CHAPTER 8 Application Of Controls PREPARED BY Ahmed

CHAPTER 8: Application Of Controls PREPARED BY: Ahmed Al Tayeb Saed Al Qeshawe Tareq Amen Abdalla Syiam S U P E R V I S E D B Y : Dr. Kamalain K. Shaat Fall 2010

Management-level Reporting By Construction Manager. v Management level reporting must provide a straightforward statement of : 1 The work accomplished. 2 Predict future accomplishment in terms of the project cost and schedule. 3 Measure actual accomplishments against goals set forth in the plan. 4 Review current and potential problems and indicate management action underway to overcome the effects of the problems

A Comprehensive "Monthly Progress Report" Can Convey This Essential Information. 1 Summary of project status 2 Procurement status 3 Construction status 4 Schedule status 5 Cost report summary

1 Summary of project status This item represents a short, overall status. information such as the physical percentage complete compared with scheduled completion, and forecast "at completion" costs against budget. 2 Procurement status This item reviews contracts awarded during the period, contracts currently out for bid. A simple bar chart showing actual procurement status and contract awards compared with the original plan.

3 Construction status provide a description of work accomplished during the period. work to be accomplished in the next period. discussion of major problems, with solutions or proposed solutions. 4 Schedule status -This item should contain the summary control schedules by contract and by facility, showing actual progress compared to early and late start schedules. Where contracts or facilities are behind schedule or are slipping, an explanation of the problems and the indicated solution.

5 Cost report summary Show actual recorded costs, committed costs, and estimated costs to complete. It should compare "at completion" costs with project budgets and identify and explain changes from the previous report. An evaluated contingency should be included so that an overall estimate of actual costs at completion is provided. A summary of value engineering savings to date and new items added during the period can be included

Overall Cost Controls By Construction Manager Overall cost controls, designed to measure project status against budget, include the following: • Preliminary estimates • Fair cost estimates • Definitive estimate • Cost report summary • Value engineering studies • Value engineering status • Other significant data

Project Control Techniques For Managing Construction. 1 Preliminary estimates assist the overall cost control program by serving as the first check against the budget. Indicating cost overruns early enough for the project team to review the design for possible alternates. Preliminary estimates are made prior to the completion of detail drawings, the margin for error is usually greater than for fair cost estimates. A larger contingency should be applied; this will vary with the amount of design information available and the extent of cost information obtainable from similar projects. For a phased construction program, it is especially important to prepare preliminary estimates by contract package.

2 Fair cost estimates are best prepared from the actual bid documents provided to the bidders. Whenever possible, it is helpful to complete the fair cost estimate well before receiving bids so that any discrepancies in plans and specifications, duplications in scope, and possible value engineering alternates suggested by the estimator can be communicated to the bidders via addenda before bids are received. Fair cost estimates represent the professional construction manager's appraisal of the fair value of the bid package to the owner. Local conditions, such as materials prices, wage rates, labor productivity, and anticipated competition, are important in achieving a reasonable estimate for the area.

Fair cost estimates in an integrated cost progress control system will also develop significant additional information for upgrading the usefulness and accuracy of the schedule and progress control portion of the overall control system. Some of these items include the following: 1 An estimate of total man hours of field effort required. 2 An estimate of reasonable unit costs for various components of the work. 3 Information for allocation of contract costs for owner capitalization and tax con siderations. In the event actual bids differ significantly from the fair cost estimate, the manager can often meet with the low bidder and compare quantities and scope. Many times this comparison can pinpoint the reason for the discrepancy.

3 -Definitive estimate • Definitive estimates are the anticipated cost with little margin of error. • In case of phased construction program, the overall estimated cost becomes more certain if more contracts have been awarded. • When 100 percent of the contracts have been awarded, contingency is generally limited. • The manager's knowledge will indicate the point at which a reliable definitive estimate can be prepared.

4 - Cost report summary • Cost report summaries describe the actual and forecast status of the project; they generally commence with the preliminary estimate and end when the project is complete and all claims. • Cost reports show: 1) actual cost to date. 2) estimated cost at completion. 3) estimated costs to complete (2) (1).

• Some owners prefer that PCM have to perform additional accounting to progress payments, Others prefer to handle this themselves and are interested in the manager's report only for costs to complete. • Some owners require continual cash flow to support cost reports, while others prefer to handle this themselves.

5 - Value-engineering studies • Value engineering studies help in determining the most economical approach prior to detailed design. • Value engineering must involve a partnership where the professional construction manager, designer, and owner all work together. 6 -Value Engineering Status • A report showing value engineering savings can be useful for long term benefit to all parties.

Field Cost Controls. • Evaluation of plan changes, claims, and other change orders can be done better at the job site. • When drawings are changed, an increase or a decrease in the contract price may be indicated. The adjustment should be fair to both the contractor and the owner. • In one helpful technique, the contract terms require an itemized breakdown by labor and materials to be supplied by the contractor for all changes, including applicable quantities.

• Whenever possible, the price for a modification should be settled before the work is performed. • An important item of field cost control is scheduling contractors to avoid interference, delays, and other effects of one contractor's operations upon another's. • In a professional construction management program, the owner through his manager is largely responsible for the coordination involved among site contractors.

Schedule And Progress Controls By Construction Manager • Cost Schedule progress control systems integrated with computerized data base have been successful on project. Effective Control: by compared actual accomplishments with the overall plan.

Schedule And Progress Controls By Construction Manager 1. Critical Path Method and double S-curve. 2. Physical measurements

Schedule And Progress Controls By Construction Manager CPM (Critical Path Method) is the foundation of Progress Control System. • According to both early & late start schedules and double S curve can be obtained to form an envelope. • Actual performance can be obtained from earned value approach.

SCHEDULE AND PROGRESS CONTROLS BY CONSTRUCTION MANAGER • Simple comparison between the envelope & actual curve shows: Below the Within the Above the envelope Behind the Due to Ahead the schedule

Physical Progress Measurement • Physical measurements dial with Cost (C), Quantities (Q), & Man power (M) for each item and whole project: 1) 2) 3) 4) 5) (C Q M) due to plan (fair cost estimate). (C Q M) accomplished to date (earned v. ). (C Q M) at completion (+ or ). % completion = (2)/(3) (C Q)%. % productivity = (2)/actual (M) %.

Field Schedules and Progress Controls • Construction manager, his staff, and the contractors must developed more detailed plans to accomplish short term goals. • Weekly meetings can be helpful to eliminate conflicts between parties. • Reporting of actual quantities completed each month is the heart of the overall progress control.

Bid Estimate v. The contractor maintains an estimating capability in the home office sized to achieve his planned annual bidding volume. v. The estimator first develops a material take off from the plans and specifications listing all of the required quantities for labor, material, construction equipment and subcontract pricing. v. When a bid is successful the estimator often acts as the project manager to oversee the work from the home office. In this event his first task will be to "buy out" the job by awarding subcontracts and purchase orders for materials and other required items.

Cost Reports v. The concrete contractor will utilize a weekly unit labor cost report to compare actual unit costs or man hours with estimated units. v. The concrete contractor utilizes a monthly cost report to tabulate recorded and committed costs plus estimated costs to complete in order to forecast estimated costs at completion SCHEDULE AND PROGRESS CONTROLS BY CONCRETE CONTRACTOR. v Figure 8 13.

Summary • This chapter reviewed the application of controls. However, the control system is only a tool which assist the manager in shaping the completed product. • In itself it connot manage; it connot tell what must be done to improve unsatisfactory performance; if it receives as similar reports based upon sound input data.

• The control system will never replace the judgment of competent homeoffice and job-site managers. • Managers must be knowledgeable enough to use the control system as available tool; but they must also have sufficient experience and skill to know when the tool has become dull.

Thanks For Attention