#8

BROQUEZA, DANA LYN B.

CONSTRUCTION MANAGEMENT
MWF/ 12:00-1:00

Acceleration cost

An increase in the rate of progress of a Contractor above that initially

contemplated by the Contract or a construction program forming part of the
Contract. The Contract may allow for the Superintendent to direct an
acceleration to bring the Date for Practical Completion forward (in which
case the Contractor would usually receive Acceleration Costs). Alternatively,
a Contractor may decide to accelerate works in order to meet the Date for
Practical Completion.

Acceleration costs are a somewhat misunderstood concept in construction

projects. The literal interpretation of acceleration means an increase in the
rate of speed. In the construction context, the speed is towards completion
of the project and accelerating progress means going faster
than one is obliged to do in order to complete the project. What one is
obliged to do is governed by the construction contract. Essentially, a
contractor is obliged to complete by the completion date set out in the
contract.

Acceleration costs are therefore costs that a contractor is entitled to for the
additional effort he has taken to complete the work before the scheduled
completion date. The scheduled completion date could be the original
completion date, or an extended completion date. There are three key points
to bear in mind in relation to a claim for acceleration costs: First, just
because the contractor has accelerated the works and has completed earlier
than the scheduled completion date does not entitle him to additional
payment. He may be entitled to bonus payment for early completion if
there are such provisions in the contract, but such bonuses are not
acceleration costs. To be entitled to additional payment for acceleration
costs, the contractor must show that the employer instructed him to
accelerate the completion of the works. Usually, this needs to be a
clear and express instruction. Secondly, just because the employer has
instructed the contractor to accelerate completion does not mean the
employer will be liable for the costs of acceleration. One needs to look at the
circumstances under which the employer has given that instruction. If the
employers instruction is given because the contractor is himself in delay,
then the acceleration effort is merely mitigation by the contractor of his own
liability for delay related damages.

The contractor cannot charge the employer for such acceleration related
costs. Thirdly, there could be circumstances where the contractor believes
that the delays to completion are matters for which the employer is liable but
the employer has not responded to the contractors claim for extension of
time. The contractor is not sure whether or not his extension of time claim
will be allowed or refused. In such circumstances, the contractor has to make
a choice: if it proceeds as normal, the work will be completed late and he
could be liable for delay damages. If he accelerates, the work will be
completed on time but he will have incurred additional costwhich, if the
extension of time claim is refused, he will have to bear himself. This is quite a
common situation but legally a complex one.

Example Accelerating Construction Work

Lets say we have a 12 day cast-in-place slab activity. Our estimates say this
is a 12 day activity following typical procedures. However, we would like to
compress the duration in half to complete in 6 days.

The steps involved in this activity include building forms, installing rebar,
pouring the concrete, finishing, stripping forms, reshoring and lastly stripping
the reshores.

Compressing by 1 Day

To save 1 day on this activity, we might implement a simple adjustment of

procedures. Perhaps we opt for a concrete mix with accelerations to saving
on curing. Another option might be to increase worker time from 8 hr/d to 10
hr/d. Both of these options are fairly inexpensive to achieve the 1 day of time
savings. Our estimate is a cost increase by 10%.

Compressing by 3 Days
To compress the activity by 3 days, well employ the same suggestion as
before opting for a special concrete mix. But well also have to increase
worker time to 10 hr/d and approve work on Saturdays. With the longer hours
and weekend work, we now incur overtime costs (x 1.5) for our team. In this
case our costs increase by 17%.

Compressing by 6 Days

Were now brainstorming and implementing many strategies to reach our

goal of reducing the activity to 6 days from its original 12 days. Perhaps we
have to implement a different formwork system or bring in crane pump
instead of crane and bucket. And we still have to use the faster curing
concrete and approve overtime hours and weekend work. Direct costs have
now increased by %70 on this activity to achieve a 6 day time savings.

As we desire to compress the activity more, we always opt to implement the

most inexpensive options. However, to save more and more time, our limited
options become more and more expensive. Also our viable strategic options
become fewer and fewer (and possibly more complex).
 In a compression situation, for direct costs, the relationship of Duration to
Costs is inverse. As we compress and decrease Task Duration, Costs
increase, perhaps exponentially depending on how far we go.

Compressing a project schedule requires a specific process that looks at both

duration and cost impacts in order to optimize the two. Of course, if costs
arent a concern, then you can compress significantly. In most situations,
Direct Costs are tightly managed so youll want to calculate the true cost
impact of compressing a task to keep your budget in check..

CHANGE ORDERS

In project management, a change order (or variation order) is a component

of the change management process in which changes in the scope of
work (or project brief) agreed to by the client, contractor and architect are
implemented.
A change order is work that is added to or deleted from the original scope of
work of a contract, which alters the original contract amount
and/or completion date. A change order may fork a new project to handle
significant changes to the current project.
Change orders are common to most projects, and very common on large
projects. After the original scope (or contract) is formed, complete with the
total price to be paid and the specific work to be completed, a client may
decide that the original plans do not best represent their definition for the
finished project. Accordingly, the client will suggest an alternate approach.

Common causes for change orders to be created are:

The project's work was incorrectly estimated.
The client or project team discover obstacles or possible efficiencies
that require them to deviate from the original plan.
The client or project team are inefficient or incapable of completing
their required deliverables within budget, and additional money, time, or
resources must be added to the project
During the course of the project, additional features or options are
perceived and requested.
The contractor looks for work items to add to the original scope of
work at a later time in order to achieve the lowest possible base bid price,
but then add work items and fee back on once they have been appointed.
This is an exploitative practice.
A project manager then typically generates a change order that describes
the new work to be done (or not done in some cases), and the price to be
paid for this new work. Once this change order is submitted and approved it
generally serves to alter the original contract such that the change order
now becomes part of the contract.
R1= 1,2,2,2,4,3,3,3,3,1,2,2,1,2,2,1,2,4,4,3,2,1,2,1,1,4,4,3,2

R2= 1,2,3,2,2,3,5,3,3,3,3,1,2,2,1,2,2,1,2,4,4,3,2,3,1,2,6,4,3,2

R3 = 7,3,2,2,3,5,3,3,3,3,3,2,3,2,3,4,4,3,2,7,4,4,2,6,4,3,2

CRITICAL PATH = 82 DAYS

TOTAL FLOAT =

ACCELERATING COST =

NORMAL COST =
#36
TAN, NEIL STEVEN I.
CONSTRUCTION MANAGEMENT
MWF/ 12:00-1:00

Acceleration cost

An increase in the rate of progress of a Contractor above that initially contemplated by the
Contract or a construction program forming part of the Contract. The Contract may allow for
the Superintendent to direct an acceleration to bring the Date for Practical Completion
forward (in which case the Contractor would usually receive Acceleration Costs).
Alternatively, a Contractor may decide to accelerate works in order to meet the Date for
Practical Completion.

Acceleration costs are a somewhat misunderstood concept in construction projects. The

literal interpretation of acceleration means an increase in the rate of speed. In the
construction context, the speed is towards completion of the project and accelerating
progress means going faster
than one is obliged to do in order to complete the project. What one is obliged to do is
governed by the construction contract. Essentially, a contractor is obliged to complete by
the completion date set out in the contract.

Acceleration costs are therefore costs that a contractor is entitled to for the additional effort
he has taken to complete the work before the scheduled completion date. The scheduled
completion date could be the original completion date, or an extended completion date.
There are three key points to bear in mind in relation to a claim for acceleration costs: First,
just because the contractor has accelerated the works and has completed earlier than the
scheduled completion date does not entitle him to additional payment. He may be entitled to
bonus payment for early completion if there are such provisions in the contract, but such
bonuses are not acceleration costs. To be entitled to additional payment for acceleration
costs, the contractor must show that the employer instructed him to accelerate the
completion of the works. Usually, this needs to be a
clear and express instruction. Secondly, just because the employer has instructed the
contractor to accelerate completion does not mean the employer will be liable for the costs
of acceleration. One needs to look at the circumstances under which the employer has
given that instruction. If the employers instruction is given because the contractor is himself
in delay, then the acceleration effort is merely mitigation by the contractor of his own liability
for delay related damages.

The contractor cannot charge the employer for such acceleration related costs. Thirdly,
there could be circumstances where the contractor believes that the delays to completion
are matters for which the employer is liable but the employer has not responded to the
contractors claim for extension of time. The contractor is not sure whether or not his
extension of time claim will be allowed or refused. In such circumstances, the contractor has
to make a choice: if it proceeds as normal, the work will be completed late and he could be
liable for delay damages. If he accelerates, the work will be completed on time but he will
have incurred additional costwhich, if the extension of time claim is refused, he will have
to bear himself. This is quite a common situation but legally a complex one.

Example Accelerating Construction Work

Lets say we have a 12 day cast-in-place slab activity. Our estimates say this is a 12 day
activity following typical procedures. However, we would like to compress the duration in
half to complete in 6 days.

The steps involved in this activity include building forms, installing rebar, pouring the
concrete, finishing, stripping forms, reshoring and lastly stripping the reshores.

Compressing by 1 Day

To save 1 day on this activity, we might implement a simple adjustment of procedures.

Perhaps we opt for a concrete mix with accelerations to saving on curing. Another option
might be to increase worker time from 8 hr/d to 10 hr/d. Both of these options are fairly
inexpensive to achieve the 1 day of time savings. Our estimate is a cost increase by 10%.
Compressing by 3 Days

To compress the activity by 3 days, well employ the same suggestion as before opting for
a special concrete mix. But well also have to increase worker time to 10 hr/d and approve
work on Saturdays. With the longer hours and weekend work, we now incur overtime costs
(x 1.5) for our team. In this case our costs increase by 17%.

Compressing by 6 Days

Were now brainstorming and implementing many strategies to reach our goal of reducing
the activity to 6 days from its original 12 days. Perhaps we have to implement a different
formwork system or bring in crane pump instead of crane and bucket. And we still have to
use the faster curing concrete and approve overtime hours and weekend work. Direct costs
have now increased by %70 on this activity to achieve a 6 day time savings.

As we desire to compress the activity more, we always opt to implement the most
inexpensive options. However, to save more and more time, our limited options become
more and more expensive. Also our viable strategic options become fewer and fewer (and
possibly more complex).
In a compression situation, for direct costs, the relationship of Duration to Costs is inverse.
As we compress and decrease Task Duration, Costs increase, perhaps exponentially
depending on how far we go.

Compressing a project schedule requires a specific process that looks at both duration and
cost impacts in order to optimize the two. Of course, if costs arent a concern, then you can
compress significantly. In most situations, Direct Costs are tightly managed so youll want to
calculate the true cost impact of compressing a task to keep your budget in check..

CHANGE ORDERS

In project management, a change order (or variation order) is a component of the change
management process in which changes in the scope of work (or project brief) agreed to by
the client, contractor and architect are implemented.
A change order is work that is added to or deleted from the original scope of work of a
contract, which alters the original contract amount and/or completion date. A change
order may fork a new project to handle significant changes to the current project.
Change orders are common to most projects, and very common on large projects. After the
original scope (or contract) is formed, complete with the total price to be paid and the
 specific work to be completed, a client may decide that the original plans do not best
represent their definition for the finished project. Accordingly, the client will suggest an
alternate approach.

Common causes for change orders to be created are:

The project's work was incorrectly estimated.
The client or project team discover obstacles or possible efficiencies that require
them to deviate from the original plan.
The client or project team are inefficient or incapable of completing their required
deliverables within budget, and additional money, time, or resources must be added to the
project
During the course of the project, additional features or options are perceived and
requested.
The contractor looks for work items to add to the original scope of work at a later
time in order to achieve the lowest possible base bid price, but then add work items and
fee back on once they have been appointed. This is an exploitative practice.

A project manager then typically generates a change order that describes the new work to
be done (or not done in some cases), and the price to be paid for this new work. Once this
change order is submitted and approved it generally serves to alter the original contract
such that the change order now becomes part of the contract.
R1= 1,2,2,2,4,3,3,3,3,1,2,2,1,2,2,1,2,4,4,3,2,1,2,1,1,4,4,3,2

R2= 1,2,3,2,2,3,5,3,3,3,3,1,2,2,1,2,2,1,2,4,4,3,2,3,1,2,6,4,3,2

R3 = 7,3,2,2,3,5,3,3,3,3,3,2,3,2,3,4,4,3,2,7,4,4,2,6,4,3,2

CRITICAL PATH = 82 DAYS

TOTAL FLOAT =

ACCELERATING COST =

NORMAL COST =