Project Mangement by Ephrame (All)

ARBA MINCH UNIVERSITY
Institute of Technology
Department of Civil Engineering
MSc in Construction Technology and
Management
CENG 6101- Project Management
1
Introduction
1.1 Construction Industry and Its Management Requirements
 Construction and the ability to build things has transcend from the
most ancient human skills of the Primary age to the modern ages
of Industrialization and Information.
 During the whole of Primary age, the construction industry has
largely related to talents of human beings on how to construct
shelters and small roads and river improvements.
 Generally speaking, the focus during this age is largely on fulfilling
humans' basic needs and major figurative and monumental ones.
3
Introduction
 As the number of humans' enlarge and their demands become
more, a need to fulfill such demands amass and in short period of
time pressed human beings to search for alternatives in order to
live peacefully for their co-existence.
 This leads to creating appropriate technology that develop
progressively in line with increasing productivity.
 This brought the development of society into the Industrialization
age where mass production for assembly is becoming possible.
 This brought different approaches to construction methods and
their completion times
4
Introduction
 This period has mainly created conscious way of technology
improvements for first mass production followed by quality
enhancement and productivity issues.
 Subsequently, the concept of competition such that time, quality
and cost values were starting to govern.
 The development of technology and the concepts of
competitions opened a considerable role for management
functions such as planning, implementing and controlling cycles.
5
Introduction
 The information age which made most cumbersome
mathematical calculations simple and that brought and revealed
many more complex factors involved in construction processes
enhanced the way how construction activities need to be
managed.
 As a result, Management functions have enlarged and become
more important for the construction industry competitiveness
and development.
6
Introduction
1.1 Construction Industry and Its Management Requirements.
 Management
 is defined as the art of arranging and/or organizing various
activities, operating equipment and group of people in a
suitable manner to create systematic operation with continuity
to achieve a common goal.
 As construction is also one of the industries which need the proper
systematic coordination of activities, materials, labor and operating
equipment, therefore managing such industry is necessary.
7
Introduction
 Management
 management also involves the implementation of the function
of management: planning, organizing, implementing and
controlling. These functions are the very essence of
management.
8
Introduction
 What is construction management?
 The management towards coordinating different workmen,
availing the required machinery and material at the right time,
executing the project economically and successfully, and
controlling over the quality, time and sequence of flow of
construction in a well planned and organized manner is called
Construction Project Management.
9
Introduction
 In our world construction resources are scarce, hard to obtain
easily and becoming expensive every day in spite of the fact that
their demand is high. It is this reality which obliged us to utilize
them efficiently and effectively.
10
Introduction
 Construction Management is necessary to insure the:
 proper planning and organization of the works,
 effective use of resources,
 completion of works within estimated budget and specified time,
 timely delivery and utilization of materials,
 necessary quality of the work,
 proper usage of equipment and latest methods of construction
and technology,
11
Introduction
 Construction Management is necessary to insure:
 building up of reputation for high quality of workmanship,
 controlling over the contract agreed upon and specification,
 motivation of people to work to their best and creating an
organization that works as a team,
 taking of sound decisions at the lowest practical management
level through delegation of authorities,
12
Introduction
 Construction Management is necessary to insure:
 proper communication and reporting of the works executed,
 provisions of safe and satisfactory working conditions for all
workers,
 monitoring of the works to be executed against planning,
 proper sequence of flow of construction, and
 proper coordination of the resources to create an organization
that works as wholesome to fulfill the objectives.
13
Introduction
1.2 Functions of Management
Functions of management can be described in four major elements.
14
Introduction
PLANNING:
◦ Deciding in advance :
◦ What to do
◦ How to do
◦ When to do
◦ Who is going to do it
◦ Bridges a gap between where we are today and where we want to reach.
15
Introduction
PLANNING:
◦ Thus, planning is a systematic thinking about ways & means for
accomplishment of pre-determined goals.
◦ Planning is necessary to ensure proper utilization of human &
non-human resources.
◦ It is an exercise in problem solving & decision making.
◦ Involves setting visions, missions and goals of organizations or
projects or programs together with the activities to achieve
them.
◦ All levels of managers develop goals that corresponds to the
efforts of the top management overall goals and strategy.
◦ This requires operational plan aimed at administration and
coordination of stakeholders, processes and resources.
16
Introduction
ORGANIZING:
◦ It is the process of arranging people and physical resources to
carryout plans and accomplishes organizational objectives.
◦ According to Henry Fayol, “To organize a business is to provide it
with everything useful for its functioning i.e. raw material, tools,
capital and personnel's”. To organize a business involves
determining & providing human and non-human resources to the
organizational structure.
17
Introduction
ORGANIZING:
◦ Establishing the framework of working:
◦ How many units or sub-units or departments are needed.
◦ How many posts or designations are needed in each
department.
◦ How to distribute authority and responsibility among
employees
◦ Once these decisions are taken, organizational structure gets
set up
18
Introduction
Organizational structures in the construction industry
◦ Organizational structure is about how to use one of the basic
resource people , and how to facilitate overcoming the
communication barriers at organizational interfaces (Enshassi
1997)
◦Types of organization structures
1. Functional Organization Structure
2. Project-type Organization Structure
3. Matrix Organization Structure
19
Introduction
Functional Organization Structure
◦ A functional organization structure is a hierarchical type
of organization structure wherein people are grouped as
per their area of specialization.
◦ These people are supervised by a functional manager
who has expertise in the same field, which helps him to
effectively utilize the skills of employees, which
ultimately helps him in achieving the organization's
business objectives.
20
Introduction
21
Introduction
◦ The functional organization structure is suitable for an
organization which has ongoing operations and
produces some standard products or goods, such as
manufacturing and production industries.
22
Introduction
Advantages of the Functional Organization Structure
◦ Employees are grouped as per their knowledge and skills,
which helps achieve the highest degree of performance.
◦ Employees are very skilled and efficient because they are
experienced in the same work and hence they perform very
well.
◦ Their role and responsibility is fixed, which facilitates easy
accountability for the work.
◦ The hierarchy is very clear, and employees don't have to
report to multiple bosses. Each employee reports to his
functional manager, which reduces the communication
channels.
23
Introduction
Advantages of the Functional Organization Structure
◦ There is no duplication of work because each department
and each employee has a fixed job responsibility.
◦ Employees feel secure, and therefore they perform well
without any fear.
◦ Since there is a sense of job security, employees tend to be
loyal to the organization.
◦ Employees have a clear career growth path.
◦ Within the department, cooperation and communication is
excellent.
24
Introduction
Disadvantages of the Functional Organization Structure
◦ Employees may feel bored due to the monotonous, repeated
type of work and may become lazy.
◦ If the performance appraisal system is not managed properly,
conflicts may arise. For example, an employee may feel
demoralized when a lower performing employee is promoted.
◦ The departments have a self-centered mentality. The
functional manager pays more attention to only his/her
department; he/she usually doesn't care about other
departments.
25
Introduction
Disadvantages of the Functional Organization Structure
◦ Communication is not good among the departments, which
causes poor inter-department coordination. This decreases
flexibility and innovation. Moreover, there is a lack of
teamwork among different departments.
◦ When the organization becomes larger, functional areas can
become difficult to manage due to their size. Each
department will start behaving like a small company with its
own facilities, culture and management style.
26
Introduction
Projectized Organization Structure
◦ In projectized (Project-type) organizations, organizations
arrange their activities into programs or portfolios, and
implement them through the projects.
◦ The project manager has full power and authority over
resources to be utilized in the project. He controls the budget,
resources, and work assignments.
◦ The project manager has full-time team members working
under his control who directly report him.
◦ When the project is completed the team is disbanded, and
team members and all other resources are released.
27
Introduction
Projectized Organization Structure
28
Introduction
Advantages of a Projectized Organization Structure
◦ Since the team members directly report to the project
manager, there is a clear line of authority. This reduces
conflict, and makes decision making faster and more flexible.
◦ Due to a single reporting system, there are shorter lines of
communication which creates strong and effective
communication within the project management team.
◦ Due to a single authority, less time is consumed in
communication, and response to stakeholders' concerns is
fast.
◦ Team members become versatile and flexible due to
experience in different kinds of projects.
29
Introduction
Disadvantages of a Projectized Organization Structure
◦ Since the project manager has full authority and power over
his team members, he can become arrogant.
◦ In projects, there is always a deadline and usually a tight
schedule, which makes the work environment stressful.
◦ If the organization has multiple projects, there can be poor
communication among them, causing resources to be
duplicated.
30
Introduction
Dis advantages of a Projectized Organization Structure
◦ There is a sense of insecurity among the team members,
because once the project is completed, they feel that they
may lose their jobs. Therefore, they tend to be less loyal
towards the organization.
◦ The cost of employees and equipment can be higher because
we may be hiring skilled people and specialized equipment for
a shorter period of time. Moreover, if the project gets
stretched out, the cost of equipment and other resources can
be much higher.
31
Introduction
Matrix Organization Structure
◦ According to the PMBOK Guide, the matrix organization
is a blend of the projectized and the functional
organization structures
◦ This combination helps organizations to achieve higher
efficiency, readiness, and quick market adaptation.
Moreover, they can respond faster to market or
customer demand, and decrease the lead time to
produce a new product.
◦ This type of structure is most suitable for organizations
operating in a dynamic environment.
32
Introduction
◦ In a matrix organization structure, employees may
report to more than one boss.
◦ The functional manager may look after the functional
part of the project; he may decide how to do the work,
and may distribute the project work among his
subordinates.
◦ The project manager will have authority over the
administrative part of the project such as what to do,
follow-up the schedule, evaluate the performance, etc.
33
Introduction
34
Introduction
Advantages of Matrix Organization Structure
◦ Highly skilled and capable resources can be shared between
the functional units and projects, allowing more open
communication lines which help in sharing the valuable
knowledge within the organization.
◦ The matrix structure is more dynamic than the functional
structure because it allows employees to communicate more
readily across the boundaries, creating a good working and
cooperative environment which helps in integrating the
organization.
35
Introduction
Advantages of Matrix Organization Structure
◦ Employees can learn and widen their skills and knowledge
areas by participating in different kind of projects. The matrix
structure provides a good environment for professionals to
learn and grow their career.
◦ In functional departments employees are very skilled, and
project teams can get these highly skilled employees
whenever their services are needed.
◦ Since there is a sense of job security, employees tend to be
loyal to the organization and perform well, and hence the
efficiency of a matrix organization is higher.
◦ .
36
Introduction
Disadvantages of Matrix Organization Structure
◦ Employees may have to report to two bosses, which adds
confusion and may cause conflict. This usually happens in a
balanced matrix organization where both bosses have equal
authority and power.
◦ A conflict may arise between the project manager and the
functional manager regarding the authority and power.
◦ If the priorities are not defined clearly, employees may be
confused about their role and responsibility, especially when they
are assigned a task which is different from what they were doing.
◦ It is generally seen that matrix organizations have more managers
than required, which make overhead cost high.
37
38
Introduction
IMPLEMENTING:
◦ It is the process where by the actual work is executed. This helps in
executing the task defined in the planning stage with proper
organization system together with monitoring quality, time and
cost of the works.
◦ Proper inspection and supervision, recording data of executed
works, availing all necessary resources at the right place and at the
right time with their proper coordination are necessary to achieve
the required goal efficiently and successfully.
39
Introduction
IMPLEMENTING:
◦ The most important aspect in implementation of works is leading /
directing.
◦ Leading / Directing is:
◦ Giving direction or instruction to employees to get the job done.
◦ Leadership qualities are required.
◦ Motivating employees by providing monetory and non-
monetory incentives.
◦ Communicating with them at regular intervals.
◦ It is that part of managerial function which activates the
organizational methods to work efficiently for achievement of
organizational purposes.
40
Introduction
MONITORING/ CONTROLLING:
◦ It implies measurement of accomplishment against the standards
and correction of deviation if any to ensure achievement of
organizational goals.
◦ The purpose of monitoring/controlling is to ensure that everything
occurs in conformities with the standards. An efficient system of
control helps to predict deviations before they actually occur.
◦ According to Theo Haimann, “Controlling is the process of
checking whether or not proper progress is being made towards
the objectives and goals and acting if necessary, to correct any
deviation”.
41
Introduction
MONITORING/ CONTROLLING:
◦ Effective management can take place when proper planning,
organizing, implementing, continuous communication, feed back
for monitoring/controlling purpose and future planning are carried
out successfully.
◦ Therefore monitoring/controlling has following steps:
◦ Establishment of standard performance.
◦ Measurement of actual performance.
◦ Comparison of actual performance with the standards and
finding out deviation if any.
◦ Corrective action.
42
Introduction
1.3 Management Scopes and Levels
◦ Managers could be classified into different categories depending
upon the scopes and levels of management they are involved in.
Depending on the nature and scope of the job managers are
performing, they can be classified under either
 Functional or
 General managers.
◦ Functional managers are responsible for a work group segmented
according to functions;
◦ General managers involve in managing several different functions
or departments which are responsible for different tasks. While
Functional managers greatest challenge is lack of communication
skill; that of General Managers is technical skills
43
Introduction
◦ Managers exist at various levels in the organizational hierarchy but
are dependent on their sizes and forms. That is, while small
organizations may have only one, big ones several layers.
◦ Generally speaking, a relatively large organization possesses three
levels of managers:
 Top, Middle and First – line or Lower managers and could
resemble pyramidal shape.

 These levels of managers do perform certain job or level –
specific skills which are more important to their respective

levels.
44
Introduction
45
Introduction
◦ From the figure above, Technical skills (the basic knowledge
required to perform a task) are more important to lower
management levels; Human skills(the ability to work well with
other people individually and in a groups) are more important to
middle management levels and Conceptual skills (Abilities which
allow a person to visualize concepts, understand abstract ideas,
solve problems, and understand how systems, programs and ideas
interrelate) are more important to top management levels.
46
 Assignment-1:
 Develop a typical organizational structure
of building projects in Ethiopia to at least
four levels, with a clear description of
responsibilities at each position.
 Discuss: project management ,
construction project management, and
construction technology and
management.
 Submission date will be on Oct. 28/2019
47
Construction Project Management
48
2.1 Projects and Project Management
◦ Three broad categories of projects can be identified (Dennis
Lock, 1987) each with its own characteristics:
 Manufacturing projects,
 Projects requiring external organizations, and
 Management projects.
49
◦ Manufacturing projects: In this category projects involve the
following activities:
 original design work,
 prototype testing, if necessary,
 manufacturing,
 assembling, and
 installation and commissioning
Such projects are often made for a fixed price, promised delivery
dates, and a set of unambiguous/clear data – specifications – that
define the performance.
50
2.1Projects and Project Management
◦ Projects requiring external organizations:
Such projects include civil engineering, construction,
petrochemical, mining, etc; which aims to establish buildings or
operating plant on required sites requiring external or
supplementary organization to the mother organization on these
sites.
◦ Management projects: The employment of an external manager or
managing teams offering services to organizations:
 to ensure effective and efficient management system,
 to ensure efficient installation and start up of new
approaches,
 to follow projects of the above nature on behalf of clients
and / or financiers,
 etc.
51
52
The two types of project management approaches:
I. The traditional project management approach, and
II. The new project management approach
53
54
55
56
57
58
2.2 Process Management
Process management in Construction Projects can be understood using
concepts developed in Project Cycle for Construction Management
Process System and for Project Scope Management.
 Project Cycle
Construction projects are carried out using identified project

phases.
 Phases are defined as the top level breakdown of an entity.
 A construction project is distinctly characterized by a

number of phases or stages during its life cycle though there
may be some overlaps between the characteristics of two
phases.
Can you describe the phases of construction project?
59
60
61
62
 Construction Management Process System
Project cycle
Project Project Project Project
Definition Development Implementation Closing
Project process
Core Processes Concept Definition Concept Design of buildings, Roads, Maintenance Period
Development etc & Physical construction and
works Defect Remedies
Administra- Concept Evaluation Monitoring, Procurement Acceptance, Hand
tive Processes Project Approval and Other Processes Over and
Budget Allocation
Public Right-of-way (if necessary) Tender award Final Approval,
Regulatory and and and
Processes Regulatory Permits Changes and Variation User Permit
63
64
 Project Scope Management
65
A. Scope Definition:
 Project scope definition covers initiating, planning and
verification of the project scope.
 The inputs
 Product Description is a document that contains clear
requirements of the product created or the project final output
/ outcome. This is usually carried out using Demand or Need
Analysis tools and techniques.
 Strategic Plan All projects undertaken in organizations should
be in line with its Strategic Plan and be supportive to its goals.
As a result, the Strategic Plan of the parent organization
undertaking the project should be the input for Project Scope
definition.

66
A. Project Scope Definition:
 The inputs
 Selection Criteria: in a world where financial resources are
scarce, specifically in developing countries like Ethiopia
Project Selection Criteria to prioritize demands are necessary.
They are typical reflections of the merits of the product the
project is creating based on full range of management
concerns such as public perceptions/view, market shares,
investment returns, environmental acceptance, etc. This can
be carried out using project selection methods and
alternative analyses.
67
68
69
 The outputs
 Formal Acceptance: Once the project scope statement is
formulated, the next deliverable of the Project scope is to
inspect and formally accept and approve it by the
stakeholders (Financier or Sponsor; Client, Beneficiaries, etc).
70
71
 The Tools and Techniques
 Alternative Analyses: These are required to make sure
whether the project responds to social responsibility,
economic effectiveness, appropriate technology usage and
legally sound. (Alternative Analyses methods like: SWOT,
Sensitivity analysis, Cost / Benefit analysis etc.)
 Work Breakdown Structure: It is a deliverable oriented
structuring or grouping of project components that organizes
and defines the entire project scope.
72
B. Monitoring Project Scope Changes:
 The inputs
 Project Scope statement: including the project charter/plan;
Performance Reports; and Change Requests.

 Performance Reports: is a measurement and an evaluation of
the performances of the project against set plans whether the

deliverables agreed upon are met or not together with
identifying problems encountered, actions or remedies
required, lessons learned for possible scope changes or
redefinition.
73
 The inputs
 Change Requests: These are requests either to widen or shrink
the project scope; or to justify consequences for problems

encountered. They can either be written or oral; and/or direct
or indirect; and/or externally or internally initiated; and/or
legally mandated or optional.
74
 The outputs
 The outputs: are Revised or Redefined scope statement
incorporating scope changes, and a revised project

charter/agreement with plan; Lessons learned and Corrective
actions.
 The tools and techniques: are Scope Change Monitoring
System, Performance Management, Scope Redefinition.
75
2.3 Stakeholders Management
 Knowing the stakeholders and their characteristics relative
to the project is an important step in stakeholder
management (Cleland, 2002)
 Despite the recognition of stakeholder management as an

important strategy for achieving project success, the
definition of stakeholders is not clearly certain as project
stakeholders have been defined in different ways.
 While some definitions of project stakeholders are criticized

for being too narrow.
 Others suffer criticisms for being too broad.
76
 The following may be taken as general defination:
 Construction project stakeholders are individuals or groups/
organizations who have some aspects of right or ownership in
the project and can contribute to it; or will incur or justifiably
perceive they will incur a direct benefit or loss as a result of
either the works during the project or the outcome of the
project.”
77
78
 Stakeholders' Classification:
Categories stakeholders based on their attributes (Mitchell et al., 1997)
79
 Stakeholders' Classification :
 Dormant stakeholders: Although they have the power to exert
their will, they lack the legitimacy and urgency to make any claim
on the project. Their power therefore will remain unused and may
not exert any pressure on the project.
 Discretionary stakeholders: They have the attribute of legitimacy

but do not have power and urgency hence cannot mount pressure
on the project management team to actively engage them.
However, when they form alliance with other stakeholders, they
could mount some pressure on the project. (e.g. Beneficiary of the
project)
 Demanding stakeholders: This class of stakeholders have the

attribute of urgency but lack the attributes of power and legitimacy.
The demanding nature of their stakes makes them to require
management attention because they could become more
problematic when they are able to form alliance with other
stakeholders. (e.g. people with unjustified ill will, serial complainers)
80
 Dominant stakeholders: These stakeholders have the attributes of
both power and legitimacy and lack the attribute of urgency of
claim, thereby making them to occupy an important place in
management's consideration of stakeholders' needs. (e.g. Boards
of directors, HR department, public relations)
 Dangerous stakeholders: They have the attributes of power and

urgency but lack that of legitimacy. This places them in the
position of having the possibility to not only seek alliance but also
to be coercive and violent in opposing the project. (e.g. employee
sabotage or coercive/using force)
 Dependent stakeholders: These stakeholders have the attributes

of urgency and legitimacy but lack that of power. This makes them
to be dependent on other stakeholders for the necessary power
they need to impose their will on the project. (e.g. local residents )
81
 Definitive stakeholders: These are the stakeholders that have
all three attributes of power legitimacy and urgency. These will
already be members of the dominant decision making group
for the project and their definitive character makes it possible
for them to influence/win managers' immediate priority and
attention. They are very capable of imposing their will on the
project.
82
2.4 Resources Management
 The following are the common resource to be considered in
most of the construction projects:
 Human Resources / Labor or Workmen
 Financial Resources / Fund
 Information Resources
 Physical Resources such as Materials,
Equipment and Other Assets
83
Human resource management
 No single definition of HRM. Some of the definitions include:
Human Resource Management encompasses those activities
designed to provide for and coordinate the human resources of an
organization.
 Traditionally know as ”personnel administration” or ”personnel
management”
 HRM is the process of managing people in a company as well as
managing the existing inter-personal relationships.
 According to Invancevich and Glueck : “HRM is concerned with the
most effective use of people to achieve organizational and
individual goals.”
84
 According to Milkovich and Boudreau : “HRM is a series of
integrated decisions that form the employment relationship; their
quality contributes to the ability of the organizations and the
employees to achieve their objectives.”
 Thus, HRM is a combination of people oriented management
practices that views employees as assets, not costs.
85
 Objectives of HRM
 The primary objective of HRM is to ensure the availability of
competent and willing workforce to an organization. Specifically,
We can classify the objectives into four major category as:
86
 1) Societal Objectives: seek to ensure that the organization
becomes socially responsible to the needs and challenges of the
society. (that is the legal, ethical, and social environmental issues
are properly attended to. Equal opportunity and equal pay for
equal work are the legal issues not to be violated).
 2) Organizational Objectives: HRM is a means to achieve
efficiency and effectiveness in the organization. It serves other
functional areas, so as to help them to attain efficiency in their
operations and attainment of goals to attain efficiency. Acquiring
right man for the right job at right time in right quantity,
developing through right kind of training, utilizing the selected
workforce, and maintaining the workforce are the organizational
objectives of HRM.
87
 3) Functional Objectives: is to maintain the department's
contribution at a level appropriate to the organization's needs.
 4) Personnel Objectives: In today's world there is shortage of
requisite talent. Employees are encouraged by competitive firms
to change the jobs. HRM has the responsibility to acquire,
develop, utilize, and maintain employees.
88
Construction Project
Management
Functions of the HRM
 Manpower planning
◦ Expected work load
◦ Current company human force
 Number, and capability/competency,
 Commitment &motivation, etc
◦ Forecasted turnover
 Normal turnover, Planned staff movements,
 retirements, etc
89
Functions of the HRM
 Selection and recruitment of employees
 Job requirement (job description)
 Physical and mental characteristics applicants must possess
 Qualities and attitudes are desirable
 Motivate and employee services

 Reward employees
 Working Environment, welfare, employee benefits, etc
 Money is not the only motivator
 Empower employees
 Schemes for occupational sick pay, special leaves, etc
 Provision of canteens and other catering facilities
 The rehabilitation of injured/unfit/ disabled employees and
temporary or permanent move to lighter work

 Opportunities to make decisions
90
Resources Management
 Financial Resources / FUND:
 One of the basic resources in the construction industry is
Fund, which 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.
91
 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 mater.
92
 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.
93
 Information Resources:
 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.
94
 Physical Resources:
 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.
95
 EQUIPMENT: These days various plants, equipment, tools etc.,
are used very often in construction activities. Provision of
equipment replace the hard work that can be made by human
labor taking much time with in reasonable period of time.
 Therefore it increases efficiency and economy. 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.
96
 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.
97
 Performance Management
 Performance is understood as an integral part of Construction
project management system that:
 works for a reasonable balance among its three major
purposes: Accountability; Trend or Progress Assessment; and

Learning: This is related to the two contending performance
demands: Success and/or Failure, or Poor and/or Good
Performances;
 sets baseline for progress monitoring during Project
Definition: That is, the Performance Criteria
98
Performance Management
 uses objective and subjective measurement & evaluation
techniques during Project implementation and after

completion: That is, Performance Measurement, Monitoring
and Evaluation.
 considers process - result orientations within the result -
outcome interface limits of the project: and hence

Uncertainties Changes and Risk Management became a vital
contribution, and
 Consider both the Critical Failure and Success Factors.
99
 works for a reasonable balance among its three major
purposes: Accountability; Trend or Progress Assessment; and

Learning: This is related to the two contending performance
demands: Success and/or Failure, or Poor and/or Good
Performances;
 sets baseline for progress monitoring during Project
Definition: That is, the Performance Criteria
100
 uses objective and subjective measurement & evaluation
techniques during Project implementation and after

completion: That is, Performance Measurement, Monitoring
and Evaluation.
 considers process - result orientations within the result -
outcome interface limits of the project: and hence

Uncertainties Changes and Risk Management became a vital
contribution, and
 Consider both the Critical Failure and Success Factors.
101
Management
 Success and Failure
 One of the vaguest concepts of project management is project
success. Although it is probably the most frequently discussed
topic in the field of project management, yet it is the least
agreed upon even though for more than two decades,
researchers have labored to identify managerial variables
critical to project success (Pinto and Slevin 1988).
102
Management
 Since each individual or group of people who are involved in a
project have different needs and expectations, it is very
unsurprising that they interpret project success in their own
way. For example a project that met budget and schedule
constrains but did not meet customer needs and
requirements may be considered as successful (Baker et al.
1988).
103
Management
 Furthermore, delays in completion of projects are common
but they could still be considered successful.
 For example the Sydney Opera House project
construction was originally scheduled for four years,

with a budget of AUS $7 million but the project
ended up taking 14 years to complete and cost AUS
$102 million. Yet it is one of Australia's iconic
buildings and is recognized around the world and has
become a global symbol of Australia (Paol and Jonas
2009).
104
Management
 Performance evaluation Criteria.
 Performance evaluation are the measures by which success or
failure of a project or business is judged (de Wit 1998).
Traditionally, the criteria for measuring project success had
been adjudged to be scheduled time, budgeted cost and
required quality also known as 'The Iron Triangle' (Atkinson
1999, Chan 2001, Cooke-Davies 2001, Koelmans 2004).
105
Management
 Performance evaluation Criteria.
 However, as project management practices and theories
developed through the decades, researchers have suggested
the inclusion of additional performance evaluation criteria to
evaluate construction project execution from a more balanced
perspective. For instance, safety of the project site (Hare et al.
2006; Haslam et al. 2005; Illias2000), environmental impact
(Eriksson and Westerberg 2011) and
community/client/customer satisfaction (Ali and Rahmat
2010; Chan and Chan 2004) etc. have been suggested by
researchers.
106
Management
Summary of Performance evaluation Criteria
S.No. Authors Success criteria
Time and cost, Budget / Financial performance/ profitability,
Health and safety, Quality , Meeting technical performance
Parfitt and specification and functionality, Satisfaction of client/ customer,
1
Sanvido (1993) Contractor, project manager/ Team satisfaction, Expectation /
aspiration of client/ contractor/project manager/ team
satisfaction.
Shenhar et Project efficiency, Impact on customer, Direct and business
2 al.(1997) success, Preparing for the future.
Lim and Zain Time ,Cost, Quality, performance and safety
3
Mohamed (1999)
Westerveld Time and cost, Quality, Project objectives/ Goal attainment
4 (2003) (technical), Satisfaction of client/ customer, contractor, Project
Manager/ Team satisfaction
Project cost, project duration, Satisfying the customer’s needs,
5 Bryde and Satisfying the needs of stakeholders (other than customers) and
Robinson. (2005) Meeting the technical specification.
quality , schedule, budget, Customer Satisfaction, Functional
6 Al-Tmeemy et Requirements, Revenue and Profits, Competitive Advantage,
al.(2010) Market Share and Reputation.
Time, Cost and Quality Management; Satisfaction, Health and
7 Adinyira et al. environmental Safety; User Affordability and Design
(2012) Consideration; and Cost of Individual Units and Technology.
Users satisfaction on product, Fitness for purpose, Project
functionality, Value for money, Meets pre stated objectives ,
8 Dosumu and Stakeholders needs and expectation, Exploration of technology,
Onukwube Increase level of professionalism, Develop new knowledge and
(2013) expertise, Benefit to end users, 107
Management
108
Management
109
Management
110
Management
111
Management
 Project Time Management.
 The construction planning may consist of the following steps:
2. Determination of job activities (WBS)
112
Management
113
Management
 The construction planning may consist of the following steps:
3. Job Logic /Sequential Relationships/ or Precedence
Precedence Relations for a Nine-Activity Project Example

Activity Description IPA
A Site clearing ---

B Removal of trees ---
C General excavation A
D Grading general area A
E Excavation for utility trenches B,C
F Placing formwork & reinforcement for concrete B,C
G Installing sewer lines D,E
H Installing other utilities D,E
I Pouring concrete F,G
114
Management
Act. IPA
A -
B A
C A
D A
E B
F B,C
G C,D
H E,F
I G,H 115
 Assignment-2:
 Develop work breakdown structure
(WBS) of building project in Ethiopia and
then develop a responsibility assignment
matrix (RAM) for the same project.
 Submission date Nov.4/2019
116
Management
 Project Scheduling:
 It is the determination of timing and sequence of
operation in the project and their assembly to give the
overall completion time
 This process may uncover flaws in the plan leading to
the revision but still the planning form the first in the
hierarchy.
 This process is fairly systematic and scientific, without
a schedule the project has a higher probability of
delay, cost overrun and sometimes dispute to follow.
117
Management
118
Management
119
Management
120
Management
121
Management
122
Management
123
Management
124
Management
125
Management
126
Gantt (Bar) Chart
The bar chart is graphical representation of project schedule
They are easy to understand and very useful in reviewing
progress.
It is one of the oldest methods and an effective technique for
overall project planning.
These charts were developed by Henry L. Gantt during the World
War I and accordingly these are also sometimes referred to a Gantt
chart.
 They give an idea of duration of activities / project and hence can
be useful in preparing strategy for working.
 In a bar chart the activities are shown as horizontal bars on a
horizontal time scale, where the start and end locations of the
bars coincide with the start and finish dates of the activities.
 A bar chart representation of the illustrative example given in
Figure below
Gantt (Bar) Chart
Gantt (Bar) Chart structure:

task
T1
T2
T3
T4
T5
T6
T7
T8
T9
day 1 day 2 day 3 day 4 day 5 day 6 day 7 day 8 day 9 day 10 day 11
time
Task and its duration
Gantt (Bar) Chart

task
T1
T2
T3
T4
T5
T6
T7
T8
T9
time
Phases, tasks groups:
Gantt (Bar) Chart

task
T1
T2
T3
T4
T5
T6
T7
T8
T9
time
Gantt (Bar) Chart

task
T1 100% complete
T2 90%
T3 80%
T4
T5 0%
T6
T7
T8
T9
time
Project performance analysis
Line of Balance
Many types of projects contain repeated blocks of activities. Examples
of these kinds of projects include road and high-rise construction. In both of
these types of projects there is a set of tasks repeated across many work
areas.
For this type of projects the LOB is used to calculate the required
resources for each stage of production so that succeeding stages are not
delayed and the target out is achieved maintaining continuity in the use of
resources (i.e. the Line-of-Balance method result in a common understanding of how crews
follow one another through the job work areas.)
Activity A has a total duration of 10 weeks. Spread across each
of the work areas the productivity of Activity A can be shown
to be 2 weeks per floor.
Now consider the implication of an Activity B that has a productivity of
one week per floor. If we try to start Activity B as soon as possible, then the
start of activity B on the first floor can occur at the end of week 2
The breaks in the Activity B line, shown as red dashed lines above, are significant.
This gap means that the crew is waiting around for Activity A to clear out before it
can start. In the case of the project above, starting work as soon as you can will
result in a lost productivity of 4 crew weeks
The diagram below shows that you should delay starting Activity B for four
weeks. If you do that, then you will keep the crew productive for their
entire stay on your project. but you would likely not start Activity B as
soon as it could start!
Network diagrams
show the precedence relationships among activities. It's
easier to understand these relationships graphically
help to understand the flow of work in a project
are a useful tool for project planning and control, as well as
for scheduling
The application of network
techniques
It is quite impossible to list all the applications of networks since the
technique is now used extremely widely
 Construction,
 Town planning,
 Marketing,
 Shipbuilding,
 Modification programmes,
 Plant layout etc.
Activity-on-Arrow (AOA) networks
Elements of an activity- on –arrow diagram.
 An activity, which is an element of the work entailed in the project.
 An event, which is the start and/or finish of an activity or group of
activities.
Conventions adopted in drawing AOA networks.
There are only two conventions usually adopted in drawing
networks
i. Time flows from left to right.
ii. Head nodes always have a number higher than that of the tail
node.
The graphical representation of events and activities in
AoA
 Nodes are represented by labels within convenient geometric shapes –
usually circles.
 Activities are represented by arrows, the arrow-heads being at the
completion of the activities.
 AOA allows only for the finish to start relationship.
 The length and orientation of the arrow are of no significance
whatsoever, being chosen only for convenience of drawing.
 The activity of digging a hole can equally well be represented by the
following Fig.
It is equally not essential that arrows should be straight,
The representation of time
The expected time that will be required to carry out an
activity (the duration time) is written as a central subscript
to the activity.
If an activity must, for some reason external to the

network, be completed by a given date, then an inverted
triangle can be drawn above the node at the head of the
activity arrow
Identification of activities
The node at the beginning of an activity is known as a 'tail'
or 'preceding' node, while that at the conclusion of an
activity is known as a 'head' or 'succeeding' node.
Fundamental properties of events and activities
If activity B depends upon activity A, then the two activities
are drawn as
while if activity C is also dependent upon activity A, but is

not dependent on activity B, then the three activities are
drawn as
This dependency rule gives rise to two fundamental
properties of events and activities:
1. An event cannot be said to be realized (or 'be reached'
or 'occur') until all activities leading into it are complete.
(event 11 can only be said to occur when activities 7-11, 8-11 and 9-11 are all complete)
2. No activity can start until its tail event is realised.
Thus, activity 10-1 1 cannot start until event 10 is
realised.
'Merge' and 'burst' nodes
Events into which a number of activities enter and one (or
several) leave are known as 'merge' nodes.
Events that have one (or several) entering activities
generating a number of emerging activities are known as
'burst' nodes
Two errors in logic
Two errors in logic may come about when drawing a
network, particularly if it is a complicated one. These are
known as looping and dangling.
looping
dangling
'all nodes, except the first and the last, must have at least
one activity entering and one activity leaving them' and 'all
activities must start and finish with a node'
Dummy Activity:
An artificial activities which do not require resources and
have zero time duration that only shows a precedence
relationship among activities
They are drawn as broken or dotted arrows
For example, if in making a cup of instant coffee two
activities
'boil water' and
'heat milk' could proceed simultaneously,
Boil water
This would result in two activities having the same head

and tail numbers
it is preferable to avoid confusion by the introduction of a
dummy
Another example
^^^^^^^^^^^^^^^^^^^^
156
Process for Creating AOA Diagrams
1. Find all of the activities that start at node 1. Draw their finish
nodes and draw arrows between node 1 and those finish
nodes. Put the activity letter or name on the associated
arrow.
2. Continuing drawing the network diagram, working from left
to right. Look for bursts and merges.
3. Continue drawing the project network diagram until all
activities that have dependencies are included in the
diagram.
4. As a rule of thumb, all arrowheads should face toward the
right, and no arrows should cross in an AOA network
diagram.
Example:
Construct an AOA networks for the activities listed in the
following table:
Activity Predecessors
A -
B -
C A,B
D C
E C
F D
G D,E
Activity Predecess
ors
A -
B -
C A,B
Solution D C
E C
F D
G D,E
Estimating duration for an activity
The time required to complete an activity should
depend not only on the quantum of work to be
executed (Q) but also the resources allocated (R) and
the (unit) productivity of the resources (P).
Simply put, the time required (T) to complete an
activity can be calculated using the following
relationship, provided care is taken to ensure proper
units for all the quantities.
T = Q / (RxP)
For example, the time taken to paint 100 m2 (Q) using 2
painters (R) and assuming each painter can do 5 m2 in an
hour (P), is simply 10 hours (T).
Life in real projects is however, not as simple, and there
could be uncertainties involved in the estimation of
quantities, resources, and the productivity of a resource.
It is really a very challenging task to estimate the
productivity of a particular resource. as it is dependent on
a number of parameters
quality of management
technological changes
workforce knowledge and skill resulting from training and
experience etc.
Statistical data stored over a period of time for a number
of similar construction projects plays an important role in
the estimation of the three parameters namely, Q, R, and
P and consequently helps in estimating the duration of an
activity.
Activities relationships
Types of activities relationships
Four types of relationships among activities are:
 a) Finish to start (FS).
 The successor activity can begin only when the current activity
completes.
 b) Finish to finish (FF).
 The finish of the successor activity depends on the finish of the
current activity.
 c) Start to start (SS).
 The start of the successor activity depends on the start of the
current activity.
 d) Start to finish (SF).
 The successor activity cannot finish until the current activity starts.
Activities relationships
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)
Start and finish times
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)

Scheduling Computations
(Forward Pass Rules)
Rule 1 : The initial project event is assumed to occur at time
zero.
Rule 2 : All activities are assumed to start as soon as
possible, that is, as soon as all the predecessor
activities are completed.
Rule 3 : The early finish time of an activity is merely the sum
of its early start date and the estimated activity
duration.
Rule 4 : At merge point, the early start is the largest value of
the preceding early finish time.
Scheduling Computations
(Backward Pass Rules)
Rule 5 : The late start date of the last activity is equal to
its early start date.
Rule 6 : The late start date for other activities found by
subtracting the activity duration from the late
start date.
Total and Free Float
Total Float (TF)
The total number of days that the activity can be delayed
without delaying the total project
Free Float (FF)
without delaying the successor activity
 (i.e.the amount of time that an activity can be delayed without
taking float away from any other activity.)
Total Float and Free Float will be zero in critical path of
the schedule
Critical Path Method (CPM),
Definition:
Critical Path Method (CPM), is a procedure for using
network analysis to identify those tasks which are on the
critical path: i.e. where any delay in the completion of these
tasks will lengthen the project timescale, unless action is
taken.
Critical path (CP) is Longest sequence of activities in a
project plan which must be completed on time for the
project to complete on due date.
Critical Path Method (CPM),
For CPM, activity durations are considered more
deterministic than a probabilistic .
Accordingly ,instead of the three time estimates for an
activity, in CPM single time estimate for an activity is
adopted.
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
Critical Path Method (CPM)
3
Example-1
B D
7
2
A F
1 2 5 6
3 8
C
E
7
4
4
Activity on Arrow (AOA)

Early Start Date Calculation
ES LF
ES= Early Start
LF= Late Finish
3
B D
7
2
A F
1 2 5 6
3 8
C
E
7
4
4
Forward Pass
Early Start Date Calculation
ES LF
ES= Early Start
5 LF= Late Finish
B D
0 3 14 22
7
2
A F
1 2 5 6
3 8
C
7 E
7
4
4
Forward Pass
Late Finish Date Calculation
ES LF
ES= Early Start
5 7 LF= Late Finish
B D
0 0 3 3 14 14 22 22
7
2
A F
1 2 5 6
3 8
C
7 7 E
7
4
4
Backward Pass
Critical Path
ES LF
ES= Early Start
5 7 LF= Late Finish
B D
0 0 3 3 14 14 22 22
7
2
A F
1 2 5 6
3 8
C
7 7 E
7
4
4
Critical Path
Illustration for TF and FF calculation
Total Float
Total Float in an activity (i,j) [TF(i,j)]
Total float is the amount of time by which the start of an
activity may be delayed without causing a delay in the
completion of the project. This is calculated as (TF(i,j) =
[LST(i,j)]– [EST(i,j)]) or ([LFT(i,j)]– [EFT(i,j)])
Free Float
Free float is the amount of time by which the start of an
activity may be delayed without delaying the start of a
following activity.
Free Float = (Earliest start time of the following activity –
Duration of the activity – Earliest start time of the activity)
that is
Free Float = TEj- TEi -D
Illustration for EST, EFT, LST, LFT,TF, and FF calculation
 Example : For the project indicated below, Activity Duration, Days Preceding Activity
 A. Develop a clear logic network for the A 3 ---
B 2 ---
activities.
C 5 A
D 4 A
 B. Show the critical path. E 6 B, C
F 2 B, C
G 3 D, E
 C. Using tabular format calculate the H 2 D, E
event, activity, total and free float times. I 7 F, G

J 5 H, I
181
Illustration for EST, EFT, LST, LFT,TF, and FF calculation
C. Using tabular format calculate the event, activity, total and free float times.
Activity Duration EST EFT LFT LST TF FF
A 3 0 3 3 3 0 0
B 2 0 8 8 6 6 6
C 5 3 8 8 3 0 0
D 4 3 14 14 10 7 7
E 6 8 14 14 8 0 0
F 2 8 17 17 15 7 7
G 3 14 17 17 14 0 0
H 2 14 24 24 22 8 8
I 7 17 24 24 17 0 0
J 5 24 29 29 24 0 0
182
EXAMPLE
 Calculate EST, EFT, LST, LFT,TF, FF in respect of all the
activities of the net work shown below
2
2 4
1 4 5
6
5
3
3
PERT
PERT
PERT ( Program Evaluation and Review Technique) is
commonly used in manufacturing industry especially in the
research and development types of programs.
It is assumed that activities and their interdependence are
well defined though it recognizes uncertainty in the time
estimate of an activity.
PERT incorporates uncertainties in activity durations by
requiring three durations for each activity.
the most probable,
the optimistic (shortest), and
the pessimistic (longest) duration.
PERT
The optimistic Time estimate(to)
This is the shortest possible time in which an activity can
be completed , under ideal condition. This particular time
estimate represent the time in which we could complete
the activity or job if everything went along perfectly , with
no problems or adverse effect.
The pessimistic Time estimate(tp)
This is the maximum possible time it could take to
accomplish the job. If everything went wrong and abnormal
situations prevailed this would be the time estimate for the
activity.
PERT
The most Likely time estimate(tm) or most probable time :
Is the time that in the mind of the estimator , represents
the time the activity would most often require if normal
conditions prevail .
 It lies between the optimistic and pessimistic time
estimate
It assumes that things go in the normal way with a few
setbacks , usual lapses in deliveries, no dramatic
breakthrough, etc
PERT
Example of three time estimate
For an activity “design foundation”
the optimistic time = 14 days
the most likely time = 18 days and
the pessimistic time estimates = 28 days
The PERT technique assumes that the three time
estimates of an activity are random variables and the
frequency distribution of duration of an activity takes the
shape of Beta distribution
Beta distribution for the activity 'design foundation'
Expected Time te
te=19
to=14 tm=18 tp=28
Activity duration (in days)

PERT
The average or expected time te is given by
te= (to+4tm+tp)/6
For the case of 'design foundation', t e can be worked out
to be 19 days [(14 + 4 x18 + 28)/6].
PERT
It is often difficult to arrive at one activity-time
estimate; three subjective definitions of such
estimates do not help the matter (how optimistic and
pessimistic should one be).
Nevertheless, the three time estimate also provides
the advantages of ascertaining the variability or
uncertainty associated with a particular set of
estimate.
PERT
Example :
Calculate the total project completion time and determine
the critical path for the following PERT network diagram.
3 10-
9 1 2-1
- 6- 4
3
2-4-6 4-6-8
1 2 12 5 6
-1
4 -1
6 6-9
3-
4
PERT
For example, suppose we have two sets of estimate
provided by the different estimator for the same 'design
foundation' activity.
In order of (t0, tm,tp), let the first set of estimate (14, 18,
28) and the other set of estimates be (17, 18, 25).
There is large variability in the estimates of first estimator
compared to the second one, even though the expected
or average activity duration turns out to be 19 in both the
cases .
PERT
In order to measure the uncertainty associated with the
estimate of duration of an activity, the standard deviation
(St) and the variance Vt are determined, which in PERT
are defined as:
St = (tp-to)/6 and
Vt = (St)2
The formula for St indicates that it is one sixth of the
difference between the two extreme time estimates.
PERT
Further, the greater the uncertainty in time estimates,
the greater the value of (tp-to), and the more spread out
will be the distribution curve.
A high St represents a high degree of uncertainty
regarding activity times. In other words there is a greater
chance that the actual time required to complete the
activity will differ significantly from the expected time t e.
PERT
For the two sets of estimate used in 'design foundation'
activity, the St and Vt would be 2.33 days and 5.44
respectively for first set of estimates while 1.33 days and
1.77 are the corresponding values of St and Vt for the
second set of estimates.
The expected length or duration of project Te is
calculated by summing up the expected duration t e's of
activities on the critical path.
PERT
The critical path is determined following the forward pass
and backward pass explained earlier.
The variance associated with the critical path is the sum
of variances associated with the activities on the critical
path.
PERT
In case, there is more than one critical path in a project
network, then the path with the largest variance is
chosen to determine the VT and ST. Mathematically,
Te= ∑te
VT = ∑Vt and
ST=√VT
PERT
VT and ST represent variability in the expected project
duration. The higher the VT and ST values, the more likely
it is that the time required to complete the project will
differ from the expected project length Te.
As was pointed earlier, to, tm, and tp are assumed to be a
random variable following Beta distribution in the PERT
technique.
PERT
Now that, te is the weighted sum of to, tm, and tp, it is also
treated as a random variable. Since, T e is the sum of te's it
indeed is a random variable.
The distribution of Te follows normal distribution
according to the Central Limit Theorem of statistics.
PERT
The behavior of normal distribution is well known and a
number of inferences can be drawn which could be useful
to a planner or a project manager.
For example, it is possible to compute the probability
(index) of whether a project (or a key stage therein) will
be completed on or before their schedule date(s).
PERT
Suppose, it is required to compute the probability of
completing the project within a target duration of TD
days.
Now given the Te of the project it is possible to
calculate the deviation of TD from Te in units of
standard deviation.
This is calculated from the normal distribution table.
To adopt the table, a ratio called the standardised
deviation or more often the normal deviate, Z, is
derived. Z is defined as the ratio of the difference in
TD and Te to ST. Mathematically, Z= (TD- Te)/ ST,
Example: PERT Diagram
E (5,14, 17)
30 50
13
B (2,5,14) H(1, 4,7)
2 F (2,5,14) 2
6 D (1,2,3) 6
A
A (3,12,21) C (6, 15, 30) 40 G (4, 5, 12) 60
10 20
4
12 16 6
Expected duration, standard deviations
and variances for activities
Duration (days) Expected Standard Variance
Activity Optimisti Most Pessimisti duration deviation St Vt = (St)2
Id c likely c duration (days) te= (t -t )/6
= p o
duration duration tp (to+4tm+tp)/6
to tm
Col 1 Col 2 Col 3 Col 4 Col 5 Col6 Col 7

10-20 3 12 21 12 3 9
20-30 2 5 14 6 2 4
20-40 6 15 30 16 4 16
30-40 1 2 3 2 1/3 1/9
30-50 5 14 17 13 2 4
40-50 2 5 14 6 2 4
40-60 4 5 12 6 4/3 16/9
Computation of early occurrence
and late occurrence times
No Early occurrence time Late occurrence time Slack
de
10 0 12-12=0 0
20 0+12=12 Min of [(21-6)=15 and (28 0
-16)=12]=12
30 12+6=18 Min of [(34-13)=21 and (28 3
-2)=26]=21
40 Max of [(12+16)=28 and Min of [(36-6)=30 and (34 0
(18+2)=20]=28 -6)=28]=28
50 Max of [(18+13)=31 and 36-2=34 0
(28+6)=34]=34
60 Max of [(34+2)=36 and 36 0
(28+6)=34]=36
Now, the problem of computing the probability of
meeting target duration (TD), such as 42 days shown in
the figure is quite simple. Since the total area under the
normal curve is exactly one, the cross hatched area under
the normal curve is directly the probability that the actual
completion time, will be equal to, or less than, 42 days.
In this case Z= (TD- TE)/ ST, = (42-36)/ 5.48 = 1.09

standard deviations.
In other words, the target duration TD is 1.09 standard
deviations greater than the expected time TE=36 days.
The equivalent probability P(Z=1.09) can be read off
aCumulative probability for the Standard Normal
Distribution.pdf . This corresponds to a probability of
0.862 (86.2%)which implies that there is a 86.2% chance
that the project will get completed within 42 days.
Meeting a Target Duration TD
1.09 Standard Deviations
P(t  42 days)
 86.2%
36 42
Time - days
0 Standard Deviations
P(t  36 days)
 50%
36
36
Time - days
-0.55 Standard Deviations
P(t  33 days)
 29.1%
33 36
Time - days
Assuming that time now is zero, one may expect this
project to end at time 36 days (corresponding
probability of achieving this target being 50%,
verify!!! Hint: TD=36, TE=36 ); and the probability that
it will end on or before the target duration of 42,
without expediting the project is approximately
86.2%.
On the other hand, if one were to schedule towards
TD= 33 days; herein TD<TE; i.e. Z=-0.55 (Note the
negative sign); the corresponding probability would
be 0.291.
In the above, the phrase 'without expediting' is very
important.
In certain projects schedules always may be met by
some means or another,
for example,
by changing the schedule,
by changing the project requirement,
by adding further personnel or facilities, etc.
However, here it is implied that the probability being
computed hereinabove is the one that the original
schedule will be met without having to expedite the
work in some way or another.
The feature in PERT on the computation of probability of
completing the project in a particular duration is quite
useful especially for negotiating the duration with an
owner by the executing agency.
For example, while agreeing on a particular duration, the
executing agency would like to judge his chances on
completing the project in that duration.
For being reasonably sure of a particular duration, he
would like to attain a probability of more than 95%.
Thus for the same example, suppose the executing
agency is asked to provide the projected duration for
the project, the agency would find out the duration
corresponding to Z(P=0.95)= 1.65, thus the target
duration for this case could be TD= TE + 1.65 x ST= 36
+ 1.65 x 5.48= approximately 45 days. In other words,
the executing agency would be quite confident of
completing the project in 45 days.
Question
1. The following figure shows the network for a
construction project, with the three time estimate of
each activity marked.
› Determine:
a) Critical Path and standard deviation
b)Probability of completion of project in 40 days.
c) Time duration that will provide 95% probability
of its completion time.
Example: PERT Diagram
(3,5, 13) (2, 4,6) 8
7
3
(2, 3, 10)
)
20
1,
,1
(0
(8
,0,
A (2,5,8) 0) 4 (7, 10, 13) 6
2 (4, 7, 16)
1
4
(4, )
9,2 , 17
0) ,7
(3
5
Precedence Diagram Method
(PDM)
PRECEDENCE NETWORK
A precedence network diagram – a task network for
a project made with boxes and realtionship lines.
It resembles an AON diagram with activities on nodes
or boxes and precedence relationship shown as
arrow.
Numbering of activity, Forward and Backward passes
also follows rules similar to that followed in PERT and
CPM
PRECEDENCE NETWORK
 Time estimate for the activity could be one time
estimate or three time estimate
 But the three time estimate needs to be converted
into single time before using in the network
Example-1
ES EF
Activity (Duration)
LS LF
B (2) D (7)
A (3) F (8)
C (4) E (7)
Activity on Node (AON)
PDM (Forward Pass)
ES EF
Activity (Duration)
LS LF
3 5 5 12
B (2) D (7)
0 3 14 22
A (3) F (8)
3 7 7 14
C (4) E (7)
PDM (Backward Pass)
ES EF
Activity (Duration)
LS LF
3 5 5 12
B (2) D (7)
5 7 7 14
0 3 14 22
A (3) F (8)
0 3 14 22
3 7 7 14
C (4) E (7)
3 7 7 14
PDM (Critical Path)
Critical Path
ES EF
Activity (Duration)
LS LF
3 5 5 12
B (2) D (7)
5 7 7 14
0 3 14 22
A (3) F (8)
0 3 14 22
3 7 7 14
C (4) E (7)
3 7 7 14
Total and Free Float
Total Float
without delaying the total project
Free Float
without delaying the successor activity
Total Float and Free Float will be zero in critical path of
the schedule
Total Float Calculation
Total Float (TF) = LS- ES = LF-EF
Critical Path
ES EF
Activity (Duration)
LS LF
3 5 5 12
B (2) D (7)
5 7 7 14
TF = 5-3=2 TF = 7-5=2
0 3 14 22
A (3) F (8)
0 3 14 22
TF = 0
3 7 7 14
C (4) E (7)
3 7 7 14
TF = 0 TF = 0
Free Float Calculation
Free Float (FF) = ESJ-EFI
Critical Path
ES EF
Activity (Duration)
LS LF
3 5 5 12
B (2) D (7)
5 7 7 14
FF = 5-5=0 FF = 14-12=2
0 3 14 22
A (3) F (8)
0 3 14 22
FF = 3-3=0
3 7 7 14
C (4) E (7)
3 7 7 14
TF = 7-7=0 FF = 14-14=0
Precedence Diagram Method Example-2
WBS Code Activity
Early Start (ES) Late Start (LS)

Duration
Early Finish (EF) Late Finish (LF)
Total Float (TF)
Activity Node
227
Simple Project consisting of 5 Tasks
WBS Code Activity WBS Code Activity
Activity A Activity B
Early Start (ES) Duration Late Start (LS) Early Start (ES) Duration Late Start (LS)
Early Finish (EF) 7 Late Finish (LF) Early Finish (EF) 5 Late Finish (LF)
Total Float (TF) = Total Float (TF) = WBS Code Activity

Activity D
Early Start (ES) Duration Late Start (LS)
Early Finish (EF) 3 Late Finish (LF)
WBS Code Activity

Activity C Total Float (TF) =
Total Float (TF) =
WBS Code Activity

Activity E
Total Float (TF) =
228
Project Start Date & Task Durations are known
0

Activity D
WBS Code Activity

Total Float (TF) =
WBS Code Activity

Activity E
Total Float (TF) =
229
Early Finish = Early Start + Duration
0
7
Activity D
WBS Code Activity

Total Float (TF) =
WBS Code Activity

Activity E
Total Float (TF) =
230
Early Start With Single Predecessor
0
7
7
Total Float (TF) =
12
Total Float (TF) = WBS Code Activity
Activity D
WBS Code Activity

7
9
Total Float (TF) =
WBS Code Activity

Activity E
Total Float (TF) =
231
Early Start With Multiple Predecessors
0
7
7
Total Float (TF) =
12
Activity D
12
WBS Code Activity

15
7
9
Total Float (TF) =
WBS Code Activity

Activity E
Total Float (TF) =
232
Start-to-Start Relationships (A to E)
0
7
7
Total Float (TF) =
12
Activity D
12
WBS Code Activity

15
7
9
Total Float (TF) =
WBS Code Activity

Activity E
0
3
Total Float (TF) =
233
Completed FORWARD Pass
0
7
7
Total Float (TF) =
12
Activity D
12
WBS Code Activity

15
7
9
Total Float (TF) =
WBS Code Activity

Activity E
0
3
Total Float (TF) =
234
Start the BACKWARD Pass
0
7
7
Total Float (TF) =
12
Activity D
12
WBS Code Activity

15 15
7 2
Early Finish (EF) Late Finish (LF)
The last activity
9
Total Float (TF) = Early Finish (EF)
will default to be
the Late Finish
(LF).
WBS Code Activity
Activity E
0
3
Total Float (TF) =
235
Late Start (LS) = Late Finish (LF) - Duration
0
7
7
Total Float (TF) =
12
Activity D
12
Early Finish (EF) 3 12
Late Finish (LF)
WBS Code Activity

15 15
7
9
Total Float (TF) =
WBS Code Activity

Activity E
0
3
Total Float (TF) =
236
Late Starts with Single Successors
0
7
Late Finish (LF)
7
Total Float (TF) =
12
Total Float (TF) =
12 WBS Code Activity
Activity D
12
Late Finish (LF)
WBS Code Activity

15 15
7
Late Finish (LF)
9
Total Float (TF) =
12
WBS Code Activity

Activity E
0
3
Total Float (TF) =
237
Late Start with Multiple Successors
0
Late Finish (LF)
7
Late Finish (LF)
7
Total Float (TF) =
7 12
Total Float (TF) =
Activity D
12
Late Finish (LF)
WBS Code Activity

15 15
7
Late Finish (LF)
9
Total Float (TF) =
12
WBS Code Activity

Activity E
0
3
Total Float (TF) =
238
Finish-to-Finish Relationships (D to E)
0
Late Finish (LF)
7
Late Finish (LF)
7
Total Float (TF) =
7 12
Total Float (TF) =
Activity D
12
Late Finish (LF)
WBS Code Activity

15 15
7
Late Finish (LF)
9
Total Float (TF) =
12
WBS Code Activity

Activity E
0
Late Finish (LF)
3
Total Float (TF) =
15
239
Completed BACKWARD Pass
0
Late Finish (LF)
7
Late Finish (LF)
7
Total Float (TF) =
7 12
Total Float (TF) =
Activity D
12
Late Finish (LF)
WBS Code Activity

15 15
7
Late Finish (LF)
9
Total Float (TF) =
12
WBS Code Activity

Activity E
0
Late Finish (LF)
3
Total Float (TF) =
15
240
Total Float (TF) = Late Finish (LF) – Early Finish (EF)
0
Late Finish (LF)
7
Late Finish (LF)
7 7 12 12
Total Float (TF) =
0 Total Float (TF) =
0 WBS Code Activity
Activity D
12
Late Finish (LF)
WBS Code Activity

15 15
0
7
Late Finish (LF)
9 12
Total Float (TF) =
3
WBS Code Activity

Activity E
0
Late Finish (LF)
3 15
Total Float (TF) =
12
241
Critical Path – Tasks with no Total Float (TF)
0
Late Finish (LF)
7
Late Finish (LF)
7 7 12 12
Total Float (TF) =
0 Total Float (TF) =
0 WBS Code Activity
Activity D
12
Late Finish (LF)
WBS Code Activity

15 15
0
7
Late Finish (LF)
9 12
Total Float (TF) =
3
WBS Code Activity

Activity E
0
Late Finish (LF)
3 15
Total Float (TF) =
12
242
example-3
Some books prefer to write inside the box as shown
below:
ES d EF
ACTIVITY
LS TF LF
FS – Finish to Start relationship With Lead & Lag
 Task 'B' can't start unless Task 'A' is completed
 For (e.g.) consider a project with two tasks

 Task 1 – Laying bricks
 Task 2 – Plastering
 Plastering can't start until laying bricks is complete
(common dependency)
 Case 'a':
12 5 17 17 15 32
FS=0 Plastering
Laying Bricks
12 0 17 17 0 32
 There is no lead or lag

FS – Finish to Start relationship (contd.)
 Case 'b':
12 5 17 24 15 39
FS=7
Laying Bricks Plastering
12 0 17 24 0 39
 There is a lead of 7 days

 Plaster commences 7 days after laying bricks
 Case 'c':
12 5 17 12 15 27
FS=-5
Laying Bricks Plastering
12 0 17 12 0 27
 There is a lag of 5 days
 Plaster commences 5 days before completion of laying bricks

See Example 1 & 2
Quiz (20 Minute)
1.Draw AOA network diagram representing the
following activity relationship using minimum number
of dummies.
i. X, Y and Z are initial activities.
ii. A, B and C are finishing activities.
iii.H precedes N but follows D.
iv. E follows D but precedes N.
v. F and L follow K and Y.
vi.F precedes B.
vii.A follows P, L and N.
viii.L precedes C but follows Z.
ix.G follows D.
x. K and D follows X.
xi.P precedes A but follows G.
Quiz (20 Minute)
•For the project indicated below, draw AOA network diagram using
minimum number of dummies.
Activity (IPA) Immediate Preceding Duration
Activity
A --- 3
B --- 5
C A 6
D A,B 9
E A,B 4
F B 6
G C,D 5
H D,E 12
I D,E,F 7
J E 9
K G,H,I 10
L I,J 6
M G,I 4
N K 2
Crashing of a project
 WHY CRASHING A PROJECT?
› There are many reasons for crashing a project:
1- to avoid late penalties.
2- to take advantages of monetary incentives for early
completion of a project.
3- to beat the competition
As is known the execution of an activity involves both the
direct costs and indirect costs.
However, there is no point in attempting to crash all the
activities by increasing the resources.
We should start crashing from the activity which has
smaller/smallest cost slope (i.e cheaper).
Any reduction in duration of critical path activities can reduce the
project duration.
An activity can be performed at its normal or most efficient pace
or it can be performed at higher speed. The duration associated
with the former is called 'normal duration' and the duration
associated with the latter is called 'crash duration'.
Some activities along the critical path sometime need to be
shortened in order to reduce the overall duration of the
project.
This leads to a decrease in the indirect expenses (due to
decrease in duration) and an increase in the direct expenses
(due to more mobilization of resources).
The relationship between the cost of the job and the duration
has been assumed to be linear. The steeper the slope of the
line, the higher the cost of expediting the job at an earlier
date.
This expedition of activity at an earlier time is referred to as
Crashing.
Because the line shows the slope between the normal and
crash points, it is also understood that a project activity can
be speeded up to some degree less than the complete
crash point, relative to the slope of the crash line.
In analyzing crash options for project activities, the goal is
to find the point at which time and cost trade-offs are
optimized
Example -1
The time /cost data for each of the
activity is given below:
prepare all possible schedule, by crashing eligible activities
by only one day each time , and
compute the crash corresponding direct cost , indirect cost
and total project cost.
1.What is the optimum project duration interms of total
project cost?
2.What is the optimum project duration interms of Indirect
cost?
3.What is the optimum project duration interms of Direct
cost?
Normal Crash
Activity Duration Cost Duration Cost
10-20 (A) 3 12000 2 16000

10-30 (B) 6 18000 3 24000
20-40 (C) 2 20000 1 23000
30-40 (D) 4 16000 2 21000
40-50 (E) 5 30000 4 35000
•The indirect expenses are Birr 3000 / day.

Network used for illustrating crashing
Example -2
prepare all possible schedule, by crashing eligible activities by
only one day each time , and
compute the crash corresponding direct cost , indirect cost and
total project cost.
project cost?
cost?
cost?
Normal Crash
Activity Duration Cost Duration Cost
1-2 (A) 3 5000 2 7000

2-3 (B) 4 6000 2 10000
2-4 (C) 3 9000 1 17000
2-5 (D) 4 5000 3 9000
4-5 (E) 5 7000 2 16000
3-5 (F) 2 8000 1 9500
5-6 (G) 5 20000 5 20000
Solution:
263
Normal Crash Cost slope
Activity Duration Cost Duration Cost (∆c/∆t)
birr/ day
1-2 (A) 3 5000 2 7000 2000

2-3 (B) 4 6000 2 10000 2000
2-4 (C) 3 9000 1 17000 4000
2-5 (D) 4 5000 3 9000 4000
4-5 (E) 5 7000 2 16000 3000
3-5 (F) 2 8000 1 9500 1500
5-6 (G) 5 20000 5 20000 -
Exercise -1
prepare all possible schedule, by crashing eligible activities by
only one day each time , and
compute the crash corresponding direct cost , indirect cost and
total project cost.
project cost?
cost?
cost?
Duration Cost
Activity IPA
Nd Cd Nc Cc
A -_ 5 4 500 600
B A 7 5 350 500
C A 8 5 800 920
D A 11 7 1200 1400
E B,C 6 4 600 700
F C 4 4 500 500
G D,F 7 5 700 1000
H E,F 6 5 300 420

^^^^^^^^^^^^^^^^^^^^
26
7
Project Cost Management
Cost is a resource sacrificed or foregone to achieve a
specific objective, or something given up in exchange.
Costs are usually measured in monetary units, such as
Birr,Dollar etc.
Project cost management
− Is primarily concerned with the cost of the resources needed
to complete project activities.
− Should also consider the effect of project decisions on the
cost of using the project product. (LCC)
− Will include additional processes and numerous general
management techniques such as return on investment,
discounted cash flow, payback analysis, and others.
− In general Project cost management includes the processes

required to ensure that the project is completed within an
approved budget.
Processes involved are:
I- Resource Planning
II- Cost Estimating
III- Cost Budgeting
IV- Cost Control
I- Resource Planning
 Involves determining what physical resources (people,
equipment, materials etc) and what quantities of each
should be used to perform project activities.
Inputs to Resource Planning
1. Work Breakdown Structure:
 A deliverable-oriented grouping of project elements that
organizes and defines the total scope of the project.
 It Identifies the project elements that will need resources and
thus is the primary input to resource planning.
2. Historical Information
 Historical information regarding what types of resources were
required for similar work on previous projects should be used if
available
Inputs to Resource Planning
3. Scope Statement:
 Contains the project justification and the project objectives
both of which should be considered explicitly during resource
planning.
4. Resource Pool Description:
 Knowledge of what resources are potentially available is
necessary for resource planning .
5. Organizational Policies:
 The policies/rules of the performing organization regarding
staffing and the rental or purchase of supplies and equipment
must be considered during resource planning.
II- Cost Estimating
 Developing an approximation (estimates) of the costs of the
resources needed to complete project activities.
 Includes identifying and considering various costing
alternatives.
Inputs to Cost Estimating
 Work Breakdown Structure
 It will be used to organize the cost estimates and to ensure that all
identified work has been estimated.
 Resource Requirement
 Resource Rates
 The individual or group preparing the estimates must know the unit
rates (e.g., staff cost per hour, bulk material cost per cubic yard) for
each resource in order to calculate project costs.
 If actual rates are not known, the rates themselves may have to be
estimated
Inputs to Cost Estimating
 Chart of Accounts:
 Describes the coding structure used by the performing
organization to report financial information in its general ledger.
 Project cost estimates must be assigned to the correct accounting
category.
Tools and Techniques for Cost Estimating
 Analogous Estimating / Top-down Estimating:
 Using the actual cost of a previous, similar project as the basis for
estimating the cost of the current project. It is less costly but
less accurate. (Rough-cost Estimate)
 It is frequently used to estimate total project costs when there is a
limited amount of detailed information about the project
 Analogous estimating is a form of expert judgment.
 Parametric Modeling:
 Using project characteristics (parameters) in a mathematical model
to predict project costs.
Tools and Techniques for Cost Estimating
 Bottom-up Estimating:
 Estimating the cost of individual work items, then summarizing or
rolling up the individual estimates to get a project title. (Detailed
Estimate)
 Computerized Tools:
 Use of computerized tools such as project management software
and spreadsheets to assist with cost estimating.
Outputs from Cost Estimating
 Cost Estimates
 Supporting detail for the cost estimates should include:
• A description of the scope of work estimated
• Documentation of the basis for the estimate
• Documentation of any assumptions made
• Possible range of results, etc.
 Cost Management Plan
 The cost management plan describes how cost variances will be
managed (e.g., different responses to major problems than to minor
ones).
III- Cost Budgeting
 Allocation of overall cost estimates to individual work items in
order to establish a cost baseline for measuring project
performances.
Inputs to Cost Budgeting
 Cost Estimates
 Work Breakdown Structure
 The work breakdown structure identifies the project elements that
costs will be allocated to.
 Project Schedule
 The project schedule includes planned start and expected finish
dates for the project elements that costs will be allocated to.
Tools and Techniques for Cost Budgeting
 Tools and Techniques for developing project Cost Estimates are
used to develop budgets for work items as well
Outputs from Cost Budgeting

 Cost Baseline
 It is a time-phased budget that will be used to measure and monitor
cost performance on the project.
 It is developed by summing estimated costs by period and is
usually displayed in the form of an S-curve.
IV- Cost Control
 Cost Control is concerned with
a) Influencing the factors which create changes to the cost
baseline to ensure that changes are beneficial.
b) Determining that the cost baseline has changed.
c) Managing the actual changes when and as they occur.
Cost Control
 Cost Control includes:
 Monitoring cost performances to detect variances from
plan.
 Ensuring that all appropriate changes are recorded
accurately in the cost baseline
 Preventing incorrect, inappropriate, or unauthorized
changes from being included in the cost baseline.
 Informing appropriate stakeholders of authorized
changes.
Cost Control
 Inputs to Cost Control
 Cost Baseline
 Performance Reports
 Provide information about cost performance such as which
budgets have been met and which have not.
 It also alerts the project team to issues which may cause
problems in the future.
 Change Requests
 These may occur in many forms-oral or written, direct or
indirect, externally or internally initiated, and legally mandated
or optional.
 Changes may require increasing the budget or may allow
decreasing it.
Cost Control
 Tools and Techniques for Cost Control
 Cost Change Control System
 It defines the procedures by which the cost baseline may be
changed. It includes the paperwork, tracking systems,

and approval levels necessary for authorizing changes.
 Performance Measurement
 It helps to assess the magnitude of any variations which do
occur.
 It also helps to determine what is causing the variance and
to decide if the variance requires corrective action

Cost Control
 Tools and Techniques for Cost Control
 Additional Planning
 Perspective changes may require new or revised cost estimates or
analysis of alternate approaches.
 Computerized tools such as project management software and
spreadsheets are often used to track planned costs vs. actual
costs, and to forecast the effects of cost changes.
 Computerized Tools
 Computerized tools such as project management software and
spreadsheets are often used to track planned costs vs. actual
costs, and to forecast the effects of cost changes.
Cost Control
 Outputs from Cost Control
 Revised Cost Estimates
 These are modifications to the cost information used to manage
the project.
 Budget Updates
 These are changes to an approved cost baseline. These numbers
are generally revised only in response to scope changes. In some
cases, cost variances may be so severe that “rebaselining” is
needed in order to provide a realistic measure of performance.
Cost Control
 Outputs from Cost Control
 Corrective Action
 Corrective action is anything done to bring expected future project
performance into line with the project plan.
 Estimate at Completion
 It is a forecast of total project costs based on project performance.
 Lessons Learned
 The causes of variances, the reasoning behind the corrective action
chosen, and other types of lessons learned from cost control should
be documented so that they become part of the historical database
for both this project and other projects of the performing
organization.
^^^^^^^^^^^^^^^^^^^^
29
3
• Performance Measurement and evaluation.
 Performance measurement and evaluation in construction
project management focused on two major principles; the
integrative account of cost and time performance criteria
and the Earned value concept.
 The earned value is then used as a measure of project
performance in terms of cost-schedule control system.
29
4
 Developing S-curve.
 S Curve is a graphical report plotting the cumulative
project of a progress against time.
 Steps in developing S-Curve
 Create a project schedule. This will give us a timeline of
all project activities.
 Then calculate for each day/week/month, how much of
work needs to be done.
 Calculate the cumulative value of this work against the
number of days/weeks/months.
 Plot the cumulative work against timeline.
29
5
29
6
29
7
Earned value management .
For any instant in the life of a project there should be the
following information available:
Budgeted Cost of Work Scheduled (BCWS) The cost
of the work scheduled or planned to be completed in

a certain time period per the plan. This is also called
the PLANNED VALUE.
Budgeted Cost of Work Performed (BCWP) The
budgeted cost of the work done up to a defined point

in the project. This is called the EARNED VALUE.
Actual Cost of Work Performed (ACWP) The actual
cost of work up to a defined point in the project. This

is also called the ACTUAL COST.
29
8
29
9
 CPI > 1.0 = good/ favorable (under budget)
 SPI >1.0 = good/ favorable (ahead of schedule).
 SV > 0 = good (ahead of schedule).
 CV > 0 = good (under budget)
30
0
a negative schedule variance with zero cost variance
suggests a project running late with no over-spend;
a negative cost variance with zero schedule variance
suggests a project on time with an overspend;

a negative schedule variance with a negative cost
variance suggests a project running late which is also

overspent.
30
1
Performance Management
302
303
Possibilities Earned Value Analysis
30
4
• If we see at point “x4”
o AC> EV Over budget.
o PV > EV Behind schedule.
30
5
Example-2: Assume that operations on a Work Package cost Birr

1,500 to complete. They were originally scheduled to finish today.
At this point, we actually spent Birr 1,350. And we estimate that we
have completed two thirds (2/3) of the work. What are the cost
and schedule variances?
Project Work
 Develop a project plan for building project:
 1. Define the scope of work, method statement, and
sequence of work.
 2. Generate the work breakdown structure (WBS) to
produce a complete list of activities.
 3. Develop the organization breakdown structure (OBS)
and link it with work breakdown structure to identify
responsibilities.
 4. Determine the relationship between activities.
 5. Estimate activities time duration, cost expenditure,
and resource requirement.
 6. Develop the project network.
 Submission date will be on Jan. 17/2019 (Tir
08/2012)
 ===================
30
9
 Procurement and Contract Management involves three
major processes:
I. Contract Planning,
II. Procurement Management and
III. Contract Management
31
0
 Contract is a customary tool used to implement formulated programs
or projects.
 Contract planning includes decisions on proposed Delivery Systems,

Procurement Methods and Contract Types to be followed and used
together with its provisions for alterations.
31
1
 Types of Delivery Systems
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.
31
2
b) Design Bid Build (DBB)
 This is the most practiced type of delivery system in Ethiopian
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.
31
3
c) Design Build (DB) / Turnkey
 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).
d) Finance / Build Operate Transfer (BOT)
 Build - Operate - Transfer is a form of delivery system that
promotes Public Private Partnership (PPP) in which a private

company is contracted to finance, design, construct, operate
for a certain period (usually 10 years) and transfer.
31
4
e) Construction 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.
31
5
 Procurement Methods
 Procurement methods are the procedures used by the procuring
entity to acquire goods, services, and works. These methods can be

competitive and non-competitive.
31
6
 Contract Types
1. Lump Sum (Fixed Price) Contract
 A lump sum contract is the most basic form of agreement
between a supplier of services and a customer.

 The supplier agrees to provide specified services for a specific
price. The receiver agrees to pay the price upon completion of

the work or according to a negotiated payment schedule.
 In developing a lump sum bid, the builder will estimate the costs
of labor and materials and add to it a standard amount for

overhead and the desired amount of profit.
31
7
 Contract Types
 Most builders will estimate profit and overhead to total about 12-
16 percent of the project cost. This amount may be

increased based on the builder's assessment of risk.
 If the actual costs of labor and materials are higher than the
builder's estimate, the profit will be reduced.

 If the actual costs are lower, the builder gets more profit. Either
way, the cost to the owner is the same.
31
8
 Contract Types
 Contractor is free to use any means and methods to complete
work.
 Work must be very well defined at bid time
 Fully developed plans and specifications required.
 Owner's financial risk low and fixed at outset.
31
9
32
0
32
1
32
2
 Contract Types
2. Unit Price(Item Rate) Contract
 In a unit price contract, the work to be performed is broken into
various parts, usually by construction trade, and a fixed price is

established for each unit of work.
 In a unit price contract, like a lump sum contract, the contractor
is paid the agreed upon price, regardless of the actual cost to do

the work.
 The owner /designer will typically provide estimated quantities
for the project, then ask the contractors to “Bid” the job by
calculating unit prices for these items and calculating a final
price.
 The Owner then compares the final prices and select the lowest
bidder.
32
3
32
4
32
5
 Contract Types
3. Percentage rate contract
 This type of contract differs from the item rate contract in respect
of the method of tendering the unit rate.

 The bill of quantities supplied to all the intending bidders include
in addition to the approximate quantities and detail description,

the unit rates as estimated by engineer.
 While tendering, the contractors have not to write the rate of
each item but a percentage figure by which the estimated unit

rates are increased or decreased. the same percentage rate figure
being applicable to all items.
32
6
32
7
32
8
32
9
II. Procurement Management
 Procurement is a process used to select the lowest competitive and
qualified bidder for procuring services or works or goods from
potential competitors based on reasonable relevant criteria.
 It can also be expressed as a method used to employ or buy
services or works or goods for the value (in the form of money)
which includes reasonable profit.
 Essentially, a bid or tender is a binding offer or proposal to
furnish certain specified promises for the amount stated in the
tender.
 Physical infrastructures are cost extensive and appropriate
savings obtained through competition are the main factor behind
the procurement process.
33
0
33
1
Procurement Management Process
33
2
33
3
33
4
 Tendering
 It is highly desirable when inviting competitive offers from a
number of bidders that the tender received should be based as
far as possible on equal terms and conditions and presented in
a standardized manner.
 In this way evaluation and comparison between the tenders
received can be made more simply and accurately with less risk
of misunderstandings, errors and omissions.
33
5
 Tendering
 The Tender is the most important single document submitted by
the bidder.
 It is here that each bidder confirms that he has read and
understood the requirements of the tender documents and based
on such requirements, it is here that the bidder states his tender
sum for undertaking and fulfilling all his obligations under the
contract.
 It is therefore essential for the Employer that all Tenders
received are stated in identical terms and thus it is necessary for
the Employer, when inviting tenders, to provide bidders with a
standard form of tender which each bidder is required to
complete and sign.
33
6
33
7
33
8
33
9
34
0
34
1
34
2
34
3
34
4
34
5
34
6
 Tendering
b) Contractual Information:
 These are documents included in the tender document to
furnish bidders with full and detailed information of the

project for application after winning the contract.
 The bidder should utilize such information to provide a fair
and reasonable offer to the bidding document.
34
7
34
8
34
9
35
0
35
1
35
2
35
3
 Tendering
 Qualification of Bidders:
 Before a contractor is awarded a contract, it should likely be put
through a qualification and selection process in order to arrive at
the best advantage to the client in both price and efficiency.
 The following chart depicts the available options in bid
qualification procedure.
35
4
Bid Qualification Procedure
Competitive Bid Negotiative Bid
 Financial Proposal
Short-Listed Bid Open Bid
Financial Pr.
One-Stage Procedure Two-Stage Procedure
Financial Proposal
Pre-Qualification Post Qualification
 Technical Proposal  Financial Proposal

 Financial Proposal  Technical Proposal
35
5
35
6
 Tendering
 Qualification of Bidders:
 Competitive Bid:
 In a competitive bid arrangement equi-potential and competent
contractors are invited to provide their best offer to the bid.

 Contract is awarded to the most responsive bidder based on a bid
evaluation process to be carried out consequently.
35
7
35
8
35
9
36
0
36
1
36
2
36
3
^^^^^^^^^^^^^^^^^^^^
36
4
 According to Ethiopian law a contract is defined as an agreement
where by two or more persons as between themselves create, vary

or extinguish obligations of proprietary nature (Art.1675of civil
code of Ethiopia).
 The term “Contract” for civil engineering construction means:
 A written understanding for execution of works or supply of
materials and labor for the performance of any service

connected therewith duly/properly accepted and registered by
the competent authority in case of Government works and
by the partner in case of private works.
36
5
 The purposes of a contract are:
 To enforce law or bind conditions between or among the
parties agree to procure services / works / goods

 To clearly show the Terms and Conditions of contracts the
parties agree with.

 To clearly show the Rights and Obligations of performances
from the contracting parties

 To clearly show remedial measures in cases for non -
performances
 To identify special risks and their treatment
 To clearly show handling provisions for price, completion time,
requirements variations adjustment systems, Changes in cost and

legislations and their dispute resolution mechanisms
36
6
 Contract Management Processes
 Contract Management process can be idealized into three major
processes. These include Contract Formulation, Contract

Administration, and Closing of Contract Processes
Contract Management Process

36
7
36
8
36
9
37
0
37
1
For proper Contract Management an understanding of
construction contracts is essential.
Construction Contracts
Contracts are referred to in a number of ways.
 When both parties have fully performed, the contract is
said to have been executed.
 If something remains to be done, by one or both
parties, it is executory.
 When one party makes a promise for the performance
of an act, the contract is unilateral, (because only one
obligation is outstanding).
 In an exchange of promise, on both sides, at the time
the contract is made, the contract is bilateral.
Essentials of a valid contract
The legal obligations to perform a contractual obligation
only exist when the contract is valid.
 In order that the contract shall be valid, the following
conditions must eventually operate.
1. The contract shall be made by parties legally
competent to contract,
Parties Competent to Contract: A person is
competent to contract provided,
 He is of the age of major according to the law to
which he is subject. A person not major according to
law can break an agreement.
 In Government Departments and Organizations,
competent or delegated authorities are capable to

make a contract.
 Subordinate authorities who have not been directed
or authorized by competent authority, cannot enter

into contract.
He is of sound mind.
 A person is said to be of sound mind for the purpose of
making contract provided he is capable of
understanding it and of forming a rational judgment
as to its effects upon his interest at the time when he
performs the contract. (e.g. Minors, insane and
drunken or intoxicated by drugs or alcohol can't enter
in to a binding contract)
He is not disqualified from contracting by any
law to which he is subject to.
2. Free Consent of the Parties
Two or more persons are said to consent when they agree
upon the same thing in the same sense. Consent is said free
when:
 It is not caused under influence.
 It is not caused by committing or threatening to
commit any act forbidden by the law.
 It is not caused by fraud/deception .
3. That there shall be definite offer or
proposal and its acceptance,
Such an agreement involves offer and acceptance
The signed contract by the contractor constitute an Offer
Notification by the owner of the winning proposal constitute
Acceptance
4. That there shall be a valid consideration
In the case of a construction contract, if a constructor
promises to build an addition to a home without
compensation and then changes his mind, he generally
cannot be forced to build the addition because there was
no consideration for his or her services. (Unilateral promises,
gratuitous /cost-free promises, and impossible promises usually are not
enforceable by contract law because of the absence of a real
consideration. )
5. That the subject matter of the contract
shall be legal
 A contract shall be illegal and unenforceable if its
subject matter is contrary to the common law, if it
violets a state or federal statute, or if it is against the
established public policy. (e.g. Contracts involving crime,
fraud, restraint of trade, gambling are typical examples of
unlawful subject matter.)
Subject Matter Of Contract
In construction contracts,
legal,
financial, and
engineering considerations are involved,
and the relationship between the contracting parties is complex.

Therefore, discerning judgment is a pre-requisite in arriving
at the appropriate terms to be included.
It is significant to note that for a contract, all the terms
except for the contract amount, are dictated by one party,
the Employer, without consulting the other .
The formal contract documents to be accepted and
agreed to by both parties consist of the contract,
specifications, and drawings.
Out of these the contract is the strongest from the legal
viewpoint,
it being the document which consists the basic promises or
covenants and which bears the signatures of both the
contracting parties.
All contract documents should be written in a simple style
and so for as possible they should be self- explanatory.
The parties to the contract are mentioned throughout the
contract as if each were singular in number.
Direct references are made to the Employer, the
Contractor or the Engineer rather than mentioning them as
First Party and Second Party.
Form of Contract
Contracts for construction work follow legal practice
and are encountered in many different forms.
In general, all contain an introduction or preamble
which states the date of the agreement and designates
the parties thereto, as in the following.
This agreement, entered into the
------------------------------------------------date of---------------------------2005,
--------------------------------------------------hereinafter called the Owner /
Employer and
--------------------------------------------------------------------------------------,
called the Contractor, witness that the parties hereto, do mutually
agree as follows:
Preamble/introduction----------------------------------------------------------------
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
--------------------------
Basic essentials (various contract conditions are given hereafter)
1.
2.
3.
After the preamble, the articles or covenants are written. These may be
limited to the basic essentials for a valid contract, namely,
 1. the conditions precedent to the agreement,
 2. A statement of the work to be done,
 3. The time in which it is to be done, and
 4. the signatures of the contracting parties, affirming their agreement as
to the conditions imposed by the contract.
The is sometimes divided in to parts:
Part-I contains the basic articles related to
Scope of the work
Compensation to contractor called the agreement
Time of completion etc.
Part-II is called the general conditions of contract and

contains all the supplemented articles.(called General
Provision)
Part-III the special conditions.
It is written specifically for each job to cover special contractual
provisions not included in the standard agreement or the general
conditions. (see example below)
Procurement and Contractual
Management
Special Conditions (e.g.)
No adjustment shall be made for any price increase of
what so ever nature, even if the increase is by decree/order
or any other reason.
Clause 70 (Increase or Decrease of Costs ) of the Standard
Conditions of Contract for Construction of Civil Works
( Ministry of Works & Urban Development ) December
1994 is replaced by this statement and shall not be
applicable for this Contract.
Termination of contract
A contract may be terminated under the following
situations.
1. Termination by Performance
A contract is automatically terminated when both the
parties have performed their obligations satisfactorily
under the agreement.
A contract may be terminated if specific performance
mentioned in the agreement has been completed and paid
the contract price against the specific performance.
A contract may also be terminated by substantial
performance
Substantial performance is a term used in contract law
that means the contract has been completed or performed

to an extent that performance should be considered
adequate.
If a contract had been almost completely performed, the
absence of the completion of small or insignificant details

would not give one party license to breach a contract.
In other words, if, for example, a contractor is bound to
complete a contract using one type of wood but the wood
is unavailable so he uses a wood that is equivalent,
substantial performance will protect that contractor. It
permits the contractor to enforce the contract and demand
payment, although he did not perform the duties listed
under the contract to the exact specifications listed in the
contract.
2. Termination by Agreement
The parties under contract may agree to the termination
of a contract at any time in its life time if it is based on
payment in lieu of performance.
Government provides a clause in the contract that the
contract shall be terminated at any time it appears to
be in the interest of the government. This constitute
termination by agreement (in advance of actual
termination) in which an incomplete portion of the work
under the contract is accepted instead of complete
performance.
3. Termination by Breach
A breach of contract occurs under the following conditions;
A) Actual breach: where a party fails to perform one
(
or more obligations of contract.

(B) Anticipatory breach: where a party shows an
intention not to perform one or more obligations of the

contract.
4. Termination by Impossibility of Performance
A contract may be terminated if conditions unforeseen
when the agreement was made preclude/prevent
performance. For example, subsoil characteristics
previously assumed to be satisfactory for a bridge pier
foundation may be determined unsuitable after the signing
of the contract, making the construction of the pier
impossible , and such a contract could not be enforced.
Remedies for Termination of Contract by Breach
Whenever a breach of contract occurs a right of action
exists in the courts to remedy the matter. The remedies
generally available are as follows;
1. Damages
2. Specific performance
3. Injection
4. Rescission
Damages-
 In most cases a breach of contract gives rise to a right of
action for damages. The 'damages' consist of a sum of
money, which will, as far as is practicable, place the
aggrieved party in the same position as if the contract has
been performed.
The parties to the contract, when entering into agreement,
may agree that a certain sum shall be payable if a breach
occurs. (Liquidated damage, penalty)
Specific Performance-
The term 'specific performance' refers to an order of the court
directing a party to a contract to perform his part of the
contract agreement.
Injection-
An injection is an order of court directing a person not to
perform a specified act.(A agreed not to construct for the benefit of B on adjoining land, but
after B started A also started to construct )
Rescission-
the act of rescinding/ cancellation of a contract by the court
or may be on mutual consent, and the return of the parties to
the positions they would have had if the contract had not
been made.
Procurement and Contractual Management
Contract document
Contract documents are the documents in which the scope
and the requirements of a project are comprehensively laid
down.
 In these documents the obligations and
responsibilities of the parties to the Contract as well as
the Engineer's powers, duties and functions which flow
from such a contract are defined.
The Engineer is not generally a party to the Contract and
therefore has no contractual rights or obligations under it.
Contract document
Construction contract documents generally
include:
The agreement
General conditions
Supplementary/Special conditions
Drawings
Specifications
Addenda issued before submittal
Notice to proceed
Bonds
Change orders or contract modifications
Contract document
The agreement
The Agreement is the formal document conforming the
existence of a Contract between the Employer and the
Contractor.
A list of the parties to the contract, the contract type,
start and substantial completion dates, methods of
payment and consideration and a list of the documents
that make up the contract are all recorded in the
agreement.
Parties in government construction contracts are
required to execute the agreement with signatures and
their seal.
Contract document
General conditions
The legal aspects of the Contract Documents are
outlined in the General Conditions (GC's).
E.g. the International Conditions of Contract (FIDIC)
or modifications thereof. In Ethiopia, Standard
Conditions of Contract for Construction of Civil Works
Projects (December 1991 ) prepared by the Ministry of
Urban Development and Works Bureau.
FIDIC-construction -1987(“Red Book”).doc
General Conditions of Contract, MoWUD.pdf
Contract document
Supplementary/Special conditions
The Supplementary Conditions of Contract are
essentially those which have to be drafted to suit a
particular situation.
They are matters for which clauses are not included in
the standard( general) Conditions of Contract (because
the General conditions (GC's) should not be amended
within itself.)
Contract document
Drawings (design plans)
The Contract Drawings are the drawings on which the
Works are to be carried out and which the Contract price is
based.
Any modifications to drawings as approved in writing by
the Engineer and such other drawings as may from time to

time be furnished or approved in writing by the Engineer.
(see GC's MoWUD, Clause 7)
Contract document
Specifications
The Technical Specification (Detailed Specification or
Spec) is information developed by the Engineer or
Architect of the project. The information is provided to
give the Contractor guidelines to follow during
construction in conjunction with the project design.
Contract document
Addenda issued before submittal
An addendum is a formal written document issued to
modify, add or delete any part of the Contract
Documents prior to submission of the bids.
Once issued, an addendum becomes part of the
Contract Documents and supersedes the information
that it modifies, adds, or deletes.
Contract document
Notice to proceed
The Notice to Proceed is a written notice from the
Owner to the Contractor that establishes the date on
which the Contractor shall begin performing its duties
and obligations as outlined in the Contract Documents.
Contract document
Bonds
Bid bond-
submitted at time of bid- guarantees that company will execute
a contract if they are the low bidder (5% to 10% of contract price)
Performance Bond
This bond guarantees the Owner that the project will be
completed for the contract price in the event the original
Contractor fails to perform the work.(usually cover 50-100 % of
the contract price)
Payment (or Statutory) Bond
This bond guarantees the Owner that all labor, equipment, and
materials will be completely paid for in the event the original
Contractor fails to perform the work. (usually 20 % of the bid
amount)
Contract document
Maintenance Bond –
This bond guarantees the Owner that any defects found after
the work has been completed will be corrected by the original
Contractor or other agent of the surety company (warranty
period may be 2-3 years)
Change orders
Unilateral written order by a project owner directing the
contractor to change contract amount, requirements, or
time.
Such changes must be within the scope of the contract and in
accordance with the contract's Changes clause to be legally
implemented without the consent of the contractor
Sub-contracting
Sub-contracting is performance of contract by others
other than the Main Contractor.
Types of Sub-contracts
Sub-contracts, in relation to construction contract, may be
classified on the basis of the following criterion:
These are:
A. Based on Appointment; and
B. Based on the Type of Contract Price.
Sub-contracting
A.Based on Appointment:
Domestic Sub-contractor
is a subcontractor appointed by the main contractor at his
discretion/choice.
Nominated Sub-contractor
is a subcontractor nominated by the employer which the
contractor is obliged to appoint as a subcontractor.
Selected Sub-contractor
is a subcontractor selected by the contractor in consultation
with the employer in terms of the requirements of the
contract.
Sub-contracting
B.Based on Contract Price
Just as the Main Contract, the Sub-contract could be
classified in to:-
Lump Sum Sub-contract. It is competitive
Unit Price Sub-contract. It is competitive.
Negotiated Sub-contract. It may be used in special
circumstances. It is not necessarily competitive.

Variation:
Variation is any change (additions or omissions) to the
works, the time scale in which the works are completed and
the order or way in which the works are to be completed.
Variation should be instructed or approved as a variation
under the clause in the contract dealing with variations to the
contract.
Variation:
Variation orders are an unwanted, but inevitable reality of
every construction project (Clough and Sears, 1994; O'Brien,
1998; Mokhtar et al., 2000).
Construction projects are bound to encounter variation
orders; the goal of the owner, design or construction manager
is to limit the number of such changes (CII, 1994b; Ibbs,
1997a).
Proper management of variation orders is very significant for
all types of construction projects.
Potential Causes of Variations.
Causes of variation orders have been identified by many
researchers (CII, 1990a; Thomas and Napolitan, 1994; Clough
and Sears, 1994; Fisk, 1997; Ibbs et al., 1998; O'Brien, 1998;
Mokhtar et al., 2000; Gray and Hughes, 2001; Arain et al.,
2004).
A. Owner Related Changes
Change of plans or scope by owner:
It is usually the result of insufficient planning at the
project definition stage, or because of lack of
involvement of the owner in the design phase (Arain et
al., 2004).
Change of schedule by owner:
A change of schedule during the project construction
phase may result in major resource reallocation (Fisk,
1997; O'Brien, 1998).
A change in schedule means that the contractor will
either provide additional resources, or keep some

resources idle. In both cases additional cost is incurred
Owner's financial problems:
The owner of the facility may run into difficult
financial situations that force him to make changes in an
attempt to reduce cost.
Proper planning and review of project cash flow would
be effective in eliminating this problem.

Inadequate project objectives:
Due to inadequate project objectives, the designer
would not be able to develop a comprehensive design
which leads to numerous variations during the project
construction phase.
Change in specifications by owner:
Change in specifications by the owner during the
construction phase may require major variations and
adjustments in project planning and procurement
activities.
B. Consultant Related Variations
Change in design by consultant:
The changes in design are frequent in projects where
construction starts before the design is finalized (Fisk,
1997).
Design changes can affect a project adversely
depending on the timing of the occurrence of the

changes.
Errors and omissions in design:
Design errors and omissions may lead to delay in
project schedule (Assaf et al., 1995).
Conflicts between contract documents:
Conflict between contract documents can result in
misinterpretation of the actual requirement of a project
(CII, 1986a).
Insufficient details in contract documents may
adversely affect the project, leading to delay in project

completion.
Inadequate scope of work for contractor:
In a multi-player environment like construction, the
scope of work for all the players must be clear and
unambiguous for successful project completion (Fisk,
1997; Arain et al., 2004).
Inadequate scope of work for the contractor can cause
major variations that may adversely affect the project,

leading to changes in construction planning.
C. Contractor Related Variations
Lack of contractor's involvement in design:
Involvement of the contractor in the design may assist
in developing better designs by accommodating his
creative and practical ideas (Arain et al., 2004).
Practical ideas which are not accommodated during
the design phase will eventually affect the project

adversely.
Contractor's financial difficulties:
Construction is a labour intensive industry. Whether
the contractor has been paid or not, the wages of the
worker must still be paid (Thomas and Napolitan, 1994).
 Contractor's financial difficulties may cause major
variations during a project, affecting its quality and

progress.
Differing site conditions:
Differing site condition can be an important cause of
delays in large building projects (Assaf et al., 1995). The
contractor may face different soil conditions than those
indicated in the tender documents. Eventually this may
affect his cost estimates and schedule adversely.
Defective workmanship:
Defective workmanship may lead to demolition and
rework in construction projects (Fisk, 1997; O'Brien,
1998).
Defective workmanship results in low quality in
construction projects (Arain et al., 2004).

Eventually, this cause may affect the project adversely,
leading to rework and delay in the project completion.

D. Other Variations not directly related to the
participants.
Weather conditions:
Adverse weather conditions can affect outside
activities in construction projects (Fisk, 1997; O'Brien,
1998).
 When weather conditions vary, the contractor needs
to adjust the construction schedule accordingly.

 Occasionally, this may affect the project progress
adversely, leading to delays in construction.
participants.
Change in government regulations:
Change in government regulations during the project
construction phase may cause major variations in design
and construction. This can affect a project adversely
depending on the timing of the occurrence of the
changes.
participants.
Safety considerations:
Safety is an important factor for the successful
completion of a building project (Clough and Sears,
1994). Lack of safety considerations may affect the
project progress adversely, leading to serious accidents
and delays in the project completion.
Claims
Claim is defined as a demand or request for something,
which one has a right to have.
Claims in construction industry are associated with cost
overruns, mismanaged jobs, legal entanglements, and wrong
practices on the part of various contractors.
They are often viewed by owners and engineers as the
contractor's strategy to cover bidding errors or omissions, this
is a misconception.
Claims
There are two basic requirements for identification of claim.
These are:
a) knowledge of contract document and
b) knowledge of legal concept and right.
Claims
These are:
a) knowledge of contract document
 The construction project staffs must have a good working
knowledge of the contract documents.
 Familiarity with pertinent technical and general terms is
essential for project personnel to recognize contract rights

and duties.
 If these key personnel have a thorough and detailed picture
of the entire job, they will be in the best position to

recognize claims situations as soon as they occur.
Claims
These are:
b) knowledge of legal concept and right.
 The project staffs are expected to have a working familiarity
with legal concepts and rights, which will affect the
outcome of potential claim situations.
 With a firm background in these legal percepts, the contract
manager is in a position to sense and appreciate the

significance of events that may lead to later problems.
Common construction claims
Claims of Owner/Client against Contractor
Claims of Contractor against Owner/Client
Sub-contractor's claims
Claims of Owner/Client against Contractor
Claims for defective work done by the contractor
Claims for delay caused by the contractor
Counter-claim as a defense
Claim against professionals
Claims following termination and breach
Claims for expenditure incurred in completing the
work left incomplete or abandoned by the contractor

Claims for liquidated damages
Claims of Contractor against Owner/Client
Claims to recover damages caused by breach of
conditions by the owner.
Claims to recover loss or damage caused by an unjust
termination of the contract by the owner

Claims to recover damages upon rescinding /
withdrawing of the contract due to frustration.

Dispute
If construction claims are not properly handled they
will be changed into dispute.
Modes of Settlement of Disputes
By direct negotiations between the client and the
contractor
Settlement by arbitration
Through civil courts
Direct Negotiations
Easiest and least expensive
Majority of the disputes are settled through
negotiations
Arbitration is sought after, only if direct negotiations
fail
Settlement Through Courts
Last resort
Attempted only if direct negotiation and arbitration
fails
Time consuming, to the tune of several years
Expensive
Settlement Through Arbitration
Arbitration is the hearing and determination of a
dispute by an impartial referee selected by the parties
concerned.
Arbitrator is a person chosen by the concerned parties
to pronounce judgment on the dispute.
Sole Arbitrator
Joint Arbitrators
Advantages of Arbitration over Litigation
 Cost
 Speed
 Convenience
 Proceedings in private premises, etc.
Insurance in construction industry
Insurance is required under contracts to protect the
Principal and other parties from financial loss, and
disruption to projects.
An insurance policy is a contract under which an insurer
agrees to pay for losses or liabilities suffered by an
insured, as a result of specified causes, in return for the
earlier payment of a premium, subject to stated limits,
conditions, and exclusions.
The most common types of insurance required by
construction contracts are:
a) Insurance of the works
 Insurance of the works covers the works against damage or
destruction, while under construction, and provides for
reinstatement or reconstruction of works that are damaged or
destroyed.
b) Insurance against public liability
 Public liability insurance covers liability for death, personal
injury, property damage, or other loss sustained by persons
other than the Principal and the contractor, arising out of the
project or contract.
 Public liability insurance should also cover costs of responding to
and defending claims for any such liability.
c) Workers compensation insurance
 Workers compensation insurance is required by law to be
held by employers to cover their financial obligations to
employees who suffer work related injuries.
 If a contractor does not hold legally required workers
compensation insurance the Principal/ owner may become
liable to pay outstanding workers compensation insurance
premiums or to meet the financial obligations of the
contractor to employees who suffer work related injuries.
d) Professional indemnity insurance.
 Professional indemnity insurance is a type of insurance
which is designed to protect professionals from claims made
against them by clients.
 Professional indemnity insurance is primarily for the benefit
of the consultant, so that if claims are made, they are
covered by insurance, and consultants' assets are protected.
Health and safety at work
The construction industry has earned the reputation
of being a dangerous or highly hazardous industry
because of the disproportionately high incidence of
accidents and fatalities that occur on construction
sites around the world (Smallwood and Haupt, 2008).
 Similarly Sohail (1999) labels construction industry as
very hazardous.
Internationally, construction workers are two to three
times more likely to die on the job than workers in
other industries while the risk of serious injury is
almost three times higher.
Health and safety therefore is an economic as well as
humanitarian concern that requires proper management
control.
One of the most common myths that have plagued this
industry is that health & safety comes at a cost.
 Construction managers tend to believe that introducing
and executing measures that ensure health and safety in
construction sector will lead to higher cost, and hence
lower profitability.
However, it has been proved that investment in
construction health and safety actually increases the
profitability by increasing productivity rates, boosting
employee morale and decreasing attrition (Mohammed,
2003).
Health and Safety in the Work Place
 Occupational health and safety has been defined by the
International Labour Organization (ILO), 2001 as:“The
prevention and maintenance of the highest degree of
physical, mental and social well-being, the prevention of ill-
health among workers caused by their working conditions,
The protection of workers from factors adverse to their
health in their employment, and the placing and
maintaining workers in occupational environments adapted
to their individual and psychological conditions.”
Health and Safety in the Work Place
 Health refers to the protection of bodies and minds of
people from illness resulting from materials, processes or
proceeding used in the work place whereas
safety is protection of people from physical injury
(Hughes and Ferret, 2008). Safety means a state in which
no danger of a damage causing accident exists.
Construction Industry Health and Safety
In construction workplaces the workers are exposed to
hazards of occupational diseases and injuries and the
adverse effects of excessively long hours of work.
 Machines, plants and other sophisticated construction
equipment pose danger to the operators, who in most
cases do not have prior skills for operating such machines
or plants.
A worker should be assigned duties in relation to his
physical and mental health and skills.
Further, employers should have complete control over
their employees and therefore ensure adherence to safety
practices. The company must comply with all provisions of
safety and health regulations that pertain to the
construction works itself.
A number of factors having a negative impact on health
and safety management in developing countries which
include:
poor infrastructure;
problems of communication due to low literacy
level;
unregulated practices on construction sites;
adherence to traditional methods of working;
non availability of equipment;
extreme weather conditions;
improper use of equipment and corruption.

Health and Safety Measures in Construction
1. Site Layout and Planning
 A badly planned and untidy site is the underlying cause
of many accidents. This results from falls of material and
collisions between workers and plant or equipment.
 Proper planning by management is an essential part of
preparation and budgeting for the safe and efficient
running of a construction operation.
 There are many accidents due to tripping, slipping or
falling over materials and equipment which have been
left lying around, and stepping on nails which have been
left projecting from timber
2. Personal Protective Clothing (PPE)
 Personal protective equipment (PPE) refers to protective
clothing, helmets, goggles , or other garment or equipment
designed to protect the wearer's body from injury by blunt
impacts, electrical hazards, heat, chemicals, and infection, for
job-related occupational health and safety purposes.
 OSHA (Occupational Safety and Health Administration) (2007)
requires the use of personal protective equipment (PPE) to
reduce employee exposure to hazards when engineering and
administrative controls are not feasible or effective in reducing
these exposures to acceptable levels.
2. Personal Protective Clothing (PPE)
 The PPE required in the construction sites include;
 eye protection and face protection,
 hearing protection,
 respiratory protection,
 hand and arm protection,
 foot and leg protection,
 head protection and
 body and fall protection mechanisms

3. First aid Kits and Accident Reporting
 Construction sites are dangerous places, and first aid and rescue
equipment should always be available.
 What is needed depends on the size of the site and the numbers
employed, but there should be a blanket and a stretcher.
 On large sites with more than 200 people are employed, there
should be a properly equipped first aid room.
 On any construction site of that size, at least one person on every
shift should have been trained in first aid to a nationally
recognized standard.
3. First aid Kits and Accident Reporting
 On day -to-day works procedures, an accident register book
should be kept at the site, in which all types of minor injury such
as bruises, to major accidents like imputing disability and fatal
should be recorded.
4. Health and Safety Warning Signs
 Safety Signs and Signals are one of the main means of
communicating health and safety information.
 This includes the use of illuminated signs, hand and acoustic
signals (e.g. fire alarms), spoken communication and the
marking of pipework containing dangerous substances.
 Traditional signboards, such as prohibition and warning signs,
signs for fire exits, fire action plan notices (fire drills) and fire-
fighting equipment are also considered to be Safety Signs.
4. Health and Safety Warning Signs
 It is critical that all Safety Signs and Signals can be easily
understood. Where signboards are used in a workplace they
should be sufficiently large and clear so that they can be easily
seen and understood. Signboards also need to be durable,
securely fastened and properly maintained to ensure they remain
visible.
5. Safety Policy
 Site managers should have a written safety policy for their
enterprise setting out the safety and health standards which it is
their objective to achieve.
 Construction safety policy is something that must be developed
by each site manager and operating company prior to starting
any construction job.
 Once developed the development safety plan should be placed
into a training program that's needed to be participated in by
every site worker previous to partaking in any job found on the
positioning irrespective of the roles simplicity.
6. Health and safety risk assessment
 Health and safety risk assessment in a construction site is an
important measure towards reduction of hazards and injuries.
 In the context of health and safety, common definitions used for
risk are that: risk is the likelihood of a substance to cause harm;
and risk is a combination of the likelihood of an occurrence of a
hazardous event or exposure(s) and the severity of injury or ill
health that can be caused by the event or exposure.
 Since managing health and safety is different from managing any
other aspect in construction there need to do a risk assessment
to find out about the risks, and to put sensible measures in place
to control them, and make sure they stay controlled.
7. Health and Safety Training in Construction Sites
 With regard to Occupational Safety and Health, training consist
of instruction in hazard recognition and control measures,
learning safe work practices and proper use of personal
protective equipment, and acquiring knowledge of emergency
procedures and preventive actions.
 Training also provide workers with ways to obtain added
information about potential hazards and their control; they
could gain skills to assume a more active role in implementing
hazard control programs or to effect organizational changes that
would enhance worksite protection.
8. Working Environment
 According to ILO (1999), chemical Substances are a major health
hazards since there are many chemicals used in the construction
industry, which include insecticides, adhesives, cleaning agents,
wood preservatives, fungicides, and paints among others.
 Many of these chemicals are hazardous, with a potential to cause
poisoning. Toxic substances can cause both acute and chronic
effects resulting from exposure for a long period.
 Therefore, appropriate care should be taken in handling these
chemical substances.
9. Welfare Facilities
 Work in the construction industry is tough and involves much
manual or physical activity. It is also hazardous and dirty and
therefore good welfare facilities not only improve workers'
welfare but also enhance efficiency.
 Welfare facilities such as the provision of drinking-water,
washing, sanitary and changing accommodation, rest-rooms and
shelter, facilities for preparing and eating meals, temporary
housing, assistance in transport from place of residence to the
work site and back, all help to reduce fatigue and improve
workers' health.
Professional ethics in Civil
Engineering
What is Engineering Ethics?
 It is the study of Moral Values, Issues and Decisions as they
relate to Engineering Practice.
 Professional Societies and Codes of Ethics:
 Provide a set of guidelines of how engineers should behave
with respect to clients, the profession, the public, and the law.
 Engineers shall undertake assignments only when qualified by
education or experience in the specific field involved.
 Engineers are morally responsible for harms they intentionally
[knowing and deliberately], negligently [unknowingly, but
failing to exercise due care] or recklessly [aware that harm is
likely to result] cause.
Personal, Common and Professional Ethics
Professional Societies and Codes of Ethics
 Provide a common agreed-upon standard for professional
conduct.
 Civil Engineering Society has its own code of ethics which strive
to :
 Provide a set of guidelines of how Engineers should behave
with respect to clients, the profession, the public, and the

law.
Fundamental Principles
 Civil Engineers uphold and advance the integrity, honor, and
dignity of the engineering profession by:
 Using their knowledge and skill for the enhancement of
human welfare;
 Being honest and impartial, and serving with fidelity
/loyalty the public, their employers and clients; and

 Striving to increase the competence and prestige of the
engineering profession
__________//___________
 TERM PAPER AND PRESENTATION REQUIREMENTS
FOR CENG 6101- PROJECT MANAGEMENT
 STUDENT PRESENTATIONS
Students will form groups that will be assigned one of topics listed below.
 Presentation Topics

Group-1: Variations and Claims in construction contracts.
Group-2: Insurance & Health and Safety in construction project.
Group-3: Pre-feasibility and feasibility studies in construction project and
Professional ethics in Civil Engineering.
1) Each group will prepare a 30 minute PowerPoint Presentation discussing
your topic and how it relates to Project Management.
2) Particular emphasis should be given how your particular topic enables the
project manager to effectively manage and enhance overall performance of
the project.
 TERM PAPER AND PRESENTATION REQUIREMENTS
FOR CENG 6101- PROJECT MANAGEMENT
Term Paper will be submitted electronically through e-mail and with

one hard copy bound in ring binders on Dec. 02/2019 (Hidar 22/2012
E.C.)
Presentations for section “A” will be made on Dec. 04/2019 (Hidar
24/2012 E.C.) Morning.
Presentations for section “B” will be made on Dec. 04/2019 (Hidar
24/2012 E.C.) Afternoon.

Project Mangement by Ephrame (All)

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Project Mangement by Ephrame (All)

Uploaded by

Copyright:

Available Formats

ARBA MINCH UNIVERSITY

resemble pyramidal shape.

specific skills which are more important to their respective

 prototype testing, if necessary,

 installation and commissioning

 A construction project is distinctly characterized by a

Performance Reports; and Change Requests.

the performances of the project against set plans whether the

the project scope; or to justify consequences for problems

incorporating scope changes, and a revised project

 Despite the recognition of stakeholder management as an

 While some definitions of project stakeholders are criticized

Categories stakeholders based on their attributes (Mitchell et al., 1997)

 Discretionary stakeholders: They have the attribute of legitimacy

 Demanding stakeholders: This class of stakeholders have the

 Dangerous stakeholders: They have the attributes of power and

 Dependent stakeholders: These stakeholders have the attributes

 Motivate and employee services

temporary or permanent move to lighter work

purposes: Accountability; Trend or Progress Assessment; and

Definition: That is, the Performance Criteria

techniques during Project implementation and after

outcome interface limits of the project: and hence

purposes: Accountability; Trend or Progress Assessment; and

Definition: That is, the Performance Criteria

techniques during Project implementation and after

outcome interface limits of the project: and hence

construction was originally scheduled for four years,

Precedence Relations for a Nine-Activity Project Example

A Site clearing ---

Gantt (Bar) Chart structure:

Gantt (Bar) Chart structure:

Gantt (Bar) Chart structure:

Gantt (Bar) Chart structure:

If an activity must, for some reason external to the

while if activity C is also dependent upon activity A, but is

This would result in two activities having the same head

LST(i,j) = LFT(i,j) – D(i,j)

Activity on Arrow (AOA)

event, activity, total and free float times. I 7 F, G

Activity Duration EST EFT LFT LST TF FF

to=14 tm=18 tp=28

Activity duration (in days)

Col 1 Col 2 Col 3 Col 4 Col 5 Col6 Col 7

In this case Z= (TD- TE)/ ST, = (42-36)/ 5.48 = 1.09

1.09 Standard Deviations

-0.55 Standard Deviations

Early Start (ES) Late Start (LS)

Early Finish (EF) Late Finish (LF)

Total Float (TF)

Total Float (TF) = Total Float (TF) = WBS Code Activity

Early Finish (EF) 3 Late Finish (LF)

WBS Code Activity

Early Start (ES) Duration Late Start (LS)

Early Finish (EF) 2 Late Finish (LF)

Total Float (TF) =

WBS Code Activity

Early Finish (EF) 3 Late Finish (LF)

Total Float (TF) =

Total Float (TF) = Total Float (TF) = WBS Code Activity

Early Finish (EF) 3 Late Finish (LF)

WBS Code Activity

Early Start (ES) Duration Late Start (LS)