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Turner Construction Company: Project

Management Control Systems


SUBMITTED BY
GROUP 6

What is Turners business strategy? How does its strategy differ


from competitors?

To make the owner as partner in managing the project thus a way


of getting repetitive business opportunity from the same client

Decentralized structure Territory general manager had autonomy


to run his territory as an independent business

It follows efficient spending instead of low pricing strategy

Knowing the project risk helps turner to find a formula for sharing
the savings

Communication with client

Ability to develop and share accurate information with the owner

Involves owner to make smarter decisions

Use of GMP which leads to sharing ofsavings

Contd..

Turner forecast systems(TFS) consolidates the IORs on


a monthly basis at every level up the organization

IOR(indicated Outcome report) helps in deciding when


and how to tell an owner about savings in the project

Prediction at any point of time the total expected cost and earnings
contribution of a completed project

Identify the problems and options in the project

What contingencies could threaten or invalidate the viability of


Turner's strategy?

Q.3 Evaluate IOR systems and related report and meeting? Does the IOR
systems address contingencies identified in previous question?

IOR updating process

IOR REVIEW MEETING

General Culture at Turner

If you were Gary Thompson, what would you say about the $500,000 contingency
Reported Earnings if further scope changes are allowed
Head

Cost

Microsoft Excel
97-2003 Worksheet

Comments

Kent square project estimated cost

29,000,000.00

Construction Contingency

725,000.00

Contingency hold

328,000.00

CC is usually 2.5% we are already


getting lesser
1.13% of total project cost

Exposure hold

471,000.00

1.63% of total project cost

Already released

215,000.00

of Construction contingency

Available Construction contingency

510,000.00

20% of project is remaining

5,800,000.00

Construction Contingency for 20% project

145,000.00

Construction Contingency for 20% project Including scope change (14.5%)

166,025.00

Exposure hold for 20% project

94,200.00

Contingency hold for 20% project

65,600.00

What we suggest
Retain double the estimated contingency hold because of strike and other risks

131,200.00

Construction Contingency for 20% project

166,025.00

Total amount that can be released is

540,775.00

Owner share in released amount

405,581.25

Available CC+ C hold - CC for 20% - 2*


20% pf C hold

Our share

135,193.75

Reported Earnings this quarter

108,155.00

Reported Earnings if further scope changes are not allowed


Head

Cost
Comments
$

Microsoft Excel
29,000,000.00
97-2003 Worksheet
$
CC is usually 2.5% we are already
725,000.00
getting lesser
$
1.13% of total project cost
328,000.00
$
1.63% of total project cost
471,000.00
$
of Construction contingency
215,000.00
$

510,000.00
$

5,800,000.00
$

145,000.00
$

94,200.00
$

65,600.00

Kent square project estimated cost


Construction Contingency
Contingency hold
Exposure hold
Already released
Available Construction contingency
20% of project is remaining
Construction Contingency for 20% project
Exposure hold for 20% project
Contingency hold for 20% project
What we suggest
Retain double the estimated contingency hold because of strike and other risks
Construction Contingency for 20% project
Total amount that can be released is
Owner share in released amount
Our share

$
131,200.00
$
145,000.00
$
561,800.00
$
421,350.00
$
140,450.00

If you were Gary Thompson, what would you say about the $500,000 contingency