CM658 – Construction Time

Management

Lecture no. 1

The 6 Stages of a Project

The 6 Stages of a Project

The 6 Stages of a Project

The 6 Stages of a Project

Topics:
• Theory of estimating
• Estimating Principles
• Basic Estimating Process & Procedure
Construction Estimating

“Murphy’s Law” on Estimating:

“The same work under the same
conditions will be estimated differently
by ten different estimators or by one
estimator ten times”
What Cost Estimates really Means:

• “Opinion of Probable Costs”

• Estimates are like a hypothesis
(educated guesses)

Estimating & Tendering (CIOB)

• Estimating:
• the technical process of predicting costs of construction
• Tendering :
• a separate and subsequent commercial function based
on the estimate’
18

Why Detailed Estimating is Important?

• A contractor must produce detailed estimate or he

cannot:
• Compete in a highly competitive endeavor
• Complete the project on time
• Stay in business
Detailed Estimates = Management Tool

• Source of initial project schedule

• Information for procuring materials & to
let subcontracts
• Input for planning (labor, supervision,
equipment & finances)
• Other project management needs (e.g,
project controls & productivity analysis)

Construction Squeeze
 Construction Squeeze

Estimating Theory
Law of the average

• If one square is one unit, estimate the total number

of units.

Law of the average

• Ellipse (Area)
= π x short radius x long radius
= π x 1.5 x 2.5
= 11.78 units
 Item Description Qty % Total
A Full Squares 3 1.00 3.00
B Partial Squares 4 0.80 3.20
C Partial Squares 2 0.97 1.94
D Partial Squares 2 0.90 1.80
E Partial Squares 4 0.35 1.40
Total 11.34

Item Description Qty % Unit Total

A Full Squares 28 1.00 0.25 7.00
B Partial Squares 4 0.95 0.25 0.95
C Partial Squares 4 0.97 0.25 0.97
D Partial Squares 4 0.85 0.25 0.85
E Partial Squares 4 0.55 0.25 0.55
F Partial Squares 4 0.80 0.25 0.80
G Partial Squares 4 0.35 0.25 0.35
H Partial Squares 4 0.20 0.25 0.20
56 Total 11.67
Note: 1 square = 0.25 units Calculated ellipse 11.78
Law of the average
• “A very significant factor that allows contractors to
produce reliable construction estimates, but only
works when the estimate for each element is based
on reality and not on mere assumptions” AGC

Law of the average

• The principle of obtaining accurate estimate is to
breaking it down into a small elements.
• Whole square can be compared to a firm price
proposal where parts of elements (e.g., labor,
equipments, materials, OH, etc) must be
approximated.
Associated General Contractors of America

Associated General Contractors of America

• Founded in 1918
• AGC represents more than 33,000 firms including
7,500 of America's leading general contractors,
nearly 12,500 specialty contractors and more than
13,000 service providers and suppliers.
CM658 – Construction Time
Management

Lecture no. 2
1. Decision to Bid &
Planning

1. Decision to Bid & Planning Process

1. Decision to Bid & Planning Process
• Receiving Bidding Documents
• Review Documents, Prepare Estimating Plan &
Budget
• Management Decision to Bid Project (Yes or No)
• Establish Estimating Team
• Document Control

Group Discussion:
•With your neighbor list
down all considerations to
be taken in order to
decide if a contractor
need “To Bid or Not To
Bid”.
Information for “To Bid or Not To Bid”

• Bidding Time
• Time given is sufficient
• Surety Bond (performance & payment)
• Present bonding capacity of the co.
• Consistent with the Business Plan
• Line of business/expertise
• Project size to be bid
• Current project workloads

Information for “To Bid or Not To Bid”

• Personnel
• Enough qualified people
• Cost of Bidding
• Costs for preparing bid is substantial
• Other projects being bid
• Prioritization of bid submissions
• Equipment
• Availability of company owned equipment
Information for “To Bid or Not To Bid”
• Supervision
• Availability of competent project
supervision/managers
• Support Staff
• Sufficient support staffs
• Finances
• Financial resources from start to completion
• Adequacy of resources
• Company resources as a whole

External Considerations:
• Competition
• List (& names) of competitors
• Experience with parties to the contract
• Good or Bad Experiences
• Design consideration in the contract
• Design risks involved
• Condition in the contract
• Restrictive conditions
External Considerations:
• Quality of Documents
• Licensing
• Community Relationship
• Availability of Suppliers & Subcontractors
• Time/Project Schedule
• Availability of Funds
• Special Project Requirements

My Estimating Team
Lead Estimator
• Experience in construction scheduling
• Ability to read & interpret plans
• Understanding of specifications
• Familiar with construction techniques
• Knowledge of circumstances & conditions
affecting costs
• Ability to determine costs of construction
• Ability to perform mathematics manually

Other attribute of Lead Estimator

• Detailed oriented
• Able to work with people
• Organize well
• Able to work with deadlines
• Thrives under pressure- stays calm when
stressed
• Can scan a large volume of specifications &
recognize special & important items
Document Control

Document Control
• Contractor must have good document control
system such as handling, filing, distributing,
submitting bid documents, etc.
Group Discussion:
•What are the
consequences of not
submitting/aborting the
bid?

2. Underlying Studies
2. Underlying Studies

2. Underlying Studies Process

• Site investigation
• Develop Construction Method
• Management Review of Construction Method
• Develop Production Rates & Preliminary
Schedule
• Prepare Special Equipment & Plant Design
• Management Review Schedule
• Prepare Construction Schedules
2.1 Investigating The Site
• “No Site Visit, No Detailed Estimate” Policy

Ideal Investigating Team

• Estimator
• Design Engineer/Architect
• Operations (Construction) Personnel
• Senior Management
Things to consider:
• Geophysical condition of the site
• Site access
• Local & Government
regulations/permits
• Local resources
• Labor, Material, Equipment,
Subcontractors

2.2 Planning the Construction

Method
• Cost estimates must be based on a particular
construction method and accepted by
management.
• includes sequence of work
• provide alternate method of construction
• provide alternate design from bid documents
2.3 Plan of Operation
• Operating plan may include layout of site,
contractor’s facilities, temporary access, temporary
works, etc.
• Equipment Comparative Costs Selection & Planning
• Labor Force Planning
• Potential risks should be considered

2.4 Construction Schedule

• Detailed construction estimate is based
on selected construction method,
schedule logic & analysis.
• Things to consider in schedule:
• Clients milestone schedules
• Subcontractors & Suppliers Schedules
• Inspection Requirements
• Mob & Demobilization
• Document Submittals & Approvals
Special Schedules:
• Manpower Loading
• Equipment Loading
• Cash Flow

3. Quantity Survey
3. Quantity Survey:

3. Quantity Survey
• A thorough systematic breakdown approach in
measuring of the quantities/units of work for the
purpose of evaluating the time and costs to
construct.
Pre-QS Check-up/Review
• Instruction to Bidders
• Technical Specifications & Standards
• General & Special Conditions
• Proposal Forms

Guidelines on Client Bid Quantities

• Never assume that quantities given by Client
can be used for purchasing materials or for
costing of the work.
• Quantities must be provided for costing each
element of the work, including:
• Materials to be procured (permanent/
temporary)
• Labor
• Construction Equipment
• Services or other items
Principles of Quantity
Surveying

Principles of Quantity Surveying

1. Selected Construction Method
2. Estimation Norms & Forms
3. Quantifying to industrial standards
• Commercial weight, dimensions, etc.
4. Allowance for Waste
5. Accuracy of Quantities
6. Prevention of mistakes
Practical Tips:
• QA must have complete set of bidding
documents.
• Acquainted with company estimating
norms & forms to be used
• Use Work Breakdown Structure (WBS)
• Establish good checking procedure
• More attention to be given on
expensive items

4. Cost of Work
 4. Cost of Work

Cost Categories
• Direct Costs
• All elements of cost associated with specific work to be
put in place.
• Indirect Costs
• All elements of costs other than associated with specific
items of work to be put into place.
Elements of Cost
• Labor
• Material
• Construction equipment
• Subcontractors
• Services & other expenses

6. Finalizing &
Submitting the Bid
 6. Finalizing & Submitting the Bid

Group Case Study:

 Bid Summary:
Group Bidder Quoted Price Quoted Duration Ranking
No. (AED) (days)
1 Al-Tsamba Est. 1,850,000.00 90 2
2 Al-Chao Gao Est. 1,156,611.00 3 1
3 Al-Musal Est. 1,952,266.00 26
4 Ali Mango Est. 1,966,416,00 40
5
6

Group Bidder Laborer Operator Spotter Civil Elect Elect

No. F/M F/M
1 Al-Tsamba Est. 15 1 1 1 2 1
2 Al-Chao Gao Est. 33 3 3 3 21 3
3 Al-Musal Est. 20 1 1 1 1 1
4 Ali Mango Est. 20 1 1 2 4 1
5
6
 Al-Tsamba Est.

Bid Summary:
Group Bidder Quoted Price Quoted Duration Ranking
No. (AED) (Weeks)
1 M/s Al-Makabayan 1,747,000.00 7 1
2 M/s Al-Pinoy 2,044,796.09 20 3
3 M/s Al-Dabest 2,901,875.00 12
4 M/s Al-Sadiki 1,976,428.50 12 2
5 M/s Al Tazaj 2,171,394.00 20
6 M/s Al-Pombra 2,197,842.37 3.5

Group Bidder Laborer Operator Spotter Civil Elect Elect

No. F/M F/M
1 M/s Al-Makabayan 21 3 3 1 2 1
2 M/s Al-Pinoy 10 2 1 1 1 1
3 M/s Al-Dabest 10 1 1 2 2 2
4 M/s Al-Sadiki 5 1 1 1 5 1
5 M/s Al Tazaj 3 2 2 3 3 3
6 M/s Al-Pombra 10 1 1 1 1 1
 Group Bidder Quoted Price Quoted Duration Ranking
No. (AED) (Weeks)
1 M/s Al-Makabayan 1,747,000.00 7

Group Bidder Labour Operator Spotter Civil Elect Elect

No. F/M F/M
1 M/s Al-Makabayan 21 3 3 1 2 1
 CM658 – Construction Time
Management

Lecture no. 3

Basic Terminologies
 Two Types of Bidding Procedure
1. Competitive Bidding
• each contractor submitting a proposal in
competition with other contractors to build
the project. The project may be awarded
based on the price or best value.
2. Negotiated Bidding
• often used when owners know which contractor
they would like to build the project, the parties
arrive at a mutually agreed upon price, terms
and conditions, and contractual relationship.

What are the pros & cons of:

• Competitive Bidding?
• Negotiated Bidding?
Group Workshop:
Bid Summary:
Group Bidder Quoted Price Quoted Duration Ranking
No. (AED) (Weeks)
1 M/s Al-Makabayan 510,000.00 5 2
2 M/s Al-Pinoy 500,000.00 6 1
3 M/s Al-Dabest 510,000.00 6 3
4 M/s Al-Sadiki 1,060,000.00 9
5 M/s Al Tazaj 5,134,925.25 8
6 M/s Al-Pombra 7,909,650.00 80

Group Bidder Operator Labor/ Welder/ F/M Gen.

No. Utility Ironw. F/M
1 M/s Al-Makabayan 18 9 72 9 3
2 M/s Al-Pinoy 2 9 72 2 1
3 M/s Al-Dabest 2 6 48 6 2
4 M/s Al-Sadiki 6 3 20 3 1
5 M/s Al Tazaj 52 26 208 26 9
6 M/s Al-Pombra 10 5 40 5 2
Estimation Norms

Productivity (Sample):

CSI
MasterFormat

Material Productivity
Cost (MH/EA)

How many hour is required to weld 5 nos. x 2” WN Flange, 150#, Sch. 40,
ASTM A106 Gr. B?
Composite Crew Rates:

• Equipment Requirements:
• Welding Machine = 1 No.
• Oxy-acetylene = 1 Set
• Power hand tools = 1 lot

Productivity (Sample):
How many hours are required to install 3 nos x 200 HP, Industrial Fan &
the minimum size of crane to be used?
• 3 nos x 36 Hours/ea
• (6,975 lbs or 3.2 Ton); Say 25 tons
Productivity (Sample):

Composite Crew Rates:

• Equipment Requirements:
• Welding Machine = 1 No.
• Oxy-acetylene = 1 Set
• Power hand tools = 1 lot
Manpower Productivity
Analyzer
Construction
Productivity

• Is your company regularly measuring productivity?

• Project Cost Controls vs. Productivity?
Why is productivity measurement not
universally applied?
• "I don't know how to measure productivity."
• "I've never monitored it before, and I am still in
business."
• "Productivity control is a part of a cost control
system that is too complicated and expensive
for my company to implement."
• "Productivity cannot be controlled."
• "Productivity measurement tells me little about
my project that I do not already know."

Productivity (CII):
• Many Contractors are not regularly
measuring productivity and therefore
forfeiting a fundamental management
tool for managing labor costs.
Productivity (CII):
• The work-hours required per unit of work.
Productivity is the input divided by the output and
is calculated for a finite time interval.
• It is commonly called the unit rate.
• Practical management tool.
• The input effort divided by the output quantity
(mh/cy, mh/lf).

What is Productivity?
• Simple and inexpensive to implement and
maintain.
• Timely in providing problem indicators.
• Independent of other business systems such as
estimating and cost accounting.
Construction Productivity is used in:
1. Determining how effectively their projects are
being managed
2. Determining adverse trends quickly so as to
facilitate timely corrective action
3. Determining the effects of changed methods or
conditions
4. Identifying the reasons for differences in
productivity from one project to the next
5. Providing the means for assessing the effects of
productivity improvement programs

Productivity Index
Productivity Index
• The ratio of planned productivity to actual
productivity.
• Performance that is better than planned will result
in a productivity index (PI) greater than 1.0

Project Cost Controls vs. Productivity?

Project Cost Controls vs. Productivity?

• Productivity and cost systems are viewed as one

and the same is the reason many contractors do
not measure productivity.
• Productivity measurement and control have been
accomplished as parts of large, sophisticated cost
control systems.

CII Recommends Productivity Measurement

separated from Cost Control System
• Productivity measurement can be limited to those
labor-intensive activities that have the greatest
impact on project cost and schedule.
If used properly, Productivity
Measurement system can be:
• Simple,
• Data gathering, measurement, and calculations
are simple and address only those activities that
have the greatest impact on cost and schedule.
• Inexpensive,
• No significant additional contractor overhead is
required to support the system.
• Flexible,
• The system does not require changes in the
contractor's current business methods.

If used properly, Productivity

Measurement system can be:
• Accurate Unreliable data is worse than no
data at all.
• The data accumulated reflects what is
happening.
• Evaluates performance,
• It supports management decision-making, i.e.,
performance correcting unsatisfactory.
Pareto Principles

Pareto Principle (Efficiency)

“For many events, roughly 80% of the effects come
from 20% of the causes”
Productivity measurement system
flow chart

Stages of Productivity Measurement

System
1. Selecting activities to be monitored
2. Reporting of quantities installed
3. Reporting of work-hours expended
4. Calculating productivity
5. Using measured productivity for
performance evaluation, forecasting
required resources, and estimating.
Productivity Measurement Flow Chart:

1. Selecting Activities
• Can we measure productivity on any construction
activity?
• Yes, but limit tracking to only those labor-intensive
activities that affect the success of the project to
maintain simplicity & minimize project overhead.
Productivity Measurement Flow Chart:

2. Reporting Quantities
• The units of measure used for reporting quantities
should be simple, easy to apply, and accurate.
• They should not burden field personnel with
unnecessary, time-consuming measurements and
computations.
Productivity Measurement Flow Chart:

3. Reporting Work-Hours
• The reporting of work-hours is straightforward
because the existing payroll reporting system
usually collects the required information.
Productivity Measurement Flow Chart:

Various methods of quantity

measurement
1. Units completed
2. Percent complete (Supervisor Opinion)
3. Level of effort
4. Incremental milestone
5. Start/Finish Percentage
Various methods of quantity
measurement
1. Units completed
2. Percent complete (Supervisor Opinion)
3. Level of effort
4. Incremental milestone
5. Start/Finish Percentage
Level of Effort (Sample)
Incremental Milestones (Sample)
Guide in selecting method to be
used:
• (1) simplicity, (2) degree of control needed, (3)
activity complexity, (4) activity scope, and (5)
construction techniques.
• The simplest method that provides the level of
accuracy and detail necessary to control the work
should be selected.

Time interval for data collection:

• Daily,
• Weekly,
• Biweekly,
• Monthly, and
• Cumulative.
4. Productivity Calculations
• Productivity is defined as "work-hours per unit of
work,“ or
Productivity Measurement Flow Chart:

Group Discussion:

• Productivity Calculations (Literature Review)

Reporting Format:

• Graphical representations of productivity data are

highly desirable because large amounts of data can
be grasped quickly and without the need to
manipulate data arithmetically.

4. Performance Evaluation
• The comparison of actual and forecast performance
to estimated performance is a powerful
management tool not currently used by many
contractors.
Performance Evaluations Methods
1. Control Budget
2. Productivity Index
3. Forecasting
4. Monitoring Progress by Control
Account
5. Productivity and Schedule
Performance
6. Earned-Value Concept

1. Control Budget
• For productivity comparisons, a control
budget is established for each activity to
be monitored, including estimated
work-hours, quantities to be installed,
and estimated productivity at
completion.
• If no estimate for the activity is
available, then the project manager can
substitute realistic target values.
2. Productivity Index (construction
efficiency)
• The simplest form of performance evaluation is to
compare the actual and budgeted productivity
values.

• A productivity index greater than 1.0

indicates better-than-estimated
performance.

3. Forecasting
• Forecasting is defining the total work-hours needed
to complete an activity.
• This is valuable for projecting work-hour variances
and assessing cost impacts.
Tool in using Forecasting:
• Graphical Forecasts

4. Monitoring Progress by Control

Account
• It is monitor progress by grouping related
activities into a single, larger category called
a control account instead of a collection of
narrow-scope accounts.
• One difficulty in using this approach arises,
however, because the work effort required
for the various narrow-scope accounts is not
the same. The earned-value concept can be
used to overcome this problem.
5. Productivity and Schedule
Performance
• To evaluate schedule performance, a
planned progress curve is needed that shows
the scheduled cumulative percentage of the
quantities installed versus time. The simplest
progress curves assume that the same
number of quantities will be installed each
day or week. This assumption yields a
straight line quantity installation rate from 0
to 100 percent, with the activity finishing at
the required time.

6. The Earned-Value Concept

• Earned Value is keyed to the budget, which is
expressed in both work-hours and dollars (work-
hours and dollars are the only common
denominators for the many accounts within a
project).
6. The Earned-Value Approach
1. Earned Value - Fixed Budget System Approach
2. Earned Value - Variable Budget System
Approach

1. Earned Value - Fixed Budget

System Approach
1. Earned Value - Fixed Budget
System Approach

CII Earned Value Formulas

2. Earned Value - Variable Budget
System Approach

Conclusion:
• Productivity is an important topic in the
construction industry because
productivity improvement translates
directly to labor cost savings.
• A growing consensus indicates that
measuring and monitoring productivity
are essential first steps to managing-
that is, improving-productivity.
 CM658 – Construction Time
Management

Lecture no. 4

Ten Themes for Construction Productivity

Improvement
Ten Themes for Construction
Productivity Improvement
1. Formal continuous education program for all employees
2. Use of job audits to promote use of a productivity procedures manual
with defined processes
3. Focus on implementing process management
4. Use of measurement and benchmarking
5. Implementation of defect analysis
6. Measurement of risk as a means of setting out productivity
improvement
7. Focus on the vital few versus the useful many
8. Implementation of a best practice program
9. Focus on safety and quality as means of improving productivity
10. Implementing programs to make a job look like a firm

Ways to Improve Construction Productivity

5 Ways to Improve Construction
Productivity
1. A dependable foreman
2. Incentives
3. Training
4. Planning
5. Site Security (theft)
“What are the practical challenges on these
recommendations”

Other factors for Improving

Construction Productivity
1. Highly motivated, and satisfied
workforce
2. Best practices model for supervision
3. Better working relationship model
between sub-contractors and the main
contractor
4. Efficient materials, tools, and
equipment management
Other factors for Improving
Construction Productivity
4. Optimize work practices and workface
planning
5. Information technology based on-site
communication framework
6. Better integration between site and
office management

Motivational Theories
Motivational Theories
1. Maslow in 1954;
2. Herzberg et al in 1959;
3. McGregor in 1960
4. McClelland in 1961
5. Alderfer in 1969;

Maslow's hierarchy of needs

Herzberg’s Theory of Motivation
Hygiene Factors (leading to Motivators (leading to
dissatisfaction): satisfaction):
• Company Policy • Achievement
• Supervision • Recognition
• Relationship with • The work itself
Boss • Responsibility
• Work Conditions • Advancement
• Salary • Growth
• Relationship with
Peers

McGregor’s Theory of Motivation

• Theory X and Theory Y have to do with the
perceptions managers hold on their employees
McClelland’s Theory of Motivation

Alderfer’s – ERG Theory of Motivation

Alderfer’s – ERG Theory of Motivation

• Existence needs- These include need for

basic material necessities
• Relatedness needs- These include the
aspiration individual’s have for
maintaining significant interpersonal
relationships
• Growth needs- These include need for
self-development and personal growth
and advancement.

Motivation and Construction

Productivity
Motivation?
• Motivation is not synonymous with
salaries.
• Motivation means an inner wholesome
desire to exert effort without the
external stimulus of money.
• The ability of indoctrinating the
personnel with a unity of purpose and
maintaining a continuing, harmonious
relationship among all people.

Motivation = Leadership
• Motivating means to inspire, encourage and impel
people to take action.
• Leadership to Influence people to take action
Leadership Skills for Implementing
Productivity Improvement

Leadership Skills for Implementing

Productivity Improvement
1. Leaders are Idea Driven and are Visionaries
2. Leaders Focus on Processes and Planning for
the Desired Result
3. Leaders are Team Builders, They Seek and
Obtain Consensus from Participants
4. Leaders are Consistent, But Flexible
5. Leaders do not Accept Failure, They are Not
Whiners or Blamers; They are Problem
Solvers and Opportunists
Influence Impact

Law # 2 – The Law of INFLUENCE

“The true measure of Leadership is

influence – Nothing More, Nothing
Less”
Law # 2 – The Law of INFLUENCE

“If you don’t have influence, you will

never be able to lead others”

Law # 2 – The Law of INFLUENCE

“The very essence of all power to

influence lies in getting the other
person to participate”
“Influence” – definition
• The power or ability to affect someone’s beliefs or
actions.
• Power arising out of status, contacts or wealth.
• The power to produce a physical change.

History
• Over 2,300 years ago, the Greek philosopher
Aristotle, summarized the skills required to
become a successful influencer in his book on
rhetoric.
• He defined persuasion as the ability to convince
others to adopt your ideas.
HISTORY
• A good influencer is able to speak logically,
fluently, and confidently. They are also able
to motivate and inspire others by appealing
to their personal interests.
• Aristotle wrote, that to be convincing, you
need to learn how to win over the minds
with logic, to win over hearts with emotion,
and to manage yourself, so that you can be
seen to be a person of authority.

Being influential
• When you succeed in getting your ideas
heard and accepted, you are exerting
influence. Recognize that your powers
of persuasion contribute directly to your
ability to achieve your goals.
• Effective influencers are convincing and
trustworthy, and both these qualities
require self-management.
Being influential
• You win people’s hearts when you respect their
aspirations, interests and concerns.
• In order to persuade people of the merits of a
proposal, you will need to demonstrate how your
ideas meet their needs.

Being influential
• Let your enthusiasm for your ideas show,
without side lining other people’s views.
• To win peoples minds, you must research your
subject and present a good case.
• Effective influencers look and sound confident,
well rehearsed, and polished. They are alert to
the feelings of others and adapt what they say
accordingly.
Summary
• INFLUENCE is the result of WHO you
really are, that flows out into the
decisions and actions that you take.
Your CHARACTER, the “real you”
impacts other people’s lives and
influences them in a particular direction
or line of thought.

Summary
• The word “influence” could also be written
“IN..FLOW..ENCE” as it is what “flows” out of you
that directly affects and impacts other people!