Project Control IE 699

John C. Solu

PLANNING & SCHEDULING

NJIT

Project Control IE 699

Project Life Cycle

Process
Engineering

Equipment Design
Facility Design

Basic
Engineering

Design
Engineering

Procurement

Start-up

Construction

75% REDUCTION
TIT
X

X
DATE: 25 MAR 91
MDH E:\DC\DWG
11.

Project Control IE 699

NJIT

PLANNING
Planning is the determination of
the individual operations which
must be performed in order to
carry out a project, and the
establishment of the sequential
relationships between them.
Project Control IE 699

NJIT

SCHEDULING
Scheduling is the development of
time requirements for each
operation, and the relating of
each to calendar time.

Project Control IE 699

NJIT

KEY DATA TABULATION

Start Detail Design

Complete Tk Design
Requsition Tank
Complete all Design
Start Construction
Start Tk. erection
Mech. completion
Loading station Compl.

January 1
January 10
January 15
March 15
March 15
April 15
April 30
July 1

NJIT

Project Control IE 699

Basic Schedule
JAN

FEB

MAR

APR

MAY

JUN

Description
Tank Design
General Project Design
Construction Fdn./Racks
Erection of Tanks
Construct R.R. & Roads

Project Control IE 699

NJIT

DETAIL PLAN. & SCHED.

Start with Detailed Estimate [U/G Pipe(600 MH)]

Determine work to be accomplished[Eqpt. list]
Assemble correct sequence of work [Fdn-Steel-Eq.]
Determine work day (8hrs/day - 10hrs/day)
Determine work crews (15/20/30/40 person)
Use 4 week months (8% Sched. Contingency)

Project Control IE 699

NJIT

PROCUREMENT &
ENGINEERING

Develop a list of Eqpt. items (Delivery dates)

Determine Detailed Engineering schedule for Eqpt.
Allow for Requsition prep. + design review
Assemble construction sequance and schedule
drawings for work packages.
Allow for fabrication and CERTIFIED drawing recipt.

Project Control IE 699

NJIT

Detail
Engineering
DESIGN ENGINEERING
PIPING
30.00
INSTRUMENTATION 30.00
MECHANICAL
30.00
ELECTRICAL
30.00
CIVIL
30.00

CATEGORY

6782
4660
1895
2663
8486

68277

MANHOURS

30.00

7302

219063.

PROCESS ENGINEERING

30.00

422

12672.

DESIGN ENGINEERING
PIPING
INSTRUMENTATION
MECHANICAL
ELECTRICAL
CIVIL

30.00
30.00
30.00
30.00
30.00

6782
4660
1895
2663
8486

203454.
139791.
56844.
79896.
254574.

30.00
30.00
30.00
30.00
30.00

13671
4880
0
2091
8048

410124.
146415.
0.
62736.
241428.

30.00
30.00
30.00
30.00

428
675
2368
3907

12831.
20238.
71049.
117204.

68277

2048300.

DRAFTING

203454. PIPING
INSTRUMENTATION
139791. EQUIPMENT
56844. ELECTRICAL
CIVIL
79896.
OTHER
254574. GENERAL DRAFTING

2048300.SUBTOTALS
OVERHEAD ITEMS:
REPRODUCTION
COMMUNICATIONS
TRAVEL
COMPUTATION
PAYROLL BURDENS/FRINGES
INDIRECT OFFICE EXPENSES

TOTAL DETAIL ENGINEERING

RESULTING UNIT VALUES:

DOLLARS PER MANHOUR
MANHOURS PER DRAWING
DOLLARS PER DRAWING

Detail
Engineering
Drawings

ENGINEERING
COST

PROJECT ENGINEERING

PLANNING & SCHEDULING

COST ESTIMATING
ENGINEERING SUPPORT

SUBTOTALS

RATE
$/MH

56300.
8400.
21600.
101400.
512100.
1536200.

68277

4284300.

62.75
46
2917

DRAWING
CATEGORY(PLANS & ELEVS.)
PIPING
ARRANGEMENTS
PIPING ISOMETRICS
SPECIAL HANGER/SUPPORT DRAWINGS
STEAM TRACING DRAWINGS
PIPING MODEL

NUMBER
35 OF
726
DRAWINGS

INSTRUMENT LOCATION DRAWINGS

CONTROL CABLE SCHEDULES
CONTROL ROOM/CONSOLE DRAWINGS
CONTROL SYSTEMS SCHEMATICS
INSTRUMENT LOOP DIAGRAMS
CONNECTION DIAGRAMS/JUNCTN BOX DRWGS

16
29
2
28
373
16

ELECTRICAL ONE LINE DIAGRAMS

SUBSTATION LAYOUT DRAWINGS
ELECTRICAL SCHEMATICS
POWER DISTRIBUTION DRAWINGS
CIRCUIT SCHEDS, CONNECTION DIAGRAMS
CABLE TRAY DRAWINGS
LIGHTING DRAWINGS
GROUNDING DRAWINGS
ELECTRICAL TRACING DRAWINGS

3
7
4
14
7
3
10
7
0

INSTRUMENT LOCATION DRAWINGS

16
CONTROL CABLE SCHEDULES
29
CONTROL ROOM/CONSOLE DRAWINGS
2
EQUIPMENT FOUNDATION DRAWINGS
STEELWORK FOUNDATION
CONTROL SYSTEMS SCHEMATICS
28 DRAWINGS
AREA PAVING DRAWINGS
INSTRUMENT LOOP DIAGRAMS
373
MISC. CONCRETE,
SUPPORTS, ETC.
UNDERGROUND PIPING DRAWINGS
CONNECTION DIAGRAMS/JUNCTN BOX DRWGS
16

5
0
0

37
4
10
19
0

STRUCTURAL STEEL (PLANS & ELEVNS.)

LADDERS & PLATFORMS, MISC.STEEL
GRATING DRAWINGS

21
22
7

BUILDING ARRANGEMENT PLANS, ELEVNS.

ARCHITECTURAL DETAILS

26
5

FACILITIES PLOT PLANS

AREA EQUIPMENT LAYOUTS
SITE DEVELOPMENT
OTHER DETAIL DRAWINGS, LISTS

9
6
6
12

TOTAL DRAWINGS

1469

SKETCH THE SCHEDULE

Once the Engrg and Procurement Schedules
have been determined plan Construction
Know the PRECEDENCE
Resolve conflicts(Eqpt./Fdn./Steel - Drwg)
Complete first pass calculate Start up date
Rework schedule to plan OT / 2nd Shift /
Change crew size / etc.
Project Control IE 699

NJIT

General Schedule
DETAIL ENG'G

PROJECT

1JUL95
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1JUL95
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31JUL95
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PROCUREMENT
PIPING EQUIPMENT 1JUL95 1JUL95
********************************
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5JAN96
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***---************
28NOV95 31AUG95
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CIVIL STEELWORK 1JUL95 23AUG95
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INSTRUMENTATION
1JUL95
**--******--*****************
STEELWORK
31JUL95 16JAN96
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1JUL95
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SITEWORK
6OCT95
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CONSTRUCTION EQUIPMENT SETTING
16FEB96
*CCCCCCCCCCCCCCCCCCCCCCC
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18OCT95
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31MAY96
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BUILDINGS
22JAN96
*****************
16MAY96
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STEELWORK
12FEB96
************
29APR96
:
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INSTRUMENTATION
21MAR96
*******************
23JUL96
:
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ELECTRICAL
18OCT95
*---****---------***-**************----**
25JUL96
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INSULATION & PAINTING 6AUG96
*****
CCCCCCCCC
4NOV96
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PIPING

DETAIL

Project Control IE 699

NJIT

Converted estimated construction manhours into a time chart

(estimated manhours + 8 hr/day - manpower = work days)

8t 15=

15

5300+-8+22=30

Foundations
+ 8 +

25

Install Piping

Erect TWR
10600

8 + 22 = 60

0
-

u-l

In

II

II

Erect Bldg.
=

60

7000

+ 8 +

22 = 40

Erect Str. Steel

.

106OOt8+22=60
Erect Steel
. 7000

t 8 t 22

Set Exch.

Pipe Up

7000+8+22=40
= -3500
40 + 8
f 20 = 20
Set + Pipe Up Compr.
.
10600+8+22=60
- .

10
+ 25 = 20
.

Painting

4000t8t 16=30
Manpower Chart
(Most Probable)
Manpower Chart
(Theoretical)

Catender Days
*__.*
r

..

WORK FORCE LEVELING

Check for constructability
Check for work force density
Develop Manpower Curve to show buildup
Show crew mix and plan for hiring
Check for planed site supervision

NJIT

Project Control IE 699

Construction
Manpower
Developing Country
Work Force
66
67

CRAFT
CODE

51
53
54
56
57
59
60
62
63
64
66
67
69
70
71
72
74
75
77
78
79
81
83
84
86
87
89
98
99

PIPEFITTER
PIPE WELDER

CRAFT

MANHOURS

LABORER
MILLWRIGHT
RIGGER
LIGHT VEHICLE DRIVER
HEAVY VEHICLE DRIVER
OILER
MECHANIC
LIGHT EQUIPMENT OPER
MEDIUM EQUIP OPER
HEAVY EQUIPMENT OPER
PIPEFITTER
PIPE WELDER
CEMENT FINISHER
CARPENTER
BRICKLAYER
IRONWORKER - REBAR
IRONWORKER - STRUCT
WELDER - STRUCTURAL
WELDER - SPECIAL
WELDER - FABRICATOR
BOILERMAKER
INSTRUMENT FITTER
ELECTRICIAN - LINE
ELECTRICIAN - WIRING
SHEETMETAL WORKER
INSULATOR
PAINTER
CRAFT HELPER
FOREMAN

149771
59231

TOTAL DIRECT FIELD MANPOWER

2.70
2.70

DIRECT
COST
-$-/MH

58335
14653
24340
1906
10409
1499
265
5945
7924
21412
149771
59231
9812
27607
0
3906
12514
700
0
0
1753
14956
2381
51283
7108
20447
30927
0
57472

2.70
2.70
2.70
2.70
2.70
2.70
2.70
2.70
2.70
2.70
2.70
2.70
2.70
2.70
2.70
2.70
2.70
2.70
2.70
2.70
2.70
2.70
2.70
2.70
2.70
2.70
2.70
2.70
2.70

157503.
39563.
65717.
5147.
28103.
4047.
715.
16053.
21394.
57811.
404380.
159923.
26491.
74539.
0.
10546.
33788.
1889.
0.
0.
4733.
40382.
6429.
138463.
19191.
55206.
83504.
0.
155158.

596556

2.70

1610675.

404380.
159923.

OVERTIME PREMIUM
TOTAL ADJUSTED FIELD MANPOWER

CRAFT
RATE

80534.
596556

1691209.

OVERTIME PREMIUM IS INCLUDED IN THE FIELD INDIRECTS REPORT(S).

BASIS: 45 HOUR WORKWEEK PLUS 5 HOURS OVERTIME AND 1 SHIFT(S) PER DAY

-$-

Reporting Progress
Prepare reports that show actual progress on
scheduled activities(Engrg./Procure./Const.)
Retain baseline schedule / Revise after review
Show critical path items and communicate cost
impact on improvements in schedule
Develop S curve to show cummulative
progress vs. plan

NJIT

Project Control IE 699

Progress Report
JAN

Description
Tank Design

FEB

MAR

APR

MAY

JUN

DESIGN
DELAY

General Project Design

Construction Fdn./Racks
Erection of Tanks
Construct R.R. & Roads

Project Control IE 699

START UP

NJIT

Dos and Donts of Planning &

Scheduling
Do control progress in research, development, and
project definition stages.
Do tie the tasks for planning and scheduling to the
units of the cost coded estimate.
Do plan schedule and control startups.
Do remember the strong ties between Engineering
Procurement and Construction
Dont use system more complex than it has to be

NJIT

Project Control IE 699

Phase III
Process Design and Scope Definition and Strategic Procurement
Phase VII

Key

Project
Activities:
Finalize
Project Execution Plan
Project
Closeout
Closeout
-Engineering/Construction Plan
Project Team Building Efforts Commences
Phase VI
Master Schedule
Commissioning
(Eng.,Procurement,Constr.,Start-Up)
Commissioning
And Start-Up
And Start-Up
Detailed Project Scope
Hazop Review-Preliminary
Phase V
Outside Partnerships Involvement
Functional Reviews Completed
Construction
Construction
Procurement Packages Submitted and Major
Vendors Selected
Phase IV
AR or Advance Spending Preparation
Project
Project
Finalize Financial and Business Analysis
Detailed
Detailed
Design and
Design Value Engineering. Review, Cycle
Design and
Procurement
Time Reduction Analysis and Project
Procurement
Phase III
Execution Plan Review
Design
Execute Permitting and Environmental Plan Process
Process Design
And Scope

Phase II

Rev. 0 2/9/95
SPLCC.PPT-16

Phase I

Project
Project
Concept
Concept
Development
Development
And
And
Alternatives
Alternatives
Analysis
Analysis

And Scope
Definition And
Definition And
Strategic
Strategic
Procurement
Procurement

Capital
Capital
Strategic And
Strategic And
Operational
Operational
Planning
Planning

Time

Best Practices Trigger Points

Meets SBU Objectives

AR Scope/Estimate (+10%)
Phase III Project Review
Scope Frozen
Cross-Functional Project Team in Place
Strategic Material Ordered
Final Risk Analysis and Funding Plan
10% to 25% Engineering Completed
Phase IV Funding Approved (Including Advance
Purchasing Required)
AR Submittal

Key Activities:
Finalize Project Execution Plan
-Engineering/Construction Plan
Project Team Building Efforts
Commences
Master Schedule
(Eng.,Procurement,Constr.,Start-Up)
Detailed Project Scope
Hazop Review-Preliminary
Outside Partnerships Involvement
Functional Reviews Completed
Procurement Packages Submitted and
Major Vendors Selected
AR or Advance Spending Preparation
Finalize Financial and Business
Analysis

Design Value Engineering.

Review, Cycle Time Reduction
Analysis and Project Execution
Plan Review
Execute Permitting and
Environmental Plan

Project Control IE 699

NJIT

Best Practices Trigger Points

Meets SBU Objectives
AR Scope/Estimate (+10%)
Phase III Project Review
Scope Frozen
Cross-Functional Project Team in Place
Strategic Material Ordered
Final Risk Analysis and Funding Plan
10% to 25% Engineering Completed
Phase IV Funding Approved (Including Advance Purchasing Required)
AR Submittal

Project Control IE 699

NJIT

..

I;:

\
/

\
/

FOUNDATIONS
& U/G

ERECT
BLDG'S

SET EQUIPMENT
& PIPE-UP

INSTRUMENTATION &
ELECTRICAL INSTALL'N

- -

e!!r
con

I, ,I \I

TEST'
CALIBRATE
INSULATE I

START
UP

ABC INC.
PROJECT:
CONSTRUCTION & START-UP CPM
(PARTIAL)

Ill

,,yju,

Starting
Event
6 5
6 6
676
4 3
805
6 1
4 7
806
807
808
8 1
813
641
6 8
8 1
655.
684
8 1

9
7
-

1
-

3
1
-

.
2
-

0
4
.5

,,,cr,l-uuy~ UI

Ending
Event
801
803
804
805
812
812
806
807
812
812
813
814
814
815
815
815
999
999

IIUUIJ

)JEI

u a y .

UGG I

MH
Activity
U/G Piping
600
12,000
Foundations
Erect Bldg.
7,000
Erect Twr. pi
5,300
10,600
Install Piping
10,600
Erect Str. Steel
Erect Steel
7,000
Set. Exch.
3,500
Pipe up
7,000
Set & Pipe up Compr. 10,600
Press. Test
1,000
Equipment Run
1,000
Instr. Install
12,000
Insulate
3,200
Calibrate
2,000
Electr. Instal I
21,000
Painting
4,000
Commission ng
4,000

lYUlG3

IL- I uo,u IL.&.

Work Crew

Work Days

15
25
22

5
60
40
30
60
60
40
20
40
60
5
5
60
20
10
65
30
20

22,
2
2
22
22
22
22
25
25
25
20
25
40
16
25

Figure 12-2 combines the above data into a theoretical bar chart, This
chart will show the major activities, indicating theoretical manpower for
each, and adding this into a combined manpower loading.
The reader should be well aware that this is a theoretical example and

c,

Planning And Scheduling

:
;

-_(

AT JOB SITE

FROM ENGINEERING

>

>

>

r,
-

>

cu

Third, the schedule is the base for the project status report. The planner will update his schedule on a delivery basis. The percent complete is
compared with the cost to date, then the remaining work is re-estimated in
light of costs to date. This is the reason for the simuftaneous updating of
project cost and schedule.

Early Finish

Late Finish - The latest date at which an activity can finish without
jeopardizing the overall schedule.
IFloat

It may be helpful to the reader who is not too familiar with scheduling to
have a brief description of terms used in this chapter.
l

Network - An arrow diagram as shown in Figures 12-1, 12-3, 12-4,

12-6, where the major activities, their duration and interrelationship are arranged in a network.
Sub Net - A detailed network that will explode activities like 667
- 803 foundations in Figure 12-1. Thls is required for detailed
control and phasing with subsequent and preceding activities.
Activity - The work that is being scheduled, like foundations.
Duration - The time in working days to complete the respective
activity foundations require 60 working days.
Event - (sometimes called bubble or node). The time when the
activity is complete. For the foundations it is 803. This is the point
after which subsequent activities can start.
C.P.M. - (Critical Palh Method) A network which unables the user
to find the critical path. or the string of activities that will take the
longest to complete from start to finish. These calculations can be
performed by computer. The user can rearrange activities, or the
logic, to develop a most practical network.
Pert - (Program Evaluation and Review Technique) Basically the
same as the CPM but the emphasis is on events rather than
activities.
Per&Cost - A network that examines cost of the activity In addition
to its duration. This is very helpful if the program has an option to
include the physical percent complete.
Early Start - The earliest date at which an activity can start.
Late Start - The latest date at which an activity can start without
jeopardizing the overall schedule.

- The earliest date at which an activity can finish.

- The difference between early start and late start.

Critical Path - If the float is zero, or the early start and late start
are the same, then the activity is critical. The critical path itself
runs through the string of activities with zero float. Note that a
project could have more than one critical path.
Positive or Negative Float - If the late start is later than the early
start, then the activity has a positive float equal to this difference.
If, on the other hand, the late start is past and the activity has not
started, the float is negative. If this slippage cannot be eliminated,
then the completion of the project will be delayed by the days of
the negative float.
Restraint - This is a dummy activity, like 813-680 on Figure 12-l.
indicating that insulation cannot start before event 813 is complete.
Floating or Dangling Activity - An activity that is not connected to
a successor event.
Loop -A string of activity where the finish of one will be connected
to a start event of a predecessor event - forming a loop. A
computer will stop computing a network which has a loop.
Milestone - A significant completion point, such as 812 in Figure
12-j. The piping is complete so that pressure testing can start.

Preparing a Network
A milestone network should be prepared before the cost estimate, but it
should only be expanded after the estimate is completed. This way the
schedule activities parallel those of the estimate. Again, Figure 12-3 could
be used to illustrate this point. Assuming that the project consists only of
pumps A and B, vessel B, column C valves and piping. This is,
of course, incomplete but it will help illustrate the point. This data is taken
from the estimate. Using the milestone network, it is expanded to show the
activities and the time required to purchase and deliver to the site the
required equipment. Similarly, Figure 12-1 is developed for the construc-

2d

Construction Cost Engineering

205

Planning And Scheduling

First we will convert manhours in the estimate into construction

man-days. The list below will be used to illustrate this process. From the
estimate we have the following activities and the respective manhours. We
will figure man-days at 8 hours per day. See Figures 12-1 and 12.2.
Starting
Event
G59
667
676
421
805
613
471
806
807
808
812
813
641
Ii80
814
655
684
815

Ending
Activity
Event
801 U/G Piping
803 Foundations
804 Erect Bldg.
805 Erect Twr.
812 Install Piping
812 Erect Str. Steel
806 Erect Steel
807 Set. Exch.
81 2 PIk)e up
812 Set & Pipe up Compr.
Press. Tpst
813
Equll)ment Run
814
Insrr. Install.
814
815 Insulate
815 Calibrate
875 Electr. Install
999 Paintin!]
999 Conirnlssioning

MH

Work Crew

600
12,000
7,000
5,300
10,600
10,600
7,000
3,500
7,000
10,600
1,000
1,000
12,000
3,200
2,000
21,000
4,000
4,000

15
25
22
22
22
22
22
22
22
22
25
25
25
20
25
40
16
25

Work Days
5
60
40
30
60
60
40
20
40
60
5
5
60
20
10
65
30
20

Flgure 12-2 combines the above data into a theoretical bar chart. This
chart will show the major activities, indicating theoretical manpower for
each. and adding this into a combined manpower loading.
The reader should be well aware that this is a theoretical example and
that 111 real life all foundations do not have to be complete before equipment
,lnd butldlng erection start. Detailing the bar chart in Figure 12-2 shortens
the overall construction span considerably by phasing activities for the most
logical and economical sequence of construction.
Second, examine equipment deliveries. Figures 12-1 and 12-3 show the
scheduled delivery for equipment and when it is required at the site. For
long deliveries. this schedule helps calculate escalation, indicates if
equtpment delivery must be expedited, and shows what will happen if the
dellvery IS late This will help management decide if additional money
should be expended to accelerate delivery. If float or delay time is available,
dellvery of equipment could be delayed without affecting the overall
schedule

Figure 12-1

208

Construction Cost Engineering

Third, the schedule is the base for the project status report. The planner will update his schedule on a delivery basis. The percent complete is
compared wrth the cost to date, then the remaining work is re-estimated in
lrght of costs to date. This is the reason for the simultaneous updating of
project cost and schedule.

Planning And Scheduling

209

Early Finish - The earliest date at which an activity can finish.

Late Finish -The latest date at which an activity can finish without
jeopardizing the overall schedule.
Float - The difference between early start and late start.

I I may be helpful to the reader who is not too familiar with scheduling to
have a brief descriptron of terms used in this chapter.
l

Network An arrow diagram as shown in Figures 12-1, 12-3, 12-4,

12-5, where the major activities, their duration and interrelationshop are arranged in a network.
Sub Net A detailed network that will explode activities like 667
803 foundations in Figure 12-1. This is required for detailed
control and phasing with subsequent and preceding activities.
Activity

- The work that is being scheduled, like foundations.

Duration - The time in working days to complete the respective

activity foundations require 60 working days.
Event (sometimes called bubble or node). The time when the
actrvlty IS complete. For the foundations it is 803. This is the point
after which subsequent activities can start.
C.P.M. - (Crrtical Path Method) A network which unables the user
to ftnd the critical path, or the string of activities that will take the
longest to complete from start to finish. These calculations can be
performed by computer. The user can rearrange activities, or the
logrc. to develop a most practical network.
Pert - (Program Evaluation and Review Technique) Basically the
same as the CPM but the emphasis is on events rather than
aclivtties.
Pert-Cost - A network that examines cost of the activity in addition
to its duration. This is very helpful if the program has an option to
Include the physical percent complete.

. Early Start
l

- The earliest date at which an activity can start.

Late Start - The latest date at which an activity can start without
Jeopardizing the overall schedule.

Critical Path - If the float is zero, or the early start and late start
are the same, then the activity is critical. The critical path itself
runs through the string of activities with zero float. Note that a
project could have more than one critical path.
Positive or Negative Float - If the late start is later than the early
start, then the activity has a positive float equal to this difference.
If, on the other hand, the late start is past and the activity has not
started, the float is negative. If this slippage cannot be eliminated,
then the completion of the project will be delayed by the days of
the negative float.
Restraint - This is a dummy activity, like 813-680 on Figure 12-1.
indicating that insulation cannot start before event 813 is complete.
Floating or Dangling Activity - An activity that is not connected to
a successor event.
Loop-A string of activity where the finish of one will be connected
to a start event of a predecessor event - forming a loop. A
computer will stop computing a network which has a loop.
Milestone - A significant completion point, such as 812 in Figure
12-l. The piping is complete so that pressure testing can start.

Preparing a Network
A milestone network should be prepared before the cost estimate, but it
should only be expanded after the estimate is completed. This way the
schedule activities parallel those of the estimate. Again, Figure 12-3 could
be used to illustrate this point. Assuming that the project consists only of
pumps A and B, vessel B, column C valves and piping. This is,
of course, incomplete but it will help illustrate the point. This data is taken
from the estimate. Using the milestone network, it is expanded to show the
activities and the time required to purchase and deliver to the site the
required equipment. Similarly, Figure 12-1 is developed for the construc-

ad

Construction Cost Engineering

tion phase. Note that Figure 12-1 and 12-3 are not really related since they
are only partial.
It 1s important to cover all the important activities shown in the estimate.
It was seen above how one calculates the durations for the activities
shown. If a Pert/Cost network is used, thecost of the corresponding activity
IS included in the network and the computer program. This information,
combrned with the percent complete and actual cost to date, is an excellent
tool for forecasting the cost of the project.
Time is Money
Successful engineering and construction firms do not leave for tomorrow
what must be done today. A slippage in issuing engineering specification,
for example, could mean more engineering manhours and a higher cost. It
may also mean a delaved purchase of equipment and thus a higher cost.
Thus could cause other delay in the field and thus create more slippage in
the project schedule. Schedule slippage may require adjustments in staff,
hours worked or completion date - always at higher cost. Delays may push
some work from good weather into bad and result in a tremendous loss of
effrclency Any of the above can make the difference between success or
failure on any project.
Slrppage in the completion date means higher cost for the lump-sum
contractor, unhappy clients, lost revenue for the owner, and inevitably harm
to some good reputations. Everyone in construction should understand how
time and money, cost and schedule, are related.
You should try to find the optimum balance between time and money.
Most projects could be built without errors and without risk, but few owners
cou!d afford the cost or the time. It may be true that there is no problem that
money cannot cure, be it accelerating schedules, or rearranging
construction logic. But no owner can afford the waste required to perform
the impossible. Every project has an ideal mix of cost and schedule. Cost
engtneers arecharged with finding that right combination for management.
Simulation
One of the many advantages of a computerized schedule is that it can be
used for simulation. It was mentioned earlier that Figure 12-1 is only a
theoretlcal network. This is because activities usually follow each other
more smoothly than shown. Manpower mobilization and demobilization do
not follow a straight vertical line, but follow the shape of the datedcurve
Instead In addition, the network as shown in Figure 12-l represents the
longest possible duration for construction and thus is the most expensive.

Planning And Scheduling

211

After having developed this first network, the planning engineer

modifies it to develop the most logical network. With practice you can begin
by developing the most logical network without going thru the
preliminaries.
Simulations are very useful if problems arise. What will happen if a
piece of equipment, the erection of which is on the critical path, does not
arrive at the site on time. HOW can the logic be changed to maintain or
improve the end date? By using costs you can calculate the cost if an activity
must be crushed. What wilt be the cost if overtime, shorter time
duration, or more people are used for a particular activity Or group of
activities? Find the least costly or the most costly way of doing things.
If the problem is of such a nature that it can not be improved, then
management will know its impact on the end date. Simulation can be used
also to accelerate or decelerate construction schedules at the least cost.
To Create the plan and the detailed schedule you make a model or
simulation of what must be done. All the activities are arranged in the
logical sequence. This shows if the project can be completed within the cost
and time budgets. Assuming that your simulation shows that you do not
have the optimum mix of time and money, make another run. It is far
cheaper to do this on paper than to do it in the field.
A;1 important part of your time and money study is the cash flow
forecast. The owner must have the required cash on hand to pay the bills
when they come due. Payment dates should be shown on the schedule.A
good fOreCaSt ensures that funds do not stay idle until delayedwork is
finally performed,
Planning, Scheduling, and the Budget
A cost engineer with a few years of experience in estimating and
budgeting should be able to integrate the cost estimate with the time
estimate. Scheduling involves an estimate of durations in the sequence in
which the work will be done. It is the last step - the sequence - that
distinguishes estimating and budgeting. For the cost estimate manhours
were used to calculate labor cost. In scheduling manhours are reduced to
calender days to find the duration.
Scheduling acti-iit& should follow exactly the same format as the
budget. If a sophisticated scheduling device such as P.E.R.T. or C.P.M. is
used, every scheduling activity carries its respective dollar estimate. When
making a status report, the percent complete for the activity and the actual
cost for that Percent complete are used to calculate the new cost forecast. If

272

Construction Cost Engineering

physical completionis 50% and cost is 75% of budget, you are going to have
a cost report that forecasts an overrun for the particular activity. The
average for all theactivities shows the total percent complete, the cost, and
is the basis for the new forecast. You may alS0 Want to Cakukde the cost Of
crash schedules: What will the cost be if overtime scheduling, shorter
ttme duration or more people are used for a particular activity or group of
actlvlties?
Your schedule of manpower requirements is the primary scheduling
tool. It should show the total manpower required for the construction by
traae ano oy mor~tr,. ~~UIII ~1113 yvu tiaII ucIIvuIuI~ . .,_ w... __... _. __r_. ..-._
requrred, based on established supervision-to-craft ratios. Based on the
total projected manpower, you can calculate what temporary construction
facilities are required and when they are needed. Your manpower schedule
will show when training and hiring must be completed for each trade so you
have men ready for productive work when required.
Make it Simple!
Simptrcity is essential to the work of the scheduler. YO U m u s t
understand that your schedule will be used by many others, including those
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project components should be able to follow the sequence of events depicted
wrthout more than a few minutes of indoctrination on the signs, symbols
and methods you use. Every well-prepared schedule must be simple
enough so that it can be used by those who contribute to the timely
completion of the project. There can not be a successful project without a
general understanding of the schedule.
It is hard to draw a line between simple and complicated. Too many
details will be confusing and time-consuming - too few will not serve the
control purpose. Every scheduler must find the limits which are acceptable
...
to those in line, staff and management posntons.

Types of Schedules
There are m a n y planning and scheduling systems in use. Distinct
systems have been developed in many firms. The basic principles in most Of
-.___ ___
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tnese sysrerr~s
dre ~IIIIII~I rlV,cbL allr, uI\LIIII -a YY_,, _.. __._.._, __._ _.._
use of the schedule dictate the exact system which is most appropriate.
The schedule should ensure that nothing important, or maybe even
nothing less than slightly important, is overlooked. All activities necessary
to meet the established objectives must be clearly visible. Some schedules
. . ~___ _I .L^ :_rl:.,:rl..r, rmrnenrihla fnr ncarh lie+& >p+ivi+v
even snow rne name 01 true IIIUIVIUU~I I=J~uv~~I~~~ IvI ~I, IILIU U.....,
Most schedules have only activities indicated by department code. Dont

Planning And Scheduling

213

overlook important details such as obtaining construction permits and

approvals from the owner.
Schedules are easiest to absorb when shown graphically. Most
construction people prefer to use a bar chart drawn on a time scale. The
length of each horizontal bar represents an activity duration. The problem
with the bar chart is that it must be redrawn every time there is a change in
schedule, whether slippage or acceleration. The trouble may be worth it,
however, because a bar chart is easy to understand and use. Unfortunately,
size of a project and desired detail can make the bar chart too big to be
manageable. It may be practical to use a bar chart if you have a smaller
project or identify milestones only.
Another scheduling system used extensively for large projects is
C.P.M., the Critical Path Method. The critical path is the route that goes
through the entire project and takes the longest time to complete. Those are
the activities without any float or slack time that control the project
duration.
A C.P.M. arrow diagram such as Figure 12-1 can show the current
project StatUS and depict the schedule. In case of problems, using the
computer printout, management can see which activity or group of activities
must receive attention. It also indicates where additional time and money
are not needed. If any activity duration is too long, preceding or subsequent
activities can be run partially in parallel rather than in series or the tardy
activity can be broken down into subunits that can be run simultaneously.
A C.P.M. system used on large projects may involve thousands of
activities and many arrow diagrams. For these larger projects scheduling
can be done with data processing equipment that can follow the status of
each activity aS well as that of the entire project. The machine output can be
rather cumbersome, but becomes more usable when the data is sorted into
specific categories:

The critical path

Earliest start dates

Latest start dates

Earliest finish dates

Latest finish dates

274

Construction Cost Engineering

Planning And Scheduling

215

Milestones

By speciality such as piping or instrumentation

By departments such as engineering, purchasing, or construction

By float available

Another advantage of C.P.M. is that reports can be printed in a

pyramidal form - the chart for any department shows only milestones that
are relevant to the management of that department. At the bottom of the
pyramid is the working control network that shows all the details and
indicates which events are milestones.
Figures 12-1 and 12-3 illustrate a scheduling technique that is well
adapted to a wide variety of projects. This system has a number of
advantages:
1. it uses one arrow diagram for every major phase of the project:
design, drafting, purchasing, fabrication and construction. Every department receives a copy of its diagram which is separate from ail the others.
2. The chart offers the simplicity of an arrow diagram but has the
advantage of showing each heading only once. Every column is reserved for
a particular activity which is indicated at the top of the column. At the left
margin is the title of the item that is being controlled. Durations are
indicated by numbers below the arrows. The status of the event is found at
the intersection. Completed activities are not shaded like in Figure 12-4
b e c a u s e the lower part of the bubbleis used for the scheduled date.
instead, a code of double arrows can be used to indicate a completed event.
3. When ail of the activities on a particular arrow diagram are
completed, the diagram is taken out of active use.
4. Grouping construction activities in one diagram makes it easy to see
the point when deliveries of major equipment or bulks must be made.
interdependence between subcontractors and the duration for the various
subcontracts are clear. if more details are desired, the main diagram could
show only milestone events and sub-nets could be developed to display as
much information as is required.

Figure 12-4

5. Dates can be calculated by computer, but only the scheduler has to

use the printouts. Early or late starts are indicated in the lower part of the

-.-

START
JOB
OMPR. A

XCHANGERS
'UFPS

:OMPR

VALVES

MECHAN:CAL

INSTR.

cIv!L

iLiCT?!CfiL

._.~

Construction Cost Engineering

211

Planning And Scheduling

219

completion date. This simple example is depicted in Figure 12-6.

REQUEST FOR
TIME CONTINGENCY

Engineering
and
Procurement

TRANSFER

Construction
PROJECT NO.

DATE

TRANSFER

1 Year

CALENDAR WORKING

DAYS FROM CONTINGENCY (FLOAT)

TO

ACTIVITY

Figure 12-6
The first phase cannot take longer than one year without jeopardizing
the schedule for the second phase, as shown in Figure 12-7.

THIS TRANSFER WOULD

I- REDUCE TOTAL FLOAT FROM

Engineering
and
Procurement
1
I

~~

Construction

~--15Months

9 Months - -

DAYS

DAYS
TO
~.. ~_
2- WOULD NECESSITATE CHANGE IN LOGIC TO
ACTIVITY

,~--------- c

J- WOULD REDUCE FLOAT OF SUBSEQUENT ACTIVITIES

FROM
DAYS
TO
DAYS
4- WOULU CAUSE A DELAY IN PRDJFCT COMPLFTION

Months+
Idelay

OF

DAYS

Figure 12-7
If phase one is expanded, the only alternative is a slippage in phase two.
This could apply to the entire project or t0 any tW0 activities in Series.
The example does not necessarily involve time contingency because
there may not have been any contingency to begin with. It could, however,
be used to demonstrate the principle that no activity should exceed its
allotted time limit without approval. For the type of situation described
above, and for activities with time contingency, a system for controlling
time contingency transfers should be implemented.
The importance of contingency allowances in estimating cost is well
understood and many systems have been designed to calculate amount and
use the funds. Chapter 7 was devoted entirely to this subject. The concept of
time contingency transfer is not so well understood. The form for this
transfer is shown in Figure 12-8. Every major activity has a certain duration
which is shown in the network diagram. Manual or computer calculations
determine each activity float. This float is the amount of time contingency
available for completinp the activity. Another time contingency allowance

.-.--

REASONS FOR TRANSFkR RCQUIST.

REQUESTED BY:

DATE

REVIEWED BY-

DATF

APPROVED BY:

DATE

Figure 12-8

220 {

Construction Cost Engineering

could be obtained by changing the schedule logic, but the alternate

contingency allowance should be identified and controlled separately. Every
activity has its own early start, late start, early finish, and late finish date.
Assuming that all major activities must be started and finished at the early
date, any deviations from these dates must be authorized by the project
manager. This allows the project manager to Conserve as much float time as
possible. This should be limited, Of Course,to important activities. No float
should be used without completing a formal request for a time contingency
transfer. The transfer form should be completed by the engineer or the
group requesting a time extension. The reason for the request is given by
the requesting party but the implications to the schedule should be entered
by the cost engineer.
The reason for controlling schedule like you control cost is simple: time
money and the schedule is a budget. The budget has a dollar amount for
all major activities and a contingency allowance to cover variations from the
estimate. The schedule is the budget for time, and every major activity must
he per formed withln a certain time frame. Any deviation must be authorized
alter Its effect IS carefully reviewed.

IS

The time contingency transfer request requires the originator to give

rayons why the activity can not be completed in the assigned time.
Otherwise major changes and delays may not be investigated, documented,
or even lustified, a situation that is conducive to a lack of responsibility.
The transfer request can be used to evaluate the dollar impact of a delay
and to explain the reasons why delay is required. The transfer requests are
also useful when negotiating extra charges. The discipline this form
lrnposes can eliminate many useless changes and procrastinations and
make for a more time and money conscious organization.
Schedule Updating and Progress Reporting
A schedule mtrst cover the entire life of the project from inception
through completion. In the early stage of the project it will be necessary to
have a detailed schedule only for the engineering activities and long
delivery time equipment. As the project progresses, subsequent activities
can be detailed as desired. This will ensure that the control mechanism is
ready when required.
When updating the schedule, the planning and scheduling engineer
must compare actual progress against planned progress. He should
compare actual productivity with the expected productivity, modify his
forecasts accordingly and communicate this data to Cost Control so the cost
forecast reflects the actual progress to date.

Planning And Scheduling

221

Updating the schedule on remote or overseas projects requires more

careful coordination. The success of the coordination effort must be
predicted, measured, and reforecasted as required.
Schedules are most useful when they are kept current. Major deviations
should be pointed out immediately and progress review meetings should be
held at regular intervals. Each status report should be made at the same
time as the cost reports - preferably on a monthly basis. The work in place,
Percent complete, remaining work and activities to be started or completed
in the immediate future must be updated at frequent intervals.
There are probably as many good ways to follow project status as there
are COnStrUCtiOn firms. Every firm could conceivably have its own acceptable system. One practical form of indicating required action would
be to publish a list of activities that must be started, expedited, or
completed within the following week, two weeks or month. This makes it
unnecessary to examine arrow diagrams or computer printouts. This system
Places great responsibility on the scheduling engineer, for he must develop
the list of what must be done and when.
Schedule, even more than cost, must be updated with the complete
cooperation of all team members. The team members that are involved in
the updating process should be the same individuals that prepared the
original schedule. Only by having key personnel involved in scheduling all
along the way can you get the complete cooperation you need. This applies
to individuals and whole disciplines alike.
The key People should know that this is their schedule and the cost
engineer must make sure that it is indeed theirs from the beginning.
Anyone who does not want to use the schedule should be allowed to explain
why. Getting this explanation may be very difficult or sometimes impossible
because there may be only very irrational or subjective thinking behind the
refusal. The scheduler should understand, however, that he does not
control the Progress any more than the cost control engineer controls cost.

Oversimplifying it, the job of the scheduler is to arrange all project

activities into a logical network, show interdependence, run the network
through the computer and publish the reports. Based on the printouts, the
scheduler shows what should be done, when it should be done, and what
Will happen if it is not done. The scheduler does not make things happen.
Only those involved in the execution of the project do.

222

Construction Cost Engineering

Updating should cover all project activities that could have an effect on
the schedule:
l

Process engineering

Design engineering

Purchase of long delivery items

Other purchases

Subcontracting

Major expediting activities

The status of major orders

Planning And Scheduling

223

OATE:

PROJECT -

Iam1600-

80 -

loo-

70 -

1*w-

Ooo800.

6M)ON
200

Completion of temporary construction activities

4

10

,I

10

12

The status of major construction facilities

Some payments for equipment and field activities are based on actual
percent complete. An accurate status report will be very valuable.
The schedule engineers one page graphic representation of the status
of the project can be more helpful than a several hundred page report. A
single chart can show the scheduled completion VS . actual completion,
projected manpower vs. actual manpower, projected construction manhours
vs. actual manhours, and other indicators of schedule compliance. A single
chart can summarize the overall project status or that of a selected activity.
One such chart is shown in Figure 12-9.
Schedule updating and projections are as important as cost control and
forecasting. The two functions form the basic control mechanism for the
progress of the project.
Updating Overseas Projects
Updating and controlling the schedule of an overseas project presents
many of the same problems as cost control for a domestic project. The
basic problem will be the coordination of worldwide activities, delays in
communications, problems with expediting, labor productivity and delays in
shipping and handling cargo. Most of those factors are considered in the

Pre-estimating survey and should have been allowed for in the schedule.
Allowing for a coordination problem in the schedule is one thing; measuring
the effect of that problem on performance is another.
Daily communications, constant monitoring and realistic forecasts are
all important in any control mechanism. In overseas projects problems are
magnified by distance, the many control centers, use of several languages,
varying work attitudes and less understanding than at home that time is
money.
Policing Progress Control
Any scheduling system, regardless of how simple, is just another control
system and must survive resistance, discredit and sometimes even attempts
at elimination. Scheduling control is even more difficult to implement than
cost control. Cost is part of financial management and, as such, receives the
direct scrutiny of management and financial departments. In scheduling the
scheduler must tell others what to do, when to do it, ask why it is not done,
and when it will be done. It is direct interference and people will not
voluntarily cooperate in any scheme that imposes outside restraints on
them. Moreover, management may be more willing to let the schedule

224 (

Construction Cost Engineering

engineer wage his battle unassisted.

Another great problem is that predicting delays long before they
materialize may be interpreted to mean that there is nothing that can be
done now to correct the problem. Yet another problem with forecasting a
delay is that it may create an unfavorable reaction from management, the
owner or even the bankers. With cost it is different. If more money must be
spent, there is not too much choice but to spend it (if available)! The cost
engineer must predict possible overruns long before they materialize.
The scheduling engineer publishes the plan, isolates the trend and
suggests what should be done to bring the project on schedule. Money, time
and talent used to develop a schedule is money, time and talent wasted
unless someone acts on deviations from the schedule. Scheduling without
top managements support is a waste of time and money. Management
must support and enforce schedule adherance because delays, expiration of
labor contracts, unfavorable weather, unsatisfied clients, lost production for
the client. lost possibilities for the contractor to work on another project, all
mean l o s t m o n e y .
It is the duty of cost engineering to develop a scheduling system that is
such a useful

tool that managements constant plessure is not required to

make people use it. People who can be induced to use the schedule
Invariably Improve their input of scheduling information. This makes the
schedule more useful to every member of the team. Scheduling, like every
other type of control in the project, is intended to help save money and make
a proftl.
The project owner, of course, has a prime interest in enforcing the
schedule and monitoring the progress of the project. Very OftenloSS due to
delays may be higher for the owner than for a contractor. Most plants have a
fixed end date by which the owner is obligated to start delivering the product to his own clients. The loss of delayed revenue, not to mention interest
due on the construction capital, is a very strong incentive for the Owner t0
ensure that a rigorous scheduling control system is implemented by the
contractor.

13
Cost Analysis
And Data
DQVQiOpmQnt

The preceding chapters explored the ways to develop a reliable

estimate, an adequate cost control system and a good forecasting system.
Now it is appropriate to review the last link in the chain of cost engineering,
cost analysis and data development.
Estimating, cost forecasting, planning and scheduling, are all based on
past experience and present performance. But experience must be analyzed
for it to be of value. Correctly interpreted, experience on a current project is
as helpful for that project as it is for future projects. The past and the
present form the basis for much of cost engineering. This chapter is
intended to help you analyze prior projects and current experience so that
this work becomes a guide for work done today and in the future.
It is almost impossible to estimate and forecast the cost of a project
without Cost data on work completed. There may be some projects that are
really new work and for which cost and schedule data are non-existant. But
almost nothing is 100% new. The application itself may be new, but there
are almost certainly components that are very familiar. The point
emphasized in this chapter is that what is new today must be analyzed all
the more carefully to increase our ability to do similar work tomorrow.
In the competitive construction world, cost and schedule data is
compiled by every company. This data is confidential proprietary
information because it gives that company a competitive advantage over

Project Control IE 699

John C. Solu

Case Study

Project Control IE 699

NJIT

Case Study
Contingency allocation
Project Schedule
Development
Engineering
Procurement

Project Control IE 699

NJIT