Project Control

And execution begins…

Project control is the continuous practice of
Project
1. monitoring work progress,
Project monitoring:
Control: 2. comparing it to baseline budget and schedule,
Owner
3. detecting variances: quantities and causes,
Contractor
and
4. taking a corrective action wherever and
whenever necessary
 Also called project tracking

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 Project Control
Project scheduling, like cost estimating, is a prediction
of future occurrence; time or money
Once project execution starts, actual performance may
not, and usually does not, exactly follow the baseline
Here comes Project Control to track both schedule and
cost, find variances (where, how much, and why), and
take corrective action to bring the project back to the
plan
It is like a compass or GPS: whenever you get astray,
it will direct you back to the destination!

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 Project Control
Project control is a cyclical iterative task: do
small part of the work and compare to
baseline, do corrective measures, adjust plan
(if needed), do another part of the work, and
so on
Project control requires measuring work
progress and calculating activities percent
complete

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 Baseline Schedule
Baseline: The original approved plan for a project
including approved changes. It usually includes
Baseline Budget and Baseline Schedule. It is used as
a benchmark for comparison with actual
performance
Baseline Budget: The project’s original approved
budget including any approved changes
Baseline Schedule: A schedule prepared by the
contractor before the start of the project –and
usually approved by the owner- typically used for
performance comparison
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 Schedule of Values
Schedule of Values: A detailed statement
furnished by a construction contractor, builder,
or others, apportioning the contract value into
work packages. It is used as the basis for
submitting and reviewing progress payments
 It is part of the contract documents but may get
modified or supplemented by a change order
 As a minimum, it contains an itemized list with item
description, total quantity, and unit price

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 Time and Cost Management
Bidding
Design / Negot
Contract Construction

Detailed Estimate`

Baseline Budget
Preliminary
Cost Estimate Cost Control

Project Controls
Detailed Schedule

Baseline Schedule

Summary Schedule Control

Schedule

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 Definition of Percent Complete
Percent Complete: An estimate, expressed as
a percent of the amount of work that has been
completed on an activity or a work breakdown
structure component.
(PMI PMBOK, 6th ed., 2017)

We can, and do, measure percent complete to

elements from the smallest activity to a large
program

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The Trick about Percent Complete

There are many types of percent complete, for an

activity (work package / project), based on a chosen
method of measuring work progress
Some methods are more suitable to the type of work
in the activity. Also, some methods are more
subjective than others
“We are almost done!”
 Pareto’s (20/80) Principle

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My project percent complete is 45%
Does this mean:
A. We are at 45% of the time required to complete the
project?
B. We spent 45% of the budget?
C. We used 45% of the manhours?
D. The activity (or project) is physically 45% complete? or
E. Something else?
Most importantly:
 Does this mean we are on schedule, ahead of schedule,
or behind schedule? and by how much?
 How about other “project success criteria” such as cost?

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In Oracle Primavera P6 Software
For Activities For Projects

1
2 1
3 2
4 3
5 4
6 5
7 6
8 7
9 8
10 9
10
11 11
12 12
13

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Use of Activity Percent Complete
1. Update remaining duration and start / finish
dates for successors,
2. Accurately calculate cost variance / cost to
complete / cost at completion
3. Recalculate project completion date and
important milestones
4. Update resource planning
5. Update cash flow
6. Accurately calculate progress payments

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 Use of Project Percent Complete
1. Often used to report to the client or upper
management (just to get an idea)
2. To calculate the overhead cost
3. Can be used for approximate financial
arrangements or marketing
4. Rarely, if ever, used to authorize progress
payments or make decisions on a project

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 Importance of Accurately
Estimating Percent Complete
Simple Example: An activity with original duration
of 8 days:
 After 4 days of work (AD = 4), it was recorded in the
schedule update as 50% complete.
 So the software calculated remaining duration as 4
days.
 In reality, it was less than 50%. Remaining duration, if
estimated accurately, is 7 days.
 This means the schedule shows the completion of this
activity 3 days earlier than what it should be.
 Now imagine the impact of this error on succeeding
activities.
 What if this activity is critical?

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Methods to Measure Work Progress
1. Units completed 6. Duration Ratio:
 Physical percent complete a. Actual

2. Start/finish b. Baseline

3. Supervisor Opinion 7. The “Workday” Unit Method

a. Actual
4. Cost/Budget Ratio:
b. Baseline
a. Actual
b. Baseline
8. Incremental milestones
5. Man-hour Ratio: 9. Weighted or Equivalent
a. Actual
Units
b. Baseline

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 Percent Complete Example
Assume a work package with three activities:
 The first two activities are (A and B) identical. Each one requires
the installation of an interior hollow-core wood door which cost
$200 each (including hardware). Installation of these doors
requires one laborer for 2 hours for each door
 The third activity, C, requires the installing of hand-carved
decorative exterior door that costs $2,200 and takes three
laborers for 3 hours
A
 A man-hour costs $40
B
 Activities A and B are to be performed
C
simultaneously, and then activity C
1 2 3 4 5 hours

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 Percent Complete Example

Baseline:
 Total cost of activities A and B =
$200 + 1 laborer * 2 hours * $40/hr = $ 280 each
 Total cost of activity C =
$2,200 + 3 laborers * 3 hours * $40/hr = $2,560
 Total cost for project = 2 * $280 + $2,560 = $3,120
 Total man-hours for project = 2 + 2 + 3*3 = 13 man-
hours
 Total duration for project = 2 + 3 = 5 hours
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 Percent Complete Example: Update

Activities A and B are now complete but the doors actually cost the
contractor $230 and took an extra hour for installation, i.e. 3 man-
hours (one laborer for 3 hours); each
Activity C has not yet started, no change is expected for cost or
duration.
What is the percent complete of this work package?
Data date

Actual
A
Baseline
Actual
B
Baseline
Updated
C
Baseline
1 2 3 4 5 6 hours

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 Calculation of Percent Complete
1. Units completed:
 Assume “a door is a door”
 Percent Complete = Units completed/Total units
= 2 door / 3 door = 66.7%

Note that “Units Completed” method does not look at

the time or cost aspect

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 Calculation of Percent Complete
2. Cost / Budget ratio:
A. Actual:
 Actual cost for activities A or B

= $230 + 1 laborer * 3 hours * $40/hr = $350 each

 Cost at Completion for work package = 2*350 + 2,560 =
$3,260
 Percent Complete = Actual Cost / Cost at Completion
= $700 / $3,260 = 21.5%

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 Calculation of Percent Complete
2. Cost / Budget ratio:
B. “Performance-based” baseline cost ratio:
Percent Complete =
Planned Cost for completed work / Baseline Budget
= $560 / $3,120 = 17.9%
C. “Time-based” baseline cost ratio:
Percent Complete =
Planned Cost to Date / Baseline Budget
= ($560 + / 2,560/3) / $3,120 = 45.3%
 These percentages are compared in Earned Value
Management to ACWP, BCWP, and BCWS; respectively

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 Calculation of Percent Complete
3. Man-hour ratio :
A. Actual:
 Actual man-hours for activities A or B = 3 + 3 = 6

 Total man-hours at Completion for work package

= 6+9 = 15
 Percent Complete = 6 / 15 = 40%
B. Baseline:
 Percent Complete = 4 / 13 = 30.8%

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 Calculation of Percent Complete
4. Duration: Data date

 Actual:
 Percent Complete = 3 / 6 = 50% A

 Baseline: C

 Percent Complete = 3/ 5 = 60%

1 2 3 4 5 6 Hours

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 Calculation of Percent Complete
5. Workday Unit (work-day or
work-hour unit): Data date

Actual:
A


 Percent Complete = 6 / 9 = 66.7% B

 Baseline: 1 2 3 4 5 6 Hours
 Percent Complete = 5 / 7 = 71.4% Legend
Completed
Future
Baseline

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 Calculation of Percent Complete
6. Supervisor’s opinion:
 The foreman "believes" the work package is about
75% complete!

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 Are You Confused Yet?
So, what is the true percent complete?
Which one should I use?
None of the previously discussed methods is
wrong but none of them can be considered the
“uniquely” right method
Most importantly:
 Know exactly what each percent complete means
 Pick one or two types to use
 Be consistent with the chosen ones throughout the
project
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 Earned Value Analysis
Earned Value (EV) Analysis: Earned Value analysis is
an integrated cost-schedule approach to monitor and
analyze the progress in a project.
Earned Value Management, started in the 1960’s as a
method for integrated project cost and schedule
control, was designed by the Air Force and named the
Cost/Schedule Planning and Control System.
In 1967, it became U.S. Dept of Defense policy and
was renamed Cost/ Schedule Control Systems Criteria,
or C/SCSC.

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 The Concept of EVA
The concept of Earned Value is simple; at any given
point find out:
1. How much work you have done and how much you planned
to do by this date,
2. How much money you have earned and how much money
you have spent,
3. Calculate time (schedule) and money (budget) variances
(variances) so far,
4. Analyze causes for major variance and suggest remedies,
5. Extrapolate these variances to the end of the entire project.

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 EVA: A Simplistic Example
Let’s assume an owner contracted with a
mason to install 10,000 CMU’s at a price of
$4.00 each in a total time of 20 days.
After 5 days, the mason reported that 2,800
blocks have been installed. His cost so far
(including OH&P) was $11,900.
What is the project status?

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 EV Example: Analysis
Total Budget = 10,000 CMU * $4 EA
= $40,000
Total Duration = 20 days
Daily planned budget = $40,000/20 days
= $2000/day
Percent Complete = 2800/10,000 = 28%

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 EV Example: Definitions
Actual Cost for Work Performed, ACWP, (this
is what it actually cost the mason so far).
 Also called Actual Cost (AC)
Budgeted Cost for Work Performed, BCWP,
(this is what the mason will get paid for work
performed so far).
 Also called Earned Value (EV)

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 EV Example: Definitions
Budgeted Cost for Work Scheduled, BCWS,
(this is what it would’ve cost the mason so far
if he worked on schedule and on budget).
 Also called Planned Value (PV)
Note that all numbers here should include
OH&P.

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 EV Example: Solution
ACWP (given) = $11,900
BCWP = 2,800 blocks installed * $4 Ea
= $11,200
or = $40,000 *28% = $11,200
BCWS = $2000/day * 5 days =$10,000
or = $40,000*5/20 = $10,000
Where does the mason stand now?

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 EV Example: Solution - 2
CV (Cost Variance) = BCWP – ACWP
= $11,200 - $11,900 = -$700
SV (Schedule Variance) = BCWP – BCWS
= $11,200 - $10,000 = +$1,200
SV (in days) = SV($)/Daily Planned Budget
= $1,200/$2000 per day = 0.6 days
CPI (Cost Performance Index) = BCWP / ACWP
= $11,200 / $11,900 = 0.94
SPI (Schedule Performance Index) = BCWP / BCWS
= $11,200 / $10,000 = 1.12

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 EV Example: Solution - 3
CV and SV are absolute parameters for measuring
variance from baseline budget and schedule. CPI and
SPI, are relative measures (percentages)
Always strive for
 CV and SV ≥ 0,
 CPI and SPI ≥ 1.0
EV is also used to forecast future variance:
 FCV = CV / % Complete = -$700/0.28 = -$2500
 FSV = SV / % Complete = 0.6/0.28 = 2.14 days
 Interpretation of FCV and FSV: warning signal?

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 Earned Value Chart

Activity Tot. % ACWP BCWP BCWS CV SV SV CPI SPI FCV FSV

Budget Compl Days

CMU 40,000 28% 11,900 11,200 10,000 -700 1200 0.6 0.94 1.12 -2500 2.14

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 Where are you now?

$ +

II I

- +
Time

III IV

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 EVA: The Curve

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 EVM or CPM? Which is more
reliable?
How reliable is the Earned Value method?
 It is a great tool, but needs to be used where it can be
effective
It is a “financial tool” even when measuring time:
 Schedule analysis is based on “Earned Value”
 So it is theoretically possible to have a wrong reading on the
schedule
 If we have positive SV in non-critical activities and negative
SV in critical activities or vice versa
For schedule analysis, it is recommended:
 In EVM, drill down to a more detailed level to isolate issues
 Always use the CPM calculations
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 Variances Management
Typically, we will find differences between the “As
Planned” and the “As built” in terms of percent
complete to cost, man-hours, and duration
 Do not rush to judgement
 The cause of the variance may be in the performance or
the baseline. It may be the fault of the contractor, the
owner, another party, or nobody’s!
 Some variances are tolerated and some are not.
 Most importantly: Extrapolate to the end of the project
and make the decision for the best possible outcome.

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 Variances Management

It is customary to perform project control at a mid-

level work packages:
 If the variance is acceptable (zero or small), stop here with no
need for details
 If the variance is unacceptable (large), drill down to find out
the variance at lower level components until you pinpoint the
source of the trouble
Keep in mind that a large positive variance is not
necessarily an indicator of “superb” performance. It is
likely an error in the baseline

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 Quiz
True or false:
1. Project control is to be practiced by both contractor and owner
2. Project monitoring is part of project control
3. For assistance in calculating progress payments, percent complete
for the project is more important than percent complete of
individual activities
4. It is possible that different parties compute the “project percent
complete” and come up with different estimates, yet none of them
is wrong!
5. It is possible to have the scheduler report saying the project is
behind schedule while the earned value analysis is showing a
positive schedule variance.

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 Project Schedule
Acceleration
Cost-Time Trade-offs
 Time/Cost Trade-off
Project Acceleration: An
Added Cost or Cost
Savings?
Schedule Acceleration is
shortening the duration of
the project schedule
without reducing the Scope
project scope, till reaching
the desired duration or the
crash duration, whichever
comes first
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 Project Schedule Acceleration
Schedule acceleration usually –but not always-
increases project cost and often has physical
and practical limitation to how much it can be
shortened
Synonymous terms: Schedule compression,
schedule crashing, schedule acceleration, and
time-cost tradeoff, schedule shortening
Schedule acceleration may be:
 Planned before construction starts (accelerated schedule), or
 Decided in the middle of the project (recovery schedule)

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 Why Do Owners Demand
Schedule Acceleration?
1. To make sure contractor’s finish date meets
their deadline

2. To respond to market demand / maximize profit

3. For the convenience of the public
4. To suit their cash flow (decelerate?)
5. Simply to reduce cost

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 Why Do Contractors Accelerate
Schedules?
1. To meet owner’s (contract’s) stipulated date
2. To avoid penalties (liquidated damages) and/or
get early finish bonus

3. To start other projects

4. Simply to reduce cost / increase profit

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The Northridge Earthquake Case
On January 17, 1994, a quake of 6.7
magnitude caused heavy damage and high
casualties in Northridge, California. Two
sections of the Interstate 10 in Santa Monica
were damaged.
 That part of I-10 was described as the busiest
highway in the world!

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The Northridge Earthquake Case
The immediate major concern for Caltrans (the
California Department of Transportation) was
reopening the public highways, in one of the
nation’s busiest areas
Caltrans had to get legislators’ approval to cut
the red tape and shorten the bureaucratic
process to select design and construction
firm(s)

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The Northridge Earthquake Case
Caltrans engineers estimated the repair of the
I-10 segments (including the bridge) project to
take 140 days and cost $22.3 million
Caltrans solicited Design-Build bids for the
project so the project can be performed
quicker
C.C. Myers, Inc., of Rancho Cordova, CA, was
awarded the project with a bid of $14.7 million
(crazy?)
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The Northridge Earthquake Case
The contract had a clause of:
 Liquidated damages of $205,000 for each day of
delay beyond 140 days, and
 Bonus of $200,000 for each day of early finish, i.e.
less than 140 days
Big carrots and huge sticks!

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The Northridge Earthquake Case
The project was fast-tracked. C. C. Myers
worked around the clock (24/7); putting large
amount of resources in the project, making
this project the focus of the company
What also helped was the cooperation
between Caltrans and the contractor. Caltrans
did its part to help push the project; assigning
10 engineers on the day shift and four on call
at night to inspect work and answer questions

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The Northridge Earthquake Case
The contractor was able to finish the project in
66 days only; 74 days ahead of the stipulated
deadline
Bonus per day $200,000
Early days 74
Total bonus $14,800,000
Original contract sum $14,700,000
Total compensation $29,500,000

 Yes, crazy like a fox!

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The Northridge Earthquake Case
C. C. Myers may have gone, in the process of
expediting the schedule, over their original
budget but with the large bonus, it certainly
had the last laugh
 There was a great deal of planning before the award
so they can “hit the ground running”
 The moto was “drop everything and focus on this
project”
 The incentive worked because everyone could see the
light at the end of the tunnel!

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The Northridge Earthquake Case
Despite the large paid bonus, Caltrans seemed to be
pleased with the results. The convenience of the
public was well worth the effort and the money.
Caltrans and C. C. Myers both believe that despite the
schedule compression, there was no compromise on
work quality
What else C. C. Meyers gained from that project?
 Huge positive publicity
 Reputation that paid off
 This means $$$

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Methods for Accelerating Work in
a Project
1. Invest more time and 7. Work overtime, more
money on planning workers and equipment,
2. Contractual adjustments / more shifts
incentives 8. Acquire special materials,
equipment, and
3. Revisit the schedule technologies
4. Fast-track the project 9. Offer incentives: individual,
5. Value engineering and crews, entire team
10. Improve project
constructability studies
management
6. Improve communications

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 Techniques for Schedule
Compression
The Construction I. Ideas applicable to all
Industry Institute phases of a project

suggested more than 90 II. Engineering phase

Contractual approach
techniques for schedule III.

Scheduling
compression. It further IV.

Materials management
classified them by V.

Construction work
project phase or VI.

management
function:
VII. Field labor management
VIII. Start-up phase

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Concept of Schedule Acceleration
1. Shorten the longest (critical) path. Start with the
easiest/least expensive activity to be shorten
2. At a certain point, the critical path will tie with the next
critical path. Shorten both paths: either select a
common activity (shared by both paths) or shorten two
activities; one on each path
3. At further point, the two critical paths will tie with the
next critical path. Shorten all three+ paths, and so on
4. Stop when you achieve desired duration or when the
project is completely crashed

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 Schedule Compression: Multiple
Paths - 1
Path 1

Path 2

Path 3

Path 4

Path 5

Path 6

Path 7

Path 8

Days 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

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 Schedule Compression: Multiple
Paths - 2
Path 1

Path 2

Path 3

Path 4

Path 5

Path 6

Path 7

Path 8

Days 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

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 Schedule Compression: Multiple
Paths - 3
Path 1

Path 2

Path 3

Path 4

Path 5

Path 6

Path 7

Path 8

Days 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

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 Schedule Compression: Multiple
Paths - 4
Path 1

Path 2

Path 3

Path 4

Path 5

Path 6

Path 7

Path 8

Days 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

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 Schedule Compression: Multiple
Paths - 5
Path 1

Path 2

Path 3

Path 4

Path 5

Path 6

Path 7

Path 8

Days 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

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Effect of Project Acceleration on Cost

Direct cost: increases at an increasing rate

Indirect cost (overhead): decreases linearly

Total cost: watch the curve go down and up

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 Impact of Acceleration on
Direct Cost

Schedule
compression

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Summer 2020
 Impact of Acceleration on
Indirect Cost

Schedule
compression

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Summer 2020
 Impact of Acceleration on
Total Cost

Schedule
compression

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Summer 2020
 Time/Cost Trade-offs - Example
Act IPA* Duration Cost $

Norm Crash Norm Crash

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

* Immediately preceding activities

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 Example Solution: The Network
5, 12
B 13, 19 19, 25
7 E H
6, 13 6 6
13, 19 19, 25
0, 5 5, 13 25

A C PF
5 8
0, 5 5, 13 13, 17 17, 24 25
F G
Path Length
4 7
14, 18 18, 25
ABEH 24
5, 16
ACEH 25
D
11 ACFH 23
7, 18 ACFG 24
ADG 23
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Linear Project Crashing Overhead per day = $120

Activity Duration Cost Duration Cost Crash Cost

Normal Crash Normal Crash Difference Difference per Day Days Shortened
A 5 4 $500 $600 1 $100 $100
B 7 5 $350 $500 2 $150 $75
C 8 5 $800 $920 3 $120 $40
D 11 7 $1,200 $1,400 4 $200 $50
E 6 4 $600 $700 2 $100 $50
F 4 4 $500 $500 0 $0
G 7 5 $700 $1,000 2 $300 $150
H 6 5 $300 $420 1 $120 $120

Days Cut 0
Project Duration 25
Increased cost $0
Direct Cost $4,950
Overhead Cost $3,000
Total Cost $7,950

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 73

 Example Solution:
The Paths, before crashing
Path Duration
ABEH 24
ACEH 25
ACFH 23
ACFG 24
ADG 23

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 74

 Path(s) to be
shorten:
ACEH

Linear Project Crashing Overhead per day = $120

Activity Duration Cost Duration Cost Crash Cost

Normal Crash Normal Crash Difference Difference per Day Days Shortened
A 5 4 $500 $600 1 $100 $100
B 7 5 $350 $500 2 $150 $75
C 8 5 $800 $920 3 $120 $40 1
D 11 7 $1,200 $1,400 4 $200 $50
E 6 4 $600 $700 2 $100 $50
F 4 4 $500 $500 0 $0
G 7 5 $700 $1,000 2 $300 $150
H 6 5 $300 $420 1 $120 $120

Days Cut 0 1
Project Duration 25 24
Increased cost $0 $40
Direct Cost $4,950 $4,990
Overhead Cost $3,000 $2,880
Total Cost $7,950 $7,870

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 75

 Example Solution:
The Paths: Crashing cycle #1: Act. C by 1
day
Path Duration
ABEH 24 24
ACEH 25 24
ACFH 23 22
ACFG 24 23
ADG 23 23

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 76

 Path(s) to be shorten:
ABEH
ACEH
Linear Project Crashing Overhead per day = $120

Activity Duration Cost Duration Cost Crash Cost

Normal Crash Normal Crash Difference Difference per Day Days Shortened
A 5 4 $500 $600 1 $100 $100
B 7 5 $350 $500 2 $150 $75
C 8 5 $800 $920 3 $120 $40 1
D 11 7 $1,200 $1,400 4 $200 $50
E 6 4 $600 $700 2 $100 $50 1
F 4 4 $500 $500 0 $0
G 7 5 $700 $1,000 2 $300 $150
H 6 5 $300 $420 1 $120 $120

Days Cut 0 1 1
Project Duration 25 24 23
Increased cost $0 $40 $50
Direct Cost $4,950 $4,990 $5,040
Overhead Cost $3,000 $2,880 $2,760
Total Cost $7,950 $7,870 $7,800

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 77

 Example Solution:
The Paths: Crashing cycle #2 : Act. E by 1
day
Path Duration
ABEH 24 24 23
ACEH 25 24 23
ACFH 23 22 22
ACFG 24 23 23
ADG 23 23 23

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 78

 Path(s) to be shorten:
ABEH
ACEH
ACFG
ADG
Linear Project Crashing Overhead per day = $120

Activity Duration Cost Duration Cost Crash Cost

Normal Crash Normal Crash Difference Difference per Day Days Shortened
A 5 4 $500 $600 1 $100 $100 1
B 7 5 $350 $500 2 $150 $75
C 8 5 $800 $920 3 $120 $40 1
D 11 7 $1,200 $1,400 4 $200 $50
E 6 4 $600 $700 2 $100 $50 1
F 4 4 $500 $500 0 $0
G 7 5 $700 $1,000 2 $300 $150
H 6 5 $300 $420 1 $120 $120

Days Cut 0 1 1 1
Project Duration 25 24 23 22
Increased cost $0 $40 $50 $100
Direct Cost $4,950 $4,990 $5,040 $5,140
Overhead Cost $3,000 $2,880 $2,760 $2,640
Total Cost $7,950 $7,870 $7,800 $7,780

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 79

 Example Solution:
The Paths: Crashing cycle #3 : Act. A by 1
day
Path Duration
ABEH 24 24 23 22
ACEH 25 24 23 22
ACFH 23 22 22 21
ACFG 24 23 23 22
ADG 23 23 23 22

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 80

 Path(s) to be shorten:
ABEH
ACEH
ACFG
ADG
Linear Project Crashing Overhead per day = $120

Activity Duration Cost Duration Cost Crash Cost

Normal Crash Normal Crash Difference Difference per Day Days Shortened
A 5 4 $500 $600 1 $100 $100 1
B 7 5 $350 $500 2 $150 $75
C 8 5 $800 $920 3 $120 $40 1 1
D 11 7 $1,200 $1,400 4 $200 $50 1
E 6 4 $600 $700 2 $100 $50 1 1
F 4 4 $500 $500 0 $0
G 7 5 $700 $1,000 2 $300 $150
H 6 5 $300 $420 1 $120 $120

Days Cut 0 1 1 1 1
Project Duration 25 24 23 22 21
Increased cost $0 $40 $50 $100 $140
Direct Cost $4,950 $4,990 $5,040 $5,140 $5,280
Overhead Cost $3,000 $2,880 $2,760 $2,640 $2,520
Total Cost $7,950 $7,870 $7,800 $7,780 $7,800
Least Cost

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 81

Example Solution: The Paths. Crashing
cycle #4: Act’s. C, D, E; by 1 day,
each
Path Duration
ABEH 24 24 23 22 21
ACEH 25 24 23 22 20
ACFH 23 22 22 21 20
ACFG 24 23 23 22 21
ADG 23 23 23 22 21

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 82

 Path(s) to be shorten:
ABEH
ACFG
ADG
Linear Project Crashing Overhead per day = $120

Activity Duration Cost Duration Cost Crash Cost

Normal Crash Normal Crash Difference Difference per Day Days Shortened
A 5 4 $500 $600 1 $100 $100 1
B 7 5 $350 $500 2 $150 $75 1
C 8 5 $800 $920 3 $120 $40 1 1 1
D 11 7 $1,200 $1,400 4 $200 $50 1 1
E 6 4 $600 $700 2 $100 $50 1 1
F 4 4 $500 $500 0 $0
G 7 5 $700 $1,000 2 $300 $150
H 6 5 $300 $420 1 $120 $120

Days Cut 0 1 1 1 1 1
Project Duration 25 24 23 22 21 20
Increased cost $0 $40 $50 $100 $140 $165
Direct Cost $4,950 $4,990 $5,040 $5,140 $5,280 $5,445
Overhead Cost $3,000 $2,880 $2,760 $2,640 $2,520 $2,400
Total Cost $7,950 $7,870 $7,800 $7,780 $7,800 $7,845
Least Cost

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 83

Example Solution: The Paths. Crashing
cycle #5: Act’s. B, C, D; by 1 day, each

Path Duration
ABEH 24 24 23 22 21 20
ACEH 25 24 23 22 20 19
ACFH 23 22 22 21 20 19
ACFG 24 23 23 22 21 20
ADG 23 23 23 22 21 20

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 84

 Path(s) to be shorten:
ABEH
ACFG
ADG
Linear Project Crashing Overhead per day = $120

Activity Duration Cost Duration Cost Crash Cost

Normal Crash Normal Crash Difference Difference per Day Days Shortened
A 5 4 $500 $600 1 $100 $100 1
B 7 5 $350 $500 2 $150 $75 1 1
C 8 5 $800 $920 3 $120 $40 1 1 1
D 11 7 $1,200 $1,400 4 $200 $50 1 1
E 6 4 $600 $700 2 $100 $50 1 1
F 4 4 $500 $500 0 $0
G 7 5 $700 $1,000 2 $300 $150 1
H 6 5 $300 $420 1 $120 $120

Days Cut 0 1 1 1 1 1 1
Project Duration 25 24 23 22 21 20 19
Increased cost $0 $40 $50 $100 $140 $165 $225
Direct Cost $4,950 $4,990 $5,040 $5,140 $5,280 $5,445 $5,670
Overhead Cost $3,000 $2,880 $2,760 $2,640 $2,520 $2,400 $2,280
Total Cost $7,950 $7,870 $7,800 $7,780 $7,800 $7,845 $7,950
Least Cost

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 85

Example Solution: The Paths. Crashing
cycle #6: Act’s. B and G; by 1 day, each

Path Duration
ABEH 24 24 23 22 21 20 19
ACEH 25 24 23 22 20 19 19
ACFH 23 22 22 21 20 19 19
ACFG 24 23 23 22 21 20 19
ADG 23 23 23 22 21 20 19

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 86

 Path(s) to be shorten: all
ABEH ACEH
ACFH ACFG
ADG

Linear Project Crashing Overhead per day = $120

Activity Duration Cost Duration Cost Crash Cost

Normal Crash Normal Crash Difference Difference per Day Days Shortened
A 5 4 $500 $600 1 $100 $100 1
B 7 5 $350 $500 2 $150 $75 1 1
C 8 5 $800 $920 3 $120 $40 1 1 1
D 11 7 $1,200 $1,400 4 $200 $50 1 1
E 6 4 $600 $700 2 $100 $50 1 1
F 4 4 $500 $500 0 $0
G 7 5 $700 $1,000 2 $300 $150 1 1
H 6 5 $300 $420 1 $120 $120 1

Days Cut 0 1 1 1 1 1 1 1
Project Duration 25 24 23 22 21 20 19 18
Increased cost $0 $40 $50 $100 $140 $165 $225 $270
Direct Cost $4,950 $4,990 $5,040 $5,140 $5,280 $5,445 $5,670 $5,940
Overhead Cost $3,000 $2,880 $2,760 $2,640 $2,520 $2,400 $2,280 $2,160
Total Cost $7,950 $7,870 $7,800 $7,780 $7,800 $7,845 $7,950 $8,100
Least Cost Least Time
Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 87
Example Solution: The Paths. Crashing
cycle #7: Act’s. G and H; by 1 day,
each
Path Duration
ABEH 24 24 23 22 21 20 19 18
ACEH 25 24 23 22 20 19 19 18
ACFH 23 22 22 21 20 19 19 18
ACFG 24 23 23 22 21 20 19 18
ADG 23 23 23 22 21 20 19 18

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 88

 Total Cost with Compression
Overhead = $120/day
$8,150

$8,100

$8,050

$8,000
Total Cost

$7,950

$7,900

$7,850

$7,800

$7,750
16 18 20 22 24 26 28
Project Duration

Note that the curve along with the optimum points

change if the cost of overhead / day changes

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 89

 What if Overhead is Different?
Linear Project Crashing Overhead per day = $200

Activity Duration Cost Duration Cost Crash Cost

Normal Crash Normal Crash Difference Difference per Day Days Shortened
A 5 4 $500 $600 1 $100 $100 1
B 7 5 $350 $500 2 $150 $75 1 1
C 8 5 $800 $920 3 $120 $40 1 1 1
D 11 7 $1,200 $1,400 4 $200 $50 1 1
E 6 4 $600 $700 2 $100 $50 1 1
F 4 4 $500 $500 0 $0
G 7 5 $700 $1,000 2 $300 $150 1 1
H 6 5 $300 $420 1 $120 $120 1

Days Cut 0 1 1 1 1 1 1 1
Project Duration 25 24 23 22 21 20 19 18
Increased cost $0 $40 $50 $100 $140 $165 $225 $270
Direct Cost $4,950 $4,990 $5,040 $5,140 $5,280 $5,445 $5,670 $5,940
Overhead Cost $5,000 $4,800 $4,600 $4,400 $4,200 $4,000 $3,800 $3,600
Total Cost $9,950 $9,790 $9,640 $9,540 $9,480 $9,445 $9,470 $9,540
Least Cost Least Time

Not only amounts of cost changed, but the “Least Cost

Duration” changed from 22 to 20 days
Construction Management, CCE4031 - Dr. Saleh Mubarak 90
Summer 2020
Project Acceleration: Final Thoughts

Project Acceleration should be based on scientific and

systematic principles
 It is not random dumping of extra resources on the site
 It is not a race to set records
It should be done only to the extent needed
You cannot accelerate all your projects; prioritize them
There are physical and practical limitations to project
acceleration
Unplanned or unorganized acceleration may result in
negative consequences

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 91

 Recovery Schedules
Recovery Schedule: A schedule prepared
during construction phase, after the project
falls behind (either fails to meet its interim
target or shows serious signs of failure to
meet its deadline), with adjustments made by
the contractor that expedite the remainder of
the project and ensure a timely finish.

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 92

 Optimum Scheduling
Optimum scheduling is selecting the project's
starting point and the composition of the
durations and timing of its activities, within
logic constraints, which results in an optimum
schedule and least cost while maintaining the
project's scope and quality.
Project scheduling works best in areas with
extreme weather

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 93

 Optimum Scheduling Concept
1. Divide the year into time segments (months, half
month, 10-day segments)
2. Assign a “Productivity Multiplier” and a “Cost
Multiplier” to each activity per time segment
3. When moving the project start point in time, the
entire schedule moves, so activities’ duration and
cost change per their multipliers
 This change is progressive iterative: when an activity’s
duration is increases or decreases, its successors get shifted
so they may fall in different time segment and hence their
duration and cost change

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 94

 Optimum Scheduling Concept
4. Use a computerized optimization technique to
calculate time and cost, and to find the optimum
set-up, depending on project requirements

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 95

 Move Start Date

Optimize
for best
results * Durations
Manipulate Durations* change due to
both user’s
manipulation
(crew
configuration,
work hours, etc.)
and impact of
new “productivity
zone”

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 96

 Quiz
True or False:
1. It is always a good idea to accelerate projects
2. Project acceleration always cost more money
3. It is possible that a contractor accelerates a project even
though the owner does not require him to do so
4. When economy is slumping, the contractor is more likely to
accelerate the project
5. Fast-tracking a project saves time and money
6. Recovery schedule is a schedule aims at recovering time
lost earlier in the schedule

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 97

 Linear Scheduling Method, LSM

Linear Scheduling Method (LSM):

 Good for projects with few activities (usually with
large quantities) that have to be done in the same
order or sequence. For example, heavy
construction projects such as roads, earthwork, or
utility piping.
 Rarely used in the vertical construction industry
but trying to make a comeback.
 Also called Line-of-Balance (LOB) method.

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 98

 LSM Concept

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 99

 LSM Concept
A successor must not get ahead of the
predecessor.

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 LSM Concept
The successor must slow down or get done
intermittently.

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 101

 LSM Concept
Simultaneous finish:

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 102

 LSM Example
A project consists of five activities:
A. Excavating a trench, Duration = 1000/100 = 10 days
B. Laying a sub-base of gravel, Duration = 1000/125 = 8 days
C. Laying the concrete pipe, Duration = 1000/75 ≈ 14 days
D. Backfilling, and Duration = 1000/200 = 5 days
E. Compacting. Duration = 1000/150 ≈ 7 days
Length of the pipe is 1,000’
Productivity of the five activities 100, 125, 75, 200,
and 150 LF/Day; respectively
Leave a minimum one-day Time Buffer

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 103

 LSM Example

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 104

 The Pipe Example in PDM
1 1 1 1
0, 10 3, 11 4, 18 14, 19 15, 22
A B C D E
10 8 14 5 7

0, 10 3, 11 4, 18 14, 19 15, 22
1 1 1 1

Excavating
Sub-base
Lay Concrete
Backfill
Compact
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 105

 Risk Management
Project Risk is an uncertain event or condition that, if
it occurs, has a positive or negative effect on at least
one project objective, such as time, cost, scope, or
quality. A risk may have one or more causes and, if it
occurs, one or more impacts.
Schedule risks are both threats and opportunities to
the success of a project. Threats tend to reduce the
success of meeting the project goals and opportunities
tend to increase the success.

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 Risk Management
Risk management is the process of identifying,
analyzing, qualifying and quantifying the risks, and
developing a plan to deal with them. This is routinely
done during baseline schedule development as well as
during schedule updates.
Everything that has ever gone wrong on a project is a
potential risk on the next project
Risks in this context do not include safety and health
issues.

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 107

 Risk Register
A risk management plan is prepared, including a
brainstorming meeting with the major project
stakeholders.
A master risk register is an invaluable tool for
facilitating the brainstorming session, which is often
called a risk workshop.
 This register is a logical place to collect lessons learned on a
corporate level from many project experiences.
 With a good risk register, organized by industry and type of
risk, the process of brainstorming moves quicker and is
focused with a more comprehensive list of risks.

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 108

 Issues Related to Risk
Management
Importance of Good Planning for Risk
Management
 Who has control?
 The earlier we anticipate and prepare, the better
we can manage
 Example: shop drawings / submittals approval cycle
 Team work: win/win

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 109

 Risk Shifting in Contracts

Risk Shifting: the price!

The more that risk is shifted to the contractor,
the higher the cost and, sometimes, the longer
the performance time of the project will be.
 However, this may be the right choice in some
cases provided that the owner knows the benefits
and cost of such a decision

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 110

 Risk Shifting in Contracts
Cost-plus-fee contract shifts the risk from GC
to owner
 The owner can shift back some of that risk by
requiring a GMP from the GC
 The GC also can shift some of that risk to
subcontractors by signing a lump-sum contracts
with some of them; depending on confidence he
has in the cost of these packages
In the end, it is a game of risk management
that must be planned well
Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 111
The Concept of Risk Management

“Following the timely identification and assessment of

risks, a rational approach to risk allocation can proceed
based upon the following general principles:
1. Risk should be assigned to the party who can best control it.
2. Risk should be assigned to the party who can bear the risk at the
lowest cost.
3. Risk should be assigned to the Owner when no other party can
control the risk or bear the loss.
4. Assumption of risk by the other parties to the construction
process results in increases in cost (visible or hidden) to the
Owner”
The Construction Management Association of America, CMAA

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 112

 Schedule Risk Management for
Construction
1. Risk management planning
2. Identification of schedule risks
3. Performing qualitative analysis of the identified risks and
establishing priorities
4. Performing quantitative analysis of the qualified risks
5. Responding to and addressing risks by avoiding, shifting,
preventing, or accepting risks and incorporating remaining
risks into the schedule and providing mitigation plans
where appropriate
6. Monitoring and updating the risk management plan during
update cycles

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 113

 Managing Changes
When changes are made to a project’s scope,
cost or time; these changes are formally
incorporated into the construction contract
using a change order CO.
Changes may be additive, deductive, or
substitution.
They are called variation orders, VO, in other
countries

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 114

What Situations Trigger Changes?
Errors or omissions in drawings
 Mistakes

 Poor coordination between documents

Changes by the owner

 Owners have the right to change their minds

 Contractors typically have the obligation to

make reasonable changes

Changes due to market fluctuations and trends
 Sometimes a specified product or material is

unavailable or a better one is introduced to

the market.
Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 115
What Situations Trigger Changes?

Delays
 Severe weather, failure to make timely decisions,
interference in the work
 Delays by other parties (owner, A/E, lender,
government) such as materials delivery, testing
and inspections
Unexpected / differing site / underground
conditions
Changes resulting from cost-cutting
adjustmentsConstruction Management, CCE4031 - Dr. Saleh Mubarak 116
Summer 2020
What Situations Trigger Changes?
Change orders are generally issued if a change
is due to no fault of the contractor.
The contractor should keep careful records to
ensure full reimbursement for any changes.

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 117

 Who Initiates Changes?
Changes may be initiated by anyone: the
GC, a subcontractor, a vendor, the architect
or owner
Making changes involves following formal
procedures
No changes should be made until there is
formal agreement regarding the scope and
cost
Changes are coordinated and tracked by the
general
Summer 2020 contractor
Construction Management, CCE4031 - Dr. Saleh Mubarak 118
 Process For Making Changes
The general contractor always assesses the
time and cost implications of any change no
matter who initiates it.
The cost and/or time impacts of a change
are outlined in a change proposal.
The owner/architect respond to the change
proposal in one of three ways:
 Yes, we agree to the costs and want the change
made
 No, we’ve decided not to make the change
Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 119
 Please make adjustments to the change proposal
 Process For Making Changes

Once owner/architect agree to the GC’s change

proposal the architect completes a change order
form and he and owner sign
Contractor signs the change order
Contractor makes the change
 The impact on budget and/or schedules is reflected on the
baselines

Once signed, the change order becomes part of the

formal construction contract.

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 120

 An example of a
change proposal
from the GC.

Once the owner

and architect agree,
the A/E issues a
change order to the
GC who will
issue change
orders to subs as
necessary.

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 121

 An example of a
change order.

Not all projects

use this form. Not all
projects require that
both the owner and
A/E sign.

Once all parties sign,

the CO becomes part
of the contract.

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 122

 Change Directives
Changes may be incorporated into the contract
using change directives
 When the contractor and owner can’t agree on
the terms
 When there is insufficient time for following
standard procedures for approving changes
The GC is responsible for making changes
issued with a change directive
Change directives become change orders once
the contractor and owner have agreed to the
terms
Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 123
 An example of a
change directive.

The GC must make the

identified changes
when the owner and
architect submit a
signed directive. Once
the contractor adds his
signature, the directive
becomes part of the
contract.

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 124

 Guidelines For Making Changes
Always get written authorization before making
any changes (even minor ones that do not
require a formal change order)
No changes beyond the basic scope of work
Identify the process for making changes before
construction begins, including overhead and
profit procedures and who must sign
GC should carefully assess all present and
potential future costs
Expedite the process to reduce delays to the
work

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 125

 Claims, Disputes, and
Mechanic’s Liens

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 126

 Delay Claims
Avoidance and Resolution
 Delay Claims
 Reasons for Claims
 Types of delay claims
 Delay Claims Prevention
 Delay Claim Resolution

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 Definitions
A claim is a demand by one party for additional
time or money.
A claim does not necessarily imply a dispute or
confrontation. Most claims are resolved quickly
and with the satisfaction of both parties.
Claims which are not resolved become disputes.
It is everyone’s best interest to resolve
disputes, otherwise they may escalate to
litigation.
Typically, parties strive to avoid litigation.
 Lawyers are the usual winners in confrontation

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 Types of Claims

A delay claim can be for:

 Extension of time,
 Monetary compensation,
 Extension of time and monetary compensation

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 129

 Reasons for Claims
1. Differing site conditions
2. Design errors or omissions
3. Delays caused by owner or architect
4. Changes in owner’s requirements
5. Unusually adverse weather
6. Other factors that may not be the claimant’s
fault

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 130

 Change Orders: Importance of
Timing
An owner decides to change a few doors from 2’-8”
wide to 3’-0” wide. Let’s consider the following five
different scenarios:
1. The owner makes the change before design is complete
2. The owner makes the change after design is done but before
bidding
3. The owner makes the change after signing the construction
contract but before doors are delivered
4. The owner makes the change after the door openings have
been framed but before the walls have been finished
5. The owner makes the change after everything is finished

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 131

 Force Majeure
The term “force majeure” (also written as
“force majure”) came around 1883 from a
French origin that means “superior force”.
It is a better alternate of the term “Act of
God”

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 132

 Force Majeure
In the context of construction projects, this
term generally combines three important
elements:
1. Superior, overwhelming, or overpowering, i.e.
cannot be prevented,
2. Unexpected or cannot reasonably be anticipated
or controlled, and
3. Has a destructive or disruptive effect on the
construction process.

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 133

 Types of Delay Claims from Scheduling
Point of View
1. Excusable delay: This is a delay that entitles
the contractor to additional time for
completing the contract work. Excusable
delays usually stem from reasons beyond
the contractor’s control

Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 134

 Types of Delay Claims from Scheduling
Point of View
Excusable delays are further classified into:
 Non-compensable delays: Delays beyond the control, nor
the fault, of the owner such as unusual weather conditions,
natural disasters (earthquakes, floods, hurricanes, etc.),
wars or national crises, or labor strikes. These types of
delays will most likely entitle the contractor to a time
extension but not monetary compensation.
 Compensable delays: Delays caused by the owner or the
designer (architect/engineer.) These types of delay typically
allow the contractor to recover the costs and time
associated with the delay.

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 Types of Delay Claims from Scheduling
Point of View
2. Non-excusable delay: Any delay that is either caused
by the contractor or not caused by the contractor but
should have been anticipated by the contractor under
normal conditions
 Examples: Slow mobilization, poor workmanship, labor strikes
due to unfair labor practices, accidents in the project site
caused by the contractor’s negligence or lack of preparation,
late delivery of contractor’s furnished materials and
equipment, contractor’s cash-flow problems, adverse weather
conditions that are expected for that location during that time
of the year, or lack of skilled labor.

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 Types of Delay Claims from Scheduling
Point of View
3. Concurrent delay: A combination of two or more
independent causes of delay during the same time
period are generally held to be concurrent delays.

In reality, almost all of the delay claims are

concurrent,
Why?

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 Delay Claims Prevention: Frequent
Scheduling Mistakes
1. Baseline schedules that 6. Schedules with logic
don’t show logic errors
2. Baseline schedule with 7. Skipping periodic
dates rather than logic updates
3. Overuse of constraints 8. Lack of proper
4. “Erasing footprints” documentation
5. Unrealistic baseline 9. Lack of reasonable time
schedules contingency
10.No resources leveling or
proper management

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 Delay Claims Prevention:
Documentation!
Project information to be documented (other
items may have to be included, too):
1. Project baseline schedule that was accepted by
the owner: electronic and printed copies
2. Periodic updates for the schedule
3. Change orders: including administrative and
technical correspondence
4. Project manager’s daily log
5. Job diary

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 Project information to be documented -
continued
6. Submittals along with their records
7. Record of any transmittals such as requests for
information (RFI), requests for clarification (RFC),
test lab results, warranties and certificates, etc.
8. Correspondence with the owner, architect/ engineer,
subcontractors, vendors and suppliers, or other
contracting parties
9. Correspondence with the home office
10. Meeting minutes

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 Project information to be documented -
continued
11. Procurement records (materials and equipment
orders and delivery tickets, equipment maintenance
records, quotations, receipts, etc.)
12. Government records such as permits, code non-
conformance reports, and OSHA forms/citations
13. Record of payments and lien waivers
14. Pictures / video clips
15. E-mails and electronic data in its native format (e.g.
schedules, submittals, databases)

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 Delay Claim Resolution
1. Negotiation
2. Mediation
3. Arbitration
4. Litigation
5. Disputes Review Boards (DRB)

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 Negotiation
Negotiation is the process of trying to resolve a
dispute through face-to-face discussion
Typically the architect acts as a facilitator
Negotiation has several advantages:
 It is quick
 There is minimum (or no) cost
 Negotiation provides an opportunity to resolve a
conflict before it gets out of hand
If negotiation fails, the next step may be mediation

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 Mediation
Mediation is a process whereby a neutral, trained
mediator assists the parties in reaching resolution.
It has several characteristics:
 It is non-binding
 The process is confidential
 It is quicker and less costly than litigation
 There may be moral pressure to reach an agreement
Skills needed for the mediator:
 Focus on each side’s needs
 Absolute fairness may be illusive and impossible

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 Arbitration
If no resolution is reached through mediation,
most contracts call for arbitration as the next
step.
Arbitration also involves an outside neutral party
but unlike mediation:
 Arbitration is more formal process
 Arbitrators are paid professionals and they are trained
and certified
 The arbitrator makes a ruling (like a judge)
Most contracts state that arbitration is binding
on2020
Summer the parties.
Construction Management, CCE4031 - Dr. Saleh Mubarak 145
 Arbitration: Characteristics
 Arbitration is less formal than litigation
 It is usually less costly than litigation
 It is quicker than litigation
 Unlike a court judge, the arbitrator may be very
familiar with construction and its problems
 Arbitration rulings are not appealable unless a
serious violation is committed
 Fewer controls over what is presented than
with litigation and perhaps less predictable

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 Dispute Resolution Board (DRB)
Some contracts require a DRB to attempt
problem resolution
DRB’s are made of 3 members:
 One chosen by the contractor
 One chosen by the owner
 The above 2 members select a 3rd neutral person
who becomes the chairperson of the board
Members meet regularly to review
construction progress and hear any
problems/disputes
Construction Management, CCE4031 - Dr. Saleh Mubarak 147
Summer 2020
 Litigation
The final resolution technique is for one party
to bring a lawsuit against the other and for the
matter to go before the courts.

 Litigation is complicated and expensive –

everything goes through attorneys
 Resolution can take years
 The process follows strict procedures
 The resolution may be appealed
Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 148
 Mechanic’s Liens
A mechanic's lien is a guarantee of payment to builders,
contractors and construction firms that build or repair
structures. Mechanic's liens also extend to suppliers of materials
and subcontractors and cover building repairs as well
It occurs if the claimant party did not receive full payment for
materials / services rendered in the project.
 While the lien is placed, the owner may not be able to sell without court
permission

A mechanic’s lien is unique to construction and provides a way

for someone who improves the value of real estate to get paid.
Procedures for recording a lien are strict and vary significantly
from state to state. Who has lien rights varies from state to state

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 Mechanic’s Liens
Typically contractors and subcontractors are
required to submit lien releases with all
monthly pay requests. This provides security
to the owner that those with lien rights have
been paid to date.
When final payment is made all the contactors
are typically required to submit lien releases.

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 Methods of Schedule Analysis
As-Built Schedule
Updated Impact Schedule
As-Planned Schedule
Comparison Schedule
Accelerated Schedule

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 Quiz 12 - 1
True or false?
1. Any party can initiate a claim but usually it is the contractor who
initiates claims against the owner
2. A concurrent delay is usually caused by the owner
3. One of the most important documents to keep in the project’s
records is the baseline schedule
4. As-built schedule shows the intent of the contractor on how he
planned to build the project
5. In most –but not all- cases, the as-planned schedule and baseline
schedule are the same
6. An owner adds work in an activity that increased the duration from
5 to 8 days. If this activity had 7 days of total float, then the
contractor is not entitled to any time extension

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 Quiz 12 - 2
1. While excavating, the 2. Which one of these in not
Contractor hits a rock layer. classified as force majeure:
Since the plans and soil A. Hurricane
report did not mention such B. Flood
rock, the contractor files a C. Unusually hot weather
claim under: D. Earthquake
A. Force majeure 3. A form of dispute resolution
B. Differing site conditions starts before disputes arise:
C. Design errors/omissions
A. Mediation
D. Changes in owner’s
B. Arbitration
requirements
C. Negotiation
D. Dispute review boards

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 Quiz 12 - 3
4. The simplest form of 6. Who owns the float in a
dispute resolution is: construction schedule?
A. Mediation A. The owner unless the
B. Arbitration contractor demands it in
C. Negotiation the contract
D. Litigation B. The contractor unless the
owner demands it in the
5. A form of dispute resolution contract
that is not voluntary to the C. The contractor, always
disputing partied: D. The owner, always
A. Mediation
B. Arbitration
C. Negotiation
D. Litigation

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Close-out and Occupancy

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 Close-out and Occupancy
After the completion of construction
activities and reaching the final completion
of the project, most people have left the
jobsite but there are still important activities
taking place.

There are three broad phases of close-out:

1. Construction close-out
2. Contract / fiscal close-out
3. Contractor’s close-out
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 Construction Close-out
Several important events occur during this
phase:
Completion of the physical work
Systems testing
Substantial / Final completion
Certificate of occupancy
Demobilization and final cleaning

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 Construction Close-out:
Substantial Completion
Once the physical work is substantially
complete, and systems have been tested,
the general contractor requests an
inspection by the architect.
If the architect agrees with the contractor’s
assessment, he/she issues a certificate of
substantial completion.

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 The certificate of
substantial completion
marks:

• The end of construction

time
• The start of the
warranty period
• Turn-over to the owner
for operation and
maintenance of the
building

The owner must wait for

Summer 2020
the certificate of
Construction Management, CCE4031 - Dr. Saleh Mubarak 159
 Construction Close-out:
Certificate Of Occupancy
The certificate of
occupancy (CO) is issued
by the authority having
jurisdiction (AHJ),
typically the building
department. It verifies
that the structure is safe
to occupy.

Once AHJ has issued CO,

the owner may occupy
the building.

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 Construction Close-out:
Demobilization And Cleaning
At the end of construction close-out the general
contractor and any subcontractors still on the
jobsite:
• Remove trailers, materials, equipment,
temporary facilities
• Clean site and building
• Repairs any facilities / infrastructure that were
damaged because of the construction activities
• Remove trash
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 Contract Close-out
The completion of the physical work does
not represent the complete execution of the
contract.
There are two categories of tasks still to
complete:
 Completion of non-physical contract
requirements
 Application for final payment

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 Contract Close-out:
Completion Of Contract
Requirements
The contractor will typically need to fulfill
additional contract obligations. These might
include:
 Compiling operations and maintenance manuals
 Submitting record (as-built) drawings
 Collecting spare parts and materials
 Providing documents such as lien releases,
subcontractor and manufacturers’ warranties

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 Contract Close-out:
Application For Final Payment
The GC submits a final pay request and is paid
according to the terms of the contract, after:
 All submittals are turned in
 Punch list items are done
 Approval from surety is provided (as required)
 All final payment documentation from subs is
collected and verified
 The pay request is approved by the architect

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 Contractor’s Close-out
The final task in a project close-out is
project evaluation.

Evaluation – of the job, of the subs, of the

owner – provides valuable information for
future jobs.

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 Contractor’s Close-out
Was the estimate accurate and complete and
was it close to the final, actual costs?
How accurate was the schedule? Were
milestones met on time?
How did individual subcontractors perform?
Was the owner happy with the process and the
outcome?
Did the contractor meet his goals? Why or why
not?
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Roles of Owner and
Contractor
 Roles of Owner and Contractor
While both owner and contractor have interest
in a successful execution of the project, each
plays an important and different role

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 Owner’s Role
If you don’t know how to cook, get out of the kitchen!
 But appoint a competent person/company to represent you
 “End results” or “materials & methods”?
Planning early can save you a lot of headache and money
 Most importantly choosing the type of contract and method of
delivery
Don’t cut corners. In most cases, you get what you pay
for!
Creative ideas: Partnership (PPP, other), constructability,
value engineering (VEM), building information modeling
(BIM), Earned Value, Dispute Review Board (DRB),…
 However, not every idea works best for every situation
Summer 2020 Construction Management, CCE4031 - Dr. Saleh Mubarak 169
 Owners Beware…
Don’t pressure the contractor for unrealistic
expectations
Be careful when you review and approve the
contractor’s schedule!
After start: Just because things are going fine:
 You still need to go through the formal project
monitoring process
 Insist on proper documentation
 Insist on following contract’s procedures

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 Contractor’s Role
Take the CPM schedule seriously… it is part of
the contract documents!
 It is more than a tool to satisfy a bidding
requirement!
 It is more than decoration on your trailer’s walls
 It may be used against you in the court of law!
 We know it’s “all in your head”, but others need to
see it, understand it, and agree with it!

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 Contractor’s Role
Don’t bow to pressure for unrealistic delivery date
 If you over-promise, you will under-deliver!
Remember that contract time is given in calendar
days, not work days: Reconcile them
Time contingency is just like budget contingency
 You will likely need it, but you don’t know when, where,
and how much
Weekly meeting: An opportunity to make sure
everyone is on the same page
Acceleration is a science and must be planned
carefully

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 Contractor’s Role
Educate the owner
 Always suggest solutions and alternatives to the
owner… you are the professional!
 Give the owner the choices along with cost and
consequences…
Communicate with all parties
 The schedule update is not just about what happened.
It is also about what’s going to / must happen!
Documentation: You don’t know when you’re
going to need it!
 Organization of projects: active, closed, and future

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 Others Role too!
The A/E (designer) also has a role in the cost
and schedule of the project:
 Giving the owner an approximate cost estimate and
a summary schedule, that should be accurate
(within ≈ ± 10%)
 Layout assumptions and alternatives
 Don’t forget the permits!
Professional project management consultant:
 Legal and ethical obligations to the owner

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 Reports and Documentation
Communications:
 Definitions
 Characteristics for Good Communications
 Effective Reporting
 Precautions for Use of Computers
Communications in the International
Environment

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 Communications: Definition

Communication:
 A verbal or written message
 A process by which information is exchanged
between individuals through a common system of
symbols, signs, or behavior
Plural but singular or plural in construction:
 a technique for expressing ideas effectively (as in
speech)
 the technology of the transmission of information
(as by print or telecommunication)
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 Communication: Meaning
Communication is a social activity requiring the
coordinated effort of two or more individuals
Mere talk to produce sentences does not constitute
communication
Requires knowledge and ability (to communicate)
Both speaker and hearer must actively respond to
what transpires by signaling involvement, either
directly through words or indirectly through gestures
or similar nonverbal signals

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 Miscommunication
Miscommunication: a problem arises when one
party misinterprets the other party’s verbal or
signal communication, or when one party
thinks the other party heard, understood, or
responded when he/she did not
 The problem is more likely to happen when the
communications is verbal

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 Characteristics for Good
Communications
1. Clarity 8. Proper level of detail
2. Simplicity 9. Good organization and
3. Timeliness formality
4. Accuracy 10. Conformance to
5. Preciseness and industry standards
relevance to the subject 11. Retrievable and
6. Legibility Transformable (from
one form or software to
7. Supported by proper
another)
tools (pictures, charts,
stats, etc.) 12. Secure

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 Types of Communications
Visual: text / graphic Verbal
Reports Presentations / lectures
E-mails Meetings
Letters/memos Speeches
Charts, graphs, maps, TV/radio shows
drawings, photographs, or Conversation between two
videos; may be used as a (or more) people: formal or
stand-alone report, or as informal ; both on the
supporting material phone or in person

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 Reports versus Presentations
Reports Presentations
Have to be complete at Audience may ask
time of submission questions for clarification
Read at the recipient's or more elaboration
pace Time-constrained
No help from body Use of body language
language Needs delivery skills
No need for delivery skills
Inform! Inform and Perform!

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 Good Presentations’ Skills
1. Focus on the client’s 7. Good use of body
needs language
2. Be honest 8. Make eye contact
3. Ensure that materials 9. Appropriate use of
are visible humor
4. Speak clearly and with 10. Manage time wisely
authority 11. Use of available
5. Use examples technology
6. Interact with audience 12. Have a backup plan

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 Effective Reporting

The report has to address specific needs

Don’t follow the “one size fits all” approach
Utilize computer software features
Does my report:
 have all the information needed?
 have any unnecessary / redundant information?
 present information in a clear and well-organized manner?
 present information in the required format?
Can the looks of this report be enhanced?

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 Information in the Report
Title of report Name and location of
Name of the company, project
department / division, Date
address, company’s Attachments, if any
logo Number of pages
Name of the person Legend
preparing the report
Define terms and
and supervisor’s
acronyms
approval (initials), if
needed

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Review Before and After Printing

1. Use screen “Print Preview”

2. Review after printing (on paper or digital)
3. If the report is made of many pages:
 Print one page only, review, then print rest.
 Make sure there is enough paper in the printer before you
leave
4. If you reprint the report, dispose or mark old report
5. If you print a group of reports routinely, assign a
name to that group (in Primavera).

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Review Before and After Printing

7. Utilize the software functions (group, sort, filter,

codes, etc.) to focus on certain activities / issues
and be well organized.
8. Saving paper tips: font size, margins, 2-sides, resize
columns.

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 Paperless Project Management
The integration
 More modules in the software
 Bridges among software packages
Data management / storage
 Online access
 The submittal process
E-reports: format

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 Communications in the
International Environment
Know the culture
Know the “rules”
Know government regulations
Know the labor, materials, and equipment:
 Acquisitions
 Regulations
Know the weather / seasons

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 Communications in the
International Environment
The Date format: Communications:
 4/11/04: 4th of November  Language
or 11th of April?  Local expressions
The “workweek” and  Hand gestures/body
“workday”: language
 5, 5½, or 6 workdays per Currency
week?
Measurements:
 1st day of the week?
 Weight, dimensions,
 Daily work schedule: 8 am
temperature
to 5 pm?
 Gallon, ton (tonne), billion
Holidays

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 Construction
The “local market investigation”
Partnering with locals: pros and cons
Government regulations
Standard contracts / standard practices / expectations
Acquisition of labor, materials, equipment
 Subcontracting
Distribution of tasks: local or abroad? Logistics
Local challenges
Always keep your mind open for alternatives that are
better locally
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