Project Control E-Book

Wayne J. Del Pico

• Herausgeber: John Wiley & Sons
• Kategorie: Geisteswissenschaft
• Serie: RSMeans
• Sprache: Englisch

Seitenzahl: 383

Veröffentlichungsjahr: 2013

Beschreibung

The key to successful project control is the fusing of cost to schedule whereby the management of one helps to manage the other. Project Control: Integrating Cost and Schedule in Construction explores the reasons behind and the methodologies for proper planning, monitoring, and controlling both project costs and schedule. Filling a current void the topic of project control applied to the construction industry, it is essential reading for students and professionals alike.

Leseprobe

Contents

Cover

Title Page

Copyright

Dedication

Foreword

About the Author

Introduction

Chapter 1: The Basics

The Concept of Project Management

History of Project Management

Approaches to Project Management

The Traditional Approach

Benefits of Proper Planning

The Role of the Project Manager

Goals of the Project

Role of the Contract Documents

The Schedule and Budget

Summary

Chapter 2: Introduction to Project Control

Overview of Project Control

Project Control Terminology

Project Control Formulas

The Project Control Cycle

Summary

Chapter 3: Pre-Construction Planning

Initiating the Control Process

Pre-Construction Planning

Key Personnel and Responsibilities

The Plan—the Roadmap

Establishing a Baseline for Schedule Control

Establishing a Baseline for Cost Control

The Communication Plan

Summary

Chapter 4: The Schedule

Basic Scheduling Concepts

Types of Schedules

Advanced Scheduling Methods

The CPM Schedule as a Management Tool

Tasks

Summary

Chapter 5: The Budget

Fundamentals of the Estimating Process

The Budget

Project Cost Report

The Budget as a Management Tool

Summary

Chapter 6: Integrating the Schedule and the Budget

Schedule of Values

Matching Cost Values to Tasks

Summary

Chapter 7: Calculating and Analyzing Progress

Measuring Performance

Earned Value

Schedule and Cost Performance

Summary

Chapter 8: Analyzing and Reporting Variances in Schedule and Cost

Understanding Project Analyses

Causes of Variances

Root Cause Analysis

Reporting Project Status

Summary

Chapter 9: Recognizing Trends and Forecasting Performance

Recognizing Trends

Using Trends to Forecast

Summary

Chapter 10: Productivity

Understanding Productivity

Factors Affecting Construction Productivity

Summary

Chapter 11: Acceleration and Schedule Compression

Acceleration

Schedule Compression

Time-Cost Trade-off Analysis

Recovery Schedule

Summary

Chapter 12: Resource Management

Resources

Material Management

Summary

Chapter 13: Risk Management

Components of Risk Management

Risk Contingency Planning

Summary

Chapter 14: Project Closeout

Initiation of Project Closeout

Lessons Learned Meeting

Project Closeout Report

Summary

Appendix A: Practice Review Questions

Appendix B: Answers to Practice Review Questions

Index

Cover Design: Michael Rutkowski Cover Photograph: © Michael Rutkowski

This book is printed on acid-free paper. Copyright © 2013 by John Wiley & Sons, Inc. All rights reserved

Published by John Wiley & Sons, Inc., Hoboken, New Jersey Published simultaneously in Canada

No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923, [phone], fax [phone], or on the web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, [phone], fax [phone], or online at www.wiley.com/go/permissions.

Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with the respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor the author shall be liable for damages arising herefrom.

For general information about our other products and services, please contact our Customer Care Department within the United States at [phone], outside the United States at [phone] or fax [phone].

Wiley publishes in a variety of print and electronic formats and by print-on-demand. Some material included with standard print versions of this book may not be included in e-books or in print-on-demand. If this book refers to media such as a CD or DVD that is not included in the version you purchased, you may download this material at http://booksupport.wiley.com. For more information about Wiley products, visit www.wiley.com.

Library of Congress Cataloging-in-Publication Data:

Del Pico, Wayne J. Project control : integrating cost and schedule in construction / Wayne J. Del Pico, CPE. pages cm Includes bibliographical references and index. ISBN 978-1-118-13923-3 (cloth : acid-free paper), ISBN 978-1-118-41913-7 (ebk.); ISBN 978-1-118-42106-2 (ebk.); ISBN 978-1-118-80271-7 (ebk.) 1. Construction projects— Management. 2. Building—Estimates. 3. Scheduling. I. Title. TH438.D448 2013 624.068'4—dc23 2013001240

DedicationArman J. Del Pico 1921–2011

To my father, who taught me by quiet example the meaning of living a life based on a personal code of values and strength of character.

Foreword

Successful projects do not happen by accident. Far too often, construction projects fail due to a lack of proper management. In today's competitive market, diligent management is essential not only to deliver an individual project, but also to stay in business. In this book, the author analyzes the concept of project control and how it is critical to achieve project success.

Managing the schedule can help manage costs. Projects frequently fail because contractors focus on cost or schedule, not both simultaneously. We all have heard the phrase “time is money.” This truth cannot be overstated. Project Control explains how schedule and budget are integrated and how both can be effectively managed. In a systematic, easy-to-understand format, the author discusses how to anticipate, prepare for, and resolve the inevitable road bumps that commonly occur on construction projects large and small.

A key component that is stressed throughout the text is planning. Sounds simple, right? It's not. Planning requires due diligence not only at the beginning of a project; it is an essential activity that continues through project closeout. Developing and updating a CPM schedule, monitoring cash flow, allocating resources, and anticipating risks are just some of the factors of planning that are discussed within this text. Those of us in the industry that have witnessed projects that fall behind schedule or exceed budget can attest that lack of planning is typically the root cause.

For a myriad of reasons, construction projects often do deviate from the initial schedule and/or budget. Project Control examines the details behind how performance is measured and tracked and provides the tools to analyze a project at any phase. By creating a detailed budget and CPM schedule and regularly monitoring performance in relation to these items, a project manager can identify and evaluate causes of significant deviation and take corrective action to keep the project on time and on budget. Of equal importance, Project Control teaches the reader not only how to identify and analyze problems, but also how to anticipate them.

What actions should be taken if a project is underperforming? Obviously that depends on the nature of the project, the cause of the deviation, the budget, the schedule, and risk factors associated with any potential solution. Project Control provides an in-depth look at these items and offers sound, practical advice for determining and evaluating potential solutions.

Many books have been written about project management, but none that I have read have been tailored so seamlessly to the construction industry. The author's systematic approach to analyzing the factors required to achieve proper project control is both thorough and enlightening. Whether you are a general contractor or subcontractor; an industry veteran or just beginning your career; the concepts discussed in Project Control will help you achieve success.

David M Sorgman Vice President of Architectural Services Group 7 Design, Inc.

About the Author

Wayne J. Del Pico is President of W.J. Del Pico, Inc., where he provides construction management and litigation support services for construction-related matters. He has more than 33 years of experience in construction project management and estimating and has been involved in projects throughout most of the United States. His professional experience includes private commercial construction, public construction, retail construction, and residential land development and construction.

Mr. Del Pico holds a degree in civil engineering from Northeastern University in Boston, where he taught construction-related curriculums in Cost Estimating, Project Management, and Project Scheduling from 1992 until 2006. He is also a member of the adjunct faculty at Wentworth Institute of Technology in Boston, where he presently teaches programs in Construction Cost Analysis, Estimating, Project Control, and Construction Scheduling.

Mr. Del Pico is a seminar presenter for the R.S. Means Company, where he lectures on topics from estimating to scheduling. He is the author of Plan Reading and Material Takeoff (1994) and Estimating Building Costs (2004 and 2012), and is a coauthor of The Practice of Cost Segregation Analysis (2005).

His construction experience and knowledge of the industry qualified him to be the president of the Builders Association of Greater Boston in 2010. He is also a practicing third-party neutral for the American Arbitration Association where he hears construction-related arbitration cases.

Introduction

At the upper level of the project management process is project control. It can be part of the day-to-day responsibilities of the project manager, or it can be under the jurisdiction of the more specialized project analyst. Project control combines the management skills of the project manager with the analytical focus of the professional accountant.

The construction industry has always been cost and schedule conscious; however, in lean economic times, that consciousness becomes a mantra. In today's commercial construction market, adhering to a schedule and maintaining a delivery date often define the difference between success and failure. Contracts carry substantial penalties for performance failures in the form of liquidated damages as well as the actual and consequential damages that may result from the delay. Getting to the finish line on time is critical. No less critical for the contractor is controlling costs in the process. What benefit is it if the project is delivered on time, but its costs exceed the stipulated sum of the contract and plunge the contractor into financial chaos?

The mainstream use of computers in the construction process has been a tremendous boon to the industry; at the same time, it has added a layer of complexity to the management process. The data is collected, collated, updated, filtered, and finally released for the project manager to analyze and interpret. The resulting information, subjective as it may be, is driving the decision process, leaving the manager with little doubt as to the appropriate real time status of the work from a cost and schedule perspective. With the correct and timely information, decisions can be made and actions implemented.

Productivity studies have proven that human performance and its corresponding labor costs have always been the wild card in the construction process. In comparison, material costs are more easily definable and to a large degree finite. Accurate estimating procedures and recognized professional standards help to pinpoint material quantity and cost. This is not so with labor. Despite standardized procedures for most tasks and a bounty of data on production rates, small errors can force labor costs to run amok. Labor requires the lion's share of management time to estimate, schedule, monitor, and control. Productivity for even the simplest task can be affected by a plethora of variables from crew size to weather. Productivity models, once created for an individual project, must be monitored and controlled, and deviations from those models require corrective actions.

For projects that extend over multiple years, the concept of project control becomes even more of a concern. Costly projects with labor-intensive tasks such as process piping or electrical distribution lines must be monitored to ensure adherence to the estimated productivity rates. With these types of tasks, a small decrease in productivity can become chronic over time and put a project in the red quickly.

The key to successful project control is the fusing of cost to schedule whereby the management of one helps to manage the other. This requires that a task's cost and its duration have a direct relationship, and not be just the scheduler's arbitrary assignment. Ensuring that relationship is correct and setting the appropriate baseline for tracking is the domain of the project control expert.

Accurate project control also serves as the basis of historical cost data for fine-tuning estimated productivity on future projects.

This book will explore the reasons behind and the methodologies for proper planning, monitoring, and controlling both project costs and schedule. It will take a fresh, simplified look at the topic of project control as it is applied in the construction industry today.

Chapters 1—The Basics explains project management theory and a brief history of the science. It discusses the different approaches to project management and the five processes within the Traditional Approach. It reviews the roles and goals of the project manager in the construction industry today. It defines the role of the contract documents in the controls process. Lastly, the relationship between the schedule and the budget is explored.

Chapter 2—Introduction to Project Control presents an overview of project control and the role of schedule and cost. It defines the terminology behind the process with formulas common to the control process and the project control cycle.

Chapter 3—Pre-Construction Planning elaborates on the importance of proper planning in the preconstruction phase. It provides a window to the key personnel and their responsibilities in the cycle. This chapter outlines the importance of communication and setting baselines for performance measurement.

Chapter 4—The Schedule is a review of basic scheduling types and methods, with a detailed review of the critical path method. It explains the use of the CPM as a management tool.

Chapter 5—The Budget highlights the cost side of the controls process and the fundamentals of going from estimate to budget. This chapter discusses the specifications and the organizational structure of the budget. It reviews the creation of the cost breakdown structure and its relationship to the schedule.

Chapter 6—Integrating the Schedule and the Budget provides detail on how both of these come together to create the full view of project control. It provides a brief introduction into developing the Schedule of Values.

Chapter 7—Calculating and Analyzing Progress explores how performance is measured, and expands on the concept of Earned Value Management for both fixed and variable budgets. It explains the schedule and cost performance measurements and indicators so crucial to determining project status.

Chapter 8—Analyzing and Reporting Variances in Schedule and Cost provides a look at how to interpret and display project data through common tools such as the S-curve and root cause analysis, and how the data can be reported for use.

Chapter 9—Recognizing Trends and Forecasting Performance explains how the measurements and the derived data can be used to recognize emerging trends and how the same data can be used to forecast future performance. It also explains key indicator values for predicting final performance.

Chapter 10—Productivity defines productivity and why it is so important for accurate project control. It defines factors, both controllable and uncontrollable, that can affect productivity.

Chapter 11—Acceleration and Schedule Compression outlines the different types of acceleration, including why and how they are used. It also considers schedule compression and what can be expected. Finally, it looks at time-cost trade-off analysis and what it means in terms of task performance.

Chapter 12—Resource Management develops the concept of resources and how they can impact a project. Resource and material management is introduced as a practical method for control.

Chapter 13—Risk Management considers the different types of risk a project will be exposed to and how risk can be managed. It also explains how risk is funded, and how its probability is determined.

Chapter 14—Project Closeout discusses how projects are wrapped up and the importance of sharing what has been learned, both good and bad.

Accurate construction project control is an essential skill of every successful project manager. Project Control-Integrating Cost and Schedule in Construction builds on the foundation of project management principles for the extra level of professional control so many projects are in need of.

—Wayne J. Del Pico, July 2013

CHAPTER 1

THE BASICS

Even for the most seasoned professional with years of construction project management experience, it is still beneficial to revisit the basics once in a while if for no other reason than to “re-enforce” what we already know. This chapter provides an overview of project management theory and where project control fits into the discipline. It does not offer detailed instruction in the profession of day-to-day project management, but will review the theory of project management and the basic concepts common to the construction industry.

The Concept of Project Management

Project management is the professional discipline of planning, monitoring, and controlling specific resources to achieve a set of goals for a project. The term project is defined as a one-time endeavor with well-defined, often unique goals, with specific limits of both time and cost. The temporary nature of a project is in contrast to businesses like manufacturing that are repetitive in nature. This type of management has predefined systems or processes that have been refined over time. The management of a project, in contrast to manufacturing, requires a different paradigm and skill set on the part of the practitioner. The project manager's main test is to achieve all of the goals, including the deliverables, within the constraint of a fixed budget and fixed time frame. Specific goals and deliverables in the construction industry will vary from project to project.