080215 Scaffolding-Direct or Indirect Part 1

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SCAFFOLDING HOURS Part 1
What are they? Directs or Indirects?
By RUFRAN C. FRAGO, P. Eng., PMP®, CCP, PMI-RMP®
Since scaffolding can easily account for a substantial 5% to 15% or more of
construction hours, it is a very significant value in terms of progress. Once it
becomes a part of the progressing process, and the resources quantity uploaded to
the schedule, then it will work very much in favor of the contractor or the execution
team. As such, I would like you and I to try to answer the contentious question:
In a construction project, how would you categorize scaffolding hours? Are
they directs or are they indirects?
Indirect labors are those whose output is not directly part of the assets
erected, much like camp or construction site snow-removal, overhead, security,
transportation, etc. It aligns and translates to indirect costs.
Indirect costs are costs that are not directly accountable to a cost object such
as a specific facility, equipment, module, function, or product (Wikipedia, 2013).

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I came across four known methods (see list below) of progressing scaffolding
workhours in my past, regardless of whether scaffolding is considered direct or
indirect.
1. Use equal periodic withdrawal from start to end of Construction.
2. Equal periodic withdrawal from start of Civil works to end of Construction.
3. Equal periodic withdrawal from start of Mechanical or Structural works
(which ever start first) to end of Construction.
4. Resource load the scaffolding hours on each work package.
Most projects consider scaffolding hours as indirects. Okay, you would ask,
“Why should scaffolding work hours be considered as indirects?”
If projects reflect scaffolding hours as direct hours in the estimate and
became part of the schedule resource loading in the schedule, the resource
distribution in place will be suspect. Calculating and checking labor density, peak
resources, resource leveling, resource planning, resource distribution, scope
completeness, quantitative risk assessment, and measuring/monitoring benchmark
quantities with production rates will not be accurate nor will it be useful in the
future.
Scaffolding erection does not produce a product or a deliverable that becomes
part of the capital equipment, or constructed facilities & structures. They remove all
temporary fixtures right after completely expending all direct works to install
capital assets such as a tanks, compressors, or buildings. Construction workers erect
scaffoldings so they can access the upper tank tiers like when one welds or paints.
After all is completed, the project takes down and removes all its scaffoldings
(Frago, 2013).
Direct costs are those that are expected solely to complete the activity or
asset. It can be any cost that is specifically identified with a particular final cost
objective, but not necessarily limited to items that incorporates into the product like
materials or labors (Amos, 2007).
Indirect costs are those resources expended not only to support the
completion of activities and assets but also associated activities and assets. It is any
cost not directly identified with two or more final cost objectives.
To demonstrate the impact of how projects treat scaffolding hours, let us start
with the resource distribution table (Figure 1). The table show direct labor hours

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without scaffolding. It means that scaffolding hours were not part of the base
progress and performance report. It is still part of the overall project cost and has a
bearing to final project cost but in a more indirect way.
Figure 1 – Construction Direct Hours without Scaffolding
Figure 2 displays a resource distribution table that includes scaffolding as
direct hours. By doing so, it is the stand of the project that scaffolding has a direct
cost contribution to assets erection. It becomes part of the direct cost per equipment
report during the post investment review. It will later on become part of cost per
unit benchmark.

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Figure 2 – Construction with Scaffolding as Direct Hours
Since scaffolding as direct, results in a plan progress that considers all
scaffolding work as direct hours, project controls have to add 31,518 work hours to
the total discipline direct hours tallied on Figure 1.
On the other hand, scaffolding as indirect, will result in a plan progress where
all scaffolding works remain as indirect hours. The total direct remains as is without
consideration of the 31,518 scaffolding hours. The scaffolding hours can stay
invisible and separate from direct progress tracking.
In our example, we use method number 2; i.e. equal monthly withdrawal from
start of civil works to end of construction (Nov-15 to Mar-17), Figure 3 delineates
the difference between the two approaches through the visible gaps between the
two S-curves.
Figure 3 – Plan Progress Comparison
The project farms its scaffolding workhours in a straight line without respect
to earned value. This seems good and convenient. The questionable thing about this
methodology is the fact that it creates a progress and performance padding. It
produces a gap!

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I will discuss what the gap is about in “SCAFFOLDING HOURS, What are they?
Directs or Indirects? Part of 2. Watch for it!
Rufran C. Frago, P.Eng, PMP®, CCP, PMI-RMP®
Author
Figure 4 – Progress and Performance Padding (The Gap)
Looking on the Sep-16 Data Date (see Figure 4), it became clear that about
0.6% gap exists to the reported progress when the two are tracked and compared.
The progress variance represents a progress gap, an artificial progress brought
about when the project adds scaffolding hours to direct hours.

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Note that the green represents actual progress based from unequal
withdrawal of scaffolding hours (distribution details not shown here). The brown
progress line represents a straight-line approach of equal withdrawal. The effect is
fundamentally the same regardless of how the project claims their scaffolding hours.
A straight-line withdrawal however, does signify a complete disregard to true
progress. It is because hours are available even during time where scaffolding does
not contribute to the completion of an activity or to the timely erection of the asset.
This contributes to the risk of not knowing exactly how the project is actually doing.
The estimated gap in the example is small compared to what one see when handling
large projects with large scaffolding components.
Figure 5 – Load Scaffolding Hours by Work Package (Ishii-iiw.co, 2013)
Projects must consider wisely how they will handle scaffolding hours more
effectively. There is good reason why it is better to calculate the hours for each work
package and loading the same not as a one-liner across phase but per work package
as well.
Why would I say that?

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Unless the scaffoldings remained in place and become part of the facilities or
assets constructed, then they are just indirectly supporting construction and the
hours expended should be considered indirect hours (Figure 5). There are relatively
few cases of scaffoldings intentionally left attached to installed assets. They leave
the scaffoldings behind temporarily for maintenance and operation’s use, usually to
be dismantled a short time later right after commissioning and turnover for some
good reasons.
What then is our concluding reflection on the subject of scaffolding? Did the
project use scaffoldings solely to complete the asset; say, a vessel?
I would say, very unlikely, because scaffolding erected on almost the same
spot as the vessel is also be used for installation, erection, painting, welding, and
others not exclusive for the vessel but for items like interconnecting pipes,
insulations, electrical devices, mixers, auxiliaries, control valves, floats, meters and
the like. Using this perspective, scaffolding hours are clearly indirects because
expended resources are not exclusive to the vessel but associated with other
different activities and assets.
The only reservation to the final verdict that scaffolding hours are better
taken as indirects is how the project defines its final cost objectives. Any change to
that final cost objective can change scaffolding hours to either one.
Rufran (080215)-Author
Sources:
Frago, R. (2015). Risk-based Management in the World of Threats and Opportunities: A
Project Controls Perspective. ISBN 978-0-9947608-0-7
Frago, R. (2015). How to Create A Good Quality P50 Risk-based Baseline Schedule
(Draft Manuscript). ISBN 978-0-9947608-1-4
You will find a more detailed discussion about the subject article in the paperback edition
of the book "Risk-based Management in the World of Threats and Opportunities: A
Project Controls Perspective." It is also available in Amazon’s Kindle edition.
 http://www.amazon.com/RUFRAN-C.-FRAGO-PMI-RMP/e/B01055MPYI
 http://www.amazon.com/dp/B0104OFUDI/ref=rdr_kindle_ext_tmb
 https://www.amazon.com/author/rufrancfrago

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The book provides new/additional knowledge to project management practitioners
(beginners to experts), risk management specialists, project controls people, estimators,
cost managers, planners and schedulers, and for students of undergraduate courses in
Risk Management.
The sectional contents offer practical and common sense approach to
identifying/managing risks. It is a must have for company managers, directors,
supervisors, aspiring industry professionals, and even those students fresh from high
school. The material is especially design to start with the foundational principles of risk
gradually bringing the reader to deeper topics using a conversational style with simple
terminologies. Check it out!
https://youtu.be/wxWgYUhiWos
https://www.amazon.com/author/rufrancfrago
Other articles authored by Rufran Frago:
1. Risks Surrounding Canada’s TFW Part 1
2. Risks as a Function of Time
3. Project Schedule: P50, Anyone?
4. Changing the Culture of Your Organization
5. A Person Perceives Others Based on His Own Interest
6. How Can Management Motivate and Empower?
7. How Can Managers Increase Leadership Effectiveness
8. Risks Surrounding Canada’s TFW Part 2
9. Scaffolding Hours: What are they? Directs or Indirects? Part 2

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10.Oil Price, Recession: Causes, Issues and Risks

080215 Scaffolding-Direct or Indirect Part 1

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080215 Scaffolding-Direct or Indirect Part 1