7 Budget Review & Related Practices

ENMG 634 Design Management for Large Projects Professor M. Asem Abdul-Malak AbdulEngineering Management Program E i i M tP Faculty of Engineering and Architecture American University of Beirut y

COURSE OUTLINE
The design process Project management for design The characteristics of the design process Organizing for design by the owner Teaming up for the design process by the lead consultant Design coordination Budget review and control Value engineering Constructability review y Elements of the design services agreement Design services agreement formation process Management of design services deliverables Planning and scheduling for design delivery Design knowledge management

Topics Interrelationships
Control of budget is exercised by ensuring that generated cost estimates are always within the owners set budget or any owner s revised figure approved by the owner. Budget review is concerned with the initial (purchase and installation) costs (of work items) which are normally items), weighed against maintenance and operation costs under any value engineering exercise. Installation (execution, construction,..) costs refer to the cost (execution construction ) of installing or incorporating work items or products in the built facility. The ease with which such installations take place has an impact on the eventual cost of completing the works.

Design Stages and Intent

Illustrating the scale and relationship of the project components j t t

Schematic Design S h ti D i

Design Development Refinement of design; establishing scope, relationships, forms, size, and appearance of i d f the project Construction Documentation Setting forth, in detail, the requirements for construction of the project

Owners Construction Budget

Construction budget set by the Owner Schematic Design S h ti D i

Design Development Construction Documentation

Construction budget checks and balances by the Owner

Budget Review Cycles

Detailed/Definitive Estimate Schematic Design S h ti D i Engineers Estimate Design Development Construction Documentation

Preliminary Estimate

Construction cost estimate reviews/updates by the Architect/Engineer

Q Questions to be addressed
Schematic Design S h ti D i

1. Design Information???

Design Development Construction Documentation

2. 2 Estimate Representation???

Construction cost estimate reviews/updates by the Architect/Engineer

SD Estimate: Governing Factors

Design informations attributes

Functions/Areas

Scale/Massing

Systems/Sizing

Criteria/ Standards

Estimates representation characteristics

$/m2 $/

Aggregation by function

Aggregation by system

Combined

Owners criteria of acceptance O it i f t

In conjunction with other deliverables

Comprehensive

Estimate distribution

Rates vs. quality

Cost Estimate Confirmation

DD Estimate: Estimate: Governing Factors

Design informations attributes information s

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Estimates representation characteristics

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Owners criteria of acceptance O it i f t

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Cost Estimate Confirmation

CD Estimate: Governing Factors

Design informations attributes information s

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Estimates representation characteristics

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Owners criteria of acceptance O it i f t

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Cost Estimate Confirmation

Value Engineering: g g Definition

It is the process through which it can be ensured that the delivered facility has been designed with an overall (life-cycle based) cost effectiveness taken into consideration in conceiving the functions to be fulfilled by the built facility and the systems serving such functions.

Participants Involved
Project Management M Professionals Technical Staff

Financial i i l Advisors Owner Legal Advisors

A/E Consultant Contractor C t t

A/E Consultants Role Consultant s

Relevant AIA terms: 2.1.3 The Architect shall consider the value of alternative materials, building systems and equipment, together with other considerations based on program, budget and aesthetics in developing the design for d th ti i d l i th d i f the Project.
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Project Manager s Role Managers

Project manager is to be expected to take an active role in overseeing the performance of the Architects services and in enforcing those agreement terms pertaining to value engineering. Relevant AIA terms: 2 1 3 The Architect shall consider the value of 2.1.3 alternative materials, building systems and equipment, together with other considerations based on program, b d t and aesthetics in developing the budget d th ti i d l i th design for the Project.

Contractors Role Contractor s

Relevant FIDIC General Conditions of Contract for Construction terms: 13.2 The Contractor may, at any time, submit to the y, y , Engineer a written proposal which (in the Contractors opinion) will, if adopted, (i) accelerate completion, (ii) reduce the cost of the Employer of executing executing, maintaining or operating the Works, (iii) improve the efficiency or value to the Employer of the completed Works, W k or (iv) otherwise be of benefit to the Employer (i ) th i b fb fit t th E l
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How Are These Roles Exercised

Planning Design Bidding Construction O&M Architect Project Manager Contractor

Possibilities to consider Value Engineering prevail throughout the D-B-B process

Impacted project phases

Planning Design Bidding Construction O&M

Constructability

Definitions D fi iti

Definition (UK - 1983)

Buildability is the extent to which the design y g of the building facilitates ease of construction, subject to the overall requirements for the completed building l t d b ildi

Definition (US - 1986)

Constructability is the optimum use of construction knowledge and experience in planning, design, procurement, and field operations to achieve overall project objectives objectives (Construction Industry I tit t UT A ti ) (C t ti I d t Institute, Austin)

Definition (Ferguson ( g 1989)

Buildability is the ability to construct a building y y g efficiently, economically and to agreed quality levels from its constituent materials, components, and sub-assemblies t d b bli

Definition (Tatum - 1996)

Constructability is the extent to which the y design of the building facilitates ease of construction, subject to the requirements of construction methods t ti th d

Project Phase in Question

Planning Design Bidding Biddi Construction O&M

Participants Involved
PM/CM Professionals P f i l Technical Staff

Financial i i l Advisors Owner Legal Advisors

A/E Consultant Contractor(s) C t t ( )

A/E Consultants Role Consultant s

The Architect shall be the first participant to observe the issue of constructability as the design is being conceived and rendered. Observing constructability shall be made a requirement in the Owner/Architect Agreement.

Project Manager s Role Managers

Project manager is to be expected to take an active g p role in overseeing the performance of the Architects services and in enforcing those agreement terms pertaining to Constructability. PM/CM is to undertake frequent constructability reviews, starting as early as possible into the project implementation schedule.

Contractors Role Contractor s

The Contractor is the participant most instrumental in judging the degree to which the design has been conceived with g constructability in mind. The drawback lies in the mechanism through which the judgment of the Contractor may be sought. sought

Where Are These Roles Exercised

Planning Design Bidding Construction O&M Architect Project Manager Contractor

Possibilities to consider Constructability prevail throughout the D-B-B process

Considerations during g Planning

Constructability program is an integral part of project execution plan. plan Project planning involves construction knowledge and experience. Early construction involvement is considered in development of contracting strategy. i Project schedules are construction-sensitive. Basic design approaches consider major construction methods. Site layouts promote efficient construction construction. Project team participants responsible for constructability are identified early on. Advanced information technologies are applied throughout g pp g project.

Considerations during g Design and Procurement

Design and procurement schedules are construction sensitive. Designs are configured to enable efficient construction. D i fi dt bl ffi i t t ti Design elements are standardized. Construction efficiency is considered in specification development. development Module/preassembly designs are prepared to facilitate fabrication, transport, and installation. Designs promote construction accessibility of personnel personnel, material, and equipment. Designs facilitate construction under adverse weather conditions. Design and construction sequencing should facilitate system turnover and start-up.

Design and p g procurement schedules are construction sensitive

Procurement, other than for lead times, has moderate ability to conform to the needs of the construction segment of the overall schedule. Design is a complex and demanding process, but frequently is the most fruitful f i f l area in optimizing the entire project schedule. i i i i h i j h d l

Designs are configured to enable efficient g g construction

Simplicity is a desirable element of any constructable design. Flexibility for the field construction forces to select alternative methods of innovative approaches is highly desirable. Sequencing of installation is as much a design consideration as it is a procurement and construction consideration Designs that require special consideration. skills should be minimized in all cases, along with ones that are highly labor intensive.

Design elements are standardized

Specific advantages of standardization include: (1) increased productivity from repetitive field operations, (2) volume purchase discounts, discounts (3) simplified material procurement, ( ) (4) simplified materials management, p g , (5) reduced design time, and (6) greater interchangeability of spare parts during maintenance operations.

Construction efficiency is considered in y specification development

Sufficient time is allowed to develop complete, consistent, and error-free specifications. Clarity is i t t d f ifi ti Cl it i sought as one of the prime characteristics of a good p g p specification. A single construction specification covers all appropriate aspects of a single subject or component. The cost saving potential of or equal specifications is balanced against the risk involved involved. Specifications are maintained in order to include the most current cost-effective state-of-the-practice techniques and materials. t h i d t i l

Module/pre-assembly designs are prepared to facilitate fabrication, fabrication transport, and installation
Once the decision has been made to use modularization, preassembly, and/or prefabrication, special factors must be addressed during design and procurement to ensure their successful implementation. Designers should first consider where the fabrication is to be performed. If the vendors shop is under controlled conditions, tolerances can be more stringent. Module/preassembly designs add requirements for transporting and handling large assemblies. These activities form a revised scope f the project and introduce key physical or schedule for h d d k h l h d l restraints based on the availability of transportation and handling equipment. Finally, the installation method of modules must be considered because it affects module design overall plot layout, design, layout and design of underground services and foundations.

Designs promote construction accessibility of personnel, material, and personnel material equipment
Specific issues that should be considered include: (1) sequencing of work, (2) delivery schedules for major pieces of equipment, (3) laydown areas on congested sites, (4) deli e delivery routes, o tes (5) use of permanent elevators for personnel lifts, (6) installation and location of underground work to be traversed later by heavy equipment, and (7) type, location, and required opening size for equipment.

Designs facilitate construction under g adverse weather conditions

Typical activities that may include consideration of adverse weather are: (1) planning site layout that is accessible, (2) providing protection to personnel, (3) selecting construction materials, (4) ( ) use of offsite preassembly preassembly, (5) scheduling of design, (6) planning construction lighting, (7) allowing for adequate site drainage, (8) scheduling and controlling delivery of equipment and materials to avoid unnecessary protection requirements, and
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providing adequate temporary protected storage areas.

Design and construction sequencing should facilitate system turnover and start-up
it is important that the overall start-up planning process begin early in the facility delivery process. The earlier that planning begins the less potential for startstart up problems that result in increased costs and delays. The longer the overlap between the start-up phase and the construction phase, the more important early integration of start-up into the overall project plan becomes. Of equal importance to integrated project q p g p j planning is the need to identify start-up requirements that have a direct impact on design, such as: special piping connections, environmental considerations, and connections considerations electrical power requirements.

Considerations during g Field Operations

Constructability is enhanced when innovative construction methods are utilized, which may involve: : (1) the sequencing of field tasks, (2) use of temporary construction materials/systems, (3) use of hand tools, (4) use of construction equipment, (5) constructor-optional pre-assembly, and constructorpre(6) post-bid constructor preferences relevant to the postlayout, d i l t design, and selection of permanent d l ti f t materials.