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Wachemo University

College of Engineering and


Technology
Department of Construction
1
Technology and Management

Construction Management

Chapter three; CONSTRUCTION PROJECT


MANAGEMENT

by; Abate M.
Compiled by; Abate 2013 E.c
3.1 Construction Project
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The term construction project refers to a high


value, time bound, special construction mission
with predetermined performance objectives.
The project mission is accomplished within
complex project environments, by putting
together human and non-human resources into a
temporary organization.

Compiled by; Abate M. 2013 E.C


Project characteristics
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a. Temporary
Every project has a definite beginning and a definite
end. The end is reached when the project’s objectives
have been achieved, or it becomes clear that the project
objectives will not or cannot be met, or the need for the
project no longer exists and a project is terminated.
Temporary doesn’t necessarily mean short in duration:
it is not ongoing effort.
Temporary doesn’t generally apply to the product,
service or result created by the project.

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Cont.…
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b. Unique, Products, services, or Result


A project creates unique deliverables, which are
products, services or results.
Uniqueness is an important characteristic of a
project deliverables. For example, many thousands
of office buildings have been developed, but each
individual facility is unique-d/t owner, d/t design,
d/t location, d/t contractors, and so on.
The presence of repetitive elements doesn’t change
the fundamental uniqueness of the project work.

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Cont...
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Generally, Project
Seeks to accomplish specific objectives,
Produces deliverables and end items,
Has definite beginning and end,
Unique in character and do not lend themselves in
standardization. Projects differ from each other in one
or more influencing factors such as client and
contractors, quality specifications, resources employed,
responsibilities delegated and the project environments.
Employ huge resources as material, labor, equipment,
cash and time, high level of technology and need
effective management of resources
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The six Parameters that can sufficiently define a


construction project:
Size: denotes the number of tasks to be executed
in a project and each task is measured in terms of
quantities of work involved.
Complexity: a measure of variety in the nature of
tasks to be executed. Complexity increases with
the number of dissimilar tasks increasing.
Quality: to be achieved in accomplishing tasks is
stated in terms of standard specifications.
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Cont...
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Productivity: Measures the ratio of planned effort


to produce a unit quantity of work divided by the
actual effort employed to achieve this unit of work.
Completion time: depends upon the speed which
the project is to be executed,
Cost: The expenditure which the client has agreed
to commit for creating the desired construction
facility.

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2012 EC
3.2 Project Process Cycle
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Project phases are understood as the processes at


which projects are formulated, implemented and
completed. These processes are well understood in
many literatures as The Project Life Cycle.
Some literatures presented project life cycle into
three, four to five phases with nearly similar
functions under their classification. There are some
however, which detailed the same phases into more
sub phases such that their respective functions
could be explicitly explained

Compiled by Abate M. 2013 EC


1. Conceptual and Feasibility
Studies
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In this stage, ideas generated by individuals / a group of
people are studied.
Following important points are carried out to establish
the viability of the project
Conceptual development of the model and its studies

 Technical and economic feasibility studies
 Environmental and social impact assessment
 Land and geological survey-location of the project
 Enumeration of major problems in translating the project to
reality
 Outcome of this phase: A report dealing with investigation and
studies concerning the problems to be encountered and its solution.

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2012 EC
2. Engineering Design
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In this stage, project takes the definite shape. All the
technical issues related to the project are carried out.
Engineers come out with the best alternatives available.
Design phase of project is carried out in two phases
 Preliminary design
 Detailed design

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2012 EC
Preliminary design
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This stage involves primarily the studies of various
design alternative, their economic comparative
studies and architectural aspect.
Also, in this stage, detailed field investigation such as;
 soil testing,

 geological,

 hydrological data collection,

 market survey, etc are carried out.


It is difficult to say the end of feasibility study and the
start of preliminary design. These steps are also a part
of feasibility study.
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Detailed Design
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In this stage, the project is broken down into its


components and each of the elements are
analyzed and designated, such that the engineer
renders the explicit drawings and specifications
which is used for construction
The following are the outcome of this phase
 Drawing of the structures/facilities to be
constructed
 Specifications of component to be employed
which contain detailed description of the
facilities to be constructed
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Construction Bid Documents

Structural Mechanical
Architect And
Engineer
Electrical Eng.
CAD Drafting
Software

Mechanical
Architectural Structural
Specifications & Electrical
Drawings Drawings
Drawings

Construction Bid Documents


Compiled by; Abreham D.(MSc.) 2012 EC 13
2012 EC
3. Contracting and Procurement
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In this stage, the bill of quantities are prepared,


final cost estimate is worked out.
Most of the agreements are signed and
relationships between different parties involved is
defined
Following points are generally addressed during
this time.
 Tender notices are advertised
 Qualification of contractor / suppliers is studied.

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Cont...
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 Contract is awarded to execute the work


 For many of the projects, such as industrial
projects,
industrial material and equipment to be installed
is purchased

Outcome of this stage: Contract document, which


is a legal document describing the terms and
conditions to execute the project.

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4. Construction
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This is the most important phase of a civil


engineering project, where the major portion of the
money is invested.
A lot of issues of project management are involved
during this phase.
The project is realized in the real world.
The main work involved during construction is to
answer the following questions

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Cont...
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 How to do the particular construction (Construction


Methods)
 How to organize labor, materials and equipments to
accomplish the construction (Resources Management)
 How to breakdown the overall work into small identifiable
work called activity and put them in sequence (Construction
Planning)
 How to calculate the time and resources required to
complete the activity and obtain the criticality of the activity
(Construction Scheduling)
 How to distribute the labor and equipment's, in order to
accomplish the work in the given time (resource allocation)
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Cont...
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How to prepare the bill for the money invested in the
construction to get the payment from the client
(Construction Finance)
How to conform the construction is according to drawing
the specifications (Quality of conformance)
How to implement the safety measure taken during
construction (Construction safety)
How to organize the different personals or the company
involved in the construction and define relations among
them (Constructional Organization management,
construction sub contracting, construction Supervision
and method of reporting)
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How to check whether the project is according to


construction schedule and quality (Construction
supervision)
What to do if things are not moving according to
plan (Disputes arbitration, Labor laws, Penalty)
Outcome of this stage
 Facility or structures

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5. Commissioning of a project
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Aim of this phase is to check that the project has been

carried out according to the contract document.


All the facilities developed should function properly

as envisaged in the design.


Also during this stage changes in the design during

the construction is properly documented for the


purpose of technical performance and financial
implications.
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2012 EC
6. Utilization and maintenance
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Basic infrastructure facilities created should be

utilized to its fullest capacity


Regular repair of the part getting damaged has to

be accomplished
This stage has become a very important stage in

dealing with project when we talk about the life


cycle cost of the project.

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Cont…
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Use of resources Vs Project Process Cycle

L
ev
el
of
e
f
f
o
rt

Formul Design Construction


ation
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2012 EC
3.3 Stakeholders Management
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Stakeholders can be defined as either individuals


or units or the organization itself for which they
claim a stake in the project such that they get
benefit from or affected by the whole processes of
the project and its deliverables.
They can generally be classified under Internal
and External stakeholders.
But, based on the their roles and responsibilities
in construction project, they can be classified as
budgetary, contractual , regulatory , and collateral
Stakeholders.
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2012 EC
Cont...
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Internal Stakeholders External Stakeholders

Financier(s)
Beneficiary(s) Financial Institutions

Consultant(s) Sub-Consultant(s)

Contractor(s) Supplier(s)
Stakeholders
' in Public
Government(s) The Public
Construction
Projects
Employer(s) Other sectors

Project Organization(s) Sub-contractor(s)

The Construction
Other Interest Groups
Industry
Regulatory Bodies

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Cont...
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As a result, projects need to manage such stakeholders


relationships in order to ensure their successful completions.
The following steps are useful for successful Project
stakeholder management:
 Stakeholders’ Identification
 Stakeholders’ Information gathering on recurrent attitudes,
strategy (Vision, Mission, Objectives, etc) and self-serving
interests
 Stakeholders’ SWOT Analysis
 Stakeholders’ predicted / expected Behavior, and
 Stakeholders’ Relationships Management Strategy.

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Cont...
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Recent important skills required for project


stakeholders’ management are;
• Communication,
• Negotiation,
• Alliance,
• Socializations,
• Organization Culture and
• Value building skills.

Compiled by; Abate M. 2013 EC


2012 EC
3.4 Resource Management
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For any construction Industry to be efficiently operating


and be successful the elements or the resources should
be well known, planned and made available. For most of
the construction projects, the resources to look into are
the following;
 Human Resources / Labor or Workmen
 Financial Resources / Fund
 Information Resources
 Physical Resources such as Materials, Equipment
and Other Assets
 Services and Management
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Human Resources / WORKMEN / Labor
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All works involved, including the operation of


equipment can not be executed without human
labor. Labor in the form of technical and
managerial personnel and work forces in various
trades and professions are essential to carryout
projects efficiently and effectively.
All other resources are coordinated and generally
the work itself is executed by labor. Therefore
careful planning, organizing and monitoring of
workmen are mandatory.
 
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Cont...
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 The availability of workmen from the top management


including project manger to the daily laborer staff level is
very vital. These include;
 professional,
 skilled,

 semi skilled and


 unskilled laborers.
 Human resources can be understood in two values:
Capacity and Capability.
 While the first refers to the quantity of labor for the scope
defined; the second covers knowledge, technology know-
how and skill as per the demands of the scopes ability.
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Cont...
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Human resources need to be attracted, selected,


developed, motivated and retained if an organization needs
to successfully accomplish project objectives. They do need
also be capable of:
Communication – Inter - personal, group interaction -
skills
Problem solving / Conflict resolution / Negotiation Skills
Facilitating / Decision – making Skills
Writing skills for Proposals / Reports / ToRs
Hard Skills – Planning, Implementing, Leading and
Monitoring tools.

Compiled by; Abate M. 2013 EC


Financial Resources / FUND
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Fund should be arranged before starting any project.


The project to be conceived shall be with in the fund
available for it. Usually funds are available from among
Governmental institution, Private institutions and
Donors in the form of loan or assistance.
In the case of Governmental entities, since budgetary
resources are scarce it is advisable and in almost all
cases that a priority shall be given to projects which are
very useful and necessary to the society. However, in the
case of private organizations it is the business what
matter.

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Cont...
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The objective and goal of the project is achieved


successfully if and only if the fund is sufficiently
flowing to carryout the project as planned. That is, it is
the regular supply of fund that keeps projects moving
progressively.
It is necessary to ensure financial planning for smooth
cash inflow and outflow to avoid delays in project
activities. Financial resources shall be planned and
managed with special care due to the fact that all other
resources very much depend on the availability of
funds.

Compiled by; Abate M. 2013 EC


Information Resources
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 Information can be understood in two terms: data whether


processed or not; and its technology. Both are vital for the
successful implementation of projects. Contextual
information, data useful for estimating duration and costs;
etc are some of informational resources used in projects.
 Information technology both the hard and soft wares have
brought the processing and management of such
information becomes important and helpful in facilitating
the comparison of several alternatives. This helps in
optimization or maximization of uses of project resources.
 As a result, informational resources need to be managed.
PMIS, MSProject, etc are some of the soft wares developed
in managing information resources.
Compiled by,Abate M.3013 E.c
Physical Resources
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MATERIALS:
The very large portion of a project cost is gone to
material cost. As the material cost component of the
construction industry covers between 55-70% of the
total construction cost, proper consideration shall be
given in the planning stage to design with easily
available material with out compromising the quality
for the intended purpose and for proper flow and
storage of materials.
Care shall be provided for materials easily spoiled by
climatic and expiry conditions. This undoubtedly will
affect the project if not properly managed.
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Cont...
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EQUIPMENT:
These days various plants, equipment, tools etc., are used very often in
construction activities. It increases efficiency and economy by replacing
the hard work that can be made by human labor taking much time.
Its initial cost though high, it works for long period of time under adverse
conditions with less manpower than working in its absence which will
result to be economical for long term investment.
Depending on the types and nature of construction, machinery at site
includes batching plant, mixers, trucks, tractors, excavators, dampers,
cranes, vibrators, pumps etc.
OTHER ASSETS:
Physical Infrastructures and Owned Land are assets which can be
collaterals for capital base enhancement and credit facilities and are useful
to develop the scarce financial resources and getting into business access.

Compiled by; Abate M. 2013 EC


Services and Management
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SERVICES:
 Services such as acquisition of land, provisions of water supply, electric
power, communication systems, etc., are very much necessary in the
construction industry. Without acquiring such services, it is too hard to
implement construction activities successfully. Therefore, well thought
and due consideration shall be given to services and shall be considered
as one of the resources required for civil works projects.
MANAGEMENT:
 Management has come to employ a disciplined approach to the use of
available resources. To coordinate these resources and achieve the
required goal, a system shall be devised to plan, organize, execute, and
control, the project. Such system which helps to achieve the necessary
goal is called Construction Management, without which it will be a
catastrophe both in cost and completion time to the project.
 
Compiled by; Abate M. 2013 E.c
3.5Performance Management
Time Management
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In construction all projects are time bound. The project time
objective specifies the project completion time. Time delays
results to penalties while early completion might earn
rewards.
There may be many reasons both foreseeable and
unforeseeable, for non-completion of a project time.
Planning is the devising of a workable scheme of operations
to accomplish an established objective when put into action.
Construction planning is a fundamental and challenging
activity in the management and execution of construction
projects.

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Cont…..
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It involves;
 the choice of technology,
 the definition of work tasks,
 the estimation of the required resources and
 durations for individual tasks, and
 the identification of any interactions among the different work
tasks.

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Cont…
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The construction planning may be said to consist of the following


steps:
 Choice of technology and construction method,
 Determination of the job steps or ‘activities’ that must be
performed to construct the project,
 Ascertainment of the sequential relationships among these
activities,
form of a
 The presentation of this planning information in the
network. the project planning starts with time planning as
the first step.

Compiled by; Abate M. 2013 EC


CRITCAL PATH METHOD(CPM)
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Terminology Used in Planning Techniques


Event or Milestone
 A point in time when certain conditions have been fulfilled, such as the start or
completion of one or more activities
 Unlike an activity, does not consume time or resources. Hence, expresses a state of
being
 Activities take place between events
Activity
 A item of work that consumes time and resources to produce some result
Dummy activity
This activity does not involve consumption of resources, and therefore does not need
any time to be ‘completed’.
It is used to define interdependence between activities and included in a network for
logical and mathematical reasons as will be shown later.

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Cont…..
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Critical
 Path
The series of activities all of which must finish on time for the whole project to finish on time

Sometimes described as the longest path through a network, hence the shortest project time

A critical path has zero float

A critical path assumes that the network logic is sound

Start and finish times



 

Earliest Start Time of an activity (i,j) [EST(i,j)]

This is the earliest that the activity (i,j) can be started, i.e., all the necessary preconditions are

met.
Earliest Finish Time of an activity (i,j) [EFT(i,j)]

This is the earliest that an activity can be completed. Mathematically, the relationship can be

expressed as
EFT (i,j)= EST(i,j) + D(i,j)

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Cont….
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Path and critical path


Latest Finish Time of an activity (i,j) [LFT(i,j)]
the latest time that an activity needs to be completed in order that there is
no delay in the project completion.
Latest Start Time of an activity (i,j) [LST(i,j)]
the latest time when an activity must be started, in order that there is no
delay in the project completion.
LST(i,j) = LFT(i,j) – D(i,j)
Any series of activities connecting the starting point to the finishing point
can be said to define a ‘path’ and indeed in a project having several
activities, several such ‘paths’ can be identified.
Among these paths, the ‘critical path’ is defined as one that gives the
longest time of completion (of the project), which also defines the shortest
possible project time.

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Cont…..
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Forward and Backward Pass


The forward pass moves from the ‘start’ node towards the
‘finish’ node, and basically calculates the earliest occurrence
times of all events.
Considering that the project starts at time zero, the earliest
occurrence time at each node is found by going from node to
node in the order of increasing node numbers keeping in
mind the logical relationships between the nodes as shown
by the connecting arrows.
The earliest occurrence time for any node can be estimated
from the (maximum) time taken to reach that node from the
different incoming arrows

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Cont….
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How to use the CPM?


List the activities and relationships
Create a start node
Draw arrows from Start node to the First activity’s
node
Sequentially arrange all Activities from “Start”
 Repeat process from successors for all activities
Double check for missed relationships

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Cont….
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Cost Management
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 The final or detailed cost estimate provides a baseline for the


assessment of financial performance during the project.
 Overruns in particular cost categories signal the possibility of
problems and give an indication of exactly what problems are
being encountered.
 Expense oriented construction planning and control focuses upon
the categories included in the final cost estimation.

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Cont…
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Apart from the work plan and schedule for time management,
contractors are required to show their budgetary forecast (cash
flow diagram) indicating the gross and net cash requirements
of projects. Often projects are observed running into
difficulties from short of cash flow.
Projects by nature require to be financed from other financing
securities especially during the early phases of the construction
period until they reach a stage of self-financing date.
Hence for successful performance of projects, one has to
prepare a cash flow diagram and monitor progress during the
contract period.

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Quality Management
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 The form’s greatest marketing assets are satisfied owners, and


delivering quality projects is critical to achieving customer
satisfaction.
 The project manager and its superintendents must work together
to ensure that all materials used and all work performed on a
project confirm to the requirements of the contract plans and
specifications.
 Non confirming materials and work must be replaced at the
contractor’s cost both in time and cash.

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Cont…..
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Quality Management involves the following processes:


 Setting Quality Standards to achieve both technical and
managerial competence
 Scheduling inspections
 Managing any required rework
 Documentation

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Example on EVA technique
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Given project
 5km road project
 5month contract time of completion
 Budgeted cost of Br. 500M
Scheduled(time and cost)
 1km1month100M.Br
Physical progress
 At the end of 2nd month 1.5 km
 Actual cost 180M.Br
Question
 Under spending?/ over spending?
 Behind schedule?/ ahead schedule?

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Example on EVA technique
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Solution
Cost over run=180-150= 30M
 BCWS=200M here the schedule is measured by Br.
 BCWP=150M
 ACWP=180M(Earned Value) from cost statement of the
project(Report)
Variance
 SV=BCWP-BCWS=-50M ( he/ she left with 50 birr works)
(schedule variance in terms of money, it could be in MH or
equipment, labor..)
 CV=BCWP-ACWP=-30M(negative variance as of monitoring day )

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Example on EVA technique/cost controlling
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Conclusion
As the SV & CV indicates the project is Overspending
and as well lagging
behind the schedule.
SPI=BCWP/BCWS=150/200=0.75 behind schedule
CPI=BCWP/ACWP=150/180=0.83 cost overrun

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Project Delivery system
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 Delivery system is the way project owners together with project


regulators and financiers determine the assignment of
responsibilities to project stakeholders along the construction
process. Delivery system is often determined during the basic
planning phase of construction project. types of procurement and
contract delivery systems. These are: Force Account, Design Bid
Build (DBB) Design Build (DB) or Turnkey, Finance / Build
Operate System (BOT)Construction/Facility Management
Consultancy. Such Procurement and Contract delivery systems are
developed overtime. The development is based on problem solving
for the previous type and the Development of the Construction
Industry technologically and management wise (Wubishet, 2004).

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Cont…..
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A) Force Account :-When the project owners engage themselves


to undertake the project, it is called a force account delivery
system. Often such a system is promoted if the project owners
believe that there is a comparative advantage in cost, time and
quality issues. Besides, when there is a lack of capacity from the
private sector to undertake very large and technologically new
projects, public companies do undertake such projects using
force account delivery systems These days this type of delivery
system is often used when projects are small and places are
remote such that reaching them is difficult and in general they
are not attractive enough to call the attention of bidders.

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B) Design Bid Build (DBB) This is the most practiced type of
delivery system in the construction industry. After project owners did
prepare the basic planning that identifies construction project
programs, they call upon the participation of design and / or
supervision consultants either by tender or by negotiated contracts.
This consultant will carry out the design together with the necessary
tender documents which will be the bases for tendering to select
contractors. These process is called Design - Bid - Build and hence the
name for such delivery system. Some of the main criticisms of the
traditional DBB method of project delivery are lack of innovation,
delayed completion periods, and cost overruns Since, in the DBB
method, the client bears most of the risks of the design and the
construction aspects.

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C) Design Build (DB) / Turnkey:-Design Build or Turnkey


Delivery system is a response to problems associated to the last
two types of delivery systems. These were promoting
privatization and its business-like approach to enhance the Force
Account System and reducing fragmentation, adversarial
relations and Project Owners’ risk. Design Build or Turnkey by
principle reduces numbers of procurement processes engaged in
the fragmented process and employ only one procurement
process and a single contractor to provide the entire Construction
Implementation Process (Design and Construction
Implementations).

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• Typical advantages of this system include a) Reducing


fragmentation and adversarial relations between designers and
constructors b) Minimizing Project owners’ risk transferable due
to Designers’ faults c) Accountability and entire responsibility for
both design and construction which entitle the employer to
receive completed project is onto a single contractor d) Single
point responsibility minimizes the opportunity to claims by the
contractor due to design related issues.
• The disadvantage of this delivery system is loss of control
(limited supervisory role by the employers representatives), cost
of tender and cost of risks ( for the sake of counterbalancing)

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Cont….
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 D) Finance / Build Operate Transfer (BOT) Build -


Operate - Transfer is a form of procurement and contract
delivery system that promotes Public Private Partnership
(PPP) in which a private company is contracted to finance,
design, construct, and operate for a certain period (usually
10 years) and transfer. BOT contractors look to project
financiers for the realization of projects through equity
contributions or credits.. This obliges that projects should
first be viable for revenue generation in order to payback its
depts. The operation period between completion and transfer
gives the contractor an opportunity to verify the quality of the
output of the services and works, and train the employer
personnel on how to manage the facility afterwards.
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Cont…
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This delivery system is advantageous because of three major


factors:-a) It minimizes owners’ scarcity of financial
resources b) It devoid of considerable risks from the project
owners and lesson regulatory activities & c) The facility is
well operated and transferred with free of charge or
minimum compensations to project owners.
Such delivery system requires appropriate project
packaging and their clear definition. It is advisable to start
with small projects and tries to develop experience. Most
BOT projects failed because of their built up and
engagement in very large projects which is an extremely
risky business for contractors.

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Cont…
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 E) Construction / Facility Management Consultancy


Construction Management Consultancy Delivery System is a
response to problems associated with DB and BOT where the
Project Owner was not well represented for its benefit and the
problem of fragmentation between Planning and Implementation.
As a result, construction management consultancy firm is used
to coordinate all activities from concept inception through
acceptance of the facility. Construction Management service in
such delivery system include the management activities related to
a construction program carried out during the Basic Planning,
Design & Construction Implementation and its completion
process that contributes for the successful completion of projects.

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The main difference of this delivery system is that,


while all the others involve only during the
implementation phase after major decisions was
made during the Basic planning phase of the
construction process, it is involved in the whole
construction processes.

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64

 Construction Management Consultancy service are particularly


attractive to organizations that involve in construction physical
infrastructures.
 Construction Management Consultants then represents Project
Owners to carry out the following services
 a)Feasibility studies of Construction related services b) Plan and
Monitor the Triple Constraints of Project Performances c) Lead
and Organize regulatory systems of the Construction Industry d)
Valuation, Quantity Surveying and Procurement and Contract
Management Services.

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2012 EC
End of chapter
65

Thank you!!

Compiled by; Abate M. 2013 EC

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