early warning radar

7/28/2019 Early Warning Radar

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Change IdentificationEarly Warning Radar

Durward E. Timmons, Esq.Sherman & Howard, LLC

Colorado Springs, COApril 12, 2011


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Why Worry About Claims?

Claims on construction projects are:

1. Time consuming;2. Disruptive;

3. Expensive; and

4. Career limiting.


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Out of Scope Work

Contractor: I had to do more work than the

contract required!

Owner: Lets compare what you say you did tothe contracts scope of work.

Here Comes a Claim!!!!!


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Delay

Contractor: You took too much time to review

my shop drawings and it delayed my work.

Owner: Lets compare your as-plannedschedule with you as-built schedule.

Here Comes Another Claim!


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Increased Costs

Contractor: This job is costing me more than

my bid price. Im losing my shirt!

Owner: What does your resource-loadedschedule show your costs should have been?

Yet Another Claim!!!!


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Project Basics

Proper

PreparationPrevents

Poor

Performance


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Ten Commandments for ProjectManagers

1. Know well thy contract.

2. Keepeth to thy schedule.

3. Giveth not away thyleverage, for thybargaining power issacred.

4. If thou asketh not, thoushall not receive.

5. Keepeth holy thydocumentation.

6. Surpriseth not thy elders.

7. Delay not thy response toadversity.

8. Prepareth and preserveththy pricing.

9. Seeketh early the help of

the wise.10. Stompeth not the ants

while the elephantsrunneth around wild.


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Construction Project Are Unique

Construction projects:

1. are notnever-ending production lines;

2. are planned, executed and controlled;

3. have physical structures;

4. are constrainedby resources (e.g. time,

funding, craft labor);5. have a means to determine project start

and completion.


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The Key Project Activities

Claims prevention focuses on:

1. Scope Control;2. Schedule Maintenance; and

3. Cost Management.


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Organized projects follow a 3-step, serialprocess:

1. Scope defineWHATs to be done

2. Schedule establishWHEN its to be done

3. Cost estimate HOW MUCH it will cost

Three Step Planning Process


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Project Management Tasks

Managing scope, schedule and costrequires:

Planning What are we going to do?

Defining Exactly how are we going to do it?

Verifying Have we really planned and defined?

Controlling Are we sticking to the plan?


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Scope tracking allowsidentification ofWHATshappening on the project.

Scope Tracking


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Scope Planning

Scope planning asks:

What are the projects goals andrequirements to meet those goals?

Effective scope planning includesstakeholder participation andagreement.

Do we all agree on what were goingto do?


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Scope Planning

Are the projects goals stated interms of:

1. Design Requirements;2. Performance Requirements; or

3. Both?


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Design vs. PerformanceRequirements

Design Specifications specify howsomething is to be done and permit no

deviations.

Performance Specifications specify theultimate goal to be achieved and require

the contractor to determine the best wayto achieve that goal.


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Assignment of Risk

SpecificationType

Design

Performance

Risk Allocation

Owner

Contractor

Keys to Success

1. Clear, complete plans

and specifications.2. Leave means andmethods to contractor.

1. Establish objective,

verifiable measures ofsuccess.

2. Dont change thecriteria.


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Scope Definition

Scope definition identifies all project

deliverables and divides them into thesmallest measurable units for whichcost and duration estimates can be

made.


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Work Breakdown Structure

A WBS divides each project activityinto the smallest logical components

which can be assigned to individuals or

project units for completion.Example: Foundation Work

1. excavate 4. pour concrete

2. set forms 5. strip forms

3. tie rebar 6. inspect

7. backfill


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Scope Verification

Scope verification formalizes keystakeholder understanding and acceptanceof a projects scope.

Effective verification includes a detailedreview of the WBS to ensure agreement bythe contracting parties on contract

requirements.


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Contractor Protection

A WBS is a roadmap of a project

against which to measure projectprogress and assertions of changes inscope.

Contractors should prepare a WBSprior to construction start-up.


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Scope Change Control

Change control involves:

1. Influence control factors whichtypically lead to changes and ensure only

beneficial changes occur;2. Attention - determine when

unanticipated changes occur;

3. Management - when they do occur,limit the impact.


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Change Control

Measure all potential changes against thecontracts scope of work.

Ask yourself:

1. Is the change qualitatively orquantitatively more or less than required?

2. If so, to what extent?


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Schedule tracking helpsidentifyWHEN something

happens.

Schedule Tracking


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Tracking the Project Schedule

Project scheduling involves:

Defining activities

Sequencing activitiesEstimating activity durations

Schedule preparation

Schedule control


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Critical Path Scheduling

The Critical Path Method (CPM) ofscheduling is the most widely used in the

industry.Critical Path is the series of activities which

controls the pace of the work. Any delay to acritical path activity will result in a day-for-daydelay in the projects completion date.


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The Key Project Schedules

As-Planned Schedule - describes whenthe work is supposed to be done.

Periodic Updates - describe when theworkis being done.

As-Built - final schedule which recordswhen the workwas actually done.


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Resource-Loaded Schedule

AResource-Loaded Schedule identifies all:

1. labor;

2. materials;

3. equipment; and

4. other resources

required to complete each task.


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Resource-Loaded Schedule

Example:Activity: Excavate foundation

Resource Quantity CostLabor 200 manhours $50/hrMaterials metal shoring $500

Equipment 1 - bull dozer $75/hr4 - dump trucks $30/hrOther fuel, oil, lubricants $5/hr


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Activity Sequencing

Activity sequencing identify allactivity interdependencies.

Ask yourself: In what order must allactivities be completed to finish theproject?

Activity sequencing requires familiaritywith construction process and judgmentbased on experience.


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Activity Sequencing

Example:Activity: Drywall Installation

1. Estimate drywall materials

2. Order drywall and materials

3. Stage drywall

4. Hang drywall5. Tape and mud drywall

6. Finish sand drywall


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Activity Duration Estimating

Duration estimating determine thetime required to complete each activity.

Activity float is the bandwidth of time

within which an activity may begin andstill be completed on time.

Activity durations form the basis for

measuring schedule impacts.


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Schedule Development

Preparing a schedule requires:

1. Input of activities, sequencing, anddurations into a scheduling software application

e.g. Primavera or MicroSoft Project.2. Confirming the logic of the overallschedule.

While scheduling software will create aproject schedule - BEWARE - Garbage In,Garbage Out.


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Schedule Control

Schedule control requires:1. Influence manage the factors which

impact the schedules - ensure onlyfavorable changes to the schedule;

2. Attention - determining when theschedule has been changed;

3. Revision incorporate schedule impactsinto the current schedule as they occur.


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Cost Tracking helpsdetermine how much it will

COST

Cost Tracking


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Monitoring Project Costs

Project Cost Management includes:

Resource planning;

Cost estimating;Cost budgeting;

Cost control.


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Resource Planning

Resource planning requiresdetermining what labor, materials andequipment are required to performparticular tasks.

Reference back to the WBS is critical toadequate resource identification.


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Cost Estimating

Cost estimating involves approximatingall resource costs needed to complete projectactivities.

Cost estimates form thebaseline againstwhich changes to the work can be measuredin terms of cost.


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Cost Budgeting

A Cost Budget allocates overall costestimates to individual activities.

Cost budgeting will result in a time-phasedbudget.

Cost budgeting is based on:

1. cost estimates;

2. the WBS;

3. the project schedule.


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Cost Control

Effective cost control requires:

1. monitoring cost performance against the time-phased cost baseline;

2. recording authorized changes in the costbaseline;

3. change order accounting;

4. informing stakeholders of authorized changesto the cost baseline.


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Cost Control

Costs

j ij j l

$0

$100,000

BudgetCosts

ActualCosts

UnderBudget

OverBudget

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