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UNIT V CONSTRUCTION MANAGEMENT

Overview of construction management topics including :

Estimating ,
Cost control,
Quality control,
Safety,
Productivity,
Value engineering,
Claims, and legal issue
INTRODUCTION- ESTIMATING

 Cost estimation in project management is the process of forecasting the financial and
other resources needed to complete a project within a defined scope.

 Cost estimation accounts for each element required for the project—from materials to
labor—and calculates a total amount that determines a project’s budget.

 An initial cost estimate can determine whether an organization greenlights a project,


and if the project moves forward, the estimate can be a factor in defining the project’s
scope.

ESTIMATING 1
ELEMENTS OF COST ESTIMATION IN A PROJECT

There are two key types of costs addressed by the cost estimation process:

1.Direct costs: These are the costs associated with a single area, such as a
department or this particular project itself. Examples of direct costs include fixed
labor, materials and equipment.

2.Indirect costs: These are costs incurred by the organization at large, such as
utilities and quality control.

ESTIMATING 2
ELEMENTS OF COST ESTIMATION IN A PROJECT

Within these two categories, some typical elements that a cost estimation will take into
account include:

•Labor: the cost of project team members working on the project, both in terms of
wages and time.
•Materials and equipment: The cost of resources required for the project, from
physical tools to software to legal permits.
•Facilities: The cost of using any working spaces not owned by the organization.
•Vendors: The cost of hiring third-party vendors or contractors.
•Risk: the cost of any contingency plans implemented to reduce risk.

ESTIMATING 3
TYPES OF COST ESTIMATES USED IN CONSTRUCTION

PLINTH AREA COST ESTIMATE

Plinth area cost estimate is prepared on the basis of plinth area of building
which is the area covered by external dimensions of building at the floor
level .

Plinth area estimate is obtained by multiplying plinth area of building


with plinth area rate.

ESTIMATING 4
TYPES OF COST ESTIMATES USED IN CONSTRUCTION

CUBE RATE ESTIMATE

Cube rate cost estimate of a building is obtained by multiplying plinth


area with the height of building.

Height of building should be considered from floor level to the top of


the roof level. It is more suitable for multi storied buildings.

The rate per cubic meter is taken into consideration based on the costs
of similar type of buildings situated in that location.

ESTIMATING 4
TYPES OF COST ESTIMATES USED IN CONSTRUCTION

DETAILED COST ESTIMATE

Detailed cost estimate is prepared when competent administrative


authority approved the preliminary estimates.

This is very accurate type of estimate.

Quantities of items of work are measured and the cost of each item of
work is calculated separately.

SUPPLEMENTRY COST ESTIMATE

Supplementary cost estimate is a detailed estimate and it is prepared


freshly when there is a requirement of additional works during the
progress of original work.

ESTIMATING 4
VALUE ENGINEERING

INTRODUCTION

Value engineering is based on a methodology developed by Lawrence Miles, who


worked for the General Electric Company in the USA during the Second World War.

Miles was responsible for purchasing raw materials for the General Electric
Company and realised if he was unable to obtain one particular material, then it
was necessary to obtain a replacement material which performed the same function.

This ‘value engineering’ began with a creative, team-based approach which


allowed the generation of alternatives to the existing solution.

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VALUE ENGINEERING

METHODOLOGY

Value engineering is used to solve problems and identify and eliminate


unwanted costs, while improving function and quality.

The aim is to increase the value of products, satisfying the product’s


performance requirements at the lowest possible cost.

In construction, this involves considering the availability of materials,


construction methods, transportation issues, site limitations or restrictions,
planning and organisation, costs, profits, and so on.

Benefits that can be delivered include a reduction in life cycle costs,


improvement in quality, reduction of environmental impacts, and so on.
Contd..

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VALUE ENGINEERING

METHODOLOGY

Value engineering should start at project inception where the benefits can be
greatest, however the contractor may also have a significant contribution to make
as long as the changes required to the contract do not affect the timescales,
completion dates or incur additional costs that outweigh the savings on offer

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PROCEDURE FOR VALUE ENGINEERING

•Identifying the main elements of a product, service or project.

•Analyzing the functions of those elements.

•Developing alternative solutions for delivering those functions.

•Assessing the alternative solutions.

•Allocating costs to the alternative solutions.

•Developing in more detail the alternatives with the highest likelihood of success.

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INTRODUCTION

Construction claim can be defined as a request by either party to the


Contract usually the contractor for compensation for damages caused
By failure of the other party to fulfil his part of obligation as specified
In contract.

TYPES OF CLAIMS

Delay claims
Price accelerator claims
Change of work order claims
Extra item and variation claims
Different site conditions claims
Damage claims

Loss of profit claims

CLAIMS AND LEGAL ISSUES 4


INTRODUCTION

CAUSES OF CLAIMS

There are many kind of conflicts occur in construction


Industry between the parties which mostly converts into
The claims .

Listed below are common causes of claims.

Delay in supply of drawing.


Delay in handing over the site
Delay in supply of materials
Delay in starting work
Delay in completion of work.
Due to design errors.
Due to inadequate bid information.

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CLAIMS SETTLEMENT METHOD

When contractor discovers the problem, he should try to


Eliminate or avoid it. If he cannot do so, then he should
Write to a letter to owner to make formal claim.

This is first step in claim procedure.

The problem approached during regular meeting or


Special meeting may be arranged to settle or discuss dispute.

If all that not succeed , then mediation could be friendly way


For settling claims, otherwise arbitration or litigation could
Be other ways to solve the problem.

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INTRODUCTION

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