Contract Planning Notes

BT 258: PRE-CONTRACT PLANNING AND CONTROL

COURSE EXAMINER: DR. E. ADINYIRA

DEPT. OF BUILDING TECHNOLOGY KNUST KUMASI -GHANA

Course outline

Dr. E. Adinyira 2

Project planning and control procedures

Pre-tender planning

Pre-contract planning

Project planning and control techniques

Programming techniques

The Gantt Chart/The Bar Chart Network Analysis

Project compression or crashing

Project resource allocation

Further References 1. Oxley, R. & Poskitt, J. (1996) Management Techniques Applied to

the Construction Industry. Blackwell Science, Oxford.

2. Harris F. & McCaffer R (2002) Modern Construction Management, Blackwell Publishing, Oxford.

3. Calvert, R. E., Bailey, G. & Coles, D. (1995) Introduction to Building Management, Newnes-Butterworth, Limited, London

4. Kwakye, A. A. (1997) Construction Project Administration in Practice. Pearson Eeducation.

5. Pilcher, R (1976) Principles of Construction Management, McGraw-Hill Book Company (UK) Limited, Maidenhead, Berkshire, England.

Dr. E. Adinyira 3

Assessment Requirement

Dr. E. Adinyira 4

Class quizzes 15%,

Assignments 15%,

End of bridging examinations - 70%.

Note! Assignments must be done on an individual basis

unless otherwise specified by the examiner.

Cheating during class quizzes and bridging examination will be severely punished

PROJECT PLANNING AND CONTROL PROCEDURES

Project planning starts with the contractor deciding whether to bid or not for a project and ends when a successful project is delivered to the client.

Project planning and control within the contractors outfit can be categorized under three (3) main phases namely;

1. Pre-tender Planning phase.

2. Pre contract Planning phase.

3. Contract Planning phase.

Dr. E. Adinyira 5

Pre-tender planning phase: all activities undertaken from the time a project is known up to the time that a bona fide tender is submitted

Pre-contract planning phase: all activities undertaken from the time of receipt of letter of award up to the time of site possession.

Contract planning phase: begins from the possession of the site to the handing over of project.

Dr. E. Adinyira 6

Pre-Tender Planning Decision to tender:- carefully consider and assess the facts

surrounding the project, to ascertain ones chances of winning the contract, as well as the projects viability and profitability.

The decision to tender should be the responsibility of senior management.

Managing Director or one of the Directors.

Chief Estimator.

Contracts Manager.

Chief Buyer.

Office Manager.

Dr. E. Adinyira 7

Information required for decision to tender

1. The client for the project.

2. The consultants for the project, i.e., architects, quantity surveyors, structural engineers and services engineers.

3. The location of the project.

4. The type and size of the project.

5. The value of the project.

6. The local authority within whose jurisdiction the project is located.

7. Current work load.

8. Degree of competition.

Dr. E. Adinyira 8

9. Market conditions, in terms of the availability of contract works.

10. Availability of finance, especially from sources outside the company.

11. The going interest rate.

12. Governments fiscal as well as monetary policies.

13. The current labour and materials supply markets.

14. Adequacy of tender information.

15. Time available for preparing and submitting tender.

16. Terms and conditions of contract.

Dr. E. Adinyira 9

Pre-tender meeting:

Attendance:

General Manager/Director.

Chief Estimator.

Contracts Manager.

Planning Engineer.

Buyer.

Office Manager.

Job Estimator.

Purpose:

announce the companys participation in the bidding process

plan the activities for the pre-tender stage (pre-tender programme)

allocate responsibilities for the process

Dr. E. Adinyira 10

Dr. E. Adinyira 11

Site Visit Reports The site visit report should aim to collect the following data:

Access to site ,

Working space available for locating offices, canteens, stores, materials etc.

Services available to site, i.e., electricity, water, telephone, etc.

Concealed services, i.e. water, telephone, electricity.

Site security.

Details of damage to existing structures.

Nature of ground and conditions of trial holes.

Dr. E. Adinyira 12

Local water table.

Nearest benchmark.

Availability of local labour, and local rates of pay.

Other contracts in the area and approximate completion dates.

Other tendering in the area.

Availability of local suppliers, plant hire companies and sub-contractors.

Availability of lodging accommodation.

Availability of transport services to site.

Restrictions due to site location.

Customs and festivals of the area.

Dr. E. Adinyira 13

Methods Statement A document that details out the selected method for each activity that constitutes the project

Prepared by: I. an estimator, II. a planner, (prospective site manager) and III. a work study officer.

The methods statement is the document on which all subsequent pre-tender activities will be dependent for the preparation and submission of a realistic tender figure.

The following activities of the pre-tender planning process can only begin when the methods statement has been approved;

I. The preparation of the cost estimate.

II. The preparation of detailed pre-tender programme. Dr. E. Adinyira 14

Dr. E. Adinyira 15

METHODS STATEMENT

CONTRACT: SHEET NO.:

TENDER NO. : DATE: PREPARED BY:

Serial

No.

Operat

ion

Quant

ity

Method Seque

nce

Plant &

Labour

Outp

ut

Durati

on

Remarks

Format for Methods Statement

Dr. E. Adinyira 16

ASSIGNMENT 1 A three storey residential property is to be built on Accra Poly campus. Select a site on campus for the location of this building and making reasonable assumptions about size and other perimeters, prepare a Pre-Tender Method Statement for the sub-structure phase of the project Submission: 8th May, 2011

Dr. E. Adinyira 17

Cost Estimate Preparation

The objective is to determine the total cost of the project under consideration by calculating the cost of each item in the bills of quantities and summing the cost to obtain the overall project cost

Cost of each item would be made up of all, or some of the following : 1. Materials costs.

2. Labour costs.

3. Plant costs.

4. Overhead costs.

5. Profit.

Dr. E. Adinyira 18

Materials Costs

Ascertain quantity of materials per operation 1. Wastage.

2. Bulking factor.

3. Shrinkage factor.

4. Accessories and other deemed to be included items.

5. Laps.

6. Usage rates/covering capacities.

Determine the price at which they can be acquired and all sources

1. Internal sources, i.e., the companys materials database

2. External source such as materials manufacturers, materials distributors, builders merchants

Dr. E. Adinyira 19

For external source a Materials Enquiries will have to be prepared. The information to be provided in enquiries to suppliers includes:

Quantity of material.

The specification of the material.

Address of the site.

The likely delivery programme.

Means of access.

Period for which the quotation is required to remain open for acceptance.

Date by which quotation is to be submitted.

The name and contact telephone number and/or e-mail address, fax number etc., of the contact person in the contractors organisation.

Quotations submitted by suppliers in response to enquiries must be compared and a quotation selected for use in the calculation of each unit rate

Dr. E. Adinyira 20

Labour Costs The cost element can be categorized under;

The work content component.

The price component.

Work Content Component determination helps in fixing of the work periods or durations and is dependent on such factors as;

1. The competence education, training and experience of the worker(s).

2. The motivation of the workers.

3. The work environment both physical and psychological in which he (they) operate(s).

4. The organizational capabilities of the managers/supervisors; and so forth.

Dr. E. Adinyira 21

The Price Component is determined by looking at the following: 1. Both the basic wage/salary paid to labour

2. All the statutory and non-statutory extra additions paid to labour

3. The total productive time worked by the labour

The all-in rate for labour is computed from the above and applied to the work content component to obtain the cost of labour for an item of work.

There might be the need to use a labour-only sub-contractor in which case an invitation will have to be sent out.

Plant Costs Calculated from the work content component of the plant and the all-in rate of the plant Plant items that are not owned by the company would have to Be sourced from outside organizations or plant hire companies

Dr. E. Adinyira 22

Overhead Costs These costs can be divided into two main sections, namely;

Site overhead costs.

General office overhead costs.

Site overhead costs are computed from items allowed for in

the preliminaries bills

General overhead costs are computed by allowing for costs that

are related to, but not specific to the project under consideration.

Profit Is a reward to the contractor for taking the risks of undertaking the project.

The figure may be suggested by the estimating team but it is the adjudication panel that decides on the final figure.

Dr. E. Adinyira 23

Pricing of Preliminaries

Access to site. Site staffing.

Site accommodation.

Mechanical plant.

Small tools.

Temporary services water, electricity, telephone, etc.

Welfare and safety provisions.

Insurance for the works.

Attendances on sub-contractors and suppliers.

Cleaning site and clearing rubbish.

Defects liability costs.

Provision for testing of materials.

Scaffolding.

Dr. E. Adinyira 24

Tender Adjudication Adjudication is the action taken by management to convert an

estimate into a tender.

The process is undertaken by an adjudication panel which consists of representatives of senior management and senior members of the estimating team.

The decision of the adjudication panel is based on a report prepared by the estimating team for the adjudication exercise.

One of the key inputs of the adjudication report, is the estimate finance statement

Dr. E. Adinyira 25

Estimate Finance Statement is a simplified summary and financial breakdown of the total cost anticipated for the project, and involves the following:

Preliminaries.

Labour costs.

Material costs.

Mechanical plant and transport costs.

Sums to be included for nominated sub-contractors and suppliers.

Sums to be included for the builders own sub-contractors.

Provisional sums and contingencies.

Dr. E. Adinyira 26

Dr. E. Adinyira 27

Bills of quantities

Less Provisional Sums

Contingencies

Prime Cost Sums

Sub-contractors

Builders Own Costs

Staff on-costs

Telephone

Offices

Water for Works

Insurances

Scaffolds

Special Plant (Cranes, Hoist)

Travel Expenses

Overheads and Profit 10%

Prime Cost Sums

Add 21/2%

Subcontractors

Add 21/2%

Provisional Sums

Contingencies

600

2,500

125,605

300,555

15,000

208

3,750

800

11,500

4,000

7,000

1,700

Total of Tender

700,520

429,260

271,260

43,958

315,218

31,521

125,605

3,140

300,555

7,514

600

2,500

786,653

example of an estimate finance statement

The report to management for tender adjudication should include:

A brief description of the project.

A description of the methods of construction.

Any major assumptions made in the preparation of the estimate.

The estimate finance statement.

An assessment of the state of the design process and the possible financial implications.

An assessment of the profitability of the project.

The time for which the tender is to remain open for acceptance.

Dr. E. Adinyira 28

The adjudication panel must consider the following during its work:

1. Items included in the report to management.

2. The conditions of contract any risks inherent in the project and not adequately covered by the contractor.

3. Review of the plant allocation within the preliminaries, including any adjustments due to changes in the methods of construction.

4. Adjustment to the terms of quotations received from domestic sub-contractors.

5. Cash flow of the project and its effect on current work in progress.

6. Review of the items covered by the site visit report in the light of prevailing current conditions.

7. Final review of the allocation of monies to the contract preliminaries.

8. Assessment of the percentage allowance for general overheads.

9. Addition of profit percentage.

Dr. E. Adinyira 29

PRE-CONTRACT PLANNING

At the pre-contract planning phase, the following items must be subjected to further analysis:

Site Visit Report.

Methods Statement.

Site Organisation Structure.

Sub-Contracting Arrangements.

Pre-Tender Programme.

Estimate Finance Statement.

Dr. E. Adinyira 30

The Pre-Contract Meeting The meeting must establish what further information is needed for detailed planning purposes. The notice of this meeting should carry the following information .:

Client.

Clients address.

Address of job.

Value of Contract.

Contract period.

Anticipated commencement date

Description of work.

Architect.

Quantity surveyor.

Consulting engineers.

Site manager.

Contracts manager.

Site foreman.

Dr. E. Adinyira 31

The following are minimum information requirements for pre- contract planning:

1. Fully Priced Bills of Quantities.

2. Schedule of Sub-Contractors.

3. Copies of all Enquiries and Estimates.

4. At least, 1:100 Scale Plan of all Floors.

5. At least, 1:100 Scale Elevations and Sections.

The need for further information should be communicated to the consultant team. The meeting is used by the contractor to pass over the tender documentation from the estimating department to the contracts department

Dr. E. Adinyira 32

Drawings received for the project at all times must be systematically registered.

Provision should be made in this register to record:

Title of Drawing or Description.

Drawing Reference Number.

From Whom Received.

Main Scale.

Date Received.

Number of Copies Received.

Date Distributed Within the Company.

Details of Distribution.

Provision for Details of Subsequent Amendments.

Dr. E. Adinyira 33

Key Pre-contract planning issues:

Sub-Contractors Nominated sub-contractors or specialist sub-contractors

Co-ordination of Specialist Work

Suppliers Domestic Supplier.

Nominated Supplier

Pre-Contract Methods Statement

Pre-Contract Master Programme

Site Layout Planning

Requirement Schedules

Check List and Requisition for Starting New Contracts

Dr. E. Adinyira 34

PROJECT PLANNING AND CONTROL TECHNIQUES

A key elements of any planning process is programming. Programming will determine when each activity in a plan will

start and end and is useful for control purposes.

The following are programme techniques commonly used in the construction industry: The Gantt Chart or The Bar Chart.

The Network Diagrams.

Line of Balance.

Time-chainage Diagrams

The recipient of the information should be considered in selecting a suitable programme

Dr. E. Adinyira 35

Programmes are prepared at various stages of a project for different purposes and different audiences

Design Stage Project master schedule

Tender Stage Pre-tender programme

Pre-contract Stage Master programme

Subcontractors programme

Procurement programme

Contract Stage Stage programme

Short term programme

As-built programme

Dr. E. Adinyira 36

Developing a bar chart

1. Decide on the most appropriate time scale for the programme

2. List the activities involved

3. Obtain the duration for the listed activities

4. Link the activities to obtain logic for the programme

5. Capture important features such as holidays, milestones, resources and cost information

Dr. E. Adinyira 37

The advantages of Gantt chart include:

1. Easy to construct and understand.

2. Applicable at all stages of the project.

3. Clearly mimics the construction sequence.

4. Very popular with site staff.

5. Can be easily used to indicate progress of work.

6. Used for resource aggregation and analysis.

7. The relationship between a master programme and subsidiary programmes is readily seen.

8. Requirements and key date symbols may be introduced.

9. Can serve as the basis of financial forecasting.

Dr. E. Adinyira 38

The major weaknesses of the Gantt chart can be stated as follows: 1. Its inability to portray the interdependencies that exist among the

activities that make up a project.

2. The Gantt chart is not able to identify the activities whose non-completion time according to schedule will prolong the overall project duration.

3. If there is delay in the overall project duration and it becomes necessary to bring back the project time on course, the Gantt chart is unable to aid the planning in the identification of the activities that close attention must be paid to achieve that aim.

4. The starting time of activities comprising a project is arbitrarily determined by the planner without recourse to subjecting such times to rigorous analysis.

5. Complex useful analysis, such as project compression, cannot be carried out using the technique.

Dr. E. Adinyira 39

The Gantt Chart/The Bar Chart

Dr. E. Adinyira 40

Dr. E. Adinyira 41

Dr. E. Adinyira 42

Dr. E. Adinyira 43

Dr. E. Adinyira 44

Recording Progress on Gantt Chart

Dr. E. Adinyira 45

Activity Time

A Quantity & Time

B

C

D

Time Line

E

F

G

1. Activity A started on time and completed on time.

2. Activity B started earlier than planned and was completed ahead of schedule.

3. Activity C was started late and was completed later than scheduled.

4. Activity D was started earlier than scheduled, was completed today, but a few days behind the scheduled date.

5. Activity E started late, it is 50% complete and it is in progress.

6. Activity F started much earlier than scheduled and was complete a few days before today.

7. Activity G has been scheduled to start a few days from today. It has not been started.

Note A cursor is used to indicate the position reached on the time scale.

The programme line is used to represent time and quantity of work, while the time line is used to indicate the start and finish times for an operation.

Dr. E. Adinyira 46

Network Analysis Critical Path Method (CPM)

Critical Path Analysis (CPA),

Critical Path Scheduling (CPS)

Programme Evaluation and Review Technique (PERT)

Resource Allocation and Multiple Project Scheduling (RAMPS)

Least Cost Estimating and Scheduling (LCES)

Networks are drawn by using three symbols

Circle (other geometric figures) - represent events

Arrow - denotes an activity or operation

Broken arrow - represent a dummy

Dr. E. Adinyira 47

Events

An event is a milestone or a point in time

It is used to indicate a point at which an operation is completed or another can start

The following figures are used to represent events

Circle Square Triangle Oval-shaped

Dr. E. Adinyira 48

Activity or Operation An activity is a time and resource consuming element of the

network diagram

Length of the arrow bears no relationship to the time which the activity takes,

Direction of the arrow simply indicates the direction of the workflow.

Dr. E. Adinyira 49

Straight Curvilinear

Dummy A dummy is pseudo-activity that does not consume time or

resources.

Dummy activities are used for 3 principal reasons:

1. To take care of the logic of the network diagram.

2. To give unique identification to activities in a network diagram.

3. To span the first event and other starting events of on-going activities during the control phase of a project.

Dr. E. Adinyira 50

Straight

Curvilinear

2 types of network diagrams: 1. Activity-on-the-Arrow (AOA) or Arrow Diagrams

2. Activity-on-the-Node (AON) or Precedence Diagram

Activity-on-the-Arrow Diagram Activity is shown by an arrow

Event is show by a circle (other geometric shapes)

A dummy may or may not be required

Dr. E. Adinyira 51

Activity-on-the-Node Diagram (Precedence Diagram) Activities are denoted by boxes

Arrows are used to designate the inter-relationship between

activities

Dummy activities are used at the beginning of the diagram

A finishing dummy activity is used to end the precedence

diagram

Dr. E. Adinyira 52

Construction of Activity-on-the-Arrow Diagram Dependency (no event can be reached in a project before the

activity which immediately precedes it is accomplished)

(no activity can be started until the event which immediately precedes it has been reached)

Networks must start from one event and end in one event (avoid dangling activities)

The length of the activity arrow bears no relation to the length of time that the activity takes.

An activity line can cross other activity lines in the network.

Avoid drawing of endless circles (looping/cycling) in network diagrams is not allowed

Avoid the introduction of unnecessary dummies (redundancy) in a network diagram

Dr. E. Adinyira 53

Network diagrams are drawn from left to right with the time

scale unfolding towards the right hand side of the diagram. Often a number of draft versions may have to be produced

before the final copy is produced.

To construct a network diagram, one will have to:

1. Identify the activities that constitute the project

2. Place each activity in the appropriate construction sequence

Each activity has to be considered in turn, and the following three questions:

What activity must immediately precede this operation?

What activity can immediately follow this operation?

What activities can be taking place concurrently with this operation?

Dr. E. Adinyira 54

Dr. E. Adinyira 55

Project scheduling Project scheduling is the assignment of time to each of the

activities that make up a project.

The circle that represents an event has been divided into

three segments and labelled as shown below.

Earliest Event Time

Latest

Event Time Event

Number

1. Each event is given a unique number.

2. Events are numbered from left to right in a network diagram.

3. Events are numbered in such a way that as far as possible,

the number of the event at the head of each arrow is greater

than the number at the tail.

Dr. E. Adinyira 56

10

20 60

50

80

90

100

70

40

30

Dr. E. Adinyira 57

Earliest Event times

Dr. E. Adinyira 58

Earliest and Latest Event Times

Critical Activities

An activity is critical if there is no flexibility in the time at which it may be carried out. An activity is critical if: 1. The Earliest Event Time of the Tail Event is the same as the Latest

Event Time of the Tail Event.

2. The Earliest Event Time of the Head Event is the same as the Latest Event Time of the Head Event.

3. The Event Time of the Head Event minus the Event Time of the Tail Event minus Activity Duration is equal Zero.

The chain of critical activities from the start event to the terminal event is the longest time path through the network and is known as the critical path.

Each network diagram must have at least one critical path, starting from the first event and ending in the last event.

Critical path can run through dummy activities (critical dummy activity).

Dr. E. Adinyira 59

Analysis of Network Diagrams Event Slack = Latest Event Time - Earliest Event Time

It is the difference between the latest event time and the earliest event time. The event slack at the head of an activity is called Head Slack, and that of its tail activity is Tail Slack

Earliest Start Time (EST)

The earliest time at which an activity can be started is known as its earliest start time. Since an activity cannot start until the event from which its arrow emerges has been reached, the earliest start time of an activity is therefore the earliest time of the preceding event.

Earliest Finish Time (EFT)

The earliest finish time for an activity is the duration further on from its earliest start time. Thus Earliest Finish Time = Earliest Start Time + Activity Duration.

Dr. E. Adinyira 60

Latest Finish Time (LFT) = Latest Time of the following event

Since an activity must finish before its terminating event can be reached, the latest finish time must therefore be the latest time of the terminating event.

Latest Start Time (LST) = Latest Finish Time - Activity Duration

The Latest Start Time of an activity is its duration before its Latest Finish Time.

Float This is the amount of spare time associated with an activity and can also

be defined as the time by which the activities can be delayed without delaying the total duration of the project

Generally, an activity has float if the difference between its latest finish time and its earliest start time is greater than its duration

Negative float is the time by which an activity must be reduced for the project to meet the targeted completion date.

Dr. E. Adinyira 61

Generally 4 types of float can be identified, namely;

1. Total Float,

2. Free Float,

3. Independent Float, and

4. Interfering Float.

Total Float The total float associated with an activity is the total flexibility available in

the time within which it may be carried out without affecting the overall time of the project. The total float of an activity is therefore the interval between Latest Finish Time and the Earliest Start Time minus the Activity Duration, i.e.,

Total float = LFT - EST - Activity Duration.

It is also equal to the difference between the Earliest and Latest Finish times or to the difference between the Earliest and Latest Start times, i.e.,

Total Float = LFT - EFT or, Total Float= LST - EST.

Using the event times, Total Float of Activity = Latest Event Time of Succeeding Event or Head Event - Earliest Event time of Preceding Event or the Tail Event - Activity Duration

Dr. E. Adinyira 62

Free Float The Free Float associated with an activity is the flexibility in the time it

may be carried out, if all other activities are carried out at their Earliest Start Times. That is, the time an activity can be delayed without delaying any subsequent activity.

The total float for an activity is always larger than, or equal to its free float.

If the succeeding activity starts at its Earliest Start time, then the activity under consideration has flexibility only to the extent that it could be carried out in the time interval between its own Earliest Start Time and

the Earliest Start Time of the succeeding activity.

The Free Float is therefore this time interval minus the activity duration, and is equal to the difference between the Earliest Start Time of the Succeeding Activity and the Earliest Finish Time of the Activity concerned.

Using event time, Free Float = Earliest Event Time of the Succeeding Event - Earliest Event Time of the Preceding Event - Activity Duration

Free Float = Total Float - Head Slack

Dr. E. Adinyira 63

Independent Float

This is the amount by which an activity can be delayed or expanded without affecting the preceding and succeeding activity

Independent Float = Earliest Start Time of Succeeding Activity - Latest Finish Time of Preceding Activity - Activity Duration

Independent Float = Earliest Succeeding Event Time - Latest Preceding Event Time - Activity Duration.

Independent Float = Free Float - Tail Slack of the Tail Event.

Interfering Float

Interfering float is the float which when utilized will affect subsequent activities and will thus result in the targeted project duration being extended.

Interfering Float = Total Float - Free Float.

Dr. E. Adinyira 64

Total float may include independent, free and interfering float

Should additional resources be required on critical activities they could be obtained from:

Activities with independent floats without affecting the rest of the network

Activities with free float without affecting the float of subsequent activities

Activities with interfering float only, which will affect the float of the previous and subsequent activities

Dr. E. Adinyira 65

Dr. E. Adinyira 66

Identification marks as shown below can also be used:

Calculations of Float Using Network Diagram

Dr. E. Adinyira 67

Activity

Event Times Total Float

Free Float

Ind. Float

Int. Float

Head Tail Earlies

t Latest

Earliest

Latest

10 20 7 8 0 0 1 0 0 1 10 30 8 8 0 0 0 0 0 0 10 50 6 11 0 0 5 0 0 5 20 60 11 12 7 8 1 0 -1 1 30 40 16 16 8 8 0 0 0 0 30 70 14 17 8 8 3 0 0 3 40 90 19 19 16 16 0 0 0 0 50 53 14 23 6 11 9 0 -5 9 50 60 11 12 6 11 6 5 0 1 50 70 14 17 6 11 5 2 -3 3

53 100 28 28 14 23 9 9 0 0 60 80 20 21 11 12 1 0 -1 1 70 90 19 19 14 17 5 5 2 0

70 100 28 28 14 17 3 3 0 0 80 100 28 28 20 21 1 1 0 0 90 100 28 28 19 19 0 0 0 0

Float Calculations Using Event Times

Dr. E. Adinyira 68

Activity Duration EST EFT LST LFT Total Float

Free Float

Ind. Float

Int. Float

10-20 7 0 7 1 8 1 0 0 1 10-30 8 0 8 0 8 0 0 0 0 10-50 6 0 6 5 11 5 0 0 5 20-60 4 7 11 8 12 1 0 -1 1 30-40 8 8 16 8 16 0 0 0 0 30-70 6 8 14 11 17 3 0 0 3 40-90 3 16 19 16 19 0 0 0 0 50-53 8 6 14 15 23 9 0 -5 9 50-60 0 6 6 12 12 6 5 0 1 50-70 6 6 12 11 17 5 2 -3 3

53-100 5 14 19 23 28 9 9 0 0

60-80 9 11 20 12 21 1 0 -1 1 70-90 0 14 14 19 19 5 5 2 0

70-100 11 14 25 17 28 3 3 0 0

80-100 7 20 27 21 28 1 1 0 0

90-100 9 19 28 19 28 0 0 0 0

Float Calculations using Activity Times

Precedence Diagram Activities are drawn on the nodes and arrows are used to represent relationships.

Four types of relationships may be used, namely:

1. Finish-to-Start (FS) relationship.

2. Start-to-Start (SS) relationship.

3. Finish-to-Finish (FF) relationship.

4. Start-to-Finish (SF) relationship.

Precedence diagrams make provision for indicating Leads and Lags

Leads are indicated as negative figures while Lags are indicated as positive figures.

Dr. E. Adinyira 69

Dr. E. Adinyira 70

Earliest Start Time

Activity Description

Earliest Finish Time

Latest Finish Time

Total Float Latest Start Time

Activity No.

Duration

Dr. E. Adinyira 71

Dr. E. Adinyira 72

Monitoring Progress with the Network Diagram

Dr. E. Adinyira 73

3 8

8

7 14

17

5 6

11

9 14

23

4 16

16

10 19

19

11 28

28

2 7

8

6 11

12

1 0

0

8 20

21

Dr. E. Adinyira 74

Activity

Days left for

completing on-going

activities

2-6 2

5-9 3

4-10 2

7-11 8

Activities Completed

1-2

1-5

1-3

3-7

5-7

On the 15th day of the project the following information has

been gathered on it.

Dr. E. Adinyira 75

PROJECT COMPRESSION The process of reducing overall project duration from its

normal duration to a specific duration is known as project crashing or project compression.

Project durations can be reduced to: its minimum possible duration

a specific duration

Effecting a reduction in project duration comes at extra cost

It should be possible for obtain for any project the minimum duration consistent with the minimum project cost

Dr. E. Adinyira 76

Activity Utilisation Data

Each activity that is part of a project can be undertaken in countless number of ways, using varying

resource combinations,

gang sizes,

shifts/overtime work periods and

construction methods.

Each construction activity will have associated with it a minimum possible duration normally known as the crash duration, and a normal duration.

The detailed time and cost information which are obtained from the works estimate for each project activity are known as utility data.

If all activities are fully crashed, i.e., reduced to their minimum possible durations, the result is called all-crash solution.

Dr. E. Adinyira 77

Cost slope is the incremental direct cost per unit time, and it indicates the rate of change in direct cost of an activity with reduction in its duration.

The cost slope indicates the extra cost (both direct and indirect) required to expedite an activity per unit time.

Dr. E. Adinyira 78

Crash Cost - Normal CostCost Slope =

Normal Cost Duration - Crash Duration

Projects that are to be reduced to their Minimum Possible Durations

Hint: continue to repeat the reduction process until it is no longer possible to reduce the durations of the activities on any critical path(s) in the network diagram.

Example

Dr. E. Adinyira 79

Dr. E. Adinyira 80

Activity

(a)

Network duration

(weeks)

(b)

Minimum duration

(weeks)

(c)

Cost per unit

reduction ()

(d)

10 20 2 2 -

10 30 6 3 600

10 50 4 2 600

20 40 9 7 300

20 60 - - -

30 50 - - -

30 60 4 1 100

30 70 15 7 900

40 80 9 6 400

50 60 8 6 800

60 70 - - -

60 80 7 4 200

60 90 9 6 200

70 90 2 1 800

80 90 4 2 300

Dr. E. Adinyira 81

Since the project duration can only be reduced by reducing

activities on the critical path, the following reductions on the

critical activities will be effected.

Activity 10 30 will be reduced from 6 weeks to 3 weeks Activity 50 60 will be reduced from 8 weeks to 6 weeks Activity 60 80 will be reduced from 7 weeks to 4 weeks Activity 80 90 will be reduced from 4 weeks to 2 weeks

Dr. E. Adinyira 82

Dr. E. Adinyira 83

Dr. E. Adinyira 84

Examination of the durations of the activities on the critical

path of the network diagram in Fig. 46 produced the following

results;

Activity 10 20 has a duration of 2 weeks, which is its minimum duration, and can thus not be reduced any further.

Activity 20 40 has a duration of 7 weeks, which is its minimum duration and can thus not be reduced any further.



The minimum possible duration of the project is 17

weeks.

Optimizing the cost of reduction

It is important to check that the duration of no activity has been reduced unnecessarily

Find out if an activitys duration can be increased from its present duration to a duration below its normal duration without affecting the earliest event time of the activitys head event.

Dr. E. Adinyira 85 The Result of the Final Crashing of the Project

Cost Associated with the Reduction in Project Duration

Dr. E. Adinyira 86

Activity

(a)

Normal

duration

(b)

Reduced to

(c)

No. of weeks

reduced by

(d) = (b) - (c)

(d)

Cost per unit

reduction

(e)

Total cost of

reduction

(f) = (d) x (e)

(f)

10 20 2 2 0 - 0

10 30 6 3 3 600 1,800

10 50 4 3 1 600 600

20 40 9 7 2 300 600

20 60 - - - - -

30 50 - - - - -

30 60 4 4 0 100 0

30 70 15 7 8 900 7,200

40 80 9 6 3 400 1,200

50 60 8 6 2 800 1,600

60 70 - - - - -

60 80 7 6 1 200 200

60 90 9 8 1 200 200

70 90 2 2 0 800 0

80 90 4 2 2 300 600

TOTAL 14,000

Projects that are to be reduced to Specific Durations or by Specific Durations

Hint: rank the activities on the critical path in ascending order, starting from the activity with the lowest cost per unit reduction

Example

Dr. E. Adinyira 87

Dr. E. Adinyira 88

Activity

(a)

Normal

duration

(wks)

(b)

Minimum

duration

(wks)

(c)

Cost per unit

reduction

(d)

Activity

ranking

(e)

10 20 2 2 -

10 30 6 3 600

10 50 4 2 600

20 40 9 7 300

20 60 - - -

30 50 - - -

30 60 4 1 100

30 70 15 7 900

40 80 9 6 400

50 60 8 6 800

60 70 - - -

60 80 7 4 200

60 90 9 6 200

70 90 2 1 800

80 90 4 2 300

Dr. E. Adinyira 89

Since the project duration is to be reduced from 25 weeks

to 18 weeks, there is a total of 7 weeks (25 weeks 18 weeks) of reduction to be made.

Dr. E. Adinyira 90

Activity

(a)

Normal

duration

(wks)

(b)

Minimum

duration

(wks)

(c)

Cost per unit

reduction

(d)

Activity

ranking

(e)

10 20 2 2 -

10 30 6 3 600 * 4

10 50 4 2 600

20 40 9 7 300

20 60 - - -

30 50 - - - * 1

30 60 4 1 100

30 70 15 7 900

40 80 9 6 400

50 60 8 6 800 * 5

60 70 - - -

60 80 7 4 200 * 2

60 90 9 6 200

70 90 2 1 800

80 90 4 2 300 * 3

Dr. E. Adinyira 91

Dr. E. Adinyira 92

Activity

(a)

Normal

duration

(wks)

(b)

Minimum

duration

(wks)

(c)

Cost per unit

reduction ()

(d)

Activity

ranking

(e)

10 20 2 2 - O 1

10 30 6 3 600

10 50 4 2 600

20 40 9 7 300 O 2.5

20 60 - - -

30 50 - - -

30 60 4 1 100

30 70 15 7 900

40 80 9 6 400 O 4

50 60 8 6 800

60 70 - - -

60 80 7 4 200

60 90 9 6 200

70 90 2 1 800

80 90 4 2 300 O 2.5

Dr. E. Adinyira 93

Three critical paths can be identified in the network diagram for

the project, namely;

10 50 60 90 10 30 50 60 90 10 30 70 90

Dr. E. Adinyira 94

Activity

(a)

Normal

duration

(wks)

(b)

Minimum

duration

(wks)

(c)

Cost per unit

reduction

(d)

Activity

ranking

(e)

10 20 2 2 -

10 30 6 3 600

10 50 4 2 600 +2

20 40 9 7 300

20 60 - - -

30 50 - - -

30 60 4 1 100

30 70 15 7 900

40 80 9 6 400

50 60 8 6 800 +3

60 70 - - -

60 80 7 4 200

60 90 9 6 200 +1

70 90 2 1 800

80 90 4 2 300

Dr. E. Adinyira 95

Activity

(a)

Normal

duration

(wks)

(b)

Minimum

duration

(wks)

(c)

Cost per unit

reduction

(d)

Activity

ranking

(e)

10 20 2 2 -

10 30 6 3 600

10 50 4 2 600 +2

20 40 9 7 300

20 60 - - -

30 50 - - -

30 60 4 1 100

30 70 15 7 900

40 80 9 6 400

50 60 8 6 800 +3

60 70 - - -

60 80 7 4 200

60 90 9 6 200 +1

70 90 2 1 800

80 90 4 2 300

Data Table with Critical Activities Ranked (Path 10 50 60 90)

Dr. E. Adinyira 96

Activity

(a)

Normal

duration (wks)

(b)

Minimum

duration (wks)

(c)

Cost per unit

reduction

(d)

Activity

ranking

(e)

10 20 2 2 -

10 30 6 3 600 2

10 50 4 2 600

20 40 9 7 300

20 60 - - -

30 50 - - -

30 60 4 1 100

30 70 15 7 900

40 80 9 6 400

50 60 8 6 800 3

60 70 - - -

60 80 7 4 200

60 90 9 6 200 1

70 90 2 1 800

80 90 4 2 300

Data Table with Critical Activities Ranked (Path 10 30 50 60 90)

Dr. E. Adinyira 97

Activity

(a)

Normal

duration (wks)

(b)

Minimum

duration (wks)

(c)

Cost per unit

reduction ()

(d)

Activity

ranking

(e)

10 20 2 2 -

10 30 6 3 600 1

10 50 4 2 600

20 40 9 7 300

20 60 - - -

30 50 - - -

30 60 4 1 100

30 70 15 7 900 3

40 80 9 6 400

50 60 8 6 800

60 70 - - -

60 80 7 4 200

60 90 9 6 200

70 90 2 1 800 2

80 90 4 2 300

Data Table with Critical Activities Ranked (Path 10 30 70 90)

Dr. E. Adinyira 98

Dr. E. Adinyira 99

Activity

(a)

Normal

duration

(weeks)

(b)

Reduced to

(weeks)

(c)

No. of weeks

reduced by

(d) = (b) - (c)

(d)

Cost per

unit

reduction

(e)

Total cost of

reduction

(weeks)

(f) = (d) x (e)

(f)

10 20 2 2 0 - 0

10 30 6 4 2 600 1,200

10 50 4 4 0 600 0

20 40 9 7 2 300 600

20 60 - - - - 0

30 50 - - - - 0

30 60 4 4 0 100 0

30 70 15 13 2 900 1,800

40 80 9 7 2 400 800

50 60 8 8 0 800 0

60 70 - - - - 0

60 80 7 4 3 200 600

60 90 9 6 3 200 600

70 90 2 1 1 800 800

80 90 4 2 2 300 600

TOTAL 7,000

RESOURCE ALLOCATION Networks can be analysed from three closely

connected perspectives:

Time (i.e. to set work schedules and to find what leeway exists)

Cost (i.e. to minimise the total cost of the project)

Resources (i.e. to formulate the distribution of trades, equipment, etc, required for the various activities)

For most projects resources needed will not always be available in the right quantity and when required for use on the project

Dr. E. Adinyira 100

The resources available, which are usually limited, may be required for a single project or for several projects running simultaneously

A contractors must balance the requests for these resources so that the load on them is as even as possible, and yet the projects are each completed in the shortest possible time.

The procedure for doing this is to:

1. Analyse the requirements for each type of resource according to its various activities, project by project and period by period.

2. Analyse the total requirements for each particular resource, period by period, assuming that each activity is started at the earliest possible time.

3. Balance the resource requirements, when it is necessary, by delaying the least critical activities.

Dr. E. Adinyira 101

Conversion of Network Diagram into Bar Chart

Dr. E. Adinyira 102

Resource Histogram

Dr. E. Adinyira 103

The summation of the resources on the histogram per

period, i.e., hour, day, or week etc., is known as resource

aggregation.

Ideal resource demand pattern

Dr. E. Adinyira 104

An attempt to move from an erratic resource demand histogram to an ideal pattern is known as resource smoothening.

The resource smoothening exercise is carried out through the use of the floats available to the non-critical activities in the project.

An over-allocation of the resource can be resolved by using the floats available to activities in a process is known as resource levelling.

Dr. E. Adinyira 105

Dr. E. Adinyira 106

Over-allocated Resource

Maximum Resource Level

TIME

Dr. E. Adinyira 107

CARPENTERS

MASONS

PLUMBERS

LABOURERS TIME

TIME

TIME

TIME

R

E

S

O

U

R

C

E

Project planning computer software

There are several project planning computer software that assist project planners to effectively handle real-life resource planning activities

1. Microsoft Project

2. Primavera Sure Trak project Manager.

Dr. E. Adinyira 108

Documents

Contract Planning Notes