approval volume 4 020408

GROSSMONT HEALTHCARE DISTRICT PROPOSITION “G” PROJECTS Grossmont Hospital Projects Procedures Manual

VOLUME 4 – PROJECT CONTROLS MANUAL

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GROSSMONT HEALTHCARE DISTRICT PROPOSITION “G” HOSPITAL PROJECTS PROCEDURES

VOLUME 4

PROJECT

CONTROLS MANUAL

Date: February 4, 2008

Adopted:

Grossmont Healthcare District

GROSSMONT HEALTHCARE DISTRICT PROPOSITION “G” PROJECTS Grossmont Hospital Projects Procedures Manual


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TABLE OF CONTENTS

Volume 4 – Project Controls

A. Introduction.........................................................................................................3

B. Project Funding And Budget...............................................................................4

C. Encumbering Funds ...........................................................................................8

D. Purchasing Accounting System (PAS) .............................................................10

E. Total Project Cost Estimate (TPCE) .................................................................12

F. Capital Cost Estimating ....................................................................................15

G. Value Engineering ............................................................................................19

H. Master Project Schedule ..................................................................................23

I. Contractor Schedules .......................................................................................27

J. Schedule Review And Acceptance...................................................................32

K. Schedule Updates ............................................................................................37

L. Incorporating Change Orders Into The Schedule .............................................40

M. Change Order Signature Authority ...................................................................43

N. Construction Contract Changes........................................................................44

Appendix

1. Acronyms, Abbreviations, and Definitions

GROSSMONT HEALTHCARE DISTRICT PROPOSITION “G” PROJECTS PROCEDURES MANUAL


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A. INTRODUCTION

1. Purpose The purpose of this Procedures Manual (Volume 4) is to establish Project Controls guidelines for the administration of the Grossmont Healthcare District Proposition “G” Projects. This manual is based on the criteria requested by Grossmont Hospital Corporation (GHC) and the Grossmont Healthcare District (GHD).

2. Organization of Grossmont Healthcare District Proposition “G” Project

Procedures The GHD Prop “G” Procedures are organized into eight Volumes. Within each Volume, individual procedures are developed to address the major management activities. Procedures are comprehensive so that conditions that apply to new construction may not be applicable to renovations. Generally, each Volume is to be used as a stand-alone document to support a specific phase or function of the project. The eight volumes are: 1. Project Orientation Manual 2. Administrative Procedures 3. Preconstruction 4. Project Controls 5. Agency Reviews/Interface/Permits 6. Project and Construction Management 7. Contract Document Control/Plan Room 8. Disputes and Claims

3. Project Management Information System (PIMS) Many of the procedures in this volume refer to the Project Information Management System, Impact (PIMS). The PIMS system is the electronic document control and information-tracking system specifically developed for the GHD Prop “G” project. The PIMS system has its own users manual and on-line context sensitive help facility. Where appropriate, these procedures will link to the PIMS help facility to provide user guidance on procedural issues. (Note: As of this writing many of the features and functions of the PIMS system are still under development and may not currently function as described.)

4. Living Document Suggested modifications to this Procedures Manual may be submitted to the Parsons Senior Program Manager (SPM) at any time during the life of the project.



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B. PROJECT FUNDING AND BUDGET

1. Purpose The purpose of this procedure is to define the funding sources and budget structure for the GHD Prop “G” Project.

2. Responsibility

Tasks

GH

D C

EO

GH

C C

EO

PMT

SPM

PM

T PA

PM

T Pr

ojec

t A

ccou

ntan

t D

istr

ict

Re p

rese

ntat

ives

1. Design Project Budget Summary A P A A

2. Review Project Budget P A

3. Approve Project Budget P C A A P A

4. Maintain Project Budget Summary A A P A = Assist P = Perform C = Concur with SPM recommendations

3. Funding Sources Bonds - Much of the Project financing is done through Bond revenues received from the sale of general obligation bonds authorized by the voters on June 6, 2006. Proceeds from bonds are expended only for costs incurred in connection with expansion, improvement, acquisition and construction of medical related facilities as enumerated in Proposition G, and the costs of the issuance of the bonds pursuant to Government Code Section 53410; and, No proceeds from the issuance of bonds are to be used for any administrative salaries or other District and/or Hospital operating expenses not incurred in connection with such bond issuance. Oversight is provided by an Independent Citizens’ Bond Oversight Committee (herein known as “ICBOC” or “Committee”). The Committee consists of eleven (11) members serving a term of two (2) years and for no more than two (2) full consecutive terms. All members are appointed by the Grossmont Healthcare District (herein known as “GHD” or “District”) board of directors.

4. Budget Allocation Summary (BAS) The first step in providing project cost control is the establishment of the project budget. This is accomplished by allocating the available funds for the project into various budget line items. These budget line items become the benchmarks against which estimated and actual project costs are compared.



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The Budget Allocation Summary for the GHD Prop “G” Project.has five (5) levels of detail:

Level 1 – Facility GHD Prop “G” Project – Total Budget.

Level 2 - Division

Defines major divisions of the budget including Land Acquisition, Make Ready, Construction, Equipment, A/E Services, Consultant and Vendor Services, Permit and Plan Fees, and PM Services.

Level 3 - Budget Element

Key elements of work within each division developed prior to contracts being awarded. Used during the estimating and budgeting phase to allocate budget and control scope.

Level 4 – Contract Individual contracts and purchase orders.

Level 5 – Schedule of Values Individual budget line items within a contract. Example: Level 1 GHD Prop “G” Project. (1) Level 2 Consultant and Vendor Services (1.E) Level 3 Construction Management and Support (1.E.01) Level 4 Constructors (1.E.01.a.200) Level 5 SOV Line Items In this example, the Level 1 budget was established at the onset of the project during the Bond Project Budget Process. A portion of the Level 1 budget was allocated for Consultant and Vendor Services. Prior to the award of Program Management services to Parsons, GHD established a Memo of Understanding with Sharp Healthcare and The Grossmont Hospital Corporation to provide services as a Program Agent in order to facilitate completion of the projects. Using this structure, project reports may be produced comparing the budget to the estimated cost, committed cost, actual cost, or forecast cost of the project or any portion of the project at any point during the project lifecycle.

5. Audit Trail Transfers or New Dollars that redistribute or increase the BAS must have prior approval from the GHD CEO. Furthermore, the movement of any funds within the Budget Allocation Summary must be recorded in the PIMS system. PIMS will assign a unique "BAS Change" number to each entry and provide a “notes” field to document the justification for the change. It also produces an approval form that is used to approve proposed BAS changes. After review and approval by the PMT SPM, the form is forwarded to the GHD CEO for final approval. After final approval, the appropriate information is input into the PIMS system by the PMT Financial Manager.



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Point of Clarification Project team members and existing project reports use various names to identify the structure of the Budget Allocation Summary. It is interchangeably referred to as the Organizational Breakdown Structure (OBS) or Work Breakdown Structure (WBS). In fact, it is neither. The OBS is a reporting structure that identifies “who” is responsible for the work. The WBS is a roll-up structure that refers to “what” work is being performed. The budget allocation summary identifies the roll-up structure for the project budget.

Budget Allocation Summary Flow Chart

Grossmont Healthcare DistrictProposition “G” Projects

05CA & RECORD

DRAWINGS

B.CONSTRUCTION

C.EQUIPMENT

D.A/E SERVICES

E.CONSULTANT AND VENDOR

SERVICES

F.PERMIT & PLAN

FEES

012-4-5 Build Out

02CENTRAL PLANT

03EAST TOWER

04D&T

99CONTINGENCY

05MISCELLANEOUS CONSTRUCTION

03FF&E

04CONTINGENCY

01MASTER

PLANNING

02PROGRAMMING

03SCHEMATICS

DEVELOPMENT

04DESIGN &

CONSTRUCTION DOCUMENTS

01MEDICAL

EQUIPMENT OFOI

02MEDICAL

EQUIPMENT OFCI

99CONTINGENCY

01CM & SUPPORT

02GEOTECHNICAL

SERVICES

03ENVIRONMENTAL

DOCUMENTS

04SURVEYING

05INSPECTIONS &

MATERIALS TESTING

06MISCELLANEOUS

CONSULTANTS

07COMPUTER

INTEGRATED FACILITY

MANAGEMENT

08PRINTING

99CONTINGENCY

01OSHPD

02San Diego COUNTY REVIEWS

03La Mesa CITY

REVIEWS

04AQMD

05REGIONAL PLANNING

06UTILITY & USAGE

FEES

7OTHER

AGENCIES

99CONTINGENCY

BUDGET ALLOCATION SUMMARYLEVEL 3 OF 5

A.MAKE READY

01PROGRAM

RELOCATIONS

02TI's AND

CONSTRUCTION

03TEMPORARY

SPACE

04CONSULTANT

SERVICES

05ASBESTOS

ABATEMENT

99CONTINGENCY



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Master Cost Flow Chart

District General

ObligationBonds

Sharp HealthcareMoveable Equipment

Funds

Project Funding

Project Budget Allocation Summary

Level 1Level 2

Level 3

Level 4

Level 5

Parsons Estimate

Design Documents

(B)Construction (C)Equipment)

Designer's Estimate

Estimate Detail(CSI Format)


Reconciled& Approved

Estimate

(A)Make Ready(B) Construction(C)Equipment(D)A/E Services(E)Consultants(F)Permit & Plan Fees

Schedule of Values, Division of Work, or Work Breakdown Structure (Cost Loaded CPM

Schedule)

Monthly Invoice

Total Project Cost Estimate (TPCE)


Schedule)

Monthly Invoice

Sharp Direct Charges

PMT Review/ GHD Approval

PAS System

Bid Price Detail(CSI Format)

Contractor, Vendor, and Consultant

Payments

Sharp Healthcare Reimbursements

Monthly PAS Report (Actual Expenditures)

Parsons Monthly PAS

Report Reconciliation

Parsons Time Phased Cost

Forecast

Master Project Schedule

P.O and Consultant

Contract Awards

P.O. and Bid Package Awards

Encumber Yearly Funds

Bond Counsel Review/ Approval



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C. ENCUMBERING FUNDS

1. Purpose The purpose of this procedure is to identify the District process for encumbering funds.

2. Overview The Grossmont Healthcare District sets aside (encumbers) funds for a given contract or purchase order to ensure that funds are available to pay expected invoices in that fiscal year. Encumbrances are made against specific base contracts, purchase orders, supplemental agreements, or other contracting vehicles and are not transferable even within the same contract. For example, funds encumbered against a supplemental agreement can not be used to cover payment requests against the base contract. Encumbrances will roll over at the end of one fiscal year to the next.

3. How Funds Are Encumbered When a contract, purchase order, or consultant agreement is approved by the District Board, the GHD CEO will initiate the encumbrance paperwork and forward it to the District Auditor / Controller. Supplemental agreements, if approved by the Board, are handled in the same manner.

4. Partial Encumbrances If a contract value is very large and expected to span more than one fiscal year the full contract value is not encumbered at the time the contract is awarded. Doing so will affect the schedule for the sale of Bonds.

5. Yearly Cash Flow Forecast PMT helps the District in determining the correct amount to encumber each year by producing yearly cash flow projections as part of the TPCE (Total Project Cost Estimate) forecast (see TPCE procedure).

6. Excess Encumbrances Excess encumbrances may be unencumbered by a memo to GHD Finance. This would typically be done when a contract is completed and there are funds remaining within the contract.



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Encumbered Funds Flow Chart

General Obligation

Bonds Sharp Moveable Equipment

Funds

Project Funding


Level 1Level 2

Level 3

Level 4

Level 5

Parsons Estimate

Design Documents

(B)Construction (C)Equipment)

Designer's Estimate




Estimate



Schedule)

Monthly Invoice



Schedule)

Monthly Invoice

Sharp/ GHC Direct Charges

Parsons Review/ GHD CEO Approval

PAS System

Bid Price Detail(CSI Format)


Payments

Inter-Departmental Reimbursements


Parsons Monthly PAS

Report Reconciliation

Parsons Time Phased Cost

Forecast


P.O and Consultant

Contract Awards


Encumber Yearly Funds



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D. PURCHASING ACCOUNTING SYSTEM (PAS)

1. Purpose The purpose of this procedure is to establish the process PMT will use to reconcile project costs with the District’s purchasing accounting system.(PAS)

2. Responsibility

Tasks

PMT

SPM

Fi

nanc

ial

Man

ager

CA

O

1. Produce reports P 2. Review reports A P 3. Reconcile with Project Data P 4. Inform District of discrepancies P

A = Assist P = Perform

3. Cost Reconciliation

The District CAO will issue reports monthly of all expenditures made and are considered the official “source” documents for project expenditures. If discrepancies are detected between the CAO’s reports and the project financial records maintained by the PMT, the discrepancy must be resolved.

4. Monthly Reconciliation Each month the PMT will compare the financial information listed in the report to project cost data maintained by the PMT. If there are errors or differences between the two data sources, the differences will be reconciled and reported to the District.

5. Yearly Reconciliation The CAO’s office produces year-end reports of project expenditures. The final close out of the fiscal year by the CAO is usually completed two months after the end of the fiscal year. All contract expenditures should be included in these year-end reports. The PMT cost data should be reconciled with this year-end data and the results reported to the District.



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Accounting Flow Chart

General Obligation

Bonds Sharp Healthcare Moveable Equipment

Funds

Project Funding


Level 1Level 2

Level 3

Level 4

Level 5

Design Documents

(B)Construction (C)Equipment



Schedule)

Monthly Invoice


Schedule)

Monthly Invoice

Sharp Direct Charges

PMT Review/ GHD Approval

PAS System(Level 5 Cost Input Only)


Payments

Sharp Healthcare Reimbursements


PMT Monthly PAS Report

Reconciliation

P.O and Consultant

Contract Awards


Yearly PAS Report (Actual

Expenditures)

PMT Yearly PAS Report

Reconciliation

Report PAS Discrepancies to

District



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E. TOTAL PROJECT COST ESTIMATE (TPCE) 1. Purpose

The purpose of this procedure is to establish the process for preparation and distribution of the Total Project Cost Estimate (TPCE).

2. Responsibility

Tasks G

HD

CEO

GH

C C

EO

SPM

PM

T Es

timat

ors

Dis

tric

t Pr

ojec

t A

ccou

ntan

t

1. Update TPCE A P 2. Review TPCE C P 3. Approve TPCE P

A = Assist P = Perform C = Concur with SPM recommendations

3. Overview

The Total Project Cost Estimate is PMT’s best estimate of what the final costs of the project will be when the project is completed. The TPCE is time phased to show when the funds will be expended over the life of the project. In other words, the District secures the cash required to pay the project bills based on the PMT yearly TPCE forecast. If the forecast is too low, the District will not have secured sufficient cash to pay the GHD Prop “G” project bills.

4. TPCE Organization The TPCE is organized in accordance with the Budget Allocation Summary (BAS) coding structure and can provide both detailed and summary information. The TPCE is comprised of budgeted, actual, and forecast expenditures. As the project progresses and the scope of the project is refined, the TPCE is updated to reflect the most current Estimate-At-Completion (EAC) information for the project.

5. Initial Budget Allocation Prior to contract award, budgets are established for the major components of work and entered into the TPCE. To accomplish this, the PMT estimating staff, using the Construction Specifications Institute (CSI) format, prepares detailed Capital Cost Estimates at various phases during the design. The Capital Cost Estimates are summarized and entered into the TPCE using the Level 3 and 4 BAS account structure.



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6. Actual Budgets When a specific contract or purchase order is awarded, funding is drawn down from its previously budgeted amount, held in a Level 3 BAS account. The funds are then transferred to a new Level 4 BAS account created for the new contract or purchase order. When there is no previously budgeted Level 3 amount, its funding comes from a contingency account. This procedure will keep the bottom line of the TPCE the same as work is awarded and provide a clean audit trail for comparing fund transfers between the initial budget and actual award amounts for the various project expenditures.

7. Review/Approval Transfers or New Dollars that redistribute or increase the TPCE must have prior approval from the GHD CEO. Furthermore, the movement of any funds within the TPCE must be recorded in the PIMS system. PIMS will assign a unique "TPCE Change" number to each entry and provide a “notes” field to document the justification for the change. It also produces an approval form that is used to approve proposed TPCE changes. After review and approval by the both SPM’s, the form is forwarded to the GHD CEO for final approval. After final approval, the appropriate information is input into the PIMS system by the PMT Financial Manager.

8. Monthly TPCE Report The official monthly Project Cost Report is the updated TPCE. The updated TPCE is distributed no later than the end of the third week following the period end date for the prior month. The time lag is due to the time required for the CAO District Accountant to produce the current period APS report and the time required to receive and process consultant, vendor, and contractor invoices. The updated TPCE is distributed to the following individuals: Barry Jantz GHD Tom Saiz CAO Michele Tarbet GHC Tim Meehan Parsons Dan McDaniel Sharp Healthcare Kari Kornicelli GHCLou Smith Sharp Healthcare



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TPCE Cost Flow Chart

Project Funding


Level 1Level 2

Level 3

Level 4

Level 5



PMT Monthly PAS Report

Reconciliation

PMT Time Phased Cost

Forecast




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F. CAPITAL COST ESTIMATING

1. Purpose The purpose of this procedure is to define the process for organizing, estimating, validating, and reporting on the status of the Estimate-At-Completion for the entire GHD Prop “G” Project at each specified design stage.

2. Responsibility

Tasks

GH

D C

EO

GH

C C

EO

SPM

s A

/E

PMT

Estim

ato r

C

leric

al S

taff

Estim

atin

g St

aff

1. Coordinate CM Estimate P 2. Perform Detailed CM Estimate P A 3. Perform Detailed A/E Estimate P 4. Coordinate Estimate Format A P 5. Verify and Document Assumptions P A 6. Determine Unique Project Factors P A 7. Assign ENR Cost Index P A 8. Perform PMT QA Review P A 9. Copy and Distribute Estimate P 10. Coordinate Reconciliation Meeting P 11. Chair Reconciliation Meeting P 12. Minutes Reconciliation Meeting P A

13. Approve Estimate P C A A A = Assist P = Perform C = Concur with SPM recommendations

3. Overview PMT may be required to prepare a detailed construction project cost estimate at the end of 100% Schematic Design, 100% Design Development, 60% Construction Documents, and 100% Construction Document Phases for comparison with the A/E's estimates. The District CEO will direct when these estimates are to be provided. The 100% Construction Document Estimate will serve as the fair construction cost estimate required prior to release of requests for construction bids. Estimates will be prepared in a similar format and organizational structure as the A/E estimates. The format is based on the Construction Specifications Institute (CSI) format. A line-item by line-item comparison and reconciliation of the two estimates will be performed. Any cost variations will be analyzed and explained. Value Engineering sessions will be conducted, if deemed necessary, to bring costs in line with the budget. When it is determined that the design is within budget, the GHD CEO, in his sole discretion, may issue a Notice to Proceed to the A/E to continue into the subsequent Design Phase.



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4. Estimating Software Standard estimating software will be used and draw cost data from Historical Cost databases.

5. Estimate Coordination The PMT Chief Estimator (CE) will coordinate the efforts of all estimators and be responsible for the final quality and accuracy of the estimates. Major portions of the estimates will be prepared off-site by other PMT estimating groups. The CE will forward all necessary information to the off-site estimators and act as the focal point for all information flow and clarifications during the estimating process. The CE will also assure that all assumptions made by any of the PMT estimators are accurate and well documented.

6. Unique Project Factors The CE is responsible for determining all local adjustment factors to be applied to the estimate for Contractors Overhead, Profit, Insurance, and Taxes. In addition, the CE is responsible for selecting the appropriate time-period and ENR Cost Index to apply to the estimate for escalation.

7. Internal PMT Review When the CE is satisfied with the estimate, he will submit it to the PMT SPM for review. The PMT SPM will perform, with the assistance of on-site personnel, a quality and sanity check of the estimate. When the SPM is satisfied with the estimate, it shall be forwarded to the clerical staff for duplication and distribution.

8. A/E Estimate Similar to the PMT estimating requirements, the A/E is required to produce an independent estimate at the end of 100% Schematic Design, 100% Design Development, 50% Construction Documents, and 100% Construction Document Phases. The purpose of the A/E estimate is to provide a basis for comparison with the PMT estimates. Because of the difficulty that can be experienced when reconciling estimates that were produced in different formats or at different levels of detail, the CE will establish estimating protocols with the A/E prior to the start of each estimate.

9. Estimate Reconciliation The CE shall be responsible for scheduling, producing the agenda, distributing the estimates, and notifying the attendees of the date and location of the estimate reconciliation meeting. At least one week prior to the meeting, PMT and the A/E shall exchange estimates. Each firm shall study the other’s estimate in preparation for the upcoming meeting. The PMT SPM shall chair the meeting and the CE shall take the minutes. If, at the end of the meeting, both firms are in agreement with the accuracy of the estimates and the estimated amounts are within the budget, a meeting shall be scheduled with the GHD



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CEO for final review and approval. If the estimates can’t be reconciled, further detailed evaluation shall be performed until the estimates are reconciled. If, after the estimates are reconciled and the project is over budget, a formal Value Engineering (VE) session shall be scheduled (see Value Engineering Procedure).

Capital Cost Estimate Flow Chart


Level 1Level 2

Level 3

Level 4

Level 5

Parsons Estimate

Design Documents

(B)Construction (C)Equipment

Designer's Estimate




Estimate

(A)Make Ready(D)A/E Services(E)Consultants(F)Permit & Plan Fees



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G. VALUE ENGINEERING 1. Purpose

To provide for a systematic process to analyze the materials, systems, and components of the GHD Prop “G” Projects in order to achieve the stated project criteria and required functions at the lowest overall cost.

2. Responsibility

Tasks

GH

D C

EO

GH

C C

EO

A/E

Valu

e En

gine

erin

g Te

am

Cer

tifie

d Va

lue

Spec

ialis

t

PMT

1. Authorizes VE Study P 2. Leads Formal VE Study P 3. Selects VE Recommendations P 4. Approves Selections P 5. Implements VE Selections P 6. Monitor A/E Implementation P


3. Description A combination of Validation Studies and Value Engineering sessions will be used to assure the GHD Prop “G” Projects are designed within budget without compromising the project criteria. The validation studies provide an independent confirmation that the project criteria are being achieved within budget, while the VE reviews ensure that best overall value is considered when systems, components, and materials are specified. VE is a process for selecting the materials, systems, and components for a project based on their total lifecycle cost and direct relevance to meeting the project criteria. A system that is economically attractive on a first-cost basis may be unattractive when the costs of operating and maintaining it during the required operational period are factored into the equation. VE techniques consist of conducting performance and cost comparisons of potential alternate methods of satisfying the project requirements. These techniques can be easily and successfully applied by in-house PMT personnel who are competent in the disciplines involved, familiar with the program requirements, and who are willing to explore all possible solutions without preconceived notions. However, in some cases, it may be advisable to have a third party conduct or participate in the VE analysis. If specialized expertise is required or it is advisable to perform an arms-length VE analysis to satisfy the concerns of outside organizations, the GHD CEO may request PMT to provide the services of an independent Certified Value Specialist. The GHD CEO will determine if in-house resources or an outside VE consultant will be used.



Page 20 1/28/2008

VE for the GHD Prop “G” Projects are applicable to the design and construction phases. The PMT will perform VE studies during the design phase and review Value Engineering Change Proposals (VECP) submitted by the various contractors during the construction phase.

4. Procedure a) Value Engineering Team (VET) gathers all available information (e.g., drawings,

specifications, cost estimates, cost targets, project goals, project strategies, schedules, contracts, etc.).

b) Build cost model including the reasonable anticipated costs for each component of the

project based on historical data and compare against the current estimate. c) Select those systems, components or items which the model indicates have the

highest potential for cost savings, e.g., items that vary most from the cost model. d) Analyze the function of each item to determine if the function is basic, secondary, or

unnecessary. e) Prioritize functions. f) Prepare rough estimate of functions. g) Determines least expensive means of completing function. h) Selects the functions, for in-depth study, which have the best cost-saving potential. i) Establish alternative approaches to provide the basic functions and any required

secondary functions. j) Consider each of the alternatives generated and:

• Roughly estimate the cost of each alternative, including initial costs and life-cycle costs.

• Evaluate the reliability of each alternative. • Ensure the alternative will perform the required function.

k) List all the alternatives or combinations of alternatives that produce a significant cost

savings potential and which meet the basic functional requirements. l) Identify advantages and disadvantages of each function. m) Review life cycle cost analysis of alternatives. n) Obtain input from suppliers and specialists.



Page 21 1/28/2008

o) Select best alternatives. p) Prepare VE recommendations. q) Present recommendations to the GHC CEO and GHD CEO. r) GHD CEO renders decision on which VE recommendations will be implemented after

consideration of recommendations from GHC CEO. s) A/E is directed to incorporate VE recommendations. t) PMT reviews subsequent design submissions to assure the approved Value

Engineering recommendations were incorporated.



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Value Engineering Flow Chart

Start

Gather avaliable information

Build cost model

Select items with highest savings

potential

Analize functions

Prioratize functions

Prepare rough estimate of functions

Establish alternative

approaches

Evaluate each alternative

Priorativze alternatives based on potential cost

savings

List advantages and disadvantages of each alternative

Select functions with best cost-

savings potential

Determine least expensive means

of completing function

Review life cycle cost of each alternative

Obtain additional input from

suppliers and specialists

Select best alternatives

Prepare VE recommendations

Present recommendations

GHC selects VE recommendations

to implement

GHD approves GHC selections

A/E is directed to implement selected

recommendations

PMT monitors and back checks A/E implementation

End



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H. MASTER PROJECT SCHEDULE 1. Purpose

The purpose of this section is to establish the process for creating, organizing, updating, and reporting the schedule for the project.

2. Responsibility The following matrix defines the PMT responsibilities related to scheduling.

Tasks

GH

D C

EO

GH

C C

EO

SPM

s

PMT

Sche

dule

r

Bid

Pac

k M

anag

er

1. Collect data P 2. Develop Master Schedule P 3. Approve Master Schedule P C A 4. Prepare detailed schedules P 5. Analyze schedule and identify issues P 6. Prepare narrative on issues P 7. Authorize remedial actions P A


3. Project Scheduling Software The Project will be scheduled, updated, and tracked using Primavera Project Planner scheduling software.

4. Hierarchical Reporting Levels The Scheduling System will use the hierarchical reporting levels described below. a. Executive Summary Schedule (Level 0)

The Executive Summary Schedule is the highest level of schedule reporting. The schedule information at this level will be used to monitor the start and completion of the projects at the Hospital.

b. Project Master Schedule (Level 1) The Project Master Schedule is a summarized schedule showing the major activities for each project and is graphically presented as a milestone bar chart. It depicts the schedule for accomplishing the design, bid and award, and construction phases of all projects that make up the Project. The Project Master Schedule will be used to communicate time-related goals to a broad spectrum of participants and interested parties. This schedule will show the framework of pre-established milestones and completion dates within which all subsequent detailed schedules must fit. The



Page 24 1/28/2008

Project Master Schedule will be the primary tool for assessing overall Prop “G” Project status. It will be used to manage the interfaces between different organizations, consultants, and contractors.

c. Detailed Phase Schedules (Level 2) The Detailed Phase Schedules will be used to establish time frames for the design, bidding, and construction phases of each significant construction contract. Typical activities shown in these detailed schedules include schematic design, construction documents, regulatory approval, bidding, construction, medical equipment installation, telecommunication equipment installation, and occupancy.

d. Detailed Work Element Schedules (Level 3) The Detailed Work Element Schedules will show the detailed activities within individual contracts and the contractually established interface points and interim milestones. These schedules will be developed and submitted for approval by the various consultants, vendors, and contractors. Baseline and schedule revision data shall be provided by the appropriate consultant, contractor, and suppliers.

e. Short Interval Schedule (Level 4) The Short Interval Schedule will show the detailed activities within a three-week period. It will include the previous weeks activities and the activities planed for the next two weeks. These schedules will be developed and submitted by the various contractors on a weekly basis.

5. Project Master Schedule (Level 1) Development The PMT Scheduler will prepare a Project Master Schedule that will incorporate all major project activities, milestones, and critical interfaces necessary for the successful completion of the Project (e.g., design, construction, offsite improvements, permits, move transition, etc.). The input of key PMT members will be solicited in developing the Project Master Schedule. As the Project Master Schedule is developed, it will integrate schedule input into a single critical path network. The PMT Scheduler will develop the various phase and detail level schedules within the Project Master Schedule network. As the schedules are developed, intermediate milestones will be established and float will be evaluated and adjusted. a. Review and Approval

The draft Project Master Schedule will be distributed to PMT participants for review and comment. All participants will be asked to provide a detailed review of the portion of the Schedule that relates to their area of responsibility. Meetings will be held to present, discuss, and incorporate comments into the Schedule. The PMT SPM will review/revise the schedule and then present it to the GHC CEO for final review by hospital operating units. Upon recommendation of the GHC CEO, the GHD CEO will approve the Schedule as appropriate.



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START HERE….. b. Updating The Project Master Schedule will be updated on a monthly basis and published as part of the monthly report. Additional updates will be performed as necessary. The Project Master Schedule and the progress of current activities will be reviewed with PMT participants at the progress meetings. The PMT Scheduler will monitor the schedule and alert the PMT to actual or expected deviations from the approved schedule.

6. Detailed Schedules (Levels 2 and 3) Development

During the course of the Prop “G” Project, the PMT Scheduler will prepare schedules that provide further detail of the Master Project Schedule. Types of detailed schedules that will be developed during the design phase include:

• Environmental review • Design • Design review • Regulatory Agency approval • Bid and award • Move transition (GHC Task)

a. Review and Approval

All detailed schedules are reviewed and approved by the appropriate members of the PMT before being included in the Project Master Schedule update.

b. Updating

The PMT Scheduler is responsible for coordinating and gathering the project status information needed to update the schedule. The PMT staff will verify that the information provided is correct. Status information will also be collected from other sources, including correspondence, meetings, inspection reports, and site observations.

Updated schedule reports will be prepared and distributed to the PMT and other key participants on a monthly basis. As the need arises, the PMT Scheduler will produce special studies and analyses of activities and delays.

c. Schedule Revisions

Schedule revisions shall not be combined with schedule updates. Any modification to the schedule, except inputting updated status information, shall be considered a



Page 26 1/28/2008

schedule revision. Revisions include adding new activities, deleting existing activities, modification of activity logic ties, modification of activity constraints or coding structure, and modification of any activity resource assignment or calendar assignment.

Any revision to the approved schedule shall be individually identified, explained in writing, and approved by the GHD CEO, or his designee, before it is incorporated into the schedule.

7. Schedule Analysis

The monthly schedule update report will contain a narrative analysis of the Prop “G” Projects’ critical path. Shifts in the critical path will be highlighted in the report narrative along with a description of controlling factors that led to the change in the critical path.

8. Implementation of Corrective Actions

If the updated schedule indicates slippage of essential project milestones, the PMT Scheduler and appropriate PMT members will develop recovery strategies. Once the strategies have been reviewed by the PMT SPM they will be presented to the GHD CEO for approval. When a corrective strategy is approved by the GHD CEO, it will be implemented by the PMT and reflected in the Revised Project Master Schedule.

9. Reporting

The Project Master Schedule Reports will be developed to present an accurate picture of the progress achieved by the designers, consultants, construction contractors, and other project participants. The format and distribution of these Schedule Reports will he tailored to the specific needs of the GHD CEO and PMT SPM. The schedule data will be presented both in the bar chart format and as a network logic schedule. To facilitate referencing activities between reports, the Project Master Schedule will include a specific identifying code for each activity.



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I. CONTRACTOR SCHEDULES

1. Purpose

The purpose of this procedure is to establish the process for reviewing, approving, and monitoring contractor compliance with the scheduling requirements of Section TBD of the specifications. Note: This Section is applicable only to the Site Preparation Bid Package. As other Bid Packages are developed, this Section will be modified accordingly.

2. Responsibility

Tasks GH

D C

EO

GH

C C

EO

SPM

s

Fina

ncia

l C

ost M

gr.

PMT

Sche

dule

r B

id P

ack

Man

ager

s Verify proposed scheduler’s qualifications

P

Prep Agenda for Precon Scheduling Conference

P A

Chair Precon Scheduling Conference P Minute Precon Scheduling Conference

P A

Review Contractor’s Schedule A A A P Approve Contractor’s Schedule P C A Define SOV Line Items P A Maintain list of interface flags P


3. Qualifications and Expertise of Contractor’s Scheduler

Within 7 calendar days after the date of the Notice to Proceed, the Contractor is required to designate, in writing, the individual(s) who shall be responsible for preparation and maintenance of the Contractor’s Schedule

4. Preconstruction Scheduling Conference

The Contractor and major Subcontractors shall meet with the District within 7 calendar days after the date of the Notice to Proceed to conduct a joint review of the Construction Schedule requirements of the contract. This is a separate meeting from the preconstruction conference and is dedicated exclusively to discussions about the scheduling requirements for the project. The PMT Scheduler will prepare the agenda for the meeting and produce the meeting minutes. The PMT SPM or his designee will chair the meeting. Specific requirements will be outlined prior to the meeting.

5. Activity Numbering



Page 28 1/28/2008

To provide for global management of activity level information, it is necessary to establish a consistent Activity Numbering scheme to be used by all contractors on the project. This will allow the PMT Scheduler to electronically combine schedule submissions from multiple contractors into an integrated master schedule for construction. Primavera allows a ten-digit alphanumeric field for the activity identification number. The first three digits should be reserved for the Bid Package Identification number. This will prevent the occurrence of duplicate activity numbers in the master schedule when the individual contractors' schedules are linked together.

The contractors may use any part of the remaining seven digits of the Activity ID field to meet their own internal scheduling needs.

6. Work Breakdown Structure (WBS)

As with Activity Numbering, it is necessary to use a consistent WBS scheme across all Projects to facilitate information flow on the project. The WBS scheme for the GHD Prop “G” Projects will allow reports to be grouped, sorted, filtered, and summarized across multiple bid packages. The contractor will be required to prepare a work breakdown structure in the following detail:

• Project Phase • Subcontractor • Construction Specification Institute (CSI) code • Change Order • Delivery • Construction/Installation • Inspection/Testing • Closeout

7. Schedule of Values (SOV)

As with Activity Numbering and the WBS, it is important for the contractors to use a predetermined schedule of values structure. This is necessary for PMT to coordinate the detailed cost loaded schedules with the Total Project Cost Estimate (TPCE). The project costs must roll up from the cost loaded CPM activities, to the SOV, and then to the TPCE. The structure of the SOV provides the link between the cost loaded CPM activities and the TPCE.

The direct roll-up of CPM activity cost to the SOV line items will be accomplished by use of the Primavera Activity Cost Table. The contractors will be required to distribute the dollar value of each activity on the CPM schedule to the appropriate SOV line item(s). Each month, when the contractors submit their payment applications, the PMT Cost Engineer (CE) shall code the individual SOV line item costs against the appropriate TPCE budget line item. This will allow PMT to produce an updated TPCE that accurately reports construction phase costs against the appropriate TPCE budget category.

PMT will define the SOV line items, for each Project, by examining how the funds were



Page 29 1/28/2008

budgeted in the TPCE. In the simplest case, all the funds for a Project will come from a single budget item in the TPCE. In this case, there will be a single Level 4 Budget line item for that Project. However, for site-wide bid packages the funding may come from several TPCE budget items. In this case, there must be at least one SOV line item for each Level 4 budget category. An example of this could be a bid package for site-wide communication systems.

To track cost against budget, the costs within the bid package must be segregated by the individual TPCE budget sources. This is accomplished by establishing at least one SOV line item for each TPCE budget source. When the contractor produces his monthly pay application, the activity costs are rolled-up and summarized in the appropriate SOV line items. The PMT CE may then enter the individual SOV line item against the appropriate TPCE budget items and produce the updated cost report.

8. Required Contractor Schedules

The various forms of schedules required for this project are:

a. Preliminary Network - To be submitted 14 days after NTP. This schedule shows the

procurement and construction activities for the first 90 days of the contract. The schedule should provide a general idea of the sequencing of work beyond the 90th day by use of summary activities. Cost loading is required for summary activities. From receipt of the preliminary schedule, PMT has 7 calendar days to respond to the contractor with any comments or concerns.

b. Detailed Network (Baseline) - To be submitted by the contractor 30 days after NTP No.

1. This schedule shows detailed activities for the entire project, fully cost and manpower loaded.

c. Updated - Once each month, after the schedule update meeting, the schedule will be

updated to reflect the status of the activities. Updates are to be kept separate from revisions. Updates only involve documenting the status of the activities on the current approved schedule.

d. e. Revised – When changes are needed to the schedule a schedule revision request must

be submitted by the contractor. Revised schedule requests are required for any activity logic change, when activities are added or deleted, or activity resource loading is modified. Revisions must be approved by PMT before they become incorporated into the Contract Schedule

f. Recovery - As needed to indicate how the contractor plans to recover lost time

g. Short Interval Schedule (SIS) - This schedule is produced weekly. It shows the actual

or proposed activity during the prior week and the upcoming two weeks of the project. The activities shown on the SIS should be extracted from the current approved schedule. Additional levels of detail may be shown on the SIS if necessary. Actual start and completion dates must be shown on the SIS where applicable



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g. Fragmentary Network (Network Window) – This analysis technique is used to 'explode' a section of the current approved schedule to provide a more detailed depiction of the effects of a change.

9. Cost Breakdown

a. The detailed baseline schedule must be cost loaded with the sum of all of the activities

on the schedule totaling the value of the contract at award and correlate with the approved schedule of values. Furthermore, the sum of the values of the activities for each subcontractor must equal the award value of each subcontract.

10. Milestones

a. Each milestone, including project completion, must be represented independently on the schedule. All milestones are contractual requirements and may not be moved without a change order.

b. All milestones must be shown on the schedule on the specific date identified in the

contract. PMT should assure that the contractor associates all milestones with a seven-day calendar to avoid confusion during schedule updates and analysis of proposed schedule revisions.

11. Interface Flags with Other Projects

a. Interface flags provide a means for identification of the coordination links between Projects. They also allow the individual Project schedules to be combined into a detailed master project schedule.

b. Specification Section TBD should require the contractor to identify interfaces and

dependencies with preceding, concurrent and follow-on contractors and utilities. The general contractor shall indicate these points of coordination by use of interface flags.

c. Once interface flags have been established for a given bid package, the information

should be provided to follow-on bid packages at the preconstruction scheduling conference. The appropriate preexisting interface points shall be shown in the detailed network submission by the contractor. The contractor shall also show additional interface points as required to support their work. PMT will provide this updated list to the next follow-on contractor and require that existing contractors add any new interface points to their next revised schedule.

d. PMT shall maintain the master list of Interface Flags and assure that the flag numbering

system used by each contractor will allow their schedule to be electronically linked into the master project schedule.

12. Resource Loading

Each activity in the schedule must be loaded with the resources required to complete the task. The units of each resource must also be noted in the schedule. Like Activity ID coding and Code field definition it is important for PMT to establish the resource units to be



Page 31 1/28/2008

used. The contractors should all be required to use the following units:

• U.S. Dollars ($) for all costs • Mandays (MD) for all of the manpower resources • Equipment Hours (EH) for all of equipment resources

13. Submittal Activities

Section TBD should require all major fabricated items to be represented as specific activities in the schedule. At a minimum, the contractors are required to show five separate activities to portray the fabrication and installation process. These are “Prepare Submittal”, “Review and Approve”, “Place Purchase Order”, “Fab and Deliver”, “Install”, and “Test”. The expected duration for each of these activities is to be determined by the contractor with the exception of the "Review and Approve" activity. The duration for the review shall be shown as a minimum of thirty-four calendar days unless otherwise specified.

14. Bond and Insurance Costs

The schedule must include the costs for contractor bond and insurance in order for the total of the schedule to match the contract amount. These costs must be represented as separate activities.



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J. SCHEDULE REVIEW AND ACCEPTANCE

1. Purpose

The purpose of this procedure is to establish the CPM Schedule review process for the Prop “G” projects.

2. Responsibility


Tasks SPM

s

Fina

ncia

l M

gr.

PMT

Sche

dule

r

Proj

ect

Man

ager

s Review Contractor’s

Schedule A A A P Approve Contractor’s Schedule P

3. Overview

PMT has the responsibility for reviewing and advising the District on the adequacy of the schedules submitted by the Consultants and Contractor(s). The GHD CEO is responsible for approving the schedules.

Specification Section TBD should require that, within 14 days of receipt of the contractor’s detailed network, the District respond with any questions concerning proposed activities, logic, durations, manpower, cost or equipment loading. Within 7 days of receipt of the Contractor’s response to these questions, the District shall meet with the contractor for a joint review and revision session. Section TBD should stipulates that within 7 calendar days after the joint review between the Contractor and the District, the Contractor must revise and resubmit the Network in accordance with the agreements reached during the joint review. Upon receipt of the revised schedule, and if the schedule has been revised as previously agreed, the District has 7 calendar days to accept the schedule.

4. Review Procedures

The PMT Project Manager, with the assistance of the PMT Scheduler, shall review the Contractor’s proposed schedule. When reviewing the schedule, at a minimum, the following items shall be reviewed:

a. Milestones: Make sure the Contractor has included all appropriate milestones, including

the Project Completion milestone. The milestones shall be in the form of constrained dates on milestone type activities. Verify that the milestones use a 7-day calendar and the dates are in compliance with the milestone dates specified in the contract.



Page 33 1/28/2008

b. Completeness: Verify that all essential elements of the project are included in the schedule.

c. Verify that, at a minimum, procurement sequences include activities for Place Purchase

Order, Submittal, Approval, Fabricate, and Deliver. d. Level of detail: Are there enough activities in the schedule for a project of this size? As

a rough rule of thumb, you should expect to have 1 activity per every $20,000 of construction value.

e. Activity duration: Are activity durations reasonable for the quantities of work involved? Specification Section TBD specifies a maximum of 15 Work Day duration for construction activities. Has this maximum been complied with? Test durations against activity manpower loading to see if crew sizes and durations are compatible.

f. Schedule logic: Are activities tied together so that proper construction sequence is maintained?

g. Cost loading: Verify that the schedule activities are cost loaded and that the activity

dollar amounts total up to the contract amount. Check the cash flow curve to see if it fits the standard S-curve profile. Check for front end loading of costs.

h. Manpower loading: Verify that the schedule activities are manpower loaded with Man Days (MD) as the resource unit. Do the manpower totals match what the project estimate shows? Check the manpower curve to see if it fits the standard S-curve profile. Check for manpower peaks indicating unachievable crew stacking.

i. Float suppression: Note the number of activities that are on the critical path. Normally,

only about 10% of the schedule's activities should be critical. If significantly more than that are critical, look for the presence of float suppression techniques such as unnecessarily constrained activity dates, excessive use of leads/lags, or unnecessary logic ties. Any of these techniques will serve to increase the number of critical or near critical activities.

j. Owner/Architect commitments: Make sure the schedule contains the minimum specified time for the A/E to review any submittals. For the prop “G” project, Specification Section TBD allows 34 calendar days on non-OSHPD submissions. One Hundred Four (104) calendar days are required for OSHPD submittals.

k. Owner Furnished Equipment: Verify that delivery times/dates for Owner-furnished

equipment is contained in the schedule and does not conflict with the need dates shown in the Contractor’s schedule.

l. Completion date: Check the schedule's end date to see if the Contractor is proposing an earlier-than-required project completion. Approving such a schedule may expose the Owner to extended overhead claims should the project be delayed beyond this earlier completion date. If there is a legitimate reason for not finishing the project early (such as the Owner being limited in his ability to make accelerated payments or coordination with other contracts), then the early completion date proposed should be rejected. With an early completion schedule, it is especially important to check the accuracy of any



Page 34 1/28/2008

Owner/Architect commitments, such as submittal review durations or Owner-furnished equipment dates to ensure that adequate time is allowed in the schedule for these items. If the early completion date is acceptable, a Change Order should be issued to modify the contract completion date. (Note: The Specifications don’t currently contain language requiring a C.O. for early completion schedules. This is disadvantageous to the District and should be added to the Specifications.)

m. Weather allowance: Review the schedule to see if the Contractor has accounted for lost production due to bad weather. Caution the Contractor if it appears his work activities do not consider the weather. Keep in mind that Specification Section TBD only allows weather related time extensions in the case of abnormally inclement weather, not just inclement weather.

n. Coordination of work: Verify that the contractor has added the ‘Coordination Flags’ provided to them by PMT at the preconstruction scheduling meeting. Also, carefully review and note the new ‘Coordination Flags’ the contractor has added to facilitate their work with the work of others. These new flags should be coordinated with the other bid package contractors before they are approved.

o. Software: Is the schedule submitted using the approved Primavera software?

p. Activity codes: Do the schedule activities use the Specified WBS codes?

q. Contingency activities: Float is a resource available to both the Owner and the Contractor. Allowing the contractor to add “contingency activities” serves to allocate float for the sole benefit of the contractor. “Contingency Activities” should not be allowed.



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Prop “G” SCHEDULE SUBMITTAL CHECKLIST Prepared by: Date: Type of Schedule: Project No: Contractor: Date Schedule was due: Date Schedule was submitted: Resubmittal: Yes / No

Item No.

Specification Section

TBD Description Does it

comply?

1 Is the schedule a CPM schedule in Precedence format? Yes / No

Did the contractor provide a work breakdown structure capable of linking the activity number to the appropriate specification section? Yes / No

2 Did the contractor use the approved activity naming and coding structure? Yes / No

Did the contractor submit a non-time scaled preliminary network diagram? Yes / No

3 Did the contractor use Primavera Project Planner software? Yes / No

4 Project calendar(s) identify work days, holidays, and shift work (by trade) Yes / No

5 Do calendar(s) comply with specification and EIR work hour restrictions? Yes / No

Major material and equipment procurements show the following string of activities; prep and submit, review and approve, fabricate and deliver, install, test. (note: this string of activities should include an activity for ‘place purchase order’.) Yes / No

6 Activities are included for mobilization, shop drawings, samples submittal, fabrication, and delivery. Yes / No

7 Construction activities don't exceed 15 working days and $20,000 except as specified or approved. Yes / No

8 Summary activities are included for work beyond the first 90 days (this is for preliminary schedule only). Yes / No

9 Procurement Activities from the Preliminary schedule are incorporated in the detailed network. Yes / No

10 Construction Activities from the Preliminary schedule are incorporated in the detailed schedule? Yes / No

11 4 prints were submitted (Preliminary Network only). Yes / No

12 1 sepia, 4 prints, and one CD were submitted (Detailed Network only). Yes / No

13 Are activities manpower, cost, loaded? (This is required for detailed schedule and activities in first 90 days of preliminary schedule.) Yes / No

14 Activities are cost loaded and the cumulative value of all activities adds up to contract value. Yes / No

Activities have the minimum required responsibility codes?

15 Activity values tie to the Schedule of Values. Yes / No

General requirements costs, overhead, and profit are prorated over all activities. Yes / No



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Contractor included coordination flags provided by PMT

16 Manpower loading is in Man Days. Yes / No

17 Resource loading includes major construction equipment. Yes / No

18 Does the activity duration for each activity correspond to the resource loading for the activity? Yes / No

19 Do durations for individual activities include adjustments for seasonal weather conditions? Yes / No

22 Does the schedule comply with all specified milestone dates? Yes / No

23 Durations for submittal activities are not less than the durations specified in Section TBD Yes / No

24 All submittals on the approved submittal list are shown on the schedule. Yes / No

25 All OSHPD shop drawing submittals are shown on the preliminary schedule. Yes / No

26 Does the schedule comply with all specified constraints and sequences of work related to OFCI equipment? Yes / No

27 Does the schedule show activities for required approvals by regulatory agencies? Yes / No

28 Does the schedule indicate when utilities are needed for test and balance activities? Yes / No

29

Does the schedule include punch list activities? (Are the durations of the punch list activities reasonable given it usually takes several iterations to clear a punch list.) Yes / No

30 Does the schedule include final clean-up activities? Yes / No

31 Does the schedule include final submission of as-built drawings and other closeout activities? Yes / No



Page 37 1/28/2008

K. SCHEDULE UPDATES

1. Purpose

The purpose of this procedure is to define the process for the monthly update of the Contractor’s schedules as required by Section TBD of the specifications.

2. Responsibility A = Assist P = Perform

Tasks Con

trac

tor

Insp

ecto

r of

Rec

ord

PMT

Sche

dule

r B

id P

ack

Man

ager

s Create Progress Estimate Worksheets P Fill in Progress Estimate Worksheets P P P Participate in Monthly Job Walk P P A P Determine Activity Status A A P Update Schedule and Submit with Monthly Pay Application P Review Updated Schedule P A 3. Overview

Schedule updating is a procedure for documenting (tracking) job progress. It differs from schedule revision in that updating deals exclusively with logging actual start dates, actual finish dates, and percent complete on existing schedule activities. Schedule revision consists of adding or deleting activities, modifying existing logic, or adjusting durations (see Specification Section TBD).

4. Progress Estimate Worksheet

The update is performed by completing a Progress Estimate Worksheet (Exhibit 4-1). This “fill-in-the-blank” type worksheet is used to record (post) actual progress on appropriate activities. The requirements for filling out this report are:

a. Actual start dates should be posted in the "Updated Schedule Start" column to activities

that were started since the last update was done. Use working days only.

b. Actual finish dates should be posted in the "Updated Schedule Finish" column to activities that were finished since the last update was done. Use working days only.

c. Activities started, but not complete, should be updated in one of the following ways:

1) Indicate percent complete in the "Percent Complete" column. Remaining duration

will be automatically calculated. 2) Indicate working days remaining (from the data date) to complete the activity in the

"Remaing Duration" column. Percent complete will be automatically calculated.



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d. If an updated activity partially complete, then it must also have an actual start posted to it. Leaving off an actual start date when entering a percent complete or remaining duration will cause the scheduling software to make a random calculation of that date.

5. Procedure

a. PMT Scheduler generates Progress Estimate Worksheets.

b. The worksheet is provided to the Contractor, Inspector, and PMT Project manager, by the PMT scheduler, at least 5 working days before the update data-date.

c. The worksheet is completed by all participants prior to the data date. (Actual start and

finish dates may be taken from the weekly Short Interval Schedules.)

d. The monthly job walk is conducted on the data date. During the job walk, the Contractor, Inspector, and PMT Project manager compare the activity status on their individual worksheets. Differences are resolved and the PMT Project managers inputs the final activity status on his/her worksheet. In case of disagreement, the District’s determination shall govern (see Specification Section TBD).

e. The Contractor updates their detailed network and submits it to the District along with their monthly pay request.

f. The PMT Scheduler compares the updated schedule with the PMT activity status worksheet prepared during the job walk. If the updated schedule is consistent with the agreed activity status, the update is approved and the pay application is processed.



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EXAMPLE PROGRESS ESTIMATE WORKSHEET

Insert Example



Page 40 1/28/2008

L. INCORPORATING CHANGE ORDERS INTO THE SCHEDULE

1. Purpose

The purpose of this procedure is to define the methodology for incorporating a change order into the schedule.

2. Responsibility

The following matrix defines the responsibilities related to determination of the direct time impact of change orders. A = Assist P = Perform

Task PMT

Sche

dule

r PM

T B

id P

ack

Man

ager

PMT

Estim

ator

Prepare independent PMT direct cost estimate A P

Negotiate direct cost items with Contractor P A

Create New Activities A P

Meet with Contractor and agree on new activities A P

Input new activities into copy of current schedule P

Determine Change Order Impact P

Finalize Time portion of CO with Contractor A P

3. Overview

The methodology for incorporating change orders into the schedule must be unbiased, consistent, timely, and defensible in a court of law. This will be achieved on the Prop “G” project by applying a systematic and detailed approach for analysis of all project change orders.

This methodology is defensible to the extent it is fairly, reasonably, and consistently applied to the direct impact of a change. If done properly, a third party scheduler, hired by the Owner or Contractor at a later date, using the same information, should come to the same conclusion.

The approach is a three-step process. First, the direct cost of the change is determined and negotiated with the Contractor. The second step is to agree on the number activities and logic ties required to implement the additional work. The third step involves adding time and/or money to the previously negotiated direct cost of the change if the Critical Path was impacted by the new agreed upon activities.

Attempting to negotiate time and money on a change order concurrently can often lead to frustration, delay in processing the change order, and significant disagreement on how the change order should be input into the schedule. Breaking the direct cost and direct time



Page 41 1/28/2008

elements of a change into separate analysis and negotiation steps will greatly improve the fairness and ease with which change orders may be resolved. It also establishes a logical, consistent, and defensible methodology similar to the methodology used to resolve claims.

4. Procedure

The procedure for determination of the direct time impact of a change order on the Prop “G” projects is as follows:

a. Perform a detailed direct cost estimate for the change.

a. Negotiate the direct cost items with the contractor. c. Create a new activity(s) in accordance with the same Specification Section TBD

requirements used for creating the detailed activities for the network schedule. Keep in mind; most changes can’t be incorporated into the schedule by adding a single new activity. Changes involving more than one subcontractor or milestone will have at least one new activity per subcontractor or milestone.

d. Determine the man-hours, crew size, equipment, and materials required for performing the work. This information should come directly from the negotiated ‘Direct Cost’ change order estimate. Distribute the resources to the individual activities.

e. Meet with the contractor and agree upon the new activities, resource loading, and

successor/predecessor activities for each new activity. Do not discuss the change order time extension at this time. The purpose of the meeting is to obtain agreement on the number of new activities, application of resources, and appropriate schedule logic ties.

f. Based on the agreed upon man-hours and crew size, determine the direct activity time required for performing each activity. Do not consider any indirect time or cost impacts at this time.

g. Input the new activities into a copy of the current schedule using the agreed

successor/predecessor logic ties. h. After recalculating the schedule, obtain the float values for the project milestones.

i. Using the most recent updated schedule, compare the changes in the float values of the

milestones. j. Use the following table to analyze the impact of the change on the critical path.

Condition Before

Change Condition After

Change Cause Action to Take

Milestone float is a positive number Float does not change Change did not impact the

critical path No time granted for change order

Milestone float is a positive number

Float decreases but is still positive

The impact of the change was absorbed be existing float

No time granted for change order

Milestone float is a positive number

Float becomes negative Change impacted critical path Time is due to contractor



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Milestone float is a negative number Float does not vary Change did not impact the

critical path No time granted for change order

Milestone float is a negative number

Negative float increases Change impacted critical path Time is due to contractor

Remember, this approach applies to the direct impact of the change on the schedule. The indirect impacts of changes are more difficult to assess and require the application of experience, judgment, and negotiation skill (see Volume VIII, Disputes and Claims for a more detailed discussion on assessing indirect impacts.)



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M. CHANGE ORDER SIGNATURE AUTHORITY

1. Purpose

The purpose of this procedure is to define the process for implementing the change order signature authority requirements of the Program Guidelines.

2. Overview

The Public Contract Code and the By-laws of Corporations in California specifically empower certain individuals to act on behalf of the public entity or corporation. This authority to commit the organization may be delegated by these individuals to others within the organization. However, the delegation must be in writing and specifically identify the scope and limits of the delegated authority. Typically, the authority to contract does not flow to private sector consultants acting as independent contractors to the District.

On the GHD Prop “G” project, PMT has no authority to bind the District. Additionally, Sharp Healthcare and/or Grossmont Hospital Corporation has no authority to bind the District.

Change Orders may be found to be binding, even if signed by an unauthorized individual, if the Contractor was unaware of the limits of authority. This creates a potential liability for Parsons and Sharp/GHC staff. However, the limitations on authority will prevail if they are published and properly communicated to the Contractor.

3. Procedure

a. PMT Project manager shall issue a letter to the Contractor, immediately after award, stating the limits of authority of Parsons and the Sharp/GHC staff (see example letter). The letter shall include authority levels up through the District hierarchy and end with the District Board of Directors.

b. Accordingly, request a similar letter from the Contractor.

c. Review both letters at the preconstruction meeting and enter the limits of authority in the meeting minutes.

d. If, at any time during the life of the project, authorized individuals become disassociated

with the project or the levels of authority are modified, assure that updated delegation letters are issued.



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N. CONSTRUCTION CONTRACT CHANGES

1. Purpose

The purpose of this procedure is to summarize the management directives and reference appropriate sections of the District’s standard General Conditions of contract.

2. Nomenclature

The term Change Order is used to refer to all changes to construction contracts. In the past, the term Supplemental Agreement may have been inappropriately applied to change orders for construction contracts. The term Supplemental Agreement is used to refer to changes to professional service agreements (e.g., Architect/Engineer and consultant services agreements). The term Supplemental Agreement shall not be use to describe changes to construction contracts.

3. Scope Changes

All potential change orders which change the scope of a project, either positively or negatively, and which exceed $10,000.00 in value, must be approved in principle by the CEO prior to execution.

4. Contractor Proceeding at Own Risk

If the contractor starts work on a change order prior to receiving authority from the District, the contractor should be issued a letter, polite in tone, but clearly stating that the contractor is proceeding at his own risk.

6. Unilateral Change Orders

Change orders should be resolved and executed as soon as possible. If it appears that negotiations will drag on for a long period, or if the contractor is not responsive to requests for supporting data, the project manager should issue a "unilateral" change order as detailed in the Program Policy and Procedures and where allowed by the Project’s Specifications.

7. Not Used

8. Signature Authority for Change Orders

The GHD CEO will have sole approval authority on all change orders.



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9. Contractor’s Signature To Be Obtained Prior To District Signature

The contractor's signature must be obtained on all change orders prior to District signature. This will assure the contractor's commitment to the terms and conditions of the change before the District takes action. In the event a change order must be submitted to the Board for approval, the contractor’s signature on the change order should be secured prior to filing the Board Letter.

10. Proceed Orders

A Proceed Order is used to authorize work prior to fully executing a change order. A proceed order should only be used when circumstances dictate that starting (or continuing) work is essential to avoid costly delay charges from the contractor. A proceed order must clearly state cost and time limits and encourage the final negotiation and full execution of the change order as quickly as possible. Multiple subsequent proceed orders may be used on a single change order while negotiations proceed, but this situation should be the exception rather than the rule. The GHD CEO shall sign all proceed orders.