A pr~ject is defined as a temporary endeavor under taken to create a unique products or
service.~. "Project Managemuit Body of J(nowledge (PMBOJ()
"Proje~·t is a one which starts from scratch with a definite 111ission, generales aclivity involving ({
verity o_[human, non-human resources all dil-ected tovvCtrdsfuljWment ofrhe mission and stop once
the miSsion is fulfilled." - S. Chaudhary
"A project can be defined as a unique task (however large or small) with defined goal, limited in
cost and time and giving some benefits to the users when the rask is completed."
S.J(.Bizattacharjee
Plan, Programme and Project
A project is a unique group of tasks designed to attain a specific objective within the oom""traints
of time, cost and quality based on plmming and controltln·ough the use of a variety of resources in
a dynamic environment.
A plan is an image, map or vision .ito represent the forrns and/or features of desired simar.~~~:cfs). It
is the process
.
of setting
.
futme goa s for organization and choosing the actions to achieYe :LS,em.. It
is bunch of programme
Similarly, a program is the exte s1ve and consistent set of action units stating the nee3s of
interrelated activities to achieve th plan's objectives and goal. It is group of projects
There may be several programs within a plan or development plan.

----------------------~----~------ .•... -··- -··
Prepared By: Er. Subash K. Bhattarai (B.E Civil I PGDESD I MPA I MSc CM) I Chapter 2.!.i' fD •.•:,:
.~&:.....
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;,.,~~s:

A Manual on Construc6on Project Management (Purbai1chal Unive1~sity) 2014
2.2 Nature I Characteristics of project
Ingeneral, the term 'construction project' refers to a high-value, time-bound, special construction
mission with pre-determined performance objectives. Construction projects employ huge
resources of men, materials and machines. The construction project mission is accomplished
within complex project environments by putting together human and non-human resources to form
a temporary organization (like the special mission task force of the army), headed by a project
manager.
A project has the following characteristics:
1. Specific objectives
A project has clearly defined specific objectives. It is focused on end results. A project
without objectives is unthinkable. Its output is measltrable. The objectives are predetermined.
2. Life Span ·
All projects have a life span. It has definite beginning and end. Projects cannot continue
endlessly. A project is a one-time- only set of activities, it is a temporary endeavor. Its life
span can be short or long depending on its nature and scope. It has a life cycle consisting of
formulation, planning, implementation and termination phases.
3. Constraints
}\11 projects have constraints. A project operates within the constraints of time, cost and
q{iality performance. It has a time schedule for various activities and a completion date as
deadline. It has clearly laid down quality specifications. The scope and boundaries of a
project are clearly delineated. Project schedule sets deadlines.
4. U~1ique
E*ch project is different. No similar project do exist. Clearly, no two projects are exactly
similar. Every project is unique in some elements. It consists of customized non-repetitiYe
activities. It has a specific geographical location. It involves complex set of actiYities.
5. Team Work 1
Projects work through team work. A project consists of multi-functional team. Te2:m
members are temporarily assigned :fiom other functional departments and or required human
resources fi·om various disciplines with varied experiences are pulled together to form a
temporary organization. The project manager is the leader of the team. He/She coordinates
project activities. He/She builds and maintai11s a cohesive team. He achieves unity in
diversity. He/She effectively manages conflicts. The manager is supported by a project team.
6. Flexibility
Projects have flexibility. They are not rigid. Aproje t operates in adynai11ic environment. It
needs flexibility to provide rapid response to chan ing environmental forces. The project
complexity prodLJces riskS~ Flexibility is essential o control arid ~ni.anage project risks a(
different stages of life cycle. Project risks can be r lated to time, costs, technology, scope
aHd performance.
7. Resource Integration
Prepared By: Er. Subash K Bbattarai (B.E Civil I PGDESD I MPA I MSc CM) I Chapter 2.0

-A Manl.talon Coi1struction Project Management (Purbancrz1 Cnir,·ersity) 2014
Projects consume and coordinate resources. A project integrates physical, fmancial, human
information. It maintains appropriate interrelationships \\ith them. Resource use is
prioritized in disciplined way for optimization.
8. Planning and Control
Projects work to a plan. A project requires effective and et11cient planning and coritrol
systems. Standards are set for project activities through planning. They serve as yardsticks
for measuring project performance. Actual performance is compared with standards to find
out deviations. Corrective actions are taken to control deviations.
9. Contracting and subcontracting
Most projects are contract-based. The project work is characterized by high level of
· contracting and subcontracting. Contracts can be of various types, such as lump- sutn
contract, unit price contract, negotiated cost plus fixed fee contract and turnkey contract.
Proper contract plam1ing and management is the key to effective project management.
10. Beneficiaries
All projects have beneficiaries. Beneficiaries are the ultimate users of the project outputs.
They are the client ofthe project. A project has a specific group ofbeneficiaries. It should
be focused on fulfilling or exceeding their requirements. Projects should clearly identify the
needs of their beneficiaries .
. Some .Qf tlze core features which makes construction project management d{ffers from rest of
the oth[~rs are summatized as follows:
a. ,Construction Projects are unique and transient in nature. Its organization is temporary.
b. i_Every construction Projects are time bound with fixed life span and new tasks. These tasks
,·.c:reate never-ending problems, especially when projects are crashed, under relatively risk-
.;,,1]rone, complex situations and resource constraints.
c. -Project time and cost are correlated. Time delays can increase costs exponentially instead
oflinearly as in the case of most of ongoing enterprises.
d. Project tasks leave no time for the training or learning process. It is handled and managed
by multidisciplinary experts headed by a single responsible center, project manager.
e. Projects are flexible and runs with operational autonomy to manage the complexities due
to risks and adaptation to enviromnental change.
f. Projects being handled by a company; generally interact with each other socially,
organizationally, technically and economically.
g. Project integration is relatively complex under dyr1amic project environments.
h. Construction projects are executed with the support of contracting agencies, whereas
ongoing industrial processes are managed by the departmental sta and workers.
1. Construction projects ate c:bangeoriented and self-managed.
2.3 Project Life cycle
The project life cycle of a construction project generally follow similar p ttern. It is divided into
several phases for management control. These phases in a typical construction project are:
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Level of Execution process

Activity
Plarining
Initiating processesc.v---
processes
Phase Time Substantial phase

start completion finish
Fig. Phases in a Project Life Cycle
Project initiation phase

ln this phase project formulation is ca.rried out. Formulation of the project scope and the
implementation strategy is done. Output of this phase marks the client go ahead or no-go decision
:or investment. The project charter outlines the project scope, objectives, preliminary plans, and
.,xganization for the execution of the project.
Planning phase.
The objective of this phase is to develop a workable and manageable plan to accomplish me p:rojec:
mission. It involves creating the planning documents to guide the team throughout the projec:
deliverx. Various planning documents regarding project management are prepared prior to project
.J.;._~
executloi.1.
~~:~.
Execut'ibg phase.
I
~his phi1se is concerned with coordinating and managing people and other resources to carry out
:.~::~~ plan>tExecuting phase is also lmown as implementing phase. This phase of the lifecycle implies
:-aiidin'ffphysical deliverables and is presented to customers. It is longest phase and consumes lot
,c;:i ener!y, effort and resources. In this phase, the activities like allocation of the tasks to teai11
=embers; procurement activities, contract administration, MIS set up etc. are carried out.
Controlling phase
:?'roject plan indicates the path to achieve objectives. During the implementation phase, the project
.:ontrol aims to track the progress of work as per the plam1ed schedule and take corrective actions
:..J:cluding re-planning, when necessary, to achieve the project objectives. Project control follows a
system concept. Monitoring and Evaluation is done collectively for the controlling of project
::::,:tivities.
Closing phase
Tills formalizes the ac eptance of the project and brings it to an orderly end. After completion o
;'TOject by the contra tor, it is handed over to the client. The team also prepares a projec
completion· report wl ch -includes the scope arid schedule of work, the imp-ortant events,· th
contract executed, th addresses of the suppliers of materials and equiprrtent, the equipment
:naintenance manual, 1e as-built drawings, the costs involved, the problems encour:ttered durin
=xecution, the lessons learned and the minor defects noticed at the time of handing over.
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A Manual on Construction Project Management (PurbanchaJ. University) 2014
Noie:
The project phases are not discrete, one-time events; they do overlap at varying levels of intensity
throughout the project life cycle.
Project Phase and Processes in Details

Each phase in a project is composed of one or more processes. A process involves series of actions
or steps to achieve desired results. The processes involved in a typical construction project, phase-
wise, are tabulated below:
Project Phases Processes Phase-Wise (Steps involved in Phase)

Project Initiation • Need identification I Development of Business case
Phase • Performing Feasibility study
• Project Scope Definition and Establishment ofTOR I Project Charter
• Appointment ofProject Team
• Setting ofProject office
l
• Investment appraisal
1• Performing Phase review
,l
Project Planning I• Creating a project Plan
Phase • Creating a resource Plan
• Creating a fmancial Plan
,.
• Creating a Quality Plan
• Creating a Risk Plan
• Creating a Construction contracts procurement plan
• Creating an acceptance plan
• Creating a communication plan
• Coi1tracting the suppliers
• Performing phase review
Project Executing • Time management
Phase • Cost Management
• Quality Management
• Change Management
• Issue management
• Procurement Mailagement I Conttact Administration
• Acceptance management
..•
Commun ·cation Management
Performin g phase review . - -- -- .. - ---- .. .. -
- -
Project Controlling • Overall sc ope change control

Phase • Resource' coilttol
• Schedule c;Ontrol
• Cost control

A Manual on Construction Project Management (Putbanchal Univ.ei·sity) 2014 ··
• Quality control
• Risk response c011trol
• Perfol'martce rep01iing
Project Closing Phase • Project Clost.tre Report

• Administrative closure
• Contract· close-out
• Reviewing project Completion
• Lessons learnt
OR
Project is a temporary job. 1t cannot continue endlessly. A project depending upon its nature, size
and type, undergoes through different well defined phases right from its inception to successfi.1l
completion. Collectively, the project phases are known as project life cycle phases. The breakdown
and terminology ofthese phases differs depending upon the nature of the project or organization.
The following impo1iant five phases contribute to develop a project :fi.·om an idea to reality.
..
a. Initiation Phase
.•
b. Planning Phase
c. Engineering and Design Phase
d. Implementation Phase
e. Termination Phase
a. irtitiation Phase
This phase includes:
• Conceptual study: projects are born with creative ideas. It includes preliminary evaluation
of ideas, such as project identification, project formulation.
• Feasibility study: the objective of the feasibility study is to have more detailed information
about the location, nature, dimensions, raw material needed, equipment, cost-benefit
analysis, and the detail abolit the users who will be benefitted :fi.·om the project.
• Market study: it includes the study ofthe mai·keting prospects and demand ofthe product,
considering (a) potential size and composition of the market (b) present and projected
demand ofthe product/services.
After the completion ofthis phase, a go/no-go decision is mad
b. Planning phase
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AManuaJ on COJi.Struction Project Management (Purbancbal University) 2014
• Work breakdown structure: the project is broken down into small elements so that all the
activities to be perforrned in the project are included.
• Cost and Schedule Planning: after breaking down the project, the time arid cost of each
activity is determined and overall time and cost of the project is determi11ed.
• Contract terms and co11dition: the contract terms in which the project activities are to
accomplish is determined in this phase. The contract rnay be lump-sum, fixed price, unit
rate etc.
)
After the end ofthis phase time and cost estimate of the project is made and major contracts are
let.
c. Engineering and Design
• Prelimi1i.ary engineering and design
It stresses architectural concepts, evaluation of technological process alternatives, s1ze and

capacity decisions, and comparative economic studies. In designing dam, hydropower, irrigation
thann~,l,preliminary design requires analysis of hydrological characteristics, geological condition,
precis€·Jocation of dam etc.
liP Detailed engineering and design
It invol~'es the process of successively breaking down, analyzing and designing the structme and
its elenl.ents. This detailed phase include architects, interior designers, landscape architects, and
several engineering disciplines including chemical, civil, electrical, mechanical etc.
d. Implementation Phase
• Application of the paperwork physically in the real field.

• Manufacturing, installation of machines and testing and civil works.
• Controlling is performed to check project performance at any point of time during
implementation.
• The facility is substantially completed at this phase.
Divestment/ Phase out/ Termination
Thi phase is the end of project and project is brought to its completion. In t is phase, the final
testing and maintenance of the project is done and handed over to the customer and resources are
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A Manual on Construction Project Mamigement(Purbanchal University) 2014 _
released to other projects. The basic tasks in this phase are evaluation and handover of the project
output to the beneficiaries.
Project life cycle in terms of resources/risk and time
• _Cost and staffing levels are low at the star1, higher towards the end, and drop rapidly as
project draws to a conclusion as shown in fig below.
• The probability of successfully completing the project is lowest, and hence risk and
uncertainties are higher at the start. The probability of successful completion gets
progressively higher as the project continues.
• Most project life cycles tend to progress slowly at the stm1, quicken their momentum
towards the middle and drop their momentum towards the end.
Resources /Risk
I
Resources
I
'
Project life:cycle
'
I
Initiation planning: iEngineering and design: Implememationh-e:mi.-:z;io:o

.
I I I
I I
.
I
2.4 Principles ofProject Management
The principles of project management can be traced as follows.
1. The Success Principle The goal ofProject Management is to produce a successful product or
servtces
2. The commitment Prin iple: A mutually accepted commitment between a project sponsor and
a project team must e ist before a viable project exists.
3. The Tetrad- Tradeoff rinciple: The core variable of the project management process, namely:
scope, quality grade, time to complete and cost to complete (time cost trade off) must all
mutually consistent
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A Manual onConstruction Project Management (Purbanchal University) 2014.
4. The primary communication chmmel or unity conu11and principle: A single channel of

conm1llnication must exist between the project sponsor and the project team leader for all
decisions affecting the product of the project
5. The cultural environment. or suitability principle: An informed management must provide a
supportive cultural envirtmniertt to enable the project team to produce its best work
6. The process Principle: Effective arid efficient policies and procedures must be in place for the
conduct ·ofthe project commitment
7. The life cycle Principle: Plan first, then do
Objectives of construction project mruiagement

The main objectives of construction management are:
1. Completing the work within estinJ.ated budget and specified trme

2. Evolving a reputation for high quality workmanship
3. Providing safe and satisfactory wotkirtg conditions for all personnel and workers
4. Taking sound decisions at the lowest practical management level through delegation of
authority
5. Motivating people to give of their best within their capacities
6. Creating an organization that works as a team
2.5 Fu~_;ctions of construction project management
Project' management is the application of Knowledge, skills, tools and teclmiques to project
activities to meet the project requirements. Project management is accomplished through the use
of planbing, executing, contt·olling and closing processes. Basically nine managerial functions are
involve'0 in managing the project.
• Project Integration Management (plai1 development)

• Project Scope Management
• Project Time Management
• Project Cost Management
• Project Risk Management
• Project Human Resource Management
• Project Quality Management
• Project Communication Management
• Project Procurement Management
Besides these above functions typically, p1 oject manageme~it has followings ingint. functions

AMimual on Construction Project Management (Purbanchal University) . 2014
1. Planning and scheduling
Planning involves formulation of a number of alternative realistic Work plans for achieving
specified objectives and selecting a plan which is best suited fi-om the stand point of available
resources and constraints imposed upon the project. It is essentially covers the aspects of 'what to
do' and 'how to do'
Scheduling is the fitting of the final work plan to a time scale. It shows the duration and order of
~,~arious construction activities. It deals with the aspect of 'when to do'
2. Organizing
Jc:-ganizjng is concerned with the division of the total construction work into manageable
5:::pannients I sections and systematically arranging various operations by delegating specific tasks
1:: :i;.dividuals. The relationship between various persom1el are established and the organizational
s.:..xcitue of the project is depicted by a simple flow chart
:; . Staffing
:~·c-g:::rizing
involves the division of project work into sections ai1d staffing is the provision of ·
w fill the positions so created. Recruiting the right people, arranging staff training courses
C&'1)·ing out proper staff assessment are all part of the staffing :fimction
...::_ Directing
.crrecting function is concerned with training sub ordii1ates to carry out assigned tasks,
:;;n::e:-Yising their work and guiding their efforts. The essence of directing lies in the ability to
~""',,..,,""••.,_,.1f=- people individually and as groups to utilize their creative efforts in achieving specified
Controlling
Il:ing is necessary for ensuring effective and efficient workir g. It involves a constant review
;~.crk plan to check on actual achievements and to discover and recJify deviations fhro.ugh
ll!.lliii:::JJL=;;r:zre corrective measures. The essential steps in manageme t control are:
' Measurement of actual performance in terms of progre s, quality and cost incurred
.., Comparison of actual and planned perfonnances
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A Manual on Constniction Project Management (Purbanchal University) 2014 ·
c. Analysis of sh01i fall in performance when it occurs, and identification and

implementation of suitable remedial measures
6. Coordinating
Since authority converges to the top of the organizational pyramid, it is necessary to bring together
and coordinate the work of various depmiments and sections. This requires an efficient system of
communication so that each department and section is aware of its role and the assistance to be
expected from others. Regular meetings of departmental I sectionheads with top management are
fundamental to roper coordination, so that plans, problems and remedies are discussed for
determining the best solution
7. Conummicating
There should be an effective communication in every direction within the organization. Quick
and accurate flow of information is a vital aspect of the controlling action.
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A Manual.on Construction Project Management (Purbapchal University) 2014
Chapter 3.0 Construction Cost Estimation and Bidding

3.1 Planning and Design
After project has been initiated, next phase ofproject life cycle begins with planning and design.
"Ifyou fail to plcm, you are bound to fail"
Planning is the rhost imp01iant constitue1it of the construction managenient. In the simplest sense
planning is the mental process deciding about the future line of actions. Planning is the course of
action to achieve the desired results taking into consideration the present needs and future
requirements. Planning is critical to the project management process. It forms the basis for the
project scope, schedule, reso1.1rces, quality, risk, and integration
Planning is done to
• Eliminate or reduce uncertainty

• Improve efficiency of the operations
• Obtain better understanding ofthe objectives
• Provide basis for monitoring and controlling
Objectives of planning
T::e main objective of plam1ing of a work is to execute the project or work most economically in
:c::::-::ns of money and time both. The effective planning depends upon the following factors:
.. Proper design of each element of the project

~ Proper selection of plant and equipment
* Proper arrangements of repair ofplant and equipment at site
• Procurement of required materials well in advance
• Ensure employment of skilled and unskilled employees
• To provide welfare schemes for the workers
• To provide incentives for goodworkers
• To arrange constant flow of funds in eiitire project duration
• To provide required level of safety and compensations
• Proper an·angements of Communication and mobility in site
.Principles of planning
?,)];~nving are the general principles of planning
• The plan should be rea ily understandable

• The plan should be real stic not an optimistic
--. - . --
• The plan should be fle. 'ble
• The plan should be con prehensive .
• The plan should in corp rates the system of monitoring and controlling
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A Manual on Construction Project Management (Pll;rbm1chal University) 2014
Features of Planning
Planning is an integral part of management. A manager expects problems in future, analyzes them
and expects their possible effects on the activities of the enterprises. This is why features of
plmming is important. The following are the important features ofPlaiming.
1. Process: It is a systematic ment~l process of doing things and involves creativethinking

and imagination.
2. Future/goal oriented: Plmming is essentially thinking ahead and preparing for :fi.1ture. It
anticipates future opportunities and threats to the best advantage ofthe organization. It is
based on forecasting and enviromnental scmming. It provides direction to the organizatiorL
3. Intellectual Process: Planning is a mental exel'cise involving creative thinking and
imagination. A ma11ager can prepare sound plans only when he has sound judgment,
foresight and vision.
4. Primary Function: Plal1ning serves as basis for other functions of management. It precedes
all other :fi.mctions of management such as organizing, staffing, leading/directing and
controlling.
5. Pervasiveness: Plan:ning is required in all types of organizations and at all levels of
management. Every department prepares plan however scope of planning may differ from
\department to department and :fi:om one level to another.
6. '(;ontinuous: Planning is an ongoing process. Plans are prepated for specific time period.
At the end of each plan period new plans are period. Similarly as the conditions changes
new plans are prepared.
7. /.A.ims at efficiency: Plam1ing is directed towards efficiei1cy at all levels of management.
)ound planning leads to accomplishment of desired objectives at minimum possible cost.
It helps in optimization of resources. Alternatives are evaluated on the basis of efficiency.
Steps involved in planning

Following steps are involved in the effective plmming
• Identifying the likely problems to be encountered m the execution of the work and
obtaining necessary n1formation useful in the execution of the work.
• Ascertaining alternative feasibility of execution of work and selection of the optimum plan
• Fixing the time of starting the execution of work
• Deciding the time of delivering the materials at site
• Deciding the quantities and duration ofvarious types of machines and equipment
• Deciding the number of different types f labors for various works and duration of their
employment
• Estimation of financial help if needed
• Estimation of the duration of completiOI of the work
• Evaluation of the effectiveness of plan a· opted
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_A Mai1ual on Construction Project Management (Purbanchal University). 2014
Broadly planning involves folJowing steps

• Setting Objective
• Determining the alternatives
• Evaluating the alternatives
• Selecting the best alternatives
• Formulatii1g the real plan
Stages of planning
Usually the stages of pla1ming are as follows:
1. Preplanning
During this stage objectives are clearly spelt out. A general frame work ofthe project is formulated .
.-\ cost benefit analysis is to be canied out along with cost analysis of alternative sites.
Thus this stage of planning is before a decision finally is taken to undertake a project.
1. Detailed planning
During this stage detailed design and drawings are carried out. Specifications of materials and
2:rawings are also prepared in this stage. Quantities calculation along with preparation ofWBS is
ione. ~equence and scheduling ofthe activities are done
.::~\:
3. 1~1o~~itoring and controlling

In this r?hase, the progress of construction is monitored as per proposed scheduled. Updating of
s::hedul~ can be carried out according to the actual progress of work. Preparation of the revised
:orecasts regarding the availability of various resources is done.
':.I
Pianni~g by client and contractor

Planning by the Client /Owner/Employer
_:t_ Pre-tender stage planning
• Clients sets clear objectives of the project
• Client communicate the objectives to all the parties and stakeholders
• After proper investigations of the project, client prepares qumitity estiniates and determines
the quantum of money required for the completion of the work.
• Take respective approval of the project :6.-om concerned authority
• Selection of project team and pi:oject appraisal
• Select the consultant
• Bidding and contract award
; ConStP-uClion stage planilirig
• Revision in objectives in responding unexpected events
• Make site available for the contractor
• Timely payment and settlement of claims
• Keep the changes less
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A Manual on Const1:uction Project Management (Purbanchal University) 2014
• Update performance bond ofthe contractor

• Timely decision
c. Post construction stage planning
• Prepares project operation schedule
• Prepares project maintenance schedule
• Project ownership
Planning by Contractor
a. Pre tender stage planning

The planning undertaken by the contractor after receipt of tender r1otice and before submitting the
bid is known as pre tender stage planning. Steps of planning at this stage are as follows:
• Carefi.1l Study of tender documents and drawings to find out the quantities of each item of
work
• Study of specifications and workout the detailed quantities of materials required for
different items
• Determine the availability of construction materials at site or nearby site.
• Determine the method of work execution i.e. by labor or equ:ipment
" .Thorough study of site and site investigations
b. Con~truction stage planning
After the acceptance of the tender, the contractor further needs ir1 depth planning. This stage of
ph::ni::g is also known as contract planning. Here are following steps in this stage of planning:
= Studying the altema6ve methods of construction and to decide about subcontracting

• \Vorking out detailed quantities of materials required and examine and fixing the methods ·· ·.
of procurement and sources of them
• \Vorking out detailed abotit construction workforce like skilled and unskilled manpower
• Working out details ofplants, equipment their layout and repair & maintenance strategy
• Planning for camp facilities, access, accommodations, site offices and layout
• Planning for surveillance like proper lighting, ventilation, drinking water, sanitation, first
aid treatment
• Study interdependence of different items of works and fixing the sequence of them
• Finalize the work program of each item of work and to decide the dates of their stmiing
and completing
c. Post construction stage planl1ing
• Dem bilization ofplants and equipment
• Der bilization of labors·
• Clea ance of materials iiwentory and its stock
" Han over the project to client in targeted date
• Responsible for the defect liability construction within its period

A Manual on Constl'uction Project ·Mamigement (Purbanchal University) 2014
Design
Design phase in project management includes
Preliminary engineering and design
It stresses on:
• .AJ:chitectural concepts,
• Evaluation of teclmological process alternatives,
• Size and capacity decisions,
• Comparative economic studies.
For example, in designing dam, hydropower, irrigation channel preliminary design reqtmes
analysis of hydrological characteristics, geological condition, precise location of dam etc.
Detailed engineering and design
h involyes the process of:
"' ._;Analyzing
, and designing the structure and its elements .
o 'A set of explicit drawings and specification
s :Setting standards of safety and performance
~ ,;rechnology (construction methods)
• /Consultation of experts like geologist, economists and enviromnentalist
• Detail estimation of project
This detailed phase include architects, interior designers, landscape architects, and several
engineering disciplines including chemical, civil, electrical, n1echanical etc.
3.2 Project Scope Management
The construction project scope defines the \YOrks that must be undertaken in order to deliver a
facility, a product or a service with the specified attributes and features. Project work scope
management aims at ensuring that planned v.-odcs are done to ensure the achievement of the stated
purpose of the project. It focuses on the proje.:t scope of work and its components.
_-\typical project scope definition 9oYe:rs ill.; .P'Jjecr purpose, project objectives, brief statement of
•sork, Work Breakdown .Structurel('.\"BS)"
. .~
o:n.I:ille execution methodology,
. - . .
milestone
. -
time - plan,
- . . -
..:ash flow pattern, outline project.lganization and potential risks and problem areas
.?roject Scope Management mcludfs the processes regmred to ensure that the proJect mcludes all
<he work required, and only the \\·ork required, to complete the project successfully. It is primarily

.. A Manual on Construction Project Management (Purbanchal University).. 2014
concerned with defining and controlling what is or is not included in the project. Below Figtu·e
provides an overview of the major project scope management processes:
• lnitiation-co111111ittil'1g the organization to begin the next phase of the project.

• Scope Planning-developing a wtitten scope statement as the basis for future project
decisions.
• Scope Definition-·Sl1bdividing the major project deliverables into smaller, more
manageable components.
• Scope Verification-formalizing acceptance ofthe project scope.
• Scope Change Control-controlling changes to pl'oject scope.
These processes interact with each other and with the processes in the other knowledge areas as
well. Each process may involve effort from one or more individuals or groups of individuals based
on the needs of the project. Each process generally occurs at least once in every project phase.
Although the processes are presented here as discrete elements with well-defined interfaces, in
practice they may overlap and ii1teract in ways not detailed here. In the project context, the term
"scope" may refer to:
• Product scope-the features and functions that are to be included in a product or service.
• Proje1fscope-the work that must be done in order to deliver a product with the specified features
and funCtions.
The processes, tools, ai1d techniques used to manage product scope vary by application atea and
are usuit.lly defined as part of the project life cycle. A project consists of a single product, but that·
product)nay include subsidiary elements, each with their own separate but interdependent product
scopes)For example, a new telephone system would generally include four subsidiary elements-
hardwate, software, training, and implementation. Completion of the product scope is measured
against the requirements while completion of the project scope is measuted against the plan. Both
types of scope management must be well integrated to ensure that the work of the project will
result in delivery of the specified product.

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3.3 Elements of cost estimation
Cost estimate
_-'\. cost estimate is the approximation of the cost of a ptogram, project, or operation. The cost
estimate is the product of the cost estimating process. The cost estirnate has a single total value
and may have identifiable component values. A problem with a cost overr n can be avoided with
4 c~·edible, reliable, and accurate cost estimate. An estimator is th~ pr~fess~ · nal who prep~res cost
Jstmmtes
· tasic cost elements are:
e Materials
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Material (Matetial is a very imp01iant part ofbusiness). Materials can be direct material or indirect
material
• Labor
Skilled, unskilled, semi skill and highly skilled labor force
• Expenses I overheads (variable or fixed)
• Production or works overheads

• Administration overheads
" Selling overheads
.. Distribution overheads
• Maintenance & Repair
• Supplies
• Utilities
• Other Variable Expenses
• '.' Salaries
'.' .
•'. ~
.. ';;;'Occupancy (Rent)
.. ·.:Depreciation
',>
• .·• Othef Fixed Expenses

Costs Associated with Constructed Facilities
The cd$ts of a constructed facility to the owner include both the initial capital cost and the
subseqtt~nt operation and maintenance costs. Each of these major cost categories consists of a
number of cost components.
Capital cost:
The capital cost for a construction project includes the expenses related to the initial establishment
of the facility:
Land acquisition, including assembly, holding and improvement

• Plmming and feasibility studies
• Architectural and engineering design
• Construe ion, including materials, equipment and labor
• Field sup rvision of C()nstn1ction
• Construe ion financing
• Insuranc and taxes during construction
• Owner's eneral office overhead
• Equipment and furnishings not included in construction
• Inspection and testing

A Manual on Construction Project Managerrie:ilt (Purbanchal University) 2014
O&M cost:
The operation and maintenance cost in subsequent years over the project life cycle includes the
following expenses:
• Land rent, if applicable

• Operating staff
• Labor and material for maintenance and repairs
• Periodic renovations
• Insurance and taxes
• Financing costs
• Utilities
• Owner's other expenses
The magnitude of each of these cost components depends on the nature, size and location of the
;roject as well as the management organization, among many considerations. The owner is
:T:Kerested in achieving the lowest possible overall project cost that is consistent with its investment
. ::bjectives.
:: ~s in1portant for design professionals and construction managers to realize that while the
z,.:-:!struction cost may be the single largest conl.ponent of the capital cost, other cost components
.::.:;:: not insignificant. For example, land acquisition costs are a major expenditure for building
.:. =·r-.siruction in high-density urban areas, mid construction financing costs can reach the same order
:::-:.2gnitude as the construction cost in latge projects such as the constmci:on ,Jf nud=:'E:"
?::.J<m the owner's perspective, it is equally impm1ant to estimate the correspondir"lg operation and
=-2i"'tenance cost of each alternative for a proposed facility in order to analyze the life cycle costs.
-::-:ce large expenditures needed for facility maintenance, especially for publicly owned
=:::nrastructure, are reminders of the neglect in the past to consider fully the implications of
cperation and maintenance cost in the design stage.
Contingency cost:
In most construction budgets, there is an allowance for contingencies or unexpected costs

occurring during construction. This contingency amount nl.ay be included within each cost item or
be included in a single category of cons ruction contingency. The amount of contingency is based
on historical experience. and the exp ted difficulty of a. pCl.rticu}ar ,construction .Rroject. For
example, one construction firm makes stimates of the expected cost in five different areas:
• Design development changes,

• Schedule adjustments,
• General administration changes (such as wage rates),
Prepared By: Er. Subash K Bhattarai (B.E Civil I PGDESD I MPA I MSc CM) II Chapter 3.0

A Manual on Construction Project Management (Purbanchal Uiliversity) 2014
• Differing site conditions for those expected, and

• Third party requirements imposed during construction, such as new permits.
Contingei1t amounts not spent for construction can be tel eased neal' the end of construction to the
owner or to add additional project elements.
Approaches to Cost Estimation
Cost estimating is one of the most iinportant steps in project mahag,ement. A cost estimate
establishes the base line ofthe project cost at different stages of development ofthe project. A cost
estimate at a given stage of project development represents a prediction provided by the cost
engineer or estimator on the basis of available data. According to the American Association of
Cost Engineers, cost engineering is defin:ed as that area of engineei·ing practice where engineering
judgment and experience are utilized in the application of scientific principles and techniques to
the problem of cost estimation, cost control and profitability.
VirtuaJly all cost estimation is performed according to one or some combination of the
following basic approaches:
·Production function. In microeconomics, the relationship between the outpL1t of a process and
· the nep;~ssary resources is referred to as the production function. In construction, the production
functioi1 may be expressed bythe relationship between the volume of coi1struction and a factor of
produCtion such as labor or capital. A production function relates the amount or volume of output
to theyarious inputs oflabor, material and equipment. For example, the amount of output Q may
. be deri~ed as a function of various input factors x1, x2 ... Xn by meahs of mathematical and/or
· statistiSal methods. Thus, for a specified level of output, we may attempt to find a set of values for
· ·· the inpl.it factors so as to minimize the production cost. The relationship between the sizes of a
building project (expressed in square feet) to the input labor (expressed in labor hours per square
foot) is an example of a production fimcticin for construction.
Empirical cost inference. Empirical estimation of cost functions requires statistical techniques
which relate the cost of constructing or operating a facility to a few important characteristics or
attributes of the system. The role of statistical inference is to esti1i1ate the best parameter values oi·
constants in an assumed cost fimction. Usually, this is accOmplished by means of regression
analysis techniques.
Unit costs for bill of quantities. A unit cost is assigned to each of the facility components or tasks
as represented by the bill of quantities. The total cos is the summation of the products of the
quantities multiplied by the coHesponding unit costs. he unit cost l'nethod is .straightforward i11
principle but quite laborious in application. The initia step is to break down or disaggregate a
process into a number of tasks. Collectively, these task must be completed for the construction of
a facility. Once these tasks are defined and quantities r presenting these tasks are assessed, a unit
cost is assigned to each and then the total cost is determined by summing the costs incurred in each

.: ~
AManual on Construction Project Management (Purbanchal University) 20f4
task. The level of detail in decomposing into tasks will vary considerably :fi-om one estimate to
another.
Allocation of joint costs. Allocations of cost fi:om existing accounts may be used to develop a
cost furiction of an operation. The basic idea in this method is that each expenditure item can be
assigned to particular characteristics of the operation. Ideally, the allocation of joint costs should
be causally related to the category of basic costs in an allocation process. In many instances,
however, a causal relationship between the allocation factor and the cost item cannot be identified
1J>r may not exist. For example, in construction projects, the accounts for basic costs may be
.:!assified according to (1) labor, (2) material, (3) construction equipment, ( 4) construction
supervision, and (.5) geheral office overhead. These basic costs may then be allocated
. . 1 .
:;:::-opm1ionally to various tasks which are subdivisions of a project.
Types of Construction Cost Estimates

c::>Jnstructioncost constitutes only a £·action, though a substantial fraction, of the total project cost.
:-£Dwever, it is the part of the cost under the control of the con~truction project manager. The
=-=~uired levels of accuracy of construction cost estimates vary at different stages of project
.:i:Yelopment, ranging £·om ball park figures in the early stage to fairly reliable figures for budget
.:::::11rol?prior to construction. Since design decisions made at the beginning stage of a project life
:~ :::Ke ai~e more tentative than those made at a later stage, the cost estimates made at the earlier
::>:'~e a~e expected to be less accurate. Generally, the accuracy of a cost estimate will reflect the
~::s~::!·rmation available at the time of estimation.
-::si.r{1ttion cost estimates may be viewed from different perspectives because of different
n::;Iimti6nal requirements. In spite of the many types of cost estimates used at different stages of a
1c~~.:t, cost estimates can best be classified into three major categories according to their
.1rcctions. A construction cost estimate serves one of the tlu·ee basic functions: design, bid and
.:.n:r:.:rol. For establishing the financing of a project, either a design estimate or a bid estimate is
__ Design Estimates. For the owner or its designated design professionals, the types of cost
estimates encountered tun parallel with the planning and design as follows:
o Screening estimates (or order of magnitude estimates)
o Preliminary estimates (or conceptual estimates)
o Detailed estimates (or definitive estimates)
o Engineer's estin1ates based on plans and specifications
For each of these different estimates, the amount of design information available typically
rncreases.
Bid Estimates. For the contractor, a bid estimate submitted to the owner either for
competitive bidding or negotiation consists of direct construction cost including field

·: 1
supervision, plus a markup to cover general overhead and profits. The direct cost of
construction for bid estimates is usually derived from a combination of the folloWiiig
approaches.
o Subcontractor quotations
o Quantity takeoffs
o Construction procedures.
3. 3. Control Estimates. For monitoring the project during construction, a control estimate
is derived from available information to establish:
c Budget estimate for financing
o Budgeted cost after contracting but prior to construction
o Estimated costto completion dtiring the progress of construction. -
Design Estimates
In the plmming and design stages of a project, various design estimates reflect the progress of the
design. At the very early stage, the screening estimate or order of magnitude estimate is usually
made before the facility is designed, and must therefore rely on the cost data of similar facilities
built in the past. A preliminary estimate or conceptual estimate is based on the conceptual design
of the facility at the state when the basic technologies for the design are known. The detailed
estima~%' or definitive estimate is made when the scope of work is clearly defined and the detailed
design';~~ in progress so that the essential features of the facility are identifiable. The engineer's
estimate is based on the completed pl~ms and specifications when they are ready for the owner to
solicit bids fi·om construction contractors. In preparing these estimates, the design professional
.;
\-viii incJude expected amounts for contractors' overhead and profits.
The c6~ts associated with a facility may be decomposed into a hierarchy of levels that are
appropriate for the purpose of cost estimation. The level of detail in decomposi:n.g the facility into
tasks depends on the type of cost estimate to be prepared. For conceptual estimates, for example,
the level of detail in defining tasks is quite coarse; for detailed estimates, the level of detail can be
quite fine.
As an example, consider the cost estimates for a proposed bridge across a river. A screening
estimate is made for each of the potential alternatives, such as a tied arch bi·idge or a cantilever
truss bridge. As the bridge type is selected, e.g. the technology is chosen to be a tied arch bridge
instead of some new bridge form, a preliminary estimate is made on the basis of the layout of the
selected bridge form on the basis of the preliminary or conceptual design. When the detailed design
has progressed to a int when the essential details are known, a detailed estimate is made on t e
basis of the well-de med scope of the project. When the -detailed plans -and specifications· a e
completed, an en gin er's estimate cm.1 be made on the basis of itern:s and quantities of work.
Prepared By: Er. Subash K. Bhattarai (B.E Civil I PGDESD I MPA I MSc CM) 1/ Chapter 3.0

A Manual on Construction Project Management-(Purbanchal University) 2014 .
Bid Estimates
The contractor's bid estimates often reflect the desire of the con:traetor to secure the job as well as
the estimating tools at its disposal. Some contractors have well established cost estimating
procedures while others do not Since only the lowest bidder will be the winner of the contract in
most bidding contests, any effort. devoted to cost estimating is a loss to the contractor who is not a
successful bidder. Consequently, the contractor may put in the least amount of possible effort for
making a cost estimate if it believes that its chance of success is not high.
If a general contractor intends to use subcontractors in the construction of a facility, it may solicit
price quotations for various tasks to be subcontracted to specialty subcontractors. Thus, the general
subcontractor will shift the burden of cost estimating to subcontractors. If all or part of the
construction is to be undertaken by the general contractor, a bid estimate may be prepared on the
basis of the quantity takeoffs :fi·om the plans provided by the owner or on the basis of the
construction procedures devised by the contractor for implementing the project. For example, the
cost of a footing of a certain type and size may be found in commercial publications on cost data
which can be used to facilitate cost estimates from quantity takeoffs. However, the contractor may
want to assess the actual cost of construction by considering the actual construction procedures to
be used and the associated costs if the project is deemed to be 'different :fi·om typical designs.
Hence;jtems such as labor, material and equipment needed to perform various tasks may be used
as pararr1eters for the cost estitnates.
Control Estimates
Both the owner and the contractor must adopt some base line for co SOL .c:ontro~ d'!Hir':g .:fie
constit12tion. For the owner, a budget estin1ate must be adopted early ena,ugh ic•:r ?kn~'n,1mrg Th21gg
term fii{ancing of the facility. Consequently, the detailed estimate is o:Tien 1E...-;erll :35 rl:e rot!~
estimate since it is sufficient definitive to reflect the project scope and is c.YailaHe i:~ re:i~e ~
engineer's estimate. As the work progresses, the budgeted cost must be re;.iseJ. pecio,,S.::::iE~; ;:;:::
reflect the estimated cost to completion. A revised estimated cost is necessary c!v;;..,,=r re~il..~
change orders initiated by the owner or due to unexpected cost overruns or sa,·i11gs.
For the contractor, the bid estimate is usually regarded as the budget estimate, which wiH be used
for control purposes as well as for planning construction financing. The budgeted cost should also
be updated periodically to i·eflect the estimated cost tb completion as well as to insure adequate
cash flows for the completion of the project.
3.4 Methods of estimation
There are various methods employed for estimating the project costs. These include unit service
cost estimation during conceptualization phase, parameter estimation planning phase, definitive
Prepared By: Er. Subash K Bhattarai (B.E Civil I PGDESD I MPA I MSc CM) II Clzapter 3.0

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A Manual on Construction Project Management (Pui·banchalUnivei"sity) 2014 ..
estimate during execution phase and contractoi"'s detailed bid estin:lation at the time oftendering.
The methods used depends upon the nature of the project, the life cycle phase, the purpose for
which the estimate is requrred; the degree of accuracy desired, and the estimating effort employed.
Broad classification of estimates and the estimation methodology is otttline in given table beloW:
Types Estimation Methodology Effort Required ( rough

Accuracy
as %project cost)
Indicative cost Unit service method -30 to + 40 0.01 to 0.1
estimate %
Preliminary Parameter cost estimate suppo1ied with -15 to +30 0.05 to 0.2
c_ost estimate prevailing cost indices %
Approximate Detailed pricing based o:ri quantity take- -5to+15% 0.1 to 0.5
cost estimate off from available design and drawings
Definitive Detailed pricing supported with quantity + 5% 1 to 3
cost estimate take-off, actual cost incurred and
estimated costs for balance work
..
Detailed bid Detailed pncmg at market rate +- 2.5% 0.1 to LO
estimate by a supported with quantity take-off and
contractor
;·;;·,,!
quotations fi·om potential sub-contractor
(·
and suppliers
3.5 Project budgeting

'·'·
A proHct budget reflects the financial plan of the operations, divided into responsibility centers,
with sp'bcific goals clearly outlined along with the costs expected to be incurred. The pi"imary
purpose of having budget is:·
• To assign fmancial targets and resources to each responsibility center,

• To coordinate therr activities,
• To form the basis for controlling performance, and
• To make the participant's cost consciousness instead of purposeless routine working
The project budget uses language of accounting to state objectives and measl!re performance. The
project budget integrates monetary objectives, responsibilities and allocated resources. The base
of budget is the project cost plan and its schedule ofwork. Each responsibility center is assigned
goals in the form of earned value or earn value budget. It ·s allocated resources in the form of
materials, labor, equipment and budgeted cost for the assi. ned goals. And finally, the project
financial plan is presented in the forin "c)f master budge . w11ich .stninnariie's- all the budget
information like profit and loss statements, balance sheets, apital expenditure budget, cash flow
forecast and performance indicators.
Prepared By; Er. Subash I<. Bhattarai (B.E Civil IPGDESD I MPA I MSc CM) II Chapter 3.0

A Mantra! on Co.nstruction Project Management (Purbanchal University) 2014
In construction project, the client and the contractor have separate budgets. The client's
construction budget is primarily a capital bndget. It is what the client has earmarked the p1'oject. It
includes:
• The expenditUres on preliminaries,

• Procurement of land,
• Client supply resources,
• Consultant's fee,
• Contractor's payments and
• Cost of working capital.
Client cash flow forecast time- phased fi.mds requirement and the sot"'trces :fi·om which these funds
are to be provisioned.
On the other hand, a contractor's budget is earned vaJue income ai1d resources expenditure oriented
budget. It includes quarterly statements of income and expeildittire a:nd forecast of fiiiancial
statements of projected balance sheet, cash flow, profit and loss and performance measunng
baselines.
O'iemwcs
Budg•t
·C:Rsh F:to<N
Fo;ni e:.ns t
3.6 Bid ing
Prepared By: Er. Subash K Bhattarai (B.E Civil I PGDESD I MPA I MSc CM) II Chapter 3.0

The process of offering a tender or bid to execute some specified work or to supply some specified goods
at a certain rate/amount or to give service w'ithin a fixed time fi·ame under certain co1idition of agreement.
It is a process of procurement.
Tender or bid
It is an offer in written by the tenderer (the person who offers the tender). It is the first step in the
formulation of contract.
In making procurement by bidding, an invitation to bid can be made by the following process:-
• Inviting open bids by determining prequalification,

• Inviting open bids without determining prequalification.
Bidding Stages
·i) Single stage Single-Envelope Bidding Procedure
In the single-stage one-envelope bidding procedure, bidders submit bids in one envelope containing both
the Financial Proposal and the Technical ProposaL
ii) Single stage Two-Envelope Bidding Procedure
In the single-stage, two-envelope bidding procedure, bidders submit two sealed envelopes simultaneously,
one col\taining the Technical Proposal and the other the Price Proposal, enclosed together in an outer
single ~hvelope.
fiD T1w-Stage Two-Envelope Bidding Procedure.
::1 me 1\Yo-s.ilage: t\vo-envelope bidding procedure, at the first stage, Bidders submit two sealed envelopes
:::.::u::::::.:2;ec:-us~y~ cne containing the Technical Proposal and the other the Price Proposal, enclosed together
• To sele.:t be:.!. consultant

• To sde.:t best contractor
• To get quality work
• To get work at competitive price
• To maintain transparency
• Public private partnership ( encol!rage contracting procedure)

Chapter 4.0 construction Project Planning and

Scheduling
Activity start & finish Resource Aggregation

dates Resource Levelling
Limited Resource
LProject start &. " Allocation
finish dates
LSequence of operations
-~ ;
·• 4.1 Scheduling Process
Planning
'Planning is the most important constituent ofthe construction management. In

· the simplest sense planning is the mental process deciding about the fi1ture line
of actions. Plmming is the course of action to achieve the desired results taking
into consideration the present needs and future requirements. Plam1ing is
critical to the project management process. It forms the basis for the project
scope, schedule, resources, quality, risk, and integration
Scheduling
A construction schedule is a graphic representation which shows the phasing

rate ofconstruction with the starting and completing dates of each activity and
the sequential relationship among various operations in a construction project.
Use of scheduling
Following are the use of scheduling

• The quantity of work involved, labor, material, equipment and money

required at each stage of work can be determined by scheduling.
• The actnal progress of the work can be checked :fi;om time to time by
scheduling
• The project can be carried out in systematic manner by the use of
scheduling
Advantages of scheduling
Following are the advantages of scheduling
• By studying the schedule of work, alternative methods of execution can

be examined and the most economical method can be selected. Further
the effect of likely constraints can be evaluated at the planning stage.
• It gives clear picture of quantity and type of materials, man power,
machines at different stages of construction
• As the time of starting of an activity is known, the arrangements of
adequate resources can be done in advance
• The resource utilization can be optimized
• The actual progress of each activity can be monitored with reference to
planned program
,.·; • Interrelationship between the activities is known hence their priorities
can be set up
• Application of value engineering can be adopted With scheduling
Classification of scheduling
Schedules can be classified into groups accotding to the requirements as

follows:
• Construction schedule
• Materials schedule
• Labor schedule
• Equipment schedule
• Financial schedule
• Control schedule
• Organizational schedule
• Summary schedule
Prepared By: Er. Subash K. Bhattarai (B.E Civil I PGDESD I MPA I MSc CM) J Chapter 4. 0

Methods of scheduling .
• Bar chart or Gantt charts

• Milestone charts
• Network analysis
The Planning & ScheduHng Process
IDENTIFYTHEPR(.DJEGTACTIVlTIES ·
EXTlMATE DUR&TION OF ACTlVJTY
DEVELOPED TliE PRbJECTPLAN
SCHEDULER RQJECT ACTIVITIES
1
REVIEW AND ANALYSE THE SCHEDULE
IMPLEMENT
4.2 Work Breakdown Structure (WBS)
Work breakdown structure, represents a systematic and logical breakdown of a

project into several coniponents. It is constructed by dividing a project into
major components, each of which is . further subc.divided into sinaller
components. The process is continued till a breakdown accomplishes
manageable unit of works for which responsibility· can be defined. Work
breakdown is the first major step in planning the execution fthe project. WBS
acts as a vehicle for breaking the works in to smaller elem. rits, thus providing
a greater responsibility that every major and minor activit . are Well accounted
for their implementation.
Prepared By: Er. Subash K. Bhattarai (B.E Civil/ PGDESD I JvlPA I JvlSc CM) I Chapter 4.0

·: ..
A Manual on Construction Project Management (Purbanchal University) 2014.
Usually, the project manager is responsible for strncturinga project into

several components. The level of the smaller components should be such that
each of which should be:
• Manageable so that specific authority, and responsibility can be assigned

• Independent so that there happens to be minirtmm irtterfacing with artd
dependence on other ongoirtg elements
• Integral so that the total package can be seen, and
• Measurable intern1s of progress
Advantages I Uses ofWBS
The WBS provides a common framework for work from which the following
important aspects can be covered:
• Planning can be petformed

• Costs and budgets can be established
Risk analysis can be done
• Control and contract administration can be done
• Schedt1les can be established
a Network analysis canbe done
~ Responsibility matrix can be established

• Coordination can be established
• When summed up, the total program can be described.
Levels of WBS
Although a variety of Work Breakdo~n Structures exist, the ri1ost commmi is

the six-level structure as shown below: ... ·
1 Total program
2 Project
3 Task (activity)
4 Sub-tasks
5 Work package·
6 Levelofeffort
is the total program and is composed of a set of projects. The s m~

n' tion of the activities and costs associated with each project must equal he
td al program. Each project, however, can be broken down into tasks, wl re
tl summation of all tasks equals the summation of all projects, which, in t

A Manual on Construction Project Manageri1ent (Purbanchal University) 2014
comprises the total program. The reason for this subdivision of effort is simply
ease of control.
The upper three levels of the Wl3S are normally specified by the project
management office (customer), while the lower levels are generated by the
contractor for in-house control. Each level serves a vital purpose: level 1 is
generally used for the authorization and release of all work, budgets are
prepared at level 2, and schedules are prepared at level 3.
Characteristics OfWBS can be generalized as follow:
• Top tln·ee levels of the WBS reflect integrated efforts and not
department specific.
• The summation of all elements in one level must be the sum of all work
in the next lower level.
• Each element ofwork shonld be assigned to one and only one level of
effort. For example, the construction of the foundation of a house
shotild be included in one project (or task), not extended over two or
three.
• The WBS must be accompanied by a description ofthe scope of effort
required. Ifnot, only those.individuals who issue the WBS will have a
complete understanding of what work has to be accomplished.
Project
Sub Task sub Task Sub Task Sub Task

1.1 L2 2.1 2.2
Work package package Work package Work package

1.1.1 1.1.2 1.2.1 2.1.2
Prepared By: Er. Subash K. Bhattarai (B.E Civil I
A typical WBS of a project

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A Manual on ConstructiOfl Project Managen1ent (Purbancha!University) 2014
Tree diagramfor WBS
On simple projects,theWBS can also be constructed as a "tree diagram". The

tree diagram can follow the work or even the organizational stl'ucture of the
company (i.e. division, department, section, and unit). In the tree method,
lower-level functional 'units may be assigned to one and only one work
element.
·wBS Example -Banquet

"Levell"=> 1.0 Banquet
1.1 "Leve/2' 1.2 1.3 1.5 1.6

Planning & Room&
Supervision Dinner StaiT Speakers
Equipment
..:-~:
. ~.·:;
Planning :Menu Site/Room Gilest List "l10ppers

~ Invite
!
r BuCget Shopping Tab leslChairs RSVPs
l
Cooks TranspOtt
j
i List
i
Shopping Setting/ Nmne Tags (f . .,.T .,.,
.A:t, er, Coordinate
Disb""em•<sl
ReconcilL1tion Utensils Topics
Coordination Coobng Decorations Special Needs Hosts Backup for

Ho-shows
"Level J' =-~ Sei11ing Equipt~nent, Cleanup TharJ~ yo us

Pots, Etc.
Prepared By: Er. Subash K. Bhattm'ai (B.E Civil/ PGDESD I MPA I MSc CM) I Chapter 4.0

A Manual on Construction Project Management (Pm:banchal University) 2014
Example ofWBS
.r-·~
Building
foundation superstructure roofing finishing

'- /
--:-......_
s1te aQ; formwork
ci~~JJce w~~ws ~
1-w----...r'~
excavation masonry reinforcement
"".............../ "-..-/
~ ~
concreting concreting painting
-~ ~ ~/
__....../""--.....
,_/
masonry
L--.1"~
uamp
pr~o~g
'. 4.3 Scheduling Techniques
• BarChart
• Milestone Chart
• Linked Bar chart
• Netwoi"k Teclmiques
o CPM
o PERT
Gantt chart/Bar chart
The oldest formal planning tool is the bar chart. It is developed as a production control
tool in 1917 by Henry L. Gantt, an American mechanical engineer, hence also called
Gantt chart in his respect. A Gantt chmi provides a graphical illustration of a schedule
that helps to pla:n, coordinate, and track specific tasks in aproject.
A Gantt chart is constructed with a horizontal axis representing the t · al time span of
the project, broken dow11 into i11crements (for example, days; weeks, · · mo11ths)and a
vertical axis representing the tasks that make up the project (for examp e, if the project
Prepared By: Er. Subash K Bhattarai (B.E Civil I PGDESD I MPA I MSc CM) J Chapter 4. 0

A Manual on Construction Project Management (Purbanchal U1iiversity) 2014
is outfitting your computer with new software, the major tasks involved might be:
conduct research, choose software, install software). ·
Horizontal bars of varying lengths represent the sequences, timing; and til'ne span for
each task. As the project progresses, secondary bars, arrowheads, or darkened bars
may be added to indicate completed tasks, or the portions of tasks that have been
completed. A vertical line is used to represent the report date.
Steps in Preparing Bat Chart:
The following are the importalit steps in developing a bar chart.

I. Identify different activities within the work: Prepare Work Breakdown
Structure i.e. breakdown the project into its various activities or jobs or
operations, each representing manageable units for planning ai1d control.
2. Estimate time reqt1ited to complete each activity: Based on resource
availability, historical data, experience and expert opini01ls, estimate the time
required to complete each activity.
3. Develop logical :sequence between activities: Activities should be performed
or completed in a definite sequence. So, decide the sequence in which the
activities are to be performed.
4. Develop a bar chart. Represent the above information in the Bar chart,
indicating the relative positions of each activity.
How to draw a Bar Chai"t?
~ Listing of Woi"k activities

~ Estimation of work duration
~ Identifying start and completion date in calendar fornia:t
~ Drawing each activity as a horizontal bar in chroiwlogical order
according to its start date. ,..,.
Sample of a Bar Chart

Advantages of Bar chart:
Theadvantages of Bar chart are:
1. It is simple to understand: Even a person with little education can understand

the concept quite easily. This 111ay be the reason that bar cha1i is popular in
every sector.
2. It is easy to prepare, consume less resources and economical. No sophisticated
tools and Special knowledge isnot required to prepare the bar chart hence it is
easy and economical.· ·
3. It ca11 be used to show progress. Simple "fill in the bar" method is used to
show how much of the project was complete. It can also be shown by the
planned bar alongside the progress bar like.
4. It can be used for resource plal111ing,.,such as manpower planning, budgel:ing
etc.
5. It gives clear pictorial model of the project.
Disadvantages /Limitation ofBar chart
. The Bar chart suffers from some disadvantageswhich limits its usefulness:
1. There 1i1ay be physical limit to the size of the bar chart, which may lii11it the
size 6f the project that cari be plabned with this technique or only major
activities are showi1. Hence, _it is not useful for large and complex projects.
2. There are some· activities of a project which are taken lip concurrently, w-hile
there m'e others which cai1 be taken up o11ly after con1pletion of some other
activities. Similal'ly some activities can be started few days after the other
activity stmis. The activities whose start and end depend on other activities
are shown serially. In a project, there may be large nui11ber of activities which
can start with certain degree of concurrency. By merely depicting them
parallel, interrelationship between them caimot be clearly depicted.
3. Each activity receives equal importance due to the lack of special indication
in the chart. Thus in bar chart, long duration activity may appear most
important ones, which may not be true. In building constJ'uction, plastering
work, may take long time but concreting may be completed in a single day
and cOiTcreting is more in'iportant activity.
4. It cam1ot be used as coi1trol device for large projeCts.
5. It is diffici1lt to show critical path, critical activities i:uid floats available.
6. Data is hard to manipulate i.e. it cannot easily cope with frequent changes or
updating. The bar cha ·t is a static representatim1 of the planned activities and
does not respond to t e dynamic happening on the construction site of the
complex project.
7. Updating means drawi1g the entire chart again and again
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Example
A project con:sist of 8 activities A,B,C,D,E,F;G,H with their time ofcompletion as

follows.
Activity Duration (weeks)

A 2
B 4
c 2
D 4
E 6
F 4
G 5 ...
H 4
• Activity A and B canbe performed in parallel

• Activity C ai1d D cannot start until Activity A is cornplete.
• Activity E cannot start until the half the work of Activity Cis complete.
• Activity F can start only after Activity D is complete.
• Activity G succeeds Activity C
• H is the last activity which should succeed activity E.
i:. Draw the bar chati and find out the completion time of the p'roject.
···;
i')' Solution
Activity/week 1 2 3 4 5 6 7 8 9 10 11 12 13
A
B
c
D hi·
E
F
G
H
Here the j)roject completion time is 13 wee~.
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Milestone chart
To overcome some ofthe limitations ofBar chart, Milestone Chal't and Linked
bar charts are developed.
Milestone cha1i is a modification over the original Gantt chart (bar chart). Milestones
are the key events i.e. start or end ofthe activity. A Chart that graphically depicts key
evel1ts along a timescale, usually with ti'iangles repres'enting each event, is called
milestone chart. It can mark specific points in the project where checks can be made·
to see if the project is on time and \vhere it should be. The best place to locate
milestones is at the completion of a major activity. For a building construction, there
are various activities but milestones may be considered as laying foundation stone,
concreting, inauguration etc.
Linked Bar chart
One of the main drawbacks of simple bar chart is that it does not show the
interrelationship between activities. The links between tasks are the heart of project
scheduling. Linked bar chart uses the Jinks (arrow) to show the relationship betweei1
activities. There are mainly four types of relationship between activities.
1. Finish to Start
(Activity B cannot staJi until Activity A is finished)
2. Start to Start
(Activity B must start when activity A starts)
3. Start to Finish
(Activity B should be finished when actiYity A starts)

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Fi11isli to Fiitisb
(Activ.ity B Iilust be fi11ished \vhenactivity A finishes)
The linl<ed bar chart has advantage of exhibitii1g the effect of delay 011 succeeding
·activities and also it can provide sortle information of the extra tit'ne available (if there
is) with an activity for its cot'npletion. The extra tifne available for an activity for its
completion is called float. Similarly, the activities, which do not have extra time for
co1npletion, are called critical activities.
Network Techniques
-·
It is one of the efficient modern tools for planning and scheduling in Project
management. In a complex projects, there involves large number ofactivities, hence
project scheduling becomes almost impossible with the use of conventional method of
scheduling like bar charts. Complex projects, if not correctly schedilled, will most
probably result in either under estimation or over estirnatioi1 of ·the project
•iinplementation period. Both of the estimation will have serio1.1s conseqnences in any
project. If the project com:pleti6n tih1e is underestimated, the actl1al it'nplemel1tation
period will be more tha11 the estimated period of time resulting in 'time oven·on' and
ultimately leads to cost overrim of the project. If the additii:mal cost dt\e to cost
overrun is not made available in time, the project completiot1 will sllffer a setback.
Network · ased scheduling of projects come handy in solving cotnplex projects
scheduling problems, There are two popular network based scbedoling techniques.

A Manual on Construction Project Mai1agement (Purbanchal University) 2014
a) Critical Path Method - CPM developed in the year 1957 .by Morgan R.
Walker of DU Pont arid James E. Kelly ofRemihgton Rand for preparing
shutdown schedLlle of a chemical phtnt. .
b) Program Evaluation and Revie'\v Technique - PERT, develbped by US
Navy in 1958 for scheduling Polaris Missile Project
Though the two methods are conceptually similar except for certain minor differences,
they were developed independently in USA.
Terminologies used in Network Technique
1. ACtivity (Task): An activity is any identifiable job which requires time, manpower,
material, alld other resources to complete. It means the performance of the specific
task of project. Arrow in a network diagram ~presents activity. The following are the
examples of activity for a building construction project.
• · Layout
• Excavation offoundation
• Construction of wail Layout
• Concreting
• Construction of roofing
• Wiring and electrification
• Plastering and paining work
Relationship between activities:
A project is a collection of various actJvJtJes a:nd those actJVJtJes are interrelated

amorrg themselves. There are t]u·ee possible relationships between different activities:
Concurrent. (Parallei) . Activities: Those activities .which can be petformed

simultaneously and independently to each other are known as concurrent activities. In
figure below activities A and B are paralleL ·
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Sel·ial Activities: Those aCtivities which are to be performed one afteJ· the other, in
succession are known as serial activities. Serial activities canimt be performed
independently. In the figure below construCtion ofwall and plast~ring are serial
activities.
In the above. figure, actlVlty A i.e. construction of wall is preceding activity

·(Predecessor) of activity B i.e.· Plastering. Or, we can say that Construction of wall
(B) is succeeding activity (Successor) of Earthwork in excavation (A). This means
activity A must be completed to start activity B.
For a given activity, the activity that occurs immediately before it is its predecessor
whereas for a given activity, the activity that follows immediately after it, is its
successor.
2. Activity D nration
An activity's duration is the amoilnt of time estimated for its completion. The tin1e
•·.·. unit for the project can be minutes, hours, work days, caJendar days, weeks or months.
Most construction schedule comn1oi1ly use dt:1rations of work days or calendar days.
The use of the time units expressed should be consistent throughotit the schedule.
.i:}Activity duration= Work quantity I Production rate
The accuracy of duratio11 estimates depends on many factors:
• Methods of construction, -~·:
• Resource availability,
• Work quantity,
• Nature or complexity of work,
• Labor and equipment productivity,
• Quality of field management,
• Weather and site conditions,
• Concurrent activities .
.3. Event (Node):
The beginning or end of the activity is known as . It represents specific point in

time and does not consurne time, manpower, material nd other resources.

Two conventions can b'e used for developing networks are: Activity on
Arrow (AOA) and Activity on Node (AON).
Activity oti Arrow (AOA): Ui:rder this convention the following rtlles a'pply.
• Activity is represented by a straight arrow with circles at both ends. The

direction of the m'row indicates the direction of flow of the project. Unlike bar
chart, length of arrow does not represent the duration of the activity.
• Eve!lts are represented by the circle_. The circle atthe beginning of the activity
( even:t) ·is known as tail event/burst event where. as circle at the end of the
activity (event) is known as head event/merge event. Event is symbolically
represented by numbers or alphabets written inside the circle. l1'1 a network,
some events work as head event for an activity· and tail evei1t of another
activity. Such eVeJi.ts are known as DWtl Role Event.
Generally, the name of the activity (Or symbol of the activity is) is indicated above
the arrow while the dtlration ofthe activity is indicated below the arrow.
Earthwork in Excavatio Construction of \Na!!•P

12days ..._:.._}
·. Event 1 is the tail event ofActivity- Earthwork in excavation
Event 2 is the head event. of activity -Earthwork in excavation as well as tail event of
activity- construction of wall.· Hence event 2 is doa1 role event.
Event 3 is the head event ofactivity- construction of wall
0E70~
T2i~/ Burst . Head/ Merge event Dual Role event
4. Dummy activity
:Jt!,.,:i:.._-nmy activity is an imaginary (hypothetical) activity included in a network Since

:r: is ::we! a real activity, it does not consume time, manpower, inatetial and other
iirees:=l~-ccs_ It is included in a network to maintain the relationship between a tivities
·il!:l!l?i"'2FOa1Iely. Jt is represented by dotted arrow. Dnml'nies serve two pnrpo es in a
.•~jcf'k:
a) Grammatical purpose and b) Logical purpose
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1. Grammatical purpose: It is used to prevent two a:rr6ws havii1g com·mon

beginni11g and e11d nodes for two or more activities. For example, coitsider the
arrows of activities A arid B; both stmts frol'n node 1 ai1d end at node 2. Due
to this an inconve1iience results when the network is used for complltation,
i.e., tfniqueness in the identification is lost. This inconvenience fi·equently
leads to mistake.
2. Logical pmpose: Dummies are also used to give logical clear represe11tation in
a network having an activity common to t\vo sets of operations running
parallel to each other.
1 Dummy
D
c
A- Wait delivery of new machine
B ~ Install new machii1e
C -Remove existing machil'J.e
D -Dispose of existing n1achine
Set I activity A and Bare tobe performed serially while Set 2 ~ctivities C and D are
to be performe serially. Both the sets are performed simultaneously. However, for
practical consi erations; we fii1d that activity D of set 2 cannot be performed unless
activity A of s t 1 is completed. He11ce a dummy is used joining i1ode 2 and 5
indicating that ·ctivity D cm1nbt be started unless activity A is cmnpleted.
{Note: Unneces ary dioi11nies makes network n1essyand creates confusion)
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5. Rules ofD.rawing Nehvork diagram
The process of cm1structing tietwork consists of following:
a.All activities shall be represented by way of straight arrows pointing from left
towards the right. This means flow of 11etwork shall be from the left to the
right.
b. There must be only single initial node (tail event) as well as ending node
(head event) in a network. Initial node has only o11tgoing arrows, whereas
ending node has incomii1g a1Tows.
c. An event cannot occur morethan once, i.e. there cannot be any i1etwork path
looping back to previously occurred evel1t. Thi.ts network show11 in figure
below is incorrect.
d. There shall not be any crisscrossi.1g of arro\YS. Fig be1c1F'•\- s.~•'li~:S 2

network in which two a.rl'ows cross each other, ,..-hich :Tis DGi ~~~~
The 11etwork following the sarne logic can be drawn as below.
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~<%-a-~~~~""""""""""""'""""""""'""""""""""""""""""""~-=~,_,-
e. There should be only one arrow for an activity, i.e. nun1ber of arrows should
be equal to number of activities.
f. There shall not be unnecessary dumt11)1 activities in the network. Dummy
activity shall be introduced oi1ly when it is absolutely necessary and without
which the netwod<: diagram cannot be completed.
g. In short, CPM network diagram must answers the following questions:
1. What activity or activities must immediately precede this activity?
u. What activity or activities cannot be started until after the completion
of this activity?
m. What activity or activities can be performed COJicurrelitly with this
activity?
6. Numbering the events:

Though CPM networks are activity Oi"iented, the events coristiti.1te itnporta:nt control
points. The events should be nuinbered in such a way that they reflect the iogical
sequence of activities. It is essential to number the events or node points correc!ly.
The activities joining the nodes can better be identified oi1 the network by the event
J':ltnnbers at the tail and head of the activity. This can be done by following the by D.R.
Fulkerson 's rule.
1. Number the initial event as 1

2. Neglect all the arrows emerging out ofthe initial event numbered 1.
3. Doing so will apparently provide 011e or more new initial events, Number
these apparently produced new initial events as 2, 3, 4 etc.
4. Again neglect all emerging arrOws from these numbered events; vvill create
few more initial events.
5. Follow step 3 such that tail evel1thave lower 11uniber tha11 the head event.
6. Continue this operation until the last event, which has no emerging arrows
7. Event Time
a. Earliest Event Time
The earliest occurrence time or earliest event til11e (TE) is he earliest time at which an
event can occur. It is the time by which all the activities accomplishing an event are
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completed. In CPM network, the time of completion of each activity (tij) is known.
Hence the earliest 6cctirrence time can be easily calculated. We can. formulate the
following expressions for (TE) of any event j using forward pass calculation.
(TE )j = {(Te)i+ tij }max
Where, (TE )j = earliest occurrence time for the tail event
(TE)i =earliest occurrence time for the bead event .
ij = activity under consideration

tiJ =time of completion of activity ij
.....
b. Latest Event Time
.The latest event tii11e or latest allowable occurrence time (TL) is the latest time by
which an event must occur to keep the project on schedule. The latest event time for
an activity is completed by. sta1iing from tail event and using backward pass and
taking minimtun valt\e.
Where, (h)j == eai"liest occurrence time for the head event
(TL)i = earliest occllrrence time for the tail event
ij = activity under consideration
tij =time of completion of activity ij
(TE) j

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8. Activity time
CPM is activity otiented; CP.rvi: consist of following activity times which are
useful for network computations.
a. EST (Earliest Sta1't Time): It is the earliest possible time an activity

or operation can be started. It is equal to earliest occutrence time of
tail event of that activity. EST= Earliest event time at its tail= (TE) i
b. EFT (Eadiest Finish Time): It is the earliest possible time for
completi01~ of an activity or operation without delayin:g the ptoject
completion time. It can be computed by adding activity duration by
EST. (EST+D)
EFT (i-j) =EST (i--j) + e-j

c. LFT (Latest Finish Time): It is the latest time the activity or
operation must be completed so that scheduled completion date of the
\\'ork can be achieved. It is equal to latest occurrence time ofhead event.
LFT =Latest eve1it time at its head = (TL) j
d. LST (Latest Start Time): It is the latest possible time; an activity

can be started without delaying the project. (LFT~D)
tH
L:ST (i;.j) =LFT (isj) - f-j
Examples: 1
Draw a network with the following details. Number the events using Fulkerson's rule
SN Activity Predecessor Successor

1 A - B,C
2 B A D
3 c A E,F
4 D B G
5 E c G
6 F c -
7 J G D,E -
l
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Solution: D
'•
Examples: 2
Draw a network with the following details. Number the events using Fulkerson's rule.
.......
Solution
SN Activity Predecessor Successor
1 A - B,C
.2 B A D
3 c A E,F
4 D B F
5 E c -·
6 F C,D -
"
/"
"" E
Activity on Node (AON):

r
It uses circle to represent the project activities, with arrows linking them together to
show the sequence in which they are to be performed. The main a:dvaiitages ofAON
techniques are that it does not require dLimm activity and show EST and LST directly
in the network. In AOA there can be only ore type of relationship bet\-veen activities
i.e. Finish to Start however in AON it is poss le to establish four types of relationship
as i11entioned in Linl<ed bar. This is also kno 11 as Precedence Diagramming Method.
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Critical Path Method I Critical Path Analysis
A network represents the logical sequence ofactivities ccintait1ed inthe project. The
activities are represented by anows and arrows flow frol'n left to right. In a network,
there may be many paths starting fi·om the initial event and leading to the last event. If
the duration of all the activities that lie on particular paths is added, it gives the
duration of the path. Each path in a network will have a different duration. The path
that has the longest duration is called the critical path and the activities lying on the
critical path are critical activities. It is the critical path that sets the overall duration of
the project In a following network, there are seven activities and from event 1 to
event 6 there are tlu·ee paths.
D (3)
Path Description Duration Retnarks

1 1-2-3-5-6 4+2+3+4 =13 days
2 1-2-4-5-6 4+5+6+4 =19 days Longest/Critical
path
3 1-2-4-6
""'
4+5+ 1 =1 0 days
Thus Activities A, C, E and G are critical activities and Project duratioi1 is l9days.
Characteristics of Critical Path:
1. Critical path is the longest path (time wise) connecting the initial and final
events.
2. Critical activity may run through dt\mmy activity/activ ties also.
3. The number of activities lyil1g on critical path may be ess than the Tiul'nber of
activities in other non -critical activities.
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4. It is possible that a network may have 1i1ore that:i one critical path i.e, if two or
more paths have the same time duration which is !'naxin1um, then all such
paths will be critical paths.
Finding Critical Path
The method of fii1di1ig out the number of paths available in a given network
connecting the initial and fit:ial events, finding the time duration of all the available
paths and identifying the critical paths is suitable for small networks. If the network is
relatively larger in size; there will be larger number of pa.ths available connecting the
initial and final events. The method uses two series of computatio11s viz., Forward
pass computation m1d Backward pass computation.
Fonvard pass computation: ."""

• In the forward pass calculation, all activities in the 11etwork are assumed to
start as early as possible.
• The calculation begins from the left to the right side ofthe network.
• When two or more activities merge into a1'1 event, the largest value is taken as
an earliest occurre11ce tin1e of that event.
• Forward pass calculation gives the EST and EFT of each activity.·
:Backward p~1ss compl.Itation:

•· In· the backWai·d pass calcu]ation, all activities in the netWork are assun1ed-to
stm·t as late as possible.
• The calculation begins from the right to the left side of the network.
• When two or more activity mergesat a node, the smallest valueis taken as a
latest occurrence time of that event.
• Backward pass calwlation gives the LST and LFT of each activity.
In the following network
Event 1 2 4 5 6
No.
Early vent 0 0+4 = 4 4+2 = 6 4+5= 9 6+3= 9 15 + 4 =19
time
9+6 = 15 9+1 = 10
Late vent 4-4=0 12-2=10 15-3=12 19-1=18 19-4=15 19
Time
9-5=4 15-6=9
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Thus in the above network, Events 1, 2, 4, 5 & 6 have both the times (early event time
ai1d late event tirnes) ire equal.
What does the critical path signifY?
In the above network, Activities A, C, E and G are critical activities. Since the two
time estimates of all the critical activities are same, it means that succeeding activity
in a critical path shall commet1ce immediately after preceding activity is completed so
that project will be completed in time (19 days). Activity G shaJ] stmi immediately .
after activity E is completed; activity E shall start in1mediately after activity C is
completed; Activity C shf:tll start immediately after aCtivity A is completed. If there is
any delay in either starting a critical activity or if time taken to complete the critical
activity exceeds the estimated time, project implementation period will get extended.
Thus it is obvious that only the critical activities get more attention fi·om the
management. Any delay in critical activities lead to time overrun of the project which
ultimately results in cost overrun. All paths in the n·etwork other than critical path are
called non critical path. A non-critical path may have only non-critical activities or a
combination of both critical and non-critical activities.
9. Activity Float Analysis:
Floats means the available fi·ee time for an activity, which is useful for managers to
manage the limited -resources. There are four types of activity floats (slacks) in
network problem. A detailed study of non-Ci·itical activities with regard to the 'free
time' available is worth doing sihce it will help in better conu·o] of the project
· implementation and better allocation of resources. This study is ktlown as activity
float analysis.
1. Total Float (TF): Total Float represents the maximiun time by which the
completion of the activity can be delayed without affecting the project completion
time. If an activity is delayed by a time equal to its total float, that activity and all
other subsequent activities in that path bE:come critical. Mathematically,
TF of ai1 activity = LST -EST or LFT - EFT
2. Free Float (FF): It is the delay that can be permitted i.e. the spare tin1e allowable
for ai'J activity so that sl.Jcceeding activities in the path are not affected. If the
succeeding activities are to remain tin-affected by the delay in a particular activity
the earliest· start Time Of the head event of that activity shall not be exceeded.
Mathematically,
FF of an activity= ST ofsucceeding activity- EFT ofthat activity
FF = ESTj - ESTi- ij

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More Clearly, FF = {(T£)j- (TE)i}- til
3. Independent Float (lF): It is the spare til'ne available for the activity, if preceding ·
activity is started as late as possible and succeeding activities are finished as early
as possible. It is maxin1um delay allowable for an activity so that the start time of
succeeding activities are not affected. It may come negative (super critical
activities) but should he taken as zero. Mathematically,
IF of an activity.= EST of s.ucceeding activity - LFT of that activity
More Clearly, FF = {(TE)j- (TL)i}- tij
4. Interfering Float (IF1 ): It is the nari1e given to head eve11t slack (Sj ). It is the
difference between total floa:t and free float. It is the excess of minimum available
time over activity time.
IFl = TF- FF = Sj
All the floats are equal to zero for critical acttvtttes. Critical path JS that path
connecting activities having Total Float Equal to Zero;
Ll
FF E-l IFl L-J
~----~~--~·+---~
TF
IF
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In the above exaniple:
S.N. Activity Dur·ation EST EFT LST LFT TF FF IF IF Rcmnrk

1
I A 4 0 4 0 4 0 0 0 0 Critical
2 B 2 4 6 10 12 6 0 0 6
3 c 5 4 9 4 9 0 0 0 0 Critical
4 D 3 6 9 12 15 6 6 0 0
5 E 6 9 15 9 15 0 0 0 0 Critical
6 F I 8 10 18 19 9 9 9 0
7 G 4 15 19 15 19 0 0 0 0 Critical
Use of different floats for management deCisions
1. Total float belongs to the path. If the total float is used entirely for a:n activity,
it would make that activity and all other activities in that path critical. Hence
it is not advisable to use the total float completely in an activity as there will
be no cushion available if subsequent activities need additional time for
completion than originally planned.
2. Free float can be used completely for the activity since this does not disturb.·
the succeeding activities. However the preceding activity should have been
completed as planned.
3. Independent float of an activity does not depend on precedi11g activities and it
also does not disturb succeeding activities. Hence independent float can be
used without any constraint.
Steps in Critical Path Analysis
1. Develop a list of tasks using work breakdown structure.
2. Order and determine immediate predecessor~or each task
3. Estimate completion time for tasks.
4. Layout a project network using tasks and their predecessors.
5. Determine earliest start a:nd finishing tin'H::s using a forward pass through the network.
Equations: forward pass EST of the activity is Early occurrence time of tail event and EFT =
EST+D
6. Determine the latest start and .fmish times for .each task. LFT is' equal to the Latest
occurrence time of the head event and LST = LFT- D.
7. Determine slack/ float for each task using difference between latest and arliest start times.
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8. Find tasks with zero slack. These are critical tasks lying on the critical path.
Numerical examples: Find all the components of CPM from the following
inforn'lation.
S.No. Activity Duration Predecessor Successor

1 A 3 - D
2 B 6 - E, G,I·
,.,
.) c 2 - F
4 D 2 A G
5 E 1 B H
6 F 3 ... c I
7 G 7 B,D -
,.,
8 H .) E -
9 I 4 B,F -
Sol 11 • Drawing the network ofthe given problem
Computing the forward pass from left hand side to right hand side i.e. from tail
event to the head event. We have to add the given duration (ti.i) to compute the
forward pass. This will give the earliest start time (EST) of an activity. The
higher values will the taken while computing forward pass.
Similarly, the backward pass is computed from head event towai'ds toil event.
The lowest value is taken to compute LST:
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0EST
~
0LFT
Now, tabulating the value of EST, EFT, LST and LFT
Activity Duration EST EFT LST LFT

,.,
A :> 0 3 1 4
B 6 0 6 0 6
c 2 0 2 4 6
,.,
D 2 :> 5 4 6
E 1 6 7 9 10
F 3 2 5 6 9
G 7 6 13 6 13
H 3 7 10 10 13
I 4 6 10 9 13
0 A 3
G),--~>Q)
.C.
Where,, 10r EST, t-IJ·= 3
EST of A = 0, and EFT = 0+3= 3
Similarly, LFT of A 0 and LST = 4- 3 = 1

Now, computing total float (TF), free float (FF), Independent float (IF) and
Interfering float (IF 1)
a. Total float TF =LFT- EFT or,LST- EST
For, activity A = 4 - 3 =1-0
=1 =1
b. Again, free float (FF) = ESTj - ESTi- tij
For activity 'A'= 3 - 0- 3 == 0
c. For independent float (IF)= ESTj- LFTi- tij
For activity 'A'= 3- 0-3 = 0
d. AndJnterferii1g float (IF1) = TF -FF
For activity 'A'= 1 - 0 = 1

·: ..
A Manual on Construction Project Mai1agement (Purbanchal University) 2014
Computing all the values for all activities as shown in above calculation.
Summarizing the values as shown below:
Activity Duration EST EFT LST LFT TF. FF IF IFI

,.,
A 3 0 .) 1 1 1 0 0 1
B 6 0 6 0 0 0 0 0 0
c 2 0 2 4 4 4 0 0 4
,.,
D 2 .) 5 4 4 1 1 0 0
.., ,.,
E 1 6 7 9 9 .) 0 0 .)
,., ,.,
F .) 2 5 6 6 4 1 -3( 0) .)
G 7 6 13 6 6 0 0 0 0
,.,
H 3 7 10 10 10 3 .) 0 0
., ,.,
I 4 6 10 9 9 .) .) 0 0
Here, the longest path is critical path B -dummy - F ~ 13 days and critical
activities are B & F
Note: The TF of C.A. is always equal to zero.
, 2. Find all the components of CPM problem as given below.
Activity Duration (days) predecessor

A 2 -
B 5 -
,
c .) -
D 4 '¥
A,B
E 2 A,B
F 4 D
G 1 D,E
H 3 B,C
I 2 B,C
,.,
J .) F,G,H
SoJD . Drawing the network diagram and computing EST, EFI, I STand LFT
first and then calculating floats.
Prepmed By: Er. Subash K. Bhattarai (B.E Civil I PGDESD I MPA I \1Sc 01:, Chapter 4;0

A Manual on Construction Pr.cje..:: ~:.~..:::..:>:=.g:=me;-;: (?urbanchal University) 2014
I~ 9
9.
0, 3, 7
13
. 13
~ctivity Duration EST EFT LST LFT TF FF IF IF1 R I

,.., ,.., ,..,
A 2 0 2 3 5 0
l
.) J .)
.)··::.
n :>
5 0 5 0 5 0 0 0 0 Ic- £
~
'!i
~~
·.-;:.
,.., i '
.·
c ·:·
.J 0 3 7 10 7 2 2 b I
\.·;:.
·,?i·: i
D 4 5 9 5 9 0 0 0 0 ic
E 2 5 7 10 12 5 2 2 3
F 4 9 13 9 13 0 0 0 0 c
G 1 9 10 12 13 3 3 0 0
I
,..,
H .) 5 8 10 13 5 5 0 0
I 2 5 7 14 16 9 9 4 0
,..,
J .) 13 16 13 16 0 0 0 0 0
Critical path: a- D - F - I with project completion period = 16 days
Prepared By: Er. Subash K. Bhattarai (B.E Civil I PGDESD I MPA I MSc CM) I Clraptet 4.0

. .
A Manual on Construction Project Management (Pui·banchal University) '14
Example:
Draw a CPM network diagram. Find Critical path, critical activities, project duration, EST, EFT, LST, LFT, TF, IF (both independent
and interfering).
S.N. Activity Duration (days) Predecessor Successor
1 A 1 - D,E
2 B 6 - F,J
,
.) c 2 - G
4 D 2 A H I
5 E 4 A H
6 F 3 B I
7 G ~
4 c J
8 H 2 D,E K
9 I 5 F L
10 J 3 B,G -
11 K 3 H L
12 L 4 I,K -
''
........

A IVlttllllill llil (
Solution
~
·l:J-
\
H(2) .,
\
''
0
ffi c (2
1\
Prepared By: Er. SubashK. Bhattarai (B.E Civil I PGDESD I Ml't\ I MSc CM) I Chapter 4,0

A Manual on Construction Project Mnnnp.emcnt (Purbanchal University) ~1.
;:m~~~~~IO'I/I.I\OIIItol:l~liWiitllt<l ..... l-''l'f'"l.,...,'l>'l~l\lot-'l~¥m>W~~$!;$ V1:i i< .i.;~~H~':)l'fil'-1'
---_.,..,-- .., ...... .,..,-~.
Activity Duration EST EFT L:S'.E '.;c; 'LFT-' Tli:;-; FF IF IFl Remark
1 A 1 0 1 4 5 4 0 0 4
2 B 6 0 6 0 6 0 0 0 0 Critical
,
.) c 2 0 2 9 ]1 9 0 0 9
4 D 2 1 3 7 9 6 2 0 4 -veiF
5 E 4 1 5 5 9 4 0 0 4 -ve IF
,
6 F .) 6 9 6 9 0 0 0 0 Critical
'
7 G 4 2 6 11 15 9 0 0 9
8 H 2 5 7 9 11 4 0 0 4
9 I 5 9 14 9 14 0 0 0 0 Critical
10 J 3 6 9 15 18 9 0 0 9
,
11 K .) 7 ! 10 11 14 4 4 0 0
12 L 4 14 18 14 18 0 0 0 0 critical
• The critical path is 1-:-3-..7-10-11 show1i in dark arrow line.
•· The critical activities are B-F-1-L. The project completion time is 18 days
Prepared By: Er. Subash K. Bhattaral (B.E Civil I PGDESD IMP A I MSc CM) I Chapter 4.0

·~:..: ·' '· •\'< ·>:·:· '•
Same Problem by AON I PDM Method
r' I I 9 ·1
---·-·-·~- ['tl~Ltl.
"~~~.li•mJ··········· J I j0l
=~~s;;r~e-
=<~~= ~L.z_''"''"'"~'''''""1~~
=P
5 »W<-;·, 7;
, 4 r -· · E 4 --:tl~·-~--
~---,-~,J-=
~---·- r
· ·- ··;:; . • !riq 'Jjl'41 L.,.fhrl 18
~ =:r~~~=jT ----~Fln!sh (18)
: :I~ .:..-=:~~:~-~=-:31
5
) - .J __ .. =r4===:-=I=s··
i«=BJ J~ .. ·
"""""'"" '"'""""'""
1§.. . . _j
. . J.9. . . . . . . . .''"""""'"~ ri ---] (· .
..... ::!...........................A..... L] ' .
,4ot~.
< ~
8,F,\ ~ L; <.n·uo;;:.l·'l"b-.,,1,.,,.
' , •• , • • • • • • • , • •• ' >
1_;;=----=--t---"1 ~ 9 ~ .·.H~;ir:9.·:?.~~~;~.:~~~··.··it~-·
li N·· m"'· w;.,+met.t
f"'
.- ;;>htit , lt)l,.
="' . . EP: earfi.IJ!!t Fink£:'1 Tlm.;;
Ls~ L~1t-asl SEs1t:.T:Wr~c
LF:. Litbl~ .Fini'Sh. TirniJ
TF ·TolaJ Hm"t
Froje·ci Ccrnr:•'"tirm ·durst,•c•"•: HI d:py.'}
><

A Manual on Constrtiction Project Management (Purbanchal University) 2014
Advantages of the Critical Path Method

. . . -.
There many pros of using the critical path n]ethod dnring ptoject planning and
execution. The critical path method:
• Makes dependencies visible between the project activities; this is done by

constructing project network diagrams or precedence diagrams
• Organizes large and complex projects, hence allowing a more systematic
approach to project planning and scheduling, project execution, and risk
management
• Enables· the calculation Of the float (slack) ·or each activity. The float tells
you exactly how long an activity can come in late withottt it impacting the
project schedule.
• Encourages the Pi·oject Mai1ager to redtice the project duration by
optimizing the critical path and using compression tech11iqt:1es as applicable
• Increases visibility of impact of schedule revisions, which are usually
necessary when major milestones have been n1issed or whe11 the risk of
missing a major milestone iooms large
• Enables the Project Manager to optimize efficiency by allocating resources
appropriately, consequently the overall cost can be reduced
• Provides opportunities to schedule by identifying the activities that are most
critical
For large and complex projects, it is best to use specialized software like Ms-
Project and Primavera:. This software generates data, such as activity float,
automatically for you. Next, let's. take a look at some Critical Path Method
disadvantages.
Disadvantages of Critical Path Method
There aren't many disadvantages to Y;itical Path Method. Me11tioned below are
the cons of Critical Path Method. · ·
• For large and complex jn'ojeds, there'll be thousands ofactivities and

dependency relationships. Without software it can be 111ighty difficult
managing this. To 1'nake matters wo1·se, if the pian changes during project
execution then the precedence diagram will have to be redrawn. Fortunately,
we do have relatively cheap software that can handle this with ease.
• One of the advantages of drawing a project precedence diagram is that you
can print and stick in the pr ~ect area. The precedence diagram enables the
team to st11y focused on proj ct activities. Project team men1bers are always
cognizant of the critical path· ince it is visible every day. However; for large
projects with thousands o activities, it may be difficult to print the
project network diagram. · u would most definitely need a plotter.
Prepared By: Er. Subash K. Bhattarai (B.E Civil/ PGDESD I MPA I MSc 01) l Chapter 4.0

• The Critical Path Method does not account for resource and resource
allocation. Critical Chain will be handy in these situations.
PERT -Program Evaluation and Review Technique.
Project manager would be i1iterested in completing the project at the mmunum
possible time but it is not entirely in his hand to do so. There are many factors, both
internal and external to the organizations which have influence on the completion time
of each activity in the project. It is a probabilistic approach for estimating the duration
of an activity and event oriented network diagram. PERT is used in the completely
newly developed project such as Reseat-ch and design, new industries product design
·.and there may not be record of past experiences in the pa1iicular field. PERT system is
preferred for those projects in which correct time determination for various activities
cannot be made.
PERT uses three time estimates for each activitY with a view to overcome uncertainty
in time estimates.
a) Optimistic time estimate

b) Pessimistic time estimate
c) Most likely (probable) time estimate,
a) Optimistic time estiniate (to): It is the shortest possible time· i!'t \\ihich an
activity can be completed under ideal conditions. Til arriving at the optimistic
time estimate, it is assumed that everything is favorable in co.nipleting the
activity in the shoiiest possible time.
b) Pessimistic time estimate (tp): It is the maximum possible time it would take
to complete an activity under worst conditions. In arriving at the pessimistic
time, it is assumed that everything is unfavorable for completing the activity
in time and every possible delay and difficult situation is encouhtered.
c) Most likely time estimates (tm): It lies between optimistic and pessimistic
time estimates. It is the time in which an activity can be completed under
normal conditions. In arriving at the most likely time, it is assu111ed that
conditions are neither favorable nor unfavorable, but normal.
Expected time estimate (te): PERT assumes that the optimistic time (to) and the
p·essimistic time (tp) are equally likely to occur while the most likely thne (th1) is four
times more likely to occur tha11 the others. Hence foi" arriving at the expected ti111e (te)
,.,.e use following fon'nula
To arrive at this formula we must assume s0Ii1e functional fon of the activitytime as
shown in the figure below. It was observed that beta disti·ib ttion suits well for the
purpose and hence same was accepted as a mathematical rn del fot arriving at the
Prepared By: Er. Subash K. Bhattarai (B.E Civil I PGDESD I MPA I MSc CM) j Chapter 4. 0

mean (te). The formula is a linear approxi!'nation of beta distribution whose accuracy
is considered reasonably stJfficient.
Aftei" having arrived at the expected time (te) for each activity, tl~e critical path is .
found out by making forwardpass computation and backwardpass computation as in
CPM. Variance in activity times: Consider the followiJ1g two tiine estin1ates.
Activity to tm tp
te
to + 4tm. · + tp
--
6
A 3 4 5 4
B 2 3 10 4
For the activities A & B the expected time arrived at is the same. However as seen, the
diffel·ence. between to and tp is more for activity B than for activity A. Thus, thot1gh the
estimated expected time (te) is the same for both the activities, there is greater extent
of uncertainty in the same estimate for activity B. Thus the reliability of the expected
time (te) depend uponthe variability of two time estimates to and tp.
There are two measures of variability of possible activity times viz.
1. Variilnce and
2. Stai1dard deviation.
PERT uses the following simplified formula for arnv111g at the variance and
standard deviatiai1 of activity times.
Variance ( 0 2)
t "-t
= [. P
6
°]2 andStandartl deviation (0) = [t °]
P
6
~t
1.00 .
Probability of occurrei1ce
0.80
0.60
0.40
.20
Activity time
.00 1
I
tm

A Manual on Constmction Project Management (Purbanchal University) .2014
PERT is more of an event-oriented teclmiqtle rather than start- and completion-

oriented, and is used more in projects where ti1i1e, rather than cost; is the major factor.
It is applied to very large-scale, one-time, complex, non-routii1e infrastructure and
· Research and Developn1ent projects.
Example
Activity Predecessor Optimistic Time Most Likely time Pessimistic time

(to) (tm) (tr)
~ - 4 5 6
B - ~ 6 8
c A 3 5 7
D B I 3 5
E C,D 2 5 8
F C,D 3 ~ 11
G E ~ 5 12
H E 4 4 10
I F,H 5 6 13
Draw a PERT i1etworkfor the following data. Arrive at the criticalpath and find out
the estimated project duration along the critical path.
Solution:
The first step involves is to calculate the expected time (te) for all the activities from
the given three time estimates, llsing the formula.
Expected Standard Variance

Optimistic Most Likely Pessimistic time
Predecessor time (te) deviation
ime (to) ime (tm) (tp) (cr) (~)
A 4 5 6 5 0.33. 0.11
B - 4 6 8 6 0.67 0.44
c A 3. 5 7 5 0.67 0.44
D B 1 3 5 5 0.67 0.44
E C.D 2 5 8 5 1 1
F C.D 3 ~ 11 5 1.33 1.77

G E 4 . 5 12 ~ 1.33 1.77
H E 4 4 10 iS 1 1
I F,H 5 6 13 17 1.33 1.77 ..
5
15115
0 0
I
·~ .
Critical Path is 1-2-4-5-6-7
Critical activities ~re A, C, E, Hand I
Expected Project Con1pletion time (mean value) is 27
Variance of Te(Which is nofhilig but the suni of variai1ces ofali activities along the
critical path)= 0.11+1.77+1+1+0.44 = 4.32
Standard deviation ofcritical path= CJ = .J4.32 =2.08
Probability of completing projects within given time:
Let's assume that we have identified the critical path for·a given PERT network. The
expected project completion time (Te) is the sum of expected corilpietion time (te) of
all the activities lying on critical path. The activity expected time (te) has a probability
of 0.5. Hence, the probability of cuniulative expected time (Te) also has a probability
of0.5.
For the easiness in calculation, it is assum d that the project completiol1 time follows
the normal distribution. If'Z' is the numqer of standard away fi·om the mean for an
observation, Z can be represented as,
Prepared By: Er. Subash K. Bhattarai (B.E Ci"i,il I PGDESD IMP A I MSc CM) [ Chapter 4. 0

A Manual on Construction Project Management (Purbanchal Ui1iversity) 2014
observed value - mean value

z= ·-·--~~~~~~~~~~
(J
Where 'Z' is known as standardized normal deviation. Tbe value of 'Z' also follows a
normal probability distribution with a mean of 'zero' and a standard deviation of
'one'. This probability distribution is know:n as standal·d normal probabili1ty
distribution and it allows us to use single table areas under the normal curve fOlr all
types of normal distributions.
Th~ cinm:dative ·normal distributive function
z Probability z !. Pmbabii1iiD>--
0.00 0.5000 0.00 !0.5000
-0.1 0.4602 0.1 ""' li 0.539:S
-0.2 0.4207 0.2 0.5 .i :S3 :
-0.3 0.3821 0.3 . 0.6119 :
-0.4 0.3446 0.4 0.6554

-0.5 0.3085 0.5 0.6915 I
-0.6 0.2743 0.6 I o.n57
~. -0.7 0.2420 0.7 0.7580
-0.8 0.2119 0.8 0.7881
-0.9 0.1841 0.9 0.8159
-1.0 0.1587 1.0 0.8413
-1.1 0.1357 1.1 0.8643
-1.2 0.1151 1.2 0.8849
-1.3 0.0968 1.3 0.9032
-1.4 0.0807 1.4 0.9192
-1.5 0.0668 1.5 0.9332
·.
-1.6 0.0548 1.6 0.9452
~1.7 0.0446 1.7 0.9554
-1.8 0.0359 1.8 0.9641
-1.9 0.0287 1.9 0.9713
-2.0 0.0228 2.0 0.9773
-2.1 0.0197 2.1 0.9821
-2.2 0.0139 ... 2.2 0.9861
-2.3 0.0107 2.3 0.9893
-2.4 0.0082 2.4 0.9918
-2.5 0.0062 2.5 0.9938
-2.6 0.0047 2.6 0.9953
-2.7 0.0035 2.7 0:996
-2.8 0.0026 2.8 0.997
-2.9 0.0019 2.9 0.998
-3.0 0.0014 3.0 0.998
Prepared By: Er. Subash K. Bhattarai (J3.E Civil I PGDESD I MPA I MSc CM) I Chapter 4. 0

A Manual on Constructiori Project Management (Purbanchal University) 2014
In the abOve example, mean value of project completioi1 time is 27 this means
probability of completing the p1~oject in 27 days is 0.5 {50%). 1f the project manager
wants to know the probability of co1i1pletion of the project in 25 days, i.e. observed
valne is eqlial to 25, then 'Z' value is equal to (25-27)/2.08 = -0.9615 from table
probability is equal to 16.84 %(Interpolating)
Difference between CPM and PERT
CPM originated from construction project whereas PERT is originated from R & D
projects. Both CPM a11d .PERT share same. approach for coristructing the project
network and for determining the critical path of the network. However there are some
basic differences between CPM and PERT.
SN CPM PERT
1 Time estimates are Time estimates are
deterministic so use single probabilistic with m1certainty .
time estimate for activity in activity dtiration so liSe three
duratioi1. time estil'nates
2 Activity oriented network Event oriented network
diagram diagram
3. Focused on time cost trade Focused on time only; 110 cost
off
4 More suitable for simple More stJitable for new and·
and repetitive projects like complex projects like research
construction and developinent.
5 . Easy to maintain. Costly to maintain
4.5 Resource Management
Resource
Any consumable, except time, required to accomplish an activity, snch as labor,

materials, equipment, machinery, tools and shop space are the resources foe the
project.
Resource reqtrirements are estimated at the activity level based on project/activity

documentation and achieved productivity or production rated nnder the· stated
environmental and managerial conditions. More than one resource needed is to be
esti ated. These resources may be constant over an activity's duration or may b
vari le in intensity. Having estimated the resources needed for the activitie
cons dered, and based on the CPM diagram already developed, the project team wil
deve op a schedule with no resource constraints.
Prepared By: Er. Subash K. Bhattarai (B.E Civil I PGDESD I MPA I MSc Cd) Chapter 4;0

A Manual on Construction Project Management (Purbanchal Ui1iversity) 2014
In organizational stt1dies, resource managementis the ef[icieht and effective

-- -dep-Joym ent -of-an- erganizati~lil's -resources -w11en t-hey are.:n eeded: Btieh~resot1rees-ma y -- -· -.- - ,-; ~ - ·- ~- ····
include financial resom'ces, inventory, human skills, production 'resm1rces, or
information technology (11).
Resource Allocation
Resource allocation is the distribution of available l'esources to different activities on

different dates and in differentqtJantities. It is usual in planning a project; a planner
has to consider not only the activity precedence relationships but also the availability
of the .resources. While allocati11g resollrces, the plan11er tries to distribute (allocate)
the resources fi·om non-critical activities to cri6cal activities so that important
a:
activities (having no floats) can be continued without affecting the p1'oject completion
date.
Resource Aggregation
Resource aggregation is a method of calCulating needed resources at the project or

multi project level for each time unit to enable implementation of the plan. During this
process, no limitation on available resourcesjsconsidered.
Resource Aggregation Process
The step-by-step proced'L1re fo:r obtaining resources histograms for a given prq_iect \\Eu1
or without computer usage are as listed below.
1. ~ A project CPM network using the arrow or precedence technique is

developed. .
2. The required resources/activity are liJ'riited; someti(nes more than one
resources I activity is specified.
3. The CPM network is computed considering Earlyand Late start schedule.
4. A bar chart in ascending order of early or late activity start is d~veloped.
5. For each specified resource for each project time unit, the total daily-required
resource is calculated.
6. For each resource, based on requirementsper project til'ne tll'J.it, histograms are
developed.
7. For each resource analyzed, cumulativ. curves for early start and late start
schedules are developed on the same plo .
Resource aggregation, or resource loading, is si ply the summation, bD a period-by-

period basis, of the resources :required to co!np!'te all activities based on the resource

allocation carried out in the previous stage. The results are usually shown graphically
as a histogram. Such aggregation maybe done on an hourly, daily, or weekly basis,
· · -
7
depei1din)forftne-fiine-unitusea-to ·anocafer-esot1rces.-wh'ei1-a oar- Ciiarf is usea-a·s -tile-------
planning tool, the resource aggregation is fairly siniple ai1d straightfohvard. For a ·
given bar chmi, there is a unique resoilrce unit aggregation chart which can be drawn
underneath the bar cha:rt.An example is shown in Figure below, where, for a particular
resource, the reqLiircd resource units for each time period are annotated o'n the bar
chart. The total number of resource Linits for each time period can then be summed
and a resource aggregation or load chart can be produced.
Resource Unit Aggregation Chart Derived From a Bar Chm't
Resource Leveling
Resource leveling as defined byPMBOK is a (pi·oject Iruinagemerit) "tech11ique in

which start and finish dates are adjusted based on re~ource coi1straints with the goal of
balancing demand for resources with the available supply".
When performing project planning activities, the manager will attempt to schedt1le
certai11 tasks simultaneously. When more resources such as mac ines or people are
needed thari are available; or perhaps a specific person is neede it1 bOth tasks, the
tasks will have to be rescheduled concurrently or even seguenti lly to manage the
constraint. Project planning resource leveling is the process f resolving these
conflicts. It cai1 also be used to balance the .workload of primary resources over the
Prepared By: Er. Subash K. Bhattarai (B.E Civil I PGDESD I MPA I MSc CM) I Ch(lpter 4. 0

course of the p1"oject[s], usually at the expense of one of the traditional triple
-------- -- C-constni:iiits-(titne,-cost;-scope]--- ~-- -- ----- -- --------- ---'-~7-----
--- - ---------- -- - ~ -------- -~ - -
Resource Leveling is the method of scheduling activities within their available float so
as to minimize fluctuations in day~ today resource _requirements. By resource
leveling, we try to optirnize the use of resources required to complete a project.
Resource leveling helps in obtaining uniformity (as far as possible) in resource
requirement throughout the life of a p1'oject. The benefit of resource leveling is to ease
resource management so that cost~ involved in managing resources can be minimized.
Resotiice Leveling Process:
1. Identification of what type df resources on what dates and on what

quantity.
11. Preparation ofResource Histogram of the resources required for each
activity in a time series. ·
m. Shifting of activities having floats for resource allocation/leveling.
1v. Sometimes, resource allocation/leveling may require extension of
total project dtJration also.
It is an attempt to reduce peak resources requireme11t and smooth out period to period
assignments within the constraitits of project duration. A project 111anager often comes
across mismatch between the availability of resources m'ld the· requirement of
resoUrces. This means that there are surplus resources available on someday and there
is deficit of resource on some other days. It will be uneconomical to perni~nently.
employ personi1el to satisfy peak time requirements since there will be .under
utilization of personnel_ to many days. Hence only less number of persotmel than
peak time reqt1irement during peak time can be handled by hirii1g on casualbasis.
Since the personnel require1nent varies from day to day, the project manager should
plan properly in such a way that optimum utilization of available personnel is
achieved. Thns the objective of project manager in such a situation is to level as far as
possible the demand for resources throughout the project executi011 tin1e keeping in
view that project completio:n time does not exceeds.
Prepared By: Er. Subash K. Bhattarai (D.E Civil I PGDESD I MPA I MSc CM) I Chapter 4.0

Resource Demand Compared to Resource Availability
Resource Smoothing
f Resource smoothing is part of the resource leveling process. In itself, resource

smoothing is the process that, ilbtwithstanding any constraints imposed during the
leveli11g process, attempts to determii1e a resource· requirement that is "smooth" and
where peaks and troughs are eli1ni11ated.
"... 4.6 ProjectCrashing
Spending more rnoney to get somethi11g done more quickly is called "crashing." .
The objective of prqject crashing is to reduce prqject duration while minimizing the
cost of crashing. Since the project completion time cai1 be shortened only by crashing
activities on the critical path, it may turn out that not all activities have to be crashed.
However, as activities are crashed, the critical path may change, reqLiiring crashing of
previously noncritical activities to reduce the project completion time even further.
Project eras/zing mul Time cost tradeoff
The project manager is frequently ccmfi·onted. with havi1ig to reduce the schedtlled
completion ti1:ne of a project to meet a deadline . .In other words, the manager nmst
finish the prqject sooner than i11dicatedby the CPM/PERT network ~m~lysis. Prqject
duration can often be reduced by assigning more ]~bor to prqject activities, in the form
of overtime, and by a:ssi ning rriore resources (material, equipment, and so on).
However, additional labor nd resources increase the prqject cost. Thus, the decision
to reduce the project dmat · n must be based on an analysis of the trade-off between
time and cost. Project era hin;; is a method for shortening the project duration by
reducing the time of one or more) of the critical project activities to less than its
normal activity time. Thi reduction in the normal activity time is referred to

! ..
A Manual on Construction Project Management (.Purbanchal University) 2014
as crashing. Crashing is achieved by devoting more resoilrces, ustmlly measured in

terms of dollars, to the activities to.be crashed.
· Terminologies used in crashing
Project cost
For any project total expenditure incurred in terms of. man power, equipment,
machinery and materials and time to achieve aparticulargoal is known as total cost of
the project. The total sum of the project is the sum of two distinct costs.
• Direct cost
• Indirect cost
Direct cost
The cost of materials, equipment and money spent on man power form the direct cost.
The direct costs of project ate of major concern and behavior panem of direct costs
with time is of importance. Direct cost of a project depends on the c.ompktilO>n tiiw.e of
project, but the variation is not linear.
Total cos:<:
Cost rises if . . .
projects is . Cost ns~ 1f
...------crashed T. /project JS
une cost j)i·o]onaed
~ "
Minimum cost
Crash Optimuin . Normal

Crash Optimum Normal
Duration duration ·· di.Jration • duration
Indirect cost
The expenditures which cannot be allotted clearly·. o the i11dividual activities of the
project, but are assessed as a whole are called indii·e t costs. The ii1direct cost includes
overhead charges, administrative and establishment harges, supervision charges, Joss
of revenue, loss in profit and penalty etc.
Prepared By: Er. Subash K. Bhattarai (B.E Civil I PGD:ESb I MPA I MSc CM) [ Chapter 4.0

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A Manual on Construction Project Management (PurbanchEil University) 2014
Definitions ofTenns
Normal time
The time usually allowed for an activity by the estimator is known as normal time. It
is the standard time for that activity and is denoted by (Tn).
Crash time
The miniinum possible time in which an activity can be completed by deployii1g extra
resources is known as crash time. Beyond the crash time the d11rationof m1 activity
cannot be reduced or shortened by any an1ount of increase in mobilization. It is
denoted by (Tc).
~ormal cost
The direct cost required to complete the activity in the normal duration IS called
normal cost and is denoted by (Cn).
Crash cost
The direct cost corresponding to the crash time of completing an activity is known as
crash cost and is denoted by (Cc ).
Cost slope
The direct cost curve generally is a curve as shown below. But this ctlrve can be
approximated by the straight line ot more than one stl'aight lines deper1ding upon the
.'$!' .
flatness of the curve. Thus the slope of this. straight. line is cost slope.
Crash cost - horrhal cost

·. Cost slope (CS) =
·Normal time- crash time
Minimum duration
The duration obtained after crashing all activities is k11owi1 as 111inirntn. dl!ration:

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A Manual on ConstrLJction ProjectManagement (Purbanchal University) 2014
Time cost trade-off
Time and cost are the two most in1portant resources that a project manag'er deals with.
Both of these resources have constrains and the job of a project nianage:r is to have
judicious balance between them. The judicious balance between·· tin'!e and cost is
called Time-Cost trade-off and it cai1 be achieved by studying the availability and
demand of these resources for the given project.
The. sut'n of direct costs and indirect costs is known as total costs of the project. The
relationship between indirect costs~ direct cost and total cost with duration is given in
figure above. Frmil figure it is see11 that the curve of direct costs do~s not have a linear
relationship with time. Thus the conl.bination of direct and if1direct cost gives a
curvilinear relationship with time as shown. •
From the total cost ACB, it can be seen that the total cost of a project is mit1imum for
certain time duratiol'L This duration is known as optii11Uli1 duration for the
corresponding minimum cost. Fu:rther if the project duration is increased, the total cost
will also increase. On the other hand if the project duration is decreased to the crash
value, the project cost will be the highest. The optimum duration is less than the
normal duration con"esponding to· the direct costs. This is due to the fact that both
direct and indirect cost increases beyond the normal duration, whereas below the
, normal duratior:i indireCt cost decrease, but the direct cost increases .
...._.....
Example onproject ctashing
The jollovi1ing table shows the costs ai1d duration of each activity of a projec:!. The
netwOJ-k is shown. The indirect cost may be taken as Rs. 3150.- per week. Derr?Tm7ne
the optimum duration of the project and corresponding minimum cost.
Activity Normal Normal cost Crash Crash cost

duration d rwati o·n
A 7 8000 4 15500
B 9 5000 6 ·9500
c 5 7000 2 10000
D 6 9000 4 16000
E 6 6000 4 12000
Prepared By: Er. Subash K. Bhat1arai (B.E Civil/ PGDESD I MPA I MSc CM) I C//(/pter 4.0

A Manual on Construction Project Management (Putbanchal University) 2014
·. 7, 7
' _:,,'-c·-':B---------__:_,_ ______ ~-·-~--·----- -:-' ::_ ___ ~~----
6
0, 0 18,18
12, 12
. . .
Sol". From the given netwodc diagram: Stii11marizing the dnration and critical path:
Duration (w)
Path Normal Crash
A-D 13 8
rA·=. c·=£· . . . . . . . . . . . . . . . . ··1s.......................................1 10
: :
B-E 15 10
Here, the path A-C-E is longest path :. it is the critical path
DiYect project cost of all activities = I nonnal cost= 35000
Indirectptoject cost of project= (critical duration * 3150) - 18 x 3150 =

56700
:. Total project cost= 91700
Now finding the cost slope of all activities.
Activity Difference 111 cost (t,cr = Difference in duration (t,t) Cost

Crash cost~ no!"mal cost = slope
Normal dutation - crash

duration·.
A 7500 3 1000
B 4500 3 1500
,.,
c 3000 .) 2500
D 7000 2 3000
E 6000 2 3000
Prepared By: Er. Subash K Bhattarai (B.E Civil/ PGDESD I MPA I MSc CM) i Chapter 4;0

·: ..
A Manuak c::t C:~<:r:.:::'iion Project Management (Purbanchal Ur1iversity) 2014
-c
b:as minimum cost slope therefore starting fron1 activity 'C'
Here, actiiYii::c
____________ the_r:~nkingjs d<2ne mascendiJ!g~'2.r:.<!~ o:(_~Q§_!_§lope. Start crashing__!h_~w.k_c__!,_ _ --'- ________ _
initiation frcm ilie CP. '"'ith lowest cost slope.,·. Ctashingthe activity 'C' by 3
weeks.
Path Duration
A-D 13 w
['A·::::··c··=·E··-····-- --····:] 18 - 3 = 15 w
1..~--=--~---···-·····-··---·-·----------- ------- __.}j w

Extra cost of crashing= 3 x 1000 = 3000, li1crement in Direct cost = 35000 +
3000 = 38000 and decrement in Indirect cost= 15 x 3150 = 47250 and total cost
== 85250 *
And the project duration after crashing is show in table below. Here we can see
that, there are two critical path A- C - E and B - E ~lth dt.n'ationeqi.1als to
15w. So, crashing most be carried out in such a way that the activity JTitJSt be
selected which belongs to both of the path for immediate restllt: As we see in
both paths activity 'E' is cominoi1. So crashiilg it by 2 weeks:
Path Duration
A-D 13 w
r·A·::::··c··=·E··--- ----·------··--·I·s··=-·2·-;;--1"3··-w··l
1.1.?...::::..~---··-·-·------·-·- __ }} __ :."__________________________________________ ,
Extra cost of crashing= 2 x 3000 = 6000, Direct cost= 6000+ 38000 = 44000,
Indirect cost= 13 x 3150 ~ 40950, Total cost= 84950/-
And the project duration after crashing is shown in table below.
Here, we can see that, all the path becomes critical at this Stage. Tbe project
duration is reduced to 13 w.
Now, Selecting 'A' from path A - -'- - D and A- C - E to crash and simt!ltaneously
selecting 'B' fi·om path B-E. 'A' is selected due to COihmon of both paths.A- D
and A - C -E. So, crashing activities 'A' and 'B' b · 3 weeks simoltaneously we
get,
Prepared By: Er. Subash K: Bhattal'ai (B.E Civil I PGDESD/ MPA/ MSc CM) I Chapter 4.0

A Manual on Construction Project Managemei1t (Purba:nchal University)
Path Duration
A-D
------~------
13 '-= 10 w
-------·-- ---- -- '-----·---------- -·--- ------·---·----'--·-----------------,.----- ---------
A-C-E 13-3=10w
B-E 13-3=10w
Extra cost of crashing= 3 x (2500 + 1500) = 12000, Direct cost =12000 +

44000 = 56000, Indirect cost= 3 x 3150 = 31500 and total cost= 87500
Conclusion
We see that after crashing the project from 13w to lOw the total cost of project
increases from 84950 to 87500. Therefore further crashi11g beyond '13 w'
increases the cost. Hence, the optional duration of project is 13 w, the minimum
cost of project is 84950.The minimum duration of project is 10 w, if crashed to
minimum duration corresponding cost be Rs. 87500.
Cost
I I I I
.....
..
--•••••••·-----~----~-~-A
91700 I
I
I
I
I
I
I
I
85250 .
84950
82500
3 6 9 12 5 18 Time
. Prepared By: Er. Subash K. Bhattarai (B.E Civil I PGDESD I MPA I MSc CM) I Chapter 4. 0

·: ..
A Reading Manual on Construetior~ Pr~ject Management (Purbanchal University) 2.014
Chapter 5.0 Construction Procurement
5.1 Investing in Construction projects

---P.hys-ieal_:_i-nfi=a~true-tare- Elevelepmem -is- tbec~m.aj er-te 6-ls-:-t-h-at--leEl-t-e-p1'0~pel=&1:l5-4na -de-velepeEI-nat-ie ns-.'----· -
National ii1fi:astructure system must be c01inected through global and regional links if countries are to
benefit from the expansion of markets and trade through globalization. Infrastr-ucture development
offers the foundation on "vhich a country can seize and capitalize on the opportunities ushered in by
globalization and regional integration.
Investments on large scale in:fi:astructures are critical to enable a country to achieve long term. grov;th
·and Sl1stainable povertyreduction. It played an important role in enabling the poor to participate in
the growth process. Access to education and health which are also the indicators of economic
development, can be vastly improved through better road, electricity, communications, water supply,
and sanitation services.
We can eas'ily trace out the investments sectors in the field ofinfrastructttre in Nepal.
1. Roads and Airports:
The ggal of economic development can only be achieved through the establishment of adequate and
effiti~Bt transport facilities. Nepal has rugged topography about two third area of the country. Hence~
an effi;~iet1t road network has become a challenge. Likewise Nepal is land locked country~ HoweYero
an imHi·ovement and extension of tni11spodation network provides the opportunities to grO'-'-_- the
ecOi10;)1y. Nepal is stilllackiilg sufficient road network. If road networks are extended, Nepal can be
"Land'iLinked" between India and China. From which it can reap the benefit of transit poim bern"ce:n
these 6otmtries. Similarly, for tourism industry, which is regarded as one of the major somce of
foreign· currency earning, m:any infrastructures development in different pans of the comm~
including regional and international airports are the opportunities of the construction induS!r::• 8
Nepal. On the other hand, investment forn1 the gdvei"nment in road sector is 10\v and is nm able ;r,J.
meet the requirements of the country _and aspirations of the people. Hence, contractors 2nd
consultants can and have to play key role in this regard to attract the private sector to make
investme11ts in the road sector following the Built, Operate and Transfer (BOT) approach.
2.lrrigation andHydropower:
Nepal is second richest eountry after Btazil in its water resomce and it has the great pto~pects in
generating hydroelectricity and constructing irrigation projects throughout the country. Although
Nepal has a large reserve 'fwater resources, it is not able toutilizetheirt propetly. At the endofF .
2070/71, the total peak de ahd is arol.fnd l176 (MW) Provisional but the power production is les•
than the demand. Hydropo er p1'oduction is m·ound 700 MW only, which is merely 0.85 percent o
the total potentiality of 83 000 MW. So there is wider scope of hydto electricity market inside th
nation and the possibility o exp01iing to India as well.
The extension of irrigation facilities in the agricultural land can bring crop integration and crop
diversification, which can help to generate employment and reduce poverty. At present only 40

A Reading Manual on Con_struction Project Manag~rhei)t (Purbanchal University) 2014
percent of cultivated land is covered by round the year liTigation. If power supply generation and
irrigation is possible from the same project, it will be beneficial and cost effective. In this regard, the
feasibility studies of such projects are required to develop the Nepalese construction industry.
-------3.-:ReaJ-S.tate-a.ri.d.J:Iousi-n-g---- -------------+-----~--- --- '-- ----'- -- -_- --- ---· :-'-'------ ---- ----'---'-~---'~-"-·
According to population census 2011, the growth rate of population is 1.35 percent per annnm. With
the economic development of the co uritry, the tendency or the flow of population is from rutal areas
to urban areas. It requires better real state; housing, market complex, good hospitals, schools and
colleges. Still there are insufficient such facilities in Nepal. Though there are lots of opportunities for
local contractor on building real state and housing.
4. Public Private Partnership in infrastructure development
The governme11t ofNepalliberalizes its policies after 1980's. Now government has released the act
related to Build, Operate, Own and Transfer BOOT Act (PPP) -'- 2063, Road Sector Policy 1999,
BOOT Regulation (PP:P) -2064, Hydtopower Act- 1992, Public Infrastructure Build Operate and
Trai1sfer Policy - 2057, Private Investment in Infrastructure Build and Operate Ordinance-~ ·2060.
There is still sol'rie opportunity for the contnictors tlu'otigh Contrattual PPP's as:
• :Build and Transfer (B1)

• ·}3uild, Operate and Transfer (BOT)
.. J,3uild, Operate, Own and Transfer (BOOT)
.. · ?uild Transfer and Operate (BTO)
• ::,,·Lease, Operate and Transfer (LOT)
• Develop, Operate and Transfer (DOT)
!PPP is;ftegarded as the revolutionary approach towards infi'astructure development which pulling in
resotm':es, pulling in expertise, maximizing service delivery, magnifying scope opportunities and
creates the employment opportunities for the contractors also.
Prospective PPP projects now iil Nepal. "'''
Kathmandu- Terai Fast Track

East-West Railway
Kathmandu-Terai Railway
Kant iRajpath
Birgunj-Jitpur Roadway
Kathmandu Outer Ring Road
Janakpur-Jayanagar Railway
Sitapaila-Dharke Roadway
Airports- Nijgadh,Pokhara, Bhaira . wa
Dry ports
Truck Terminals
Bus Terminals
Cargo Complex at TIA
Cable Car and Ropeway
Prepared By: Er. Subash K Bhattarai (RE Civil I PGDESD I MPA I MSc CM) I Chapter 5.0
A R~ading Manual on Constructioi1 Project Management (Purbanchal Uniyersity) 2014 ..
Road and Infrastructure Maintenance

Road Int~rsection
Sky Bddge
Sub Way
------=-----Ffyovers-ancfliiiercoilliectloils----c--···· -~~-- -----~-------~~------'--,--- --~------ -------------- ---
·city Parking
In conclusion, there is huge task on construction of infi:astructme facilities, both basic as well as
developmental. Living between the two developing economies giants, who are accounted as the
future superpower oftl:e _World innext two decades, and living at neighborhood ofBhutan, Nepal is
still searching and endeavoring to find lasting solution to reduce poverty. Time is rich to learn lessons
fi·om the neighboring countries and march ahead for real achievements, Which will largely depend
upon development projects tlu·ough construction industry .
..,
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fi.~~fl"lc1fWi'jf1~'lT - ){~"' irTrcm

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.:~:~~ ~ ci'i "1 c1fCJ '0, 3f~ - \3~ 0 i'rTrTcnc
ct
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' .·. ··~:\
J~.~<-<r trm1 ~ +n1T - 9\9\3"' F<P.m.
:;;~~ ~ - 9 \S'<,c:; F<P.m.
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~ ~- ~ ,C!i'r~fr. ~ <: ~) - c:;~9 F<P.m.
-~ m"i"iilfCJ<q(ill:l ~~- 9~9\3.){ F<P.m.
¥.~~
ffi<R:r ~~ - ~~.\3"'"' ~
<l.-1'i>iili<l ~~ - ~o.~oo ~
~ ~~-9'<,,ooo ~ ~ (lL!i- <: ~9,ooo ~ m~
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~ 3J"d<lf~£1 ~~. ~. mn -~"'oo ){~ ~m ,~) -mx ··
'8\i\cllfCJBI'it~ ~otl£1fCJiil'if~C1fC!Cf>ltl -rR- ~000 m.
X){~ m.~. C:l!C1CJ!illl
~ ~ li'lotl£1fC!lil'i~<11ilfC!Cf>ltl -rR - ~~00 -mx ){~ m. afCf'il1TTT

A Reading Man~al C?n Construction ProjectManagement (PurbanchalUniversity) 2014. _ ·
Some of the highlights of the Budget in the field of construction industries are as follows (F'f
2071/72)
: . ...
--- -:· ....:...: ,..:..: __
·------Tn e ·goiie rn riTe nfffas u8ve'r]fci~R'#61'8~b~ itrcfn-"ifefag"et"'for-'fififfs'-&~·1\;~~i~i(h_-~j§- Jtpt- ~- ·.:....:....~-""'";---·---~
25 Megawatts solar plants in kath'm·ariduand encour~ge'othersolarpTa;hts

Proceed the cdnstrucotion offr'i3nsnational and other transmission 'lines With high Priority
Procure sixaircraftsf()r international services and ·15 a(~~rafts for dom~stidir services
Formulate rr)aster:pla/isfor.~ey~f<;lpr1).entof Pashupatinath a.nclLunibini
To lay optical fiber cables alongtne)nid~hill highway
J6 construct
% one library and ascienc~
. . . lab in each high
. school
.
)\utom~~~ion of Nepa!'Stoci<Exchang~
- .. . . ' ·-. -~·
• Government to assist construction of ethnic museum
;!Jevei~ping infrastructure for payment of taxes online
5.2 Project finance

Project finance is the long-term financing ofinf,t.astructure and industrial projects based upon the
projected cash flows of the project rather than the balm1ce sheets of its sponsors. Usually, a ptoject
financing structure involves a number of equity investors, known as 'spcnisors', as well as a 'syn:dicate'
ofbanks or other lending institutions that provide loans to. the operation. They me tnost
cmmnonly non-recourse loans, which are secnred by the project assets and paid entirely fi·om pi~bject
cash flow, rather than from the general assets or creditworthiriess of the project sponsors, a decision
in part supported by financial modeling. The financing is typically secured by all of the project assets,
including the revenue-producing contracts.
Risk ide tification and allocation is a key component of project finance. A ptoject may be subject to
a numb r of teclmical, environmental, economic and political risks, particul rly in developing
countrie and emerging markets. Financial institutions and project sponsors may' conclude that the
risks inh rent in project development and operation are nnacceptable (un~financea ,le ). "Severallorig-
term contracts such as construction, supply, off-take and concession agreements, along with a variety
of joint-ownership strnctures are used to align incentives and deter oppOiiUnistic behavior by any
party involved in the project. The patterns of implementation are sometimes referred to as "project
·: .
, -A Reading Manual on Construc6onPr()ject_Management (Purbanchal University) 2014.
delivery methods." The financing ofthese projects m:ust be distributed amorrg mnltiple pal'ties, so as
to distribute the risk associated with the project while simultaneonsly ensuting profits for each party
involved.
Jarties_i]_z_l!_q_b!'if! in I'Lf!il!Sf_}[_i[£ql!Cing __________________ _____ ~---~--- _ --~'---'-~--:-- ____ _c _ _ ..:.,-.,.'-'-~--c __ _
There are several parties in a project financing depending on the type and the scale of a p'i'oject. The
most usual parties to a project financing are;
1. Project
2. Sponsor
,.,
.). Financial Advisors
4. Technical Advisors
5. Legal Advisors
6. Debt Financiets
7. Equity Investors
8. R.egulatoty Agencies
9. Multilateral Agencies
Prepared By: Er. Subash K. Bhattarai (B.E Civil/ PGDESD I MPA I MSc CM) Chapter 5.0
J

.. A Reading Manual on Construc:tion Project Manageme1~t (P~rbanchal University) 2014 ·
5.3 Procurement Strategies
0 t·· ... :•..t ·. :. .·:

~:rae;gy
e;xtt'Jrrl.~l ~p~ncl,
c:.pt¢i"f21U6hlf3 mhd
ott!t;>1' Vt;.til.Je <;or'ltrlbufinni\.'
In :rtJ'i':1J"It1G:\F ti~1:at fflupport:::; .
th~ C\:lff>Otat..W.tflQ(iJntJ¥¥1
Before knowing about the procurement strategy we should know about the theme of procurement.
Public Procurement Act 2063 and Public Procurement Regulations 2064 (with amendment) Specify
that there are three kinds of job which can be procured and executed. They are procurement of goods,
consultancy services or carrying out any consttuction works. Prior to procuring goods, constructioli.
works, or services, organization shall have to prepare specifications, plan, drawing, design, spe'cial
requirement, or other descriptions.
:BeforeWgoing to procurement strategy employer should prepare the ptocurei:nent plan. Procurement
).(.·
plan is;;a_ document stating the types of procurement jobs and the methods of procurement along \Vith
~ .
types q{ contracts and project delivery methods.

. ..·:·
PPA, ~PR along with Guidelines prepared by Public :P:rocutemertt Monitoti11g office (PPM())··
describ~s the following ptocurement strategies for procure1ne11t ofeonstruction works as per the total
cost and types of works.
i
!i. i
- 'o_ Procurement Method Contract Size Cont:ractot
I Sealed Bidding
1 ICB Not mentioned in PPA 2063 but ·. International,

donors have their special International Nepali JV,
..
prOVlSIOI1 Nepali JV
11 NCB/LCB More than 2 Million All I
2 Sealed Quotation Up to·2 Milli pn All·
,..,
.) Direct Procurement Up to 5,00,0( 0 All
4 Force Account Up to 1,00,000 None
Prepared By: Er. Subash K Bhattarai (B.E Civil I PGDESD • .\1PA I MSc CM) I Chapter 5.0
A R_eadipg Manual on Construction }=>rojectManagement (Purbanchal University) 2014
5 Procurement under Emerge1icyIS pecial Depends on contract

special Circumstances Circumstances amount
.... ·
. . .
6
~---······----
Users' Co:rnr:nittee
~---·--- -----·---·-·-----·-~
:..Y_R_!QJ?J~1illi.911.'Y9Ll~~9f~!mpJ~- ..:~.9.l11!:.a.£19L _Q.mQt_:___b~ __
nature used
1. Sealed Competitive Bidding

A. National Competitive Bidding (NCB)
It is sometimes called· as local competitivebidding. In this process all the eligiblebidders ate invited
to participate in bidding. For NCB, tendernoticeis to be published in national newspaper; a period of
at least 30 days shall be given. While stating the place from which the bidding docume11ts can be
obtained, provision shall have to be made for obtaining such documents fiom two or more than two
public entities. NCB is necessary for public entity irestimated amount ofworkis greater than20 lakhs
m estimated goods is greater than 10 lakhs.
B. Iniertwtitmal Coinpetitive Bidding (ICB)

If the r:rhount of Woi"k is big and national/domestic contractors cannot petfotm the job, eligible
'-:·+ .
~idder5?,are invited fi:om all over the world. Such type of bidding is known as ICB. Ili. this process,
•'"!'.'
c.znderJi'otice shall be published in national neWspaper in English language providing a period of at

:cast 41S;. days. Invitation to an international level bid shall be inv1ted in a:ny of the following
~'
• :(;)\!hete the goods or construction works as requisitioned by a Public Entity are not available
(hnder competitive price from more than one construction entreprene~n· or supplier within the
State ofNepal,
• Where no bid was subi11itted in response to invitation to national level bidding for the
procurement of goods, construction works or other services, and the same has to ~e procured
fi-om abroad,
• Where under an agreement entered into with a donor pmiy; foteign goods, or construction
works have to be procured from foreign assistance soutce,
• Where the Public Entity has certified that the goods or construction works, being of complex
and special nature, have to be procured through an iritetmitionallevel bidd.ing.
Z Sealed Quotation
me Public Procure1i.1ent ·Act and Public Procurement Regulation, g ,ods ancl other services v~lning
:..'P to one million Rupees and construction works valuing np to two Ii illion Rupees may be procured
by inviting a sealed quotation. Provision relating to Sealed Quotation i :
• Before inviting a sealed quotation, a form of sealed quotati h stating clearly therein the
specifications, quality, quantity terms and conditions of supply and time a:nd other necessary
matters of the goods, construction work or othet services to be 'procured shall have to be
prepared.

·: 1
A Reading Manual o:p ·co_nstruction Project Manageinen:t (Purbanchal University) 2014- ·
• In inviting a sealed quotation, a notice shall be published in a·naticmal or local level news paper
by giving a period at least of 15 days.
• The sealed quotation, once submitted, cannot be withdrawn ot arh.ended.
• The lowest evaluated sealed quotation falling within the cost estimate after fulfilling the terms
--- -----a~<fC0ilci!tioilisilaTi1lav~to-Be-apiJrovecr.--------------------------------- --- --------- -----------
3. Direct Procurement
Expendable or capital goods or consultancy services valuing up to three lakhs at1d construction work
valuing up to five lakhs Rupees may be directly procmed. Provided that a construction work 1.mder
this Section cannot be directly procured fi·om the same individual, firm, company or organization
more than one time ii1 a fiscal year. But Nepali products goods valuii1g up to fifteen hund1"ed
thousand Rupees may be directly procured.
Directly procurernent can be done in the following conditions:
• If only one supplier or con$ttuction entrepreneur or consultant or service provider has the
technical efficiency or capacity to fulfill the procurement requirement,
• If only one supplier has the exclusive right to supply the goods to be procured and no other
appropriate alternative is available,
If the service of a pai"ticular consultant with his unique qualifications is immediately needed for
tHe concerned work or where the service of same consultant is indispensable.
Wo1;ks thi·ough Users Committee
Construction Works May be Caused to be Carried otit by Users Committee oi Beneficit'lry

-Commmlity. Cost estimate up to sixty lakhs Rupees m:ay be catried olit or obtained :fi:om users
committee or beneficiary community. If economy; quality or sustainability isincreased in having a
construction ·work carried out or obtaining services related thereto from the 1.1sers com1i1ittee · or
beneficiary community or if the main objective of the :project is to create erhployii1ent and to ha:ve the
beneficiary community involved, such work may be cat1sed to be carried by or such service itiay be
obtained from a users' committee or beneficiary coo1mm1ity by fulfilling the procedUre as prescribed.
5. Works inay bedolie byForteAccOllilt(A1iuiiJat)
"Force Account'; means any construction work to be carriedoutby a Public E11tity itself It is the
execution of public works by l1sir1g the resources of a public agency of the government, without
recourse to competitive bidding or negotiated contract. Works done by force account may apply it1
following situation:
• The Si e, nature and location of the works being unsuitable for competitive biddi g .
• Works must be carried ol.lt without disrupting existing operations, by crews fam· iar with those
operati ns.
• When he implementing agency can bear the associated risks in a better way than he contractor.
• No co 'tractor is interested in canying out the works .
• Emergencies .
• Institutional development
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A Reading Manual on Construction Project Manqgement (Purbanchal University) 2014
6. Procurement under special Circuri1Stalices

• Emergency/special circumstances.··
• It depends on contract amount
SA Project·Delivery Methods
Project Delivery is the. process by which all of the procedures and components of designing and
building a project are organized and put together in an agreement that results in a eompletedproject.
The Owner's approach to organizing the project team that will manage the entire design and
construction process.
Project Delivery is the contractual relationships between the owner, architect/engineer (A./E),
contractor(s), and the management services utilized to design and construct a project.
A project delivery method is a system used by a.n agency or owner for orgm1izing and financing
design, construction, operations, and maintenm1ce services for a Stl'Ucture or facility by enteting into
~;egal agreements with one or more entities or pa1iies.
_lfanyjactors will affect the method selection such cis:

• Owner's experience, qualifications and capability
• /,The magnitl1de, form, function and complexity of the project.
cr. Time is ofthe essence.
• ·,Sequencing ofthe project.
• Establishin:g the project time line.
• Fast-tracking utilizing r'nultiple contractors or contracts to condense the project timelii1e. ·
• ,Cost /Budget/ Other Financial Challenges
Below listed are different methods ofptoject delivery:

LThe Traditional Method- Design-Bid-Build
=The Design~Bid-Btiild method is most common.
=The Owner first contracts with a Design Professional who provides the design. The basis of this
delivery method is that design is completed prior to bidding/pricing and construction.
=competitive bidding is a method. of determining the ieast cost for. accomplishing the scope of work
::Bdined by the bid documents. Once the design is complete, the Owner conti·acts with the Builder
11.::ho provides the most respot1sive competitive bid for construction
Prepared By: Er. Subash K. Bhattarai (B.E Civil I PGDESD I MPA I MSc CM) [Chapter 5.0

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A.Reading Manual on Construction. Project Management (P!.ltbapchal University) 2014
It Well defined relationships,. procedures

. .
and rules of COI'ldt.ict
. . have beeii. worked out and
understood.
• A known quantity. Lots of experience in this method by all parties.
• The risk of cost increases depends to a large extent on the accuracy and completeness of the
work scope and contract doctm1ents.
• The actual construction price of the project is not known until all bids are received.
• No collaboration :fi01n the coi.i.n·actor.
• Normally design-bid-build with a specific timefi·ame. This does Ii.ot allow for fast tracking the
project.
• This process is inherently adversarial.
"" Price is based on a specific scope of work. If the documents are poor or scope of work is
undefined then the potential for chal1ge orders is exti·eme. Tliis ca11lead to contract problems
and litigation.
Traditional Approach
A traditional procurement approach may be adopted Where the clients design teain is appointed to
prepare a detail engineering design, cost-estimates and specifications before the choice of conttactor
is considered. This type of contract is considered ft5 be a sequential or"e11d-on'; process where design
and construction is separated by an interveiiihg tendering pehod. The owner ei11ploys a designer who
first prepares the plans and specifications, then exercises
.
some degree of il'ispection,
. monitoring or
control during construction. C01istruction itself is theresponsibilit.Y of single general contractor under
contract to the owner.
The traditional approach of contract has the advm'ltage of price competition and ideally the procedure
should work provided that:
• The design is complete before the tendersta e . (Price certainty)
• The designer understands how the constrncti n will be Undertaken (build ability)
• The design does not change substantially dur ng Construction (avoiding delay and disruption)
2.0wner-Builder
In this approach, owners perform both their ow design work and some or all of the actual
construction with their own forces. This approach is often referred to as "force account". Ovme:r may
utilize, while retaining many of the management and conceptual design responsibilities themselves,
Prepared By: Er. Subash K. Bhattarai (B.E Civil I PGDESD · ?\iPA I MSc CM) I Chapter 5.0
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A Readil}g Manual on Construction Projec;tManagement (Purbanchal University) ~2014 ·
consultants for some or all ofthe detail design and can depend upon construction contractor for the
actual hiring and supervision of the labor.
3.Design-Negotiate-Build
• Same structure as Design-Bid-'Build usually the design is complete before:Iiegotiations .
• The coJitractor may be selected on other fattots than low price irtclnding q'ualifica:tiohs,
expertise, reputation and timeline.
• This negotiating process allows both parties to work together on issues including design,
product selection, and project phasing, optimum constructability, scheduling and budgeting.
• Cost is not usually the primary c.onsidetation for selection but the firm's history of
successfully completing complex ptojects on time which will ustially mean an ultimate
savings of money and time with collaboration arid worki11g together.
Negotiated Contracts
A Negotiated Contract is one where the. Principal negotiates directly with a contractor to anive at· a
mutually satisfactory agreement to undertake the work. An owner can enter into contract with a
constnwtor by negotiating the price and method of reimbursement.
·.r·;.:-·
Major items
,, of negotiation are:
Level
il
. and amount of fee in addition to the charge :Schedule.
.
• Quality of the works to be performed.

• h~rojected time for completi011 etc.
4. The Design-Build Method

• A single entity provides both design and construction of the project.
• The Design-Builder is obligated to meet the design criteria and performance requirements
specified in the bidding documents.
• On a design/build project the contractor and designer work together to serve the Owr1e1~ on
cost, schedule and scope of work.
• Ability for fast ttack/phased construction.
• Tlu·ee types of design-build entities
o Coritractor Led (subcontract design or joint venture)
o Designer Led (subcontract construction or joint venture)
o A single firm with both capabilities internally

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}\Reading Manual on C~tJ.str~lction Project Management (P'urbmichal University) 2014
Design and Build (D&B) Contr(tci

Design and Build procurement wOi-k~s on the basis that the niain cOntractor is responsible for
undertaking both the design and construction work on a project, for an agreed lump-smn price.
Design and build projects can vary depending on the extent of the contractor's design responsibility
m1d how much initial design is included in the employer's i"equiremerits. Nevertheless, the level-of
design responsibility and input from the contractor is ml.lch greater on desigi1 a11d build projects than
a traditional contract with a contractor's designed pmiion. The employe.rh~s coritml over any design
elements of the project that ate included in their requirements, bl1t once the cOntract is let
. · .respon~}bility ovet design passes to the contractor, so the employer has no direct control over the
ccmtracibr's detailed design. The conti'actor can carry out the design in a: n11mber of ways. Often they
will appoint their own consultants or use their ownin-hot1se team .
.· . Wity De~·ign/Build?
OAbilit:y for fast track/phased construction.
/:,(
. DHigh~~ quality ptojects.
DReduction of claims and litigation against owners.
Didentification of costs early.
DBetter relations and communication, more ContraCtor involvement throughout the process. The
design-builder provides only the necessm·y documentation tobuild .the projeCt efficiently.
A Mabi Differellce b1 Desig1f-Build

The contractor is responsible for the risk of design in their contractual relationship with the Owi1er
5. EPC
The EPC contrac stands for 'Engineering, Ptocurement and Constrt1ction' contract. Tend·· an EPC
contract, the co··· ractor designs, procures the necessary materials and builds the proj ·:· t, either
directly or by su contracting part of the work. In some cases, the contractor carties the pi ject risk
for schedule as w 11 as budget in return for a fixed price depending on the agreed scope of\vork. The
cost is negotiated and finalized and paid in mutually agreed installments.

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A Rea<;iing Manual on Constructimi Project Ma11a·gement (Purbanchal University) .201-4
6. Turn Key contract
A turnkey is a: type of project that is constructed sothatitcould be sold to anybl1yer as acOiilpleted

product. Turnkey is often t.1sed to describe a home bl1ilton the developer's land with the.deveJopet's
__ financing-teady_J.o.t-the.._custotner-to-rno¥e7iil.-.l Lis_j.usLtur.n-a. ke-¥ -in-the:...door..:.: In tm:nke:y-co.riti:act,: .tlie -- - -
contractor is entrusted to desigi1, constrt.1ct, conm1ission & handoverthe project to the etnployer. The
employer will make the lump-sum paymentto the contractor at the different stages of work as pert he
agreement. This type of contract is useful when the work has to be completed at a very sho'!t 'period.
Whole risk is borne by the contractor.
7. Build Own Operate Transfer (BOOT) Contract
Build-own-operate-transfer (BOOT) orBuild~operate-transfer (BOT) or BOO (Build__:Own.:_

Operate) is a form of project financing, wherein a private entity receives a concession fi:om the
private or public sector to finance, design, construct, arid operate a facility stated in the concession
contract. This enables the project proponent to recover its investri1ent, operating and maintenance
expenses in the project. Due tc)the long-te:i'in nature of the arrangement, the fees are usuaUy :raised
during the concession period. The rate of increase is often tied to a combination of internal an.d
external variables, ailowing the proponent to reach a satisfactory internal rate of return for iiS
investment.
The major components of a BOOT Project inClude:_
Build:· design, i11anage, projectimpleme11tation, p1'ocurement, construct ar.:c f.D3J.Jee
Own: own the asset for the coi1cession period a:nd the license for the equipmem used.
Operat~: manage and operate plant, carryolit maintenance, deliver product or service and receive
off take Payments.
Transfer: handover plant in operating condition at.the end of the concession period.
8 .. Construction Management Contracts

• Good communications among owner, designer and CM firm is established early in the project.
• Usually involve multiple

.
coiitracts orfast-tackmg
.
or complex projects that requireinte11se
. '.
professional management.
• Knowledge of construction; systems costs and scheduling is utilized dt.tring the desigt1 phase.
Good opportunities for cost savings and value engineering by having construction expel'tise
involved early.
• The Owner receives the cost be efit of the competition among the subcontractor a:ndsupplier
bids.
• Good communication leads to a ess difficult change process.
• This delivery system requires the project team to share responsibilities where trust, proper
ethics and a cooperative envirom11ent is a must.

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A Reading Manual on Construction Project Management (Purbapch~l University) Z014
Construction management is defined as- " that group of tnanagernerit activities related· to a
construction program, carried out during the pre~de·sign, design, and construction phases, that
contributes to the control of time m1d cost in the constrt:tction of a 11ew facility. This approach unites a
a
three party team consisting of owner, designer and CM in non- adversary reh1.tionship.
Construction management contracts are particularly attractive to organizations that periodically build
con1plex structures (e.g., hospital authorities, municipalities etc.) but do not desire to maintain a full
tiine c'bi1struction staff to supervise projects·on recurring basis .. In suchcases;.ari owner can retain a
.·firm as construction manager to plan, develop arid co-ordinate the activities of one or more design
· professionals; trade contractors, vendors and other interested pmiies snch as licensing and control
bodies.
5.5 C~rttract Types

• In addition to choosing a delivery ~ystem for a project, the owner rnhst decide what type of
contract to use.
• A contract is simply an agreement between two or more ejlfities in which they agree to
provide a specific task in exchatige for something in return.
..The contract type basically is the format 011 how the owher. pays for the services· of" the
contractor.
Contract
According to Contract Act 2056 ;'Contract is an agreenient between'tWo onnore than two persons to
do or not to do something, which can be enforceable by law". An Engineeting Contract is a n1t1tual
agreement negotiated between t:Wo parties rot the pur bse of uhdertakihg, on a commercial basis,
certain clearly specified engineering work. The main bjective entering to coritl'act is to seek legal
ac6on/remedies if any party breaches the contract:
Elements of Contract
For a contract to be binding and enforceable by law, thefollowing elernen:t n1nst bepresent:
I. Offer and Acceptance
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A Reading J\1anu_alon Constr.uctionProject Mahagement_(Purhanchal University) 2014
• If a person advances a proposal to a person, who gives his acceptm1ce, contract exists. Offer
can be specific or general.
2. Consideration . . .
It is the cause, motive, price or impelling influence that inducesa contracting party to ,el1tet into
---contract~- Cons-ideration -caii-be-de~crll)ed -as--something- orviiiue~ thit~is-ixchanged-_by~the____ _
conti·acting pm1ies.
3. Capacity to contract
For a contract to be legally binding and enforceable, all parties must be capable to enter into
contract. As per the contract act, the following persons are not capable of contract. Idiots,
drunkards, insane; and children below 16 years are 11ot capable ?fsigning contract. ·
4. La-vvful pwpose
Illegal contract are invalid. If two pmiies agree to perform a job, Which is against the country law,
the contract is invalid.
:>. Possibility ofpe;formance
Impossible contract is invalid. If two parties agi-ee to build a house on air, which is impossible,
contract is invalid.
6. Free consent
Co.htract
,,,·,
should not involve coercion, fraud, undue influence, deceit. Otherwise, cm1tract 1s
in9n1id.
- Certainty/ u11certainty
Coi1tract which cannot be carried out because of various reasons (vague/ an1biguous etc.) are not
valid. . ·· · .. ·
:; Legbl Relationship
There should be a clear intention of parties to enter into contract i.e, all the necessary documEmts
should be fulfilled. ·
l: Written
Verbal agreement cmmot be a contract.
"·o. Tvvo or m.ore competent parties
Contract is made between two or more pmiies.
"All contracts are agreetnents but all agreenients are notcontracts."
Agreement + legality == Contract

Ag·re ment is the acceptance of the offer (proposal) with or without any cond tion. It may 11othave
legal obligation. But contract is an agreement concluded between two dr more arties for perfon'hing
or n t performing any work. The main objects or entering into conti"act is . to seek legal action/
reme ies if any party breached the contract. An agreement is the consent b EWeen owner and the
contractor for a meaningful undertaking. It includes all the terms and reforms to executed the job.
Contract as per enforceability

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A Rt:<ading Manual 01'1 Constr_u·ctism Project Management (Purbancha1 University) 2014
1. Valid Contract -Ifall the ele1nentsof conhact are present, the contl'act is valid.
2. Voidable Contract- As per con:tract act; following contracts ate voidable, i.e. if the pmifdesire to
make it void (invalid).
- -- - -- -;----Fc>-rce:ful C:on1lictoi-coiitiac1 ag~ii-isr:&~e-conse111oico111raCi:'::invBTt-ing':':fra:ua.- --~- -.~-----,------
• Entered dl.1e to undue influence
• Contract involving :fi:aud 6:r misstatement.
3. Void Contract- As per contract act the following contracts become null a11d Void.
• C011traryto statutory law

• . Ambiguous vague andtinliri1ited-conttact
• Not possibility of performance
• Contrary to public policy and Welfare,
• Signed by incompetent paiiies.
SigJiificancel Importance of contracts
Contract is necessary:
• -.to make agreement legally enforceable
• .·•to specifY what the contractor must do and what the owner must pay
" '.':to specify what will be done if either party fails to perform
,. ;:to specify the quantity and quality ofwork to be done
• \tO specify the time :fi:aine within which the work is to be completed and payment to be made
• .'to set out in advance the courses of action that will be taken in different possible situations
.. \}.to define words and establish common meanings
• to specify what is a11d what is not inCluded in contract
• to· specify how the contract will be tenninated
• to specify the responsibilities of the parties not just to each bnt also to third parties such as:
government, community in which work'is to be done, workers, sub-contractors, material,
suppliers, uni011s etc
Types of Contract
Depending upon the rnagn:itude and nattn'e of the work, its special design needs, ftinding
requirements, complexities of the job and owner's own preference, different types of contracts are
entered into. Contracts for any particular engineering project can be classified in the first instance as
either Main Contracts (sometimes referred to as Head Contracts) or Subcontracts;
The essential differ nee is that a M~in Contract is ditectly between the Pdrtciple and Mai11
Contractor, where a a Subcontract is between a Main Contractor and another contractor refe''i-ed to
as a Subcontractor.
Engineering contracts, whether Main Contracts or Subcontracts, can ntrther be classified in a number
of·ways, each ofwhich depends upon a particular characteristic o~ feature · ·
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A Reading Manual on Con?truction Ptoject Manag~ri1e11t (Purbanchal1)1'1iversity) :Z014
The Three most commonly used characteristics for this purpose are:
I) The method by which payment· for the wol'k under the contract is evaluated.
2) The method by which the contractor is selected.
---- ·- --2.l--Co1npefifivetencre1.-ecr ------ --------------- - ------------ -~--------------- ----- ~ ~- ---
2.2
Negotiated contract
3) The method by which the responsibility for the technical and administrative aspects ofthe.work is
allocated. (as discussed in project delivery methods)
A brief description of different contract types under above .mentioned categories are as summarized
below.
Classification by the method of payment for the Work
The method of payment is of such in1portance, particularly to the Coritl'actor, that contracts are often
classified solely by the method of payment. There are three basic methods of payme11t used in
Engineering Contracts:
• ·....Lump sum contracts
• }~chedule of rates or unit-price contracts
ao ·'Cost plus conti·acts
Sounetimes, Part .Lump Sum arid Part Unit-Price Contract is aJso adopted in a. single J:Yroject as a
:burth type also. The Lump Sum and the Unit-Price Conttacts rnay be either ''fixed" or "stibject to
::ost adj~1stment" as specified in the contract.
"]I·
~a) Lump Sum or;Stipulated Suin Contracts
L tis type of contract is the one in which the contractor based on the available col'nplete set of plans
:m.J specifications quotes one single price which covers all works and services required by the
:ontract plans and specifications. The lump sum price includes all direct costs. ofthe contractor for
~bor, machines, materials and indirect costs such as field and front office snp·ervision, secretarial
s::::pp01i and equipment maintenance and support costs and also incltldes prcifit of the contractor.
1i·b) Unit- Price or Schedule of Rates Contracts

. .
11.his type of contract, the project is brok n down into the work items that can be characterized by
,;mits such as Cum, Sq.m, R.m, a:nd Nos etc The contractor quotesthe price by units rather than as a
rngle total Contract price. A guide quantity; s given for each work item. :Based on this guide gl.mritity,
·~:fLe contractor quotes a unit price for each ··tern of the project work The total price is computed by
:rnr.:Jtiplying the unit price by guide quantity and summing up the cost ofwhole the items. The lowest
:e.3Sonable bidder is determined and the contract is awarded.

A Reading Manual on Construction Project.Management (Purbanchal U:piversity) 2014
In unit price contracts, the progress payments for the contractors are based on precise measurerbent of
the field quantities placed.
(c) Cost phis Contracts · · ··..· · ·· ·· · ·

·--·--rnaTosTp1us~t:oi1tracr,-niecontfaetorjs"feimoursEa·tJ:itaat1a1co1>ts~illcurret1hcirry1ng-oi1nRe··:wc;!I-
under the Contract plus a fixed or variable fee to cover overhead costs and p'rofit.
Four types of fee structure are common. They lead to the following cost pins types of reimbursement
schemes:
• Cost + Percent of Cost
• Cost+ Fixed Fee
• Cost+ Fixed Fee +Profit .Sharing
• Cost+ Sliding Fee
i. Cost +Percent of Cost . . . . ., .

This is the oldest form of fee structure. This form is very lucrative for the contractor
I .
but is·subject to
abuse. There is little incentive to be efficient and economical in the construction ofthe project. Just to
the contrary, the larger the cost of the job, the higher the amount of fee that is paid by theow11er. If
the cost ofthe job is Rs.40 million and fee is 2%, then the contractor's fee is Rs.800,000. If the cost
increaS:es to Rs.42 Million, the contractor's fee increases by Rs 40,000 .
ii. Cos·i+ Fixed Fee

In ord~rto offset the abuse ofcost plus p·ercent approach, the fixed fee fonri.ula was de\reJoped. In
this ioil.)11 of contract, a fixed amount of fee is paid regardless of the flttctuation of the reii11butsable
cost co}hponent. This is usually established as a percent of an originally estimated total cost figure.
The coiitractor's fee is fixed and does not change dite to variation of the project·cost from the original
estimated cost. This form gives the contractor an incentive to get the jobdoi1e a:s qtiickly as possible
in order to recover his fee over the shortest time frame. Because of the desir~ to move the job as
quickly as possible, however, the contractor maytend to use expensive teimbursable materials and
methods to expedite completion of the project.
iii. Cost +Fixed- Fee +Profit Sharing

The fixed- fee plus profit sharing formula provides a rew~td to the cotl.fractor who controls co as,
keeping them at a minimum. In this forrrit:.tla, it .. is eohnnori to specify a target price for the· total
contract. If the contractor brings the job in under the target, the savings are divided or shared between
owner and contractor. A common sharing formula provides that the contraCtor shares by getting 2.$%
of this under run of the target. If for instance, the target is R .1 0 Millio11 and the contractor conipletes
the job in Rs9.5 Millioi1, he receives a bonus ofRs.l25,000::
iv. Cost+ SlidingFee
A variation of the profit sharing approach is the sliding fee, which not m11y provides a bonus for
underrun but also penalizes the contractor for overrunning the target value. The amount of fee
Prepared By: Er. Subash K. Bhattarai(B.E Civil I PGDESD I MPA I MSc CM) I Chapter 5.0
A Reading Manual on Construction Project Mai1C\.g'ement (PurbancJ1al University) 2014.
. .
increases as the contractor falls below the target and decteases as he overruns the target valne. ·Ot1e
formula for calculating the contractor's fee based on slidingscaleis,
Fee="=R (2T-A)
Where; · ·. . · ·
--T~Targetprlce _______________ _ . ··- -· _;__~_· _____._: ___--;_ -·-· - -..-- ,.:..-"---·--·-----_..:...... ~.:..__ -:-.:...:..._....:.. -· --~ ·-.- -·----- ·....,.-=:-- _,__--=:- --~.:..... _.:. . : _.___;._~---'--~--::...:~:..:..:.:._._____ -·
R=Base percent value
A=Actual cost ofthe construction.
5. 7 Contract and claim management
Contracting for construction services is an inherently risky venture for the owner, desigl'1 agent and
contractor. All of these parties are exposed to tmanticipated risks, exposure to economic loss and
unforeseen contract liability while performing under the contract . Riskresponsibility plays an
important role in the development of contract dispt'ij,es that arise duting the construction process.
Though the risk of doing business cani1ot be eliminated, proper risk management can le~d to a
smoother operation and ultimately reduce the total cost of the project for the owner, designer and
contractor alike. Likewise, improper risk allocation can result in increased bid contingencies, higher
projects costs, poor working relationships, a higher probability of disputes and the increased ris...\: of
judici~}intervention between the parties. This chapter concentrates on the developrnem, :illocatiion
and ni.ii'nagement of risk· as it effects the construction process.
Whrtt is claim?
ln sin1ple contractual terms it is a tequest for reimbursement of cost and I or time from one pany to
anothe{:
. .:;·::.
A forinal contract procedure 'L1sed to review contract disputes between the contracting panY:es. Tne
claim process is ideaitified in the contract provisions which describes the steps to be taken to prmesr
an initial decision oVer the merits of a change order proposal.
Basic ingredients of Claims

Claim must include following:
• Definition of relevant risk events: what event oi· circumstcn1ces happened? Allegatibl'l of
occurrence of events must be supported by evidence .
• Identification of contractual provisions which flow from the events eg .. Unforeseen ground
condition
• dentification of obligations
• emonstrate cause·and effect
• alue the effect in terms of cost or time
Claim anagemei1tjlow chart

.. A Reading Manual ori Construction Project Management (PtJrbanchal University) 2014.
Claiin docunieizt
It contains four basic features
• The narrative: records relevant events, both cause and effects
• The entitlement: demonstrates the contractual or legal entitlement to compensation
• The argument or discussion: linking cause to effect, event to entitlen1eilt
• Quantum: quantity reimbursement or ti e being claimed
Note: either party should notifY the claim ithin. the 28 days form the event occtirred for
compensation with the documents stated above · s per PP A/ PPR

A Manual ..on Construction Project Management (Purbanchal Urtive1'sity) 2014
Chapter 6.0 Construction Equipment

Use ofEquipment . . . .... ·. .
Constructio11 industry uses different types of equipment for different purposes. Equipment relating
to emih work, transportation, aggregate production and handling, co~ctete_,_Ql~o_d_!.~c!i_9p2. ~g~_l!}J_i1].~gt ___ _
- -- --fo~-r~ad-p~;~~~~t~t~l;.;~-1-c~~Stf~~tion~hYdfacliZ-con~t~:~~ti~;:-et~~ a.i;:;tl1e typical examples for
such industry.
The use of construction equipment depends upon the purpose and :fimction.Jh general, construction
equipment classification facilitates identifying the equipment, verifYing stock, locating the spares,
recording repairs, accounting for costs, indexing the catalogues, loggingperfortil~rnce, monitoring
.effectiveness, estimating output and plam1ing procutenients.
Advantages of using equipment

• Large and complex works can be carried out easily
• Faster rate of work progress can be achieved
• High quality of work can be achieved
Equipment for excavation and fill
· Earth \vorkin excavation is basic task in any civil engineering projects~ Excavation may be in the
. surface· of ground or below the surface of ground: Excavation is done for foundation ?r fat
collection and production of consttuction matei'ials. Following arethe eon1Iiloi1ly used exca\rating
equipni_ent in the construction works:
a. Ex~:avator
It has ~l'nall hoe in its back. Hoe is teeth attached bucket. It is capable of excavating to a depth.
Excavation is done by teeth attached to a bucket, which is also capable o:f loadingthe excavated ·
material directly to the transporting vehicle. By changing the bucket it can be converted to driller,
power shovel etc. Excavators are classified on.,;the digging motion. An t1pwai'd tnotion u11it is
known as shovel and downward motion is Hoe.
b. Dozers
Dozer is versatile mechanical instrument for scraping and the excavating in both firm i.u1d hard
soil. It can work in worst condition of site like water logged as well as loose soil where other
equipment cam1ot run. It can push the excavated material to the other place with its blade. The
dozer with pneumatic wheel is more suitable in case ofnormal site condition, a11d for movemeJit
oflong distance, rather crawler mounted.
c. Power Shove]/ Loaders
It has a square tilting bucket on the end of themoveable a.nns t' lift and move material around.
The loader assembly may be a removable attaclm1ent or permane tly mounted mi. the vehicle. The
bucket can be removed or changed with other devices foi· the o her purpose of work. These are
also called loader because they are used to excavate earth atid load into a tl"i.1ck or on to a conveyer
belt. They may be either crawler mounted or pi1euinatic wheel mot.mted.
Prepared By: Er. Subash K. Bhattarai (B.E Civil I PGDESD I MPA I MSc CM) I Ch'apter 6.0

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A Manual on Co.nstruction Project Ma.nagement CPu:rbanchalUniversity) 2014
d. Back Hoe Loader

Back hoe loader falls under the group of power shovel group. It has a long handle andonedigging
unit. It is known by several names as Hoe, backhoe, back shovel and pull shovel. A hoe is found
more advantageous for digging below machine level as trenches;footings, pits which re'qi1inis.' ..·
- -P~:~-~i~~~~;!;~};~d~pth~~-s~~rf~~t;i~l~-~rfi~;~1~~'d1i;~ci~i;~re'att~a~hl:ci-&-'e~ciili);p~ci;,ith"a'diii~:-------····----·
on its rear side hence called back hoe loader or back hoes.
Loader Excavator'
--<fit
e. Drag Lines
The drag line is a multipurpose machine capable in wide range ofopen:ttions. n. works on soft to .
medium hard material. It has a long light crane boom with buckets sb that it candig and dump.the ·
excavated materials over long distances eliminating the need of battling equipment. It cai1 har1dle
digging wet material or tmder water digging standing on the finn soil £·om the pit. Generally, the
draglines are of three ki11ds track mounted, wheel mounted, truck mounted and walking draglines.
Drag line Clamshells

f. Clamshells
The name of this machine is derived fro in the shape of bucket. The shape of bucket is hinged
double shell. It has a bucket attached which perfom1s the tasks suchasdigging,exaction and lifting
the material. Clamshells are used to handle the loose material such as sand, aggregate, gravel and
crushed stones. They can be used for lifting the material from deep fonndation like coffer dam,
pier foundation, manholes, etc. They can be Specially used to lift the material vertically. Clamshell
has most of he characteristics as of drag line and som~ ofthe cranes.
g. Trenchi g Machines
These are th special machines to dig trenches. These are called as trenchers. These m chines are
designed fo excavating ditches of considerable length and varying depths and width·. They ate
available in the different sizes and capacity. They are very useful fol' digging water pipeline, gas

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pipeline, cable trenches and· sewer ditches, where the soil ai1d job conditi011 perrriits. U swilly they
are crawler mounted which increase their stability and distribute its weight over a greater atea.
h. Scrappers
.The_;Lare-the..machines- capable-of-cutting...thin Ja.y:er .of earth- and- taki1:.tg -Som€-eX:Gavated-ma:.teria-1-~- --·-
in its bowl to be discharged in depressions uniformly. They can cut, haul arid d.ischarge m~terl.als
by themselves. Scrapper can be self.:propelled or tractor pulled type~ Self-propelled can be chiwler
mounted type or rubber tire ri1omited. These are not suitable in such location where the cutting
blade cannot work, like gravely and rocky strata.
i. Graders
Graders are basically the equipment meant to grade the road surface and other large area. With the
help of teeth attached to them, they can scarify earth surface to loosen the material which can
eventually be shifted forward or to the sides by grading blades. These blades rotate up to 270° in
the ceritral ring making it unique to shift the material 011 all sides. The self-propelled grader are
also known as motor grader and can be Classified in four different types a) Light Grader -up to 9
'ions b) Medium Grader- 10-12 tons and c) heavy grader 13-15 tons and D) Very Heavy Grader
17-24 tons.
Grader
j. Power Jack Hammers and PneumatiC Drills
Powe.r Jack Hammer ....
These are the equipment used to drill holes :in the hard rock arid are used to excavate hard rock by
drilling and blasting method. Engine to drive the .drilling bit is mounted ovet the jack Hammel'.
These types of jack hammer are very use:fi.ll fo:r the openit1g track in mou11taino1Js road whe11larger
equipment like air compressor cannot be taken to site to r'un types of drilling bids.
Pneumatic Rock Drills

These are the rock drilling op,erated by compressed air and hence they are called pneumatic rock
drills. The can bore a hole ii the hard soil up to the 5 meters in the hatd rock. Their oper~ting
system of this machine is sue that a steel rod hammer and the bottom of bore hole and turn around,
the steel rod is equipped with a cutting bit.
k. Air Compressor
These are very important part of excavating equipment when excavation to hard rock had to be
done. These compressors drive the drilling machines to drill holes ir1 the rock. More than one

A Manual on Construction Pro]ect Management (Purbal1ch~l University) 2014 ·
drilling machine can be driven With the help of o·ne compressor. ·.·Compressor used in t11e
construction project is relatively small, simple and. strong enough sO that they need minimum
maintenance. Some other uses ofcompressor are:
• Drill hole in rock for blasting and clearing.
---
~ ~- --.- -euttingliiateriaJ·s-wttlrthe~netrforpfieumatic- circular saws ol.·-chairiS.----
~-- -----~----- - - - -----
~
• Bore holes in timbers number of jointing them to make timber structttre.

• To run air-operated centrifugal pumps at construction site.
Comparison between Wheel mounted and Crawler (track) Mounted equip!nent.

• Crawler mounted have bett~r capacity to operate in soft soil, roughand rocky surface than
wheel mounted . .
• Crawler mounted cm1 push large blade load. It has lessspeedthanwheel mounted.
• Crawler mounted equipment gives more fatigue to operate thal1 wheel inounted one.
• Wheel mounted equipment has less damage~n the road surface than the crawler
• Wheel mounted has greater output when considerable travel is necessary.
Equipment for Transportation

In consthrction site the earth moving work is especiaily carried by transportation equipment. Large
<Scale di,tting and embankment is necessary in constnrctioi1. Therefore tranS}5ortation equipment is
equally· important in moving the earth and to carry gravel and other materials :tiom borrow pits.
The following are transporiation equip1nent.
·a) Trm;ks or Trippers
Trucks,:are the hauling units that provide transportation facility for excavated materials, aggregates~
construction equipment :fi:om one place to another. Trucks can be an ordinary or dump typ·e.
Ordinary truck are also called flat-bed tri..ICks which are not capable of self-empty the materials bm
dump trucks are capable ofdumping the load automatically by lifting the body \Vith the help of
hydraulic attachment. Trucks provide relatively low hauling costs due to their higher travel speeds.
b) Rail wagons
Mostly rail' wagons are usedin tunnel excavation. They are used Wh~nlarge quantity ofmaterial
has to be transporied to large batHing distance ..
c) :Mini Dumpers
Mini dumpers are small front end dump trucks with small capacity bowl in the :fi·ont. They can
dump or unload automatically, hence very handy to se at construction sites. They are used when
material to be transported is of very small quantity t a relatively short distance.··
d) Loaders
Front end loaders are primarilythe equipment to loa loose eaiih in:to a ttuck or other transpmii11g
device or into bins of crushers or n1ixers. They are a so used to excavate soft soil and transport it
while excavating to a short distance. Loader ate used to load rocks ar'l:d stones for cn.ishing
aggregates in jaw crusher at site.
Prepared By: Er. Subash K. Bhattarai (B.E Civil I PGDESD IMP A I MSc CM) I Chapter 6.0

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A Manual on Construction Pr~ject Management (PurbandmlUniversity) 2014
e) Belt Conveyor
Belt conveyor are generally of fixed type, Belt conveyor are loaded with the help ofloaders. ·It is
used in gravel and sand quarries.
-- ~--:1)-Rue-ket"e-o-nv.e-y:et:s- ---------- --'- -,--~--c- ,.,.."'-~--:--- --·---'---·-"'"-'-~-_c.- --'--:-~•:.c-"~.:.·-c--- -"--'-.- ---'~----~-'--~--~--
. '
They are commonly used to trarispmi earth in vertical dii·ection. Bucket conveyors are efficient .
means of transporting loose materials vertically. Loading is done n1anually or mechanically and
emptying is done automatically.
g) Ropeways
Ropeways are used when matel'ial to be transp01ied is :fiotn a fixed location to a fixed location.
Rope way buckets are loaded manually 01~ by i11achine. This is more often used in quarrying
operation.
Equipment for Compaction
Emih compaction is done to remove the air entrapped in the soil mid making it denser to acquire
required strength. The equipment use to remove the air fi:om the soil is called compacting
equipme1it. Rollers are used for earth compaction.
a. Smooth wheel roller
·"(
:° Foi tl{~:'compaction of cohesive soils, sinooth wheel rollers are commonly us~d. It consist dfthree
'.":
steel v;'heel cine at front and two at back. ·

. b. ·. Sheep Footeu RoHer
'This rtiller consists of a hollow steel drum. They are suitable for clayey soil. Pads of the shape of
· .sheep~~~- foot are attached on an outer surface of hollow drum. Hollow .steel drum is filled with
moist sand or stones to obtain the desired weight.
Sheep footed roller Dta11p thic!ddumpei- ·. ··
c. Grid roller
The working principle of grid roller is same ofthatsheep footed. Th~ drum ofthis roller is covered
by steel chain grids which gives more pressute on the surface to be c' ffip~ded. These compactoi-s
are used on granular materials when size ofthe grain is relatively lat er.
d. Vibrating Rollers
Ordinary vibrating rollers are single drum type steel wheel. It is suitable for granular soil.

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A Manual on Construction Project Management {PurbanchalUniversity) 2014
e. Tandem I Talnping Rollers

They are 2 wheel steel drum type rollers, generally self-ptopelled. This roller can also be ballasted
to increase the dead load. Some tandem rollers are available in 3 axles having 3 steel drums rolling
in tandem. They are called "Three Axle Tandem Rollers". This m~Y be with one tVli~el_yjbr~tiDKc..~ ____ _
-- ---- or-boti1\V11eeTV!braTilir----~----------~ --"-~--:- ---------- ~- - _, -- --c:-:- , - - - ,_- ~__, _, --- _,_. . .- .--.
Tandem roller Pneumatic rollers

f. Pneumatic Tired Rol1ers
These are surface rollers and work on the principle of kneading action to produce· compaction in
the soil below. This type of the roller has rubber tyres, generally it consists of3 in the fi·ont m'ld 4
in the rear. They are suitable for clayey soiL They are non-vibrating types. These rollers arc
sl1itabif. for the compaction of the bituminons pavement. Also they a:re most sliitable in asphalt
concrete paving work -especiallyfor back rolling of the finished surface.
g: Frog Hammer
It is also called inonkey jun1persthese compactors are very useful· and handy ~hen area to be
compa~ted is very small. They are generally used to compact back filling around the man hole,
back ·filling of the culvert approach or on· corners of the structutes where other compactin:g
equipment cannot reach.
h. Plate Compactors ,...
These are small hand held equipment used in compacting small area.
i. Hand Held Roller
These are small drum rollers, generally vibrating and self-propelled.
. .
6.2 Aggregate handling and concrete construction Equipment
Equipment for Aggrega e Handling
Screening Plants
Screening is necessary i order to separate the aggregates by size. Scree11ing plants are seH~cted
depending upon the speci 1cation of aggregates that are required fot the work. The following two
types of screens are generally in t1se.
Prepared By: Er. Subash K. Bhattarai (B.E Civil I PGDESD I MPA I MSc CM) /Chapter 6.0

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A Manual on Constr~1ction Project Management (Putbarrthal University) 2014
Revolving Screens
Revolving screens are the most conunon types of screens used to wash imd screen sand and gravel.
The maintenance and repair costs are low as compa.redto other type of screens. Streams ofwater.
may be sprayed on the aggregates as it ~~y~_s_t~o-~lgh_t]~~~~~~~Q:._ ~_g~E·~ge!_:t~~§:~~ ~~-aJ?!~d_l;>y~i_ze _ ,..-- __ _
---and store(:fteidpo-rai:ny-irt-bills-b~lo~~the screen. . . . . . ..
Vibrating- Screens
It is the most widely used screens fot aggregate production for their efficiency and capacity to
handle large amount of materials. These plants come under multiple deck type. Screens are
installed one above another. Each screen is called deck. A vibrating mechanism is filled to the steel
frame whichholds the screens; Therefore all the screeiis Vibrate siniultan:eously;
Crushing Plants
A crusher is a machine designed to break and rednl'!e large rocks.into aggregates, gravel, or rock
dust. Crushers may be used to rednce the size, or change the foni1, c:if'waste materials so that they
can be more easily disposed of or recycled, or to reduce the size of a solid mix ofraw materials
(as in rock ore), so that pieces of diffetent composition can be differentiated. The stone chips-
aggregates are the most important ingredients of concrete constmi::tion of buildings, dams,
·irrigati$n structures bridges, water stipply projects and similar civil engineering constmctio~
: constr~d~tion of road and highways airports and rail road. The product :fi:om the crusher is taken to
.screeni11g plant to separate various sizes of aggregates. The range of the sizes depends upon me
need specific project.
Crusher .Conveyor belt
Different types ofcrusher are discussed below:

a) Jaw Crushers
It operates by allowing stoi1e to flow into the space between two jaws, one of which is stationm"y,
while other ism vable. Stone is fed betweet,·these-2 jaws opening of which is bigger attl top
:fi·om where stone is fed and smaller at the bottom to get aggregates reduced to the required size.
The movable jaw exerts pressure which is required to crush the rock.

A Manlial o~ Constructioi1 Project M~nagement (Purbanthal University) 2014
---- --- ---------- ----·---------- -~
Jaw crusher Impact crusher
b) Gyratory Crushers
The crusher unit consists of a heavy cast iron or steel :fi·ame with an eccentric shaft and driving
gear in the lower part ofthe unit.
c) Cone Crushers
These crushers are used as secondary or tertiary crushers. They are capable of producing large
quantities of uniformly fine crushed stone aggregates.
d) Roll crushers
It can 1Je used as tertiary crushers to produce additional reductions in the size of stone after the
output'bf a quarry has been subject to one or more stages of prior crushitig.
e) Imf}act Crushers
Impact crushers involve the use of impact rather than pressure to crush materiaL The material is
contai1ied within a cage, with openings of the desired size to allow rnHvetized material to escape.
Hani1TI¢i mills can a type of impact crusher. R.od mill is used to produce sand from cru_shed
aggregcites. If steel balls are used to give impaCt in place of rod theri it is named as ,ball milL
Equipment for Concrete Construction

Cement Concrete is a mixture of cement, sand, coar-se aggregates and water. It is the most widely
used construction material in civil e1igineering constroctioil. Its versatility, adaptability,
availability and economy shows its usefulrtess all over the world and •its low maintenance
requirements have made it an excellent building material.
a. Form Work Construction

Form work is either made of up steel or timber. The most commonly used material for ariy large
construction work is the steel pi tes. In smaller construction projects timber and plywood a:re
extensively used.
b. Equipmentfor Batching of ateri:Hs

After prop01iioning the materia :fi·om 1i1ix design, hatching is done to achieve the correct
measurement of the ingredients of the concrete, Batching is measuring different ingredients of
concrete to correct quantity.

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A ·Mai:mal on Construction Project Management (Purba:n'chalUnivei'sity)
Batching is generally done by weight. For small construction simple weighing scale are comrnonly
used whereas for larger concrete construCtion, automatic batching plant are:used. Water and liquid
admixtures are generally measi1red by volume and other in:gredients by weight. The batching plarits
are available in 3 clitego:ries.
-- --- --.--·Manuai------- ---- ----·------- ---------------------------- - - - - - - --- -- - - ---
~ -~-- ·--··-·---·-·-~----
• 'Semiautomatic and
• Fully automatic.
Botching plant Transportation of concrete
C. Equipment for :tylixing Of Concrete
The ob}ective of mixil)g of concrete is to coat the surface of all aggregates particles with cement
paste. J\,Jixing allows the blend all ingredients of concrete into a uniform mass. Small quantity of
concrete at micro level are mixed by hand which is termed as hand mixing. For good quality of
works ~~t macro level mixing are done tbJough mixing plant. Batch mixers and continuous mixers
are t\~li. types of readily available mixers for concrete mixing. Batch l'nixers can be further
classifi~d. as:
' (a) Tilting type mixers.

:\1ixer consist of conical or bowl shaped drum with inside vanes. These vanes revolve on an
mclined axis. It discharges mix by tilting its drum without segregation. This l'nixer are preferable
:for mixes of low workability and having large size aggregates.
(b) Pan niixers

Ibis mixer is static type. It is fixed and stationary and hence used eit11er at a ce11tral mixing plant
or at large concrete project or in laboratory.
(c) Non tilting type mixers

En this type of mixer, the drum is cylindrical and alw . s rotate about a horizontal axis. The
discharge of mixed is obtained either by inserting chute in. o the drurh 6rreversirig the direction of
rotation of the drum. Concrete is liable to segregate in t is type of mixer due to slower rate of
discharge.
(d) Transit mixers


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• A Manual on Const:tuttion Project Managemerit (Ptti·banchal U11iversity} 2014

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Transit mixers are mounted in a tntck These mixers is feed with aggregates arid cement fi'Ofu a
hatching. plant and add water to mix coilcl'ete. The drum: c'>f these Ii::iixets revolve 70 - 100
revolutions for complete mixing of concrete.
______ _!!:_ql!iJl~ ~J:!L[or '!f~P:~.R ~!i.<~i0_1_!__ ~f~Q!!.¢!~.!_t:_ . ··c- ~ • - .... ~. -~,"-'·-··-'··'··,

After mixing of concrete, it should be transported a:nd .Placed a:t site a:s quickly as··possible.
Segregation and drying should be avoided while transp·ortirig the conctete aftefmix. Fot niost of
the smalljobs concrete mix is transpmied manually with the help of wheel batrows or even in a
pan carried manually. For any medium to large projects, mechanical equipi11ent are itsed to
transpo1t concrete from mixer to the forrri work where it has to be laid in the final shape. Dep~ndirtg
upon the type of work and equiptnent available various methods of transporting of concrete can be
employed.
a) Pan method
This method of concrete transportation· can be employed for small jobs, where qimtitity ofci::n1ctete
required is si11all and labor are available in cheaper rate.
b) Bucket conveyors
Bucket conveyors are used to transpmi concrete in vertical direction fi·om botton1 to top.
c) Chutes
They are used to ti"ansfer concrete from ground level toiower lever: The chute section should be
lined with metal sheet with the uniform slope for fulllei1gth.
d) Dmnpers and trucks ..
These are special type of trucks. These dumpers are Sllitable to n-arisport ·corictete for relatively
longer distance without segregation and setting. Tipping'Lotries ate also used to tni.hsport concrete.
e) BeltConveyors
'
.· BCit coiiveyors are very convei1ient in movement of concrete easily to different p<nis at site. 'It can
transpmi concrete continuously and is suitable for hot clirnate. When other method of
transpmtation are not feasible, belt conveyors are best fot the altetnate solution.·
f) Concrete Pumps .
_. .
Concrete ate transported throngh pumps in tmmel construction. The gtmiting and shortcreting are
specially done tln·ough pum:ps in high pressure.
g) Builders Hoist
Now a days at multistory building sites up to 150m hoists are tised totra.n:spmi the cm1ctete,
h) Cranes
Cranes a:re commonly used to transfer concrete fi·om mixer or a place of delivery to the for1Il wodc
where it has to be laid. It is very suitable transferring system as it can take concrete to the right
location where it is required.
Concrete Compaction Equipment
Concrete mixes are heterogeneous mixtnre of cement, aggtegates an water m a stiff state
containing large voids and entrapped air. Consolidation can be catried ot' thi'ough compactio1'1 to
remove air voids. Compaction is achieved by the use ofmechanicalvibta.tio11s.
a) Internal Vibrators

A Manual on Construction Project Management (Purbancbal University) 2014
An internal vibrators are also called needle vibrator. It consist ofthree parts. Power unit, flexible
tube and vibratory head. They are introduced into the fresh concrete to vibrate and give compacting
effect to the concrete. Power is given to vibrator either by patrol engine or electricity input. Flexible
rubber tube connects wer connecting device and the vibrating needle. Vibrating head is a straig t
iron tube having ec · weight fitted inside it.
Needle vibrator Swface vibrator
b) Plate Vibrators
-
They are used to compact concrete with lesser thickness. This vibrators falls under the category of
surface vibrator. It is extensively used in slab construction.
c) Vibrating Screed
Vibrati!1g screed are also the type of surface vibrators capable of compacting large section of
concrete surface giving i1eat shape to the concrete. They are used in finishing bridge decks and
also concrete pavement of roads, aprons and parking area.
d) Form Vibrator
These vibrators are external vibrators and are attached to the outside of the concrete formwork.
They vibtate formwork and in turn formwork vibrates the concrete. These are used in compaction
ofprecast concrete.
c) Concrete Rollers
Large static rollers are also used for compacting Plum concrete construction with greater thickness
of concrete layer. Generally used in compaction of Dams.
Equipment for Finishing of Concrete
After compaction of concrete, the concrete surface is finished by trawling, floating or by belts.
Most ofthe concrete surface is finished by hand trowels for smaller surface area but power trowels
are used for larger area. Similarly power floats are used to level area of concrete to a accurate level.
Power are given by electric motors.
6.3_Equipm~nJ for CoosJn1~JionofPipes~mdC~iss_ons
6.4 Cranes for lifting materials and parts

Hoisting is the operation of lifting load fi:om one location, transpotiing it to another location
situated at a reasonable distance and landing it down. Cranes is versatile and most useful machine.
For more Notes

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A Manual on Construction Project Management (Purbanchal Univers 2014
It is the only single machine capable of providing three dimensional movements to a load virtually
in one continuous operation. It is able to perform the operations with speed, safety and precision.
It is necessary to know the lifting capacity and working range of a crane to be selected to perform
a giv njob.
Clas ification of cranes
Broa ly cranes are classified into four categories
a) Stationary crane: It is also called derrick crane. These cranes give ~n e eptionally large
working radius and can be designed to give any lifting capacity. They may be steam,
electric or diesel driven. The derrick cranes may be used on a wide ra1ige of works, from
large civil works to industrial building construction, erection of plants, handling timber,
hoisting works at ship yards, loading and un-loading cargos at ports etc. It consist of:
• AbMast
" ABoom
• A bull wheel
• Guys
b) Over head or gantry crane: These cranes are used for handling loads over a long rectangular
area such as in factories and workshops to move machines and other loads in any directions.
These cranes consist of a hoisting mechanism mounted on carriage or crab capable
travelling laterally across a girder which spans. The girder resisting on wheels travels
longitudinally on rails on an overhead gantry.
c) Mobile crane: These Cranes are mounted on mobile units. Truck cranes have high mobility,
whereas crawler mounted cranes move slowly. Classification of mobile cranes are as
follows:
• Crawler
• Telescopic boom truck mounted cranes
• Lattice boom truck mounted cranes
• Rough terrain cranes
• All terrain cranes
" Heavy lift cranes
d) Tower crane: Usuallythis crane is used in the consttuction of industrial and multi-storied
residential buildings. These cranes provide high lifting a11d good working radius. Theytake
up limited space around the work site. These are generally of fixed base type motu1ted on
a foundation block. Structural sections can be added to increase the height of the crane.
There is a vertical limit called "maximum fi·ee-standing" height to which these cranes can
sately rise above the base. A self-erecting tower to grater vertical heights is fairly easy and
economical. A self- erecting crane has a short section of hydraulically operated erecting
tower that is situated below the slewing ring for this purpose. It is also used in assembling
.of high industrial-pla-Rts- -with--elernents of steel structure including loading and unloading
works. The principal components of tower crane are:
• Under carriage
• Slewing platform

A Manual on Construction Project Management (Purbanchal University)
• Tower with operators cabin

• Jibs and Operating mechanism
c) Heavy Lifting Cranes: These are basically the system that significantly increases the lit1ing
capacity of a crawler. Heavy lifting system consis of:
• Trailing counter weight
• Extendable counter weight
• Ring system
• Guy derrick
-
Tower crane
6.5 Equipment for Tunnel Construction
Basically there are two methods of tmmel construction. The first one is conventional method and
another is construction using tunnel boring machine.
Conventional method of tunnel construction
The excavation of tunnel by drilling and blasting method 1s the traditional method of tunnel
construction. Excavation by manual operation or using excavating equipment is done for the soft
soil. For rocks drilling and blasting method for excavation is adopted. The process oftaking out
the excavated materials or blasted materials from the tmmel is known as mucking. It is done
manually in wheel barrows for small section of tunnel whereas for the larger diameter tunnel
tippers and loaders are operated inside. Railway wagons are also used for mucking operation.
Excavated material is taken out as the excavation progress. Tunnel ventilation is needed when
. excavation is in sufficient depth. Ventilation arrangements are done through exhaust pipes.
Exhaust pipes consist of two numbers one pulls foul air fi·om inside and another push fi·esh air
inside. Power is supplied into the tmmel to provide light as well as to run equipment like exhaust
fans.
Conventional tunnel construction process uses the following equipment:
• ... Excavators f61; s6rfgt:6\.md
• Drilling machine
• Compressors to run drilling heads
• Earth transpmiing equipment for mucking or clearing the excavated material

" Exhaust fans for ventilation

• Compressors to supply fi·esh air
Tunneling by TBM
Modern tunnels constructions are done ith the tunnel boring machines. These are the machines
which have programmed boring head or · oles which drill mountain to bore tmmel through them.
The muck is taken out tlu·ough a pipe att ched to the boring machine. This method oftmmeling is
very fast and efficient. These machines a every costly. The length of the tmmel can justifY the use
of TBM's they are economical. TBM's are available of different capacity and size. Once
programmed before operating, these machines can progress in the fixed co-ordinates in all the X,
Y and Z direction.
Tunnel Boring Machine (TBM)
6.6 Equipment for Hydmulic Construction

The special types of hydraulic construction are construction of off shore oil rigs and deep sea
harbors. These project uses cranes, excavating equipment and concreting equipment of special
types, size and capacity. Construction of hydraulic structures in shallow waters where water is
diverted with the help of temporary coffer dams and water is pumped out to facilitate excavation
and concreting, water pumps of various types and sizes are used. The selection of the size of pumps
depends upon the quantity of water to be pumped or the quality of water to be pumped. These
pumps are operated electrically or driven by,JC engines.
6.7 Equipment for Highway and Pavement Construction
Highway construction involves earthwork in excavation, embankment construction and pavement

construction. The equipment used in the constructions of pavements are discussed below.
Sub -grade Preparation and compaction
The sub grade is prepared after eatihwork in excavation. Preparation if sub grade includes site
_ . clearance, grading<ll1Q_compa<::!i()n. A grader is_ used~<:> grade tbe s~lrfc'1ce to achieve uniform ..
surface both along cross section and longitudinal section. Final compaction of the sub grade is
done with the help of compacting equipment like rollers, sheep foot tandem roller carefully so that
rollers, tandem rollers, pneumatic tyred rollers etc ..
Prepared By: Er. Subash K Bhattarai (B.E Civil/ PGDESD I MPA I MSc CM) I Chapter 6.0

Construction of sub-base and compaction

After achieving the final and finished surface of sub grade, sub base is prepared. Sub base
construction involves quarrying of sub-base materials, screening of sub base materials,
transp01iing the aterials to the site and spread by loader or grader and compact the sub b se in
layers. The top s rface is graded with the help of grader to bring it into the final surface. Final
cor~1paction is th n done with the help of compacting equipment.
Construction of ase- Course

Base course is constructed likewise of sub base construction. Grader is very important equipment
to be used in this method for spreading, mixing, laying and finishing base course layer. Pavers or
the laying machines are also used in fully mechanized.
Equipment for Bituminous Pavement work
a) BitumenBoiler:
Bitumen boiler is used to heat bitumen to required temperature. Boilers fired with wood and coals
were of common type. Modern boiler use di~el fuel burners to heat the bitumen to required
temperature. These boiler can be stationary.
b) Bitumen distributor
They load preheated bitumen fi:om bitumen boilers. Bitumen distributor is truck which consist of
tank. These machines come with burners fi·ied by organic fi.tel, generally diesel or crude oil to
control the temperature during transportation. These burners heat the bitumen to required
temperature before spraying. The distributors have bitumen spraying attachment which sprays
bitumen in fan shapes through nozzles.
c) Aggtcgate Spreadet·
Aggregate Spreader is use for surface dressing work. Aggregates are spread uniformly in layer
covering the bitumen sprayed. A dump truck with spreading attaclm1ent is fixed on the tail which
spread aggregate in uniform manner.
d) Asphalt Distributor
Asphalt distributors are used to apply prime or tack coats on a surface in preparation for paving.
They are available in either truck mounted or trailer models and are considered the most important
piece of equipment on any asphalt surface treatment project. It consists of an insulated tank with a
heating system, a spray bar and unique control system
d) Asphalt Concrete Plant
To make asphalt concrete pavei11ents asphalt concrete is used. Asphalt concrete is the mix of
bituminous binder and different types of graded aggregates. For patch works asphalt concrete is
batched and mixed manually. However for large jobs and quality of work it is done in a hatching
and mixing plant called asphalt concrete plant.
Prepared By: Er. Subash K. Bhattarai (B.E Civil I PGDESD I MPA I MSc CM) I Clwpter 6.0

A Manual on Construction Project Management (Purbancbal University) 2014
, concrete plant Asphalt paver
e) Asphalt Concrete pavers

A paver (p~ver finisher, asphalt finisher, paving machine) is a machine used to .lay asphalt on
roadways. It is normally fed by a dump truck which brings hot asphalt. They are also called mat
makers. They are the self-propelled machines on rubber tyre or track mounted.
f) Rollers
Compaction of aggregates are done by rollers. Generally, pneumatic roller is used to ensure that
aggregates are not broken and remain intact.
f) Water truck
Water trucks are uses for compaction and dust control
Selection of appropriate equipment
Selection of Construction Plant basically involves planning the equipment, careful selection
considerations and the basis for selection. The selection process may vary fl-om company to
coni.panyand within the company fi:om project to project. Equipment selection plays an important
role in execution of any construction project, since proper selection of equipment contributes to
the completion of the project timely; economically; and of desired quality standards. Basically
there are two principal aspects of equipment.,. selection they are:
..
• Technical aspects governed by the performance, and

• Economic aspects and conunercial aspects mainly concern the contractor or the equipment
hire organizations from a business sense.
After the selection is carried out purely from a technical point of view, it is necessary to test the
viability of the selection fiom an economic or business point of view also. Planning for Equipment
Selection involves working out to get the answer to the following questions
a) What for is the equipment needed?
b) When is the equipment needed and for how long? (The duration of equipment use)
G)... .. How big e.quipment is need.ed? (The capacity assessment)-
d) Which one is preferred based upon the history of performance ofthe equipment?
At the planning stage it is necessary to take concrete decisions on the method of achieving the
ultimate target by utilizing resources (Men, Machinery, and Material & Money) in the best possible
Prepared By: Er. Subash K. Bhattarai (B.E Civil/ PGDESD I MPA I MSc CM) /Chapter 6.0
.. :.
A Manual on Construction Project Management (Purbanchal University)
way. This may be done in the pre tender stage by the contractors by studying the contract
documents, plans and the local conditions. Depending on the type of the project the contractor may
be required to survey the following:
" Geological conditions:
.. Weather conditions:
• Site conditions:
• Transport facilities
• Availability of Fuel
• Availability of Labor
• Availability of services (Electricity, Water)
• Pollution Standards
Cat·eful Selection Considerations of equipment

The following have to be carefitlly considered .,,.
before selecting any equipment.
a) Specifically designed
b) Performance is fixed
c) The Varying need
d) Combination may be needed
· e) Match Finding
Apart Jiom the above general and broad principal considerations, there are several other tactors
that influence selection of equipment
lVIain Basis for Selection

Some ofthe factors that need to be considered while selecting constructs plant are as follows:
>- Identification of task
>- Quantity of Material
> Unit weight and size
> Changeable Characteristics
>- Haul Distance
> Traffic ability
> Maneuverability
Factors Affecting Selection of Proper Construction Equipment

The selection of an equipment or plant system to perform an assigned task depends upon many
inter-related factors. These factors are:
A. Task Considerations
• Nature of task and specifications.
• Daily forecasfofpl::umedpi~Odlicfioi1.
• Quantity ofwork and time allowed for completion.
• Distribution of work at site.
• Interference expected and inter-dependence with other operations.

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B. Site Constraints
• Accessibility to location.
• Maneuverability at site.
• Working space restrictions.
• Altitude and weather conditi · ns.
• Working season and workin hours.
• Availability of local resourc s of manpower, materials and equipment.
• Availability ofland, power s 1pply and water supply for workshop and camp.
• Availability of local equipment hiring, repair and maintenance facilities locally.
• Availability of fl!el, oil and lubricants.
C. Equipment Suitability
• Type of equipment considered suitable for the task.
• Make models and sizes of special purpose and general purpose equipment available, which
can handle the task.
• Production capability, service conditions and delivery time of each equipment available.
• Equipment already owned by the contractor.
• Usefulness ofthe equipment available for other and future tasks.
D. Operating Reliability
• Manufacturer's reputation.
"' Equipment components, engine transmission, brakes, steering operator's cabin.
• Use of standard components.
o Warranties and guarantees.
• Vendor's after sales service.
• Operator's acceptability, adaptability and training requirements.
• Structural design.
• Preventive maintenance program.
• Safety features. ...,.
• Availability of :fhel, oil and lubricants.
E. Maintenance
.. Ease of repair and maintenance.
• Vendor's after sales service, repairs, spares and maintenance.
• Availability of spare parts.
• Standardization consideration.
F. Economic Considerations
• Owning costs.
• . Operatiug£Q;>t_$,
.. Resale or residual value after use.
• Replacement costs of existing equipment.
.. ·
G. Commercial Considuations
• Buy second-hand or new equipment.
• Rent equipment.
• Hire- rchase equipment.
• Purch se or lease.
Eqt:ipment se ection analysis is not necessarily limited to the above. It leads to alternativ choices
for acquiring the required equipment. It is followed up with the management decidi1 g on the
required equi ment. It may be noted that, in most cases, the final equipment selection d cision is
likely to be ~ compromise between what is ideally required and what can actually be obtained
economically.
Prepared By: Er. Subash K. Bhattarai (B.E Civil I PGDESD I MPA I MSc CM) Cflapter 6.0
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A Reading Manual on Construction Project Management (Purbanchal University) 2014
Chapter 7.0 Periorwnrut~ce Measuremem1t
7.1 Definition of Performance
Performance is referred to as being about doing the work, as well s beingabout the results
achieved. It can be defined as the outcomes of work becausethey pro vi e the strongest linkage to
the strategic goals of an organization,customer satisfaction and econom c contributions.
Performance measurement is the process of collecting, analyzing and/or reporting information

regarding the performance of an individual, group, organization, system or component. It can
involve studying processes/strategies within organizations, or studying engineering processes/
parameters/ phenomena, to see whether output are in line with what was intended or should have
been achievgd.
Ped"onnance measurement in engineering

Performance measurement are carried out in the design, building, operation and maintenance of
systems, machines, devices, structures, materials . and processes. In design, performance
measurement can be of physical properties, parameters, etc., while in maintenance, repair, and
operations, and reliability engineering, failures, downtime, uptime, maintainability are common
measures
Introduction
Throughout the last two decades a number of industries, primarily manufacturing,have
introduced new methods and techniques to shift traditional paradigms in order toimprove their
performance. This has led to the creation of new philosophies such asconcurrent
engineering/construction, lean production/construction and many otherssuch as JIT, TQM, and
TPM etc. The main driver behind those philosophies is to optimize an organization's
performance both internally and externally within its respectivemarketplace. Therefore,
performance measurement is the process of "determining howsuccessful organizations or
individuals have been in attaining their objectives [andstrategies]". To achieve this, the outputs
of organizational strategicand operational processes are measured, in a quantifiable form, to
monitor the vitalsigns of an organization.
Background to pedonnance measurement

The importance of identifying an organization's performance is evi.dent throughout theworld-
wide markets, the results of which are to attract future investment, increases hare value and attract
high caliber employees. Therefore, it is important to considerhow an organization's performance
is measured and how it can be conmmnicated tothe wider market i.e. how can it be understood
and interpreted by the potentialinvestors, employees and customers. Traditionally performance
indicators have traditionally concentrated onfinances e.g. return on investment, sales per
employee, and profit per unit production. These measures are criticizedbecause they:
• Encourage sh01i-termism
• Lack strategic focus and fail to provide data on quality, responsiveness andflexibility
• Eiicoutage loca:roptin1ization · ··- · --
• Do not encourage continuous in1provement
The main reason for the above failings offinancial measures is they are 'laggingmetrics' in that
they report on results and decisions made inthe past and therefore of liale use in improving
Prepared By: Er. Subash K. Bhattarai (B.E Civil I PGDESD I MPA I MSc CM) I CIL(Ipter 7.0

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(Purbanchal University) 201 ~
current pe1jormance. In effect, theyare reporting on the organization's past performance rather
its current pe1jormance.
Asimplistic analogy to illustrate this point can be drawnfrom the field a,[ sports, and inparticular
football, where knowing the result of a match offi rs you an indication ofhow the team pe1jorrned
but it does little to suggest future improvement~ identifymistakes and wrong strategies, assess
individual pe1jormance or identify weaknesses.! . any case the match was either lost or won.
7.2 Performance issues and Measurement in t eConstruction Industry

·The construction industry's core business is und rtaking projects in generating newbuildings or
refurbishing existing ones for a variety of clients. Therefore, it is not asurprise to find that
traditionally performance measurement in construction isapproached in two ways:
• in relation to the product as a facility
• in relation to the creation of the product
In particular, the latter of the two has been the prime performance assessment (inten11s of success
or failure) of construction projects. A conm1on approach is toevaluate performance on the extent
to which client objectives like cost, time andquality were achieved". Indeed, those are seen as the
'three traditional indicators otperformance' used j,p. the UK construction industry.
Although the 'three measures' provide an indication as to the success or failure of aproject they
do not, in isolation, provide a balanced view of the project's performa:nce.Furthermore, their
implementation in construction projects is usually apparent at theend of the project, and therefore
they can be classified as 'lagging' rather than'leading' indicators of performance.
The client's willingness to pursue a given procurement route toachieve a fltture project is likely
to be strongly influenced by these factors. Therefore, it is clear to see that the traditional
measures of the performance ofconstruction projects are not enough to assess their 'true'
performance. It can beargued that the methods used to measure performance in construction
project~; fall intothe three main categories of the BSC:
1. Financial Perspective: how do the project's financial stakeholders vie\v theproject? For
example cash flow forecasting and cost benefit analysis.
2. The Internal Business Process Perspective - hO\\. arc \Ye pert(,:::-:::n; Gill b:::-;=-~ ..:~:;:s
activities? For exaniple critical path analysis
3. The Customer Perspective - how do our existing and potential cusromers seeus·~ Ec,:-
example quality assurance.
Hovvever, during the 1990s there has been some interest in 'emerging' techniques and
philosophies such as total quality management (TQM), benchmarking, businessprocess re-
engineering (BPR) and business process management that have shifted thefocus fl·om 'lagging'
towards 'leading' indicators of performance. The majority ofthose concepts have been imported
to construction from the manufacturing industry.
Furthermore, these measures have tended to concentrate on construction productivityand those

factors that influence it, with the aim being to achievecontinuous improvement. Therefore, the
fourth perspective of the Business Score Card (BSC) was also introduced in the 'organizational
learning.'
The construction industry often acts as a catalyst to stimulate the growth of a nation's economy.
The industry is often referred to as an engine of growth. However, numerous govenm1ent reports
have criticized the industry's poor performance, especially in terms of productivity, quality and
quality systems. In order to improve performance, many construction companies implement the
... ·
ISO 9000 series, an integrated system to ensure consistency and better performance of
construction projects. This is achieved by creating a framework for continuous improvement and
by providing the necessary criteria to guide construction firms setting up and maintaining quality
system in the organizations.
The construction industry has numerous problems to deliver quality construction projects
because it comprises of a multit de of professions, occupations and organizations. The quality of
service delivered by consultants has often been a subject of thorough investigations. Some clients
have underestimated the impa: ts of substandard consultancy service to the success of a
construction project. Many delays, cost overruns, reworks, variations, claims and disputes can be
traced back to erroneous design, poor contract administration or lax supervision of the client's
representative. Furthermore, the production processes of construction projects are generally non-
standardized; hence, it is difficult to ensure quality. Therefore, some local building authorities
seek to alleviate the quality problem by making certification to ISO 9000 mandatory for all
contractors who are tendering for public sector projects.
Errors induced by a system can be prevented or at least minimized through the implementation
of a quality management system (QMS). Among various QMSs, ISO 9000 certification has been
widely adopted by the construction industry in many countries. For instance, in Hong Kong all
consultants must have a certified ISO 9000-based QMS before they can bid for public
construction projects. With the release of ISO 9000:2000, an unprecedented emphasis is placed
on customer satisfaction and continual improvement. 'Satisfaction' can be measured by
comparing the difference between what is expected and actually received, and clients would
satisfy with the performance of a consultant when the quality of service provided exceeds or at
least meets their expectations. Continual improvement can only be realized if consultants are
aware of their weaknesses or deficiencies and make corresponding adjustments to satisfy the
expectations oftheir clients.
ISO 9000-based QMSs have been repotied to be able to improve the service quality ofthe firm.
This will subsequently increase the clients' satisfaction, market share, revenue as well as
workers' morale. However, to what extent International Organization for Standardization (ISO)-
certified contractors could satisfY clients' needs in construction projects are still inconclusive.
There are still a lot ofcomplaints reported r~lating to the quality of delivery.
B S 5750 (1987) defines quality as 'The totality of features and characteristics of a product or
service that bear on its ability to satisfY stated or implied needs'.
Quality is understood differently by different people and different organizatiC?ns. For

instance, opined that quality is probably the best way of assuring customer loyalty, the best
······ · ·· deference agaias+ foreign-competition an& the only way to· secure continuous growth ·and profits···· · ·
in difficult market conditions. In order to manage quality, the starting point for the organization
is to understand the meanings of the term 'quality'. Quality is defined as conformance to
requirements. All of the definitions given above define quality fi·om the perspective of the
customers. In essence, quality can be understood as 'meeting the customer's expectation'. These

A Reading Manual on Construction Project Management (Purbanchal University) ·• 201-f
definitions imply that the needs of the customer must be identified first because satisfaction of
those needs is the 'bottom line' of achieving quality.
ion organizations, quality is defined as meeting the requirements of owner need

nal adequacy; completion construction project on time and within life-cycle
operation and maintenance. Construction companies need to consider lity in the
process, contract review, project planning, financing control, su ntractor and
leadership and utilization, resource allocation and other mana aspects
As quality became a major focus of business throughout the world, various organizations started
to practice standards and guidelines. This sees the introduction of the ISO 9000 series in 1987,
which has since become a worldwide quality management norm for organizations, regardless of
their sizes and products. The ISO 9000, originated Jiom the military procurement standards in
the Second World War, is a series of guidelines for companies that establish their quality systems
by focusing on procedures, control and documentation. ISO 9000 standards are supposed to help
---
companies identify mistakes, streamline their operations and be able to guarantee a consistent
level of quality. The standard also drew the attention of quality professionals worldwide. Owing
to its original intent to create a two-pmiy, non-binding standard, it penetrated barriers of culture
and language, which no other quality standard could achieve. Therefore, it became a non-
political baseline for quality, accepted internationally as quality management framework and an
excellent marketing tool for entering the global market. It gradually spread fi:om Europe to North
Ameri;::a, Japan and the rest of the world.
The ISO 9000 series for the revision of year 2000 consist of the following:
• ISO 9000:2000 Quality Management Systems - Fundamentals and Vocabulary;

• ISO 9001 :2000 Quality Management Systems- Requirements; and
• ISO 9004:2000 Quality Management Systems- Guidance for Performance Improvement.
The ISO 9000 series concentrate on the fiye key areas of quality-management systems, that is,
management responsibility, resource management, product or service realization, measurement,
analysis and improvement
Performance measurement is defined as ~h..c process of evaluating performance relative to a

defined goal. It provides a sense of v;h;::re '·Sc are and, more importantly, where we are going
Measurement can guide steady adYarrce::::.:er:t t<)ward established goals and identify shortfalls or
stagnation. Measuring performance <:1so b..JS rhe importance because it will indicate status and
direction of a project.
It is widely accepted view that, at 2. rr;rJ:i:r.Jc""E performance measures of a project are based on
time cost· and quality noted tillit thcs.~ Ik.::.: .;:,;::;mpvnents of project performance -as the -'iron - -·
triangle'. However some conside;:-ed. "•:::i-?::::::• .::ri:eria in measuring a project. This includes
meeting budget, schedule, and r.he c.. ::J2~i:y ''':err~::aaship, stakeholder's satisfaction, transfer of
technology, and health and safety. Si.'11It~b-. other key components also used in measurmg
Prepared By: Er. Subash K. Bbattarai (B.E Civil I PGDESD I MPA I MSc CM) I Chapter 7.0

project performance such as health and safety, environmental performance, user

expectation/satisfaction, actor's satisfaction and commercial value.
Basically, six variables have been identified for measuring proje performance. They are cost,
time, quality, clients' satisfaction, health and safety and functional" y.
Cost pe1jormance
Cost is defined as the degree to which the general conditions prom te the completion of a project
within the estimated budget. Cost variance was the most comm n technique used to measure
design performance. It is not only confined to the tender sum, but the overall cost that a project
incurs fi:om inception to completion, which includes any costs arise :fi:om variations, modification
during construction period and the cost arising :fi:om the legal claims, such as litigation and
arbitration. It can be measured in terms of unit cost, percentage of net variation over final cost.
Cost variance is a very important factor in measuring project performance because it indicates
how much the project is over or under budget.
Time pe1jormance
It is very important for construction projects to be completed on time, as the clients, users,
stakeholders and the general public usually looks at project success :fi:om the macro view where
their first criterion for project success appeared to be the completion time. The time variance is
one of the teclmiques. for assessing project performance in construction projects. The element of
time could indicate to project managers that the project was not running as smoothly as
scheduh~d. Furthermore, timely delivery of projects is one of the important needs of clients of the
construction industry. Construction time can be regarded as the elapsed period fi·om the
commencement of site works to the completion and handover of a building (facility) to the client.
The construction time of a building is usually specified before the conm1encement of
construction. Construction time can also be deduced :fi·om the client's brief or derived by the
construction planner :fi·om available project information.
Qita!ity pe1jormance
In the construction industry, quality is defined as the totality of features required by a product or
services to satisfy a given heed, or fitness for purpose. In other words, the emphasis of quality in
construction industry is on the ability to cooform to established requirenlents. Requirements are
the established characteristics of a product, process or service as specified in the contractual
agreement and a characteristic is any specification or property that defines the nature of those
products, processes or services, which are determined initially by the client. In order to achieve a
completed project that meets the owner's quality expectations, all parties to a project must
acquire an understanding of those expectations, incorporate them into the contract price and
other contract documents to the extent possible, and commit in good faith to carry them out
Clients' satisfaction
Satisfaction is regarded as a function of comparison between an individual's perception of an
outcome and its expectation for that outcome. In the construction industry, client's satisfaction
)19:s l'~lll?:!I~e<:I _(lJ~- ~l~rsiy~ _(ltlci_ch?-Jlel1ging iss_L!yJQL sOJIJ,e con~idecahle time. Dissatisfaction is __
widely experienced by clients ofthe construction sector and may be caused by many aspects but
is largely attributable to overrunning project costs, delayed completion, inferior quality and
incompetent service providers including contractors and consultants. Research findings have
suggested that it is five times more expensive to develop a new construction client than to
maintain an existing one and companies could increase their profits by almost 100 per cent by
Prepared By: Er. Subash K. Bhattarai (B.E Ci~i! I P_GDESD I MPA I MSc CM) I C!wpter 7.0

A Reading Manual on Construction Project Management (Purbanchal University) 2GU
retaining just 5 per cent more of their clients. Client's satisfaction is therefore a fundamental
issue for construction participants who must constantly seek to improve their performance if they
are to survive in the global marketplace. In the construction industry, the measurement of client's
satisfaction is often associated with perfo mance and quality assessment in the context of
products or services received by the eli nt. Usually the client's requirements are to get
construction needs translated into a design tl at specifies characteristics, performance criteria and
conformance to specifications, besides to get the facilities built within cost and time.
Health and safety

Health and safety are defined as the degrees to which the general conditions promote the
completion of a project without major accidents or injuries. The measurement of safety is mainly
focused on the construction period as most accidents occur during this stage. Throughout the
world, construction industry is known as one of the most hazardous activities. Thousands of
people are killed and disabling injury annually in industrial accident. Construction workers
worldwide have tlu·ee times more chances of dying and two times of getting injured than any
worker of other economic activity. There is no single reliable measure of health and safety
performance. Traditionally, the safety perforrQf.tnce is measured tlu·ough injury statistic. The
main purpose of measuring health and safety performance is to provide information on the
progress and current status of the strategies, processes and activities employed to control health
and safety risks. Effective measurement not only provides information on what the levels are but
also why they are at this level, so that corrective action can be taken.
Funcliunality
'Functionality' refers to one of the success measure that is made in the post construction phase
when tl1e project is finished and delivered to service. Opined that there vvould be no point in
undertaking a project if it does not fulfil its intended function at the end. This indicator correlates
with expectations of project participant and can best be measured by the degree of conformance
to all technical performance specifications. Both financial and technical aspects implemented to
teclmical specifications should be considered, achieving the fitness for
purpose objective. Specification is workmanship guidelines provided to contractors by clients or
clients' representatives at the commencement of project execution. The measure of technical
specification is to the extent that the technical requirements specified can be achieved. In
addition to that, consider meeting specifications as one success criterion for design-and-build
projects that is consistent with the measurement of technical performance, which is to be
measured in both the preconstruction and construction phases when the technical requirements
are laid down.
7 .J Factors affecting Project Success

Project is one time set of only activities designed to attain specified goal within the constraints of
time, cost and quality performances. Every project operates in a dynamic environment. There are
various factors which affects the project success. The tlu·ee constraints time, cost and quality are
fundamental areas for control within the project. There are various factors which causes the
--- scheditle overrun and cosfove6:'lni iii. cor1fexfi)fc0r1sh:LicticnlprojecL
Pmject implementation in Nepal has remained poor. Most development projects have failed to
achieve the desired results. Time and cost overruns are corm11011. There are various reasons
behind the failure of the projects. Some of them are as listed below:
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.. •' For more Notes and Tutorials Visit www.masenzworld.com

. Unclear Policy and Objectives

.. Weak Institutional Capabilities
• Lack of Users' Participation .
• Defective Project Des gn
. Delays in Project appr oval
• Consultants related Pr blems
• Procurement Delays
• Delays in Contract A ard
• Lack of Co-ordination
. Delays in Budget Release
• Lack of Counterpart Ftincls
.. Poor Monitoring and Evaluation
• Corruption
Causes of project delays in Nepal
• Management related delays

• Design and document related delays
It Material related delays
II> Human resource related delays
& Teclmology related delays
.. Finance related delays
ill Employer related delays
II> Contractor related delays
• Engineer/ consultant related delays
• Unforeseen conditions
7.4 Industry Report
An industry report is a comprehensive account of a particular industry, containing a depth of

-~-
information, facts and statistics. Industry reports could be private (distributed among industry
insiders or paid subscribers) or public (accessible to everyone). Industry reportsare either paid or
free.
\'Vho prepares an industry report?
Industry reports are prepared by various parties, including:
a. Governmental Agencies: They prepare and compile various industry reports to judge the
overall economic health of the nation. Examples of these are reports by the Bureau of
Labor Statistics (BLS) and International Monetaty Fund (IMF).
b. R~~~~r~h.Fixms: These finns Qondu.ct market surveys and compile different industry
repotis and sell them to companies and government organizations. These reports are
purchased to facilitate decision marking. Standard & Poor's is one of the most popular
research firms.
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A Reading Manual on Construction Project Management (Purbanchal University) 201 ~1
c. Individual Companies: Different companies in an industry prepare industry reports for

their own use in order to facilitate decision marking and internal management. These
industry reports are generally not available to outsiders
dustry report generally contains the following:

Industry definition: An industry report includes a comprehensive definition of the
industry, mentioning what the industry includes and what comes outsid its purview.
Major industry players: It mentions the names and other relevant inforn ation about major
companies that generate the largest revenue in the industry.
d. Market share: The report presents a breakdown of the different markets of the industry
and its share in each market.
e. Historical and current trends: These trends include the facts and figures (such as revenue,
sales and profits) of various companies in the industry. Historical trends in the industry
are generally presented for five to ten years and the current trend pertaining to the prior
financial year.
f Employment statistics: It includes an·~ccount of the total employment figures and
distribution in different companies within the industry. Key statistics also include the
composition of men and women in the labor force.
g. SWOT analysis: This is an overall analysis of the industry in terms of its strengths,
weaknesses, opportunities and threats.
h. Achievements: It mentions the significant milestones and achievements of the industry.
This could include new innovations in the industry or the industry's contribution to
social-economic development.
1. Outlook: The rep01i includes the prospects of the existing companies in the industry as
well as the scope for new players.
An industry report contains graphs, charts and tables, generally supported by written
commentary. This enables even non-professionals to get an understanding of!he industry
7.5 Performance measurement tools

Measuring success in business performance is a challenge for construction organization. There
are many intelligence tools, techniques, methodologies and best practices being implemented for
performance measurement in construction industry. Although, total quality management (TQM)
has been used extensively and beneficially in manufacturing and engineering industry to control
process and prevent defects. Other techniques, such project-management, partnerships, Quality-
Assurance Plan (QAP), Quality FLmction Deployment (QFD), Jobsite Quality Planning (JQP) and/or to ISO
9000 and l4000standards have tied to incorporate TQM approach into their practices. Moreover, if we can't
measure it, then how can we improve it"?
Hence, there is a great need in the construction industry for identifying a set of common
--. - -indioaters to se used by cons-truction exec-utive and project managers in meastu'ing constmcticnl
performance at the project level as a part of achieving business strategy to delive1y project on time,
on budget, fi·ee fi·om defects, efficient, right first time and safety. This set of key performance indicators
willmake objectives quantifiable, providing visibility into the performance of organizations and
Prepared By: Er. Subash K. Bhattarai (B.E Civil I PGDESD I MPA I MSc CM).I Chapter 7.0

enabling decision makers to take action in achieving the desired outcomes. However, in general
here are 10 popular Business Performance Measurement tools that every construction sectors
should follow:
l. Platming and Budgeting
In time and well planning is essential for construction "1dustty. The construction projects
follows the complex life cycle, hence planning is one tool to measure its performance.
Construction planning possess, the planning of 5 M's (Manpower, machine, material,
money and minute). Similady, in time and proper allocation of the budget for every
activity is essentiaL
2. Key Performance indicators (KPis)

Use of KPI in measuring performance IS emerging new concept m performance
measurement. The performance can be measured in routine way with the help of setting
KPL KPI acts as milestones tor the progress in enhancing project's' and industry's
performance. KPis are the navigation instruments that companies use to understand
whether they are on track or veering off the prosperous path. It is simi.lar to what a doctor
would to assess your health where she might measure blood pressure, cholesterol levels.
heart rate and your body mass index as key indicators of your health
3. Balance score card(BSC)
The BSC is another popular management tool that has been designed to articulate the
strategic objectives of a business and then align performance measures and action plans
to these strategic objectives to ensure the strategy gets executed.
The BSC proposes that compames develop objectives in the following interrelated
4111•·
perspectives:
• Financial
• Customer
• Internal processes
• Learning and growth (people, culture, IT)
4. Benchmarking
Benchmarking is the process of comparing one's business processes and performance
metrics to industry bests or best practices fi:om other companies. Dimensioqs typically
rneasuredare~_quality,.. time and cost. In the. process .. of best practice benchrnarking,
management identifies the best firms in their industry, or in another industry where
similar processes exist, and compares the results and processes of those studied (the
"targets") to one's own results and processes. In this way, they learn how well the targets
.. :.
A Reading Manual on Construction Project Management (Purbanchal University)
perform and, more importantly, the business processes that explain why these firms are
successful. For example, banks might learn about customer service from Hotels and
hotels might learn from insuran e companies about optimizing back office processes
5. Business excellence Model
The business excellence mod ls come fi:om the quality movement and have been
developed by national bodies to assess quality standards in companies. There are various
national standards that are often used as the basis for quality awards.
In Europe, the most popular tool is the EFQM model, which refers to "outstanding
practices in managing the organization and achieving results, all based on a set of eight
fimdamental concepts."
These concepts are:
* Achieving balanced results

• Adding value for customers
• Leading with vision, inspiration and integrity
., Managing by processes
~ Succeeding through people
., Nurturing creativity and innovation
,, Building partnerships
,, Taking responsibility for a sustainable future
6. Enterprise Risk Management (ERM)
ERM represents a set of tools and approaches to identifY, assess and manage corporate
risks. Every projects are risky, risk gets managed as project phase's proceeds. Effective
risk management is essential for performance measurement. Risk management process
follows the six steps:
• Risk management planning
• Risk identification
• Qualitative risk Analysis
• Quantitative risk Analysis
• Risk Response Planning
• Risk Monitoring and Control
7. Six Sigma
In boarder context, the six sigma methodology is a proactive management philosophy aim at
problem solving and performance improvement where as in focused context, sig sigma
methodology involves the rigorous application of both statistical and non-statistical methods to
reduce the amOLll1t of variations which implies greater efficiency and lower costs.

A Reading Manual on Construction Project Management (Purbanchal University) J2014
The six sigma model can be adapted to a project environment. The six process involved in the sox
sigma model is as follows:
• Define: determination of the quality characteristics of the output from the project that are
critical to cus omers satisfaction
• Measm·e: de ermine what to measure, sources of information and data and data collection
plan
• Analyze: use of appropriate quality planning or quality control tools and techniques to
analyze the c Jlected data
• Impmve: based on performance and comparing with standards, modify or redesign existing
methods and implement the change
• Control: monitoring the change to assure the required performance level is satisfied or not
8. Performance Dashboards
Most organizations today are ·bursting with data, metrics, reports and analyses.
Dashboards provide single-page at-a-glance overviews of areas of performance (e.g.
corporate overview, sales, finance, HR, business units, etc.).They are designed to
effectively conmmnicate performance information using elements such as visuals,
graphs, traffic lights and text.
Good dashboards make it easy for the reader to understand the key messages so they can
concentrate on using the insights to make better-informed business decisions. Dashboards
should be as effective as good newspaper fi:ont pages in conununicating a story.
Some best-practice design principles are:
" Customize the dashboard for the audience

"' Dashboards should be designed to answer specific business performance questions
• Dashboards (like neWspaper front pages) should contain headlines
., Dashboards should contain meaningful graphs that make it easy to understand current
performance levels •.
.. Dashboards (again like newspaper fi·ont pages) should have short descriptive
narrative and comments to provide context.
e Dashboards should not contain any distracting information, unnecessary graphics or
decorations, or excessive detaiL
9. Customer Relationship Management (CRM)
Most companies want to make sure they not only have satisfied customers but that they .
turn their customers into profitable and loyal customers.
-
CRM
.... --· -·
systems
····-·· --·- -- -··-
are. used
·-·-··· ----- --- --
~-- ··--
to manage --····
a company's interactions
. --- ----------·········· .. - ---- ...... ·-···· --- ----. ---- ...
and relationships
.... --- -------------·-. ---- -------· ........ .....
-----·
with
--
their
··-··--- ·--.
--··. -····-
existing or potential customers. It usually involves using technology and software

applications to track and monitor any interactions with customers - from sales activities

A Reading Manual on Construction Project Managemen: (Purbanchal University) 2014
to customer service or customer support.The simplest form of CRM is just tacking the
various levels of interactions.
10. Perfonnance Appraisals

Another popular performance management tools is the perfon ance appraisaL It 1s
basically a tool to assess job performance of individuals in a compar y.
Traditionally, performance appraisals are done annually by a line n nager who discusses
performance with their subordinate employees. The problem is that this type of appraisal
can often be bureaucratic and has probably become one of the most-dreaded performance
management practices of all leading to little actual improvements.
If performance appraisals are done right they can very well facilitate meaningful
conummication, ensure individual goals are aligned with the objectives of the business,
motivate and engage employees, determ;~e relevant development and training needs.
7.6 Key Performance Indicators (KPis)
KPis havebeen invented and branded by Business Intelligence (BI) as "benclunarking". Since
then, various models ofKPis have been adopted amlll1d the globewith different levels such as European
Foundation for Quality Management excellence model,balanced scorecard modeland key
pedormance indicators modeL With such successfi.tlimplementation, KPis have been re-defined by
BSRIA (2003) as qualitative or quantitativemeasurement of the activities of a project or organization
towards its objectives.ConstructingExcellence (2007) defines construction KPis as "national data
sets against which a project or acompany can benclunark its perionnance". KPis represent a set of
measures focusing on those aspects of organizational performance that are the most critical for the cturent and
ii.1ture success ofthe organization.
Recently the UK best practice progranm1e has launched the 'key performance indicators' (I<Pis)
for construction. These KPis give information on the range of performance being achieved on all
construction activity and they comprise of:
a. Client satisfaction- product
b. Client satisfaction- service
c. Defects
d. Predictability - cost
e. Predictability- time
f. Profitability
a
v· Productivity
h. Safety
1. Construction cost
J. Construction time
-Themanagement-ofKPI engages-seven steps-as follows:

Step 1: Decide what to measme
Step 2: Collect Data
Prepared By: Er. Subash K. Bhattarai (B.E Civil I PGDESD I MPA I MSc CM) I CIJapter 7.0

Step 3: Calculate KPis

Step 4: RepOlt Results
Step 5: Analyzed Results
Step 6: Take Action
Step 7: Measm·e Again
Key Peiformance Indicators A1ust Be Quantifiaf(le

A manual On Construction Project Management (Purbanchal Univers[ty)
Chapter 8.0 PERSONNEL MANAGEMEr'IJT
8.1 Management Principle: Administration and Organizational Principle

Management
Management may be defined as, ''a p ·ocess by which responsible person in an organization get things
don~ through the efforts of other people in grouped activities". It involves the coordination of human and
material resources towards objective a complishment. Four basic elements can be identified in the context
of management. They are: towards obj ctive; through people via technique; and in an organization.
Management is a key subsystem in the organization systems. It spans the entire organization and is the
vital force that links all other subsystems. Management is _the process of planning, organizing, directing,
coord iiwti ng and controlling of human resources, physical resources, financial resources and information
resources in order to achieve desired goals.
According to Marry Parker Fillet, "Management IS the art of getting things done with and through
people."
According to James L Lundy, "Management is principally the task of planning, coordinating, motivating
and controlling efforts of others towards a specific objective."
.r~
( ® ® 1
___
\~!]...../'
--........._ ,....
.. J<,,j::::!t \I[nrnnn)
• 1'-·fo(,:Jlin.,;':<-
• tv\t:il}llds
• krt.'int:::y
• Mnrb:tx
Management includes five core components

/ Planning, organizing, directing and controlling the activities of human and other resources
/ Making the most efficient and effective use of resources
/ Coordinating various activities
./ Coping with the changing environment
/ Achieving organizational goals
C han1cteristics of management
The following are the major characteristics (features) of a management.
Goal oriented
Universal as;tivity
Socia I process
Dynamic activity
Grouped activity
Distinct process
Both science and art

A manual On Construction Project Management (Purbancbal University) 2014
A profession
Multi-disciplinary in nature
Function of management
Management Functior ·
Organizing
Organization and its management Principle

The term organization has been derived from Greek word 'organon' meaning tool or instrument. A good
tool or instrument is one which has precision, efficiency, reliability and predictability built in it. These
features of good tool or instrument are also present in the functioning of an organization. An organization
is built around systems of policies, procedures and technologies which create conditions of precis ion,
efficiency and reliability of performance. According to Stephen P. Robbins (1996) "An organization is a
systematic arrangement of people to accomplish some specific purpose"
For Knst and Rosenzweig organization implies structuring and interacting activities. i.e. people working
or cooperating together in interdependent relationships. They say an organization consists of:
~ Goal oriented arrangements (people with purpose)
. ~ Psychosocial systems (people interacting in groups)
~ Technological systems (people using knowledge and techniques)
~ An integration of structured activities (people working together in patterned relationships)
Characteristics
Common characteristics of organizations are:
· a) Social interaction: an organization consists of people. They interact with each other while in
work. This interaction leads to the devetOpment of a network of social relations in the work place.
b) Shared goals or purposes: organization has its own definite goals or purposes to attain. Without
shared goals, people rarely come together and establish definite pattern of interaction.
c) Coordination of efforts: the divided tasks performed by individuals need to be linked together to
keep the activities of each division goal focused. This is accomplished by coordination.
d) Hierarchy of authority: The jobs to be performed in an organization are arranged in a ladder Iike
hierarchy. The bases of this hierarchy construction are job responsibility and accountability, skill
demands of the job, and complexity of the job. A clear hierarchy of authority makes direction,
supervision and coordination easier and more effective.
e) Division of work: it means dividing large tasks into smaller packages of work to be handled by
one person.
f) Social control: organization maintains their control over the behavior of their members and
-regu-lates their activities. Tirey- make ·use of· vari-ons n.des, I10f'f11s a11d staiidatds to ensLil'e
acceptable conduct and behavi~r.
Types of organization (According to Purpose)
Prepared By: Er. Subash K. Bhattarai (B.E Civil/ PGDESD I MPA I 1\tlSc CM) /Chapter 8.0
...
A manual On Construction Project Management (Purbanchal University)
Purpose Primary beneficiaries Common examples Overriding management

problems
Business (pr·ivate) Owners Travel agencies, Must make a profit

construction companies
etc.
Non-protit Service Clients Public hospitals, schools Must selectively screen
(NCO) etc. potentially large number of
clients
Conimon well Public at li rge All governmental i\fust provide
(Government) services standardized services to
large groups ofpeople
.. -·--".-~
Note: Broadly orgamzatwn ts dtvtded mto two groups. They are; formal and 111jormal orgamzal!0/1
Bases of organization (four Ps of or-ganization)

• Purpose
.. Process
• Place
• People
Management Principle: Organizational

The principle of an organization can be listed as below:
a. Span of Management: Span of Management is the sn1aller numbers of workers which a manager
has to supervise efficiently. The ratio between supervisor and sub ordinate may vary from 1:4 to
I :5 at higher level of management and 1: 15 to 1:20 at lower level of management.
b. Line, staff and auxiliaries: The Span of management consists of line, staff and auxiliaries.
c. Unity of command: under this principle, each employee should know clearly to whom he is
answerable and who are answerable to him.
d. Span of control: The controlling and supervising of subordinates should be clearly defined under
tbis principle.
e. Hierarchy: A Well-defined hierarchy should be maintained. A clear hierarchy of authority makes
direction, supervision and coordination easier and more effective
f. Delegation of authority: delegation makes the decision making effort more decentralized hence,
delegation motives the subordinates on their work which make them more responsible and
accountable.
g. Decentralization and centralization: Some decisions are to be decentralized into lower level of
management while some of them are to be reserved at high level of authority.
h. Coordination: a strong bonding of coordination and cooperation between employees and
managers should be established for the common objective.
1. Communication: The line of communication should be as shortest as it can be in order to avoid
the communication barriers.
J. Job definition: the work amongst the workers should be allotted very carefully on the basis of
their, experience and ability to do that work.
k. Increasing organizational leadership: equal opportunities of leadership for the sake of
organizational objective must be provided and organizational interest is prime against personnel
interest.
I. Contact: The organization should allow complete coordination of each branch of work.
MaJt~geuJcntp dndplc:Adtnin istn1 tiv~

Administrative theory describes efforts to define the universal functions that managers perform and
principles that constitute good management practice. The contributor to administrative theory was French
Industrialist and mining Engineer named Henri Fayol. He was the contemporary of Taylor. He tried to
develop a comprehensive conceptual framework and general organization and management that are
applicable to all organizations. Based on his experience he developed the fourteen principles of
Prepared By: Er. Subasb K. Bhattarai (B.E Civil/ PGDESD I MPA /MSc CM) I Chapter 8.0
. . .

management, which are universally acceptable and applicable in all types of organizations. Brief
descriptions of principles of management propounded by him are as follows:
1. Division ofwork.
This principle is the same as Adam Smith's division of labor. Specialization increases output by making
employees more efficient.
2. Authority
Managers must e able to give orders. Authority gives them this right. Along with authority, l owever
goes responsibili y. Whenever authority is exercised, responsibility arises.
3. Discipline
Employees must obey and respect the rules that govern the organization. Good discipline is the result of
effective leadership, a clear understanding between management and workers regarding the organization's
rules and the judicious use of penalties for infractions of the rules.
4. Unity of command
Every employee should receive orders from only superior
5. Unity of direction
Each group of organizational activities that have the same objective should be directed by one manager
using one plan
6. Subordination of individual interests to the general interests
The interests of any one employee or group of employees should not take precedence over the interests of
the organization as a whole.
7. Remuneration
Workers must paid a fair wage for their services
8. Centralization
Centralization refers to the degree to which subordinates are involved in decision making. Whether
decision making is centralized (to management) or decentralized (to subordinates) is a question of proper
proportion. The problem is to find the optimum degree of centralization for each situation.
9. Scalar chain
The line authority from top management to the lowest ranks represents the scalar chain. Communications
should follow this chain. However, if following chain creates delays, cross-communication can be
allowed if agreed to by all pmties and superiors are kept informed.
10. Order
People and materials should be in the right plac~.at the right time.
11. Equity
Managers should be kind and fair to their subordinates.
12. Stabi liLy of tenure ofpersonnel
High employee turnover is inefficient. Management should provide orderly personnel planning and
ensure that replacements are available to fill vacancies.
13. Initiative
Employees who are allowed to originate and carry out plans will exert higb levels of effort.
14. Spirit de crops
Promoting team spirit will build harmony and unity within the organization.
Prepared By: Er. Subash K. Bbattarai (B.E Civil I PGDESD I MPA I MS~ CM) I Chapter 8.0

On Construction Project Management (Purbanchal University)
8.2 Cemn~i:Z::liti:Hl: JU1ld Decentralization

Centra!il.:illti;t1li
Centraliz;.~:::.:- :: o;;t:.c ::: ::c a process where the concentration of decisi n making is in a few hands. All
the impo::...:.:~.:: ::.:::.::::c;t..:n ::;:r,..: e::~~ions at the lower level, all subjects and act ons at the lower level are subject
to the a;::;:-:-:,:r. :t:!; :=-c:.:::::=.gement. Centralization is the systemat c and co.nsistent reservation of
authority ;;.: ::::::c::~i.. :;;:,::c; :':: :he organization. The implication of cen ralization can be reservation of
decision :' .,,,::::;: .1::: ::p 1~,_-el, reservation of operating authority w th the middle level managers and
reservation c:- .:.I i:'.'.a level at the directions of the top level.
Centralizati·:>·r:. -::;; :.rt:: :r;:c:::::s t>v which the actlvttles of an organization, particularly those regarding
planning, :Cr.::.:ome concentrated within a particular location and/or group. In political
science, this:-.::~.:::--~ 11::: :::<::- :.::::-:::<:emration of a government's power- both geographically and politically,
into a centrali:z.:-:2 ;:•;, :::::-:LT"c::. The implication of centralization can be:-
" Reserv.::.:3~-:~ :·:- :;;;::;:j:;..:;:: :naking power at top level.
• Rese;n.J.:';;: ::-, : f' :•;c::·.:.:~::; authority with the middle level managers.
• Resernrri~::: n ar lower level at the directions of the top level.
,.,.
Advantages of centr.:diz:aa:'it~m
• Facility fur ~crs.:or::::d ~::adership.
• Equitable disiri:Ccn:,:n of work.
• Unifonnitv of a.:::~·. ::i::s.
.. Specializatio:1.
" Economy .
., No duplication of ',\·.,x;.;:.
.. Quick decision.
• Greater flexibili"Y··
.. Standardization 2:nj training facilities enhanced.
"' Effective control.
t~ Fixing of respons!biiiiy is facilitated.
Disadvantages of centralization
• Delay in work.
• Bureaucracy.
• Distinctive to subordinates.
,. No loyalty.
• Lack of secrecy.
Decentralization
Decentralization is the process of dispersing decision-making governance closer to the people or citizen.
[t includes the dispersal of administration or governance in sectors or areas like engineering, management
science, political science, political economy, sociology and economics. Decentralization is also possible
in the dispersal of population and employment. Law , science and technological advancements lead to
hi.,ghly decentralized human endeavors.
Decentralization is a systematic delegation of authority at all levels of management and in all of the
. or~anization. In adesentmlization conc-ern, author-ity in reta-ined by the top mana:genrentfor taking major
de cis ions and framing policies concerning the whole concern. Rest of the authority may be delegated to
the middle level and lower level of management.
Tille degree of centralization and decentralization will depend upon the amount of authority delegated to
the lowest level. According to Allen, "Decentralization refers to the systematic effort to delegate to the
Prepared By: Er. Subash K. Bhattarai (B.E Civil I PGDESD I MPA I MSc CM) /Chapter 8.0

lowest level of authority except that which can be controlled and exercised at central points. There is a
saying that "Everything that increasing the role of subordinates is decentralization and that decreases the
role is centralization".
Table: Advantages and Disad1 antages of Centralization

Advantages I isadvantages I
Easier to implement common policies and practices [\~ore bureaucratic - often extra layers m the l
for the business as a whole h"erarchy i
Prevents other parts of the business from becoming Local or junior managers are likely to much closer :
too independent to customer needs
Easier to co-ordinate and control from the centre- Lack of auth?rit~ down the hierarchy may reduce j
e.g. with budgets manager motJvattOn
Economies of scale and overhead savings easier to Customer service does not benefit fi·om flexibility j
achieve and speed in local decision-making !
Greater use of specialization
Quicker decision-making (usually)- easier to show
strong leadership
r:able: Advantages andD"ISOdvantae,es ofD ecentra 1zatwn

Advantacrcs Disadvantages !
Decisions are made closer to the customer Decision-making is not necessarily "strategic" j
Better able to respond to local circumstances More difficult to ensure consistent practices and l
policies (customers might prefer consistency from i
location to location) '
Improved level of customer service May be some diseconomies of scale - e.g. i
duplication of roles l
Consistent with aiming for a flatter hierarchy Who provides strong leadership when needed (e.g. I
'
in a crisis)? i
Good way ()f trammg and developing JUlllor Harder to achieve tight financial control.- risk of I
management Should improve staff motivation cost-overruns 1
8.3 Supervisor-y and Leadership Styles

Leadership
Leadership is a process by which an executive can direct, guide and influence the behavior and work of
others towards accomplishment of specific goals in a given situation. Leadership is the ability of a
manager to induce the subordinates to work with confidence and zeal. Leadership is the potential to
influence behavior of others. It is also defined as the capacity to influence a group towards the realization
of a goal. Leaders are required to develop future visions, and to motivate the organizational members to
want to achieve the visions. According to Keith Davis, "Leadership is the ability to persuade orhers to
seek defined objectives enthusiastically. It is the human factor which binds a group together and
motivates it towards goals."
Characteristics of Leadership
• It is an inter-personal process m which a manager is into influencing and guiding workers
towards attainment of goals.
.. Itdet1otes a fevi cftiaiities to be pi'eseiil iii a J5erson "''ho iricludes it1teTligei1ce, maturity and
personality.
• It is a group process. It involves two or more people interacting with each other.
• A leader is involved in shaping and molding the behavior of the group towards accomplishment
of organizational goals.

A manual On Construction Project Management (Purbanchal University) 20 t,~
• Leadership is situation bound. There is no best style of leadership. It all depends upon tackling
with the situations.
Leadership is an important function of management which helps to maximize efficiency and to achieve
orgatiizational goals. The following points justify the importance of leadership in a concern.
• Initiates action- Lea er is a person who starts the work by communicating the policies and plans
to the subordinates fr m where the work actually starts.
• Motivation- A leadet proves to be playing an incentive role in the concern's working. He
motivates tl1e employ es with economic and non-economic rewards and thereby gets the work
from the subordinates.
• Providing guidance- A leader has to not only supervise but also play a guiding role for the
subordinates. Guidance here means instructing the subordinates the way they have to perform
their work effectively and efficiently.
• Creating confidence- Confidence is an important factor which can be achieved through
expressing the work efforts to the subordinates, explaining them clearly their role and giving
them guidelines to achieve the goals effectively. It is also important to hear the employees with
regards to their complaints and problems.
• Building morale- Morale denotes willing co-operation of the employees towards their work and
getting them into confidence and winning..,;their trust. A leader can be a morale booster by
achieving full co-operation so that they perform with best of their abilities as they work to
achieve goals.
• Builds wot·k envit·onment- Management is getting things done from people. An efficient work
environment helps in sound and stable growth. Therefore, human relations should be kept into
mind by a leader. He should have personal contacts with employees and should listen to their
problems and solve them. He should treat employees on humanitarian terms.
" Co-ordination- Co-ordination can be achieved through reconciling personal interests with
organizational goals. This synchronization can be achieved through proper and effective co-
~1rdination which should be primary motive of a leader.
Leadership Styles
All leaders do not possess same attitude or same perspective. Fe\v leaders adopt the carrot approach and a
few adopt the stick approach. Thus, all of the leaders do not get the things done in the same manner. Their
style varies. The leadership style varies with the kind of people the leader imeracts and deals with. A
perfect/standard leadership style is one which assists a leader in getting the besr our of~:he people who
follow him.
Some of the important leadership styles are as follows:
Autocratic leade•·ship style: In this style of leadership, a leader has complete cc·m:::;::n:Di aJU:d bcM C1ie-.r
their employees/team. The team cannot put forward their views even if they are best t';c~r n"::e Ef::lL'l:""JS '""
organizational interests. They cannot criticize or question the leader's way of gerring tllri::1gs d:=n;;e:.. Tdi!E:
leader himself gets the things done.
• The advantage of this style is that it leads to speedy decision-making and greater productivity
under leader's supervision.
• Drawbacks of this leadership style are that it leads to greater employee absenteeism and turnover.
This leadership style works only when the leader is the best in performing or when the job IS
monotonous, unskilled and routine in nature or where the project is short-term and risky.
The Laissez Fai1·e Leadership Style: Here, the leader totally trusts their employees/team to perform the
job thet:nse!ves. He just concentt:ates on the intel!ectua.l/rational aspect of his work and does not. focus. on
the management aspect of his work.
• The team/employees are welcomed to share their views and provide suggestions which are best
for organizational interests.
• This leadership style works only when the employees are ski lied, loyal, experienced and
intellectual.
Prepared By: Er. Subash K. Bhattarai (B.E Civil I PGDESD I MPA I MSc. CM) I Chapter
.
8.0
.

A manual On Construction Project Management (Purbanchal University) 2014
Democratic I Participative leade1·ship style: The leaders invite and encourage the team members to play
an important role in decision-making process, though the ultimate decision-making power rests with the
leader. The leader guides the employees on what to perform and how to perform, while the employees
communicate to the leader their experience and the suggestions if any.
• The dvantages of this leadership style are that it leads to satisfied, motivated and nore skilled
emp oyees. It leads to an optimistic work environment and also encourages creativity.
• Tbis leadership style has the only drawback that it is time-consuming.
Bureauct·ati leadet·ship: Here the leaders strictly adhere to the organizational rules and p licies. Also,
they make sure that the employees/team also strictly follows the rules and procedures. Promotions take
place on the basis of employees' ability to adhere to organizational rules.
• This leadership style gradually develops over time.
• This leadership style is more suitable when safe work conditions and quality are required. But this
leadership style discourages creativity and does not make employees self-contented.
Whicfl s()!le is best?
.. . . -

8.4 Importance of Communication

The term communication is derived from the Latin \vord 'communis' which means common. Thus if a
person communicates, the person establishes a common ground of understanding.
Effective Communication is significant for managers in the organizations so as to perform the basic
functions of management, i.e., Planning, Organizing, Leading and Controlling. Communication helps
managers to perform their jobs and responsibilities. Communication serves as a foundation for planning.
All the essential information must be communicated to the managers who in-turn must communicate the
plans so as to implement them. Organizing also requires effective communication with others about their
job task. Similarly leaders as managers must communicate effectively with their subordinates so as to
achieve the team goals. Controlling is not possible without written and oral communication.
Managers devote a great part of their time in communication. They generally devote approximately G
hours per day in communicating. They spend great time on face to face or telephonic communication with
their superiors, subordinates, colleagues, customers or suppliers. Managers also use Written
Communication in form of letters, reports or memos wherever oral communication is not feasible.
Thus, we can say that "effective communication is a building block of successful organizations". In
other words, communication acts as organizational blood
The importance of communication in an organization can be sm:nmarized as follows:
l. Communication promotes motivation by informing and clarifYing the employees about the task
to be done, the manner they are performing the task, and how to improve their performance if it is
-- - i1oti:q:J to the ,:;:;ad<. · ·- ·- - ·· - -- - · - · ·· · - -
2. Communication is a source of information to the organizational members for decision-making
process as it helps identifying and assessing alternative course of actions.
3. Communication also plays a crucial role in altering individual's attitudes, i.e., a well-informed
individual will have better attitude than a less-informed individual. Organizational magazines,

A manual On Constl'uction Project Management (Purbanchal University) 201.::!
journals, meetings and various other forms of oral and written communication help in molding
employee's attitudes.
4. Communication also helps in socializing. In today's life the only presence of another individual
fosters communication. It is also said that one cannot survive without communication.
5. As discussed earlier, communication als assists in contt·olling process. It helps controlling
organizational member's behavior in var· us ways. There are various levels of hierarchy and
certain principles and guidelines that en ployees must follow in an organization. They must
comply with organizational policies, perfmm their job role efficiently and communicate any work
problem and grievance to their superiors. hus, communication helps in controlling function of
management.
Why Communication Important at the Workplace?

Communication is necessary for the exchange of ideas amongst employees within the organization.
Healthy discussions must be promoted at the workplace for better and quicker results. A brilliant idea if
not shared is of no use. Managers must communicate amongst themselves to reach to ideas which would
not only benefit their teams but also the organization on the whole.
• Managerial communication is essential at the workplace to achieve targets within the desired time
frame.
• Effective communication also reduces duplicity of work.
• Managers must communicate with their team members to understand and address their grievances
and problems.
• Managerial communication also helps managers set goals and targets for themselves and
organization.
,. Managerial communication plays a crucial role at the times of crisis.
" Employees feel secure and develop a sense of ownership towards organization as a result of
effective communication.
Commanication Process
Communication is a process, which means that communication exists as a flow through a sequence or
series of steps. A simple model of communication process consists of seven parts or elements as follows:
a. · Communication source: it is the individual, group or organization interested in communicating
something to another party
b. Encoding: it is the process by which the message is tt'anslated from an idea or through into
transmittable symbols (e.g. sound, word, number, picture or gesture etc.)
c. Transmission: it is the process through'which the symbols that represent the message are sent to
the receiver. The medium is the channel or path of transmission. (E.g. mass media (like
newspaper, TV), talking, touching etc.)
d. Decoding: it is the process by which the rece1ver of the message interprets the message's
mean Ill g.
e. Receivet·: the receiver is the individual, group or organization that perceives the encoded symbols
and may or may not decode them and try to understand the intended message.
f. Feedback: it is the process in which the receiver returns a message to the sender that indicates
receipt of the message
g. . Noise: it as at1y disfLit:bal1ce iii-the coi11i11i:Ii1icatioii process that illlecfen~s-wlrli of' distbrts···
communication
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By: Er. Subash
. -K. Bhattarai (B.E Civil I PGDESD I MPA I MSc CM)
.
I Chapter 8.0
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Barriers to communication
Follovving are the barriers to communication
I. Physical Barl"iers: The excessive hierarchy in an organization creates physical barriers. The formal
communication must go through certain prescribed channels of many layers by which there will be
possibility of distractions
2. Personnel Ban·iers: People involve emotionally and instead of decoding objectively. This loses
rationality and people become stereotyped by which one hears what he expects. Such a preconceive
notion may disturb the interpretation wrongly.
3. Material Barriers: Organization channeling of information introduces both physical and
individual barriers into material barriers. When information passes, people interpret differently by
which distortion creates.
4. Semantic Barders: Language complexity is one ofthe great hindrances. Communication is made
difficult due to tyranny of words. Words, phrases and idioms of the same language may differ from
country to country. Similarly meaning of words may vary from person to person depending upon
time and situation.
5. Outside Bm-riers: Overload to the receiver, credibility of the message and sender, communication
climate can prevail atmospheric effects to distortion.
8.5 Information System for Decision

De.dsiQil m~W.11g
Decision making is an indispensable component of management process. It is also known as heart of
management. In general terms decision making is the process of selecting a best course of action out of
many available alternatives, it is the process of identifying and defining the problems, developing
alternative solutions, evaluating them in terms of possible consequences and choosing the best solution
among them and implementing the decision effectively.
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Importance of decision making

The following are some points which show importance of decision making.
• Pervasive function
• Indispensable component
• valuation of managerial function
• election of best alternative
" stablishment of plans and policies
• uccessful operation of management
Types f decision
Managers need to take different decision on tbe basis of time and requirement. Managerial decisions may
be divided into different types on different basis which are listed below:
1. P•·og•·ammed and non-prog1·ammed decision
o Routine and repetitive in nature. It is taken by first line managers oi1 the basis of policies,
rules and regulations.
o Unique a11d creative in nature. It is strategic decisions and regarded as truly managerial
decision. Decision on product diversification, new investment etc.
2. Routine and basic decision
o Decision taken for day to day operation of the organization. Maintenance of machines
o Strategic decision taken for ling run survival and growth of business. Replacement of plants
and machines.
3. Organizational and pe1·sonnel decision
o Formal or official decision. Appointment, promotion, transfers of employee.
o Informal or individual decision. Voluntary retirement, reject promotion etc
4. Individual and group decision
o - Single person is engaged in decision making process. CEO or Boss of organization
· o Group of persons are engaged in decision making process. BODs, mgmt team
5. I'olicy and operational decision
o Taken by top level of managers and have long term impact on organization. New rules,
regulations, amendment of existing of existing rules etc.
o Taken by lower level of managers in operation of day to day activities. Implementation of
prevailing laws, rules and regulations.
Information and decision
-
Information is the necessity for decision making. A manger can take effective decisions when he has full
information relating to a problem. He/she can get full information by analyzing data obtained from
rei iable sources. Managing information involves accumulating the necessary data from proper sources
and processing accurately such information. Taking right decision facilities in solving problems and it
St.Ipports to maintain control over the functioning of the organization.
The type of information required by decision makers in an organization is directly related to:
• the level of management decision making
........ - __ .. - the arnountof structm·e inthe decision situations managers fac_e
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A manual On Construction Project Management (Purbanchal University) 201~
The levels of management decision making that must be supported by information technology in a
successful organization (independently of its size, shape, and participants), are often shown as a
managerial pyramid
Strategic management: As part of a strategic planning process top executives
1. develop overall organizational goals, strategies, policies, and
u. monitor the strategic performance of the organization and its overall direction in the
political, economic, and competitive business environment
Tactical management: Business unit managers and business professionals in self-directed teams
1. develop short- and medium-range plans, schedules, budgets and specify policies,
procedures, and business objectives for their sub-units of the company, and
11. Allocate resources and monitor the performance of their organizational sub-units,
including departments, divisions, process teams, project teams, and other workgroups.
Operational management: Operating managers and members of self-directed teams
1. develop short-range plans (e.g. weekly production schedules), and

It. direct the use of resources and the performance of tasks according to procedures and
within budgets and schedules they establish for the teams and other workgroups of the
organization.
Decision makers need information products., hose characteristics, attributes or quality are having
the three dimensions oftime, content, and D rm
Decision maker at different levels of the organization are making more or less structured decisions.
Typically there are three types of decision structure:
• Unstructured decisions (usually related to the long-term strategy of the organization);

• · Semi-structured decisions (some deCision procedures can be pre-specified but not enough
to lead to a definite reconm1ended decision);
• Structured decisions (the procedure to follow, when a decision 1s needed, can be
specified in advance).
There are three vital roles that information systems can perform for a business enterprise: support of
business processes and operations, support of decision making by employees and managers, and support
of strategies for comp~ti_ti\f~!l.~Vai1ta,g_~~ _
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The npplications of information systems that are implemented tn today's business world can be
classified as either operations or management information systems
Operations Support Systems (OSS) produce a variety of information products for internal and external
use, such as processing business transactions, controlling industrial processes, supporting enterprise
Prepared By: Er. Subash K. Bhattarai (B.E Civil I PGDESD I iVIPA I MSc CM) I Chapter 8.0

communications and collaborations, and updating corporate databases effectively. They do not emphasiz::
the specific information products that can best be used by managers. Further processing by manageme::
information systems is usually required.
auHgement Suppot·t Systems (Support of Managerial Decision Making) is n ore specifically on li:::
p ocess of providing information and support for decision-making by different lev Is of responsibilities
tl e managers and business professionals. The management classifications of information systems can t·::
structured in four ri1ain groups of systems.
J11mwgement luforniation Systems (MIS): provide information in the form of reports and displays K
managers and many business professionals that support their day-to-day decision-making needs. Usualb
the· information has been specified in advance to adequately meet the expectations on operational and
tactical levels of the organization, where the decision making situations are more structured and better
defined.
Decision Support Systems (DSS) are computer-based information systems that provide interactive
information support to managers and business professionals during the decision-making process. DSS use
analytical models, specialized databases, a decision maker's own insights and judgments, and an
interactive, computer-based modeling process to support semi-structured business decisions.
Executive b~formation Systems (EfS) or Executive Support Systems (ESS) are information systems that
combine many of the futures of MIS and DSS. Here the information is presented in forms tailored to the
preferences of the executives using the syste.u1, such as graphical user interface, customized to the
executives graphics displays, exception reporting, trend analysis, and abilities to 'drill-down' and retrieve
displays of related information quickly at lower levels of detail.
Specialized Processing Systems (PS) are information systems characterized as functional business
systems, strategic information systems, knowledge management systems, and expert systems.
Prepared By: Ec Subash K. Bhattarai (B.E Civil/ PGDESD I MPA I MSc CM) j C!wpter 8.0

Steps in decision making

Ster f Observe
Step fl Formal recognition
Step !If [nterpretation and Diagnosis
Step IV Definition
Step V Set Objectives
Step Vf Determine the Options
Step vrr Evaluate options
Step VUI Select Option
Step IX Implement the option
Step X Monitor
8.6 Motivating and Directing

The term motivation is derived from 'movere' which means 'to move'. In simple words it is will to work.
According to T.R.Mitchell 'motivation represents those psychological processes that cause the arousal,
direction and persistence of voluntary action that are goal directed'.
Performance is the function of ability ,motivation and opportunity to do or P=f(A+M+OD), from the
managerial point of view, motivation is more important than ability because ability never can be zero or
negative but motivation can be zero or even negative.
Types of motivation: There are no hard and fast criteria to classify the types of motivation. A simple
classification can be:
• positive or incentive motivation and negative or fear n:o~ivation: _
'!! extrinsic vs: intrinsi-c f116tivatiol1-:-
• Self-motivation: and individual vs. group motivation etc.

Theories of Motivation
A. Content Theot·y of Motivation
• They are also called universalistic theories. They explain the dynamic of human needs, such as
why people have different needs at different times. By understanding an employees need we can
discover the condition that mo ·vate that person.
• [mportant theories in this cate ories are Maslow's need hierarchy theory, Herzberg's motivator-
hygiene theory, Alderfer's ER theory and McClelland's theory of learned needs etc.
B. Process theories of motivation
• These theories do not directly plain how needs emerge. They only describe the process through
which needs are translated into behavior. These theories help us understand, predict, and
influence employee performance, attendance, work satisfaction and other outcomes. Important
process theories of motivation are: ·equity theory, expectancy theory and reinforcement theory etc.
• Important theories in these categories are Equity theory of Stacy Adam, Expectancy theory of
Victor Vroom and Reinforcemerit theory ofB.F Skinner.
A. Content Theory of Motivation
I. Maslow's Need Hierat·chy TheOIJ'
Maslow's need priority model is one of the most popular theories of motivation. This theory is clinically
derived theory and is based on human needs. Theory believed that once a given level of need is satisfied,
it no longer serves to motivate human. Then, the next level of need emerges. According to Maslow, needs
exist in a hierarchy. Only when lower order needs are satisfied can huger order needs be activated and
serve as sources of motivation. It has classified human needs in five categories viz., biological needs,
need social needs, esteem and self-actualization needs.
lVIaslow' s Hierarchy of Needs

a. Physiological Needs
These needs are taken as the starting point for motivation theory. These needs include such things as food,
clothing, shelter, air, water, medicine, sex and other necessities of life. These needs must be met at least
pa1ily before higher level needs emerge. These needs relate t_9survival anci 1}1a,iutenance of human life.
6.-salety Needs
After satisfying the first level needs, the safety needs begin to dominate human behavior. They would job
security, personal bodily security of income source, provision for old age, insurance against risk etc. It
also includes the desire to know the limits of acceptable behavior (emotion). Once these safety needs are
satisfied, they no longer motivate us. They are also called sec'urity needs.

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c. Social Needs
After satisfying lower needs prior to it, the social, love or belongingness needs become important
motivators of behavior. Human is social being. Hence is interested in conversation, sociability, exchange
of feelings and grievances, companionship, belongings etc.
d. Esteem I Ego needs
They are high r order needs, also called egoistic needs. They are concerned with prestige and s atus of the
person. Acco ding to Maslow they are of two types. First one is self-esteem which inc! des; self-
confidence, a hievement, competence, self-respect, independence and freedom whei·eas sec nc! one is
esteem tooth ·s which includes; status, recognition, attention and appreciation.
e. Selt:.actuali ation needs
The final step under this model is the need for self-fulfillment. It comprises self-fulfillment, achieving
ones potential personal growth. It is person's motivation to transform perception of self into reality. These
needs are unique in that once activated, they can never be fully satisfied. In short, it is "what a man CAN
be MUST be."
2. Het·zbet·g's Two- Factor the01-y
It is also called dual factor theory and motivation hygiene theory of work motivation. It is extended work
of Maslow and is specific content theory of Motivation. He conducted a widely reported motivational
study on about 200 accounts and engineers eJTl_J~oyed by firm and used critical incident method of
obtaining data by asking two question: when did you feel particularly good about your job -what turned
you on? And when did you feel exceptionally bad about your job- what turned you off? Finally he derived
this motivation theory. ft has classified human needs in two broad categories. They are
"' Extrinsidlzygiene.faciors (Factor 10)
o They are related to the conditions under which job is performed. They are associated with
negative feelings. They do not help to improve motivatiori. The feature of hygiene factors are:
they are related to job environment, they prevent dissatisfaction, they are zero level motivation,
they a!·e never satisfied and money is most hygiene factor. (E.g., company policy and
:tdministration: work conditions: salary, relationship with superior. peers and subordinates:
personal life: status: security: and supervision)
"' Jnti"insicl motivators (Factor 6):

o They are associated with positive feelings of employees about the job. They arc related to the
content of the job. The features of motivators are they are content factors, they are job inside, they
affect satisfaction, and they encourage individuals to superior performance. (E.g. achievement;
recognition, work itself; responsibility; advancement, and growth etc.). He suggests maintaining
the hygiene factors and increasing the satisfiers or motivators.

3. E!ded"e•·'s ERG theory

This theory is the extension of the Herzberg and especially , Maslow's content theories of work
motivation. The E-R-G stands for three basic need categories: existence, relatedness and growth. In
·contrast to the hierarchy of needs theory, this theory demonstrates that:
(a) More than one need can be operative at the same time, and
(b) ff the satisfaction of the higher order need is blocked, the desire to satisfy lower order need
Increases.
4. McClelland's theo1-y of needs
It has classified human needs in tlu·ee categories viz. Need for achievement, power and affiliation. This
theory is also called macro-level theory of motivation. According to McClelland a major factor in
willingness to perform is the intensity of individual's need for achievement. He says that achievement
motivated people can prepared through training programs and they can be the backbone of organizations.
B. P1·ocess theories of Motivation

l. Equity Theory
ft was developed by Stacy Adam. It is probably the clearest of process theories. This theory says that
people seek equity in their jobs (i.e. inputs should equal to outputs). There categories in this theory are:
equity, overpayment inequity. There are four referent comparisons that an employee can use viz. Self-
inside, self-outside, other-. inside and other-output. Based on this theory (when an employee perceives
equity) they can be predicted one of the six choices. They are: changes inputs, changes outcomes, alter
perception of other, change comparisons, and leave the situation.
2, Expectancy theo1·y
It was developed by Victor Vroom. it is also said that this theory is more scholar and scientists rather than
i:cw practitioner. Major concepts in this are valance, expectancy and instrumentality. Major implications of
this theory are: employee emphasize payoffs, rewards should be tied to performance, revvard should be
equitable, recognize individual difference etc
3. Reinforcement theory
It is also called operant conditioning theory which was developed by B.F.Skinner. Basically this theory
urges that behavior of people is largely determined byits consequence.
8~ 7 Personnel Selection, Testing and tt·aining

..,,
Selection is essentially a process of choosing right applicant best suited for the organization's
requirement. It is also the process of rejecting the unsuitable applicants and finally arriving at the most
suitable one. The most common approach to the selection objective is to choose individuals who possess
the necessary skills, abilities and personality to successfully fill the specific jobs in the organization .
.Major activities involved in selection are
• Establishing selection policies
• Identifying and choosing selection criteria
• Gathering information about potential employees
• Evaluating information and assessing applicants
.. Making decisions to select or reject and
· · • ·· Communicating decision selected or rejected ·
Types of Selection Tests
1. Achievement tests: They are also called "proficiency tests". These measure the skill or
knowledge which is acquired as a result of a training program and on the job experience. These
test measure what the applicant can do. These are of two types:
Prepared By: Er: Subash K. Bhattarai (B.E Civil I PGDESD I MPA I MSc CM) I Chapter 8.0
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a. Test for measuring job knowledge and

b. Work sample tests
2. Aptitude or Potential Ability Tests: They measure the talent (ability) of a candidate to learn a
new job or skill. Through these tests one can detect peculiarity or defects in a person's sensory m
intellectual capacity. These tests focus attention or particular type of talent such as learning,
reasoning and mechanical or musical aptitude. hese tests are of three types: (a) mental tests (b)
mechanical aptitude tests and (c) psychomotor r skill tests.
3. Pe1·sonality tests: The discover clues to an i1 clividual's value system, his emotional reactions,
maturity and his characteristics mood. These ests help in assessing a person's motivation, his
ability to adjust himself to the stresses of every ay life and his capacity for inter-personal and for
projecting an impressive image of himself.
4. Interest tests: interest test are designed to discover a person's areas of interest and to identifying
the kind of work that will satisfY him.
5. Psychomotor (skill) tests: These tests measure a person's ·ability to do a specific job. They are
conducted to determine motor ability and similar attributes involving muscular movement,
control and coordination.
6. Graphology tests: it is conducted to analyze the handwriting of an applicant.
7. Polygraph test: they are designed to ensure accuracy ofthe information given in the application.
A poly graph is a lie detector machine that measures a person's heart rate, skin response and
breathing rate. It is used because if a pei"Son answers incorrectly, the body's physiological
symptoms changes like increased respiration, blood pressure Etc.
Recruitment and Selection

Recruitment is a process to discover the sources of manpower to meet the requirements of the staffing and
to apply effective measures for attracting that manpower in adequate numbers to facilitate effective
selection. Recruitment has been regarded as most important function of HR management, because unless
the right type of people are hired, even the best plans, and control systems would not produce good result.
Some important definition of recruitment is:
"Recmi!ment is the discovering ofpeople candidates for actual or anticipated organizational vacancies."
H.ccruitment process
The process of searching for a new employee is traditionally initiated by manager who decides that needs
to have staffed or to replace someone who is leaving the organization. Before sending request to HR
manager he must deeply consider the following facts:
• Whether the post is vacant or not?
co Whether there is alternative solution or not? (like part time, over time, transfer, outsourcing etc)
• Whether there is budgetary provision or not?
o Whether the qualification is according to job specification or not?
Training
It is the process of learning, a sequence of programmed behavior. In other words, training is learning
experience in that it seeks a relatively permanent change in an individual that will improve his or her
ability to perform on the job. It is application of knowledge. It gives people an a ware ness of the rules and
procedures to guide their behavior.
Lack of skill or Need for training

lmowledge
I ·· -Pei;fon1lance -
.. ~----·---
- --·-- ... -· ... - -·· ... -- 1- .. ·•··· ---·- - ---·-· -~---- - .. ·-
defeciency
Due to other reason t----i Need for motivation

Need of Training
Desired performance- Actual Performance= Training Need
Factors affecting major issues and challenges of training
• Lack of management Commi ment
• Less Attention and help from trade unions
• Lack of closer ties between o ganization and training institutes
• Nonexistence of vocational g idance and pre service training system
• Poor budgetary provision
• HR fishing and Poaching
• Traditional role of HR department
Methods of employee training
The forms and types of employee training methods are interrelated. It is difficu It to say which type of the
method or combination of methods is more useful than the other.
Traininu
b
method can be broadly classified as follows
T1·aining Methods
On the Job training (OJT) Off-the job training

• Apprenticeship • Lecture
• Job Instruction Training (JIT) • Conference
• Internship • Case Studies
• Role Play
• Programmed Instruction
. Computer Assisted f nstructions
v Audio- Visual Methods
• Other Methods
8.8 Trade Unions and Relation with Management

A union is an organization of workers. The process of labor relations begins with the formal
establishment of labor union and its recognition by the employer. A union is an organization of
workers, acting collectively, seeking to promote and protect its mutual interests tlu·ough
collective bargaining. Labor /industrial relations
Meaning and nature -
Industrial/ labor relation play a crucial role in establish in and maintaining industrial democracy and
peace in the country~ The concept of IRS/LRS has a wide meaning. The expression IRS/LRS by itself
means relationship that arises out of day to day working and association of labor and management.
Industry: it is meant for any productive activity in which an Individual is engaged.

Relations: it is meant for the relations that exist in the industry between the employer and the employees
/labor.
Ind ustdal relations
• Old concept of IRS: it simply meant for the relations that exists in the industry between the
employers and is workmen.
a_ Modem concepLofiRS:-the dynamic_ concept in coocoperates . not only the relatiotL between
employer and employee but also the relations between employer-employee-and governments.
Modern concept of industry: the term industry also covers all the gainful employments including
service and under the state.
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Labor relations have been defined by different experts/organization differently. Some of them are as
follows:
"Industrial relations are the complex of inter-relations mnong workers, managers and government. "
ILO uses th expressions (IRS/LRS) to denote such matters such as:

• Fre om of association and the protection of the right to organize,
• The application of the principle of the right to organize and the right of collectiv bargaining,
coil ctive agreements,
• Con iliation and arbitration, and
• Ma 1inery for cooperation between the authorities and occupational organization at vanous
levels of economy.
Objective of IRS/LRS
ln addition to the primary objective of bripging about good and healthy relations between employers and
employees, industrial relations are designed:
• To safeguard the interests
• To avoid industrial conflict
.. To raise productivity
• To establish and maintain the growth
• To eliminate
• To establish government control
·-
Acto1·s of an LR System
• Actors in LRS
fn an integrated and relatively free business society, the three major actors involved in the LRs are:
(i) Workers: represented by trade union
(i i) Employers: represented by employer association
(iii) The society/ state: represented by government
• Process of LR
Step l legal existence of management
Step H formation of unions
Step l[[ problem
Step IV Collective Bargaining
Step v negotiation
Step VI Implementation and Monitoring
Unionization
A union is an organization of workers. The process of labor relations begins with the formal
establishment of labor union and its recognition by the employer. A union is ai1 organization of
workers, acting collectively, seeking to promote and protect its mutual interests through
collective bargaining.
Characteristics of union
The following are the characteristics of union
• Organization
-~· --- P·errn·anenoy
• Collectivity
• Mutual interests
• Collective bargaining
Why do people join the union?
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A manual On Construction Project Management (Purbancbal University) 2(}14
Unions are goal oriented. The reasons behind joining an individual to the union are as follows:
• Higher compensation
• Job security
• Better working conditions
• Influence work place
• Obtain political power
Process of unionization
1. Legal basis
2. Organizing drive
3. registration
4. Election
5. recognition
Collective bargaining
Collective bargaining is an important function of union. It refers to negotiation, administration
and interpretation of time-bound written agreement between two parties. It is collective because
the union represents the workers as a bargaining agent, whereas employer associations or
managers represents employers.
The collective bargaining has two aspects one is it defines employer-employee relations on the
job through a collective agreement where as another is it interprets and administers the collective
agreement.
Provision in collective bargaining agreements •·elate to:

o Union recognition
4» Union security
II· Wage rates
• Conditions of employment
• Benefits
• Strikes and lockouts
• Seniority clause
• Discipline
G Grievance procedure
• Management rights •··
Importance of collective bat·gaining
It is an important toll to both workers and employers. The following are its importance
1. It promotes and protects the interests of both the parties and empowers them
economically
2. It helps to establish uniform terms and conditions of employment to prevent disputes
3. It helps in amicable settlement of disputes when arise
4. It provides the guidelines and norms in working environment
5. It establish favorable and healthy working environment
6. It promotes participation and democratic leadership
. 7. Decisions areimp1emented effectively
8. It helps to increase on productivity
9. It motivates the workers

A manual On Construction Project Management(Purbanchal University)
Labor disputes
Labor disputes are differences, conflicts or strife between workers and the employers. It can be
individual disputes or collective disputes. They are related to rights and interests of workers.
Disputes can be between employers and workers, between employers and employers, between
workers and workers and between employers nd governments. In practice most of the disputes
are between workers and employers
Types of disputes
The disputes can be of following types
a. Right disputes
Disputes over rights concerned with interpretation and application of work standards.
b. Interest disputes
Disputes due to conflict of interests related to pay, benefits, conditions of work and
working environments
Labor disputes can results:

• Loss of production due to work stoppage and lock-outs
e Loss of profit due to loss of production-
• Loss of market share due to better performance of competitors
e Poor motivation and low morale of employees
s Closure ofthe organization
Prepared By: Er. Su?ash _K. Bhattarai (B.E Civil I PGDESD I MPA I MSc CM) I C!tapter 8.0.

Cause of disputes
There are various causes of labor disputes. They can be generalized as follows:
1. Economic causes
a. Compensation demands
b. Bonus
c. Working cond · ions
d. Conditions of mployment
e. Industrial sick! ess
2. Managerial causes
a. Non recognitio to labor union
b. Lack of consultation in recruitment and development
c. Job security
d. Disciplinaryactions
e~ Lack of communication
3. Political causes
a. Political interference
b. Union rivalry
c. Collective bargaining
d. Multiplicity of labor law
Settlement of disputes (Nepalese context)

The labor act 2048 of Nepal makes the following provisions for the disputes settlement
procedures.
1. 'V1·itten complaint to employer
Process:
a. Complaint files ina written form
b. About 51% of workers must signed it
c. Complaint is made tlu·ough authorized trade union
Outcome:
Bilateral discussions are held between labor and management. Negotiations are done. If within
the 21 days if dispute is not settled it follows the next step.
. .

C:,. ::::..:lllal On Construction Project Management (Purbanchal University) 2014
2. \\-min~::a complaint to labor office

Process:
__ Files the written complaint to labor ofllce of the government
Labor officer plays conciliation role between workers and management
c. The disputes is tried to settle within 15 days. If not the followi g situation can
occur
Outcome:
I'
j!S:r:riice: the worker can go strike. 30 days' notice is given to manager ent in advance
I
! terore going to strike. Notice should be given to labor office, Department and DAO.
lLock out: Management can resort to lock out with government approval
3. Appointment of mediator I Tribunal

P1·ocess:
a. A mediator carl. be appointed with mutual consent oflabor and management
b. If there is no agreement on mediator a tribunal could be constituted
c. Tribunal must have equal representation form all the parties (labor, management
and government)
Outcome: ...,
Dispute is settled by the mediator or tribunal within 25 days through arbitration. If not, the next
step follows
4. Appeal to government
Any party after award fi-om the arbitration can file an appeal to the government within 35 days.
The government adjudicates on the dispute within 60 days. If the decisions is not given in
specified time, worker can go on strike.
Prepared By: Er. Subash K. Bhattarai (B.E Civil/ PGDESD I MPA I MSc CM) I Chapter 8.0 ·

Chapter 9.0 Performance Improvisation in Construction
9.1 Benchmarking
Benchmarking is the process of comparing one's business proc sses and performance metrics to
industry bests or best practices fi·om other companies. Dim 1sions typically measured are
quality, time and cost. In the process of best practice benchmar ing, management identifies the
best firms in their industry, or in another industry where simila' processes exist, and compares
the results and processes of those studied (the "targets") to ones own results and processes. In
this way, they learn how well the targets perform and, more importantly, the business processes
that explain why these firms are successfuL
Benclunarking is used to measure performance using a specific indicator (cost per unit of
measm;e, productivity per unit of measure or defects per unit of measure) resulting in a metric of
performance that is then compared to others.
Also referred to as "best practice benchmarking" or "process benchmarking", this process is used
in management and particularly strategic management, in which organizations evaluate various
aspects of their processes in relation to best practice companies' processes, usually within a peer
group defined for the purposes of comparison. This then allows organizations to develop plans
on how to make improvements or adapt specific best practices, usually with the aim of increasing
some aspect of performance. Benchmarking may be a one-off event, but is often treated as a
continuous process in which organizations continually seek to improve their practices.
Benefits and uses
In 2008, a comprehensive survey on benchmarking was commissioned by The Global
Benchmarking Network, a network ofbenclunarking centers representing 22 countries. Over 450
organizations responded fi-om over 40 countries. The results showed that:
1. Mission and Vision Statements and Customer (Client) Surveys are the most used (by
77% of organizations) of 20 improvernent tools, followed by SWOT analysis( strengths,
weaknesses, opportunities, and tlu·eats) (72%), and Informal Benchmarking
(68%). Performance Benchmarking was used by 49% and Best Practice Benchmarking
by 39%. .,.,
2. The tools that are likely to increase in popularity the most over the next three years are
Performance Benchmarking, Informal Benchmarking, SWOT, and Best Practice
Benchmarking. Over 60% of organizations that are not currently using these tools
indicated they are likely to use them in the next three years.
Procedure
There is no single benchmarking process that has been universally adopted. The wide appeal and
acceptance of benchmarking has led to the emergence of benchmarking methodologies. The 12
stage methodology according to Robert Camp 1989 consists of:
L_ Select.subjecL
2. Define the process
3. Identify potential partners
4. Identify data sources
5. Collect data and select patiners

6. Determine the gap

7. Establish process differences
8. Target future performance
9. Communicate
1O.Adjust goal
11. Implement
12. Review and recalibrate
The following is an example of a typical benchmarking methodology:
• Identify problem areas: Because benchmarking can be applied to any business process or
function, a range of research techniques may be required. They include informal
conversations with customers, employees, or suppliers; exploratory research techniques such
as focus groups; or in-depth marketing research, research, surveys, questiom1aires, re-
engineering analysis, process mapping, quality control variance reports, financial ratio
analysis, or simply reviewing cycle times or other perforniance indicators. Before embarking
on comparison with other organizations it isessential to know the organization's function and
processes; base lining performance provides a point against which improvement effort can be
measured.
.. Identify other industries that have similar processes: For instance, if one were interested
in improving hand-offs in addiction treatment one would identifY other fields that also have
hand-off challenges. These could include air traffic control, cell phone switching between
tovv·crs, transfer of patients fi:om surgery to recovery rooms.
" IdentitY organizations that arc leaders in these areas: Look for the very best in any
industry and in any country. Consult customers, suppliers, financial analysts, trade
associations, and magazines to determine which companies are wotihy of study.
.. Survey companies for measUI:es and practices: Companies target specific business
processes using detailed surveys of measures and practices used to identify business process
alternatives and leading companies. Surveys are typically masked to protect confidential data
by neutral associations and consultants.
• Visit the "best practice" companies to identify leading edge practices: Companies
typically agree to mutually exchange information beneficial to all parties in a benchmarking
group and share the results within the group.
• Implement new and improved business practices: Take the leading edge practices and
develop implementation plans which include identification of specific opportunities, funding
the project and selling the ideas to the organization for the purpose of gaining demonstrated
value fiom the process.
Cost
• Visit Costs - This includes hotel rooms, travel costs, meals, a token gift, atid lost labor time.
• Jin1,e Costs - Me_ll1Qe!"$_9f the benchmarking. team will b~. il1Y~$ting time in r~se~rching
problems, finding exceptional companies to study, visits, and implementation. This will take
them away from their regular tasks for part of each day so additional staff might be required.
.. Benchmarking Database Costs - Organizations that institutionalize benchmarking into their
daily procedures find it is useful to create and maintain a database of best practices and the
companies associated with each best practice now.

Types
Benchmarking can be internal (comparing performance between different groups or teams within
an organization) or external (comparing performance with companies in a specific industry or
across industries). Within these broader categories, there are tbxee specific types of
benchmarking: 1) Proc s benchmarking, 2) Performance benchmarking and 3) strategic
benchmarking. These can be further detailed as follows:
• Process benchmarl ng- the initiating firm focuses its observation and investigation of
business processes w th a goal of identifying and observing the best practices fi:om one or
more benclunark firms. Activity analysis will be required where the objective is to
benchmark cost and efficiency; increasingly applied to back-office processes where
outsourcing may be a consideration.
• Financial benchmarking - performing a financial analysis and comparing the results in an
effort to assess your overall competitiveness and productivity.
• Benchmarking ft·om an investor perspective- extending the benchmarking universe to also
compare to peer companies that can be considered alternative investment opp01tunities fJ:om
the perspective of an investor.
• Benchmarking in the public sector- fimctions as a tool for improvement and innovation in
public administration, where state organizations invest efforts and resources to achieve
quality, efficiency and effectiveness ofthe services they provide.
• Performance benchmarking- allows the initiator firm to assess their competitive position
by comparing products and services with those of target firms.
.. Product benchmarking - the process of designing new products or upgrades to current
ones. This process can sometimes involve reverse engineering which is taking apart
competitors' products to find strengths and weaknesses.
• Strategic benchmarking- involves observing how others compete. This type is usually not
industry specific, meaning it is best to look at other industries.
• Functional benchmarking - a company will focus its benchmarking on a single function to
improve the operation of that particular function. Complex functions such as Human
Resources, Finance and Accounting and Information and Conununicatioi1 Teclmology are
unlikely to be directly comparable in cost and efficiency terms and may need to be
disaggregated into processes to make valid comparison.
• Best~in-class benchmarking - involves•studying the leading competitor or the company that
best carries out a sl)ecific function.
• Operational benchmarking- embraces everything from staffing and productivity to office
flow and analysis of procedures performed.
• Energy benchmarking - process of collecting, analyzing and relating energy performance
data of comparable activities with the purpose of evaluating and comparing performance
between or within entities. Entities can include processes, buildings or companies.
Benchmarking may be internal between entities within a single organization, or - subject to
confidentiality restrictions - external between competing entities.
Prepared B_y: Er. Subash K. Bhattarai (B.E Civil I PGDESD I MPA I MSc CM) I Chapter 9.0

9.2 Risk Management

When our World was createci, nobody remembered to include Certainty
- PETTER BERNSTEIN
E ery project is risky, meaning there is a chance things won't turn out exactl as planned. Project
ou comes are determined by many things, some that are unpredictable and over which project
m riagers have little control. Risk level is associated with the certainty le el about technical,
sci edule and cost outcomes. High certainty outcomes have low-risk; low- certainty outcomes
have high risks. Certainty derives fi:om knowledge and experience gained in prior projects, as
well as from management's ability to control project outcomes and respond to emergmg
problems.
In general, risk is a function of uniqueness of a project and the experience of the project team.
Risk=f (wiiqueness, experience of project team)
Project Risk -
Project risk is an uncertain event or condition that, if it occurs, has a positive or negative effect
on a project objective. A risk has a cause and, if it occurs, an impact. For example, the cause may
be requiring a permit or having limited personnel assigned to the project. The risk event is that
the permit may take longer than planned or the persotmel may not be adequate for the task.
Project risk includes both tlu·eats to the project's objectives and opportunities to unprove on
those objectives.
The notion of project risk involves two concepts:
" The likelihood that some problematical event will occur.

Ill The impact of the event if it does occur.
Risk is also the joint function of: Risk-f (likeli!Jood, impact)
A project will be ordinarily considered risky \Yhene·,·er at least one factor- either the likelihood
or the impact- is large. For example, a project will be considered risky ·where the potential impact
is human fatality or massive financial loss even when ilie Iii.;:dli1mod of either is small.
Risk A1rawgement
Risk management is the systematic application of the risk management processes on a project.
The processes consist of risk management planning, identification, analysis, responding, and
monitoring & control.
The objective of risk management is to maximize the probability and impact of positive events
and minimize the probability and consequences of events adverse to project objectives.

A Reading Manual on Construction Project Management (Purbanchal University) :2014
Minimising Risk in
Proj cts
c
0
n
t
_____ _\-,,¢,('
----------
r
a
1
""""
n
t
U ncertai nt'~/
The curved line indicates the 'acceptable level of risk', whatever that may be in the
individual case. The risk may be reduced to an acceptable level by reducing either or
both of uncertainty and constraint. In practice, few people have the opportunity to
reduce constraint, so most focus on the reduction of uncertainty. It is also worth noting
from the diagram that total elimination of risk is rarely achieved. So we have to
consider how to manage that remaining risk most effectively.
The processes of risk management are updared throughout the project life. It involves following
steps:
Risk
Hanagement
Pleinnlng
(2 Find tl1em)
Risk Qualitative (3 Sift)
r·-· >Ieientiflcatron ('·~"~··~"·····• Risk
:....~~2.~!t,sis
I
RISk Quantitative
Risk
· cor1tror &.· ·
·Honltorino
Risk
Response
Planning
<f5~'C1Be'a·e:nons)
Prepared By: Er. Subash K. Bhattarai (B.E Civil /PGDESD I MPA I MSc Ci'vl) I Chapter 9.0

on Construction Project Management (Purbanchal University) 2014
1. Ris:: _','- ~- :-~ --~-,c:: Planning

Dec:..:..::::-::; ·:,_ · . :2- ::pproach and plan the risk management activities for a project.
2_ Ris.:: :_:~ -·:-..::·: __;:;;_;?~
Dete:-:J:~::=~ -.,!-jch risks might affect the project and documenting their characteristics.
3. Qual:L:::'.::; F~-'5.~;: Analysis
Prioritiz~ng risk by their effects on project objectives tlu·ough assessment of their probability,
impact, zud ilhe combination of bot
4. Quamirwiw Risk Analysis
QuantitatiYel:y analyzing the effect f identified risks on project objectives
5. Risk Response Planning
Developing options and ways to enhance opportunities and to reduce threats to the project's
objectives
6. Risk J\.rfonitoring and Control
Monitoring identified and residual risks, identifying new risks, executing risk response plans
and evaluating their effectiveness throughout the project life cycle
Ri>k M;tnagL~men!
..
- PrQc(\SS Ffow
9.3 Financial Management

Financial management refers to the efficient and effective management of money (funds) in
such a manner as to accomplish the objectives of the organization. It is the specialized function
directly associated with the top management. The significance ofthis function is not only seen in
the 'Line' but also in the capacity of 'Staff in overall administration of a company. It has been
defined differently by different experts in the field.
It includes how to raise the capital, how to allocate it i.e. capital budgeting. Not only about long
term budgeting but also how to allocate the short term resources like current assets. It also deals
with the dividend policies ofthe shareholders.
• Financial Management is the Operational Activity of a business that is responsible for

obtaining and effectively utilizing the funds necessary for efficient operation." by Joseph
Massie
• "Financial Management is an area of financial decision making, harmonizing individual
motives and enterprise goals." By Weston and Brigham
Prepared By: Er. Subash K. Bhattarai (RE Civil I PGDESD I MPA I MSc CM) I Chapter 9.0

.."Financial management is the area of business management devoted to a judicious use of

capital and a careful selection of sources of capital in order to enable a business firm to
move in the direction of reaching its goals."- by J. F. Bradlery
• "Financial management is the application of the planning and control function to the
finance functi n."- by K..D. Willson
.. "Financialma agement may be defined as that area or set of administrative function in a
organization hich relate with arrangement of cash and credit so that organization ma
have the mea s to carry· out its objective as satisfactorily as possible ." - By Howar
&Opton.
Money is one of the most useful instruments of transaction. It plays an important role in
everybody life and every activity of individuals, business, and government. For a construction
business, it is essential for production, distribution and to contrib_ute the development of the
country. The proper management of money is called finance. Finance refers to funds needed by
individuals, business and governments.
Finance studies money and its management, and like econoinics, it explores the allocation of
resources, the process of money management and resources allocation occurs over time. Firms
invest money in plants and equipment but returns are earned in the :flrture. If the individual
manages the money for him then this is called personnel finance. Management of money within
government is public finance, whereas money manages within the construction business can be
considered as corporate finance. The study of corporate finance raises the theme of financial
managers who has great responsibilities in managing the cash and funds within the construction
project. The financial managers must make certain that the firm can meet its obligations as they
came due, determine which are best sources of financing for the firm, and allocate the firm's
resources among competing investment alternatives. They are responsible for acquiring funds
needed by a firm and for directing those :flmds into projects that will maximize the value of the
firm tor its owners.
9.4 Claims and Dispute Resolution

What is claim?
In simple contractual terms it is a request for--reimbursement of cost and I or time from one party
to another.
A formal contract procedure used to review contract disputes between the contracting parties.
The claim process is identified in the contract provisions which describes the steps to be taken to
protest an initial decision over the merits of a change order proposaL
What is dispute?
Unsettled claims in construction leads to dispute.
(;J~t£~1~ l~_s~u!s~
wlzic!t generally tutns_ ~Qdisprttes_ itz constrr!cti()n
Owner and Designer Initiated Changes
The most common types of owner and designer initiated changes that tend to result in
disputes include:
• Numerous last minute addenda during bid period.

A Reading Manual on Construction Project Management (Purbanchal University I
e Delay in access to the site.

e Delay in furnishing approved for construction
e Design drawings or clarifications.
• Delay in furnishing owner-furnished items.
• Defects in plans or specifications including errors and omissions.
• Major design changes.
• Scope additions.
• Scope deletions.
• Schedule improvement directives.
• Acceleration directives.
o Suspension of work.
• Interference by owner or his designated representative.
• Nonperformance by owner.
• Termination of contract.
• Equivocal or conflicting contract clauses.
Contractor Initiated Changes --

The most common types of contractor initiated changes that tend to result in disputes
include:
• Failure to start work as planned.
• Failure to supply a sufficient work force.
Ill Contractor performance failure.
• Subcontractor performance failure.
* Supplier performance failure.
• Installation of defective work.
• . Poor workmanship.
• Schedule delay.
• subcontractor schedule delay
Other
The most conm1on types of changes resulting in disputes due to acts or omissions of third
parties, differing site conditions or other circumstances not caused by either pany to the
contract include:
e Unforeseen changed physical site, underground or other conditions.
o Other unforeseen site conditions.
• Unusual weather or other natural event.
• Regulatory agency change.
o Change in law.
• Labor disputes.
• Third-party interference.
• Third-party nonperformance
· ·····Glahn Afanagementflowchart

A Reading Manual on Construction Project Management (Purbancbal University)
Achieving a common understanding lead to settlement and achieving no understanding lead

to Di~putes
Dispute Resolution in Nepal (Adjudication in Nepal)
Section 58 of PPA: mechanism for dispute settlement
Any dispute arising between the public entity and the construction entrepreneur, supplier, service
provider or consultant in connection with 1J.1e implementation of the procurement contract shall
be settled amicably. The procurement contract may provide that disputes relating to construction
work shall be resolved as follows:
" By an adjudicator (contract amount up to 100 Million NRS)
• By a three member dispute resolution board/committee (Greater than 100 Million NRS)
• By arbitration: The provision that if a party is not satisfied with the decision made by
adjudicator or dispute resolution committee, such dispute shall be resolved through
arbitrator
Dispute Resolution through Adjudication
Adjudication is a new way of resolving disputes in construction contracts. Adjudication does not
necessarily acl1ieve final -setfieii1et1f of dispLifc because eitl}ei· 0 f fhe parties has- right fo fia \re file .
same dispute heard afiesh in co Lui or where the contract specifies arbitration.
Advantages of adjudication
Prepared By:Er. Subash K. Bhattarai (B.E Civil I PGDESD I MPA I MSc CM) I Cltapter 9.0
. ,.

A R;:c.ii:-~g :Yianual on Construction Project Management (Purbanchal University) 2014
.. The disputing parties has right to choose a learned adjudicator having expertise in subject
related to dispute
e .-\djudicator in1poses a fair and impartial decision like arbitrator or judge
• It is faster than arbitration or litigation, it could be within 28 days
• Disputes can be resolved hile works are still in progress
• Better understanding of fi cts and figures tlu-ough site investigations and studies
• Amicable settlement can e done after adjudication award
o Adjudication is private an confidential
Dispute resolution through Arhi ration
Arbitration is a process to resolve disputes between contracting parties based on a contract
agreement. It is supp01ied by law. Arbitration is initiated when one party gives notice to the
other. The parties then appoint independent person as an arbitrator to resolve disputes. The
decision by the arbitrator called an award is legal and binding. In Nepal NEPCA does the ad-hoc
procedures of arbitration. Arbitrator is usually a lawyer.
Advantages/ Features ofArbitration
• Neutrality
0 Expertise
Cl Flexible procedures
,. Appeal is limited
" Confidentiality
• Binding internationally
9.5 Huinan resource management

(HRM, or simply HR) is a function in organizations designed to maxumze employee
performance in service oftheir employer's strategic objectives.
HR is primarily concerned with how people are managed within organizations, focusing on
policies and systems. HR departments and units in organizations are typically responsible for a
iimnber of activities, including employee recruitment, training and development, performance
appraisal, and rewarding (e.g., managing pay and benefit systems). HR is also concerned
with industrial relations, that is, the balancing of organizational practices with regulations arising
from collective bargaining and governmental laws.
HRt\!I is the process of accomplishing organizational objectives by acquiring, retaining,
terminating, developing and properly using the human resources in an organization.
HRtVf is comprised ofthe staffing, development, motivation and maintenance fimctions
HR is a product 9f the.human relations movement of the early 20th century, when researchers
began documenting ways of creating business value tlu·ough the strategic managemerit of the
. workforce. 'The- · f,mction was initia-lly ·· dominateEi · by transactional work,- such
as payroll and benefits administration, but due to globalization, company consolidation,
teclmological advancement, and further research, HR now focuses on strategic tmtmtlves
like mergers and acquisitions, talent management, planning, industrial and labor relations,
and diversity and inclusion.

In the current global work environment, most companies focus on lowering employee
turnover and retaining the talent and knowledge held by their workforce. New hiring not only
entails a high cost but also increases the risk of the newcomer not being able to replace the
person who was working in that position before. HR departments also strive to offer benefits that
will appeal to wo ·kers, thus reducing the risk of losing knowledge.
Nature of HRM
• Human fl cus: HRM is people centered. It is concerned with human element at w rk in
organizat on. It focuses on people possessing energyand competencies. It develo s and
utilizes h man potential.
• Management functions: HRM applies management fimctions and principles which
involves acquisition, development, utilization and maintenance ofhuman resources.
'~~ Continuous conunitment: HRM is a continuous on-going activity which does not
concerned in present also with future. It ensures continuous conunitment of employees
G Dynamic: HRM is dynamic concept. It is affected by changes in environm.ent. It adapts
the political-legal environment, economic environment, socio-cultural environment and
technological environment.
e Mutuality oriented: HRM promotes mutuality between employers and employees 111
terms of objectives, influence, respect, rewards and responsibilities.
1-/RJlf ilforlel
Means Focus Ends
• Acquisition • People as a Human • Objectives

• Developmeri.t Resom-ces • Productivity
• Utilization • Profits
• Maintenance • Change
• Committment
• Quality" of work life
Functions of HRM
• objecfives.achieven1ents
• Human resource planning
• Environmental adaptation
Prepared By: Er. Subash K. Bhattarai (B.E Civil/ PGDESD I MPA I MSc CM) I Clrapter 9.0

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Management (Purbanchal University)
• Acquisition of human resources

• Development of human resources
• Utilization of human resources
• Maintenance
• Control of human resources
• Harmonious labor relations
9.6 Knowledge Management

Knowledge management (KM) is the process of capturing, developing, sharing, and effectively
using organizational knowledge. It refers to a multi-disciplined approach to achieving
organizational objectives by making the best use of knowledge.
KM is the process of collecting, organizing, classifying and disseminating information
tlu·oughout an organization, so as to make is purposefitl to those who need it.
--
Knowledge management efforts typically focus on organizational objectives such as improved
performance, competitive advantage, innovation, the sharing of lessons learned, integration
and continuous improvement of the organization. KM efforts overlap with organizational
learning and may be distinguished fi·om that by a greater focus on the management ofknowledge
as a sirategic asset and a focus on encouraging the sharing of knowledge. It is an enabler of
organizational learning. '
Types {:f knowledge
'" Tactic knowledge
o It is the cumulative store of the experience, intelligence, expertise, understanding
and learning which is difficult to formalize in written form.
• Explicit knowledge
o It can be thought of as book knowledge available in spoken or written form.
KM cycles
The management needs to consider some of the steps or cycles for systematic utilization of
organizational knowledge for prosperity. The KM follows the cycle or steps as mention here
below:

\
l
'¥
Benefits/ Objectives of KM
• Awareness to employees
• · Accessibility of Information
~ Availability of Usable Knowledge
.. Timely available of information
~ Improve decision making
• Reducing cost and risk
• Improve strategic planning
• Increase versatility of workforce
9. 7 Total Quality Management (TQM)
What is Quality?
According to advanced learner dictionary, quality is degree of goodness. Similarly cross-by
defines as conformance to requirements. According to Juran, Quality is fitness for purpose.
Otlzer defines quality as:
• Zero defects
• Consistent conformance to expectation
• Doing things right the first time
• Quality is the totality of characteristics of an entity that bears on its ability to satisfy
stated-and implied needs- · ·· ·
Facts regarding quality
• Quality is not grade (grade is an indicator of category or rank related to features that
cover different sets of needs for products or services intended for the same functional use.
Prepared By: Er: Subash K. Bhattarai (B.E Civil I PGDESD I MPA I MSc CM) I Chapter 9.0

A R-c.::.::.i::::~ :1.fanual on Construction
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Management (Purbanchal University) 201.!!.
L;:r,-el is a general indication of the extent of departure fi:om the ideal. A higl1 grade
2-~~:;::le can be of inadequate quality as far as satisfying needs and vice versa. E.g. a
luxurious hotel with poor services or small guest house with excellent service)
• Quality costs more, but lack of quality costs even more
• Quality is means of a hieving project success. It is not the goal in itself
• Process quality is more than product quality
o Quality standards d not demand the best quality; they establish the mmrmum
requirements to be acl ieved
• Quality' does not happen by accident, it has to be properly planned and implemented
Evolution of Quality management Concept
Quality Management
QUALITY CONTROL QUALITY ASSURANCE TOTAL QUALITY

What to do? • Detection • Prevention • Improvement
How to do? Output Verified • Work Procedures • Work Processes
•Adequate ., Improvement
• Authorized
• Implemented
Method? • Inspections • Audit • Quality Circles
•Sample or 100% •Samples • all work processes
Who does? • Inspectors • QA Organization • All Employees
•Client
•Suppliers
Quality Control
Quality Control is the operational techniques and activities that are used to fidfill requirements
for quality. Quality Inspection is done first for quality control. Activities Sllch as measuring,
examining, testing, gauging one or more characteristics of a product or service and comparing
these with specified requirements to determine conformity is quality inspection.
Inspection is concerned with sentencing the product as good or bad, by comparison with the
standard. On the other hand, quality control is concerned with feedback of the comparative
information in order to regulate the process. In quality control, the limits are set so that the
process can be adjusted before product fi:om the process reaches the limit where it has to be
rejected.

A Reading Manual on Construction Project Management (Purbancbal University) :~014
Quality Assurance
All planned and systematic actions necessary to provide adequate confidence that a product or
service will satisfy given requirements or quality both within the organization and Quality
assurance:
• Is a systematic way of ensuring those organized activities happen in a wa that they

a e planned
• Is concerned with anticipating problems and with creating the attitudes a
that prevent problems fi·om arising.
·Quality Management
Quality management includes Quality Assurance (QA) and Quality Control (QC) as well as other
concepts of quality planning, quality policy and quality improvement. Total quality management
(TQM) develops these concepts as a long - term global management strategy and the
participation of all members of the organization for the benefit of the organization itself: its
members, its customers and society as a whole.
Total Quality Management
Total quality management is a new concept of quality management and is that aspect of the
overall management function that determines and implements the quality policy. The essential
elements ofTQM are:
ll> Quality Planning

.. Quality Control
• Quality audit
0 Quality surveillance
• Quality Assurance
• Quality Circles
Fig: TQM
TQM consists of organization-wide efforts to install and make permanent a clin1ate in which an
· · ·
-- En:gamzat-JoncGntmuous 1y 1mproves-1ts
· · a b·r·
Hty to r1"'e 1·1ver ,11g
1• 1 1-quc>.r·1ty pro d.ucts and, serv1ces
· to
customers.
It is a management philosophy of continuously improving project quality through everyone's
conm1itment and involvement to satisfy customer needs. It puts quality first.· TQM creates a

A Reading Manual on Construction Project Management (Purbanchai Cniversity)
project culture committed to continuous improvement in all aspects \Yhicb seeks incremental
improvements.
CompOFzents of TQM
• Strategic conunitment
• Continuous quality improvement
o Customer focus
s Employee involvement
• Accurate measurement
• Improved materials, teclmology and methods
Tools and techniques of TQM
9.9 Health and Safety

Occupational safety and health (OSH) also conm1only referred to as occupational health and
safety (OHS) or workplace health and safety (WI-IS) is an area concerned with
the safety, health and welfare of people engaged in work or employment. The goals of
occupational safety and health programs include to foster a safe and healthy work
environment. OSH may also protect co-workers, family members, employers, customers, and
many others who might be affected by the workplace environment.
Occupational safety and health can be important for moral, legal, and financial reasons. In
conunon-law jurisdictions, employers have a conunon law duty (reflecting an underlying moral
obligation) to take reasonable care for the safety of their employees, Statute law may build upon
this-to impose additional general duties, introduce specific duties and create ge-Vermnent bodies
with powers to regulate workplace safety issues: details of this will vary from jurisdiction to
jurisdiction. Good OSH practices can also reduce employee injury and illness related costs,
including medical care, sick leave and disability benefit costs.
Safety

• Oxford Advanced Learner's Dictionary defines the term "safety" as 'being safe; Jiee
fi:om danger'.
e Safety hazards are those that pose imminent danger of causing injury or death to workers
or damage to materials, equipment or structures.
• Theoretically, safety would mean the ab ence of danger at work, which is made possible
by eliminating hazards that create the da ger.
• A more practical definition used in an ILO document states "A thing is provisionally
categorized as safe if its risks are deer ed known and, in the light of that knowledge,
judged to be acceptable."
• Safety may be defined as an act of being safe fiom the materials, substance and the
process at construction site. Safety basically is concerned with no loss of life at the work
place and minimizing injuries to the workmen and other common people. It is also
concerned with the safety of works and with the damage of property and loss oftime.
Accident
An event that happens all of a sudden unexpectedly which may cause injury, death or damage to
men/equipment/material and affects the life of individuals and his family as well as ultimately
entire society.
Causes of Accidents
"' Hardware Causes

o Physical
"' Improper equipment
"' High speed of operation
"' Unauthorized operation
"' Machine related (Working space, Obstruction etc.)
• Tools related (Breakage etc.)
• Materials (Inflammable, explosives etc.)
• Uniform
• Working environment
o Physiological
11
Poor eye sight
• Poor health
11 Old age
• Intoxication( alcohol, drugs etc.)
11
Physical disability
o Psychological
11
Anxiety
• Worries
11
Fear
• Over consciousness
· •· ··· Software Causes ··
o Inadequate plan and program
o Lack of training
o Negligence
o Mistakes

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Management (Purbanchal University) 2014
Health Problems in Proiects

" Health hazards in project include, among others, heat, radiation, noise, dust, shocks and
vibrations, and toxic chemicals.
• Perhaps the main hazard here, however, is human optimism. Since the effects are not
immediately felt, we say-
o " I can rk in this dust fi·om rock drilling for a few more hours. A hot, steamy
shower V\ ·a clear it out! "
into the tunnel heading without earplugs. The pain stops when I come
out!"
1
o "It sure i hot out, and I'm feeling dizzy and have a real headache coming on, bm
it's only an hour until quitting time. There is no point in stopping this truck for 2
drink of water now!"
o " I've been working with asbestos for 20 years and I'm not sick. What's this
business about its causing cancer?"
Since Health and Safety are interdependent to each other, they are dealt in combine in this
chapter.
Project and Sfifety Considerations _

• Projects involve thousands of different types of materials, chemicals, equipment and
machinery. Also the work involves working on difficult working conditions and
situations.
a Project sites are often dangerous because they:
o Are carried out at dangerous place or
o The construction place are made dangerous
o Use dangerous materials like blasting materials and other chemicals
o Use dangerous methods like underwater drilling and blasting
o Use heavy machines, which often become the cause of accident.
" •From the record of other countries, the distribution of cause of accidents are as follows:
• 50% by fall of persons
., 15% by falling objects
• 15% by transport or mobile equipment
• 6% by other machines and
• 14% by others.
• Most important thing in dealing with the dangers fi·om articles and substances and work
process and arrangements associated with them is good quality safety training to the
managers of construction industry.
• If managed properly, at least 90% of the accidents can be predicted and hence avoided in
construction industry.
Need for Safety in Construction
• A disabling injury or fatal accident on the job site has negative impact on operations at
many levels. Accidents cost money and affect workers morale.
• The factors that motivate safe practices at the job site are generally identified as follows:
11 Humanitarian Concerns
11 Economic Costs and Benefits
• ·· Legal·and Regulatory Co nsideratiotrs
FV!wt are tile Uns{ife Conditions?
• Unsafe conditions are those factors that are present due to defects in conditions, errors in
design, faulty planning or omission of essential safety requirements for maintaining
hazard free physical environment.
Prepared By: Er. Subash K. Bhattarai (B.E Civil /PGDESD I MPA I MSc CM) I Chapter 9.0

"'
Unsafe conditions may be grouped into:
o Inadequate mechanical guarding
o Defective condition of equipment, tools, f1oors, stairs etc.
o Unsafe design and construction
o Unsafe process, operation or arrangement e.g. unsafe piling, sto king, storage,
overloading, overcrowding etc.
o Inadequate light and ventilation and
o Unsafe dress e.g. loose clothing, no gloves, no aprons and shoes etc
What ar · the Unsafe Acts?
• nsafe acts of the persons are those types of behavior at the work pl ce that cause
accident and leads to injuries or death.
• They include:
o Working unsafely
o Contravention of safety orders
o Removing or altering safety devices
o Operating at unsafe conditions
o Use ofunsafe or improper equipment etc.
Human elements in safety
• Safety policy
• Recruitment and Placing
• Alcoholism
• Training
Safety Programfor Construction
qt Safety planning
e Safety Implementation
• Safety Monitoring
• Safety Control
The Growth of safety Regulation/Legislation: Nepalese Scenario
In Nepal, the government's first response towards safety in projects might possibly be the
. -
enactment of the "Labor Act 2048", which came into force on 15 May 1992. Before this, there
was no special law regarding labor in construction industry.
'Labor Act, 2048' contains provisions on health and safety of the workers. As provided under
chapter 5 of the act, management of an organization should ensure the following:
• General Safety
o The working area should be cleaned, painted, cleared of waste and necessary
insecticides spread on the area.
o Proper light and ventilation as well as appropriate temperature should be
maintained.
o ArrangemeJ1tshouldbe madeforthe disposal ofwastematerial..
o Working area should be free from dust, air, vapor and other material, which could
adversely affect the health of the worker.
o Arrangements to be made for the control of noise and necessary equipment to be
provided if workers have to work on loud noise area.
Prepared By: Er. Subash K. Bhattarai (B.E Civil I PGDESD I MPA I MSc Ci\11) I Chapter 9.0
... ::.
A Reading Manual on Construction
Downloaded Project Management (Purbanchal University)
from www.masenzworld.com
o Work area should not be congested. Every worker should get at least 15 Cum. Of
\vorking space within 4m. Height from the ground.
o Adequate potable drinking water should be provided.
o Gents and ladies latrines to be provided at appropriate place.
o Medical checkup of the workers should be d ne at least once a year.
e Safety for Eye
o Eye shield or goggles should be provided o safeguard eyes from flying dust,
object, welding and gas cutting light etc.
• Safety from Chemicals
o Personal safety arrangement has to be made for the workers who handle
dangerous chemicals.
• Fire Safety
o Modern safety equipment
o Provision of ftre escape
o Provision offtre extinguisher at required places.
• Guarding the Machines
• Heavy load handling
•. Pressure Plant
• Safety Order
• Information ofthe accidents

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A Manual on Construction Project Management ~Purbanchal University) 2014

Construction is. a process

As a discipline, Construction Project Management developed :fi·om different fields of application

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A Manual on Construction Project Management (Purbanchal University) 2014

1.2 Context of construction management

Construction stakeholders J participants

b. Construction management consultant firms

d. Construction manpower recruiti11ei1t and training age1 1es

e. Construction materials developing, manufacturing, transportation and trading

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A Manual on Construction Project Management (Pui·banchal University) 2014

J Contractors and contracting firms

Construction team (parties)

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A Manual on ConstructionProject.Management (Purbanchal University) 2014.

Three party System (FIDIC)

(Construction contract) (Consultancy agreement)

(Supervision, Notice, lnstructio,

Two party System (NCB, Japanese System etc.)

(Construction (Supervision, Instrllction,

Client possess following roles and responsibilities in construction projects:

• Offer the project through tender notice

. A Manual on Construction Project Management (Purbai1chal University) 2014

• Design, research and 'investigation for design

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· AManual on Construction Project Managen1ent (Ptirbanchal Uriiversity) 2014

Components of construction management

3. Machines, equipment and tools

Necessity of construction management

1. To effect economy in the cost of construction by adopting new teclmiques of construction

2. Jo check the wastage ofmaterials and labors

5. J o have proper coordination betwee11 different agencies (stakeholders) invo lvecl in

·A Manual oh Consfniction Project.Management (Purbanchal University) 2014

1.3 Characteristics of construction industry

1. Involvement of many parties in delivering products

Clas:i[f/catiou oftlle consti·uctioit iitdustiy

I. Building or light construction

2. In:fias ructure construction project

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A Manual on Construction Project.Managen1ent (Purbanchal University) 2014

3. Industrial construction projects

These works include construction of power generation, manufacturing, processing and

4. Special purpose construction related projects

These include environmental works, emergencies, remedial works, installation and

1.4 Domestic and Global Construction Market

-A Manual on Cm1struction Project Mariagement (PtirbanchaJUniversity) ·2014

. CIN!rf).r:-.r:::i'.::;ucture Domestic Market/Prospects of Nepalese Construction IndustJy:

L Roads and Airports:

1. Irrigation and Hydropower:

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A Mmiual on Construction Projec!Management (Purbarichal University) _2014 ·

3. Real state and Housing

4. Public Private Partnership in infrastructure development

;o Build and Transfer (BT)

Prospective PPP projects now in Nepal.

Kathmandu - T erai Fast Track·

A Manual on Construction Project Management (Purbanchal University) 2014

· Jijtel·n~·tional export market

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A Manual on Construction Project Management (Purbanchal University) 2014