Project Control Reporting on LS Project

8/3/2019 Project Control Reporting on LS Project

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INTRODUCTIONLump-sum or fixed priced projects are becoming

the more prevalent contractual format for engineersand constructors to conduct business. The monitor-ing and control of costs and schedules for bothengineering and construction projects of this typeis a major concern for corporate and project manage-ment. Utilizing a personal computer with spread-sheet/database and scheduling programs, the projectcost engineer is able to keep management informedin a timely and accurate manner. The followingparagraphs will outline an approach to the monitor-ing of design and construct projects. The transi-tion from the bid stage, through design and con-struction, will be discussed for each cost segmentof the project. Also, for each segment, the formu-lation of management performance indices will beintroduced. These indices will be further discussedin the management report section.

ENGINEERING

For the bid, the engineering/design costs wouldhave been based on the level of effort for the workor on workhours developed by task and by drawing.The final output would be total time-phased hoursand the resulting costs.Design Phase

The identification of all engineering tasks isthe start of the design monitoring program. As-signed to each task will be:

- workhours- durations- intermediate milestones with percentage

completes assigned to each (if applicable)- start and complete datesThe detail level of the tasks can vary depending

on the project. For example, a task might be allelectrical drawings or all one line diagrams oreach one line diagram. The tasks can then be putinto a schedule with a weighting assigned to each

task based on workhours. The overall percentagecomplete of the project will be established basedon this step. The workhours determined for alltasks would be summed and time-phased so that anaccumulative workhour curve can be establishedwhich is the budget curve. This work can easilybe performed using spreadsheet/database programs.

Also at this time, the workhours should be cost-ed and the cost compared to the amount calculatedfor the bid. The variances need to be explainedto management both on a way and on a workhour bas-is. The differences would be defined as to whichare omissions from the original bid and which arethe results of scope changes.

The cost engineer, during this phase, will mon-itor the engineering accomplishments and workpowerexpenditures and will then report the results toproject management.

At set intervals the cost engineer will discusswith each lead engineer the status of his work andthen determine the percent complete for each taskbased on the achieved milestones. (The costengineer should also verify the accomplishments byreviewing the drawing status and the transmittalsof information.)

The engineering monitoring system must alsocollect actual spent hours against the monitoredtask. This time collection will allow comparisonsand performance indices to be calculated betweenactuals scheduled and earned for each task, disci-pline, and for the project. The performanceindices can then be used by the cost engineer andproject management to discern where the problemareas are for both cost and schedule. Examples ofthe indices are:

Idc = earned workhours/ actual workhoursIds = earned percentage complete of

engineering/scheduled percentageAfter the reviews of the project performance are

complete, forecast-to-complete hours and costsshould be developed to compare with the budgetamount.

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Design Change Notice MonitoringThroughout the engineering phase, the cost

engineer must keep a log of all changes to theproposal design. These changes can result fromomissions in the base bid, proposed changes to thescope of work developed by value engineeringstudies, or by client requests. The changes onceapproved will then show up as deviations in theproject management reports or as changes to thebudget amount. Design change notice monitoringwill be discussed later in the management section.

CONSTRUCTIONCost Monitoring

The monitoring of construction costs in a de-sign/construct project has two stages. The firstwould be to compare the bid with the design phaseadvancements, procurements and changes. The second.occurs during construction when the actual quanti-ties, workhours, and costs are compared to thestatus at the end of the design phase and to thebudget. The basis of comparison changes from thebid amount to the total estimated at the end of thedesign phase, although it still has to.be comparedto the contract total. (The contract amount canbe different than the amount estimated at the endof design.)

The next few sections will deal with theestablishment of documents that can be used tomonitor the construction cost of:

0 Equipment' Materials and temporary construction

facilities and equipment' Craft laboro Field managementO Change Orders

EquipmentThe equipment that will be prepurchased by the

use of an engineering specification is discussed inthis section.

During the time of the preparation of the bid,quotations will have been obtained from vendors forthis equipment. These prices with the necessaryadditions for escalation, contingencies, andomissions would be the budget amount for each item.A table would be developed to monitor each purchaseorder. Included for each order would be:

" Purchase order no. and description' Budget amount (including authorized

changes)' Committed amount0 Forecast total (includes committed

plus pending changes)' Variance between budget and forecastamountThe committed amount is the total of the

purchase order and all subsequent approved changeorders. The purchase order is usually issued

during the design phase.The pending changes include all changes to the

contract that have not been committed, includingescalation allowances, known client changes, anddesign advancements.

The variances between the budget and forecast,if great enough, should be explained by the use ofa design change notice report (which is discussedin a later paragraph). The monitoring indexwhich would compare the budget and current is:

Iec = Budget $/Forecast $ and/or Actual $

MaterialsMaterials include all commodity type bulk-bought

items. They can be prepurchased or bought duringthe construction phase. The establishment of amonitoring system consists of a system for trackingboth quantities and the price of materials. Thedocument for monitoring materials during the designphasewould

00

would be similar to that of equipment andcontain the following detail for each item:System and descriptionBudget amount (including authorizedchanges)Committed amountForecast total (includes committed pluspending changes or current design status)Variance between budget and forecastamount

The detail that would be monitored can vary.For example, electrical materials can be totalelectrical, or total wire and cable, or each sizeor type of wire and cable. For each selectedcommodity, both the quantity and the delivered costof each must be tracked.

For the bid, some items would have been quanti-fied based on drawings or preliminary designs andothers would have been estimated as an allowance.This lump sum should be listed on the table ratherthan guessing quantities.

During design, as systems are completed, billsof material will be developed for purchasingpurposes. From these lists, commodities can becompared both for quantities and estimated forcosts. When the purchase orders are placed, theactual costs can then be compared to the est,imatedamounts. Also the overall costs of the item can betracked based on the quantity installed. Table 1shows the detail of a material monitoring report.As shown, costs are compared from the bid, throughdesign and construction by the use of columns forbudget/bid, current forecast, and installed quan-tities and costs. The index of comparison betweenthe budget cost and current would be:

Imc = Budget $/Forecast $ and Actual $Craft Labor

Bid estimates can be based on either a level of

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TABLE 1: MATERIAL COSTS COMPARISONSBUDGET

BUDGET AMOUUT APPROVED SCOPE CHARGES REV I SED BUDGE1 AUOUPTIlEtl OUAUTITV COSIS WJAUl IIV COSTS OUAUTIIV COSlS

(Al (81 (Cl (01 (E:AtC) lF:B+Dl----e-s-____________ ____________ ________---- ____________ ________---- ______-___-_ _________---UMIT 5

tlEtlRiCA;t71rt A cable-if 30,900 63,000 36,810 22,340 61.670 105,340Cable tray-11 1,100 2l.IlO 0 1.100 11,510Condolt-If 1,200 5,790 254 I.200 6,644nltc rtr!N-I, 1 15.800 15,661 1 29,461

TOTAL ElECTRlCAt 124,100 36,235

lUSTfiUMEl1 6 Cl15Ttiblng-if 13,100 34,800 1,500 1,920 14,600 37.720fllsc cquto.-ls I 62,300 0 29,372 1 91,672

TOTAL lt4SlR A CltS 91,100 32,292162,355 ~119,392

__COtlIJIlf.lE#lS A#Dt!EI FORECASTPURCHASED COSlS KMOWN CHAUGES COUllTtlEUIS CHAUGES OF OUEARUI

COSlS OUA#l I IV COSTS COSTS COSTS COSTS IUlJDERRU#l(HI (1) (II (K:H*Ji (11 itl:KOrF*Ll lil-H-F)---------- ---------_-- ---------__- ------------ ____________ __________ ___________ ___________

135.066 (12,250l ~17.856) 115,228 0 115,228 9,16619,510 19,510 1.000 20,510 l1,0001

8,340 8,340 3,200 11,540 5,49625,000 25,000 3.000 28,000 11.461)

185,936 (17,858) 168,076 7,200 175,278 12.923

26,000 26,000 6,000 34,000 (3,720)71,034 11,034 7,000 70.034 (13,638)97,034 0 97,034 r5,ooo 112.034 (11,358)

effort of the craft labor or productivity units would be reviewed and redefined as necessary. Theusing a quantity of material. Once again there can labor of the tasks would occur similarly to thebe different levels of detail to develop the esti- bid but will be in more detail. The resultingmate. The level of effort can be determined forthe entire project or for various tasks within thescope of the work and then summed to calculate theentire job. Productivity units can also be forvarious levels of detail based on the informationavailable. The labor is then costed and includedin the bid. The prevailing wages would be usedto cost the labor with the necessary adders fortravel, benefits, insurance and taxes. Allowancesfor escalation must also be included. There aretwo facets of craft labor that will have to beonitored during the project: craft hours and

During the design phase, variances to the craftlabor estimate are tracked by design change notices

additive to budget amountut are added to the forecast total. A table cane developed which would contain the followingitems:

- Budget amount (including all changes)- Forecast at completion total- Variance amountNear the end of the design phase and prior to

the start of construction, the schedule and tasks

craft labor loading would then be costed on a time-phased basis and compared to the current budget.The results of the comparison between the currentforecast and the budget reveal to management theproblem areas so corrective action can be taken ifpossible. This revised craftloading would be thebasis of the planning for the construction period.(The indirect facilities would be based on thesetotals.) For productivity unit estimates, reviewof the quantities and assumptions for the unitsmust occur and revised workhours determined. Theresulting workhours will be compared to the budget.

During construction, craft labor hours need tobe tracked by task in order to compare actuals withscheduled and earned. A tracking report similar toTable 2 would be used to monitor actual hour expen-ditures and productivity against each task. Thebudget amount shown is the craft hours from the cur-rent budget allocated for each task. The earned-to-date figure would be the result of multiplyingthe budget total by the actual percentage completeof the task. The scheduled complete workhours aresimilar but are based on the scheduled percentagecomplete times the budget workhours. The perfor-mance indices would compare earned with actual andscheduled with actual. The report could be relist-

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TABLE 2: MONITORING OF ACTUAL HOUR EXPENDITURE AND PRODUCTIVITY AGAINST EACH TASK

AK1 Clwl 8111no OEScA1rll0n CODE CODE_____ _____.___.__________----..---. ._____ ___ .____ ____10010 AFCCIVE 6UHLOAO PUlvERlZfR PIS FOR 9102 450 190113011 REClIVE ; UIILOAD PULV.FARlA FOR 9 10 I 150 76011001: RECEIVE 6 UNLOAD PULVEAIZER PIS FOR 9101 450 110110013 RECFIVI 6 UllOAD PUlVER1ZIA PlS FOR 6101 450 16011QOlQ RECEI VE 6 UNLOAD PULV.PAAIS FOR I ID I 450 159110015 RECtIVt (UNLOAD PUlV. PARIS FOR 1 10 I 450 1101IJQZI R ECEIVE 6 UXLDAD PA FAN PARIS 450 110110022 UN1010 PA FAN YOIOR 450 210110Ql0 ASStUBlE SPRIYS FilLIfS 550 190210015 ASSEYBLE SPRING FRAMES 550 1102IO936 ASSLY5lt PYRllES HOPPER 6 CAIE VAlVtS 550 110210031 ASStlBlt PIRIlE NOPPLRS i CAIE VAlVtS 550 I90210040 ASStYBlf PA FAN INlFl HOUSING S 06 SHAFF 550 2402IQ045 ASStlBIE P& FAJI IIlFF HDUSJIGS ON SHAFF 550 2501IO SUB 10111

_________#UDCf,____ ____ _ ____+AR#_____ ..__.JC,,[DDL[D _____ _ -_-_ .-.. AC,uA,--------- --P~RiOR,lA6C~__MAN YHR x HAN % MAN YIN YHR tAANl tARW/

OUARI HOURS U/C COUP1 OUAUl HOURS COUP1 OUAWI HOURS OUANI HOURS u/c AClUAl SIHEO_.____.__ ____. _______ _ _____ ..L..- _.----- ----. ---_-- ._____. _.____ _____.- .._..__- _----_. -._____1101202401601201)Q

20IO

I10I20110119I60160 ___

0_____._.___ _ ___ __.______ ___.____- _.._._ __.___

0.___._._. ___ _________ --._-.--- _.--.- . ..___

11100 DRAIN 011 550 II90 2011110 REYOVE SFRvICE PIPlAG 650 1190 60lllll REMOVE COAl PIPING 650 1190 6011111 REMOVE LUBE 011 COOLlR AND ?UYP 150 1190 60,

650 1IQb 10

ed by area or by craft to show performance byzraft and by area. These comparisons and the re-sulting performance indices show to the cost en-gineer and construction manager the cost status ofthe project and areas of concern for correctiveaction.

The craft rates used in the bid would be com-pared against the current to ascertain what costdifferential, if any, would be attributable to thewages.Temporary Construction Indirects

The construction indirects include:' Temporary facilities such as trailers Utilities and serviceso Tools, consumables, and equipmentThese items would have been estimated during the

bidding stage as either a percentage of the directlabor cost or time phased as a level of need. Theycan be purchased, leased, or rented.

After the craft labor loading estimate iscomplete and the construction plan is final (priorto construction), these items should be reviewed orre-estimated as necessary.

During the construction phase, the majorpurchases can be compared to the hid amount as canthe major rentals or leases for the equipment. Theremainder of the purchases and rentals can beassumed to be time-phased throughout the life ofthe project based on the percentage complete of theproject. The management index would be:

Iic = Budget $/Forecast and Actual $

Construction ManagementFor the bid, the field staff is usually

estimated as a level of effort, that is to have astaff of non-manuals assigned at the site forvarying lengths of time. Monitoring of the fieldstaff would entail comparing the projected staffloading.against the actual loading of the staffover time. Also the expended costs need to becompared. Items which could cause the variance inthe cost include overtime costs, relocation andsubsistence costs, and wage rates.

Construction Change OrdersDuring the construction phase, a listing of all

variances to the bid scope must be maintained. Thevariances must be defined as to which result of anomission from the bid and therefore not reimburs-able, and which result from differing site condi-tions or are owner changes and are thereforereimbursable. The listing would keep managementinformed of the changes. (See management reports.)Schedule Monitoring

Briefly described in this section will he anapproach to monitoring the construction progress.This subject has been in the past and will be inthe future the central focus of other papers.

During the hidding stage, a preliminary planand schedule would have been developed upon whichthe hid would he based. The schedule could havebeen a milestone schedule of varying detail or abar chart which lists the major tasks of theproject.

6.7.4 1986AACETRANSACTlONS


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During the design phase, the schedule detailcan be increased. More information will bedeveloped on the commodity quantities and theentire scope of the project so that level ofdetail and confidence of the plan andschedule can increase.

At the conclusion of the design phase (priorto construction), a revised plan and scheduleshould be developed to reflect the current scope

MANAGEMENT REPORTSDuring the life of the project, corporate man-

agement must be kept aware of the status of theproject. The report should describe to managementthe problem areas potential cost and schedulevariances, and recovery plans. Through use of theindices developed in each section, management canbe concisely shown the status of the project with atable and a chart which would include the following

of the project. The schedule can be a detailed already discussed indices:CPM chart, a milestone schedule or a bar chartlisting the tasks. showing durations, and per- "centages complete.for each.

Idc - Compares earned engineering workhourswith actual

Also at this time the labor loading of the Ids - Compares earned engineering percenttasks should occur. This forecasting will allow a complete with scheduled0comparison to be developed to the bid and to ac- Iec - Compares equipment budget costs withtuals during construction. It will also aid in forecast/actual costs0

During construction, the schedule should be up-dated at set intervals which can be daily, weekly,etc. The tasks or activities listed on the sched-ule need to be weighted. This weighting can bebased on the estimated workhours to complete thetask, durations, or costs. The percentage com-plete of each task can be determined and a weightedpercent can be calculated. The weighted percentswould be summed for the entire project to deter-mine an overall complete of the project. For eachtask, the actual and scheduled completeness must

the planning of support facilities for the crafts. Imc - Compares material budget costs withforecast/actual costso Ilc - Compares the craft labor budget with

the forecast/actualo UC - Similar to Imc but for construction

indirectso Isc - Compares for construction the

percentage complete of earned versusscheduledAn index

project is:which would represent the entire

^ _be compared. Areas of concern should be noted and " IPC - Compares the budget cost for therecovery plans established as necessary. The project with the forecast and actualscheduled versus actual comparison can be shown amountas a management index: Table 3 is an example of the index report.

Isc = Z Actual/% Scheduled

TABLE 3: PERFOWANCE TREND REPORT

MANHOURS TO DATE DOLLARS TO DATE WTD.ITEM EARNED SCHD __lNDlCES*ACTUAL BUDGET EARNED AClUAL PHOUUC I COST PERF. AVG. TOTAL_--________ __________-________-_ _______ -____ _______ _______ ---- _____ ____ _____(8 x 1000)

ENGINEERING 63.67% 62.lG% 01.24% 1165 1171 122 1 0.995: 0.954 0.949 6.2% 0.059CONST MGT 2.00% 1.60% 1.90% 17 I4 16 1.214 1.063 I.290 8.9% 0.115EOU I PMENT n/e n/e n/a 3065 NA 2990 n/e 1 .032 1 032 17.3% 0.176MATFRIALS n/e n/a n/a 2699 NA 2769 n/a 0.975 0.975 14.1% 0.137CRAFT LABOR n/a n/s n/s 6067 NA 6144 n/a 0.991 0.991 47.3% 0.469CONST IND n/.9 n/e n/a 1017 NA 1024 n/a 0.993 0.993 6.2% 0.062

TOTAL 1.020ENGINEER SCHEDULE INDEX = 1.016 (Ise)CONSTR. SCHEDULE INDEX = l.lll (ISCIn INDICES CALCULATIONS:

PRODUCT. (PRODUCTIVITY) = EARNED MANHRSl ACTUAL MANHRSCOST (ENGINEERING) = EARNED DOLLARS/ ACTUAL DOLLARSCOST (CONSTRUCTION ITEMS) = BUDGET DOLLARS/ACTUAL DOLLARS (FORECAST)ENGINEERING SCHEDULE INDEX = EARNED %I SCHEDULED %PERF. (PERFORMANCE) = PRODUCT. JNDEX n COST INDEX

1986WACETRWNSWCTIONS 8.7.5


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A summary cost table should also be included aspart of the management report. Table 4 is anexample of the document. Included as part of thereport would be:

material and equipment escalation rate would betracked utilizing indices from a source such asthe Producer Price Index published by the Bureauof Labor Statistics. The base index would be thedate of the present day of the bid. Craft laborcould be tracked using the prevailing wage ratesin the area. The local unions could be requestedto supply this information. The escalationincrease would be calculated for each segment andthen based on the weighted value, determined forthe project.

SUMMARYThe approach to monitoring fixed price design/

construct will vary from project to projectdepending on scope of the work, the overall projectschedule, the confidence level in the project, etc.The author has tried to outline a general approachto the monitoring of such projects. What tables,figures, and reports that are finally utilized onthe project would be left up to the discretion ofthe project cost engineer.

Current budget amountCommitted amountForecast/actual cost of committed,itemsBudget for committed itemsForecast/actual cost 'of all itemsVariance to the budget from forecast/actual

Another section of the management report wouldbe a listing of all change orders in a log. Thechanges woud result from both the engineering andconstruction phases as discussed earlier. The logwould include pending, accepted, and disapprovedorders whose cost responsibility could be eitherthe client's or in-house. For each change, thefollowing information should be listed in the log:

0 Change order numberQ Concise description of the change' Whose cost responsibility" Cost of change (both engineering and

construction)0 Schedule impact' Status of changeAt set intervals, this listing should be pre-

sented to project management for their concurrence,The log presents a listing of potential changesthat may or may not have been realized.

An optional part of the management report wouldbe to monitor the actual versus estimatedescalation rate for the project. This reportwould be necessary if the project would takeseveral years to completeti The bid would be'divided into cost segments such as electricalmaterial, mechanical equipment, mechanicalmaterials, indirect material and equipment, craftlabor, etc. Based on costs, the weighted valueof each cost segment would be determined. The

Ronald . Stillman. PE CCEUnited Engineers k Constructors Inc.23 Inverness Way EastEnglewood, CO 80112

TABLE 4: SUMMARY COST REPORT IS OF 1t22in5PROJECTED TOT9L

Tcl?*L BUDGET FOR BVPiE7 EXPENDTURES ALLOW =DR FlNAi COSTS CRREN7 OVEF4VNDESCRIPTION BUDGET COMM. i TEMS NOT COMM. 6 CDMMTMTS CliAN;ES FOR CDMM~TMTS FORECAST (LINDEFRUN)

(Al (81 (C-A-6) (D) (El (F=D-E! (01 tH=G-C,________________________________________________~_~-~~----------------------------~~------~--~__~__________________________~

ENGlNEERlNGBASEFEE

TOTAL. ENGRCONSTRUCTION

CONS, MOTEOU I PMENT

L1.325.00098.000_________-__ __________11.423.000 r6

s1.40c.000130.000________-_--

s1.530.000

s1.450.500130.000____________11.580.500

l5C.500 0__________--

l50.500_______________:___.z___

0--__--______

10s.0

662.254 162.25. s850.0001 .249.16 1.266.161l.Of5.29f 1.316.918

16.664 3.7t1.30052.315 481.?00

0 300.000-__--__--_I __________12.395.665 S7.946.060

1626.000)(61 ,339)

26.91911.300

(28.300)10.000

_______---lS65.4201

0 670.000 00 250.000 0

18?6.0001.349.5001.266.0003.700.000

510.000290.000___-__--_-

a6.013.500

1.305 6@1 43.819 1.227.161 22.000I.013 22r 274.779 925.291 90.000

9.S.00060.000__________

12.476.902

3.700.000412.000230.000_ _ _ _ _ _ _ _ _ _

14.660.596

16.66452.315

___-__---- _________12.263.665 s112.000

MATERIALSCRAFT LABOR

670.000250.000__________-_

65.560.596________^___ -__--____

$2.263.665 s112.000____________ __________13.706.665 61~2.000t5.580.598

CONST INDIR.TAX 6 FINAN.

SU67OTALRISK 6 PROFITINCENTIVE FE6

TOTAL, CONSTR.TOTAL. PROJECT

670.000250.000____________

66.933.500-___-__--___110.463.500

12.476.902_-_______-__S2.176.902

t2.39i.665 S6.866.060 lS65.420)__-_________ __L____-----110.446.560 (614.920)2.395.685

Project Control Reporting on LS Project

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