General Engineering Management
Describe each functions of
List the components of Project Life Cycle and briefly
describe each of these components
a. Original ideas
Needs, demands or specific intent for certain
fulfillment of certain purpose.
b. Conceptual phase
Includes conceptual report, preliminary
investigation report, feasibility study and project
investigation brief.
c. Development phase
Includes project definition, management plan, and
appropriate commitment from authorities and
financial support.
d. Project planning
Right before construction, include planning for
Time, Cost, Quality, Safety, Risk, Methods of
work and Human resources that is the project team,
procurement/tender planning.
e. Delivery phase
Actualization or construction phase, project and its
scope are fully defined, include bidding and
tendering.
f. Commissioning/maintenance phase
Completion of project, site and project are given
back to owner, facilities are placed into operation.
g. Close out
Finalizing any outstanding construction or
contractual areas, close payment account, overall
actual cost is calc.
h. Recycling/demolition/rehabilitation
Upon completion of its lifespan, the project can be
further extended, remodeled, demolished,
depending on the current demand.
List out the fundamental principle objectives of Project
Management. With your own understanding, describe
the relationships of these objectives.
 What is Project Management?
 Typical Project Objectives
 Roles of Project Management in an
organisation
 Roles of Project Manager
Safety means money. It means costs.
What is management?
management on the management control cycle.
Management in itself is a POWER, an influential power and
force, which combine various activities, functions & tools
available, guiding the enterprises towards attaining its set of
specific goals & objectives.
Management is a powerful instrument, which:
 Set the goals (Definition of objectives)
 Direct the energy (i.e. resources) along the proper
paths in order to achieve the goal (methods of
attainment)
Any successful enterprise needs management in all their
undertakings.
Planning:
 Definition of objectives, goals for the problem to
be solved or need to be fulfilled
 Definition of work requirements and policies
 Determining the resources available and required
Organising:
 Organise the resources
 Organisation structure (staffing)
Implementing:
 Proceed with implementation of the plan.
 Engineer-manager’s job include directing,
motivating and communicating and be accountable
to the plan
Monitoring & Controlling:
 Tracking progress
 Comparing actual and predicted outcome
 Analyzing impact
Rectification
 Deciding on remedial options
 Taking actions and making changes
Explain what you think is the roles of a Project Manager
towards his parent company, the client and the project
and the member of his team. (At least quarter page, max
half a page and adding your own opinion will gain extra
marks)
 To parent company ~ proper conservation of
resources, timely and accurate project communication,
establishing goodwill and name for his company
through careful and competent management. Put the
company’s profit prior to himself’s benefit.
 To client/end users and project ~ conserving the
integrity of the project even through conflicting demand
of all the parties who has legitimate rights and interest
in the projects, sorting out problems and dealing with
continuous obstacles, acquiring and keeping control of
resources, making project goal trade-offs and on top of
that completing the project on time, on budget and up to
the specifications. Aware of client’s needs and ensure
 them’s benefit. Keep well relationship and
communication with client.
 To members of the team ~ keep on motivating them
and help them to continuously improve, caring about
their concerns, their future and career as well as their
safety and benefits.
Planning
Identify and describe the basic cost elements towards
estimating and budgeting.
i) Project Direct Cost:
- Labour (site supervisors. Trademan, skilled,
semi-skilled and unskilled)
 construction work involve of people time, incurring a
cost in terms of labour. (Salary, insurance, Overtime)
- Plant & Equipment (project delivery & operational
phase)
 Major Plant – cranes, tunneling machines, earth moving
plant, barges, tugs
 Minor Plant – hoists, compressors, generators, pumps,
piling hammers and equipment.
 Cost per time unit – with or without operator
 Lump sum project cost –purchase price plus operation
and maintenance cost less salvage valve at end of
project.
- Materials
 large component of the cost of eng. Project (permanent,
temporary & consumables)
 most accurate estimated (quantity measure with high
degree of accuracy, competitive quotation for supply of
permanent materials)
 inaccuracy in estimates (incorrect allowance for
wastage and loss of material, unchecked quantity
measurement)
- Subcontractors
 One lump sum – complete work and be paid a sum
proposed before signing of contract
 As per work done on site
- Management, Engineering and Supervision
 Depending on the size, scope and complexity of the
project, cost will vary from a few % to 10 & 12 %
during delivery phases
 Schedule of personnel hours
ii) Project Indirect Cost
- Corporate Overheads (branch, administration cost, site
facilities, camp and housing, general supplier, site
vehicles)
 establish or mobilization cost of fixed or lump sum
nature
 Time based or continuing costs per week, month
 Demobilization cost
- Risk & Opportunity
 opportunity cost
What is the difference between budgets and estimates?
 Estimate is a system and pilot plan developed to
forecast or approximate the costs of all the resources
needed
 Budgeting is the actual attaching of pricing to
individual items results in the budget plan
 Cost estimates are used to build up the budgets. We
are to control and monitor our budgets as they are the
baselines
There are a few types of estimates available. Explain on
how PM can use these estimates.
 Feasibility study – to determine whether u mine
something, which cn produce smthing that will sell
and will sell at a price which leave u sm profit for
further development and to reward those who are
prepared to back u with their money. For example,
there is no point in building up a factory producing
article, which u can not sell at a price higher than it
costs u to make the article.
 Tendering – to win the job at a competitive yet
doable price. Companies depend on competitive
estimating in general to get job. Marketing,
management and construction ability is all wasted if
u has no work. However, there is no point in winning
a job at price, which u cannot build it for.
 Negotiated project – client will negotiated with u
would still wants to know what it is going to cost and
he wants to know that u are competitive
Part of project planning is doing work breakdown
analysis. Describe the importance of doing a proper
work breakdown analysis in relevant to monitoring of
time cost quality and safety on site.
Work Breakdown is the backbone for any planning and
controlling of time and cost. Not only that schedule of
operations are based on these analysis, estimates and costing
revolves around Work Breakdown and resources
(machinery, material and labour) can be allocated efficiently
and accordingly.
Define TQM and the benefits of having Quality
Management in your company and your project.
 Is a unique management approach and is a people
oriented, measurement-driven, customer-focused,
long-term strategically oriented management
philosophy using a structured, disciplined, and
continuous-improvement operating methodology.
 Recognizing the concept and importance of quality
 Create awareness within the organization of the need
and opportunity for quality improvement
 Set goals for continuous improvement
  Build an organization by establish a quality council,
which assist in identified of problems, problems
solving and choosing the right people and team to do
a job
 Provide proper training
 Reporting on progress
 Showing recognition
 Communicate result
 Keep records of successes and failure
Construction safety starts with safety program. How can
eng-manager execute to its optimum and successfully
avoid or reduce accidents on site?
 provision of sign and equipment on site
 create safety practice as set of rules and regulations
 Administer the rules and regulations, which involve
company employees and those of the site. There
should be a safety coordinator and safety officers or
superintendent appointed to enforce the safety
practices
 Provision of training and safety manuals
 Holding safety meeting
 Be in mind safety for environment and public when
creating the safety practice and be include as part of
rules and regulations
Why is it better to do CPM than gantt chart?
- CPM:
a. Provide sequence of activities and
dependencies
among the activities.
b. spare time or critical time of the activities.
c. Provide PM with an overall picture of the
time and
resources and hw these resources can be used to
the optimum.
-gantt chart does not provide those mentioned above.
Advantage of doing CPM:
 more accurate
 Provided overall picture of the time and resources
and hw these resources can be used to the optimum.
 allowed PM to trade time for cost or vice versa with
resource loading and leveling
How do u carried out a CPM procedure?
 work breakdown
 set up a net work showing the relationship of all the
activities
 Estimate the normal time expected to do each activity
 Next proceed with scheduling. From the project start
to finish we now compute the ‘earliest start’(ES) and
‘earliest finish’(EF).
 More scheduling, Working backward from
completion of the project to its start, we compute the
‘latest start’ (LS) and ‘latest finish’(LF).
 Compute ‘total float’ (TF) and ‘ free float’ (FF) =
EF-ES
 Designate the critical path. TF=0, ES=LS and
EF=LF.
Procurement and construction management
List 2 procurement strategies/methods that you know
and describe them briefly.
Traditional method
 Traditional General Contracting (TGC)
 Client engages architect or engineer to prepare
design.
 Upon completion of design, the QS or the engineer
prepares a bill of quantities based on drawings
and specification.
 Contractors are invited to price the bill.
 Contractor submitting the lowest tender usually
will be awarded the contract.
Design And Build (D&B)
 Design and Construct or Package Deal
 Client engages contractor to design and construct.
 Contractor is responsible for design, planning,
organisation and control of construction.
 Client may engage independent consultants to
advise him on the contractor’s proposals on design,
construction methods or financial aspects.
Describe the common type of tendering model in
Malaysia.
1. Open Tendering
 Initiated by advertising in local newspapers
 Eligible contractors apply for tender doc. &
tender in competition for the project.
 Tender deposit may be required to discourage
frivolous applications.
 Deposit are returnable on the submission of a
bona fide tenders
2. Selective Tendering
 Single stage: full benefits of competitions are
desired
 2 stage: limited competition + earlier
commencement of the works on site
is considered adv.
 A short list of contractors is drawn up from an
approved list or “panel” maintained by the
client or may be specifically chosen.
 Contractors may be invited through
advertisements in the press or invited through
correspondence
 Client can limit the number of tenderers.
 If firms selected are suitable and if client
fixed the contract duration then selection is on
price alone and contract can be safely awarded
to the firm submitting the most favourable
tender.

3. Negotiation
 Single stage: A proposal goes to and fro
between the client and the contractor until
complete agreement is reached and a contract
entered into.
 2 stage:
First stage:
A limited selective competition is carried out
and all firms are given a fair warning of what
is intended to follow.
Second stage:
One firm will be selected to proceed to this
stage and negotiation will proceed until
everything is finalised and a contract entered
into.
 Progressive Negotiation: Negotiation proceeds
to a stage of agreement and the parties enter
into a contract at that stage.
Describe the common tendering procedures.
Pre-selection of contractors
Selection of the right contractor to carry out a project is
important as not any contractor is suitable for any one
project.
Big Contractor - Not Suitable For Small Project as it is high
overhead and uneconomical.
Small Contractor - Not Suitable For Big Project as it may
has little or no experience in estimating and pricing tender
or may tender too low and falling to include all costs.
Therefore it had become common practice to select
contractors for pre-qualification tender. Client sets criteria
and contractors must pre-qualify before being invited.
Assessments are usually made on both technical and
financial capacity. This is to eliminate the risk of accepting
the lowest that cannot perform.
Bidding/Tendering procedures
Invitations to bid may be by letter or by advertisement. They
should state clearly the closing time, date and place for
lodging of offers and usually require that bids be placed in a
locked box provided for that purpose.
Once the bids have been opened and assessed. The owner
will proceed with acceptance and rejection of others.
Acceptance or Award Cycle
The letter of Award or Intent or Acceptance creates the
contract, and consequently should be sent by certified or
registered mail. At the same time, unsuccessful bidders
should be notified in writing that their proposals were not
acceptable and that they are released from any obligations in
connection herewith.
Describe the type of contract methods available in
details.
Fixed price contracts
 Fixed price contracts require the contractor to
complete the specified work at its own cost for the
total amount or at the various unit rates that it
offered in its bids.
 Once the offer is accepted the contractor cannot
change its price or rate for the work.
a) Lump Sum Contract
 The offer offers to do the whole of the
work specified and shown on the
drawings for Total sum of money.
 There can be lump sum through BQ+
drawings + spec.+ schedule of rates.
b) Bills of Quantity or unit price contracts.
 The contractor offers to carry out works at
unit rates specified by the contractor in its
bid.
 Contracts’ll borne with a schedule of
work with estimated quantity
 When project constructed, true quantities
measured and contract’ll be paid.
Prime Cost Contracts
 The owner pays the contractor for all costs arising
from the execution of the contract plus some form
of additional reimbursement for the contractor’s
administration and profit.
 Cost + fixed % contracts
 Cost + fixed fee contracts
 Cost + variable % contracts
Write about the importance of a site daily record with
respect to site monitoring.
o It provides information to be fed into CM data base
for monitoring of time cost quality and safety
o Should there be variation claims, such reports will
be used as the basis
o Prevent contractual disputes
o Delays and extension of times should be based on
these records
Describe five items that must be controlled on site.
a. Methods of work
 Engineers worked out together to find out what is
the best methodology to carry out certain work.
 Contractors’ engineers must be very careful when
making proposal and the adequacy of the design
should be the liability of the designers.
 To ensure the quality of workmanship.
b. Material used
 Material testing
  Documentation of material testing must be
adequate and certain quality assurance tools can be
specified and requested.
 Make sure that material delivered to be used in
accordance to the ones specified.
 Proper inspection of material must be carried out.
c. Proper coordination of work
 Sequence of work
 Control of laborers and subcontractors, delivery of
material, arrangement of machinery, tools and
plants must be carried out.
 Many variables need to be controlled to ensure
each operation can proceed as planned.
 Judgement and confidence must be in place
d. Progress of work
 Progress monitoring involves tracking of the work
on site, checking works based on timing, costing
and quality.
 Records are kept on the daily and weekly and
monthly basis.
 New records will be used to match against the
original plans set up.
 Decision-making and change management to
improve the existing situations..
e. Variations and changes on site
 Avoided or at least minimalised.
 Agreement of any addition or deduction in cost and
any delays due to variations.
 Must be properly recorded to avoid disputes n keep
a proper recorded of the finished product (as-built
drawings).
How can a project manager carry out site control and
describe five elements on site which must be controlled.
Site Daily Report
Records have to be done daily by representatives on site and
should be verified by the Consultant’s representatives
and/or other parties on site. Includes data, weather,
machinery in use, labour, work progress, instructions,
delays & variations, visitors.
Data Base
o Time Schedule
o Labour Schedules
o Plant Schedules
o Material Schedules
o Sub-contractors’ Work Report
Eng Law and Contract Administration and Dispute
Resolution
Define the following:
 Contracts - is a promise or set of promises, which
the law enforced. All contracts must be built on
meeting of mind and form of absent and agreement to
the same thing
 Offer and acceptance – the critical feature of a
contract of that there is a meeting of the minds
between the two parties to the contract. In practice
this requires the making of an offer by the offeror and
the acceptance of that offeree. Offer means making
an offer or a proposal by an offeror and must be firm
and clear and can be converted into an agreement, not
just negotiation or expressions of intention.
Acceptance is acceptance to the offer.
 Expressed term – terms formally expressed and
asserted and therefore, properly recorded and usually
written
 Implied terms – from custom or statue or courts are
terms, which even though not formally expressed, are
nevertheless essential for giving business efficacy to
the agreement.
 Consideration – linked to a promise
o Executory – a mere promise to do something
at a future date. Eg. Sell land on the basis that
b promises to pay at some later date
o Executed – promise made in return for
performance of an act. Eg. The final price
agreed between the offeror and offeree to buy
and sell
 Standard of care – is about establishing the duty of
care. The general principles when establishing the
duty of care is to test the reasonable is abt the
standard of a reasonable man. Foreseeability is abt
whether the loss injury or damage can be predicted in
the first place
 Duty of care – is expected of a competent eng to the
client in the contract and in tort
 Eng have a duty in tort to third parties to act with
reasonable competency in the provision of the
services that are within the scope of the agreement to
the client
 Negligence – In construction industry the negligence
usually arises in the form of professional negligence.
It is ruled from the Donughue vs Stevenson case that
there should exist a general duty of care, independent
of the contract, on all citizens to take care to avoid
acts and omissions which and individual can
reasonably foresee to injure persons who are closely
and directly affected by such acts.
 Breach of duty of care
 A failure to meet the requisite standard of care
 Damage
What are the responsibilities of the parties of a contract
in assessing:
Payment
Extension of time
Liquidated damages
Variation of work
For each change or delay for which the contractor is not
responsible, an official change order or variation order (VO)
should be issued by the Engineer and countersigned by the
contractor’s representative. They are usually produced in
multi-copy pads thus providing an official record for the
owner and contractor to show:
 The details of the change
 The contract items affected
 The cost
Proper recording are essential to prevent disputes in the later
stage over variations. And site daily reports can be a very
method in recording such changes especially instructions at
site made by Engineers.
Should the contractor the one detecting the necessity for
change, they should informed inform the Engineer through
writing asking for immediate remedial and Engineer should
reply no later than seven days. Ideally work constituting a
variation should only be undertaken once the price and time
for work are agreed. However, in most situations Engineer
would just have to order a variation with their letters and
later follow up with proper documentation. Occasions also
arises when the Contractor needs to take urgent action, e.g.
safety issues. In such cases common sense prevails.
Withholding of moneys due by a Client will severely
damage the relationship between the parties and could place
primary objectives of the project in jeopardy. Without cash
flow, contractors will generally be starved as will their
employees, sub-contractors and suppliers. Prompt and
proper payment to Contractors is one of the most important
obligations of the Engineer and Client . Conciliation – a process by which two or more disputants
Describe the following in terms of advantages and
disadvantages:
Arbitration – a formal judicial process prescribed to or
consented by the parties involved to settle the dispute before
a private tribunal
Advantages
 confidential and not embarrassing to the losing party
 Parties within a disputes may agree on method of
settlement
 Can be cheaper compared with litigation
 Less stressful compared with litigation
 Can be faster compared with litigation
 Procedurally simpler and more flexible
 Parties can choose the arbitrators
 Arbitrators are more familiar with technical issues
 There is a fixed time frame, so the parties are forced
to be concised
Disadvantages
 Non-legal based arbitration may result in non-
enforceable awards
 Still open to abuse especially delay by one party if
not sincere
 Not suitable in all situations
 The disputes must be technically complex rather
than legally complicated
 No neutral arbitration court for international dispute
 Can be subjected to appeal, therefore may not be
finalized and hence drag on
Litigation – a mean of resolving disputes through court
proceeding or civil procedures based on our Malaysian
judicial or legal system
Advantages
 may be decisive and fast if good lawyer is
employed
 decision is final
 decision is imposed on the other party
 one party wins, punitive on the other party
 publicized outcome unless order otherwise
 may force the parties to negotiate
Disadvantages
 Could be lengthy procedures, which takes years of
study in areas such as service of documents,
appearance in courts, summons and writs, setting
down or trials, trail and submissions
 One party will always think it is not fair. No two
win situation. Will be punitive on the losing party
 Can generate large amount of publicity which can
be bad for parties especially with future business
prospects
 Dependent on the stringent rules of law and
evidence
 Cost can sometimes be exorbitant for some
Mediation – an alternative approach disputes resolution
method, which is informal and non-binding
voluntarily choose to select a neutral party or parties
Risk – what are steps involved in doing a proper risk
management for a project. U can described with example
 A) risk identification – the process to determine the
potential key variables that impact and contributed to
risk in the problem or decision or situation under
consideration
 Source : technical risk, financial risk, management
risk, contractual risk, schedule risk, operational
performance risk
 B) risk allocation – categorizing risk according to
whom it will affect, whether it is the person or the
organization or the project overall and who shall
response to it
 C) risk classification & measurement – risk
classification involve categorizing the risk according
to its effect or impact and risk measurement involves
coming up with measurement criteria according to
the chances or probability of it occurring
 D) Risk assessment and Re- assessment – The
process of estimating the degree of severity of the
risk involved, both for intermediate and final
 outcomes. There are basically qualitative risk
analysis
 E) Risk attitudes and response – attitude of the person
making the decision concerning the risky situation
determining how a risky situation should be dealt
with
Economic – What is an economic appraisal and what
does it encompasses.
 a project evaluation technique to provide economical
rational decision. The role of evaluation is an
important tool in decision making in project
management.
 a systematic mean of analyzing all the costs and
benefits of various ways in which a project objective
can be met
 In essence, economic appraisal shows:
o Whether the benefits of a project exceed its
costs
o Which among a range of options to achieve an
objective has the highest net benefit, or
o Which option is the most cost effective if
project benefits are equivalent
 cost benefit analysis (CBA) and cost effectiveness
analysis (CEA).
List out the steps in carrying out an economic appraisal.
 define objectives and scope of project
 identify options
 identify quantifiable costs
 identify quantifiable benefits
 calculate net benefits
 identify qualitative factors and summaries
results
Describe CBA and CEA and their differences
 CBA - more comprehensive of these two techniques.
It quantifies in money terms all the major costs and
benefits of project options. Thus the outcomes for a
range of options are translated into comparable terms
to facilitate evaluation and decision making. The
technique also makes explicit allowance for the many
costs and benefits which cannot be value.
 CEA – where the main benefits of a project are not
readily measurable in monetary terms such as in
certain areas of health, education, law and order or
social welfare
 Where the benefits of each option differ, CEA is less
useful than CBA (where costs and benefits of
different kinds of options are more readily
comparable).
Describe the concept and importance of time value of
money with respect to depreciation, interest and
discounting.
 Concept of Depreciation
- Most assets decrease in value with use and time.
- A need to distribute the initial cost of an asset over
its predicted life & mk allowable for this in all
appraisals of any investment.
- An annual provision for ultimate replacement cost.
- Hv residual value at its end life span
 Concept of Interest
Specified as rate % per annum. It represents a fraction of the
principal designated as a reward to its owner.
a) Single payment compound amount factor
S= P[1+i] n
b) Uniform series compound amount factor
S = A[(1+i)n – 1]/i
 Concept of discounting
- Discount factor used to determine the original sum
P that’ll produce the compound total S with a green
interest rate of i.
- The stream of costs & benefits shd be discounted
by a real discount rate.
- Reflects the concept of time preference of money.
Describe the methods commonly used to assess the
economic and financial feasibility of a project.
Annual Costs Method
The Annual Costs Method computes the equivalent annual
charges necessary for the initial establishment of each of the
proposed alternatives, and for keeping each in operation for
the life span.
Net Present Value Method
The present value method converts all cash flows into
capital sums of money, which invested now for a specific
period, would provide the sums necessary for the project for
keeping it in operation.
PV = FV/ (1+i)n
Net Present Value Per capital investment
The highest NPV may involve very high capital expenditure
and capital availability is normally constrained. Projects
with the highest ratios would be potentially worthwhile
NPV/I
Large value is preferred
The Benefit-Cost Method
The profitability index or benefit-cost ratio (BCR) is a mean
of ranking projects. All the project costs and incomes and
savings are converted into a common base, either present
value or annual costs.
 BCR = Benefits
Costs

Larger Profitability index is preferred.

Payback
Payback is defined as the number of years in which initial
investment will be paid back by the annual earnings
generated by the project.

P/B = capital investment/average annual cash flow

A least PN is preferred
Internal Rate of Return(IRR)
Initial investiment is fully covered by the earnings and
capital recovery of the project.

NPV = PV(Benefits) – PV(Costs)

This method calculates the rate of interest that makes the

present value of the estimated cash expenditures equal to the
present value of the cash outlay required. Larger IRR is
selected.

What other areas should be considered for feasibility

studies?
The most important factor in the calculation of net present
value or internal rate of return is the value assigned to the
various cash inflows and outflows used. They represent the
expected conditions that will occur, but should these
conditions changed; the profitability of the investment can
be significantly affected. There for calculations should be
repeated for cash flows that represent the worst and the best
conditions that can possibly occur. We refer to the testing
as sensitivity analysis.