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  • 1. Page 1 of 13 CURRICULUM VITAEName : Emad ElbeltagiCurrent Position: ProfessorAddress : Dept. of Structural Eng., Mansoura University Mansoura 35516 EgyptTel : (+050) 224-4105 Ext. 1285Fax : (+50) 224-4690E-mail : eelbelta@mans.edu.eg, eelbelta@uwaterloo.caHomepage : http://osp.mans.edu.eg/elbeltagi, www.eng.uwaterloo.ca/~eelbelta1. QUALIFICATION HIGHLIGHTS: • Strong research background. Authored and Co-authored more than 50 research papers. Presented papers in a number of conferences and seminars in the USA, Canada, Mexico, Greece, turkey, Saudi Arabia and Egypt. • Extensive research experience on construction management, site layout planning, resource management, repetitive and linear project planning and scheduling, cost estimation, asset and infrastructure management systems, multi-criteria decision analysis, and optimization using evolutionary algorithms. • Expertise on construction management computer-related applications. • Project/Construction Management, Planning and Co-ordination. Preparation of Tender Documents. Designing, Preparation of Bill of Quantities and Cost Estimates, etc. • Teaching of many courses related to Construction Engineering and Management.2. EDUCATION: Dec 1996 – Jan 2000: Ph.D. in Construction Engineering and Management, Joint supervision between University of Waterloo, CANADA and Mansoura University, Mansoura, EGYPT. Thesis: “Construction Site Management”. This study optimizes the placing of the temporary facilities within the boundaries of the construction site. An integrated model developed using three different modules: A knowledge base module to identify the facilities and to determine their areas; a fuzzy logic module to determine their relationships; and a genetic algorithm module to optimize their placement. The research also involves an extensive programming work using “Visual Basic for Applications”, “Microsoft Excel 97” and “Microsoft Project 98”. Dec 1990 – Jan 1993: M.Sc. in Construction Engineering and Management, Thesis: “Scheduling Construction Projects Under Multiple Resource Constraints by Heuristic Methods”, Mansoura University, Mansoura, EGYPT.
  • 2. Page 2 of 13 Oct 1981 – Jun 1986: B.Sc. in Civil Engineering, grade: Very Good with Honor’s Degree, 83.18%, rank = 6/482. Nov 1995 – Nov 1995: Training course on Project Management conducted by Energy Conservation & Environmental Protection Project, Mansoura, Egypt. Jul 1985 – Aug 1985: Training for 6 weeks with the Arab Contractors Company, Egypt, in one of their projects in Mansoura, Egypt. Jul 1984 – Aug 1984: Training for 6 weeks with the Arab Contractors Company, Egypt, in their training center in Giza, Egypt. Jul 1983 – Aug 1983: Training for 6 weeks with the Arab Contractors Company, Egypt, in their training center in Tanta, Egypt.3. EMPLOYMENT HISTORY AND EXPERIENCE: Mar 2011 – Present : Professor – Structural Engineering Department, Faculty of Engineering, Mansoura University, EGYPT. Duties include conducting research work, supervising graduate students and teaching the following graduate and undergraduate courses: - Construction Project Management (Graduation Project: Mansoura University, AASTMT, Shorouk Academy). - Systems Analysis for Construction Engineers (CB312), 6th term, Arab Academy for Science, Technology & Maritime Transport. - Techniques of Planning, Scheduling and Project Control (CB517), 8th term, Arab Academy for Science, Technology & Maritime Transport. - Advanced Project Management (Graduate Course). Sep 2005 – Mar 2011 : Associate Professor – Structural Engineering Department, Faculty of Engineering, Mansoura University, EGYPT. Duties include conducting research work, supervising graduate students and teaching the following graduate and undergraduate courses: - Construction Project Management, 3rd year Civil, Mansoura University. - Construction Project Management (Graduation Project: Mansoura University, Tanta University, AASTMT, Cairo University, Shorouk Academy). - Systems Analysis for Construction Engineers (CB312), 6th term, Arab Academy for Science, Technology & Maritime Transport. - Techniques of Planning, Scheduling and Project Control (CB517), 8th term, Arab Academy for Science, Technology & Maritime Transport. - Construction Project Management (CE502) Misr University for Science and Technology. - Advanced Project Management (Graduate Course). - Engineering Economy. - Artificial Intelligence & Expert Systems (CB711 - Graduate Course), Arab Academy for Science, Technology & Maritime Transport. - Project Planning and Resource Allocation (CB717 – Graduate Course), Arab Academy for Science, Technology & Maritime Transport. - Techniques of Planning and Scheduling (CB612 – Pre-master Course), Arab Academy for Science, Technology & Maritime Transport.
  • 3. Page 3 of 13Nov 2010: Visiting Professor – Faculty of Engineering, University of Waterloo, Dubai campus, Dubai, UAE. Duties include conducting collaborative research with Dr. Donald Grierson in multi-objective optimization.Sep 2008 – Dec 2008: Visiting Research Associate Professor – Faculty of Engineering, Waterloo University, Ontario, Canada. Duties include conducting collaborative research with Dr. Donald Grierson and Dr. Tarek Hegazy in multi-objective optimization and multi-criteria decision making.Feb 2000 – Aug 2005 : Assistant Professor – Structural Engineering Department, Faculty of Engineering, Mansoura University, EGYPT. Duties include conducting research work, supervising graduate students and teaching the following graduate and undergraduate courses: - Construction Project Management, 3rd year Civil, Mansoura University. - Advanced Project Management (Graduate Course). - Construction Project Management (Graduation Project).Jul 2005 – Aug 2005: Post-Doctoral Fellow – Faculty of Engineering, Waterloo University, Ontario, Canada. Duties include conducting research in optimization and computer modeling.Aug 2003 – Dec 2004: Research Associate – Faculty of Engineering, Waterloo University, Ontario, Canada. Duties include conducting collaborative research with Dr. Donald Grierson and Dr. Tarek Hegazy in optimization and computer modeling.Oct 2001 – May 2003: Project Management Specialist (part-time) at OPTEAM Project Management Consultants Inc., Ontario, Canada (www.opteam1.com). Duties include software development, training, providing consultation to the industry.Aug 2001 – Jul 2003: NSERC’s Post-Doctoral Fellow – Faculty of Engineering, Waterloo University, Ontario, Canada. Duties include conducting collaborative research with Dr. Tarek Hegazy.Jul 2000 – Sep 2000: Post-Doctoral Fellow – Faculty of Engineering, Waterloo University, Ontario, Canada. Duties include research with Dr. Tarek Hegazy.Jul 1997 – Aug 1999: Visiting Scholar – Faculty of Engineering, Waterloo University, Ontario, Canada. Duties include conducting my research work towards obtaining my Ph.D.Oct 1993 – Jan 2000: Assistant Lecturer – Structural Engineering Department, Faculty of Engineering, Mansoura University, EGYPT. Duties include conducting research work and tutoring the following undergraduate courses: - Construction Project Management, 4th year Civil. - Structural Analysis, 1st year Civil.Oct 1988 – Sep 1993: Research Assistant – Structural Engineering Department, Faculty of Engineering, Mansoura University, EGYPT. Duties include conducting research work and tutoring the following undergraduate courses: - Construction Project Management, 4th year Civil. - Structural Analysis, 1st year Civil. - Strength of Materials, 2nd year Civil. - Reinforced Concrete Design, 2nd year Civil.
  • 4. Page 4 of 13 Oct 1988 - Jun 1997: Civil/Structural Engineer (Part-time) – Dr. Mahmoud Elgamal Consulting Office, Mansoura, EGYPT. Duties include the structural design of a variety of concrete multi-story buildings, and sharing in the design of many steel buildings. Jan 1988 – Sep 1988: Civil/Structural Engineer (Full-time) – Dr. Mahmoud Elgamal Consulting Office, Mansoura, EGYPT. Duties include the design and supervision on construction of many projects. This includes the preparation of structural design drawings for projects. Oct 1986 – Dec 1987: Military Service – the Egyptian Armed Forces, Metallic Floating Bridges Department. Duties include the construction and maintenance of such type of bridges.4. PROFESSIONAL AFFILIATIONS: • Member of the Egyptian Engineers Syndicate • Member of the American Society of Civil Engineers (ASCE) • Member of the Professional Engineers Ontario (PEO)5. PROFESSIONAL ACTIVITIES AND SERVICES: • Reviewer for the following journals: - Journal of Construction Engineering and Management, American Society of Civil Engineers. - Journal of Computing in Civil Engineering, American Society of Civil Engineers. - Journal of Construction Management and Economics, Taylor & Francis Group. - Journal of Automation in Construction, Elsevier Publishing. - Journal of Advances in Structural Engineering, Multi-Science Publishing. - Computer-Aided Civil and Infrastructure Engineering Journal, Wiley-Blackwell Publishing. - Emirates Journal of Engineering Research (EJER), United Arab Emirates University. - Journal of Infrastructure Systems, American Society of Civil Engineers. - Operational Research: An International Journal (ORIJ), Springer Publishing. - Journal of Mathematics and Computers in Simulation, Elsevier Publishing. - Canadian Journal of Civil Engineering. - Journal of Engineering with Computers, Springer. - IEEE Transactions on Evolutionary Computation, ScholarOne. • Reviewer for the following conferences: - 7th Mansoura International Engineering Conference, 2010. - Construction Research Congress (CRC), ASCE, 2010. - 13th International Colloquium in Structural and Geotechnical Engineering, 2009. - 2nd International Conference on Construction In Developing Countries (ICCIDC-II), "Advancing and Integrating Construction Education, Research & Practice”, 2010. - 3rd International / 9th Construction Specialty Conference, CSCE, Ottawa, Ontario, 2011. • Reviewer for the following agencies: - ITIDA - Information Technology Industry Development Agency, Egypt. - STDF – Science and Technology Development Fund, Egypt. • Theses Examination: - "‫ ,ﻓﻼح ﻋﺒﺪ اﷲ اﻟﺴﺒﻴﻌﻰ "أراء واﺗﺠﺎهﺎت اﻟﻌﺎﻣﻠﻴﻦ ﺣﻮل اﻟﺨﺼﺨﺼﺔ ﺑﺎﻟﺘﻄﺒﻴﻖ ﻋﻠﻰ وزارة اﻟﻜﻬﺮﺑﺎء واﻟﻤﺎء ﺑﺪوﻟﺔ اﻟﻜﻮﻳﺖ‬Master Thesis, Structural Engineering Department, Mansoura University, Mansoura, Egypt, Nov. 5th, 2009.
  • 5. Page 5 of 13 - "Predicting Pavement Performance Using Markov Chain Mode," Ehab Samir Awad Alla Erian, Master Thesis, Structural Engineering Department, Cairo University, Cairo, Egypt, Jan. 27th, 2010. - "‫ ,أﺵﺮف ﻋﺒﺪ اﻟﺸﻬﻴﺪ ﻋﻠﻴﻮة ﺣﺴﻦ "ﺗﺨﺼﻴﺺ اﻟﻤﺨﺎﻃﺮ واﻟﺤﺪ ﻣﻦ ﺗﺄﺛﻴﺮهﺎ ﻓﻰ ﻣﺸﺮوﻋﺎت اﻟﻘﻨﺎﻃﺮ ﺑﻤﺼﺮ‬Master Thesis, Structural Engineering Department, Tanta University, Tanta, Egypt, Mar. 11th, 2010. - “Decision Support System for Construction Projects Feasibility Analysis," Khaled Mohamed Youssef, Master Thesis, Civil Engineering Department, Helwan University, Cairo, Egypt, Mar. 10th, 2011. - “Integrated Visualized Framework for Repetitive Construction Projects Control," Mahmoud Dawood, Doctoral Thesis, Structural Engineering Department, Mansoura University, Mansoura, Egypt, Mar. 13th, 2011. - "‫ ,زﻳﺪ ﺥﺎﻟﺪ ﻣﺼﻠﺢ اﻟﻤﻄﻴﺮي " دراﺱﺔ ﻋﻮاﻣﻞ ﻥﺠﺎح ﺗﻄﺒﻴﻖ اﻟﻬﻨﺪﺱﺔ اﻟﻘﻴﻤﻴﺔ ﻓﻲ ﻣﺸﺮوﻋﺎت اﻟﺘﺸﻴﻴﺪ ﺑﺪوﻟﺔ اﻟﻜﻮﻳﺖ‬Master Thesis, Structural Engineering Department, Mansoura University, Mansoura, Egypt, Apr. 3rd, 2011. - “Value Engineering Model for Construction Projects," Hakem Safwat, Master Thesis, Structural Engineering Department, Mansoura University, Mansoura, Egypt, Apr. 20th, 2011. - “Construction Materials Waste Assessment using Artificial Neural Networks" Khaled Kamal Eldeen, Master Thesis, Construction and Building Engineering Department, Arab Academy for Science & Technology and Maritime Transport, Alexandria, Egypt, May 8th, 2011. - “Selecting a Suitable Contract Strategy for Construction Projects in Egypt" Nabil Mohamed Abd El-Baset, Master Thesis, Construction and Building Engineering Department, Arab Academy for Science & Technology and Maritime Transport, Cairo, Egypt, May 24th, 2011. - “Towards Promoting Sustainable Construction in Egypt: A Life-cycle Cost Approach" Minas Nagy Assad, Master Thesis, Architecture and Construction Engineering Department, The American University in Cairo, Egypt, June 9th, 2011. - “Optimum Analysis of Construction Projects with Nonlinear Cash Flow," Haytham Sanad, Doctoral Thesis, Structural Engineering Department, Tanta University, Tanta, Egypt, June 29th, 2011.6. COMPUTER RELATED SKILLS: • Good programming ability using Visual Basic programming language to write Windows-based programs. • Excellent programming ability using Visual Basic for Applications (VBA) to write Macro programs for Microsoft Excel, Microsoft project, and Microsoft Word. • Excellent programming ability using ForTran. • Familiar with the following software packages: - Microsoft Word (word processing) - Microsoft Excel (spreadsheet) and - Microsoft PowerPoint (presentation) • Experienced in Microsoft Project (project management). • Experienced in Primavera Enterprise (project management). • Experienced in Sap2000 (Structural Analysis) • Fair working knowledge of AutoCAD (computer-aided drawing).
  • 6. Page 6 of 137. TRAINING COURSES OFFERED AND CONSULTATION: • Participated in many training courses for practicing engineers in both Egypt and Canada. • Provided many training courses in Project Management and Primavera with many private sector training centers in Egypt. • Providing consultation for some projects for preparing the tender documents such as: project scheduling, resource scheduling, material delivery schedule, cash flow analysis, preparing of the method statement, preparing of the safety program, and preparing the project management plan for the project. • Provided Project Planning, Scheduling along with hands-on-training on Microsoft Project. • Consultant for the training program for the Water and Wastewater Sector Support Project (WWSS), Holding Company for Water and Wastewater, Egypt. • Project Management Training Program for the Water and Wastewater Sector, American University in Cairo, Egypt. • Consultant for the training program for the Water Policy and Regulatory Reform Project (WPRR), Ministry of Housing and Utilities, Egypt. • Project Management Training Program for Qatar General Electricity and Water Corporation (KAHRAMAA), Doha, Qatar.8. SCHOLARSHIPS, FELLOWSHIPS, AND OTHER AWARDS RECEIVED: • Mansoura University Scholarship for outstanding undergraduate students, from Oct. 1981 – May 1986. • M.Sc. Scholarship for three years, faculty of Engineering, Mansoura University, Mansoura, Egypt (Dec. 89 – Dec. 92). • Egyptian Government Scholarship for a period of two years (Aug. 97 – July 99) to study at the University of Waterloo, Waterloo, Ontario, Canada. • Post-Doctoral Fellowship for a period of three months (July 2000 – Sept. 2000) at the Department of Civil Engineering, University of Waterloo, Waterloo, Ontario, Canada. • NSERC’s Post-Doctoral Fellowship for a period of two years (Aug. 2001 – July 2003) to conduct a research at the University of Waterloo, Canada. • Post-Doctoral Fellowship for a period of two months (July 2005 – Aug. 2005) at the Department of Civil Engineering, University of Waterloo, Waterloo, Ontario, Canada. • Visiting Research Professor Fellowship for a period of four months (Sep. 2008 – Dec. 2008) at the Department of Civil and Environmental Engineering, University of Waterloo, Waterloo, Ontario, Canada. • Visiting Professor (5/11/2010 – 11/11/2010) at the Department of Civil and Environmental Engineering, University of Waterloo, Dubai Campus, Dubai, UAE.9. CONTINUING EDUCATION AND PERSONAL DEVELOPMENT: • Training workshop in “Effective Presentation Skills” for 20 hours (4 days) from 24/04/05-28/04/05, Mansoura University, Mansoura, Egypt. • Training workshop in “Modern Directions in Teaching” for 20 hours (4 days) from 22/05/05- 25/05/05, Mansoura University, Mansoura, Egypt. • Training workshop in “Management of Scientific Research” for 20 hours (4 days) from 12/06/05- 15/06/05, Mansoura University, Mansoura, Egypt. • Training workshop in “University Legal and Financial Aspects” for 15 hours (3days) from 2/07/06- 4/07/06, Mansoura University, Mansoura, Egypt. • Training workshop in “The Credit-Hour System” for 15 hours (3 days) from 27/08/06-29/08/06, Mansoura University, Mansoura, Egypt.
  • 7. Page 7 of 13 • Training workshop in “Use of Technology in Teaching” for 15 hours (3 days) from 3/09/06-5/09/06, Mansoura University, Mansoura, Egypt. • Training workshop in “Student Evaluation and Examination Techniques” for 15 hours (3 days) from 21/01/07-23/01/07, Mansoura University, Mansoura, Egypt. • Training workshop in “Time and Meeting Management” for 15 hours (3 days) from 17/08/08- 19/08/08, Mansoura University, Mansoura, Egypt. • Training workshop in “Organizing Scientific Conferences” for 15 hours (3 days) from 01/02/09- 03/02/09, Mansoura University, Mansoura, Egypt. • Training course in “Service Science Management and Engineering “SSME” for 40 hours (5 days) from 8/11/2009-12/11/2009, Supreme Council of Universities (SCU), Cairo, Egypt. • Training workshop in “Application of Academic Standards on Programs and Curricula” for 15 hours (3 days) from 16/1/2010-18/1/2010, Mansoura University, Mansoura, Egypt.10. PUBLICATIONS AND SCHOLARLY ACHIEVEMENTS: 10.1 Refereed Journal Publications 1. Elbeltagi, E., Hosny, O, Abdul-Razek, M., and Saeed, M. (2010). “A Fuzzy Logic Model for Selection of Vertical Formwork Systems.” Paper submitted for possible publication in Construction Engineering and Management Journal, ASCE. 2. Elbeltagi, E., and Dawood, M. (2010). “Mathematical Model for Controlling Repetitive Construction Projects.” Paper submitted for possible publication in Engineering, Construction and Architectural Management Journal, Emerald. 3. Elbeltagi, E., Hosny, O, Elhakeem, A., Abdul-Razek, M., and Abdullah, A. (2011). “Selection of Slab Formwork System Using Fuzzy Logic.” Paper Accepted for publication in Construction Management and Economics Journal. 4. Elbeltagi, E., and Dawood, M. (2011). “Integrated Visualized Time Control System for Repetitive Construction Projects.” Paper Accepted for publication in Automation in Construction Journal, Elsevier Science. . 5. Elbeltagi, E., Dawood, M., and Abd Elraheem, A. (2011). “Statistical Fuzzy Process Control Charts for Monitoring Construction Project Performance.” Journal of Engineering and Applied Science, Cairo University, Vol. 58, No. 1, pp.. 6. Ammar, M., Elbeltagi, E., and Sanad, H. (2010). “Modeling Nonlinear Activity Cost Distributions for Optimizing Construction Cash Flow.” Ain-Shams Journal of Civil Engineering (ASJCE), Vol. 2, pp.. 7. Saeed, M., Elbeltagi, E., and Emam, M. (2008) "Selection of Optimal Vertical Formwork System in Egypt Using Fuzzy Logic." Civil Engineering Research Magazine (CERM), Al-Azhar University, Egypt, Vol. 30, No. 3, pp. 796-807. 8. Elbeltagi, E., Hegazy, T., and Grierson, D. (2007). “A Modified Shuffled-Frog-Leaping Optimization Algorithm: Applications to Project Management.” Journal of Structure and Infrastructure Engineering, Taylor & Francis, Vol. 3, No. 1, pp. 53-60. 9. Elbehairy, H., Elbeltagi, E., Hegazy, T, and Soudki K. (2006). “Comparison of Two Evolutionary Algorithms for Optimization of Bridge Deck Repairs” Journal of Computer-Aided Civil and Infrastructure Engineering, Vol. 21, No. 8, pp. 561-572.
  • 8. Page 8 of 1310. Elbeltagi, E., Hegazy, T., and Grierson, D. (2005). “Comparison among Five Evolutionary-Based Optimization Algorithms.” Journal of Advanced Engineering Informatics, Elsevier Science, Vol. 19, No. 1, pp. 43-53.11. Hegazy, T., Elbeltagi, E., and Zhang, K. (2005). “Keeping Better Site Records Using Intelligent Bar Charts.” Journal of Construction Engineering and Management, ASCE, Vol. 131, No. 5, pp. 513- 521.12. Hegazy, T., Elbeltagi, E., and Elbehairy, H. (2004). “Bridge Deck Management System with Integrated Life Cycle Cost Optimization.” Transportation Research Record: Journal of the Transportation Research Board, No. 1866, TRB, National Research Council, Washington, D.C., pp. 44-50.13. Elbeltagi, E., Hegazy, T., and Eldosouky, A. (2004). “Dynamic Layout of Construction Temporary Facilities Considering Safety." Journal of Construction Engineering and Management, ASCE, Vol. 130, No. 4, pp. 534-541.14. Hegazy, T., Elhakeem, A., and Elbeltagi, E. (2004). “Distributed Scheduling Model for Infrastructure Networks.” Journal of Construction Engineering and Management, ASCE, Vol. 130, No. 2, pp. 160-167.15. Attalla, M., Hegazy, T. and Elbeltagi, E. (2004). “In-House Delivery of Multiple-Small Reconstruction Projects.” Journal of Management in Engineering, ASCE, Vol. 20, No. 1, pp. 25-31.16. Sakla, S., and Elbeltagi, E. (2003). “Design of Steel Roofs Subjected to Drifted Snow Using Genetic Optimization.” Journal of Computers and Structures, Elsevier Publisher, Vol. 81, No. 6, pp. 339-348.17. Ammar, M., and Elbeltagi, E. (2001). “Algorithm for Determining Controlling Path Considering Resource Continuity." Journal of Computing in Civil Engineering, ASCE, Vol. 15, No. 4, pp. 292- 298.18. Elbeltagi, E., Hegazy, T., Hosny, A., and Eldosouky, A. (2001). “Schedule-Dependent Evolution of Site Layout Planning." Journal of Construction Management and Economics, Vol. 19, No. 7, pp. 689-697.19. Elbeltagi, E., and Hegazy, T. (2001). “A Hybrid AI-Based System for Site Layout Planning in Construction." Computer-Aided Civil and Infrastructure Engineering Journal, Vol. 16, No.2, pp. 79- 93.20. Hegazy, T., Shabeeb, A., Elbeltagi, E., and Cheema T. (2000). “Algorithm for Scheduling with MultiSkilled Constrained Resources.” Journal of Construction Engineering and Management, ASCE, Vol. 126, No. 6, pp. 414-421.21. Karray, F., Zaneldin, E., Hegazy, T., Shabeeb, A., and Elbeltagi, E. (2000). "Tools of Soft Computing as Applied to the Problem of Facilities Layout Planning." IEEE Transactions on Fuzzy Systems, Vol. 8., No. 4, pp. 367-379.22. Hegazy, T., and Elbeltagi, E. (2000). “Simplified Spreadsheet Solutions: A Model for Site Layout Planning.” Cost Engineering Journal, AACE International, Vol. 42, No. 1, pp. 24-30.23. Hegazy, T., and Elbeltagi, E. (1999). “EvoSite: An Evolution-Based Model for Site Layout Planning." Journal of Computing in Civil Engineering, ASCE, Vol. 13, No. 3, pp. 198-206.
  • 9. Page 9 of 1324. Eldosouky, A., Abdel Reheem, A., and Elbeltagi, E. (1992). “A Comparison Approaches for Multi Project Scheduling.” Civil Engineering Research Magazine (CERM), Al-Azhar University, Egypt, Vol. 14, No. 9, pp. 42-51.10.2 Conference Publications25. Wefki, H., Elbeltagi, E., and Abdul-Razek, M.E. (2010). “Selecting an Appropriate Excavation Support System in Egypt Using Fuzzy AHP.” Al-Azhar Engineering Eleventh International Conference (AEIC 2010) (CD-ROM), Dec. 21-23, 2010, Cairo, Egypt. Published, also, in Al-Azhar University Engineering Journal, Vol. 5, No. 1, pp. 510-523.26. ‫اﻟﻤﻠﻴﺠﻰ،ﻡﺤﻤﻮد، اﻟﺒﻠﺘﺎﺝﻰ، ﻋﻤﺎد و اﻟﻤﻄﻴﺮى، زیﺪ )0102(. "زیﺎدة ﻡﻌﺮﻓﺔ اﻟﻤﻬﻨﺪﺳﻴﻦ ﺏﻌﻮاﻡﻞ ﻧﺠﺎح ﺕﻄﺒﻴﻖ اﻟﻬﻨﺪﺳﺔ‬ ،‫اﻟﻘﻴﻤﻴﺔ ﻓﻰ ﻡﺸﺮوﻋﺎت اﻟﺘﺸﻴﻴﺪ" اﻟﻤﺆﺕﻤﺮ اﻟﺴﻨﻮى اﻟﺨﺎﻡﺲ واﻷرﺏﻌﻴﻦ ﻓﻰ اﻹﺡﺼﺎء وﻋﻠﻮم اﻟﺤﺎﺳﺐ وﺏﺤﻮث اﻟﻌﻤﻠﻴﺎت‬ .2010 ‫اﻟﻘﺎهﺮة، ﻡﺼﺮ، 31-61 دیﺴﻤﺒﺮ‬27. Elbeltagi, E., Hegazy, T., and Grierson, D. (2010). “A New Evolutionary Strategy for Pareto Multi- Objective Optimization.” Proceedings of the Seventh International Conference on Engineering Computational Technology, B.H.V. Topping, J.M. Adam, F.J. Pallares, R. Bru and M.L. Romero, (Editors), Civil-Comp Press, Stirlingshire, Scotland, Paper Ref. 19, Sep. 14-17, 2010, Valencia, Spain, 17 pages.28. Elbeltagi, E., and Dawood, M. (2010). “Automated BIM and GIS-Based nD Visualization System for Controlling Repetitive Construction Projects.” Proceedings of the 2nd International Conference on Construction In Developing Countries (ICCIDC-II) (CD-ROM), Aug 3-5, 2010, Cairo, Egypt, pp. 530- 540.29. Elbeltagi, E., and Dawood, M. (2010). “Construction Performance Monitoring Based on Fuzzy Control Chart.” the 35th Annual Meeting of the Australasian Universities Building Education Association (AUBEA) (CD-ROM), Jul 14-16, 2010, University of Melbourne, Victoria, Australia, pp. A001-1:A001-13.30. Ammar, M., Elbeltagi, E. and Sanad, H. (2010). “Multi-Objective Time-Cost Trade-Off Optimization Using Ant Colony.” Proceedings of the 7th International Engineering Conference, Faculty of Engineering, Mansoura University, Mar. 23-28, 2010, Mansoura-Sharm El-Sheikh, Egypt, pp.400- 409.31. Elbeltagi, E., Ammar, M. and Sanad, H. (2009). “Optimization of Construction Cash Flows with Nonlinear Cost Distributions.” Proceedings of the 13th International Conference on Structural and Geotechnical Engineering (CD-ROM), Dec 27-29, 2009, Cairo, Egypt, pp. 191-200.32. Elbeltagi, E., and Tantawy, M. (2009) “Integrated Asset Management Framework.” 11th Arab Structural Engineering Conference, October 25-27, 2009, Dhahran, KSA, 6 pages.33. El-Agroudy, M., Elbeltagi, E., and Abdul-Razek, M.E. (2009). “A Fuzzy Logic Approach for Contractor Selection.” Proceedings of the Fifth International Conference on Construction in the 21st Century (CITC-V) (CD-ROM), May 20-22, Istanbul, Turkey, pp. 194-201.34. Salem, A., Elbeltagi, E., and Abdel-Razek, R. (2008) "Predicting Conceptual Cost of Libyan Highway Projects Using Artificial Neural Network." Al-Azhar Engineering Tenth International Conference (AEIC 2008) (CD-ROM), Dec. 24-26, 2008, Cairo, Egypt. Published, also, in Al-Azhar University Engineering Journal, Vol. 3, No. 10, pp. 76-88.35. Elbeltagi, E., and Elkassas, E. (2008) "Cost Optimization of Projects with Repetitive Activities Using Genetic Algorithms." The Sixth International Conference on Engineering Computational
  • 10. Page 10 of 13 Technology, M. Papadrakakis and B.H.V. Topping, (Editors), Civil-Comp Press, Stirlingshire, Scotland, Paper Ref. 66, Sep. 2-5, 2008, Athens, Greece, 15 pages.36. Elbeltagi, E., and Tantawy, M. (2008) “Asset Management: The Ongoing Crisis.” Second Conference on Project Management (CD-ROM), April 5-9, 2008, Riyadh, KSA, 9 pages.37. Elgamal, A., Elbeltagi, E., and Emam, M. (2008) “Parametric Cost Estimate of Maintenance Works for Educational Buildings Using Artificial Neural Networks.” 6th International Engineering Conference, Faculty of Engineering, Mansoura University, (CD-ROM), Mar. 13-16, 2008, Mansoura-Sharm El-Sheikh, Egypt, pp. 68-77.38. Elbeltagi, E., El-Kassas, E., Abdel Rasheed, I., and El-Tawil, S. (2007) “Scheduling and Cost Optimization of Repetitive Projects Using Genetic Algorithms.” 17th International Conference on Computer Theory and Applications (ICCTA) (CD-ROM), Sep. 1-3, 2007, Alexandria, Egypt, pp. 319-327.39. Elbeltagi, E. (2007). “Evolutionary Algorithms for Large-Scale Optimization in Construction Management.” First Conference on Project Management: the Future Trends in the Project Management (CD-ROM), April 7-11, 2007, Riyadh, KSA, 10 pages.40. Elbeltagi, E. (2006). “A Modified Shuffled-Frog-Leaping Algorithm for Optimizing Bridge Deck Repairs.” International Conference on Bridge Management Systems Monitoring, Assessment, and Rehabilitation (HBRC) (CD-ROM), March 21-23, 2006, Cairo, Egypt, Paper # BMS03805, 10 pages.41. Elbeltagi, E., Elbehairy, H., Hegazy, T., and Grierson, D. (2005). “Evolutionary Algorithms for Optimizing Bridge Deck Rehabilitation.” International Conference on Computing in Civil Engineering (CD-ROM), July 12-15, 2005, Cancun, Mexico, Paper # 8542.42. Elbehairy, H., Hegazy, T, Elbeltagi, E., and Soudki K. (2005). “Alternative Formulations for Large Scale Optimization of Infrastructure Maintenance.” 1st Infrastructure Specialty Conference of the Canadian Society of Civil Engineering (CD-ROM), CSCE, June 2-4, 2005, Toronto, Canada, pp. FR-160-1 - FR-160-9.43. Elbeltagi, E. (2005). “Using Ant Colony Optimization for Time-Cost Trade-Off in Construction.” 11th International Colloquium of Structural and Geotechnical Engineering (ICSGE) (CD-ROM), May 17- 19, 2005, Cairo, Egypt, pp. MG15-1 – MG15-10.44. Elbeltagi, E. (2004). “Applicability of Genetic Algorithms in Construction Engineering and Management.” Proceedings of the International Conference on Structural & Geotechnical Engineering and Construction Technology (SGECT’04), March 23-25, Mansoura, Egypt, Vol. 2, pp. 1049-1062.45. Hegazy, T., Elbeltagi, E., and Elbehairy, H. (2004). “Bridge Deck Management System with Integrated Life Cycle Cost Optimization.” 83rd Transportation Research Board Annual Meeting (CD- ROM), TRB, Jan 11-15, Washington, D.C., USA, Paper # 04-5060.46. Hegazy, T., Elbeltagi, E., Elhakeem, A., and Attalla, M. (2003). “Optimum Resource Planning for Large Infrastructure Maintenance/Construction Operation.” 9th Arab Structural Engineering Conference (CD-ROM), ASEC, Nov 29 – Dec 1, Abu Dhabi, UAE, pp. 1017-1024.47. Attalla, M., Fetaih, A., Hegazy, T., and Elbeltagi, E. (2003). “Delivering Projects with Quality and Safety.” 5th Construction Specialty Conference of the Canadian Society of Civil Engineering (CD- ROM), CSCE, June 4-7, Moncton, NB, Canada, pp. COH-294-1 - COH-294-9.
  • 11. Page 11 of 1348. Elbeltagi, E., and Hegazy, T. (2003). “Optimum Layout Planning for Irregular Construction Sites.” 5th Construction Specialty Conference of the Canadian Society of Civil Engineering (CD-ROM), CSCE, June 4-7, Moncton, NB, Canada, pp. COG-197-1 – COG-197-10.49. Sakla, S., and Elbeltagi, E. (2003). “Using Genetic Algorithms for the Optimal Design of Steel Roofs Subjected to Non-Uniform Loads.” 10th International Colloquium of Structural and Geotechnical Engineering (ICSGE) (CD-ROM), April 22-24, Cairo, Egypt, pp. E03ST22-1 – E03ST22-15.50. Elbeltagi, E., and Hegazy, T. (2002). “Incorporating Safety into Construction Site Management.” Proceedings of the First International Conference on construction in the 21st Century (CITC2002), “Challenges and Opportunities in Management and Technology”, April 25-26, Miami, Florida, USA, pp. 261-268.51. Ammar, M., and Elbeltagi, E., (2001). “Controlling Path Determination in Linear Construction Projects.” 9th International Colloquium of Structural and Geotechnical Engineering (ICSGE) (CD- ROM), April 10-12, Cairo, Egypt, pp. MG01-1 - MG01-10.52. Karray, F., Zaneldin, E., Hegazy, T., Shabeeb, A., and Elbeltagi, E. (2000). "Computational Intelligence Tools for Solving the Facilities Layout Planning Problem." Proceedings of the American Control Conference 2000, ACC 2000, June 28-30, Illinois, USA, Vol. 6, pp. 3954-3958.53. Elbeltagi, E., and Hegazy, T. (1999). “Genetic Optimization of Site Layout Planning.” AACE Transactions, 43rd AACE International Annual Conference, June 27-30, Denver, CO, USA, pp. IT.05.1-IT.05.8.10.3 Discussion and Closure54. “Algorithm for Determining Controlling Path Considering Resource Continuity." by P.G. Ioannou, R.B. Harris, and I-T. Yang, Closure by M. Ammar and E. Elbeltagi, Journal of Computing in Civil Engineering, ASCE, Vol. 17, No. 1, pp. 68-73.10.4 Other Publications55. Elbeltagi, E. (2000). “Construction Site Management.” Ph.D. Thesis, Structural Engineering Department, Mansoura University, Mansoura, EGYPT.56. Elbeltagi, E. (1993). “Scheduling Construction Projects Under Multiple Resource Constraints by Heuristic Methods.” Master’s Thesis, Structural Engineering Department, Mansoura University, Mansoura, EGYPT.57. Elbeltagi, E. (1986). “Reinforced Concrete Design.” Undergraduate Graduation project, Civil Engineering Department, Mansoura University, Mansoura, EGYPT.10.5 Presentations1. “A New Evolutionary Strategy for Pareto Multi- Objective Optimization.” Seventh International Conference on Engineering Computational Technology, Sep. 14-17, 2010, Valencia, Spain.2. “Automated BIM and GIS-Based nD Visualization System for Controlling Repetitive Construction Projects.” 2nd International Conference on Construction In Developing Countries (ICCIDC-II), Aug 3- 5, 2010, Cairo, Egypt.
  • 12. Page 12 of 133. “Multi-Objective Time-Cost Trade-Off Optimization Using Ant Colony.” 7th International Engineering Conference, Faculty of Engineering, Mansoura University, Mar. 23-28, 2010, Mansoura-Sharm El- Sheikh, Egypt.4. “Optimization of Construction Cash Flows with Nonlinear Cost Distributions.” 13th International Conference on Structural and Geotechnical Engineering, Dec 27-29, 2009, Cairo, Egypt.5. "Cost Optimization of Projects with Repetitive Activities Using Genetic Algorithms." The Sixth International Conference on Engineering Computational Technology, Sep. 2-5, 2008, Athens, Greece.6. “Asset Management: The Ongoing Crisis.” Second Conference on Project Management, April 5-9, 2008, Riyadh, KSA.7. “Parametric Cost Estimate of Maintenance Works for Educational Buildings Using Artificial Neural Networks.” 6th International Engineering Conference, Faculty of Engineering, Mansoura University, Mar. 13-16, 2008, Mansoura-Sharm El-Sheikh.8. “Evolutionary Algorithms for Large-Scale Optimization in Construction Management.” First Conference on Project Management: the Future Trends in the Project Management, April 7-11, 2007, Riyadh, KSA.9. “A Modified Shuffled-Frog-Leaping Algorithm for Optimizing Bridge Deck Repairs.” International Conference on Bridge Management Systems Monitoring, Assessment, and Rehabilitation (HBRC), March 21-23, 2006, Cairo, Egypt.10. “Evolutionary Algorithms for Optimizing Bridge Deck Rehabilitation.” The International Conference on Computing in Civil Engineering, July 12-15, 2005, Cancun, Mexico.11. “Using Ant Colony Optimization for Time-Cost Trade-Off in Construction.” The 11th International Colloquium of Structural and Geotechnical Engineering (ICSGE), May 17-19, 2005, Cairo, Egypt.12. “Applicability of Genetic Algorithms in Construction Engineering and Management.” The International Conference on Structural & Geotechnical Engineering and Construction Technology (SGECT’04), March 23-25, 2004, Mansoura, Egypt.13. “Bridge Deck Management System with Integrated Life Cycle Cost Optimization.” TRB 83rd Annual Meeting, Jan11-15, 2004, Washington, D.C., USA.14. “Optimum Layout Planning for Irregular Construction Sites.” 5th Construction Specialty Conference of the Canadian Society of Civil Engineering, CSCE, June 4-7, 2003, Moncton, NB, Canada.15. “Incorporating Safety into Construction Site Management.” 1st International Conference on construction in the 21st Century (CITC2002), “Challenges and Opportunities in Management and Technology”, April 25-26, 2002, Miami, Florida, USA.16. “Controlling Path Determination in Linear Construction Projects.” 9th International Colloquium on Structural and Geo-technical Engineering (ICSGE), April 10-12, 2001, Cairo, Egypt.17. “Schedule-Dependent Evolution of Construction Site Plans.” University of Waterloo, Civil Engineering Department Seminar Series, Fall 2000, Waterloo, ON, Canada.18. “Genetic Optimization of Site Layout Planning.” AACE 43rd International Annual Conference, June 27-30, 1999, Denver, CO, USA.
  • 13. Page 13 of 1310.6 Masters Theses Supervised to Completion1. Dawood, M. (2003) "Construction Project Control." M.Sc. Thesis, Mansoura University, Mansoura, Egypt (Co-supervised with Prof. A. Hasanein and Prof. A. Eldosouky).2. Al-Taweel, S. (2007) “Repetitive Projects Scheduling and Optimization Using Genetic Algorithms.” Arab Academy for Science Technology and Maritime Transport (AASTMT), Alexandria, Egypt (Co- supervised with Prof. I. Abdelrasheed and Prof. E. Elkassas).3. Elgamal, A. (2008) “Parametric Cost Estimate of Maintenance Works for Educational Buildings using Artificial Neural Networks.” Arab Academy for Science Technology and Maritime Transport (AASTMT), Cairo, Egypt (Co-supervised with Prof. M. Emam).4. El-Fitory, A. (2008) “Predicting Conceptual Cost of Libyan Highway Projects Using Artificial Neural Network.” Arab Academy for Science Technology and Maritime Transport (AASTMT), Cairo, Egypt (Co-supervised with Prof. R. Abdel-Razek).5. El-Abbasy, M. (2008) “Selection of Optimal Vertical Formwork System in Egypt Using Fuzzy Logic.” Arab Academy for Science Technology and Maritime Transport (AASTMT), Cairo, Egypt (Co- supervised with Prof. M. Emam).6. El-Agroudy, M. (2008) “A Fuzzy Model for Contractor Selection in the Egyptian Construction Industry.” Arab Academy for Science Technology and Maritime Transport (AASTMT), Cairo, Egypt (Co-supervised with Prof. M. Emam).7. ‫اﻟﺴﺒﻴﻌﻰ، ﻓﻼح )9002( "أراء واﺗﺠﺎهﺎت اﻟﻌﺎﻣﻠﻴﻦ ﺣﻮل اﻟﺨﺼﺨﺼﺔ ﺑﺎﻟﺘﻄﺒﻴﻖ ﻋﻠﻰ وزارة اﻟﻜﻬﺮﺑﺎء واﻟﻤﺎء ﺑﺪوﻟﺔ‬ .‫اﻟﻜﻮﻳﺖ" آﻠﻴﺔ اﻟﻬﻨﺪﺱﺔ – ﺝﺎﻣﻌﺔ اﻟﻤﻨﺼﻮرة، اﻟﻤﻨﺼﻮرة، ﻣﺼﺮ‬ .(‫)اﺵﺮاف ﻣﺸﺘﺮك ﻣﻊ د. ﺹﻼح اﻟﺒﺠﻼﺗﻰ‬8. Wefki, H. (2011) “Selecting an Appropriate Excavation Support System in Egypr Using Fuzzy AHP.” Arab Academy for Science Technology and Maritime Transport (AASTMT), Cairo, Egypt (Co- supervised with Prof. M. Emam).9. ‫اﻟﻤﻄﻴﺮى، زﻳﺪ )1102( "دراﺱﺔ ﻋﻮاﻣﻞ ﻥﺠﺎح ﺗﻄﺒﻴﻖ اﻟﻬﻨﺪﺱﺔ اﻟﻘﻴﻤﻴﺔ ﻓﻲ ﻣﺸﺮوﻋﺎت اﻟﺘﺸﻴﻴﺪ ﺑﺪوﻟﺔ اﻟﻜﻮﻳﺖ" آﻠﻴﺔ اﻟﻬﻨﺪﺱﺔ‬ .‫– ﺝﺎﻣﻌﺔ اﻟﻤﻨﺼﻮرة، اﻟﻤﻨﺼﻮرة، ﻣﺼﺮ‬ .(‫)اﺵﺮاف ﻣﺸﺘﺮك ﻣﻊ د. ﻣﺤﻤﻮد اﻟﻤﻠﻴﺠﻰ‬10.7 Doctoral Theses Supervised to Completion1. Dawood, M. (2011) "Integrated Visualized Framework for Repetitive Construction Projects Control." PhD Thesis, Mansoura University, Mansoura, Egypt (Co-supervised with Prof. A. Hasanein).2. Sanad, H. (2011) "Optimum Analysis of Construction Projects with Nonlinear Cash Flow." PhD Thesis, Tanata University, Tanta, Egypt (Co-supervised with Prof. M. Ammar).
  • 14. LECTURE NOTES ONCONSTRUCTION PROJECT MANAGEMENT Emad Elbeltagi, Ph.D., P.Eng., Structural Engineering Department, Faculty of Engineering, Mansoura University
  • 15. Structural Eng. DepartmentFaculty of EngineeringMansoura University Construction Project management (Third Year Civil)Objectives:This course focuses on the successful management of construction projects within budget,deadlines, and resource limits. Students will learn the basics of cost estimating, scheduling,bidding, and project control. The course focuses on: • Project stages • Project delivery approaches and contract types • Detailed cost estimation • Planning • Scheduling using Bar charts, CPM • Resource scheduling & Resource leveling • Scheduling of Repetitive Projects • Time-Cost Trade-off Analysis • Cash flow analysis • Project updating and delay analysis • Bidding analysis and pricing policy • Project control techniquesLectures Mondays: 12:30 – 12:30 PM Thursdays: 2:00 – 4:00 PMTutorials As per the announced scheduleInstructor Dr. Emad Elbeltagi Office: B241 Web page: http://osp.mans.edu.eg/elbeltagi E-mail:eelbelta@mans.edu.eg & eelbelta@yahoo.comOffice Hours Mondays 10:30-12:10 PM and Thursdays 4:00 – 5:40 PMTeaching assistant Eng. Ather Elshikh
  • 16. TABLE OF CONTENTS1. INTRODUCTION 1.1 Construction Industry 1.2 The Players 1.3 Categories of Construction Projects 1.4 Project Manager 1.5 Project Phases 1.5.1 Pre-construction 1.5.2 Procurement Phase 1.5.3 Construction Phase 1.5.4 Closeout2. CONTRACT STRATEGY 2.1 Organization Structures 2.2 Contractual Relationships 2.3 Construction Contracts 2.4 Contract Documents 2.5 Tender Documents 2.6 Tendering Methods 2.7 Bid Evaluation3. PROJECT PLANNING AND SCHEDULING 3.1 Introduction 3.2 Project Planning Steps 3.1.1 Work Breakdown 3.1.2 Project Activities 3.1.3 Logical Relationships 3.1.4 Overlap 3.1.5 Network Representation 3.3 Estimating Activity Duration and Direct Cost4. PROJECT SCHEDULING 4.1 Introduction 4.2 The Critical Path Method 4.3 Calculations for the Critical Path Method 4.3.1 Activity-on-nodes network calculations 4.3.2 Precedence diagram method 3.2.3 Bar Chart 4.4 Time-Scaled Diagram 4.5 Schedule Presentation 4.6 Criticisms to Network Techniques 4.7 Solved Examples
  • 17. 5. SCHEDULING OF REPETITIVE PROJECTS 5.1 Introduction 5.2 Linear Projects 5.3 Resource Driven Scheduling 5.4 Summary Diagrams 5.4.1 Summary diagrams using two relationships 5.4.2 Summary diagrams using one relationship 5.5 Line of Balance 5.5.1 Basic representation 5.5.2 Line of balance calculations 5.3.3 Example application6. RESOURCES MANAGEMENT 6.1 Introduction 6.1 Resource Definition 6.3 Resource Management 6.4 Resource Allocation 6.5 Resource Aggregation 6.6 Resource Leveling (Smoothing) 6.6.1 Method of moments for resource smoothing 6.6.2 Heuristic procedure for resource smoothing 6.7 Scheduling Limited Resource 6.8 Case Study7. PROJECT TIME-COST TRADE-OFF 7.1 Introduction 7.2 Tine-Cost Trade-off 7.3 Activity Tine-Cost Relationship 7.4 Project Time-Cost Relationship 7.5 Shortening Project Duration8. PROJECT FINANCE AND CONTRACT PRICING 8.1 Introduction 8.2 Contract Cash Flow 8.2.1 Construction project costs 8.2.2 Project S-curve 8.2.3 Project Income (Cash-in) 8.2.4 Calculating contract cash flow 8.2.5 Minimizing contractor negative cash flow 8.2.6 Cost of borrowing (Return of investment) 8.3 Project Cash Flow 8.3.1 Project profitability indicators
  • 18. 8.4 Discounted cash Flow 8.4.1 Present value 8.4.2 Net present value 8.4.3 Internal rate of return 8.5 Finalizing a Tender Price 8.5.1 Estimating profit margin 8.5.2 Risk management 8.6 Pricing Policy 8.6.1 Balanced bid 8.6.2 Unbalanced bid 8.6.3 Method-related-charge9. SCHEDULE UPDATING AND DELAYS 6.1 Scheduling Updating 6.2 Delays 5.2.1 Type of Delays 5.2.2 The As-Built Schedule 5.2.3 Analysis of Concurrent Delays10. COST CONTROL 10.1 Developing Cost Curves 10.2 The Earned Value Concept
  • 19. REFERENCESAwani, Alfred O. (1983). “Project Management Techniques.” Petrocelli Books Inc.Clough, Richard H. & Sears, Gelen A. (1979). “Construction Project Management.” John Wiley& Sons Inc., NY.Cormican, David. (1985). “Construction Management: Planning and Finance.” ConstructionPress, London.Eldosouky, Adel I. (1996). “Principles of Construction Project Management.” MansouraUniversity Press, Mansoura, Egypt.Gould, Frederick E. (1997). “Managing the Construction Process: Estimating, Scheduling, andProject Control.” Prentice-Hall Inc., New Gersy.Harris, Frank & McCaffer, Ronald. (1983). “Modern Construction Management.” GranadaPublishing, Great Britain.Harris, Robert. (1978). “Precedence and Arrow Networking Techniques for Construction.” JohnWiley & Sons Inc., NY.Pilcher, Roy. (1992). “Principles of Construction Management.” Mc-Graw Hill Book company,3rd ed.ElgareAllah, Mohamed Ibrahim & Nawara, Jamal Mohamed. (1984). “Edarat Almsharee’Alhandaseah.” John Wiley & Sons Inc., NY. (This book is available in Arabic). "‫اﺑﺮاهﻴﻢ ﻋﺒﺪ اﻟﺮﺷﻴﺪ ﻧﺼﻴﺮ "إدارة ﻣﺸﺮوﻋﺎت اﻟﺘﺸﻴﻴﺪ‬
  • 20. Contract Strategy ‫ﺳﻴﺎﺳﺔ اﻟﺘﻌﺎﻗﺪ‬ Contract StrategyContract strategy means: selecting organizational and contractual policies required for executing a specific project ‫اﺧﺘﻴﺎر اﻟﻬﻴﻜﻞ اﻟﺘﻨﻈﻴﻤﻰ وﻃﺮﻳﻘﺔ اﻟﺘﻌﺎﻗﺪ وﻃﺮﻳﻘﺔ‬ ‫اﻟﻤﻨﺎﻗﺼﺔ اﻟﺘﻰ ﺗﺤﻘﻖ أهﺪاف اﻟﻤﺸﺮوع وﺗﻀﻤﻦ ﻟﻪ‬ ‫اﻟﻨﺠﺎح‬ 24/09/2006 Emad Elbeltagi 2 1
  • 21. Contract StrategyProject Objectives 1. Time 2. Cost 3. Performance 4. Other ObjectivesTime If the top-rank owner objective is to start the project as early as possible to maximize the profit or for political reasons, then a contracting strategy that allows speedy project delivery, such as overlapping design and construction, may become desirable 24/09/2006 Emad Elbeltagi 3 Contract StrategyProject Objectives 1. Time 2. Cost 3. Performance 4. Other ObjectivesCost There may be a need for minimum project cost to ensure adequate economic return. The selected contract strategy, therefore, should be flexible to the owner’s cost requirements while also maintaining the other objectives desirable 24/09/2006 Emad Elbeltagi 4 2
  • 22. Contract StrategyProject Objectives 1. Time 2. Cost 3. Performance 4. Other ObjectivesPerformance If the performance of the work at top-rank to the owner then a contracting strategy that accommodates changes to achieve a better performance and a teamwork approach may be desirable 24/09/2006 Emad Elbeltagi 5 Contract StrategyProject Objectives 1. Time 2. Cost 3. Performance 4. Other ObjectivesOther Objectives Risk sharing between the owner and the contractor Staff training or transfer of technology Involving the contractor in the design Use of local material and resources Choice of labor-intensive construction Protection of the environment 24/09/2006 Emad Elbeltagi 6 3
  • 23. Contract StrategyThe ContractWhat is a contract Legally binding document that describes the responsibilities and rights of the parties 24/09/2006 Emad Elbeltagi 7 Contract StrategyThe ContractHow are contracts formed? Owner issues Invitation for Bids (IFB) Contractor prepares and submits bid Owner reviews and accepts bid A contract document is developed, reviewed, and agreed upon by parties The contract is signed by parties 24/09/2006 Emad Elbeltagi 8 4
  • 24. Contract StrategyThe ContractContracts documents Contract agreement General conditions Special conditions Bills of quantities Drawings Specifications Plans Others (Change orders, Warranty,..) 24/09/2006 Emad Elbeltagi 9 Contract StrategyThe ContractContract agreement Usually includes names of parties, contract price, project duration, and scope of work 24/09/2006 Emad Elbeltagi 10 5
  • 25. Contract StrategyThe ContractGeneral conditions Responsibilities of each party Project Duration Establishes the payment process Warranty period and process Special conditions Describe unique requirements of the project Unusual work hours Site access restrictions Owner-furnished items Other special requirements 24/09/2006 Emad Elbeltagi 11 Contract StrategyOrganizational Structure (Project delivery methods) ‫وﻳﻘﺼﺪ ﺑﻪ آﻴﻔﻴﺔ ﺗﻨﻈﻴﻢ ﻣﺮﺣﻠﺔ اﻟﺘﺼﻤﻴﻢ واﻟﺘﻨﻘﻴﺬ واﻹﺷﺮاف ﻋﻠﻰ‬ ‫اﻟﺘﻨﻔﻴﺬ او اﻟﻌﻼﻗﺔ ﺑﻴﻦ أﻃﺮاف اﻟﻤﺸﺮوع‬ Traditional (General) Approach (‫)ﻃﺮﻳﻘﺔ اﻟﺘﻌﺎﻗﺪاﻟﻌﺎم أو اﻟﺘﻘﻠﻴﺪى‬ Separate Approach (‫)ﻃﺮﻳﻘﺔ اﻟﺘﻌﺎﻗﺪ اﻟﻤﻨﻔﺼﻞ‬ Direct labor force (In-house) (‫)ﻃﺮﻳﻘﺔ اﻟﻠﺘﻨﻔﻴﺬ اﻟﺪاﺧﻠﻰ‬ Turnkey approach (‫)ﻃﺮﻳﻘﺔ ﺗﺴﻠﻴﻢ اﻟﻤﻔﺘﺎح‬ Construction Management (‫)ﻃﺮﻳﻘﺔ اﻟﺘﻌﺎﻗﺪ اﻟﻤﺘﺨﺼﺺ‬ 24/09/2006 Emad Elbeltagi 12 6
  • 26. Contract StrategyOrganizational Structure Traditional approach 24/09/2006 Emad Elbeltagi 13 Contract StrategyOrganizational StructureTraditional approach advantages Price competition Total cost is known before construction starts Well documented approach used in most governmental projectsTraditional approach disadvantages Takes a long time Designer does not benefit from contractor experience Conflicts between owner & contractor and A/E & contractor Changes may lead to disputes and claims 24/09/2006 Emad Elbeltagi 14 7
  • 27. Contract StrategyOrganizational Structure Separate contracting method 24/09/2006 Emad Elbeltagi 15 Contract StrategyOrganizational StructureSeparate contract method advantages Price competition Total cost is known before construction starts The owner can save profit that goes to the general contractor Suitable for projects that need specialized contractorsSeparate approach disadvantages Needs a qualified project manager The owner may be subjected to high risk Conflicts between contractors 24/09/2006 Emad Elbeltagi 16 8
  • 28. Contract StrategyOrganizational Structure Direct labor Used by large authorities The owner performs both the design and the construction May use consultants for some specialized designs 24/09/2006 Emad Elbeltagi 17 Contract StrategyOrganizational Structure Direct labor Most suitable for small projects Can be used when expertise are available Low risk projects Inadequate scope definition 24/09/2006 Emad Elbeltagi 18 9
  • 29. Contract StrategyOrganizational Structure Turnkey approach (Design-build) Used mostly for repetitive typical work The contractor performs design and construction The owner appoints project manager 24/09/2006 Emad Elbeltagi 19 Contract StrategyOrganizational Structure Turnkey contract advantages The contractor share or perform the design Used for fast-track contracts, construction can start with the design Turnkey disadvantages Design changes are limited Example Franchise projects 24/09/2006 Emad Elbeltagi 20 10
  • 30. Contract StrategyOrganizational Structure Construction management ‫ﻳﻘﻮم اﻟﻤﺎﻟﻚ ﺑﺎﻻﺳﺘﻌﺎﻧﺔ ﺑﻤﻘﺎول ﻣﺘﺨﺼﺺ )ﻣﻘﺎول ادارة( ﻟﺘﻨﺴﻴﻖ ﻋﻤﻠﻴﺔ اﻟﺘﺼﻤﻴﻢ‬ ‫واﻟﺘﻨﻔﻴﺬ ﻟﻠﻤﺸﺮوع وهﻮ ﻳﻘﺎﺑﻞ اﻻﺳﺘﺸﺎرى ﻓﻰ اﻟﻨﻈﺎم اﻟﺘﻘﻠﻴﺪى‬ 24/09/2006 Emad Elbeltagi 21 Contract StrategyContracting Stages 24/09/2006 Emad Elbeltagi 22 11
  • 31. Contract StrategyContracting Stages Bidding documents Invitation to bid ‫ﺧﻄﺎب اﻟﻤﺎﻟﻚ‬ Acceptance form ‫ﺷﻜﻞ اﻟﻤﻨﺎﻗﺼﺔ‬ Construction Contract ‫ﺷﻜﻞ اﻟﻌﻘﺪ‬ 24/09/2006 Emad Elbeltagi 23 Contract StrategyContracting Stages Contractor selection ‫ﻳﺘﻘﺪم اﻟﻤﻘﺎول ﺑﻤﻈﺮوف ﻓﻨﻰ وﻣﻈﺮوف ﻣﺎﻟﻰ‬ ‫ﺗﻘﻮم ﻟﺠﻨﺔ ﻓﺘﺢ اﻟﻤﻈﺎرﻳﻒ ﺑﻔﺘﺢ اﻟﻤﻈﺮوف اﻟﻔﻨﻰ‬ ‫ﺗﻘﻮم ﻟﺠﻨﺔ اﻟﺒﺖ ﺑﻔﺘﺢ اﻟﻤﻈﺮوف اﻟﻤﺎﻟﻰ‬ 24/09/2006 Emad Elbeltagi 24 12
  • 32. Contract Strategy Contracting Stages The agreement 24/09/2006 Emad Elbeltagi 25 Contract Strategy Type of Contracts Contracts are classified according to the method of payment to the contractor ‫ﺗﺼﻨﻒ اﻟﻌﻘﻮد ﺑﺼﻔﺔ أﺳﺎﺳﻴﺔ ﺣﺴﺐ ﻃﺮﻳﻘﺔ اﻟﺪﻓﻊ‬ ‫ﻟﻠﻤﻘﺎول‬ Contracts‫ ﻣﻌﺘﻤﺪة ﻋﻠﻰ اﻟﺘﻜﻠﻔﺔ‬Cost based Price based ‫ﻣﻌﺘﻤﺪة ﻋﻠﻰ اﻟﺴﻌﺮ‬ Cost plus Target Cost Unit price Lump sum ‫اﻟﺘﻜﻠﻔﺔ اﻟﻤﺴﺘﻬﺪﻓﺔ اﻟﺘﻜﻠﻔﺔ ﻣﻊ اﺳﺘﺮداد‬ ‫ﺛﻤﻦ اﻟﻮﺣﺪة‬ ‫اﻟﻤﻘﻄﻮﻋﻴﺔ‬ ‫ﻧﺴﺒﺔ ﻣﻦ اﻟﻤﺼﺮوﻓﺎت‬ 24/09/2006 Emad Elbeltagi 26 13
  • 33. Contract StrategyType of Contracts What is the difference between cost & price? ‫ﻣﺎاﻟﻔﺮق ﺑﻴﻦ اﻟﺘﻜﻠﻔﺔ و اﻟﺴﻌﺮ ؟‬ Price Margin Cost Profit Indirect cost Direct cost Risk allowance Site overhead Labor Financial charge Office overhead Material Equipment Subcontractors 24/09/2006 Emad Elbeltagi 27 Contract StrategyType of Contracts 1. Unit Price 3. Cost Plus 2. Lump Sum 4. Target CostFactors favoring the use of a specific contract Providing incentive for efficient performance ‫اﻟﺠﻴﺪ‬ ‫اﻋﻄﺎء ﺣﺎﻓﺰ ﻟﻠﺘﻨﻔﻴﺬ‬ Introducing changes during construction ‫اﻟﺘﻨﻔﻴﺬ‬ ‫اﻟﻘﺪرة ﻋﻠﻰ اﻟﺘﻐﻴﻴﺮ اﺛﻨﺎء‬ Allocation of risk between owner & ‫واﻟﻤﻘﺎول‬ ‫ﺗﻮزﻳﻊ اﻟﻤﺨﺎﻃﺮ ﺑﻴﻦ اﻟﻤﺎﻟﻚ‬ contractor 24/09/2006 Emad Elbeltagi 28 14
  • 34. ‫‪Contract Strategy‬‬ ‫‪Type of Contracts‬‬ ‫‪1. Unit Price‬‬ ‫‪3. Cost Plus‬‬ ‫‪2. Lump Sum‬‬ ‫‪4. Target Cost‬‬‫)ﻋﻘﺪ اﻟﻤﻘﺎﻳﺴﺔ( ‪) or Admeasurement contract‬ﻋﻘﺪ ﺛﻤﻦ اﻟﻮﺣﺪة( ‪Unit price‬‬‫ﻋﻨﺎﺻﺮ اﻟﻌﻤﻞ ﺗﻜﻮن ﻣﻔﺼﻠﺔ وﻳﺘﻔﻖ ﻋﻠﻴﻬﺎ ﺑﻴﻦ اﻟﻤﺎﻟﻚ واﻟﻤﻘﺎول )دﻓﺘﺮ اﻟﻜﻤﻴﺎت .‪(B.O.Q‬‬ ‫ﻳﺤﺪد اﻟﻤﻘﺎول ﺳﻌﺮ ﻟﺘﻨﻔﻴﺬ آﻞ ﺑﻨﺪ ﻳﻐﻄﻰ ﻋﻨﺎﺻﺮ اﻟﺘﻜﻠﻔﺔ، وﻟﻜﻦ اﻟﻤﺎﻟﻚ ﻻ ﻳﻌﺮف اﻟﻨﺴﺐ‬ ‫اﻟﻤﺨﺘﻠﻔﺔ ﻟﻬﺬﻩ اﻟﻌﻨﺎﺻﺮ وﺑﺎﻟﺘﺎﻟﻰ ﻻ ﻳﻌﺮف أﻳﺔ ﺗﻔﺎﺻﻴﻞ ﻋﻦ رﺑﺢ اﻟﻤﻘﺎول أو ﻣﺨﺎﻃﺮﻩ‬ ‫ﻳﺴﻤﺢ ﺑﺘﻐﻴﻴﺮات ﻓﻰ اﻟﻜﻤﻴﺎت اﻟﻮاردة ﺑﺪﻓﺘﺮ اﻟﻜﻤﻴﺎت ﺑﻨﺴﺒﺔ ﻣﺤﺪدة )52%(‬ ‫إذا اﺳﺘﺤﺪﺛﺖ ﺑﻨﻮد أو زادت آﻤﻴﺎت اﻟﺒﻨﻮد اﻟﻮاردة ﺑﺪﻓﺘﺮ اﻟﻜﻤﻴﺎت ﻋﻦ اﻟﻨﺴﺒﺔ اﻟﻤﺤﺪدة‬ ‫ﺗﺸﻜﻞ ﻟﺠﻨﺔ ﻟﺪراﺳﺔ اﻟﺴﻌﺮ‬ ‫ﻓﻰ اﻟﻐﺎﻟﺐ ﻻ ﺗﻨﺼﻒ اﻟﻠﺠﻨﺔ اﻟﻤﻘﺎول ﻣﻤﺎ ﻳﺆدى إﻟﻰ ﺣﺪوث ﻣﻨﺎزﻋﺎت‬ ‫6002/90/42‬ ‫‪Emad Elbeltagi‬‬ ‫92‬ ‫‪Contract Strategy‬‬ ‫‪Type of Contracts‬‬ ‫‪1. Unit Price‬‬ ‫‪3. Cost Plus‬‬ ‫‪2. Lump Sum‬‬ ‫‪4. Target Cost‬‬‫‪Unit price contract‬‬ ‫ﻳﺴﺘﺨﺪم ﻋﻘﺪ اﻟﻤﻘﺎﻳﺴﺔ ﻓﻰ اﻟﻤﺸﺮوﻋﺎت اﻟﻨﻤﻄﻴﺔ وﻣﺸﺮوﻋﺎت اﻟﻬﻨﺪﺳﺔ اﻟﻤﺪﻧﻴﺔ و اﻟﺘﻰ ﻳﻤﻜﻦ‬ ‫ﺣﺪوث ﺗﻐﻴﻴﺮات أو ﺗﻌﺪﻳﻼت أﺛﻨﺎء اﻟﺘﻨﻔﻴﺬ ﻋﻠﻰ ﻧﻄﺎق ﻣﺤﺪود و ﻓﻰ ﺣﺎﻟﺔ ﻋﺪم اآﺘﻤﺎل‬ ‫اﻟﺘﺼﻤﻴﻤﺎت ﻋﻠﻰ ﺧﻼف ﻋﻘﺪ اﻟﻤﻘﻄﻮﻋﻴﺔ.‬ ‫6002/90/42‬ ‫‪Emad Elbeltagi‬‬ ‫03‬ ‫51‬
  • 35. ‫‪Contract Strategy‬‬ ‫‪Type of Contracts‬‬ ‫‪1. Unit Price‬‬ ‫‪3. Cost Plus‬‬ ‫‪2. Lump Sum‬‬ ‫‪4. Target Cost‬‬‫‪Unit price contract‬‬ ‫ﻣﻤﻴﺰاﺗﻪ‬ ‫اﻟﻤﺎﻟﻚ ﻋﻠﻰ ﻋﻠﻢ ﺑﺘﻔﺎﺻﻴﻞ اﻟﻤﺸﺮوع إﻟﻰ ﺣﺪ آﺒﻴﺮ وﻳﻌﺮف ﻣﺒﺪﺋﻴﺎ اﻟﺘﺰاﻣﺎﺗﻪ اﻟﻤﺎﻟﻴﺔ‬ ‫ﺷﺎﺋﻊ و ﻳﺴﺘﺨﺪم ﻓﻰ أآﺜﺮ ﻣﻦ 08% ﻣﻦ ﻣﺸﺮوﻋﺎت اﻟﺘﺸﻴﻴﺪ‬ ‫ﻣﺪة اﻟﺘﻨﻔﻴﺬ ﻏﺎﻟﺒﺎ ﻣﺤﺪدة )إذا ﻟﻢ ﻳﻄﻠﺐ ﺗﻌﺪﻳﻼت أو ﺗﻐﻴﻴﺮات(‬ ‫ﻋﻴﻮﺑﻪ‬ ‫ﻳﻜﻮن اﻟﺘﺮآﻴﺰ ﻓﻴﻪ ﻏﺎﻟﺒﺎ ﻋﻠﻰ اﻟﺴﻌﺮ اﻟﺬى ﻳﺘﻘﺪم ﺑﻪ اﻟﻤﻘﺎول‬ ‫ﻳﺴﻤﺢ ﺑﺘﻐﻴﻴﺮاﻟﺘﺼﻤﻴﻢ ﺑﻨﺴﺒﺔ ﻣﺤﺪودة‬ ‫ﻋﺪم اﻟﺤﺼﺮ اﻟﺪﻗﻴﻖ ﻟﻸﻋﻤﺎل ﻗﺪ ﻳﻤﺜﻞ ﺧﻄﻮرة ﻋﻠﻰ اﻟﻤﺎﻟﻚ أو اﻟﻤﻘﺎول )ﺗﺤﻤﻴﻞ اﻷ ﺳﻌﺎر(‬ ‫اﻟﺘﻜﻠﻔﺔ اﻟﻨﻬﺎﺋﻴﺔ ﻟﻠﻤﺸﺮوع ﻏﻴﺮ ﻣﺤﺪدة وﻻ ﻳﻤﻜﻦ ﻣﻌﺮﻓﺘﻬﺎ إﻻ ﺑﻌﺪ اﻧﺘﻬﺎء اﻟﻤﺸﺮوع‬ ‫آﺜﺮة اﻟﻨﺰاﻋﺎت ﻋﻨﺪ اﺿﺎﻓﺔ ﺑﻨﻮد ﻟﻴﺴﺖ ﺑﺎﻟﻤﻘﺎﻳﺴﺔ‬ ‫6002/90/42‬ ‫‪Emad Elbeltagi‬‬ ‫13‬ ‫‪Contract Strategy‬‬ ‫‪Loading of Rates‬‬ ‫)ﺗﺤﻤﻴﻞ اﻷ ﺳﻌﺎر(‬ ‫ﺗﺜﻤﻴﻦ ﻣﺘﺰن ‪Balanced Bid‬‬ ‫ﺗﺜﻤﻴﻦ ﻏﻴﺮ ﻣﺘﺰن ‪Unbalanced Bid‬‬ ‫6002/90/42‬ ‫‪Emad Elbeltagi‬‬ ‫23‬ ‫61‬
  • 36. ‫‪Contract Strategy‬‬ ‫‪Loading of Rates‬‬ ‫)ﺗﺤﻤﻴﻞ اﻷ ﺳﻌﺎر(‬ ‫زﻳﺎدة اﻟﺘﺪﻓﻘﺎت اﻟﻨﻘﺪﻳﺔ ﻓﻰ ﺑﺪاﻳﺔ اﻟﻤﺸﺮوع وذﻟﻚ ﻟﺘﺤﺴﻴﻦ ﻣﻮﻗﻔﻪ اﻟﻤﺎﻟﻰ‬ ‫اآﺘﺸﺎﻓﻪ وﺟﻮد ﺧﻄﺄ ﻓﻰ ﺣﺼﺮ آﻤﻴﺎت اﻷﻋﻤﺎل‬ ‫- اﻟﺘﺜﻤﻴﻦ ﻏﻴﺮ اﻟﻤﺘﺰن ﻗﺪ ﻳﻤﺜﻞ ﺧﻄﻮرة ﻋﻠﻰ اﻟﻤﺎﻟﻚ أو اﻟﻤﻘﺎول‬ ‫ﺗﺜﻤﻴﻦ ﻏﻴﺮ ﻣﺘﺰن ‪Unbalanced Bid‬‬ ‫6002/90/42‬ ‫‪Emad Elbeltagi‬‬ ‫33‬ ‫‪Contract Strategy‬‬ ‫‪Type of Contracts‬‬ ‫‪1. Unit Price‬‬ ‫‪3. Cost Plus‬‬ ‫‪2. Lump Sum‬‬ ‫‪4. Target Cost‬‬‫)ﻋﻘﺪ اﻟﻤﻘﻄﻮﻋﻴﺔ( ‪Lump Sum‬‬ ‫ﻳﺘﻢ اﻻﺗﻔﺎق ﺑﻴﻦ اﻟﻤﺎﻟﻚ واﻟﻤﻘﺎول ﻋﻠﻰ ﺗﻨﻔﻴﺬ اﻟﻤﺸﺮوع )أو ﺟﺰء ﻣﻨﻪ( ﺑﺴﻌﺮ إﺟﻤﺎﻟﻰ‬ ‫ﻳﺘﻮﻟﻰ اﻟﻤﻘﺎول )ﻓﻰ ﻣﻌﻈﻢ اﻷﺣﻮال( ﻣﺴﺌﻮﻟﻴﺔ اﻟﺘﺼﻤﻴﻢ و اﻟﺘﻨﻔﻴﺬ‬ ‫ﻳﺤﺼﻞ اﻟﻤﻘﺎول ﻋﻠﻰ ﺣﻘﻮﻗﻪ اﻟﻤﺎﻟﻴﺔ ﻓﻰ ﻧﻬﺎﻳﺔ اﻟﻤﺸﺮوع أو ﻋﻠﻰ دﻓﻌﺎت‬ ‫ﻳﺴﺘﺨﺪم ﻟﻠﻤﺸﺮوﻋﺎت اﻟﻤﻌﺮﻓﺔ ﺟﻴﺪا واﻟﺘﻰ ﺗﻘﻞ ﻓﻴﻬﺎ اﻟﻤﺨﺎﻃﺮ )‪(Low risk projects‬‬‫ﻳﻨﺎﺳﺐ ﻣﺸﺮوﻋﺎت اﻟﺘﺼﻤﻴﻢ واﻟﺘﻨﻔﻴﺬ )‪ (Design-build‬وﺗﺴﻠﻴﻢ اﻟﻤﻔﺘﺎح )‪(Turnkey‬‬ ‫6002/90/42‬ ‫‪Emad Elbeltagi‬‬ ‫43‬ ‫71‬
  • 37. ‫‪Contract Strategy‬‬ ‫‪Type of Contracts‬‬ ‫‪1. Unit Price‬‬ ‫‪3. Cost Plus‬‬ ‫‪2. Lump Sum‬‬ ‫‪4. Target Cost‬‬‫)ﻋﻘﺪ اﻟﻤﻘﻄﻮﻋﻴﺔ( ‪Lump Sum‬‬ ‫ﻣﻤﻴﺰاﺗﻪ‬ ‫اﻟﻤﺎﻟﻚ ﻏﻴﺮ ﻣﻠﺰم ﺑﺄﻳﺔ ﺗﻔﺎﺻﻴﻞ‬ ‫اﻟﻤﺎﻟﻚ ﻋﻠﻰ ﻋﻠﻢ ﻣﺴﺒﻖ ﺑﺎﻟﺘﺰاﻣﺎﺗﻪ اﻟﻤﺎﻟﻴﺔ‬ ‫ﻳﺴﺘﻔﺎد ﻣﻦ ﺧﺒﺮة اﻟﻤﻘﺎول ﻓﻰ اﻟﺘﺼﻤﻴﻢ‬ ‫ﻋﻴﻮﺑﻪ‬ ‫ﻻ ﻳﺴﻤﺢ ﺑﺈدﺧﺎل أﻳﺔ ﺗﻐﻴﻴﺮات ﻓﻰ اﻟﺘﺼﻤﻴﻢ‬ ‫ﺷﺮوط اﻟﺘﻌﺎﻗﺪ ﻣﻬﻤﺔ ﻟﻠﻐﺎﻳﺔ و أى ﺧﻠﻞ أو ﻟﺒﺲ ﻓﻴﻬﺎ ﻳﺆدى إﻟﻰ ﻣﻨﺎزﻋﺎت‬ ‫ﻳﺘﺤﻤﻞ اﻟﻤﻘﺎول آﻞ اﻟﻤﺨﺎﻃﺮ اﻟﺘﻰ ﻗﺪ ﻳﺘﻌﺮض ﻟﻬﺎ اﻟﻤﺸﺮوع‬ ‫6002/90/42‬ ‫‪Emad Elbeltagi‬‬ ‫53‬ ‫‪Contract Strategy‬‬ ‫‪Type of Contracts‬‬ ‫‪1. Unit Price‬‬ ‫‪3. Cost Plus‬‬ ‫‪2. Lump Sum‬‬ ‫‪4. Target Cost‬‬‫)ﻋﻘﺪاﻟﺘﻜﻠﻔﺔ ﻣﻊ اﺳﺘﺮداد ﻧﺴﺒﺔ ﻣﻦ اﻟﻤﺼﺮوﻓﺎت أو اﻟﺘﻜﻠﻔﺔ واﻻﺿﺎﻓﺔ( ‪Cost-Plus‬‬ ‫ﻳﺘﻢ اﻻﺗﻔﺎق ﺑﻴﻦ اﻟﻤﺎﻟﻚ واﻟﻤﻘﺎول ﻋﻠﻰ ﺗﻨﻔﻴﺬ اﻟﻤﺸﺮوع )أو ﺟﺰء ﻣﻨﻪ( ﻋﻠﻰ أن ﻳﺴﺘﺮد‬ ‫اﻟﻤﻘﺎول آﻞ اﻟﻤﺼﺮوﻓﺎت اﻟﺘﻰ ﺗﺤﻤﻠﻬﺎ ﺑﺎﻹﺿﺎﻓﺔ إﻟﻰ زﻳﺎدة ﻧﻈﻴﺮ اﻹدارة وهﺎﻣﺶ اﻟﺮﺑﺢ‬ ‫اﻹﺿﺎﻓﺔ ﻗﺪ ﺗﻜﻮن ﻣﺒﻠﻎ ﺛﺎﺑﺖ أو ﻧﺴﺒﺔ ﻣﺤﺪدة ﻣﻦ اﻟﺘﻜﻠﻔﺔ اﻟﻜﻠﻴﺔ، أو ﻳﺘﻢ اﻟﺠﻤﻊ ﺑﻴﻨﻬﻤﺎ‬ ‫اﻟﻤﻘﺎول ﻣﻠﺰم ﺑﻌﻤﻞ دﻓﺎﺗﺮ ﻹﺛﺒﺎت اﻟﻤﺼﺮوﻓﺎت اﻟﻔﻌﻠﻴﺔ ﻓﻰ اﻟﻤﻮﻗﻊ واﻋﺘﻤﺎدهﺎ ﻣﻦ اﻟﻤﺎﻟﻚ‬ ‫هﺬا اﻟﻨﻮع ﻣﻦ أﺳﻮأ أﻧﻮاع اﻟﻌﻘﻮد ﺑﺎﻟﻨﺴﺒﺔ ﻟﻠﻤﺎﻟﻚ‬ ‫6002/90/42‬ ‫‪Emad Elbeltagi‬‬ ‫63‬ ‫81‬
  • 38. ‫‪Contract Strategy‬‬ ‫‪Type of Contracts‬‬ ‫ﻳﺴﺘﺨﺪم‬ ‫‪Cost-Plus‬‬ ‫ﻓﻰ اﻟﻤﺸﺮوﻋﺎت اﻟﻐﻴﺮ ﻣﺤﺪدة ﺗﻤﺎﻣﺎ وﻳﺮﻏﺐ اﻟﻤﺎﻟﻚ ﻓﻰ اﻟﺘﻨﻔﻴﺬ اﻟﻤﺒﻜﺮ‬ ‫ﻓﻰ ﺣﺎﻟﺔ رﻏﺒﺔ اﻟﻤﺎﻟﻚ اﻟﻤﺸﺎرآﺔ ﻓﻰ إدارة اﻟﻤﺸﺮوع وﻣﺮاﻗﺒﺔ اﻟﺘﻜﻠﻔﺔ‬ ‫ﻣﻤﻴﺰاﺗﻪ‬ ‫ﻳﻤﻜﻦ اﻟﺒﺪء ﻓﻰ اﻟﺘﻨﻔﻴﺬ ﻗﺒﻞ اﻻﻧﺘﻬﺎء ﻣﻦ اﻟﺘﺼﻤﻴﻤﺎت، ﻻ ﻳﺘﻮﻗﻒ اﻟﺘﻌﺎﻗﺪ ﻋﻠﻰ ﺗﻘﺪﻳﺮ اﻟﺘﻜﻠﻔﺔ‬ ‫ﻣﺸﺎرآﺔ اﻟﻤﺎﻟﻚ ﻓﻰ إدارة اﻟﺸﺮوع‬ ‫ﻣﺮوﻧﺔ ﻋﺎﻟﻴﺔ ﻷي ﺗﻐﻴﻴﺮات أو ﺗﻌﺪﻳﻼت ﻓﻰ اﻟﺘﺼﻤﻴﻤﺎت‬ ‫ﻋﻴﻮﺑﻪ‬ ‫اﻟﻤﻘﺎول ﻟﻴﺲ ﻟﺪﻳﻪ أى ﺣﺎﻓﺰ ﻟﺘﻘﻠﻴﻞ اﻟﺘﻜﻠﻔﺔ‬ ‫ﺻﻌﻮﺑﺔ ﺗﺤﺪﻳﺪ ﺗﻜﻠﻔﺔ اﻟﻤﺸﺮوع إﻻ ﺑﻌﺪ اﻧﺘﻬﺎء اﻟﻤﺸﺮوع‬ ‫ﻋﺪم ﺗﺤﻤﻞ اﻟﻤﻘﺎول أﻳﺔ ﻣﺨﺎﻃﺮ‬ ‫6002/90/42‬ ‫‪Emad Elbeltagi‬‬ ‫73‬ ‫‪Contract Strategy‬‬ ‫‪Type of Contracts‬‬ ‫‪1. Unit Price‬‬ ‫‪3. Cost Plus‬‬ ‫‪2. Lump Sum‬‬ ‫‪4. Target Cost‬‬‫)ﻋﻘﺪاﻟﺘﻜﻠﻔﺔ اﻟﻤﺴﺘﻬﺪﻓﺔ( ‪Target Cost‬‬ ‫ﻳﺘﻔﻖ اﻟﻤﺎﻟﻚ واﻟﻤﻘﺎول ﻋﻠﻰ ﺗﻨﻔﻴﺬ اﻟﻤﺸﺮوع ﺑﺘﻜﻠﻔﺔ ﺗﻘﺪﻳﺮﻳﺔ ﺗﺴﻤﻰ اﻟﺘﻜﻠﻔﺔ اﻟﻤﺴﺘﻬﺪﻓﺔ‬ ‫ﻳﺤﺪد اﻟﻤﻘﺎول واﻟﻤﺎﻟﻚ اﻟﺘﻜﻠﻔﺔ اﻟﻤﺴﺘﻬﺪﻓﺔ ﺑﻨﺎءا ﻋﻠﻰ اﻟﺒﻴﺎﻧﺎت اﻟﻤﺘﻮﻓﺮة وﻗﺖ اﻟﺘﻌﺎﻗﺪ‬ ‫ﻳﺘﻢ اﻟﺘﻌﺎﻗﺪ ﺑﻄﺮﻳﻘﺔ ‪ ،cost-plus‬وﺑﺸﺮط أﻻ ﺗﺰﻳﺪ اﻟﺘﻜﻠﻔﺔ ﻋﻦ اﻟﺘﻜﻠﻔﺔ اﻟﻤﺴﺘﻬﺪﻓﺔ‬ ‫إذا زادت اﻟﺘﻜﻠﻔﺔ اﻟﻨﻬﺎﺋﻴﺔ ﻋﻦ اﻟﺘﻜﻠﻔﺔ اﻟﻤﺴﺘﻬﺪﻓﺔ ﻳﺴﺘﻘﻄﻊ ﺟﺰء ﻣﻦ رﺑﺢ اﻟﻤﻘﺎول وإذا ﻗﻠﺖ‬ ‫ﻳﺰﻳﺪ رﺑﺢ اﻟﻤﻘﺎول ﺑﻨﺴﺒﺔ ﻣﺘﻔﻖ ﻋﻠﻴﻬﺎ‬ ‫6002/90/42‬ ‫‪Emad Elbeltagi‬‬ ‫83‬ ‫91‬
  • 39. ‫‪Contract Strategy‬‬ ‫‪Type of Contracts‬‬ ‫‪1. Unit Price‬‬ ‫‪3. Cost Plus‬‬ ‫‪2. Lump Sum‬‬ ‫‪4. Target Cost‬‬ ‫)ﻋﻘﺪاﻟﺘﻜﻠﻔﺔ اﻟﻤﺴﺘﻬﺪﻓﺔ( ‪Target Cost‬‬ ‫أﺛﻨﺎء اﻟﺘﻨﻔﻴﺬ ﻳﺘﻢ ﺑﺤﺚ وﻣﻨﺎﻗﺸﺔ أﻳﺔ ﺗﻐﻴﻴﺮات أو ﻣﺨﺎﻃﺮ‬ ‫‪Fee‬‬ ‫وﺗﻐﻴﻴﺮ اﻟﺘﻜﻠﻔﺔ اﻟﻤﺴﺘﻬﺪﻓﺔ ﻟﺘﺘﻼءم ﻣﻊ هﺬﻩ اﻟﺘﻐﻴﻴﺮات‬ ‫%5‬ ‫هﺬا اﻟﻌﻘﺪ ﻳﺸﺒﻪ ﺗﻤﺎﻣﺎ ﻋﻘﺪ اﻟﺘﻜﻠﻔﺔ واﻹﺿﺎﻓﺔ واﻟﻔﺮق‬‫‪Fee‬‬ ‫%3‬ ‫اﻟﺠﻮهﺮى هﻮ ﻣﺸﺎرآﺔ اﻟﻤﻘﺎول ﻓﻰ ﺗﺤﻤﻞ ﺟﺰء ﻣﻦ أﻳﺔ‬ ‫‪Target cost‬‬ ‫ﻣﺼﺮوﻓﺎت ﺗﺰﻳﺪ ﻋﻦ اﻟﺘﻜﻠﻔﺔ اﻟﻤﺴﺘﻬﺪﻓﺔ ﻟﻠﻤﺸﺮوع ‪Cost‬‬ ‫‪Actual cost‬‬ ‫ﻟﻢ ﻳﺴﺘﺨﺪم هﺬا اﻟﻨﻮع ﻓﻰ ﻣﺼﺮ ﺣﺘﻰ اﻵن‬ ‫6002/90/42‬ ‫‪Emad Elbeltagi‬‬ ‫93‬ ‫‪Contract Strategy‬‬ ‫‪Type of Contracts‬‬ ‫‪Target Cost‬‬ ‫ﻣﻤﻴﺰاﺗﻪ‬ ‫ﻧﻔﺲ ﻣﻤﻴﺰات ‪ cost-plus‬ﺑﺎﻻﺿﺎﻓﺔ اﻟﻰ:‬ ‫ﻟﺪى اﻟﻤﻘﺎول ﺣﺎﻓﺰ ﻟﺘﻘﻠﻴﻞ اﻟﺘﻜﻠﻔﺔ‬ ‫اﻟﻤﻘﺎول ﻳﺘﺤﻤﻞ ﺟﺰء ﻣﻦ اﻟﺘﻜﻠﻔﺔ إذا زادت ﻋﻦ اﻟﻤﺴﺘﻬﺪف‬ ‫ﻳﻤﻜﻦ اﻋﺘﺒﺎر زﻣﻦ اﻟﻤﺸﺮوع ﺑﺎﺿﺎﻓﺔ ﺣﺎﻓﺰ ﻟﻼﻧﻬﺎء اﻟﻤﺒﻜﺮوﻏﺮاﻣﺔ ﻟﻼﻧﻬﺎء اﻟﻤﺘﺄﺧﺮ‬ ‫ﻋﻴﻮﺑﻪ‬ ‫ﺻﻌﻮﺑﺔ ﺗﺤﺪﻳﺪ ﺗﻜﻠﻔﺔ اﻟﻤﺸﺮوع إﻻ ﺑﻌﺪ اﻧﺘﻬﺎء اﻟﻤﺸﺮوع‬ ‫ﻋﺪم ﺗﺤﻤﻞ اﻟﻤﻘﺎول أﻳﺔ ﻣﺨﺎﻃﺮ‬ ‫6002/90/42‬ ‫‪Emad Elbeltagi‬‬ ‫04‬ ‫02‬
  • 40. Contract StrategyType of Contracts: Target CostExample: In on of the projects, the owner and thecontractor agreed to use the Target Cost contract under thefollowing conditions: Project target cost = LE 750,000 Contractor fee = LE 90,000 The contractor will pay 50% of any additional cost The contractor will get 50% of any savingWhat are the total project price and the contractor profit if: a. Actual cost = LE 750,000 b. Actual cost = LE 900,000 c. Actual cost = LE 650,000 24/09/2006 Emad Elbeltagi 41 Contract StrategyType of Contracts: Target Cost Target cost Actual cost Contractor income Total project price Case (LE) (LE) (LE) (LE) a 750,000 750,000 90,000 840,000 b 750,000 900,000 15,000 915,000 c 750,000 650,000 140,000 790,000 b. 90,000 + (750,000 – 900,000) * 0.5 = LE 15,000 Project price = 900,000 + 15,000 = LE 915,000 c. 90,000 + (750,000 – 650,000) * 0.5 = LE 140,000 Project price = 650,000 + 140,000 = LE 790,000 24/09/2006 Emad Elbeltagi 42 21
  • 41. Contract Strategy Type of Contracts 1. Unit Price 3. Cost Plus 2. Lump Sum 4. Target CostRisk sharing between owner & contractor 0% Turnkey 100% Lump sum Unit price Cost plus 100% Owner direct force 0% Owner risk Contractor risk 24/09/2006 Emad Elbeltagi 43 22
  • 42. Introduction IntroductionProject Characteristics Defined goal or objective stated by the owner and accomplished by the project team Specific tasks to be performed Defined beginning and end Resources being consumed. The 4 Ms (Manpower, Machinery, Materials, and Money,) As the project progresses, the project team learns more about the project Information Time 20/09/2006 Emad Elbeltagi 2 1
  • 43. IntroductionProject Life Cycle The project life cycle may be viewed as a process through which a project is implemented from beginning to end From the owner’s Perspective 20/09/2006 Emad Elbeltagi 3 IntroductionProject Life Cycle (Project stages) Preconstruction Procurement Construction CloseoutAs the constructionprogresses, thecost increases whilethe influencedecreases 20/09/2006 Emad Elbeltagi 4 2
  • 44. IntroductionProject Life Cycle (1. Pre-construction) 1. Conceptual planning 2. Schematic Design 3. Design Development 4.Contract Documents Conceptual planning Very important for the owner (e.g., big store chains) During this stage the owner hires key consultants including the designer and project manager, selects the project site, and establish a conceptual estimate, schedule, and program The owner must gather as much reliable information as possible about the project The most important decision is to proceed with the project or not 20/09/2006 Emad Elbeltagi 5 IntroductionProject Life Cycle (1. Pre-construction) 1. Conceptual planning 2. Schematic Design 3. Design Development 4.Contract Documents Schematic Design During this phase, the project team investigates alternate design solutions, materials and systems. Apply Value Engineering Completion of this stage represents about 30% of the design completion for the project 20/09/2006 Emad Elbeltagi 6 3
  • 45. IntroductionProject Life Cycle (1. Pre-construction) 1. Conceptual planning 2. Schematic Design 3. Design Development 4.Contract Documents Design Development Designing the main systems and components of the project. Good communication between owner, designer, and construction manager is critical during this stage because selections during this design stage affect project appearance, construction and cost. This stage takes the project from 30% design to 60% design 20/09/2006 Emad Elbeltagi 7 IntroductionProject Life Cycle (1. Pre-construction) 1. Conceptual planning 2. Schematic Design 3. Design Development 4.Contract DocumentsContract Documents Final preparation of the documents necessary for the bid package such as the drawings, specifications, general conditions, and bill of quantities All documents need to be closely reviewed by the construction manager and appropriate owner personnel to decrease conflicts, and changes With the contract documents are almost complete; a detailed and complete cost estimate for the project can be done Designing the main systems and components of the project 20/09/2006 Emad Elbeltagi 8 4
  • 46. IntroductionProject Life Cycle (2. Procurement)Also called Bidding and award phase The project formally transits from design into construction This stage begins with a public advertisement for all interested bidders or an invitation for specific bidders In fast-track projects, this phase overlaps with the design phase If the project is phased, each work package will be advertised and bid out individually It is very important stage to select highly qualified contractors. It is not wise to select the under-bid contractors 20/09/2006 Emad Elbeltagi 9 IntroductionProject Life Cycle (3. Construction) The actual physical construction of the project This stage takes the project from procurement through the final completion It is the time where the bulk of the owner’s funds will be spent It is the outcome of all previous stages (i.e., good preparation means smooth construction) The consultant will be deployed for contract administration and construction supervision Changes during construction may hinder the progress of the project 20/09/2006 Emad Elbeltagi 10 5
  • 47. IntroductionProject Life Cycle (4. Closeout) Transition from design and construction to the actual use of the constructed facility In this stage, the management team must provide documentation, shop drawings, as-built drawings, and operation manuals to the owner organization (as-built drawings are the original contract drawings adjusted to reflect all the changes that occurred) Assessment of the project team’s performance is crucial in this stage for avoiding mistakes in the future. Actual activity costs and durations should be recorded and compared with that was planned. This will serve as the basis for the estimating and scheduling of future projects 20/09/2006 Emad Elbeltagi 11 IntroductionTypes of Construction Projects Most designers and contractors tend to focus their efforts within specialty areas Four Categories are identified: 1. Residential Housing 2. Building Construction 3. Industrial 4. Infrastructure This classification is based on: The way the projects are funded The technologies involved The way the owner, designer, and builder interact 20/09/2006 Emad Elbeltagi 12 6
  • 48. Introduction Types of Construction Projects 1. Residential Housing 2. Building Construction 3. Industrial 4. InfrastructureResidential housing Include: homes, apartments, and low and high-rise buildings Funded by individual owners for their own use or by developers for profit They use fairly low technologies and requires little investment Large number of small designers, builders, and suppliers 1/3 of construction spending is on residential construction The builder or the owner can design 20/09/2006 Emad Elbeltagi 13 Introduction Types of Construction Projects 1. Residential Housing 2. Building Construction 3. Industrial 4. InfrastructureNon-residential Building Construction Office buildings, large apartment buildings, malls, theaters,….. It depends on the economy of a specific region Most of these projects are privately funded Designed by architect and engineer, and built by general contractor These buildings use technical support more than that in residential buildings 20/09/2006 Emad Elbeltagi 14 7
  • 49. Introduction Types of Construction Projects 1. Residential Housing 2. Buildings Construction 3. Industrial 4. InfrastructureIndustrial Examples include: factories, petroleum refineries….. It is defined more by the production activities within the facility In capitalism countries, most of these facilities are privately funded Only few designers and builders are qualified to bid in these projects These projects are the most technical of all 20/09/2006 Emad Elbeltagi 15 Introduction Types of Construction Projects 1. Residential Housing 2. Buildings Construction 3. Industrial 4. InfrastructureInfrastructure and Heavy Construction Examples: roadways, bridges, water and sewer systems Designed by civil engineers and built by heavy construction contractors Publicly funded and affected by the government policy Long in duration Less sensitive to the ups and downs of the economy Heavy use of equipments Build Operate Transferee (BOT) 20/09/2006 Emad Elbeltagi 16 8
  • 50. IntroductionProject Participants Different classifications and many participants are involved in a construction project Main Project Participants 1. The Owner 2. Design Professionals 3. Construction Professionals 4. Project Manager 20/09/2006 Emad Elbeltagi 17 IntroductionProject Participants 1. The Owner 2. Design Professionals 3. Construction Professionals 4. Project Manager The Owner or the Client Is the person or organization that will pay the bills Owner Organizations Public (e.g., government agencies) Private: individual, corporations, partnership 20/09/2006 Emad Elbeltagi 18 9
  • 51. IntroductionProject Participants 1. The Owner 2. Design Professionals 3. Construction Professionals 4. Project Manager Responsibilities What the project will include (scope and objectives) When the project can begin and when must end (schedule) How much can spend (budget) Formation Large companies have divisions to set up these tasks Small business can hire project manager, consultants, etc….. 20/09/2006 Emad Elbeltagi 19 IntroductionProject Participants 1. The Owner 2. Design Professionals 3. Construction Professionals 4. Project Manager Design Professional Examples are: architects, engineers, consultants Depending on the owner size, they can be part of the owner’s organization or hired In some cases, the design professional & construction contractor together form a design-build company 20/09/2006 Emad Elbeltagi 20 10
  • 52. IntroductionProject Participants 1. The Owner 2. Design Professionals 3. Construction Professionals 4. Project Manager Design Professional Responsibilities Assist the owner in developing the project scope, budget, and schedule Prepare construction documents for bidding and construction Architect Is an individual who plan and design buildings. Sometimes they define and provide the whole envelope of the whole project 20/09/2006 Emad Elbeltagi 21 IntroductionProject Participants 1. The Owner 2. Design Professionals 3. Construction Professionals 4. Project Manager Engineer An individual or a firm who perform specialized work associated with the design or construction They usually classified as civil, mechanical, electrical Engineering-Construction Firm An organization that combines both architect/engineering and construction Has the capability of performing of what called design-build 20/09/2006 Emad Elbeltagi 22 11
  • 53. IntroductionProject Participants 1. The Owner 2. Design Professionals 3. Construction Professionals 4. Project Manager Construction Professional Named as the contractor Responsible for physical construction of the project In traditional system where the owner, design, and contractors are separate, the contractor named a prime contractor The prime contractor may divide the work among sub- contractors 20/09/2006 Emad Elbeltagi 23 IntroductionProject Participants 1. The Owner 2. Design Professionals 3. Construction Professionals 4. Project Manager Owner Contract Prime contractor ContractFirst Sub- Civil Mechanical Electricalcontractor ContractSecond Sub- Plumbing Elevators contractor 20/09/2006 Emad Elbeltagi 24 12
  • 54. IntroductionProject Participants 1. The Owner 2. Design Professionals 3. Construction Professionals 4. Project Manager Project Manager Named by the owner Responsible for the overall coordination of the project Clear definitions of the goals of the project. Investigate alternative solutions for the problems. Develop a detailed plan to make the selected program reality. Implement the plan and control the project 20/09/2006 Emad Elbeltagi 25 13
  • 55. Ibrahim Elbeltagi Construction Project Management20/09/2006 Emad Elbeltagi 1 Construction Management Agenda About Emad Elbeltagi Structure and delivery Assessment Ground rules About Construction Project Management What makes Construction Project Management Challenging? Mission Statement 20/09/2006 Emad Elbeltagi 2 1
  • 56. Ibrahim Elbeltagi Construction Management About Emad Elbeltagi Associate Professor of Construction Management Professional EngineerEmad Elbeltagi contact details Website: http://osp.mans.edu.eg/elbeltagi Email: eelbelta@mans.edu.eg Room: B241 Office Hours: Mondays 12:30-2:30 PM & Thursdays 2:00 – 4:00 PM All lecture slides, assignments, Notes will be posted on the web as can as possible20/09/2006 Emad Elbeltagi 3 2
  • 57. Ibrahim Elbeltagi Construction Management Structure and delivery 2 lectures per week (90 minutes each) 1 tutorial per week (90 minutes) Students will be expected to attend both the lectures and the tutorial Students will be expected to have undertaken a wide range of reading20/09/2006 Emad Elbeltagi 5 Construction Management Resources The World Wide Web (www) Library books Magazines and Journals Most key documents will be available electronically.20/09/2006 Emad Elbeltagi 6 3
  • 58. Ibrahim Elbeltagi Construction Management Assessment Coursework Assignment (10 marks) you will be expected to Write 8 - 10 assignments this term 5-quizes (short exams) during the lecture without prior notice (10 marks) Mid-Term exam (20 marks) 3-hour final exam (110 marks)20/09/2006 Emad Elbeltagi 7 Construction Management Ground rules Coming in late Disruption of any kind Don’t ask for an extension without good reason Individual work only is allowed, Group discussions for concepts and problems Don’t copy previous year work When confused ask instructor Academic honesty20/09/2006 Emad Elbeltagi 8 4
  • 59. Ibrahim Elbeltagi Construction Management Ground rules Cell Phones are strictly prohibited Please, Don’t bring your cell to the lecture or keep it always closed 20/09/2006 Emad Elbeltagi 9 Construction ManagementAbout Construction Project ManagementOn successful completion of this course the student should be able to: Able to estimate activities cost and duration Prepare a construction plan and schedule Manage the required resources Identify and differentiate different contracts Prepare a bid proposal (pricing) Control the project 20/09/2006 Emad Elbeltagi 10 5
  • 60. Ibrahim Elbeltagi Construction ManagementAbout Construction Project Management Syllabus What makes Construction Project Management Challenging? 20/09/2006 Emad Elbeltagi 11 Construction Management Construction Vs. Manufacturing Uncertain demand More simulation in manufacturing More data available, fewer changes Process and product is well established Higher ability to standardize and control the product 20/09/2006 Emad Elbeltagi 12 6
  • 61. Ibrahim Elbeltagi Construction Management Construction Vs. Manufacturing One-of a kind, Project specific Many specialties Location, weather High risk Availability of resources On time, on budget Social, Political & Environmental Impact20/09/2006 Emad Elbeltagi 13 Construction Management Construction Vs. Manufacturing Uncertainty in Project cost and duration20/09/2006 Emad Elbeltagi 14 7
  • 62. Ibrahim Elbeltagi Construction Management20/09/2006 Emad Elbeltagi 15 Construction Management Software Packages Primavera Microsoft Project Many other software20/09/2006 Emad Elbeltagi 16 8
  • 63. Ibrahim Elbeltagi Construction Management Mission StatementThe mission is to help organizations achieve their project objectives of scope, quality,budget, and schedule within the context ofthe natural, social, and political environment in which the project is being developed 20/09/2006 Emad Elbeltagi 17 9
  • 64. Project Planning Project PlanningPlanning in General : SWOT analysis S: Strengths W: Weaknesses O: Opportunities T: ThreatsObjectives should be: SMART S: Specific M: Measurable A: Achievable R: Realistic T: Timely 24/09/2006 Emad Elbeltagi 2 1
  • 65. Project Planning Somebody Anybody TASK Everybody Nobody 24/09/2006 Emad Elbeltagi 3 Project PlanningCharacteristics of a good plan Based on clearly definite and practical objectives Simple Flexible Easy to control Provide proper standards Exploit existing resources, etc. 24/09/2006 Emad Elbeltagi 4 2
  • 66. Project PlanningPlanning Inputs and Outputs INPUTS OUTPUTS Contract information Activities Drawings Relationships among activities Specifications Method statement Available resources Responsibility PLANNING Reporting levels Bills of quantities Project network diagram Site reports Activities duration Organizational data Activities cost Construction methods 24/09/2006 Emad Elbeltagi 5 Project PlanningPlanning Major steps Determination of Project Activities (WHAT) Establishment of Logic; Relationships and overlap (WHEN) Presentation (Table, Network, Chart, …) Estimate Activities’ Duration and Cost (HOW) 24/09/2006 Emad Elbeltagi 6 3
  • 67. Project PlanningWork Breakdown Structure (WBS) The WBS is a hierarchical structure which is designed to logically sub-divide all the work-elements of the project into smaller elements. House Civil Plumping Electrical Foundations Walls/ Pipin H/C Wiring Finishing Roof g Water24/09/2006 Emad Elbeltagi 7 Project PlanningWork Breakdown Structure (Why) Prepare project plan Identifying Activities Scheduling Identifying cost & schedule at various levels of details Time & cost control Identifying individual or departmental responsibilities24/09/2006 Emad Elbeltagi 8 4
  • 68. Project PlanningWBS & Organizational Breakdown Structure (OBS) WBS (Work elements) Project Area 1 Area 2 Area 3 …… Beams Columns Slabs …… Electrical Formwork Reinforcement Concreting …… Subcontr superinte actor B ndent Concrete foreman OBS (Responsibility Project General Civil Control account Formwork & reporting) manager contractor superinte ndent foreman Rebar Subcontr foreman actor A Mechanic al superinte ndent 24/09/2006 Emad Elbeltagi 9 Project Planning WBS Coding Each work package or activity in a WBS is given a unique code that is used in project planning and control Identifying Activities 24/09/2006 Emad Elbeltagi 10 5
  • 69. Project PlanningProject Activities Project is divided into segments of work called activities Activity: Time-consuming single work element Guidelines for project breakdown: by: area of responsibility, structural element, category of work, etc. Level of details depends on: planning stage, size of the project, complexity of the work, etc. 24/09/2006 Emad Elbeltagi 11 Project PlanningProject ActivitiesTypes of construction activities: Production: taken directly from drawings and/or specifications Management (Approvals, site establishment, …etc). Procurement (equipment delivery, material procurement) 24/09/2006 Emad Elbeltagi 12 6
  • 70. Project PlanningProject Activities Example (Double Span Bridge): 24/09/2006 Emad Elbeltagi 13 Project PlanningActivities Relationships The order in which project activities are to be performed Which activity(ies) must be completed before an activity can start Which activity(ies) can not start until activity completion Which activity(ies) have no logical relations Logic constraints: Physical, and Resources 24/09/2006 Emad Elbeltagi 14 7
  • 71. Code Description Predecessors 10 Set-up site --- 14 Procure RFT --- 16 Procure P.C. Beams --- 20 Excavate left abutment 10 30 Excavate right abutment 10 40 Excavate central pier 10 50 Foundation left abutment 14, 20 60 Foundation right abutment 14, 30 70 Foundation central pier 14, 40 80 Construct left abutment 50 90 Construct right abutment 60 100 Construct central pier 70 110 Erect left P.C. Beams 16, 80, 100 120 Erect right P.C. Beams 16, 90, 100 140 Fill left embankment 80 150 Fill right embankment 90 155 Construct deck slab 110, 120 160 Left road base 140 170 Right road base 150 180 Road surface 155, 160, 170 190 Bridge railing 155 200 Clear site 180, 190 Project PlanningType of Activities Relationships Four Types: Finish to Start (FS) Finish to Finish (FF) Start to Start (SS) Start to Finish (SF) FS FF SS SF 24/09/2006 Emad Elbeltagi 16 8
  • 72. Project PlanningOverlapshow much a particular activity must be completedbefore a succeeding activity may start Used for activities not using the same type of resources With a value less than the duration of the preceding activity +ve overlap (-ve lag) -ve overlap (+ve lag)24/09/2006 Emad Elbeltagi 17 Project PlanningOverlapsExample Consider the construction of the following sequential activities of a bridge consists of 19 bays Pile manufacturing with duration 2.5 wks/pier Pile driving with duration 1.5 wks/pier Pile cap with duration 2.0 wks/pier Pier shaft with duration 2.5 wks/pier Determine the appropriate overlap between activities24/09/2006 Emad Elbeltagi 18 9
  • 73. Project PlanningRelationships Considering Resource Constraints Predecessors Predecessors Activity description (unconstrained (constrained resources) resources) A1 Excavate unit 1 - - B1 Concreting unit 1 A1 A1 C1 Brickwork unit 1 B1 B1 A2 Excavate unit 2 - A1 B2 Concreting unit 2 A2 B1, A2 C2 Brickwork unit 2 B2 C1, B2 A3 Excavate unit 3 - A2 B3 Concreting unit 3 A3 B2, A3 C3 Brickwork unit 3 B3 C2, B3 24/09/2006 Emad Elbeltagi 19 Project Planning Project networks: AOA Two Types: Activity-On-Arrow; AOA (Arrow Networks). Activity-On-Node; AON (Precedence Networks): AOA Activity represented as arrows with start and finish nodes called Events Activity A i j j>i 24/09/2006 Emad Elbeltagi 20 10
  • 74. Project PlanningProject networks: AOA A B 5 10 15 B depends on A A C 5 10 15 C depends on A and B B 5 15 B B depends on A 5 A 10 C 15 C depends on A 5 15 A C B depends on A and B D depends on A and B B 10 D 5 15 24/09/2006 Emad Elbeltagi 21 Project PlanningProject networks: AOA Dummy activity Activity with zero duration and no resources to adjust the network A C A C 5 15 20 5 20 25 B D Dummy 25 B D 10 C depends on A and B 10 15 30 D depends on B only A A 5 15 5 15 B Dummy B 10 Incorrect representation Correct representation 24/09/2006 Emad Elbeltagi 22 11
  • 75. Project PlanningProject networks: AON AOA Activity represented as nodes Activity number 10 A Activity name 24/09/2006 Emad Elbeltagi 23 Project PlanningProject networks: AON 10 20 B depends on A A B 10 30 40 C depends on A and B A C D D depends on C 20 B 30 C 10 20 B depends on A A B C depends on B D depends on B 40 D 24/09/2006 Emad Elbeltagi 24 12
  • 76. Project PlanningProject networks: Example Activity Predecessors A - B - C A, B D C E C F D G D, E24/09/2006 Emad Elbeltagi 25 Project PlanningProject networks: Example (AOA)24/09/2006 Emad Elbeltagi 26 13
  • 77. Project PlanningProject networks: Example (AON)Calculate the Sequence step Activity Predecessors Sequence step (SS) Start - SS(Start)=1 A Start 2=SS(Start)+1 B Start 2=SS(Start)+1 C A, B 3=Highest of [SS(B), SS(A)] D C 4=SS(C)+1 E C 4=SS(C)+1 F D 5=SS(D)+1 G D, E 5=Highest of [SS(D), SS(E)] Finish F, G 6= Highest of [SS(F), SS(G)]24/09/2006 Emad Elbeltagi 27 Project PlanningProject networks: Example (AON)Sequence step 1 2 3 4 5 624/09/2006 Emad Elbeltagi 28 14
  • 78. Project PlanningActivity Duration & Direct Cost Planning time unit (hours, days, weeks, months) Establish method statement (method of construction) Specify number of resources, and hence output Duration = Quantity of work / No. of Res. x Res. Output 24/09/2006 Emad Elbeltagi 29 Project PlanningActivity Duration & Direct CostProductivity can be estimated: From published data (‫)اﻟﻤﻮﺳﻮﻋﺔ اﻟﻬﻨﺪﺳﻴﺔ‬ Previous records of a company Productivity data Daily production Man-hours/ unit Units/day Mhrs/unit How many units can be done How long it takes form one in one time unit labor to finish one unit Applies to a given crew Applies to any crew formation 24/09/2006 Emad Elbeltagi 30 15
  • 79. Project PlanningActivity Duration & Direct Cost Example What is the duration to install 6000 square feet of walls shuttering if: Crew of 2 carpenters is used, output of 200 square feet/day Productivity is measured as 0.008 man-hour/square feet. Number of carpenters =3, and number of working hours/day = 8 hours a. Duration = 6000 / 200 = 3 days b. Total man-hours needed = 6000 x 0.008 = 48 man-hours (if one man used) Duration = 48 / 8 = 6 days (if one man used) Duration using 3 men = 6 / 3 = 2 days 24/09/2006 Emad Elbeltagi 31 Project PlanningActivity Duration & Direct CostExample (balanced mix of resources)A wall involves 660 m3 concrete, 50 tone of steel, and 790 m2 of formwork. - A 6 man concrete crew can place 16 m3 of concrete/day. - A steel-fixer and assistant can fix 0.5 ton of reinforcement/day. - A carpenter and assistant can fix and remove 16 m2 of shuttering/day - using one steel-fixer: duration = 50 / 0.5 = 100 days - using one carpenter: duration = 790 / 16 = 49.4 days - using one concreting crew: duration = 660 / 16 = 41.25 days. 2 steel-fixer crews, one carpenter crew, and cone concreting crew. duration = 50 / 0.5 x 2 = 50 days 24/09/2006 Emad Elbeltagi 32 16
  • 80. Project PlanningActivity Duration & Direct CostActivity direct cost: Duration, resources, and cost are interrelated elements Direct cost comprises: labor, material, equipment, and/or subcontractors Unit cost = total cost / quantity 24/09/2006 Emad Elbeltagi 33 17
  • 81. Project Finance and Contract Pricing Project Finance & Contract Pricing Contract Cash Flow How much is the total cost? How to arrange for financing? Cash Flow = Cash In –Cash Out = Income – Expense = Revenue - Cost 27/11/2006 Emad Elbeltagi 2 1
  • 82. Project Finance & Contract PricingProject Expenses The project cost types: Fixed cost (equipment,…) Time-related cost (distributed over the duration of an activity, e.g., salaries, …) Quantity (Production)-related costs (costs per unit of materials or unit of resource usage) When these costs are paid, it is named expenses27/11/2006 Emad Elbeltagi 3Project Finance & Contract PricingProject Expenses (Smooth curve) LE x1000 700 600 500 Cost 400 300 Expense 200 100 0 Time 0 2 4 6 8 1027/11/2006 Emad Elbeltagi 4 2
  • 83. Project Finance & Contract PricingProject Expenses The project S-Curve: Cost (LE) Time 27/11/2006 Emad Elbeltagi 5 Project Finance & Contract PricingProject Income Project revenue is the summation of the activities prices Represents the payment made by the owner to the contractor Mostly, the contractor receive his payments after one month from submitting his/her invoice Retainage of 5 or 10 to ensure that that no problems will arise during construction When the contractor receive his/her payments, it is called Income 27/11/2006 Emad Elbeltagi 6 3
  • 84. Project Finance & Contract Pricing Project Income (Stepped curve) LE x1000 800 700 600 500 Revenue 400 Income 300 200 100 0 Time 0 2 4 6 8 10 27/11/2006 Emad Elbeltagi 7 Project Finance & Contract PricingExample Consider the construction operation of a foundation activity Activity duration 8 weeks Labor cost of LE 1600 paid weekly Equipment cost of LE 4000 paid weekly after 2-month credit facility Material cost of LE 800 paid weekly after 3-month credit facility Subcontractor cost of LE 2400 paid weekly after 1-month credit facility When each payment by the contractor is due and how much? 27/11/2006 Emad Elbeltagi 8 4
  • 85. Project Finance & Contract Pricing Example Activity total cost = LE 8800 Week 1 2 3 4 5 6 7 8 Payments 1100 1100 1100 1100 1100 1100 1100 1100 Total 1100 2200 3300 4400 5500 6600 7700 8800 27/11/2006 Emad Elbeltagi 9 Project Finance & Contract Pricing Project Income (Stepped curve)wk 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20L - 200 200 200 200 200 200 200 200E - - - - - - - - 500 500 500 500 500 500 500 500M - - - - - - - - - - - - 100 100 100 100 100 100 100 100S - - - - 300 300 300 300 300 300 300 300T - 500 200 200 500 500 500 500 1000 800 800 800 600 600 600 600 100 100 100 100 27/11/2006 Emad Elbeltagi 10 5
  • 86. Project Finance & Contract PricingContract Cash Flow Cost (LE) Retainage Expense Profile Income Profile Month Cash out-of-flow27/11/2006 Emad Elbeltagi 11Project Finance & Contract PricingContract Cash Flow - Admeasurements contractCumulative cost (LE) Expense Overdraft Income Time 1 2 3 4 5 6 7 827/11/2006 Emad Elbeltagi 12 6
  • 87. Project Finance & Contract PricingContract Cash Flow - Admeasurements contract with advanced payment Cumulative Cost (LE) Expense Income Advanced payment Time 0 1 2 3 4 5 6 7 827/11/2006 Emad Elbeltagi 13Project Finance & Contract PricingContract Cash Flow – Lump sum contract with three payments Cumulative Cost (LE) Expense Income Time 0 1 2 3 4 5 6 7 827/11/2006 Emad Elbeltagi 14 7
  • 88. Project Finance & Contract PricingContract Cash FlowVariables needed to calculate cash flow The project bar chart (project schedule) Activities’ direct and indirect cost Contractor method of paying his/her expenses Contractor’s markup Retention amount and its payback time Time of payment delay by owner Advanced or mobilization payment 27/11/2006 Emad Elbeltagi 15 Project Finance & Contract PricingContract Cash FlowProcedure to calculate cash flow The project bar chart (project schedule) Perform project schedule Draw bar chart based on early or late timings Calculate the cost per time period Calculate the cumulative cost Adjust the cost to produce the expenses Calculate cumulative revenue: revenue = cost x (1 + markup) Adjust the revenue to produce the income Calculate the cash flow (cash flow = income – expense). 27/11/2006 Emad Elbeltagi 16 8
  • 89. Project Finance & Contract Pricing Example 4 14 12 22 D(8) 2 3 A(4) E(4) 6 6 16 18 24 26 32 32 B(6) F(10) I(6)0 0 1 4 5 H(8) 6 9 C(2) G(16) K(10) J(6) 8 7 2 16 22 22 27/11/2006 Emad Elbeltagi 17 Project Finance & Contract Pricing Example Example data: Mark up = 5% Duration Total Cost (LE x Total Revenue (LE x Activity (day) 1000) 1000) A 4 04.00 04.20 B 6 12.00 12.60 C 2 04.00 04.20 D 8 16.00 16.80 E 4 20.00 21.00 F 10 20.00 21.00 G 16 16.00 16.80 H 8 24.00 25.20 I 6 12.00 12.60 J 6 12.00 12.60 K 10 10.00 10.50 27/11/2006 Emad Elbeltagi 18 9
  • 90. Project Finance & Contract PricingExampleExample data: Contractor expenses will be paid immediately Retention = 10% will be paid with the last payment Calculations made every 8 days Owner payment will be delayed one period First invoice after at the end of the period No advanced payment 27/11/2006 Emad Elbeltagi 19 Project Finance & Contract PricingExample Time (days) 1000/day 2000/day 000/day 2000/day 2000/day 5000/day 2000/day 1000/day 3000/day 2000/day 2000/day 1000/day 27/11/2006 Emad Elbeltagi 20 10
  • 91. Project Finance & Contract Pricing Example1. Cost/2 days x 10 10 12 14 10 10 16 16 8 8 8 8 6 6 6 2 - - - - LE10002. Cost each period x 46 52 32 20 - LE10003. Cumulative cost x 46 98 130 150 150 LE10004. Cumulative 46 98 130 150 150 Expense x 10005. Revenue = row 3 x 48.3 54.6 33.6 21 - 1.056. Revenue - retention 43.47 49.14 30.24 18.90 - = row 5 x 0.97. Retention x LE1000 - - - - 15.758. Cumulative revenue 43.47 92.61 122.85 141.75 157.50 x LE10009. Cumulative income - 43.47 92.61 122.85 157.50 x LE100010. Cumulative cash flow x LE1000 = -46 -98/-54.53 -86.53/-37.39 -57.39/-27.15 -27.15/+7.5 row 9 – row 4 27/11/2006 Emad Elbeltagi 21 Project Finance & Contract Pricing Example 160 150 140 Area = LE 10,000 130 x 1 period (8-days) 120 110 100 LE x1000 90 80 70 60 50 40 30 20 10 0 0 1 2 3 4 5 6 Time (period) 27/11/2006 Emad Elbeltagi 22 11
  • 92. Project Finance & Contract PricingExample 0 1 2 3 4 5 6 30 10 -10 LE x 1000 -30 -50 -70 -90 -110 Time (period)27/11/2006 Emad Elbeltagi 23Project Finance & Contract PricingMinimizing Contract Negative Cash Flow Loading of rates Adjustment of work schedule to late start timing Reduction of delays in receiving revenues Asking for advanced or mobilization payment Increasing the mark up and reducing the retention Adjust the timing of delivery of large material orders Delay in paying labor wages, equipment, material27/11/2006 Emad Elbeltagi 24 12
  • 93. Project Finance & Contract PricingCost of Borrowing 160 150 140 Area = LE 10,000 130 x 1 period (8- 120 110 days) 100 LE x1000 90 80 70 60 50 40 30 20 10 0 0 1 2 3 4 5 6 Time (period) 24 unit areas, interest rate 1% per period Cost = 24 x 10000 x 0.01 = LE 240027/11/2006 Emad Elbeltagi 25 Project Finance & Contract PricingProject Cash Flow Time scale is much longer spans the whole life of a project Feasibility studies Execution OperationProfitability indicators Payback period Maximum capital – maximum negative cash Profit27/11/2006 Emad Elbeltagi 26 13
  • 94. Project Finance & Contract Pricing Project Cash Flow Cumulative cash flow Payback Profit period ProjectMaximum durationcapital 27/11/2006 Emad Elbeltagi 27 Project Finance & Contract Pricing Project Cash Flow: Example Project net cash flow Year 1 2 3 4 5 6 7 8Project A (LE x 1000) -10 -40 -30 20 60 20 15 30Project B (LE x 1000) -30 -80 30 50 10 20 40 40 Project cumulative cash flow Year 1 2 3 4 5 6 7 8 Project A (LE x 1000) -10 -50 -80 -60 0 20 35 65 Project B (LE x1000) -30 -110 -80 -30 -20 0 40 80 27/11/2006 Emad Elbeltagi 28 14
  • 95. Project Finance & Contract Pricing Project Cash Flow: Example100 80 65 50 Project A 0 0 2 4 6 8 -50 -80-100 -110 Project B-150 27/11/2006 Emad Elbeltagi 29 Project Finance & Contract Pricing Discounted Cash FlowPresent value (PV) Current values of money Discounted value due to inflation Change in currency power purchasing C = P x (1+r) n(1 + r) (1 + r) (1+r) P = C / (1+r) n Net present value (NPV)= PV income- PV expense 27/11/2006 Emad Elbeltagi 30 15
  • 96. Project Finance & Contract PricingNet Present Value Project net cash flow Year 0 1 2 3 4 5Project A (LE ) -1000 500 400 200 200 100Project B (LE ) -1000 100 200 200 400 700 Which project would you prefer? Interest rate (discount rate) = 10% /year 27/11/2006 Emad Elbeltagi 31 Project Finance & Contract PricingNet Present Value Project A Project B 27/11/2006 Emad Elbeltagi 32 16
  • 97. Project Finance & Contract PricingInternal rate of return (IRR) The least discount rate (investment rate) that acceptable by the contractor or greater than the return on capital It is the discount rate with zero NPV27/11/2006 Emad Elbeltagi 33Project Finance & Contract PricingInternal rate of return: Example Same previous example Project A Project B27/11/2006 Emad Elbeltagi 34 17
  • 98. Project Finance & Contract PricingFinalizing Bid Price Price Markup Cost Risk Financial Indirect Profit Direct cost allowance charge cost 27/11/2006 Emad Elbeltagi 35 Project Finance & Contract PricingIndirect CostProject Overheads (Site) Does not apply to a specific activity Cost of site utilities, supervisors, workshop,… A detailed analysis can be carried out Generally assumed 5 – 15 % of direct cots 27/11/2006 Emad Elbeltagi 36 18
  • 99. Project Finance & Contract PricingIndirect CostGeneral Overheads (Head-office) Does not apply to a specific project Cost of head-office, managers, estimators,… Generally assumed 2 – 5 % of direct cots For a specific project: Project direct cost x general overhead of the company in a year/ Expected sum of direct costs of all projects during the year 27/11/2006 Emad Elbeltagi 37 Project Finance & Contract PricingProfit Margin The contactors’ competition to win a project A contractor’s desirability for work Volume of work that the contractor has at a certain time Size of the project and it complexity Identity of the client and the engineer 27/11/2006 Emad Elbeltagi 38 19
  • 100. Project Finance & Contract PricingRisk Management Uncertainty and risks usually leads to project completion delays and cost overruns Process: Identification of risks Responses to avoid, reduce, or transfer risk Analysis and assessment of residual risks after the risk responses Adding time and /or cost contingency for residual risks in the project estimates 27/11/2006 Emad Elbeltagi 39 Project Finance & Contract PricingRisk ManagementGenerally the risk should be carried out by the party who is best able to define it. If there is any doubt, it should be carried out by the client. This is because, it is better for the client to pay for what does happen rather than for what the contractor thought might happen 27/11/2006 Emad Elbeltagi 40 20
  • 101. Project Finance & Contract PricingRisk ManagementRisk Identification Risk is the possibility of undesirable extra cost or delay due to factors having uncertain future outcome Material may not be available prior to construction thus delay the project Risks defined through: check lists, experts opinions, comparisons with other 27/11/2006 Emad Elbeltagi 41 Project Finance & Contract PricingRisk Management: identificationAdministrative Delay in possesses of site Limited working hours Limited access to the site Troubles with public servicesLogistical Shortage or late supply of different resources Site remoteness problems 27/11/2006 Emad Elbeltagi 42 21
  • 102. Project Finance & Contract Pricing Risk Management: identificationPhysical Periods of high temperature Placing fill in dry season Diverting water canals in time of low flow Construction limited work space Changes in soil condition Availability of skilled labor Equipment breakdown 27/11/2006 Emad Elbeltagi 43 Project Finance & Contract Pricing Risk Management: identificationDesign Design incomplete Design changes Design errorsFinancial Inflation New restrictions applied on importing Exchange rate fluctuation Availability of funds 27/11/2006 Emad Elbeltagi 44 22
  • 103. Project Finance & Contract PricingRisk Management: identificationPolitical Change of local laws and regulations Necessity to use local resources Effect of wars and revolutionsDisasters Floods and storms Earthquakes Accidents Diseases 27/11/2006 Emad Elbeltagi 45 Project Finance & Contract PricingRisk Management: Response Using construction methods with high success Using extra resources Securing alternative suppliers Providing temporary roads Allowing free housing near construction Locating site facilities away of the working space Assuming realistic reduced resources output Using equipments with available spare parts Providing facilities for mechanical maintenance 27/11/2006 Emad Elbeltagi 46 23
  • 104. Project Finance & Contract PricingRisk Management: ResponseTime contingency extra time that added to the contract time to offset the effect of risks A general allowance is added to the overall contract duration, e.g., weather conditions Allowance is added to a particular activity affected by the risk 27/11/2006 Emad Elbeltagi 47 Project Finance & Contract PricingRisk Management: ResponseCost contingency extra cost is added to the estimate and the contract price Based on the experience, a fixed percentage is added This might not be accurate A detailed risk analysis may be done to determine the suitable contingency 27/11/2006 Emad Elbeltagi 48 24
  • 105. Project Finance & Contract PricingPricing Policy direct cost are associated directly to contract activities Indirect costs and markup are related to the whole contract Pricing policy is the method by which the indirect costs and markup will be distributed among the items of the bill of quantities 27/11/2006 Emad Elbeltagi 49 Project Finance & Contract PricingPricing PolicyBalanced bid (Straight forward)The share of specific item =Direct cost of this item x (total indirect cost + markup)Total contract direct cost 27/11/2006 Emad Elbeltagi 50 25
  • 106. Project Finance & Contract PricingPricing Policy: Balanced BidExample Contract price 3,500,000 Direct cost 2,800,000 If the direct cost of an activity is 400,000 Determine the price of that activity 27/11/2006 Emad Elbeltagi 51 Project Finance & Contract PricingPricing Policy: Balanced BidExample Bid price = direct cost + indirect cost + markup Indirect cost + markup = 3,500,000 - 2,800,000 = LE 700,000 Indirect cost + markup For the activity = 400,000/2,800,000 x 700,000 = 100,000 Activity price = 400,000 + 100,000 =500,000 27/11/2006 Emad Elbeltagi 52 26
  • 107. Project Finance & Contract Pricing Pricing Policy: Unbalanced Bid Called also loading of rates Increasing prices for early items in the BOQ Increase the cash revenue at the beginning Decrease negative cash flow May be risky to the owner or the contractor 27/11/2006 Emad Elbeltagi 53 Project Finance & Contract Pricing Pricing Policy: Unbalanced BidExample : Consider the following project Direct cost Balanced bid Unbalanced bidActivity Quantity rate Rate Price Rate Price A 100 4 5 500 6 600 B 100 8 10 1000 14 1400 C 100 16 20 2000 18 1800 D 100 16 20 2000 18 1800 E 100 8 10 1000 9 900 Tender price 6500 6500 27/11/2006 Emad Elbeltagi 54 27
  • 108. Project Finance & Contract PricingPricing Policy: Unbalanced BidExample Draw the cash flow curves for both balanced and unbalanced bids Determine the effect of increasing quantity of activity B by 50% Determine the effect of increasing quantity of activity C by 50% 27/11/2006 Emad Elbeltagi 55 Project Finance & Contract PricingPricing Policy: Unbalanced Bid 7000 6000 5000 4000 Price Unbalanced bid 3000 2000 Balanced bid 1000 0 0 1 2 3 4 5 6 Time 27/11/2006 Emad Elbeltagi 56 28
  • 109. Project Finance & Contract Pricing Pricing Policy: Unbalanced BidExample : Effect of Increasing activity B by 50% Direct Balanced bid Unbalanced bidActivity Quantity cost rate Rate Price Rate Price A 100 4 5 500 6 600 B 150 8 10 1500 14 2100 C 100 16 20 2000 18 1800 D 100 16 20 2000 18 1800 E 100 8 10 1000 9 900 Tender Price 7000 7200 27/11/2006 Emad Elbeltagi 57 Project Finance & Contract Pricing Pricing Policy: Unbalanced BidExample : Effect of Increasing activity C by 50% Direct Balanced bid Unbalanced bidActivity Quantity cost rate Rate Price Rate Price A 100 4 5 500 6 600 B 100 8 10 1000 14 1400 C 150 16 20 3000 18 2700 D 100 16 20 2000 18 1800 E 100 8 10 1000 9 900 Tender Price 7500 7400 27/11/2006 Emad Elbeltagi 58 29
  • 110. Project Finance & Contract PricingPricing Policy: Method related charge In conventional BOQ, all costs are related to quantity of work Result in financial problems Example, site overheads Specifying independent items from quantities as separate items in the BOQ These items may be fixed cost or time related27/11/2006 Emad Elbeltagi 59Project Finance & Contract PricingPricing Policy: Method related charge Sample BOQ in Method Related Charge Fixed Time-related Activity / Resource Unit Price charge charge Establish site Fixed - Sum Site overheads - Time-related Month Bulldozers - Time-related Day Excavators - Time-related Day General overheads - Time-related Month ----------------- - - - ----------------- - - -27/11/2006 Emad Elbeltagi 60 30
  • 111. UNIT TOTALITEM DESCRIPTION QUANTITY UNIT PRICE PRICE Heath Safety Lump Equipment and Sum Monitoring. 1 Project Site Lump Mobilization. Sum Steel Structure 2 Decontamination. a) Decontaminate steel Square 1100 structure Meters b) Load and haul debris 5 Ton to Landfill in Alexandria Walls Decontamination 3 and Coating. Square a) Support walls 1200 Meters Square b) Rolling Scaffold 1200 Meters 31
  • 112. Scheduling ofRepetitive Projects Repetitive Projects SchedulingLinear Projects Repetitive uniform of work (multiple houses, …) Geometrically linear (pipeline, highways,…) Some non typical units may exist Projects assumed to be comprised of n typical units Complex to schedule and monitor 04/11/2006 Emad Elbeltagi 2 1
  • 113. Repetitive Projects SchedulingDuration-driven Vs Resource-driven Schedule Duration-driven schedule Basic units: activities, durations, relationships Resources are functions of activities durations Resources are assumed to be available Resource-driven schedule More focus on resources Meeting a deadline Line of balance (LOB) Summary diagrams04/11/2006 Emad Elbeltagi 3 Repetitive Projects SchedulingLine of Balance (LOB) Meet deadline date Focus on resources04/11/2006 Emad Elbeltagi 4 2
  • 114. Repetitive Projects SchedulingLine of Balance (LOB) One Activity & 3 Crews Site 5 Crew 2 4 Crew 1 3 Crew 3 2 Crew 2 1 Crew 1 0 1 2 3 TimeHow Many Crews Needed to Meet Deadline ? 04/11/2006 Emad Elbeltagi 5 Repetitive Projects SchedulingLine of Balance (LOB) 04/11/2006 Emad Elbeltagi 6 3
  • 115. Repetitive Projects Scheduling Line of Balance (LOB) 04/11/2006 Emad Elbeltagi 7 Repetitive Projects Scheduling Line of Balance (LOB)Sites Diff. Durations Parallel Crews Stagg. Crews987654321 04/11/2006 Emad Elbeltagi Time 8 4
  • 116. Repetitive Projects SchedulingLine of Balance Calculations Crew synchronization and work continuity equation Computation of project delivery rate to meets a deadline Calculating resource needs Drawing the LOB schedule04/11/2006 Emad Elbeltagi 9 Repetitive Projects SchedulingLine of Balance Calculations Crew synchronization and work continuity equation Computation of project delivery rate to meets a deadline Calculating resource needs Drawing the LOB schedule04/11/2006 Emad Elbeltagi 10 5
  • 117. Repetitive Projects SchedulingLine of Balance Calculations (work continuity) R=C/D C=DxR Unit 5 4 Crew 1 3 Crew 3 2 Crew 2 C Crews 1 R Crew 1 0 1 2 3 D Time04/11/2006 Emad Elbeltagi 11 Repetitive Projects SchedulingLine of Balance Calculations (work continuity) R = 1 / (D / C) C=DxR Unit Crew 3 3 2 Crew 2 1 1 R Crew 1 Time R 0 1 2 3 D/C D/C D/C04/11/2006 Emad Elbeltagi 12 6
  • 118. Repetitive Projects SchedulingLine of Balance Calculations (Meeting a deadline) Units n . . . n-1 2 R Time 1 T1 = CPM Duration of Unit 1 TL = Project Deadline Duration R = (n – 1) / (TL - T1)04/11/2006 Emad Elbeltagi 13 Repetitive Projects SchedulingLine of Balance Calculations (Meeting a deadline) TF = 3 D (2) A (5) B (5) C (5) Unit n A D D C n-1 B (TL - T1 ) + TFD Unit 1 TL - T1 A (5) B (5) C (5) D (2) TF = 3 R = (n – 1) / (TL - T1) + TF04/11/2006 Emad Elbeltagi 14 7
  • 119. Repetitive Projects SchedulingLine of Balance Calculations (work continuity) Draw the CPM for one unit and determine activities floats; TFi Calculate CPM duration for one unit; T1 Calculate Ri = (n-1) / (TL - T1) + TFi Calculating Number of crews needed Ci = Ri x Di Calculate actual number of crews Cai = Round up Ci Then calculate actual delivery rates Rai = Cai / Di04/11/2006 Emad Elbeltagi 15 Repetitive Projects SchedulingLine of Balance Calculations (Example) A 5 Kilometer pipeline project The activities involved in one Kilometer is given below Project deadline 30 days Assume 2 days buffer time between activities Activity Duration Activity name Preceding activities no. (days) 1 Locate and clear 1 - 2 Excavate 3 1 3 String pipe 1 1 4 Lay pipe 4 2,3 5 Pressure test 1 4 6 Backfill 2 504/11/2006 Emad Elbeltagi 16 8
  • 120. Repetitive Projects Scheduling Line of Balance Calculations (Example) 0 1 3 6 8 12 14 15 17 19 -2 2 (3) -2 4 (4) -2 5 (1) -2 6 (2) 1 (1) 0 1 3 6 8 12 14 15 17 19 -2 -2 3 4 3 (1) 5 6 T1 = 19 days TL= 30 days N = 5 units Ri = (n-1) / TL - T1 + TFi = 4 / (11 + TFi) 04/11/2006 Emad Elbeltagi 17 Repetitive Projects Scheduling Line of Balance Calculations (Example) Duration Total Ri = Cai =Activity Ci =Di x Ri Rai = Cai / Di Di Float 4 / (11+TFi) Round up Ci 1 1 0 0.364 0.364 1 1 2 3 0 0.364 1.092 2 0.667 3 1 2 0.308 0.308 1 1 4 4 0 0.364 1.456 2 0.5 5 1 0 0.364 0.364 1 1 6 2 0 0.364 0.728 1 0.5 04/11/2006 Emad Elbeltagi 18 9
  • 121. Repetitive Projects SchedulingLine of Balance Calculations (Example) Activity 1: D= 1 day; R = 1 unit/day; Horizontal projection = n-1 / R = 4/1= 4No. ofunits 4 5 7 8 9 12 16 20 22 23 29 31 5 1 3 2 4 5 6 1 Time 0 1 3 4 6 8 12 18 19 21 2304/11/2006 Emad Elbeltagi 19 10
  • 122. Resources Management Resources ManagementWhat a resource? Any thing that is used by an activity to get the work done, such as: Material, Equipment, Labor, Money, ….. Resources can be classified as: Consumable (Money, Material,……) Non Consumable (Labor, Equipment,…)04/11/2006 Emad Elbeltagi 2 1
  • 123. Resources ManagementDuration-Driven Schedule All CPM scheduling techniques are duration driven schedules Basic units: activities, durations, relationships Assumes resources are available whenever needed Also, resources can be classified as: Key or constrained resources (Skilled labor, Equipment,……) Secondary or non-constrained resources (Labor, …) General resources, used by all activities04/11/2006 Emad Elbeltagi 3 Resources Management Resource aggregation or Resource loading The summation, on a period-by-period basis, of the resources required to complete all activities based on the schedule carried out in the previous stage The results are usually shown graphically as a histogram A separate graph will be required for each resource04/11/2006 Emad Elbeltagi 4 2
  • 124. Resources ManagementResource aggregation or Resource loading Consider the following activities Activity Duration (Weeks) Resources (units/week) A 2 B 3 C 2 Shown in the histogram D 5 E 2 Resource limit = 10 units /week04/11/2006 Emad Elbeltagi 5 Resources ManagementResource aggregation or Resource loading Resource limit04/11/2006 Emad Elbeltagi 6 3
  • 125. Resources Management Resource aggregation or Resource loading 04/11/2006 Emad Elbeltagi 7 Resources Management Problems Associated with Resource Resource Fluctuation (Resource leveling) Resource Over allocation (Resource Scheduling) Resource ResourceResource limit Time Time Resource profile with Less hiring and firing high resource fluctuation (More stable work conditions) (High hiring and firing) 04/11/2006 Emad Elbeltagi 8 4
  • 126. Resources Management Methods for Resolving Resource conflicts (Problems) Optimization Models (Utilize optimization techniques): Linear programming models Advantages: Provide optimum solution Limitations: Cannot be applied to large problems Heuristic Models (Utilize rule of thumb based on experience): Heuristic or rules of thumb Advantages: Can be applied to large problems Limitations: Do not provide optimum solution 04/11/2006 Emad Elbeltagi 9 Resources ManagementResource Leveling (Smoothing)Unconstrained resource scheduling (Constrained time) Resource Leveling Resource unconstrained (No limits on resources) Time (Project completion) constrained; project duration not be delayed Reduce the difference between the peaks and the valleys Average resource usage The objective is to smooth the use of the resources to avoid the resource fluctuation 04/11/2006 Emad Elbeltagi 10 5
  • 127. Resources ManagementResource Leveling (Smoothing)04/11/2006 Emad Elbeltagi 11 Resources ManagementResource Leveling (Smoothing) Minimum Moment Algorithm = ∑ Yi * Yi /204/11/2006 Emad Elbeltagi 12 6
  • 128. Resources ManagementResource Leveling (Smoothing) Heuristic Method Procedure Prepare a complete activity schedule Draw a bar chart based on ES timings Draw the FF as dashed line beside the upper side of the bar and the TF beside the lower side Put the resource usage in each bar of the related activity Critical activities to be drawn first (do not move them) Aggregate the resources in each time period04/11/2006 Emad Elbeltagi 13 Resources ManagementResource Leveling (Smoothing) Procedure Calculate the total usage of resources = ∑ unit period usage Calculate the average resource usage = ∑ usage / utilization period Shift non-critical activities within their FF first, then their TF to decrease the peaks and raise the valleys Revise the activities float Aggregate the resources in each time period04/11/2006 Emad Elbeltagi 14 7
  • 129. Resources ManagementResource Leveling (Example) Example Resource Activity Duration (Weeks) Predecessors (units/week) A 0 - 0 B 2 1 0 C 5 1 2 D 3 1 2 E 2 2 1 F 6 2 2 G 6 3 3 H 6 4 1 I 4 4 0 J 2 5, 6 4 K 7 6, 7 2 L 3 2, 8 2 M 2 2, 8, 9 4 N 2 10, 11, 12, 13 004/11/2006 Emad Elbeltagi 15 Resources ManagementResource Leveling (Example) 2 4 E (2) 14 16 0 2 2 8 8 10 B (2) F (6) J (2) 3 5 5 11 16 18 0 0 0 5 5 11 11 18 18 20 A (0) C (5) G (6) K (7) N (2) 0 0 0 5 5 11 11 18 18 20 0 3 3 9 9 12 D (3) H (6) L (3) 6 9 9 15 15 18 3 7 9 11 I (4) M (2) 12 16 16 1804/11/2006 Emad Elbeltagi 16 8
  • 130. Resources ManagementResource Leveling (Example) Activity ES EF FF TF A 0 0 0 0 B 0 2 0 3 C 0 5 0 0 D 0 3 0 6 E 2 4 4 12 F 2 8 0 3 G 5 11 0 0 H 3 9 0 6 I 3 7 2 9 J 8 10 8 8 K 11 18 0 0 L 9 12 6 6 M 9 11 7 7 N 18 20 0 004/11/2006 Emad Elbeltagi 17 Resources ManagementResource Leveling (Example) 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 C, 2 G, 3 K, 2 N, 0 B, 0 D, 2 E, 1 F, 2 H, 1 I, 0 J, 4 L, 2 M, 4 4 4 7 6 5 6 6 6 8 13 9 4 2 2 2 2 2 2 ∑= 9004/11/2006 Emad Elbeltagi 18 9
  • 131. Resources Management Resource Leveling (Example) 14 13 12 11 10 9 8 7 6 5 4 3 2 1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 04/11/2006 Emad Elbeltagi 19 Resources Management Resource Leveling (Example) 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 C, 2 G, 3 K, 2 N, 0 B, 0 D, 2 E, 1 F, 2 H, 1 I, 0 J, 4 L, 2 M, 4 4 4 7 6 5 6 6 6 8 13 9 4 2 2 22 2 2 ∑= 90M (7 days) -4 -4 +4 +4 4 4 7 6 5 6 6 6 8 9 5 4 2 2 2 2 6 6J (6 days) -4 -4 +4 +4 4 4 7 6 5 6 6 6 4 5 5 4 2 2 6 6 6 6L (2 days) -2 -2 +2 +2 4 4 7 6 5 6 6 6 4 3 3 4 4 4 6 6 6 6 04/11/2006 Emad Elbeltagi 20 10
  • 132. Resources Management Resource Leveling (Example) 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 C, 2 G, 3 K, 2 N, 0 B, 0 D, 2 E, 1 F, 2 H, 1 I, 0 J, 4 L, 2 M, 4 4 4 7 6 5 6 6 6 4 3 4 4 6 3 4 6 6 6 ∑= 90E (10 days) -1 -1 +1 +1 4 4 6 5 5 6 6 6 4 3 3 4 5 5 6 6 6 6H (2 days) -1 -1 +1 +1 4 4 6 4 4 6 6 6 4 4 4 4 5 5 6 6 6 6F (1 days) -2 +2 4 4 4 4 4 6 6 6 6 4 4 4 5 5 6 6 6 6 04/11/2006 Emad Elbeltagi 21 Resources Management Resource Leveling (Example) 7 6 5 4 3 2 1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 04/11/2006 Emad Elbeltagi 22 11
  • 133. Resources ManagementResource SchedulingConstrained resource scheduling (Unconstrained time)Resource Scheduling Constrained Resources Unconstrained project completion; project time may be delayed Reduce the resource usage to be less than the resource availability The objective is to meet the resources limits 04/11/2006 Emad Elbeltagi 23 Resources ManagementResource Scheduling R 2 A 2 B 1 C Resource limit = 2 1 D 2 E 2 2 4 4 1 1 2 2 R 2 A 2 B 1 C 1 D 2 E 2 2 2 2 1 1 2 2 2 2 04/11/2006 Emad Elbeltagi 24 12
  • 134. Resources ManagementResource SchedulingIs there is a way to prioritize activitiesThat compete for the limited resources so that the net project delay is minimized? 04/11/2006 Emad Elbeltagi 25 Resources ManagementResource SchedulingResource Scheduling Rules of Thumb Many rules have been experimented with Least TF were found to be most effective Least LS has the same effect as the least TF and doesn’t require network recalculations In case of a tie use least TF 04/11/2006 Emad Elbeltagi 26 13
  • 135. Resources ManagementResource Scheduling Procedure Prepare a complete activity schedule Aggregate the daily resource demand If demand greater than available then determine activities compete for resources Prioritize these activities based on their LS Allocate resources to some activities and delay the others Put your solution in table format04/11/2006 Emad Elbeltagi 27 Resources ManagementResource Scheduling (Example) Resource (units/week) Activity Duration (Weeks) Predecessors R1≤8 R2 ≤1 A 6 - 3 0 B 4 - 6 1 C 2 - 4 0 D 8 A 0 1 E 4 D 4 1 F 10 B 0 1 G 16 B 4 0 H 8 F 2 0 I 6 E, H 4 1 J 6 C 5 1 K 10 G, J 2 004/11/2006 Emad Elbeltagi 28 14
  • 136. Resources ManagementResource Scheduling (Example) 0 4 4 12 12 16 A (4) D (8) E (4) 10 14 14 22 22 26 3, 0 0, 1 4, 1 6 16 16 24 24 30 F (10) H (8) I (6) 8 18 18 26 26 32 0, 1 2, 0 4, 1 0 0 0 6 6 22 22 32 32 32 Start (0) B (6) G (16) K (10) End (0) 0 0 0 6 6 22 22 32 32 32 6, 1 4, 0 2, 0 0 2 2 8 C (2) J (6) 14 16 16 22 4, 0 5, 104/11/2006 Emad Elbeltagi 29 Current Eligible Resources Earliest Finish Duration Decision Time Activities R1≤8 R2 ≤1 LS Time 0 B 6 1 6 0 Start 6 A 3 0 4 10 Delay - C 4 0 2 14 Delay - 6 G 4 0 16 6 Start 22 F 0 1 10 8 Start 16 A 3 0 4 10 Start 10 C 4 0 2 14 Delay - 10 G 4 0 16 - Continue 22 F 0 1 10 - Continue 16 C 4 0 2 14 Start 12 D 0 1 8 14 Delay - 12 G 4 0 16 - Continue 22 F 0 1 10 - Continue 16 D 0 1 8 14 Delay - J 5 0 6 16 Delay - 16 G 4 0 16 - Continue 22 D 0 1 8 14 Start 24 J 5 1 6 16 Delay - H 2 0 8 18 Start 24 15
  • 137. Current Eligible Resources Earliest Finish Duration Decision Time Activities R1≤8 R2 ≤1 LS Time 22 D 0 1 8 - Continue 24 H 2 0 8 - Continue 24 J 5 1 6 16 Delay - 24 J 5 1 6 14 Start 30 E 4 1 4 22 Delay - 30 E 4 1 4 22 Start 34 K 2 0 10 22 Start 40 34 K 2 0 10 - Continue 40 I 2 0 6 26 Start 40 16
  • 138. Project Scheduling Project Scheduling Scheduling = Planning + timeWhy construction schedule? Knowing activities timing and project completion time Having resources available on site in the correct time Making corrective actions if schedule shows that the plan will result in late completion Assessing the value of penalties on project late completion Determining project cash flow Evaluating effect of change orders on project completion Determining value pf project delay and the responsible parties 24/09/2006 Emad Elbeltagi 2 1
  • 139. Project SchedulingThe Critical Path Method (CPM) Most Widely used method for project scheduling Calculates the minimum completion time for a project Calculates activities timings Computer programs use CPM , handle large projects Forward path Backward path Float calculations Critical activates 24/09/2006 Emad Elbeltagi 3 Project SchedulingThe Critical Path Method (CPM)What creates activities’ durations? Consider the example of traveling to Alex. Travel to Cairo 2 hours at 10 AM Meeting for 2 hours Travel to Alex 3 hrs Meeting for 2 hrs staring at 6 PM 24/09/2006 Emad Elbeltagi 4 2
  • 140. Project Scheduling1. CPM for Activity on Arrows ETi LTi ETj LTj x i j dxForward path Backward path ET for the first node = 0 LT for the last node = its ET ETj = ETi + dx LTi = LTj - dx ESx = ETi LFx = LTj EFx = ESx + dx LSx = LFx - dx 24/09/2006 Emad Elbeltagi 5 Project Scheduling1. CPM for Activity on Arrows ES = ETi ETj LF = LTj ES EF=ES+d Total Float d ES Total Float LS=LF-d LF d d Free Float (FF) Total time available for the activity = LF - ES TF = LF – EF = LS – ES FF = ETj – ETi – d = smallest ES (of succeeding act.) – EF (of current act.) 24/09/2006 Emad Elbeltagi 6 3
  • 141. Project Scheduling1. CPM for Activity on Arrows Critical activities & critical path Activities with TF = 0 are critical These activities need special attention during construction A set of critical activities for a critical path the critical path is a continuous path of critical activities The critical path is the longest one in the network More than critical path can be formed 24/09/2006 Emad Elbeltagi 7 Project Scheduling1. CPM for Activity on Arrows Example 5 B d1 3 A C E1 3 9 11 d=3 4 5 D d2 6 7 24/09/2006 Emad Elbeltagi 8 4
  • 142. Project Scheduling 2. CPM for Activity on Nodes (PDM) ESi EFi ESj EFj overlapij i (di) j (dj) LSi LFi LSj LFjForward path Backward path ES for the first Activity = 0 LF for the last activity = its EF EFi = ESi + di LSj = LFj - dj ESj = EFi - overlapij LFi = LSj + overlapij 24/09/2006 Emad Elbeltagi 9 Project Scheduling 2. PDM Example B (3) A (3) C (4) E (5) D (6) 24/09/2006 Emad Elbeltagi 10 5
  • 143. Project Scheduling3. Time-Scaled Diagram Activities are drawn to scale according to its duration Relationships are represented using Horizontal or vertical lines It can be drawn using calendar dates Activities times can read directly form the chart It can be used to calculate resource usage or cost 1 2 3 4 5 6 7 B 3 1 A C 3 4 24/09/2006 Emad Elbeltagi 11 Project Scheduling3. Time-Scaled Diagram A (3 days) has no predecessor B (3 days), C (4 days), & D (6 days) depend on A E ((5 days) depends on B, C, and D 1 2 3 4 5 6 7 8 9 10 11 12 13 14 B 3 A C E 3 4 5 D 6 24/09/2006 Emad Elbeltagi 12 6
  • 144. Project SchedulingBar Chart (Gantt Chart) Time versus activity chart Simple representation and easy to read Early bar chart Activity d=3 A ES = 0 d=3 TF=3 ES=3 B d=4 TF=2 C ES=3 d=6 D ES=3 d=5 E ES=9 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Time 24/09/2006 Emad Elbeltagi 13 Project SchedulingBar Chart (Gantt Chart) It can use calendar dates It can be drawn using late start times Late start bar chart Activity d=3 A LF=3 d=3 LF=9 B d=4 C LF=9 d=6 D LF=9 d=5 E LF=14 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Time 24/09/2006 Emad Elbeltagi 14 7
  • 145. Project SchedulingBar Chart (Gantt Chart) It can be used for resource and cost analysis 24/09/2006 Emad Elbeltagi 15 Project SchedulingCriticism to Network Techniques Duration driven schedule Assumes resources are available Can not deal with project deadline Ignore project cost (minimum cost) Use deterministic durations 24/09/2006 Emad Elbeltagi 16 8
  • 146. Time-Cost Trade-Off Time-Cost Trade-Off Duration and cost of activity depends on the amount an type of resources used Assuming more workers will normally reduce time and will change its cost This relationship between activity time and cost called time-cost Trade off04/11/2006 Emad Elbeltagi 2 1
  • 147. Time-Cost Trade-OffWhy do we need to reduce project time? Finish the project in a predefined deadline date Recover early delays to avoid liquidated damages Free key resources early for other projects Avoid adverse weather conditions that might affect productivity Receive an early completion-bonus Improve project cash flowscheduling techniques are duration04/11/2006 Emad Elbeltagi 3 Time-Cost Trade-OffWhat is the way to reduce activity duration? Working extended hours (Over time) Offering incentive payments to increase the productivity Using additional resources Using materials with faster installation methods Using alternate construction methods or sequence04/11/2006 Emad Elbeltagi 4 2
  • 148. Time-Cost Trade-OffActivity Time-Cost Relationship Decreasing activity duration will increase its cost Cost Crash duration & Crash cost Normal duration & Normal cost Time04/11/2006 Emad Elbeltagi 5 Time-Cost Trade-OffActivity Time-Cost Relationship Cost Crash duration & Crash cost Normal duration & Normal cost Time04/11/2006 Emad Elbeltagi 6 3
  • 149. Time-Cost Trade-OffActivity Time-Cost Relationship For simplicity, linear relationship is adopted Cost Crash duration & Crash cost Normal duration & Normal cost Time04/11/2006 Emad Elbeltagi 7 Time-Cost Trade-OffActivity Time-Cost Relationship (Example) Consider the following options Estimated daily Crew size production Crew formation (men) (square meter) 166 5 1 scaffold set, 2 labors, 2 carpenter, 1 foreman 204 6 2 scaffold set, 3 labors, 2 carpenter, 1 foreman 230 7 2 scaffold set, 3 labors, 3 carpenter, 1 foremanConsider the following rates: Labor LE 96/day;carpenter LE 128/day;foreman LE144/day andscaffolding LE60/day04/11/2006 Emad Elbeltagi 8 4
  • 150. Time-Cost Trade-OffActivity Time-Cost Relationship (Example) 8400 Sq meters of scaffolds Crew Duration (days) Cost (LE) size 5 50.6 (use 51) 51 x (1x60 + 2x96 + 2x128 + 1x144) = 33252 6 41.2 (use 42) 42 x (2x60 + 3x96 + 2x128 + 1x144) = 33936 7 36.5 (use 37) 37 x (2x60 + 3x96 + 3x128 + 1x144) = 3463204/11/2006 Emad Elbeltagi 9 Time-Cost Trade-OffActivity Time-Cost Relationship (Example) 34800 3 34600 34400 34200 Cost (LE) 34000 2 33800 33600 33400 1 33200 33000 30 35 40 45 50 55 Duration (days)04/11/2006 Emad Elbeltagi 10 5
  • 151. Time-Cost Trade-OffProject Time-Cost Relationship Project direct cost = summation of direct cost of individual activities Indirect cost comprises site and head office overheads Project indirect cost = daily indirect cost x project duration Direct cost increases as project duration decreases Indirect cost decreases s project duration decreases04/11/2006 Emad Elbeltagi 11 Time-Cost Trade-OffProject Time-Cost RelationshipProject cost Project duration04/11/2006 Emad Elbeltagi 12 6
  • 152. Time-Cost Trade-Off Shortening Project Duration (Optimum Duration) It might be necessary to shorten project duration to meet specific deadline Or to determine the optimum project duration that is correspond to the least project total cost Many approaches can be used Heuristic Cost-Slope method wii be applied 04/11/2006 Emad Elbeltagi 13 Time-Cost Trade-OffProcedure for Shortening Project Duration Draw the project network. Perform CPM calculations and identify the critical path, use normal durations and costs for all activities. Compute the cost slope for each activity from the following equation: cost slope = crash cost – normal cost / normal duration – crash duration 04/11/2006 Emad Elbeltagi 14 7
  • 153. Time-Cost Trade-OffProcedure for Shortening Project Duration Start by shortening the activity duration on the critical path which has the least cost slope and not been shortened to its crash duration. Reduce the duration of the critical activities with least cost slope until its crash duration is reached or until the critical path changes. When multiple critical paths are involved, the activity(ies) to be shorten is determined by comparing the cost slope of the activity which lies on all critical paths (if any) 04/11/2006 Emad Elbeltagi 15 Time-Cost Trade-OffProcedure for Shortening Project Duration Having shortened a critical path, you should adjust activities timings, and floats. The cost increase due to activity shortening is calculated as the cost slope multiplied by the time of time units shortened. Continue until no further shortening is possible, and then the crash point is reached. The results may be represented graphically by plotting project completion time against cumulative cost increase. 04/11/2006 Emad Elbeltagi 16 8
  • 154. Time-Cost Trade-Off Example Application Consider the following project Indirect cost LE 125/day Crash to 49 days Normal CrashActivity Preceded by Duration (day) Cost (LE) Duration (day) Cost (LE) A - 12 7000 10 7200 B A 8 5000 6 5300 C A 15 4000 12 4600 D B 23 5000 23 5000 E B 5 1000 4 1050 F C 5 3000 4 3300 G E, C 20 6000 15 6300 H F 13 2500 11 2580 I D, G, H 12 3000 10 3150 04/11/2006 Emad Elbeltagi 17 Time-Cost Trade-OffExample Application Total direct cost LE 36500 20 43 D (23) 24 47 0 12 12 20 20 25 27 47 47 59 A (12) B (8) E (5) G (20) I (12) 0 12 14 22 22 27 27 47 47 59 2@100 2@150 1@50 5@60 2@75 12 27 27 32 32 45 C (15) F (5) H (13) 12 27 29 34 34 47 3@200 1@300 2@40 04/11/2006 Emad Elbeltagi 18 9
  • 155. Time-Cost Trade-OffExample Application Activity G has the least cost slope 60 LE/day Crash G by 2 days, cost increase by 2 x 60 20 43 D (23) 22 45 0 12 12 20 20 25 27 45 45 57 A (12) B (8) E (5) G (18) I (12) 0 12 14 22 22 27 27 45 45 57 2@100 2@150 1@50 3@60 2@75 12 27 27 32 32 45 C (15) F (5) H (13) 12 27 27 32 32 45 3@200 1@300 2@40 04/11/2006 Emad Elbeltagi 19 Time-Cost Trade-OffExample Application Activity I has the least cost slope 75 LE/day Crash I by 2 days, cost increase by 2 x 75 20 43 D (23) 22 45 0 12 12 20 20 25 27 45 45 55 A (12) B (8) E (5) G (18) I (10) 0 12 14 22 22 27 27 45 45 55 2@100 2@150 1@50 3@60 12 27 27 32 32 45 C (15) F (5) H (13) 12 27 27 32 32 45 3@200 1@300 2@40 04/11/2006 Emad Elbeltagi 20 10
  • 156. Time-Cost Trade-OffExample Application Activity A has the least cost slope 100 LE/day Crash A by 2 days, cost increase by 2 x 100 18 41 D (23) 20 43 0 10 10 18 18 23 25 43 43 53 A (10) B (8) E (5) G (18) I (10) 0 10 12 20 20 25 25 43 43 53 2@150 1@50 3@60 10 25 25 30 30 43 C (15) F (5) H (13) 10 25 25 30 30 43 3@200 1@300 2@40 04/11/2006 Emad Elbeltagi 21 Time-Cost Trade-OffExample Application Activity H & G has the least cost slope 100 LE/day Crash H & G by 2 days, cost increase by 2 x 100 18 41 D (23) 18 41 0 10 10 18 18 23 25 41 41 51 A (10) B (8) E (5) G (16) I (10) 0 10 10 18 20 25 25 41 41 51 2@150 1@50 1@60 10 25 25 30 30 41 C (15) F (5) H (11) 10 25 25 30 30 41 3@200 1@300 04/11/2006 Emad Elbeltagi 22 11
  • 157. Time-Cost Trade-OffExample Application Activity C & B has the least cost slope 350 LE/day Crash H & G by 2 days, cost increase by 2 x 350 16 39 D (23) 16 390 10 10 16 16 21 23 39 39 49 A (10) B (6) E (5) G (16) I (10)0 10 10 16 18 23 23 39 39 49 1@50 1@60 10 23 23 28 28 39 C (13) F (5) H (11) 10 3 23 28 28 39 1@200 1@300 04/11/2006 Emad Elbeltagi 23 Time-Cost Trade-Off Example Application Duratio Direct cost X 1000 LE Indirect cost x 1000 LE Total cost x 1000 LE n 59 36.50 7.375 43.875 57 36.62 7.125 43.745 55 36.77 6.875 43.645 53 36.97 6.625 43.595 51 37.17 6.375 43.545 49 37.87 6.125 43.995 04/11/2006 Emad Elbeltagi 24 12
  • 158. Time-Cost Trade-OffExample Application 50 40 LE x 1000 30 20 10 0 48 50 52 54 56 58 60 Time (days)04/11/2006 Emad Elbeltagi 25 13
  • 159. Chapter 1: Introduction Chapter 1: Introduction1.1 The Construction ProjectA project is defined, whether it is in construction or not, by the following characteristics: - A defined goal or objective. - Specific tasks to be performed. - A defined beginning and end. - Resources being consumed.The goal of construction project is to build something. What differentiate the constructionindustry from other industries is that its projects are large, built on-site, and generally unique.Time, money, labor, equipment, and, materials are all examples of the kinds of resources that areconsumed by the project.Projects begin with a stated goal established by the owner and accomplished by the project team.As the team begins to design, estimate, and plan out the project, the members learn more aboutthe project than was known when the goal was first established. This often leads to a redefinitionof the stated project goals.1.2 The Need for Project ManagementThe construction industry is the largest industry in the world. It is more of a service than amanufacturing industry. Growth in this industry in fact is an indicator of the economic conditionsof a country. This is because the construction industry consumes a wide employment circle oflabor.While the manufacturing industry exhibit high-quality products, timelines of service delivery,reasonable cost of service, and low failure rates, the construction industry, on the other hand, isgenerally the opposite. Most projects exhibit cost overruns, time extensions, and conflicts amongparties. Figure 1.1 is an example of a complicated project. Table 1.1: Magnificent projects with huge cost overruns Project Cost overruns (%) Suez Canal 1,900 Sydney Opera House 1,400 Concorde Supersonic Aeroplane 1,100 Panama Canal 200 Brooklyn Bridge 100(Source: Mette K. Skamris, Economic Appraisal of Large-Scale Transport InfrastructureInvestments, Ph.D dissertation, Aalborg University, 2000).Construction Management 1 Dr.Dr.E Elbeltagi
  • 160. Chapter 1: Introduction Figure 1.1: Example of a complicated projectIn general, the construction industry is more challenging than other industries due to: its uniquenature; every project is one-of a kind; many conflicting parties are involved; projects areconstrained by time, money and quality; and high risk.1.3 The Project Life CycleThe acquisition of a constructed facility usually represents a major capital investment, whetherits owner happens to be an individual, a private corporation or a public agency. Since thecommitment of resources for such an investment is motivated by market demands or perceivedneeds, the facility is expected to satisfy certain objectives within the constraints specified by theowner and relevant regulations.From the perspective of an owner, the project life cycle for a constructed facility may beillustrated schematically in Figure 1.2. A project is expected to meet market demands or needs ina timely fashion. Various possibilities may be considered in the conceptual planning stage, andthe technological and economic feasibility of each alternative will be assessed and compared inorder to select the best possible project. The financing schemes for the proposed alternativesmust also be examined, and the project will be programmed with respect to the timing for itscompletion and for available cash flows. After the scope of the project is clearly defined, detailedConstruction Management 2 Dr.Dr.E Elbeltagi
  • 161. Chapter 1: Introductionengineering design will provide the blueprint for construction, and the definitive cost estimatewill serve as the baseline for cost control. In the procurement and construction stage, the deliveryof materials and the erection of the project on site must be carefully planned and controlled.After the construction is completed, there is usually a brief period of start-up of the constructedfacility when it is first occupied. Finally, the management of the facility is turned over to theowner for full occupancy until the facility lives out its useful life and is designated for demolitionor conversion. Figure 1.2: Project life cycleOf course, the stages of development in Figure 1.2 may not be strictly sequential. Some of thestages require iteration, and others may be carried out in parallel or with overlapping timeframes, depending on the nature, size and urgency of the project. Furthermore, an owner mayhave in-house capacities to handle the work in every stage of the entire process. By examiningthe project life cycle from an owners perspective we can focus on the proper roles of variousactivities and participants in all stages regardless of the contractual arrangements for differenttypes of work.Construction Management 3 Dr.Dr.E Elbeltagi
  • 162. Chapter 1: IntroductionThe project life cycle may be viewed as a process through which a project is implemented frombeginning to end. This process is often very complex; however, it can be decomposed intoseveral stages as indicated by the general outline in Figure 1.2. The solutions at various stagesare then integrated to obtain the final outcome. Although each stage requires different expertise,it usually includes both technical and managerial activities in the knowledge domain of thespecialist. The owner may choose to decompose the entire process into more or less stages basedon the size and nature of the project. Very often, the owner retains direct control of work in theplanning stages, but increasingly outside planners and financial experts are used as consultantsbecause of the complexities of projects. Since operation and maintenance of a facility will go onlong after the completion and acceptance of a project, it is usually treated as a separate problemexcept in the consideration of the life cycle cost of a facility. All stages from conceptual planningand feasibility studies to the acceptance of a facility for occupancy may be broadly lumpedtogether and referred to as the Design/Construct process, while the procurement and constructionalone are traditionally regarded as the province of the construction industry.There is no single best approach in organizing project management throughout a projects lifecycle. All organizational approaches have advantages and disadvantages, depending on theknowledge of the owner in construction management as well as the type, size and location of theproject. It is important for the owner to be aware of the approach which is most appropriate andbeneficial for a particular project. In making choices, owners should be concerned with the lifecycle costs of constructed facilities rather than simply the initial construction costs. Saving smallamounts of money during construction may not be worthwhile if the result is much largeroperating costs or not meeting the functional requirements for the new facility satisfactorily.Thus, owners must be very concerned with the quality of the finished product as well as the costof construction itself. Since facility operation and maintenance is a part of the project life cycle,the owners expectation to satisfy investment objectives during the project life cycle will requireconsideration of the cost of operation and maintenance. Therefore, the facilitys operatingmanagement should also be considered as early as possible, just as the construction processshould be kept in mind at the early stages of planning and programming.In summary the project phases can be summarized as follows:1.3.1 Preconstruction phase The preconstruction phase of a project can be broken into conceptual planning, schematic design, design development, and contract documents. Conceptual design: - Very important for the owner. - During this stage the owner hires key consultants including the designer and project manager, selects the project site, and establish a conceptual estimate, schedule, and program. - The owner must gather as much reliable information as possible about the project. - The most important decision is to proceed with the project or not.Construction Management 4 Dr.Dr.E Elbeltagi
  • 163. Chapter 1: Introduction Schematic design: - During this phase, the project team investigates alternate design solutions, materials and systems. - Completion of this stage represents about 30% of the design completion for the project. Design development: - Designing the main systems and components of the project. - Good communication between owner, designer, and construction manager is critical during this stage because selections during this design stage affect project appearance, construction and cost. - This stage takes the project from 30% design to 60% design. Contract documents: - Final preparation of the documents necessary for the bid package such as the drawings, specifications, general conditions, and bill of quantities. - All documents need to be closely reviewed by the construction manager and appropriate owner personnel to decrease conflicts, and changes. - With the contract documents are almost complete; a detailed and complete cost estimate for the project can be done.1.3.2 Procurement phase (Bidding and award phase) - The project formally transits from design into construction. - This stage begins with a public advertisement for all interested bidders or an invitation for specific bidders. - In fast-track projects, this phase overlaps with the design phase. - If the project is phased, each work package will be advertised and bid out individually. - It is very important stage to select highly qualified contractors. It is not wise to select the under-bid contractors.1.3.3 Construction phase - The actual physical construction of the project stage. - This stage takes the project from procurement through the final completion. - It is the time where the bulk of the owner’s funds will be spent. - It is the outcome of all previous stages (i.e., good preparation means smooth construction). - The consultant will be deployed for contract administration and construction supervision. - Changes during construction may hinder the progress of the project.Construction Management 5 Dr.Dr.E Elbeltagi
  • 164. Chapter 1: Introduction1.3.4 Closeout phase - Transition from design and construction to the actual use of the constructed facility. - In this stage, the management team must provide documentation, shop drawings, as- built drawings, and operation manuals to the owner organization. - The as-built drawings are the original contract drawings adjusted to reflect all the changes that occurred. - Assessment of the project team’s performance is crucial in this stage for avoiding mistakes in the future. - Actual activity costs and durations should be recorded and compared with that was planned. This updated costs and durations will serve as the basis for the estimating and scheduling of future projects.Figure 1.3 shows the increasing cumulative cost as the projects progresses while the influence inthe project cost and scope decreases. Figure 1.3: Level of influence vs. project duration1.4 Major Types of Construction ProjectsIn planning for various types of construction, the methods of procuring professional services,awarding construction contracts, and financing the constructed facility can be quite different. Thebroad spectrum of constructed facilities may be classified into four major categories, each withits own characteristics.Construction Management 6 Dr.Dr.E Elbeltagi
  • 165. Chapter 1: Introduction1.4.1 Residential Housing ConstructionResidential housing construction includes houses and high-rise apartments. During thedevelopment and construction of such projects, the developers usually serve as surrogate ownersand take charge, making necessary contractual agreements for design and construction, andarranging the financing and sale of the completed structures. Residential housing designs areusually performed by architects and engineers, and the construction executed by builders whohire subcontractors for the structural, mechanical, electrical and other specialty work.The residential housing market is heavily affected by general economic conditions. Often, aslight increase in total demand will cause a substantial investment in construction, since manyhousing projects can be started at different locations by different individuals and developers atthe same time. Because of the relative ease of entry, many new builders are attracted to theresidential housing construction. Hence, this market is highly competitive, with potentially highrisks as well as high rewards.1.4.2 Institutional and Commercial Building ConstructionInstitutional and commercial building encompasses a great variety of project types and sizes,such as schools and universities, medical centers and hospitals, sports facilities, shoppingcenters, warehouses and light manufacturing plants, and skyscrapers for offices and hotels. Theowners of such buildings may or may not be familiar with construction industry practices, butthey usually are able to select competent professional consultants and arrange the financing ofthe constructed facilities themselves. Specialty architects and engineers are often engaged fordesigning a specific type of building, while the builders or general contractors undertaking suchprojects may also be specialized in only that type of building.Because of the higher costs and greater sophistication of institutional and commercial buildingsin comparison with residential housing, this market segment is shared by fewer competitors.Since the construction of some of these buildings is a long process which once started will takesome time to proceed until completion, the demand is less sensitive to general economicconditions than that for housing construction.1.4.3 Specialized Industrial ConstructionSpecialized industrial construction usually involves very large scale projects with a high degreeof technological complexity, such as oil refineries, steel mills, chemical processing plants andcoal-fired or nuclear power plants. The owners usually are deeply involved in the developmentof a project, and prefer to work with designers-builders such that the total time for thecompletion of the project can be shortened. They also want to pick a team of designers andbuilders with whom the owner has developed good working relations over the years.Although the initiation of such projects is also affected by the state of the economy, long rangedemand forecasting is the most important factor since such projects are capital intensive andrequire considerable amount of planning and construction time. Governmental regulation such asenvironmental protection can also influence decisions on these projects.Construction Management 7 Dr.Dr.E Elbeltagi
  • 166. Chapter 1: Introduction1.4.4 Infrastructure and Heavy ConstructionInfrastructure and heavy construction includes projects such as highways, tunnels, bridges,pipelines, drainage systems and sewage treatment plants. Most of these projects are publiclyowned and therefore financed either through bonds or taxes. This category of construction ischaracterized by a high degree of mechanization, which has gradually replaced some laborintensive operations.The engineers and builders engaged in infrastructure construction are usually highly specializedsince each segment of the market requires different types of skills. However, demands fordifferent segments of infrastructure and heavy construction may shift with saturation in somesegments. For example, as the available highway construction projects are declining, some heavyconstruction contractors quickly move their work force and equipment into the field of miningwhere jobs are available.1.5 Construction Project Participants1.5.1 The Owner (The Client)The owner is the individual or organization for whom a project is to be built under a contract.The owner owns and finances the project. Depending on the owners’ capabilities, they mayhandle all or portions of planning, project management, design, engineering, procurement, andconstruction. The owner engages architects, engineering firms, and contractors as necessary toaccomplish the desired work.Public owners are public bodies of some kind ranging from agencies from the country level tothe municipal level. Most public projects or facilities are built for public use and not sold toothers. Private owners may be individuals, partnerships, corporations. Most private owners havefacilities or projects built for their own use or to be sold, operated, leased, or rented to others.In order to achieve success on a project, owners need to define accurately the projects objectives.They need to establish a reasonable and balanced scope, budget, and schedule. They need toselect qualified designers, consultants, and contractors.1.5.2 The Design ProfessionalsExamples of design professionals are architects, engineers, and design consultants. The majorrole of the design professional is to interpret or assist the owner in developing the project’sscope, budget, and schedule and to prepare construction documents. Depending on the size andsophistication of the owner, the design professional can be part of the owner’s group or anindependent, hired for the project. In some cases design professional and construction contractortogether form a design-build company. Architect: An architect is an individual who plans and design buildings and their associated landscaping. Architects mostly rely on consulting engineers for structural, electrical, and mechanical work.Construction Management 8 Dr.Dr.E Elbeltagi
  • 167. Chapter 1: Introduction Engineer: The term engineer usually refers to an individual or a firm engaged in the design or other work associated with the design or construction. Design engineers are usually classified as civil, electrical, mechanical depending upon their specialty. There are also scheduling, estimating, cost, and construction engineers. Engineering-Construction Firm: An engineering-construction firm is a type of organization the combines both architect/engineering and construction contracting. This type of company has the ability of executing a complete design-build sequence.1.5.3 The Construction ProfessionalsThe constructions Professional are the parties that responsible for constructing the project. Intraditional management where the owner, design professional, and contractors are separatecompanies, the contractor would be termed a prime contractor. The prime contractor isresponsible for delivering a complete project in accordance with the contract documents. In mostcases, the prime contractor divides the work among many specialty contractors calledsubcontractors as shown in Figure 1.4. Owner Contract Prime contractor First sub- contractor Contract Civil Mechanical Electrical Contract Second sub- contractor Plumbing Elevators Figure 1.4: Contractor hierarchy1.5.4 The Project ManagerThe project manager is the individual charged with the overall coordination of the entireconstruction program for the owner. These include planning, design, procurement, andconstruction. Among his/her duties: - Clear definitions of the goals of the project. - Investigate alternative solutions for the problems. - Develop a detailed plan to make the selected program reality. - Implement the plan and control the project.Construction Management 9 Dr.Dr.E Elbeltagi
  • 168. Chapter 1: Introduction Construction Manager: The construction manager is a specialized firm or organization which administrates the on-site erection activities and the consulting services required by the owner from planning through design and construction to commissioning. The construction manager is responsible for design coordination, proper selection of materials and methods of construction, contracts preparation for award, cost and scheduling information and control.Construction Management 10 Dr.Dr.E Elbeltagi
  • 169. ‫‪Chapter 2: Contract Strategy‬‬ ‫א‬ ‫א‬ ‫א‬ ‫‪Contract Strategy‬‬‫ﻳﻌﺘﺒﺮ اﻟﻌﻘﺪ اﻟﻬﻨﺪﺳﻰ اﻹﻧﺸﺎﺋﻰ ذو ﻃﺒﻴﻌﺔ ﺧﺎﺻﺔ ﺣﻴﺚ أﻧﻪ ﻳﻌﺘﻤﺪ ﺑﺎﻷﺳﺎس ﻋﻠﻰ اﻋﺘﺒﺎرات ﻓﻨﻴﺔ ﺻﺮﻓﺔ. ﻟﺬا‬‫ﻣﻦ اﻷهﻤﻴﺔ ﺑﻤﻜﺎن اﻟﻌﻨﺎﻳﺔ ﺑﺼﻴﺎﻏﺔ ﻣﻮاﺻﻔﺎت اﻷﻋﻤﺎل اﻟﻬﻨﺪﺳﻴﺔ ﻟﺘﻌﻄﻰ ﻓﻰ اﻟﻨﻬﺎﻳﺔ اﻟﻤﺸﺮوع اﻟﻤﻄﻠﻮب ﻋﻠﻰ‬ ‫أآﻤﻞ ﺻﻮرة ﻣﻄﻠﻮﺑﺔ.‬‫وﻣﻦ ﺟﻬﺔ أﺧﺮى ﻓﺈن ﻣﻌﻈﻢ اﻟﻤﺸﺎرﻳﻊ اﻹﻧﺸﺎﺋﻴﺔ ﻳﺘﻢ ﺗﻨﻔﻴﺬهﺎ ﺑﻮاﺳﻄﺔ ﻣﺘﺨﺼﺼﻴﻦ وﻳﻄﻠﻖ ﻋﻠﻴﻬﻢ ﻣﻘﺎوﻟﻮ‬‫اﻟﺒﻨﺎء. وﻋﻠﻴﻪ ﻓﺈن ﻣﺎﻟﻚ اﻟﻤﺸﺮوع ﻳﻘﻮم ﺑﻌﻘﺪ اﺗﻔﺎق ﻣﻊ اﻟﻤﻘﺎول ﻟﻴﺘﻢ ﺗﻨﻔﻴﺬ اﻟﻤﺸﺮوع ﻃﺒﻘﺎ ﻟﻠﻤﻮاﺻﻔﺎت‬‫واﻟﺮﺳﻮﻣﺎت اﻟﻤﺤﺪدة وهﻮ ﻣﺎﻳﻄﻠﻖ ﻋﻠﻴﻪ ﺑﻌﻘﺪ اﻹﻧﺸﺎء، ﺑﺤﻴﺚ ﻳﻘﻮم اﻟﻤﺎﻟﻚ ﺑﺪﻓﻊ ﻣﺴﺘﺤﻘﺎت ﻣﺎﻟﻴﺔ ﻟﻠﻤﻘﺎول ﺑﻤﻮﺟﺐ‬‫ﺷﺮوط اﻟﻌﻘﺪ ﻧﻈﻴﺮ ﻗﻴﺎم اﻷﺧﻴﺮ ﺑﺘﻨﻔﻴﺬ أﻋﻤﺎل اﻟﻤﺸﺮوع وﺗﺴﻠﻴﻤﻪ إﻟﻰ اﻟﻤﺎﻟﻚ ﻓﻰ ﺻﻮرﺗﻪ اﻟﻤﺘﻔﻖ ﻋﻠﻴﻬﺎ. وﺗﺠﺪر‬‫اﻹﺷﺎرة ﺑﺄن اﻷﺳﻠﻮب اﻟﺴﺎﺋﺪ ﻓﻰ ﻣﺠﺎل اﻟﻤﻘﺎوﻻت هﻮ ﻗﻴﺎم اﻟﻤﺎﻟﻚ ﺑﺎﻹﻋﻼن ﻓﻰ اﻟﻮﺳﺎﺋﻞ اﻟﻌﺎﻣﺔ ﻋﻠﻰ اﻟﻤﺸﺮوع‬‫ﻻﺧﺘﻴﺎر اﻟﻤﻘﺎول اﻟﻤﻨﺎﺳﺐ ﻟﺘﻨﻔﻴﺬ اﻟﻤﺸﺮوع ﺑﻨﺎء ﻋﻠﻰ ﻋﻮاﻣﻞ ﻋﺪﻳﺪة ﻣﻦ أهﻤﻬﺎ ﺧﺒﺮة اﻟﻤﻘﺎول، واﻟﺘﻜﻠﻔﺔ اﻟﻤﻄﻠﻮﺑﺔ‬ ‫ﻟﻠﻌﻘﺪ، واﻷﻋﻤﺎل اﻟﺴﺎﺑﻘﺔ اﻟﻤﻨﺠﺰة ﺑﻨﺠﺎح ﻟﻠﻤﻘﺎول.‬ ‫‪Definition‬‬ ‫א‬ ‫1.2‬‫اﻟﻌﻘﺪ وﺛﻴﻘﺔ اﺗﻔﺎق ﻣﻜﺘﻮﺑﺔ ﺑﻴﻦ ﻃﺮﻓﻰ اﻟﺘﻌﺎﻗﺪ ﻟﺘﻨﻔﻴﺬ ﻣﺸﺮوع هﻨﺪﺳﻰ ﻣﻌﻴﻦ وهﻤﺎ ﺻﺎﺣﺐ اﻟﻌﻤﻞ )ﺟﻬﺔ‬‫اﻟﺘﻌﺎﻗﺪ( وﻳﺮﻣﺰ ﻟﻪ ﻋﺎدة ﻓﻰ اﻟﻌﻘﻮد اﻟﻬﻨﺪﺳﻴﺔ ﺑﺎﻟﻄﺮف اﻷول، واﻟﺸﺮآﺔ اﻟﻤﻨﻔﺬة )اﻟﻤﻘﺎول( وﻳﺮﻣﺰ ﻟﻪ ﻓﻰ اﻟﻌﻘﻮد‬ ‫اﻟﻬﻨﺪﺳﻴﺔ ﺑﺎﻟﻄﺮف اﻟﺜﺎﻧﻰ، وﻋﻠﻰ ذﻟﻚ ﻓﺈن اﻟﻌﻘﺪ ﻳﻮﺿﺢ ﺣﻘﻮق واﻟﺘﺰاﻣﺎت آﻞ ﻃﺮف ﺗﺠﺎﻩ اﻵﺧﺮ.‬ ‫‪Contract Documents‬‬ ‫א‬ ‫2.2‬ ‫- اﻻﺗﻔﺎﻗﻴﺔ )ﺻﻴﻐﺔ اﻟﻌﻘﺪ(‬ ‫- اﻟﺸﺮوط اﻟﻌﺎﻣﺔ واﻟﺸﺮوط اﻟﺨﺎﺻﺔ‬ ‫- اﻟﻤﻮاﺻﻔﺎت‬ ‫- ﺑﻨﻮد ﻗﻮاﺋﻢ اﻟﻜﻤﻴﺎت )‪(Bill of quantities‬‬ ‫- اﻟﺮﺳﻮﻣﺎت اﻟﻬﻨﺪﺳﻴﺔ ﻟﻠﻤﺸﺮوع‬ ‫اﻟﺠﺪول اﻟﺰﻣﻨﻰ ﻟﺘﻨﻔﻴﺬ اﻟﻤﺸﺮوع‬ ‫-‬‫‪Construction Management‬‬ ‫11‬ ‫‪Dr. Emad Elbeltagi‬‬
  • 170. ‫‪Chapter 2: Contract Strategy‬‬ ‫- ﺧﻄﺎﺑﺎت اﻟﻀﻤﺎن وأﻳﺔ ﻣﻼﺣﻖ أﺧﺮى‬ ‫1.2.2 اﻻﺗﻔﺎﻗﻴﺔ ‪Form of Agreement‬‬‫هﺬا اﻟﻤﺴﺘﻨﺪ ﻳﺠﺴﺪ اﻻﺗﻔﺎق ﺑﻴﻦ ﻃﺮﻓﻰ اﻟﻌﻘﺪ وﻳﺘﻢ اﻟﺘﻮﻗﻴﻊ ﻋﻠﻴﻪ ﻣﻦ ﺟﻬﺔ اﻟﺘﻌﺎﻗﺪ )اﻟﻤﺎﻟﻚ( و اﻟﻤﻘﺎول ورﺑﻤﺎ‬ ‫ﻳﺘﻀﻤﻦ أﻳﻀﺎ ﺑﻌﺾ اﻟﺸﻬﻮد، وﻳﺬآﺮ ﻓﻴﻪ ﻋﺎدة اﺳﻢ اﻟﻤﺸﺮوع وﻗﻴﻤﺘﻪ اﻟﻤﺎﻟﻴﺔ واﺳﻤﺎ ﻃﺮﻓﻰ اﻻﺗﻔﺎق وﻣﻤﺜﻠﻴﻬﻤﺎ.‬ ‫2.2.2 اﻟﺸﺮوط اﻟﻌﺎﻣﺔ واﻟﻤﻮاﺻﻔﺎت اﻟﺨﺎﺻﺔ ‪General and special conditions of the‬‬ ‫‪contract‬‬ ‫اﻟﺸﺮوط اﻟﻌﺎﻣﺔ )‪ (General conditions‬وﺗﺸﻤﻞ ﻣﺠﻤﻮﻋﺔ اﻷﺣﻜﺎم اﻟﻌﺎﻣﺔ ﻷى ﻣﺸﺮوع وﺗﺸﻤﻞ:‬ ‫- ﺗﻌﺮﻳﻒ ﻋﺎم ﺑﺎﻟﻤﺸﺮوع )اﻟﻤﺎﻟﻚ، اﻟﻤﻘﺎول، اﻟﻤﺼﻤﻢ(‬ ‫- ﻣﻜﻮﻧﺎت اﻟﻌﻘﺪ‬ ‫- ﺣﻘﻮق وﻣﺴﺆﻟﻴﺎت اﻟﻤﺎﻟﻚ واﻟﻤﻘﺎول واﻟﻤﺼﻤﻢ‬ ‫- اﻟﺰﻣﻦ اﻟﻜﻠﻰ ﻟﺘﻨﻔﻴﺬ اﻟﻤﺸﺮوع‬ ‫- ﻃﺮﻳﻘﺔ اﻟﺪﻓﻊ ﺑﻴﻦ اﻟﻤﺎﻟﻚ واﻟﻤﻘﺎول‬ ‫- اﻟﺘﺄﻣﻴﻨﺎت وﻏﺮاﻣﺎت اﻟﺘﺄﺧﻴﺮ‬ ‫اﻟﺸﺮوط اﻟﺨﺎﺻﺔ )‪(Special conditions‬‬‫وهﻰ ﻋﺎدة ﻣﺎﺗﻜﻮن إﻣﺎ ﺗﻌﺪﻳﻞ أو إﺿﺎﻓﺔ ﻟﻠﺸﺮوط اﻟﻌﺎﻣﺔ ﺑﺤﻴﺚ ﺗﻼﺋﻢ ﻃﺒﻴﻌﺔ اﻟﻤﺸﺮوع اﻟﻤﺮاد ﺗﻨﻔﻴﺬﻩ ﻓﺈذا‬‫آﺎﻧﺖ أﻋﻤﺎل ﺑﺤﺮﻳﺔ ﻣﺜﻼ ﺗﻀﺎف ﺷﺮوط ﺗﺨﺺ أﻋﻤﺎل اﻟﻤﺴﺎﺣﺔ اﻟﺒﺤﺮﻳﺔ واﻟﺤﻔﺮ ﻓﻰ ﻗﺎع اﻟﺒﺤﺮ وآﺬﻟﻚ اﺳﺘﻌﻤﺎل‬ ‫اﻷرﺻﻔﺔ اﻟﺒﺤﺮﻳﺔ وﻏﻴﺮ ذﻟﻚ.‬ ‫أهﺪاف اﻟﺸﺮوط اﻟﺨﺎﺻﺔ‬‫- إ ﻋﻄﺎء اﻟﻤﺎﻟﻚ ﻣﺮوﻧﺔ ﻓﻰ إﺣﺪاث ﺑﻌﺾ اﻟﺘﻌﺪﻳﻼت ﻓﻰ ﺑﻨﻮد اﻟﻤﺸﺮوع دون اﻟﺘﺄﺛﻴﺮ ﻓﻰ زﻳﺎدة اﻷﺳﻌﺎر.‬‫- ﺗﻐﻴﻴﺮ ﺑﻨﻮد اﻟﺘﺄﻣﻴﻨﺎت اﻟﺘﻰ ﻧﺺ ﻋﻠﻴﻬﺎ ﻓﻰ اﻟﺸﺮوط اﻟﻌﺎﻣﺔ وآﺬﻟﻚ وﺿﻊ ﺷﺮوط ﻏﺮاﻣﺔ اﻟﺘﺄﺧﻴﺮ وآﻴﻔﻴﺔ‬ ‫ﺗﺤﻤﻞ اﻟﻤﺨﺎﻃﺮ.‬‫- ﺗﺤﺪﻳﺪ ﻣﺴﺆوﻟﻴﺔ اﻟﻤﺎﻟﻚ ﻓﻰ ﺗﻮﻓﻴﺮ ﻋﺪد ﻣﻦ اﻟﻤﻮاد اﻟﺨﺎﺻﺔ آﺎﻟﻤﻌﺪات واﻷدوات أو اﻟﻘﻴﺎم ﺑﺒﻌﺾ‬‫اﻷﻋﻤﺎل اﻻﺳﺘﺸﺎرﻳﺔ ﻟﻠﻤﺸﺮوع آﺄﻋﻤﺎل ﻣﺴﺎﺣﻴﺔ أو اﺧﺘﺒﺎرات ﻟﻠﺘﺮﺑﺔ أو ﻣﻮاد اﻟﺒﻨﺎء أو ﺗﺰوﻳﺪ‬ ‫اﻟﻤﺸﺮوع ﺑﺨﺪﻣﺎت ﻋﺎﻣﺔ )ﻣﺜﻼ: آﻬﺮﺑﺎء، ﻣﻴﺎﻩ(‬‫‪Construction Management‬‬ ‫21‬ ‫‪Dr. Emad Elbeltagi‬‬
  • 171. ‫‪Chapter 2: Contract Strategy‬‬‫- وﺿﻊ ﻣﻮاﺻﻔﺎت ﺧﺎﺻﺔ آﺎﺳﺘﺒﺪال ﻣﻮاد إﻧﺸﺎﺋﻴﺔ ﻣﺬآﻮرة ﻓﻰ اﻟﺸﺮوط اﻟﻌﺎﻣﺔ ﺑﺄﺧﺮى ذات ﻣﻮاﺻﻔﺎت‬ ‫وﺟﻮدة ﻋﺎﻟﻴﺔ.‬‫- وﺿﻊ اﺷﺘﺮاﻃﺎت ﻋﻠﻰ اﻟﻤﻘﺎول ﺑﻌﺪم اﻧﺸﻐﺎﻟﻪ ﺑﺄﻋﻤﺎل إﻧﺸﺎﺋﻴﺔ أﺧﺮى ﻓﻰ اﻟﻮﻗﺖ اﻟﺬى ﻳﺘﻢ ﻓﻴﻪ ﺗﻨﻔﻴﺬ‬ ‫اﻟﻤﺸﺮوع ﺣﺘﻰ ﻻﻳﻌﺮﻗﻞ ﺳﻴﺮ اﻟﻌﻤﻞ ﺑﺎﻟﻤﺸﺮوع اﻟﻤﺘﻌﺎﻗﺪ ﻋﻠﻴﻪ.‬ ‫3.2.2 اﻟﻤﻮاﺻﻔﺎت ‪Specifications‬‬‫وهﻰ ﻣﺠﻤﻮﻋﺔ ﻣﻦ اﻟﺸﺮوط ﺗﺸﺘﻤﻞ ﻋﻠﻰ ﻋﺒﺎرات ﺗﻘﻨﻴﺔ ﻣﺘﻔﻖ ﻋﻠﻴﻬﺎ وذﻟﻚ ﻟﻀﻤﺎن ﺟﻮدة اﻷﻋﻤﺎل اﻟﻤﺨﺘﻠﻔﺔ‬‫ﺑﺎﻟﻤﺸﺮوع، وﻳﺘﻢ اﻟﻨﺺ ﻓﻴﻬﺎ ﻋﺎدة ﻋﻠﻰ ﻧﻮﻋﻴﺔ وﻣﻮاﺻﻔﺎت اﻟﻤﻮاد اﻟﻤﺮاد اﺳﺘﻌﻤﺎﻟﻬﺎ ﻣﻦ أﺳﻤﻨﺖ ورآﺎم وﺣﺪﻳﺪ و‬‫ﻏﻴﺮهﺎ، آﻤﺎ ﻳﻨﺺ ﻓﻴﻬﺎ ﻋﻠﻰ ﻧﻮﻋﻴﺔ وﻣﻮاﺻﻔﺎت اﻟﺨﻠﻄﺎت اﻟﺨﺮﺳﺎﻧﻴﺔ وﺑﺎﻗﻰ اﻷﻋﻤﺎل اﻷﺧﺮى، وآﺬﻟﻚ ﻋﻠﻰ‬‫ﻧﻮﻋﻴﺔ اﻟﻤﻌﺪات اﻟﻤﻄﻠﻮب اﺳﺘﻌﻤﺎﻟﻬﺎ وﻣﻮاﺻﻔﺎﺗﻬﺎ اﻟﻔﻨﻴﺔ. وﺑﺼﻔﺔ ﻋﺎﻣﺔ، ﻓﺈن ﺟﻤﻴﻊ ﺑﻨﻮد اﻷﻋﻤﺎل ﻓﻰ‬ ‫اﻟﻤﺸﺮوﻋﺎت اﻹﻧﺸﺎﺋﻴﺔ ﻳﺘﻢ ﺗﻮﺻﻴﻔﻬﺎ وﺑﻴﺎن ﻃﺮﻳﻘﺔ ﺗﻨﻔﻴﺬهﺎ وﻓﻘﺎ ﻟﻠﻤﻌﺎﻳﻴﺮ اﻟﻤﺘﻔﻖ ﻋﻠﻴﻬﺎ.‬ ‫4.2.2 ﻗﻮاﺋﻢ اﻟﻜﻤﻴﺎت )‪(Bills of quantity‬‬‫وهﻰ ﺟﺪاول ٌﺗﺤﺼﺮ ﻓﻴﻬﺎ ﺟﻤﻴﻊ ﺑﻨﻮد اﻷﻋﻤﺎل اﻹﻧﺸﺎﺋﻴﺔ )ﻣﺜﻞ أﻋﻤﺎل اﻟﺤﻔﺮ واﻟﺮدم، وأﻋﻤﺎل اﻟﺨﺮﺳﺎﻧﺔ،‬ ‫ُ‬‫وأﻋﻤﺎل اﻟﺒﻨﺎء، وأﻋﻤﺎل اﻷرﺿﻴﺎت،........اﻟﺦ( وآﻤﻴﺎﺗﻬﺎ وﺗﺸﺘﻤﻞ ﻋﻠﻰ ﺧﺎﻧﺎت ﻟﻮﺣﺪات اﻟﻘﻴﺎس وﻓﺌﺔ اﻟﺴﻌﺮ ﻟﻜﻞ‬‫وﺣﺪة وﻣﺠﻤﻮع اﻷﺳﻌﺎر )ﺟﺪول 1.2 (. وﻳﻤﻜﻦ اﻟﻘﻮل ﺑﺄن ﺣﺴﺎب اﻟﻜﻤﻴﺎت ﻓﻰ اﻟﻤﺸﺮوﻋﺎت اﻟﻬﻨﺪﺳﻴﺔ ﻳﻔﻴﺪ ﻓﻰ‬‫ﺗﺤﺪﻳﺪ ازﻣﺎن اﻷﻧﺸﻄﺔ وآﺬﻟﻚ اﻟﺰﻣﻦ اﻟﻜﻠﻰ ﻟﺘﻨﻔﻴﺬ اﻟﻤﺸﺮوع، وﻳﺘﻢ ﺣﺴﺎب اﻟﻜﻤﻴﺎت ﻟﻸﻋﻤﺎل اﻟﻤﺨﺘﻠﻔﺔ ﻓﻰ دﻓﺘﺮ‬‫ﺧﺎص ﻣﻌﺘﻤﺪ ﻳﺴﻤﻰ دﻓﺘﺮ اﻟﺤﺼﺮ وﻳﻌﺘﻤﺮ ﻣﻦ اﻟﻤﺴﺘﻨﺪات اﻟﻬﺎﻣﺔ ﺑﺎﻟﻤﺸﺮوع وﻻﻳﺴﻤﺢ ﺑﺘﺪاوﻟﻪ وﻓﻰ اﻟﻌﺎدة ﻳﺤﻔﻆ‬ ‫ﻓﻰ ﻋﻬﺪة ﻣﻬﻨﺪس اﻟﻤﺎﻟﻚ، وﺗﺘﻠﺨﺺ أهﻤﻴﺔ ﺣﺴﺎب اﻟﻜﻤﻴﺎت ﻓﻰ اﻵﺗﻰ:‬ ‫- ﺗﻘﺪﻳﺮ ﺗﻜﻠﻔﺔ اﻟﻤﺸﺮوع.‬ ‫- اﻟﻤﺴﺎﻋﺪة ﻓﻰ اﺧﺘﻴﺎر اﻟﻤﻘﺎول اﻟﺬى ﻳﻘﻮم ﺑﺎﻟﺘﻨﻔﻴﺬ.‬ ‫- اﻟﻤﺴﺎﻋﺪة ﻓﻰ ﺣﺴﺎب أوﻗﺎت ﺗﻨﻔﻴﺬ اﻟﺒﻨﺪود اﻟﻤﺨﺘﻠﻔﺔ واﻋﺪاد ﺑﺮﻧﺎﻣﺞ زﻣﻨﻰ ﻟﻠﻤﺸﺮوع.‬ ‫- ﺑﻨﺎء ﻋﻠﻰ اﻟﺘﻜﻠﻔﻰ اﻟﻤﺘﻮﻗﻌﺔ ﻳﺘﻢ ﺗﺤﺪﻳﺪ ﻗﻴﻤﺔ اﻟﺘﻌﺪﻳﻼت أﺛﻨﺎء ﻣﺮﺣﻠﺔ اﻟﺘﻨﻔﻴﺬ أن ﺗﻄﻠﺐ اﻷﻣﺮ.‬‫‪Construction Management‬‬ ‫31‬ ‫‪Dr. Emad Elbeltagi‬‬
  • 172. ‫‪Chapter 2: Contract Strategy‬‬ ‫ﺟﺪول1.2 : ﻧﻤﻮذج ﻗﺎﺋﻤﺔ اﻟﻜﻤﻴﺎت ﺑﺄﺣﺪ اﻟﻤﺸﺮوﻋﺎت‬ ‫اﺟﻤﺎﻟﻰ‬ ‫ﻓﺌﺔ‬ ‫اﻟﻜﻤﻴﺔ‬ ‫اﻟﻮﺣﺪة‬ ‫اﻟﺒﻨﺪ‬ ‫ﻣﺴﻠﺴﻞ‬ ‫ﺟﻨﻴﻪ‬ ‫ﻗﺮش‬ ‫ﺟﻨﻴﻪ‬ ‫ﻗﺮش‬ ‫ﺑﺎﻟﻤﺘﺮ اﻟﻤﻜﻌﺐ ﺗﻮرﻳﺪ وﺻﺐ ﺧﺮﺳﺎﻧﺔ ﻣﺴﻠﺤﺔ‬ ‫-1‬ ‫ﻟﺰوم اﻷﻋﻤﺪة واﻟﺒﻼﻃﺎت واﻟﻜﻤﺮات واﻟﺴﻼﻟﻢ‬ ‫ﺗﺘﻜﻮن ﻣﻦ 8.0 ﻣﺘﺮ ﻣﻜﻌﺐ زﻟﻂ و 4.0 ﻣﺘﺮ‬ ‫000501‬ ‫-‬ ‫007‬ ‫-‬ ‫051‬ ‫ﻣﺘﺮ ﻣﻜﻌﺐ‬ ‫ﻣﻜﻌﺐ رﻣﻞ و 053 آﺠﻢ أﺳﻤﻨﺖ ﻣﻤﺎ ﺟﻤﻴﻌﻪ‬ ‫ﺑﺎﻟﻌﺪد ﺗﺼﻨﻴﻊ ﺗﻮرﻳﺪ وﺗﺮآﻴﺐ ﺷﺒﺎﺑﻴﻚ ﻣﻘﺎس‬ ‫-2‬ ‫021‪ 120 x‬ﺗﺘﻜﻮن ﻣﻦ أرﺑﻊ ﺿﻠﻒ ﺷﻴﺶ‬ ‫ﺷﻤﺴﻴﺔ وﺿﻠﻘﺘﻴﻦ زﺟﺎج وﺿﻠﻔﺘﻴﻦ ﺳﻠﻚ ﻣﺼﻨﻮع‬ ‫ﻣﻦ ﺧﺸﺐ ﺳﻮﻳﺪ واﻟﺘﻔﺎﺻﻴﻞ واﻷﺑﻌﺎد آﻤﺎ هﻮ‬ ‫0616‬ ‫-‬ ‫082‬ ‫-‬ ‫22‬ ‫ﻋﺪد‬ ‫ﻣﻮﺿﺢ ﺑﺎﻟﺮﺳﻢ ﻣﻤﺎ ﺟﻤﻴﻌﻪ‬ ‫5.2.2 اﻟﺮﺳﻮﻣﺎت اﻟﻬﻨﺪﺳﻴﺔ ﻟﻠﻤﺸﺮوع )‪(Drawings‬‬‫اﻟﺮﺳﻮﻣﺎت اﻟﻤﻠﺤﻘﺔ ﻣﻊ ﻣﺴﺘﻨﺪات اﻟﻌﻘﺪ ﺗﻮﺿﺢ اﻟﺨﻄﻮط اﻟﻌﺮﻳﻀﺔ ﻟﻠﻤﺸﺮوع دون ﺗﻔﺎﺻﻴﻞ )ﺣﺴﺐ ﻃﺮﻳﻘﺔ‬‫اﻟﺘﻌﺎﻗﺪ( ﺣﺴﺐ اﻟﺘﺼﺎﻣﻴﻢ اﻟﻬﻨﺪﺳﻴﺔ اﻟﻤﻌﺘﻤﺪة ﻣﻦ اﻟﻤﻬﻨﺪس اﻹﺳﺘﺸﺎرى ﻋﻠﻰ أن ﻳﻘﻮم اﻟﻤﻘﺎول ﺑﻌﺪ ذﻟﻚ ﺑﺈﻋﺪاد‬‫رﺳﻮﻣﺎت ﺗﻔﺼﻴﻠﻴﺔ )‪ (Shop drawings‬ﻟﻜﻞ ﻧﻮع ﻣﻦ اﻷﻋﻤﺎل ﻳﻮﺿﺢ ﻓﻴﻬﺎ آﻴﻔﻴﺔ ﺗﻨﻔﻴﺬ اﻷﻋﻤﺎل اﻹﻧﺸﺎﺋﻴﺔ، وﻳﺘﻢ‬‫اﻋﺘﻤﺎد هﺬﻩ اﻟﺮﺳﻮﻣﺎت ﻣﻦ ﺟﻬﺔ اﻹﺷﺮاف )اﻟﻤﺸﺮف ﻋﻠﻰ اﻟﻤﺸﺮوع( ﻗﺒﻞ اﻟﺒﺪأ ﻓﻰ اﻟﺘﻨﻔﻴﺬ. اﺿﺎﻓﺔ اﻟﻰ ذﻟﻚ،‬ ‫ﻓﻬﻨﺎك ﻣﺴﺘﻨﺪات أﺧﺮى ﺗﻌﺘﺒﺮ ﻣﻜﻤﻠﺔ ﻟﻠﻌﻘﺪ وﻻﻳﺘﻢ ﺗﻨﻔﻴﺬ اﻟﻤﺸﺮوع ﺑﺪوﻧﻬﺎ وﻣﻨﻬﺎ ﻋﻠﻰ ﺳﺒﻴﻞ اﻟﻤﺜﺎل:‬ ‫ﺑﺮﻧﺎﻣﺞ اﻟﻌﻤﻞ وﻃﺮﻳﻘﺔ اﻟﺘﻨﻔﻴﺬ ‪Planning and method statement‬‬‫وهﻰ ﻋﺒﺎرة ﻋﻦ وﺿﻊ ﺧﻄﺔ ﻋﻤﻞ ﻣﻦ ﻗﺒﻞ اﻟﻤﻘﺎول ﻟﺘﻨﻔﻴﺬ اﻟﻤﺸﺮوع وﺗﺤﺪﻳﺪ اﻷﻧﺸﻄﺔ اﻟﻤﺨﺘﻠﻔﺔ ﻟﻪ، وآﻴﻔﻴﺔ‬‫ﺗﻨﻔﻴﺬ هﺬﻩ اﻷﻧﺸﻄﺔ وﻋﻼﻗﺘﻬﺎ ﻣﻊ ﺑﻌﻀﻬﺎ اﻟﺒﻌﺾ، وآﺬﻟﻚ ﺗﺘﺎﺑﻊ ﻣﺮاﺣﻞ اﻟﻌﻤﻞ اﻟﻤﺨﺘﻠﻔﺔ ﻣﻦ واﻗﻊ ﺧﺒﺮﺗﻪ ﻓﻰ‬‫اﻷﻋﻨﻤﺎل اﻟﻤﺸﺎﺑﻬﺔ، وﻋﻠﻰ اﻟﻤﻘﺎول أن ﻳﻘﺪم ﻃﺮﻳﻘﺔ ﻋﻤﻞ ﺗﻨﺎل رﺿﺎ ﺟﻬﺎز اﻹﺷﺮاف وﻓﻰ ﻧﻔﺲ اﻟﻮﻗﺖ ﺗﻤﺜﻞ أﻗﻞ‬‫ﺗﻜﻠﻔﺔ ﻟﺘﻨﻔﻴﺬ اﻟﻤﺸﺮوع. وﻳﺘﻢ ﺣﺴﺎب زﻣﻦ آﻞ ﺑﻨﺪ واﻟﻤﻮارد اﻟﻼزﻣﺔ ﻟﻪ )ﻣﻮاد ‪ ،Material‬ﻋﻤﺎﻟﺔ ‪،Labor‬‬‫ﻣﻌﺪات ‪ ،Equipment‬ﻣﻮارد ﻣﺎﻟﻴﺔ ‪ .(Money‬وﻓﻰ اﻟﻤﺸﺮوﻋﺎت اﻟﻜﺒﻴﺮة واﻟﺘﻰ ﺗﺤﺘﻮى ﻋﻠﻰ أﻋﻤﺎل ﻋﺪﻳﺪة ﻳﺘﻢ‬ ‫اﻋﺪاد ﺑﺮﻧﺎﻣﺞ اﻟﻌﻤﻞ ﻟﻬﺎ ﺑﺎﺳﺘﺨﺪام اﻟﺤﺎﺳﺐ اﻵﻟﻰ.‬ ‫ﺟﺪوال اﻟﻤﻌﺪات واﻟﻌﻤﺎﻟﺔ ‪List of available equipment and labor‬‬ ‫ﺑﻌﺪ ﺗﻮﻗﻴﻊ اﻟﻌﻘﺪ واﺷﺘﻼم ﻣﻮﻗﻊ اﻟﻌﻤﻞ ﻳﻘﺪم اﻟﻤﻘﺎول آﺸﻔﺎ ﺑﺎﻟﻤﻌﺪات واﻵﻻت اﻟﺘﻰ ﻳﺰﻣﻊ اﺳﺘﺨﺪاﻣﻬﺎ‬ ‫ﻣﻮزﻋﻰ ﻋﻠﻰ ﻗﻄﺎﻋﺎت اﻟﻌﻤﻞ اﻟﻤﺨﺘﻠﻔﺔ. وآﺬﻟﻚ ﻳﻘﺪم ﺑﻴﺎن ﺑﻌﺪد اﻟﻘﻮى اﻟﻌﺎﻣﻠﺔ )‪ (Manpower‬ﻟﺪﻳﻪ واﻟﻬﻴﻜﻞ‬‫‪Construction Management‬‬ ‫41‬ ‫‪Dr. Emad Elbeltagi‬‬
  • 173. ‫‪Chapter 2: Contract Strategy‬‬ ‫اﻟﺘﻨﻈﻴﻤﻰ )‪ (Organizational structure‬ﻟﻠﺸﺮآﺔ ﻣﺼﺤﻮﺑﺎ ﺑﺘﻔﺎﺻﻴﻞ اﻟﺨﺒﺮات اﻟﺴﺎﺑﻘﺔ ﻟﻠﻌﻨﺎﺻﺮ اﻷﺳﺎﺳﻴﺔ‬ ‫ﻣﻦ اﻟﻤﻬﻨﺪﺳﻴﻴﻦ واﻟﻔﻨﻴﻴﻦ ﻹﻋﺘﻤﺎدهﻢ ﻣﻦ ﺟﻬﺎز اﻹﺷﺮاف ﻗﺒﻞ أن ﻳﺒﺪأوا ﻣﺒﺎﺷﺮة أﻋﻤﺎﻟﻬﻢ.‬ ‫6.2.2 اﻟﺠﺪول اﻟﺰﻣﻨﻰ ﻟﻠﺘﻨﻔﻴﺬ ‪Schedule‬‬‫زﻣﻦ ﺗﻨﻔﻴﺬ اﻟﻤﺸﺮوع ﻳﻌﺘﺒﺮ ﻋﻨﺼﺮا أﺳﺎﺳﻴﺎ ﻓﻰ ﻋﻘﻮد اﻟﺘﺸﻴﻴﺪ ﺣﻴﺚ أن اﻟﻤﺎﻟﻚ ﻋﺎدة ﻣﺎﻳﻜﻮن ﻟﺪﻳﻪ اﺣﺘﻴﺎﺟﺎت ﻣﻌﻴﻨﻪ‬‫ﺗﺘﻄﻠﺐ اﻹﻧﺘﻬﺎء ﻣﻦ ﺗﻨﻔﻴﺬ اﻟﻤﺸﺮوع ﻓﻰ وﻗﺖ ﻣﻌﻴﻦ. ﻓﺎﻟﻤﺸﺮوﻋﺎت اﻟﺘﻌﻠﻴﻤﻴﺔ ﻋﻠﻰ ﺳﺒﻴﻞ اﻟﻤﺜﺎل ﻳﺠﺐ أن ﻳﺘﻢ‬‫اﻹﻧﺘﻬﺎء ﻣﻨﻬﺎ وﺗﺴﻠﻴﻤﻬﺎ ﻗﺒﺎ ﺑﺪأ اﻟﺴﻨﻪ اﻟﺪراﺳﻴﺔ. وﺑﻨﺎءا ﻋﻠﻰ ذﻟﻚ، ﻓﺈن ﻋﻘﻮد اﻟﺘﺸﻴﻴﺪ ﻓﻰ اﻟﻐﺎﻟﺐ ﺗﺘﻀﻤﻦ ﺷﺮوط‬‫ﺗﺤﺪد اﻟﺰﻣﻦ اﻟﻤﺘﺎح ﻟﺘﻨﻔﻴﺬ اﻟﻤﺸﺮوع وﻳﺘﻢ اﻹﺗﻔﺎق ﻋﻠﻴﻪ ﻓﻰ اﻟﻌﻘﺪ، وﻋﺎدة ﻣﺎﻳﺤﺴﺐ هﺬا اﻟﺰﻣﻦ ﻣﻦ ﺗﺎرﻳﺦ ﺻﺪور‬‫اﻷﻣﺮ اﻟﻜﺘﺎﺑﻰ ﻟﻠﻤﻘﺎول وﺗﺴﻠﻴﻤﻪ اﻟﻤﻮﻗﻊ وﻳﻀﺎف ﻋﻠﻰ ذﻟﻚ أى ﺗﻌﺪﻳﻼت أو اﺿﺎﻓﺎت ﺗﺼﺪر اﻟﻴﻪ آﺘﺎﺑﺔ. وﻋﻠﻴﻪ ﻓﺈن‬‫ﻋﻦ أى ﺗﺄﺧﻴﺮات ﻳﺜﺒﺖ ﻟﻠﻤﺎﻟﻚ أن ﺳﺒﺒﻪ ﻟﻢ ﻳﻜﻦ ﺑﺎﻹﻣﻜﺎن ﺗﻮﻗﻌﻪ، أو ﺑﺴﺒﺐ ﻇﺮوف‬ ‫اﻟﻤﻘﺎول ﻻﻳﻜﻮن ﻣﺴﺌﻮﻻ‬‫ﻃﺎرﺋﺔ ﻗﺪ ﻳﺘﻌﺮض ﻟﻬﺎ اﻟﻤﺸﺮوع، ﻓﺈﻧﻪ ﻳﺠﻮز ﻟﻠﻤﺎﻟﻚ ﻓﻰ هﺬﻩ اﻟﺤﺎﻟﺔ ﻣﻨﺢ اﻟﻤﻘﺎول ﺗﻤﺪﻳﺪا ﻣﻨﺎﺳﺒﺎ ﻓﻰ ﻣﺪة ﺗﻨﻔﻴﺬ‬‫اﻷﻋﻤﺎل ﺑﻤﻘﺪار اﻟﻌﻤﻞ اﻟﺰاﺋﺪ. أم إذا آﺎن اﻟﺘﺄﺧﻴﺮ ﻷﺳﺒﺎب أﺧﺮى ﺗﻘﻊ ﻓﻰ اﻃﺎر ﻣﺴﺆوﻟﻴﺎت اﻟﻤﻘﺎول ﻓﻌﻠﻰ اﻟﻤﻘﺎول‬ ‫أن ﻳﺘﺤﻤﻞ أى ﺗﻜﺎﻟﻴﻒ زاﺋﺪة إﺿﺎﻓﺔ إﻟﻰ ﻏﺮاﻣﺔ اﻟﺘﺄﺧﻴﺮ اﻟﺘﻰ ﻳﻨﺺ ﻋﻠﻴﻪ اﻟﻌﻘﺪ.‬ ‫7.2.2 اﻟﻀﻤﺎن ‪Warranty‬‬‫ﻋﻨﺪ اﻟﺘﺴﻠﻴﻢ اﻟﻨﻬﺎﺋﻰ ﻟﻠﻤﺸﺮوع ﻓﺈن اﻟﻤﺎﻟﻚ ﻳﺮﻏﺐ ﻓﻰ اﻟﺤﺼﻮل ﻋﻠﻰ ﺿﻤﺎﻧﺎت ﻟﻠﻤﺸﺮوع ﺑﺤﻴﺚ ﻳﻌﻤﻞ آﻤﺎ‬‫ﺧﻄﻂ ﻟﻪ وﺑﺤﻴﺚ أﻳﻀﺎ ﻳﻀﻤﻦ أن ﻳﻘﻮم اﻟﻤﻘﺎول ﺑﺒﻌﺾ أﻋﻤﺎل اﻟﺼﻴﺎﻧﺔ واﻟﻤﺘﺎﺑﻌﺔ ﺑﻌﺪ ﺗﻨﻔﻴﺬ اﻟﻤﺸﺮوع، وهﻰ‬‫وﺛﻴﻘﺔ ﻣﻮﻗﻌﺔ ﺑﻴﻦ اﻟﻄﺮﻓﻴﻦ )وﺛﻴﻘﺔ اﻟﻀﻤﺎن( وﺗﺸﻤﻞ ﻓﺘﺮة ﺿﻤﺎن ﻣﻦ ﺗﺎرﻳﺦ اﻟﺘﺴﻠﻴﻢ اﻹﺑﺘﺪاﺋﻰ ﻟﻠﻤﺸﺮوع، وﻳﻜﻮن‬‫اﻟﻀﻤﺎن هﺎم ﻓﻰ اﻟﻤﺸﺮوﻋﺎت اﻟﺘﻰ ﺗﺤﺘﻮى ﻋﻠﻰ أﻋﻤﺎل وﻣﻌﺪات ﻣﻴﻜﺎﻧﻴﻜﻴﺔ وآﻬﺮﺑﺎﺋﻴﺔ. وﻳﺠﺐ أن ﺗﻜﻮن أهﺪاف‬‫اﻟﻀﻤﺎن واﺿﺤﺔ )ﻳﻤﻜﻦ ﻟﻤﺸﺮوع واﺣﺪ أن ﻳﺤﺘﻮى ﻋﺪة ﺿﻤﺎﻧﺎت وآﻞ ﺿﻤﺎن ﻟﻪ هﺪﻓﻪ وﻣﻜﺎن ﺗﻄﺒﻴﻘﻪ( ﺑﺤﻴﺚ‬‫ﻻﻳﺘﺤﻤﻞ اﻟﻤﻘﺎول ﺗﺒﻌﺎت أﺧﺮى وذﻟﻚ اذا ﺗﻐﻴﺮت ﺑﻌﺾ اﻟﺒﻨﻮد واﻟﺘﻰ هﻰ أﺻﻼ ﻟﻴﺴﺖ ﻣﻠﺰﻣﺔ ﻟﻪ ﻣﻦ واﻗﻊ اﻟﻌﻘﺪ‬‫اﻟﻤﻮﻗﻊ. وﻋﺎﻟﺒﺎ ﻓﺈن اﻟﻤﺸﺮوﻋﺎت اﻟﻜﺒﻴﺮة ﺗﺤﺘﻮى ﻋﻠﻰ ﻣﺮﺣﻠﺔ ﺻﻴﺎﻧﺔ ﻟﻜﻰ ﻳﺘﻢ اﻟﺘﺄآﺪ ﻣﻦ ﺟﻤﻴﻊ ﺑﻨﻮد اﻟﻤﺸﺮوع‬‫ﻣﻄﺎﺑﻘﺔ ﻟﻠﺸﺮوط واﻟﻤﻮاﺻﻔﺎت وﺗﻌﻤﻞ ﺑﺼﻮرة ﺟﻴﺪة. وﺑﺬﻟﻚ ﻓﺈن ﺧﻄﺎب اﻟﻀﻤﺎن ﻳﺘﻀﻤﻦ ﻗﻴﺎم اﻟﻤﻘﺎول ﺑﺄﻋﻤﺎل‬‫ﺻﻴﺎﻧﺔ اﻟﻤﺸﺮوع ﻟﻤﺪة ﻣﻌﻴﻨﺔ ﺑﻌﺪ اﻟﺘﺴﻠﻴﻢ اﻹﺑﺘﺪاﺋﻰ، وﻋﺎدة ﻣﺎﺗﻜﻮن هﺬﻩ اﻟﻤﺪة ﺳﻨﺔ آﺎﻣﻠﺔ ﻟﻀﻤﺎن آﻔﺎءة اﻟﻤﺸﺮوع‬ ‫دون أى ﺗﻜﺎﻟﻴﻒ اﺿﺎﻓﻴﺔ ﻳﺘﺤﻤﻠﻬﺎ اﻟﻤﺎﻟﻚ.‬‫‪Construction Management‬‬ ‫51‬ ‫‪Dr. Emad Elbeltagi‬‬
  • 174. ‫‪Chapter 2: Contract Strategy‬‬ ‫‪Contracting method‬‬ ‫א‬ ‫א‬ ‫א א‬ ‫א‬ ‫3.2‬‫ﻣﻌﻈﻢ اﻟﻤﺸﺎرﻳﻊ اﻹﻧﺸﺎﺋﻴﺔ ﺗﺘﻀﻤﻦ ﻣﺸﺎرآﺔ آﻞ ﻣﻦ اﻟﻤﺎﻟﻚ واﻟﻤﺼﻤﻢ واﻟﻤﻘﺎول واﻟﻤﻮردﻳﻦ، وﻋﻤﻮﻣﺎ ﻓﺈن‬‫اﻟﻤﺎﻟﻚ هﻮ اﻟﺬى ﻳﺤﺪد ﻧﻮع اﻟﻌﻘﺪ. وﺑﻤﺠﺮد ﺗﺤﺪﻳﺪ ﻧﻮع اﻟﻌﻘﺪ وأﺧﺬ ﻗﺮار ﺗﻨﻔﻴﺬ اﻟﻤﺸﺮوع، ﻓﻤﻦ اﻟﻀﺮورى ﻋﻤﻞ‬‫اﻟﺘﺼﻤﻴﻤﺎت اﻟﻬﻨﺪﺳﻴﺔ وﺑﻨﺎء ﻋﻠﻴﻪ ﻳﺸﺮع اﻟﻤﻘﺎول ﻓﻰ ﺗﻨﻔﻴﺬ اﻟﻤﺸﺮوع. ﻓﺈﺗﻔﺎﻗﻴﺔ اﻟﻌﻘﺪ وﻣﻬﺎم آﻞ ﻃﺮف ﺗﻌﺘﻤﺪ ﻋﻠﻰ‬‫ﻃﺒﻴﻌﺔ وﺣﺠﻢ اﻟﻤﺸﺮوع، وهﺬﻩ اﻟﻤﻬﺎم ﻳﺠﺐ أن ﺗﺪرس ﺟﻴﺪا ﻟﺘﺤﺪﻳﺪ ﻋﻼﻗﺔ آﻞ ﻃﺮف ﺑﺎﻵﺧﺮ ﺧﻼل زﻣﻦ ﺗﻨﻔﻴﺬ‬ ‫اﻟﻤﺸﺮوع. ﻳﻮﺟﺪ ﺧﻤﺴﺔ أﻧﻮاع أﺳﺎﺳﻴﺔ ﻟﻄﺮﻳﻘﺔ اﻟﺘﻌﺎﻗﺪ ﻓﻰ ﻣﺸﺮوﻋﺎت اﻟﺘﺸﻴﻴﺪ آﻤﺎ ﻳﻠﻰ:‬ ‫1.3.2 ﻃﺮﻳﻘﺔ اﻟﺘﻌﺎﻗﺪ اﻟﻌﺎم أو اﻟﺘﻘﻠﻴﺪى ‪General (traditional) contract method‬‬‫هﻰ ﻃﺮﻳﻘﺔ ﺗﻌﺎﻗﺪ ﺑﻴﻦ اﻟﻤﺎﻟﻚ واﻟﻤﻘﺎول اﻟﺮﺋﻴﺲ، وﻋﺎدة ﻣﺎﻳﻤﺜﻞ اﻟﻤﺎﻟﻚ ﺑﻮاﺳﻄﺔ ﺷﺮآﺔ ﺗﻘﻮم ﺑﺈﻋﺪاد‬‫اﻟﺘﺼﺎﻣﻴﻢ اﻟﻬﻨﺪﺳﻴﺔ وآﻞ ﻣﺎﻳﺘﻌﻠﻖ ﺑﺎﻟﻌﻘﺪ )ﻓﻰ ﻣﺸﺮوﻋﺎت اﻟﺒﻨﺎء ﺗﻜﻮن ﺷﺮآﺔ ﺗﺼﻤﻴﻢ ﻣﻌﻤﺎرى(، ﺑﺤﻴﺚ ﻳﻜﻮن دور‬‫آﻞ ﻃﺮف واﺿﺤﺎ وﻣﻌﺮﻓﺎ ﻓﻰ ﺷﺮوط اﻟﻌﻘﺪ. وﻳﺘﻢ اﻹﻋﻼن ﻋﻦ اﻟﻤﺸﺮوع ﻓﻰ اﻟﻮﺳﺎﺋﻞ اﻟﻌﺎﻣﺔ ﻹﺷﻌﺎر اﻷﻃﺮاف‬‫اﻟﻤﻌﻨﻴﺔ )اﻟﻤﻘﺎوﻟﻴﻦ( ﺑﺂﺧﺮ ﻣﻮﻋﺪ ﻟﺘﻘﺪﻳﻢ اﻟﻌﻄﺎء. وﺗﻔﺘﺢ اﻟﻌﻄﺎءات ﻓﻰ وﺟﻮد اﻟﻤﻘﺎوﻟﻴﻦ وﻏﺎﻟﺒﺎ ﻳﺘﻢ ﺗﺮﺳﻴﺔ اﻟﻤﺸﺮوع‬‫ﻷﻗﻞ ﻋﻄﺎء ﻣﻦ ﺣﻴﺚ اﻟﺴﻌﺮ، وﺑﻘﻴﺔ اﻟﻌﻄﺎءات ﺗﺒﻘﻰ ﻣﻔﺘﻮﺣﺔ وﺧﺎﺻﺔ اﻟﻌﻄﺎء اﻟﺜﺎﻧﻰ واﻟﺜﺎﻟﺚ ﻣﻦ ﺣﻴﺚ اﻟﺴﻌﺮ إﻟﻰ‬‫ﺣﻴﻦ ﺗﻮﻗﻴﻊ اﻟﻌﻘﺪ ﺑﻴﻦ اﻟﻤﺎﻟﻚ واﻟﻤﻘﺎول ﻣﻊ ﻣﻼﺣﻈﺔ اﻟﻀﻮاﺑﻂ اﻟﻘﺎﻧﻮﻧﻴﺔ ﻟﻬﺬﻩ اﻹﺟﺮاءات. وﻓﻰ ﺑﻌﺾ اﻷﺣﻴﺎن ﻗﺪ‬‫ﻳﻠﺠﺄ اﻟﻤﺎﻟﻚ اﻟﻰ اﻟﺘﻔﺎوض ﻟﻴﻘﻠﻞ ﻣﻦ ﺳﻌﺮ اﻟﻤﺸﺮوع اﻟﻤﻘﺪم ﻣﻦ اﻟﻤﻘﺎول. وﻓﻰ ﺣﺎﻟﺔ ﻋﺪم ﺗﺨﺼﺺ اﻟﻤﻘﺎول‬‫اﻟﺮﺋﻴﺲ ﻓﻰ ﺑﻌﺾ اﻷﻋﻤﺎل أو ﻋﺪم ﺗﻮاﻓﺮ اﻟﺨﺒﺮات ﻟﺪﻳﻪ، ﻓﺈﻧﻪ ﻳﺘﻌﺎﻗﺪ ﻣﻦ اﻟﺒﺎﻃﻦ ﻣﻊ ﻣﻘﺎول ﻳﻘﻮم ﺑﺘﻨﻔﻴﺬ ﺗﻠﻚ‬‫اﻷﻋﻤﺎل وﻳﻜﻮن ﻣﻘﺎول اﻟﺒﺎﻃﻦ ﻣﺴﺌﻮﻻ ﻋﻦ اﻟﻌﻤﺎﻟﺔ واﻟﻤﻌﺪات واﻟﻤﻮاد واﻻدارة ﻟﺒﻨﻮد اﻷﻋﻤﺎل اﻟﻤﺴﻨﺪة اﻟﻴﻪ. ﺷﻜﻞ‬ ‫1.2 ﻳﻮﺿﺢ اﻟﻌﻼﻗﺔ ﺑﻴﻦ أﻃﺮاف اﻟﻤﺸﺮوع ﻓﻰ ﺣﺎﻟﻰ هﺬا اﻟﻨﻮع ﻣﻦ اﻟﺘﻌﺎﻗﺪات.‬ ‫ﺷﻜﻞ )1.2( رﺳﻢ ﺗﻮﺿﻴﺤﻲ ﻳﺒﻴﻦ ﻋﻼﻗﺔ اﻟﻤﺎﻟﻚ ﺑﻤﺨﺘﻠﻒ اﻷﻃﺮاف ﻓﻰ اﻟﺘﻌﺎﻗﺪ اﻟﻌﺎم‬‫‪Construction Management‬‬ ‫61‬ ‫‪Dr. Emad Elbeltagi‬‬
  • 175. ‫‪Chapter 2: Contract Strategy‬‬‫ﻓﻰ هﺬا اﻟﻨﻮع ﻣﻦ اﻟﺘﻌﺎﻗﺪ ﻳﻔﺘﺮض أن ﻳﻜﻮن اﻟﻤﻘﺎول اﻟﺮﺋﻴﺲ ﻟﺪﻳﻪ اﻟﻜﻔﺎءة واﻟﺨﺒﺮة ﻓﻰ ادارة اﻟﻤﺸﺮوع‬‫وآﺬﻟﻚ ﺗﻮﻓﻴﺮ اﻟﻤﻮارد اﻟﻤﺨﺘﻠﻔﺔ. هﺬﻩ اﻟﻄﺮﻳﻘﺔ ﻟﻦ ﺗﻜﻮن اﻟﻄﺮﻳﻘﺔ اﻟﻤﻔﻀﻠﺔ ﻟﻠﻤﺎﻟﻚ إذا ﺗﻮاﻓﺮت ﻟﺪﻳﻪ اﻹدارة اﻟﺠﻴﺪة‬‫ﻟﻠﻤﺸﺮوع وﻟﻜﻦ هﺬﻩ اﻟﻄﺮﻳﻘﺔﻓﻰ اﻟﻤﻘﺎﺑﻞ ﺗﻌﻄﻰ اﻟﻤﺎﻟﻚ ﺗﺼﻮرا واﺿﺤﺎ ﻋﻦ اﻟﺘﻜﻠﻔﺔ اﻹﺟﻤﺎﻟﻴﺔ ﻟﻠﻤﺸﺮوع ﻗﺒﻞ اﻟﺒﺪأ‬ ‫ﻓﻰ ﻣﺮﺣﻠﺔ اﻟﺘﻨﻔﻴﺬ.‬ ‫2.3.2 ﻃﺮﻳﻘﺔ اﻟﺘﻌﺎﻗﺪ اﻟﻤﻨﻔﺼﻞ ‪Separate contract method‬‬‫ﻓﻰ هﺬﻩ اﻟﻄﺮﻳﻘﺔ ﻳﻜﻮن اﻟﺘﻌﺎﻗﺪ ﺑﻴﻦ اﻟﻤﺎﻟﻚ و ﻣﻘﺎوﻟﻴﻦ ﻣﺘﺨﺼﺼﻴﻦ ﻟﻠﻘﻴﺎم ﺑﺄﻋﻤﺎل اﻟﻤﺸﺮوع آﻤﺎ هﻮ ﻣﻮﺿﺢ‬‫ﺑﺸﻜﻞ 2.2، وهﻰ ﺗﺸﺒﻪ ﻃﺮﻳﻘﺔ اﻟﺘﻌﺎﻗﺪ اﻟﻌﺎم وﻟﻜﻦ ﺑﺪون ﻣﻘﺎول رﺋﻴﺲ ﻟﻠﻤﺸﺮوع، وهﺬا ﻳﻌﻨﻰ أن ﻋﻠﻰ اﻟﻤﺎﻟﻚ‬‫اﻹﺷﺮاف ﻋﻠﻰ اﻟﻤﺸﺮوع. وﺑﺎﻟﺘﺎﻟﻰ ﻳﺠﺐ أن ﻳﻜﻮن ﻟﺪﻳﻪ اﻟﻜﻔﺎءة واﻟﻘﺪرة ﻋﻠﻰ ذﻟﻚ. واﻟﻔﺎﺋﺪة اﻷﺳﺎﺳﻴﺔ ﻓﻰ هﺬا‬‫اﻟﻨﻮع ﻣﻦ اﻟﺘﻌﺎﻗﺪ أن اﻟﻤﺎﻟﻚ ﻳﺤﺘﻔﻆ ﺑﺎﻷرﺑﺎح اﻟﺘﻰ آﺎﻧﺖ ﻳﻤﻜﻦ أن ﺗﺬهﺐ اﻟﻰ اﻟﻤﻘﺎول اﻟﺮﺋﻴﺲ. أﻣﺎ ﻓﻰ اﻟﺤﺎﻻت‬‫اﻟﺘﻰ ﻳﻔﺘﻘﺪ ﻓﻴﻬﺎ اﻟﻤﺎﻟﻚ اﻟﻰ ﺗﻠﻚ اﻹﻣﻜﺎﻧﻴﺎت اﻹدارﻳﺔ ﻓﺒﺈﻣﻜﺎﻧﻪ اﻟﺘﻌﺎﻗﺪ ﻣﻊ ﺟﻬﺔ ﻟﺘﻘﻮم ﺑﻤﻬﺎم اﻹﺷﺮاف. ﻋﻨﺪ ﻋﺪم‬‫وﺿﻮح ﻣﻬﺎم هﺬﻩ اﻟﺠﻬﺔ، ﻳﻤﻜﻦ أن ﺗﻨﺸﺄ ﻧﺰاﻋﺎت ﺑﻴﻦ اﻟﻤﻘﺎوﻟﻴﻦ واﻟﺠﻬﺔ اﻟﻤﺸﺮﻓﺔ. وﻟﺬﻟﻚ ﻳﻔﻀﻞ أن ﻳﻘﻮم اﻟﻤﺎﻟﻚ‬ ‫ﺑﺄﻋﻤﺎل اﻹدارة واﻹﺷﺮاف أﺛﻨﺎء ﻣﺮاﺣﻞ اﻟﺘﻨﻔﻴﺬ ﻟﻠﻤﺸﺮوع.‬‫وﻣﻦ اﻷهﻤﻴﺔ ﺑﻤﻜﺎن ﻋﻨﺪ ﺗﻄﺒﻴﻖ هﺬﻩ اﻟﻄﺮﻳﻘﺔ اﻟﺤﺼﻮل ﻋﻠﻰ ﻣﺪﻳﺮ ﻓﻨﻰ أو ﻣﻬﻨﺪس ادارة ﻣﺸﺮوﻋﺎت ذو‬‫آﻔﺎءة ﺑﺤﻴﺚ ﻳﺸﺮف ﻋﻠﻰ اﻟﺒﻨﻮد اﻟﻤﺨﺘﻠﻔﺔ ﻟﻠﻤﺸﺮوع. وهﺬﻩ اﻟﻄﺮﻳﻘﺔ ﺗﻜﻮن ﻣﻼﺋﻤﺔ ﻟﻠﻤﺸﺎرﻳﻊ ذات اﻟﻄﺒﻴﻌﺔ اﻟﺘﻰ‬‫ﺗﺤﺘﺎج اﻟﻰ ﻣﻘﺎوﻟﻴﻦ ﻣﺘﺨﺼﺼﻴﻦ ﻟﺘﻨﻔﻴﺬ ﺑﻨﻮد اﻟﻤﺸﺮوع اﻟﺘﺨﺼﺼﻴﺔ. وﻣﻦ ﻋﻴﻮب هﺬﻩ اﻟﻄﺮﻳﻘﺔ أﻧﻬﺎ ﺗﻌﺮض‬‫اﻟﻤﺎﻟﻚ اﻟﻤﺨﺎﻃﺮ ﻣﻘﺎرﻧﺔ ﺑﻄﺮﻳﻘﺔ اﻟﺘﻌﺎﻗﺪ اﻟﻌﺎم )ﺣﻴﺚ ﻻﻳﻮﺟﺪ ﻣﻘﺎول رﺋﻴﺲ(. وﻋﻤﻮﻣﺎ ﻓﺄن هﺬﻩ اﻟﻄﺮﻳﻘﺔ ﻏﻴﺮ‬ ‫ﺷﺎﺋﻌﺔ اﻹﺳﺘﺨﺪام ﻓﻰ اﻟﻤﺸﺎرﻳﻊ اﻹﻧﺸﺎﺋﻴﺔ.‬ ‫ﺷﻜﻞ )2. 2( رﺳﻢ ﺗﻮﺿﻴﺤﻲ ﻳﺒﻴﻦ اﻟﻬﻴﻜﻞ اﻟﺘﻨﻈﻴﻤﻰ ﻟﻠﺘﻌﺎﻗﺪ اﻟﻤﻨﻔﺼﻞ‬‫‪Construction Management‬‬ ‫71‬ ‫‪Dr. Emad Elbeltagi‬‬
  • 176. ‫‪Chapter 2: Contract Strategy‬‬ ‫3.3.2 ﻃﺮﻳﻘﺔ اﻟﺘﻨﻔﻴﺬ اﻟﺪاﺧﻠﻰ )اﻟﺤﺴﺎب اﻻﺟﺒﺎرى( ‪Direct labor / Force account method‬‬‫ﻓﻰ ﻃﺮﻳﻘﺔ اﻟﺘﻨﻔﻴﺬ اﻟﺪاﺧﻠﻰ ﻻﻳﻮﺟﺪ ﻋﻘﺪ ﻟﺘﻨﻔﻴﺬ اﻷﻋﻤﺎل اﻹﻧﺸﺎﺋﻴﺔ ﻟﻤﺸﺮوع ﻣﺎ، ﺣﻴﺚ أن اﻟﻤﺎﻟﻚ ﻳﻜﻮن ﻟﺪﻳﻪ‬‫اﻻﻣﻜﺎﻧﻴﺎت اﻟﻔﻨﻴﺔ واﻟﻤﻮارد اﻟﻼزﻣﺔ ﻟﺘﻨﻔﻴﺬ اﻟﻤﺸﺮوع ﻣﻦ اﻟﻨﺎﺣﻴﺔ اﻟﺘﻘﻨﻴﺔ )اﻧﻈﺮ ﺷﻜﻞ 3.2(. وﺑﻨﺎء ﻋﻠﻴﻪ، ﻓﺈن‬‫اﻟﻤﺎﻟﻚ ﻳﻜﻮن ﻣﺴﺌﻮﻻ ﻋﻦ ﺗﺰوﻳﺪ اﻟﻤﻮﻗﻊ ﺑﺎﻟﻤﻮارد واﻟﻤﻌﺪات واﻟﻌﻤﺎﻟﺔ اﻟﻼزﻣﺔ ﻟﻠﺘﻨﻔﻴﺬ، وآﺬﻟﻚ اﻹﺷﺮاف ﻋﻠﻰ‬‫اﻟﺘﻨﻔﻴﺬ. وﻳﻤﻜﻦ اﻟﻘﻮل ﻳﻤﺜﻞ دورا أﺳﺎﺳﻴﺎ )ﻣﺪﻳﺮ اﻟﻤﺸﺮوع(. وﻗﺪ ﻳﻘﻮم اﻟﻤﺎﻟﻚ أﻳﻀﺎ ﺑﺈﻋﺪاد اﻟﺘﺼﻤﻴﻤﺎت اﻟﻬﻨﺪﺳﻴﺔ‬‫ﻟﻠﻤﺸﺮوﻋﺎت اﻟﺼﻐﻴﺮة، وﻟﻜﻦ ﻓﻰ اﻟﻤﺸﺮوﻋﺎت اﻟﻜﺒﻴﺮة ﻗﺪ ﻳﺴﺘﻌﻴﻦ اﻟﻤﺎﻟﻚ ﺑﻤﺼﻤﻢ )ﻣﻬﻨﺪس اﺳﺘﺸﺎرى ﻹﻋﺪاد‬‫اﻟﺘﺼﻤﻴﻢ اﻟﻬﻨﺪﺳﻰ ﻟﻠﻤﺸﺮوع(. وﻳﺘﻢ اﻟﻠﺠﻮء ﻟﻬﺬا اﻟﻨﻮع ﻣﻦ اﻟﺘﻌﺎﻗﺪات ﻓﻰ اﻟﻤﺸﺮوﻋﺎت اﻟﺼﻐﻴﺮة، واﻟﻤﺸﺮوﻋﺎت‬‫اﻟﺘﻰ ﺗﺘﻄﻠﺐ ﺳﺮﻋﺔ اﻟﺘﻨﻔﻴﺬ )اﻟﻤﺸﺮوﻋﺎت اﻟﻄﺎرﺋﺔ واﻟﺘﻰ ﻻﻳﻜﻮن هﻨﺎك وﻗﺖ آﺎﻓﻰ ﻹﻋﺪاد ﻣﺴﺘﻨﺪات اﻟﻤﻨﺎﻗﺼﺔ(،‬‫وآﺬﻟﻚ اﻟﻤﺸﺮوﻋﺎت ﻏﻴﺮ اﻟﻤﻌﺮﻓﺔ ﺑﺸﻜﻞ ﺟﻴﺪ أو اﻟﺘﻰ ﻳﺼﻌﺐ ﺗﻌﺮﻳﻔﻬﺎ. وهﺬﻩ اﻟﻄﺮﻳﻘﺔ ﺗﻨﺎﺳﺐ ﺑﺸﻜﻞ ﺧﺎص‬‫ﻣﺸﺮوﻋﺎت اﻟﺼﻴﺎﻧﺔ اﻟﺪورﻳﺔ ﻟﻠﻤﻨﺸﺄ واﻟﺘﻰ ﺗﺘﺼﻒ ﺑﺎﻟﺒﺴﺎﻃﺔ وﻣﻦ اﻟﻤﻨﻄﻘﻰ أو اﻟﻀﺮورى أن ﻳﻜﻮن ﻟﺪى اﻟﻤﺎﻟﻚ‬ ‫)اﻟﻤﺆﺳﺴﺔ اﻟﻤﺎﻟﻜﺔ( ﻓﺮق ﻋﻤﻞ ﻣﺎهﺮة ﻟﻠﻘﻴﺎم ﺑﺎﻷﻋﻤﺎل اﻟﻤﻄﻠﻮﺑﺔ.‬ ‫ﺷﻜﻞ )3. 2( اﻟﻬﻴﻜﻞ اﻟﺘﻨﻈﻴﻤﻰ ﻟﻠﺘﻌﺎﻗﺪ ﺑﻄﺮﻳﻘﺔ اﻟﺘﻨﻔﻴﺬ اﻟﺪاﺧﻠﻰ‬ ‫4.3.2 ﻃﺮﻳﻘﺔ ﺗﺴﻠﻴﻢ اﻟﻤﻔﺘﺎح ‪Turnkey contract‬‬‫ﻓﻰ هﺬﻩ اﻟﻄﺮﻳﻘﺔ ﻳﺘﻢ ﺗﻮﻇﻴﻒ ﺷﺮآﺔ إﻧﺸﺎءات وذﻟﻚ ﻟﻼﺳﺘﻔﺎدة ﻣﻦ ﺧﺒﺮﺗﻬﺎ ﻓﻰ ﻣﺮﺣﻠﺔ اﻟﺘﺼﻤﻴﻢ اﻟﻬﻨﺪﺳﻰ،‬‫ﺣﻴﺚ ﻳﻜﻠﻒ اﻟﻤﺎﻟﻚ اﻟﻤﻘﺎول ﺑﺎﻟﻘﻴﺎم ﺑﺄﻋﻤﺎل اﻟﺘﺼﻤﻴﻢ واﻟﺘﻨﻔﻴﺬ ﻣﻌﺎ )اﻧﻈﺮ ﺷﻜﻞ 4.2(. وﺑﻨﺎء ﻏﻠﻴﻪ ﻓﺈن اﻟﻤﺴﺌﻮﻟﻴﺔ‬‫اﻟﺘﻘﻨﻴﺔ ﺗﻨﺤﺼﺮ ﻣﻦ ﻧﺎﺣﻴﺔ اﻟﺘﺼﻤﻴﻢ واﻟﺘﻨﻔﻴﺬ ﻓﻰ ﺟﻬﺔ واﺣﺪة )اﻟﻤﻘﺎول( ﺑﺎﻹﺿﺎﻓﺔ اﻟﻰ أى أﻋﻤﺎل أﺧﺮى ﻗﺪ ﺗﻮآﻞ‬‫إﻟﻴﻪ أﺛﻨﺎء ﻣﺮﺣﻠﺔ اﻟﺘﻨﻔﻴﺬ.. وهﺬا اﻟﺘﻌﺎﻗﺪ ﻳﺸﺒﻪ اﻟﻰ ﺣﺪ آﺒﻴﺮ اﻟﺘﻌﺎﻗﺪ اﻟﻌﺎم وﻟﻜﻦ ﻣﺴﺌﻮﻟﻴﺔ اﻟﻤﻘﺎول ﺗﻤﺘﺪ ﻟﺘﺸﻤﻞ إﻋﺪاد‬‫اﻟﺘﺼﻤﻴﻢ. وﻳﻜﺜﺮ اﺳﺘﺨﺪام هﺬﻩ اﻟﻄﺮﻳﻘﺔ ﻓﻰ اﻟﻤﺸﺮوﻋﺎت اﻟﻜﺒﻴﺮة وذات اﻟﻄﺒﻴﻌﺔ اﻟﺼﻨﺎﻋﻴﺔ آﻤﺤﻄﺎت ﺗﻜﺮﻳﺮ‬ ‫اﻟﻨﻔﻂ.‬‫‪Construction Management‬‬ ‫81‬ ‫‪Dr. Emad Elbeltagi‬‬
  • 177. ‫‪Chapter 2: Contract Strategy‬‬ ‫ﺷﻜﻞ )4. 2( اﻟﻬﻴﻜﻞ اﻟﺘﻨﻈﻴﻤﻰ ﻟﻠﺘﻌﺎﻗﺪ ﺑﻄﺮﻳﻘﺔ ﺗﺴﻠﻴﻢ اﻟﻤﻔﺘﺎح‬ ‫وهﻨﺎ ﺗﺠﺪر اﻹﺷﺎرة اﻟﻰ أن هﺬا اﻟﻨﻮع ﻣﻦ اﻟﺘﻌﺎﻗﺪات ﻳﺆدى اﻟﻰ اﻟﺘﻨﻔﻴﺬ اﻟﺴﺮﻳﻊ ﻟﻠﻤﺸﺮوع ﺣﻴﺚ ﻳﻤﻜﻦ اﻟﺒﺪأ ﻓﻰ‬ ‫اﻟﺘﻨﻔﻴﺬ أﺛﻨﺎء إﻋﺪاد اﻟﺘﺼﻤﻴﻤﺎت اﻟﻬﻨﺪﺳﻴﺔ ﻟﻠﻤﺸﺮوع.‬ ‫5.3.2 ﻃﺮﻳﻘﺔ اﻟﺘﻌﺎﻗﺪ اﻟﻤﺘﺨﺼﺺ ‪Construction management‬‬ ‫ﺗﻌﺘﺒﺮ ﻃﺮﻳﻘﺔ اﻟﺘﻌﺎﻗﺪ اﻟﻤﺘﺨﺼﺺ ﻣﻦ إﺣﺪى اﻟﻄﺮق اﻟﺘﻰ ﻳﺘﻢ ﻓﻴﻬﺎ اﻟﺘﻌﺎﻗﺪ ﻣﻊ ﺷﺮآﺔ ﻟﻜﻰ ﺗﻘﻮم ﺑﺄﻋﻤﺎل‬ ‫ﺗﺨﺼﺼﻴﺔ ﺑﺤﺘﺔ وﻣﻨﻬﺎ ﻋﻠﻰ ﺳﺒﻴﻞ اﻟﻤﺜﺎل ﺷﺮآﺔ ﻹدارة اﻟﻤﺸﺮوع وﻳﻄﻠﻖ ﻋﻠﻴﻬﺎ أﺣﻴﺎﻧﺎ ﻣﻘﺎول اﻹدارة )ﺷﻜﻞ‬ ‫5.2(.‬ ‫ﺷﻜﻞ )5. 2( اﻟﻬﻴﻜﻞ اﻟﺘﻨﻈﻴﻤﻰ ﻟﻄﺮﻳﻘﺔ اﻟﺘﻌﺎﻗﺪ اﻟﻤﺘﺨﺼﺺ‬‫‪Construction Management‬‬ ‫91‬ ‫‪Dr. Emad Elbeltagi‬‬
  • 178. ‫‪Chapter 2: Contract Strategy‬‬‫وﻓﻴﻬ ﺎ ﻳ ﺘﻢ ﺗﻮﻇﻴ ﻒ ﻣ ﺪﻳﺮ ﻓﻨ ﻰ ﻟﻠﻤ ﺸﺮوع أو اﻟﺘﻌﺎﻗ ﺪ ﻣ ﻊ ﺷ ﺮآﺔ ﻹدارة اﻟﻤ ﺸﺮوع ﻗﺒ ﻞ اﻟﺒ ﺪأ ﻓ ﻰ ﻣﺮﺣﻠﺘ ﻰ‬‫اﻟﺘﺼﻤﻴﻢ واﻟﺘﻨﻔﻴﺬ، وﻣﻦ اﻟﻤﻬﺎم اﻷﺳﺎﺳﻴﺔ ﻟﻬﺬا اﻟﻤﺪﻳﺮ اﻟﻔﻨﻰ أو ﻣﻘﺎول اﻹدارة أﻧﻪ ﻳﻘ ﻮم ﺑﺎﺧﺘﻴ ﺎر اﻟ ﺸﺮآﺔ اﻟﺘ ﻰ ﺗﻘ ﻮم‬‫ﺑﺈﻋﺪاد اﻟﺘﺼﻤﻴﻤﺎت اﻟﻬﻨﺪﺳﻴﺔ ﻟﻠﻤﺸﺮوع، أﻳﻀﺎ ﻳﻘ ﻮم ﺑﻤﺮاﺟﻌ ﺔ وﺗﻘﻴ ﻴﻢ اﻟﻤ ﺸﺮوع ﻣ ﻦ ﻧﺎﺣﻴ ﺔ اﻟﺘﻜﻠﻔ ﺔ وزﻣ ﻦ اﻟﺘﻨﻔﻴ ﺬ‬‫وﻣ ﺪى إﻣﻜﺎﻧﻴ ﺔ ﺗﻘﻠﻴ ﻞ ﺗﻜ ﺎﻟﻴﻒ اﻟﻤ ﺸﺮوع )أى اﻟﺘﺄآ ﺪ ﻣ ﻦ اﻟﺠ ﺪوى اﻻﻗﺘ ﺼﺎدﻳﺔ ﻟﻠﻤ ﺸﺮوع وآ ﺬﻟﻚ ﺟ ﺪوى أه ﺪاف‬‫اﻟﻤﺸﺮوع(، وﻋﻠﻴﻪ ﻓﺈن اﻟﻤﺪﻳﺮ اﻟﻔﻨﻰ ﻟﻠﻤﺸﺮوع ﻳﻌﻤﻞ ﻟﺼﺎﻟﺢ اﻟﻤﺎﻟﻚ. وﻣﻦ اﻟﻤﻤﻜﻦ ﻟﻤﺪﻳﺮ اﻟﻤﺸﺮوع ﻋﻤﻞ ﺗﺮﺗﻴﺒﺎت‬‫ﻣﻊ اﻟﻤﺎﻟﻚ ﻟﻴﺄﺧﺬ ﻧﺴﺒﺔ ﻣﻦ اﻷﻣﻮال اﻟﺘﻰ ﻳﺘﻢ ﺗﻮﻓﻴﺮهﺎ ﻓﻴﻤﺎ ﻟﻮ ﻗﻠﺖ اﻟﺘﻜﻠﻔﺔ اﻟﻔﻌﻠﻴﺔ ﻟﻠﻤﺸﺮوع ﻋﻦ اﻟﺘﻜﺎﻟﻴﻒ اﻹﺟﻤﺎﻟﻴﺔ‬ ‫اﻟﺘﻰ ﺗﻢ ﺗﻘﺪﻳﺮهﺎ.‬ ‫ﻳﻜﺜﺮ اﺳﺘﻌﻤﺎل هﺬﻩ اﻟﻄﺮﻳﻘﺔ ﻓﻰ اﻟﻤﺸﺮوﻋﺎت اﻟﻜﺒﻴﺮة وذات اﻟﺒﻨﻮد اﻟﻤﻌﻘﺪة واﻟﺘﻰ ﺗﺘﻄﻠﺐ ﻣﺘﺨﺼﺼﻴﻦ‬ ‫ﻟﺘﻨﻔﻴﺬ اﻷﻋﻤﺎل ﺑﻬﺎ وأﻳﻀﺎ ﺗﺴﺘﻌﻤﻞ هﺬﻩ اﻟﻄﺮﻳﻘﺔ ﻓﻰ اﻟﻤﺸﺮوﻋﺎت اﻟﻤﻄﻠﻮب ﺗﻨﻔﻴﺬهﺎ ﺑﺴﺮﻋﺔ.‬ ‫‪Contracting stage‬‬ ‫א‬ ‫א‬ ‫א‬ ‫4.2 א‬‫ﻣﻦ اﻟﻤﺘﻌﺎرف ﻋﻠﻴﻪ أن اى ﻣﺸﺮوع ﻳﻤﺮ ﺑﺜﻼﺛﺔ ﻣﺮاﺣﻞ رﺋﻴﺴﻴﺔ، وﺧﺎﺻﺔ اﻟﻤ ﺸﺮوﻋﺎت اﻟﻜﺒﻴ ﺮة، وﺗ ﺸﻤﻞ ﻣﺮﺣﻠ ﺔ‬‫دراﺳﺔ اﻟﺠﺪوى، واﻟﻤﺮﺣﻠﺔ اﻟﻬﻨﺪﺳ ﻴﺔ )وه ﺬﻩ اﻟﻤﺮﺣﻠ ﺔ ﺗﺘﻜ ﻮن ﻣ ﻦ اﻟﺘ ﺼﻤﻴﻢ واﻟﺘﻌﺎﻗ ﺪ واﻟﺘﻨﻔﻴ ﺬ واﻟﺘ ﺴﻠﻴﻢ(، وأﺧﻴ ﺮا‬ ‫ﻣﺮﺣﻠﺔ اﻟﺘﺸﻐﻴﻞ واﻟﺼﻴﺎﻧﺔ، وﺳﻮف ﻧﺘﻌﺮض هﻨﺎ ﺑﺸﺊ ﻣﻦ اﻟﺘﻔﺼﻴﻞ ﻟﻤﺮﺣﻠﺔ اﻟﺘﻌﺎﻗﺪ.‬‫ﺗﺒﺪأ ﻣﺮﺣﻠﺔ اﻟﺘﻌﺎﻗﺪ أﺛﻨﺎء إﻋﺪاد اﻟﺠﺰء اﻷﺧﻴﺮ ﻣﻦ ﻣﺮﺣﻠﺔ اﻟﺘ ﺼﻤﻴﻢ )أى ﻋﻨ ﺪ اﻗﺘ ﺮاب ﻣﺮﺣﻠ ﺔ اﻟﺘ ﺼﻤﻴﻢ ﻣ ﻦ‬‫ﻧﻬﺎﻳﺘﻬﺎ( ﺣﻴ ﺚ ﻳﻜ ﻮن اﻟﺮﺳ ﻮﻣﺎت اﻟﻤﻌﻤﺎرﻳ ﺔ واﻹﻧ ﺸﺎﺋﻴﺔ ﻗ ﺪ ﺗ ﻢ إﻋ ﺪادهﺎ وآ ﺬﻟﻚ ﻣﻠﺤﻘ ﺎت اﻟﻤ ﺸﺮوع وذﻟ ﻚ ﺗﻤﻬﻴ ﺪا‬‫ﻷﻋﻤﺎل ﺣﺼﺮ اﻟﻜﻤﻴﺎت ﻟﻠﺒﻨﻮد اﻟﻤﺨﺘﻠﻔﺔ ﻟﻠﻤﺸﺮوع وآﺬﻟﻚ ﻻﺧﺘﻴﺎر اﻟﻤﻘﺎول اﻟﻤﻨﺎﺳﺐ ﻟﺘﻨﻔﻴﺬ اﻟﻤﺸﺮوع. وﺗﻌﺘﺒﺮ ه ﺬﻩ‬‫اﻟﻤﺮﺣﻠﺔ ﺑﺎﻟﻨﺴﺒﺔ ﻟﻠﻤﺎﻟﻚ آﻤﺸﺮوع ﺻﻐﻴﺮ وﺗﺤﺘﺎج اﻟﻰ ﺗﺨﻄﻴﻂ ﺟﻴ ﺪ. ﺷ ﻜﻞ 6.2 ﻳﻠﻘ ﻰ اﻟ ﻀﻮء ﻋﻠ ﻰ أه ﻢ اﻷﻧ ﺸﻄﺔ‬ ‫اﻟﺘﻰ ﺗﻤﺮ ﺑﻬﺎ ﻣﺮﺣﻠﺔ اﻟﺘﻌﺎﻗﺪ، وﻳﻤﻜﻦ ﺗﻠﺨﻴﺼﻬﺎ آﻤﺎ ﻳﻠﻰ:‬ ‫- ﺗﺠﻬﻴﺰ ﻣﺴﺘﻨﺪات اﻟﻤﻨﺎﻗﺼﺔ )‪.(Bidding documents‬‬ ‫- اﺧﺘﻴﺎر اﻟﻤﻘﺎول )‪.(Contractor selection‬‬ ‫- ﺗﻮﻗﻴﻊ اﻟﻌﻘﺪ )‪.(The agreement‬‬‫‪Construction Management‬‬ ‫02‬ ‫‪Dr. Emad Elbeltagi‬‬
  • 179. ‫‪Chapter 2: Contract Strategy‬‬ ‫ﺷﻜﻞ )6. 2( اﻷﻧﺸﻄﺔ اﻟﻤﺨﺘﻠﻔﺔ ﻓﻰ ﻣﺮﺣﻠﺔ اﻟﺘﻌﺎﻗﺪ‬ ‫1.4.2 ﺗﺠﻬﻴﺰ ﻣﺴﺘﻨﺪات اﻟﻤﻨﺎﻗﺼﺔ ‪Bidding documents‬‬‫ه ﻰ ﺗﻠ ﻚ اﻟﻮﺛ ﺎﺋﻖ واﻟﻤ ﺴﺘﻨﺪات واﻟﺘ ﻰ ﺗﻌﻄ ﻰ ﻋ ﺎدة ﻟﻠﻤﻘ ﺎوﻟﻴﻦ ﻟﺪراﺳ ﺔ اﻟﻤ ﺸﺮوع، وﻣ ﻦ ﺛ ﻢ ﺗﻘ ﺪﻳﻢ اﻟﻌﻄ ﺎء‬ ‫ﻟﻠﻤﺎﻟﻚ، ﺗﻤﻬﻴﺪا ﻻﺧﺘﻴﺎر اﻟﻤﻘﺎول اﻟﻤﻨﺎﺳﺐ اﻟﺬى ﺳﻮف ﻳﻘﻮم ﺑﺘﻨﻔﻴﺬ اﻟﻤﺸﺮوع، وﺗﺸﻤﻞ هﺬﻩ اﻟﻮﺛﺎﺋﻖ ﻣﺎﻳﻠﻰ:‬ ‫ﺧﻄﺎب اﻟﻤﺎﻟﻚ ‪Invitation to bid‬‬‫وهﻮ ﻋﺒﺎرة ﻋﻦ دﻋﻮة ﻣﻦ ﻣﺎﻟﻚ اﻟﻤ ﺸﺮوع اﻟ ﻰ اﻟﻤﻘ ﺎوﻟﻴﻦ ﻟ ﺪﺧﻮل اﻟﻤﻨﺎﻗ ﺼﺔ، وﻋ ﺎدة ﻣ ﺎ ﻳﻮﺿ ﺢ ﻓﻴﻬ ﺎ اﺳ ﻢ‬‫اﻟﻤﺸﺮوع وﻃﺒﻴﻌﺘ ﻪ وﻣﻜﺎﻧ ﻪ وآ ﺬﻟﻚ ﻣﻮﻋ ﺪ ﺗ ﺴﻠﻴﻢ اﻟﻌﻄ ﺎء، واﻟﻤﺘﻄﻠﺒ ﺎت اﻷﺳﺎﺳ ﻴﺔ اﻟﻮاﺟ ﺐ ﺗﻮاﻓﺮه ﺎ، إﺿ ﺎﻓﺔ اﻟ ﻰ‬ ‫اﻟﺸﺮوط اﻷﺧﺮى واﻟﺘﻰ ﺗﺸﻤﻞ اﻟﻀﻤﺎن واﻟﺘﺄﻣﻴﻨﺎت وﻏﺮاﻣﺎت اﻟﺘﺄﺧﻴﺮ.‬ ‫ﺷﻜﻞ اﻟﻤﻨﺎﻗﺼﺔ ‪Bid form‬‬‫هﻮ ذﻟﻚ اﻟﺨﻄﺎب اﻟﻤﻮﺟﻪ ﻣﻦ اﻟﻤﻘﺎول اﻟﻰ اﻟﻤﺎﻟﻚ ﻳﻔﻴﺪ ﻓﻴﻪ ﻣﻮاﻓﻘﺔ اﻟﻤﻘﺎول ﻋﻠﻰ دﺧﻮل اﻟﻤﻨﺎﻗ ﺼﺔ ﺑﺎﻟ ﺸﺮوط‬ ‫اﻟﻤﺬآﻮرة ﻓﻰ دﻋﻮة اﻟﻤﺎﻟﻚ، وأﻧﻪ ﻗﺪ ﻗﺎم ﺑﺪراﺳﺔ ﺑﻨﻮد اﻟﻤﻨﺎﻗﺼﺔ اﻟﻤﺨﺘﻠﻔﺔ.‬ ‫ﺷﻜﻞ اﻟﻌﻘﺪ ‪Construction Contract‬‬ ‫اﻟﻌﻘﺪ هﻮ ذﻟﻚ اﻻﺗﻔﺎق اﻟﻨﻬﺎﺋﻰ واﻟﺮﺳﻤﻰ اﻟﻤﻮﻗﻊ ﺑﻴﻦ اﻟﻤﺎﻟﻚ و اﻟﻤﻘﺎول، وﻳﺤﺘﻮى ﻋﻠﻰ:‬ ‫- اﺳﻢ آﻞ ﻣﻦ اﻟﻤﺎﻟﻚ واﻟﻤﻘﺎول وﺑﻴﺎﻧﺎﺗﻪ آﺎﻣﻠﺔ.‬ ‫- اﺳﻢ اﻟﺸﻬﻮد ﻋﻠﻰ اﻟﻌﻘﺪ وﻋﺎدة ﻣﺎﺗﻜﻮن ﺟﻬﺔ رﺳﻤﻴﺔ ﻣﻠﻤﺔ ﺑﺎﻟﻨﻮاﺣﻰ اﻟﻘﺎﻧﻮﻧﻴﺔ.‬ ‫- اﺳﻢ اﻟﻤﺸﺮوع اﻟﻤﺰﻣﻊ ﺗﻨﻔﻴﺬﻩ ﻣﻊ إﻋﻄﺎء ﻧﺒﺬة ﻋﻠﻰ ﻣﺤﺘﻮﻳﺎﺗﻪ اﻷﺳﺎﺳﻴﺔ.‬‫‪Construction Management‬‬ ‫12‬ ‫‪Dr. Emad Elbeltagi‬‬
  • 180. ‫‪Chapter 2: Contract Strategy‬‬ ‫- اﻟﺰﻣﻦ اﻟﻜﻠﻰ ﻟﺘﻨﻔﻴﺬ اﻟﻤﺸﺮوع وآﺬﻟﻚ اﻟﺘﻜﻠﻔﺔ اﻟﻜﻠﻴﺔ.‬ ‫- أﺳﻠﻮب اﻟﺘﻌﺎﻣﻞ اﻟﻤﺎدى )ﻃﺮﻳﻘﺔ اﻟﺪﻓﻊ( ﺑﻴﻦ اﻟﻤﺎﻟﻚ و اﻟﻤﻘﺎول.‬ ‫- ﻣﺤﺘﻮﻳﺎت اﻟﻌﻘﺪ ﻣﻦ رﺳﻮﻣﺎت هﻨﺪﺳﻴﺔ وﺷﺮوط وﺧﻄﺎﺑﺎت ﺿﻤﺎن وﺗﺄﻣﻴﻨﺎت وﺧﻼﻓﻪ.‬ ‫2.4.2 اﺧﺘﻴﺎر اﻟﻤﻘﺎول ‪Contractor selection‬‬‫ﻓﻰ اﻟﻌﺎدة ﻳﺘﻢ اﺧﺘﻴﺎر اﻟﻤﻘﺎول ﻋﻦ ﻃﺮﻳﻖ اﻟﻤﻨﺎﻗ ﺼﺔ )‪ ،(Bidding‬واﻟﺘ ﻰ ﻳ ﺘﻢ اﻹﻋ ﻼن ﻋﻨﻬ ﺎ ﻓ ﻰ اﻟﻮﺳ ﺎﺋﻞ‬‫اﻟﻌﺎﻣﺔ، أو ﻋ ﻦ ﻃﺮﻳ ﻖ اﻹﺳ ﻨﺎد اﻟﻤﺒﺎﺷ ﺮ )‪ (Forced tendering or Direct order‬ﻟﺘﻨﻔﻴ ﺬ اﻟﻤ ﺸﺮوع. وﻳﻮﺟ ﺪ‬‫اﻟﻌﺪﻳﺪ ﻣﻦ أﻧﻮاع اﻟﻤﻨﺎﻗﺼﺎت ﻣﻦ أهﻤﻬﺎ: اﻟﻤﻨﺎﻗ ﺼﺎت اﻟﻤﻔﺘﻮﺣ ﺔ )‪ ، (Open tendering‬واﻟﻤﻨﺎﻗ ﺼﺎت اﻟﻤﺤ ﺪودة‬ ‫)‪ ،(selective tendering‬واﻟﻤﻨﺎﻗﺼﺎت اﻟﻤﺘﻌﺪدة )‪.(series tendering‬‬‫و ﻓﻰ اﻟﻌﺎدة ﺗﻘﻮم اﻟﺠﻬﺔ اﻟﻤﺎﻟﻜﺔ ﻟﻠﻤﺸﺮوع ﺑﺪراﺳﺔ اﻟﻌﻄﺎءات اﻟﻤﻘﺪﻣ ﺔ ﻣ ﻦ اﻟﻤﻘ ﺎوﻟﻴﻦ وﺗﻘﻴﻴﻤﻬ ﺎ ﻣ ﻦ اﻟﻨﺎﺣﻴ ﺔ‬‫اﻟﻔﻨﻴﺔ واﻟﻤﺎﻟﻴﺔ وﺑﻨﺎء ﻋﻠﻴ ﻪ ﻳ ﺘﻢ اﺧﺘﻴ ﺎر اﻟﻤﻘ ﺎول اﻟﻤﻨﺎﺳ ﺐ ﻟﺘﻨﻔﻴ ﺬ اﻟﻤ ﺸﺮوع. وﻋﻤﻮﻣ ﺎ ﻓ ﺈن ﺧﺒ ﺮة اﻟﻤﻘ ﺎول وأﻋﻤﺎﻟ ﻪ‬‫اﻟﺘﻨﻔﻴﺬﻳﺔ اﻟﺴﺎﺑﻘﺔ وﻣﻮاﻋﻴﺪهﺎ وﺟﻮدﺗﻬﺎ وﺗﻜﻠﻔﺘﻬﺎ ﺗﻌﺘﺒﺮ ﻣﻦ اﻟﻌﻮاﻣﻞ اﻟﻬﺎﻣﺔ ﺟﺪا ﻋﻨﺪ اﺧﺘﻴﺎر اﻟﻤﻘﺎول ﻟﺘﻨﻔﻴ ﺬ ﻣ ﺸﺮوع‬‫ﻣ ﺎ. ﺑﺎﻹﺿ ﺎﻓﺔ اﻟ ﻰ ذﻟ ﻚ، ﻓ ﺈن ﻋﻠ ﻰ اﻟﻤﺎﻟ ﻚ اﻟ ﻀﻤﺎﻧﺎت )ﺿ ﻤﺎﻧﺎت ﻣ ﺼﺮﻓﻴﺔ أو ﺿ ﻤﺎﻧﺎت ﺷ ﺮآﺎت ﺗ ﺄﻣﻴﻦ( واﻟﺘ ﻰ‬‫ﻳﻘﺪﻣﻬﺎ اﻟﻤﻘﺎول ﻟﺘﻐﻄﻴﺔ أى ﺗﻘﺼﻴﺮ ﻗﺪ ﻳﺘﺴﺒﺐ اﻟﻤﻘﺎول ﻓﻴﻪ أو ﻓ ﻰ ﺣﺎﻟ ﺔ ﻋ ﺪم اﻟﺘ ﺰام اﻟﻤﻘ ﺎول ﺑ ﺸﺮوط اﻟﻌﻘ ﺪ. وﻋﻨ ﺪ‬‫اﺧﺘﻴﺎر اﻟﻤﻘﺎول اﻟﻤﻨﺎﺳﺐ ﻟﻠﻤﺸﺮوع ﻳﻘﻮم اﻟﻤﺎﻟ ﻚ ﺑﺈﺧﻄ ﺎرﻩ ﺑﺨﻄ ﺎب رﺳ ﻤﻰ، ﻳﻌﻠﻤ ﻪ ﻓﻴ ﻪ ﺑﺄﻧ ﻪ ﻗ ﺪ ﺗ ﻢ اﺧﺘﻴ ﺎرﻩ ﻟﺘﻨﻔﻴ ﺬ‬ ‫اﻟﻤﺸﺮوع وﺗﺤﺪﻳﺪ ﻣﻮﻋﺪ ﻟﺘﻮﻗﻴﻊ وﺛﻴﻘﺔ اﻟﻌﻘﺪ اﻟﻨﻬﺎﺋﻴﺔ ﺗﻤﻬﻴﺪا ﻟﻤﺮﺣﻠﺔ ﺗﺴﻴﻠﻢ اﻟﻤﻮﻗﻊ واﻟﺒﺪأ ﻓﻰ اﻟﺘﻨﻔﻴﺬ.‬ ‫3.4.2 ﺗﻮﻗﻴﻊ اﻟﻌﻘﺪ ‪The agreement‬‬‫‪Construction Management‬‬ ‫22‬ ‫‪Dr. Emad Elbeltagi‬‬
  • 181. ‫‪Chapter 2: Contract Strategy‬‬ ‫ﻣﺴﺆوﻟﻴﺎت اﻟﻤﺎﻟﻚ أﺛﻨﺎء ﻣﺮﺣﻠﺔ اﻟﺘﻌﺎﻗﺪ‬ ‫اﻷهﺪاف اﻟﺮﺋﻴﺴﻴﺔ اﻟﻤﺎﻟﻚ أﺛﻨﺎء ﻣﺮﺣﻠﺔ اﻟﺘﻌﺎﻗﺪ‬ ‫ﻣﺴﺆوﻟﻴﺎت اﻟﻤﻘﺎول أﺛﻨﺎء ﻣﺮﺣﻠﺔ اﻟﺘﻌﺎﻗﺪ‬‫‪Construction Management‬‬ ‫32‬ ‫‪Dr. Emad Elbeltagi‬‬
  • 182. Chapter 2: Contract Strategy ‫اﻷهﺪاف اﻟﺮﺋﻴﺴﻴﺔ اﻟﻤﺎﻟﻚ أﺛﻨﺎء ﻣﺮﺣﻠﺔ اﻟﺘﻌﺎﻗﺪ‬ Contract Strategy ‫א‬ ‫א‬ ‫א א‬ 2.5Construction Management 24 Dr. Emad Elbeltagi
  • 183. Chapter 2: Contract Strategy Unit price contracts ‫1.5.2 ﻋﻘﻮد ﺛﻤﻦ اﻟﻮﺣﺪة‬ ‫ﻃﺮﻳﻘﺔ اﻟﺪﻓﻊ ﻟﻠﻤﻘﺎول ﻓﻰ ﻋﻘﻮد ﺛﻤﻦ اﻟﻮﺣﺪة‬ ‫ﻋﻴﻮب ﻃﺮﻳﻘﺔ ﻋﻘﺪ ﺛﻤﻦ اﻟﻮﺣﺪة‬Construction Management 25 Dr. Emad Elbeltagi
  • 184. Chapter 2: Contract Strategy ‫ﻣﻤﻴﺰات ﻃﺮﻳﻘﺔ ﻋﻘﺪ ﺛﻤﻦ اﻟﻮﺣﺪة‬ Cost-plus contracts ‫2.5.2 ﻋﻘﻮد اﻟﺘﻜﻠﻔﺔ ﻣﻊ ﻧﺴﺒﺔ اﺳﺘﺮداد اﻟﻤﺼﺮوﻓﺎت‬Construction Management 26 Dr. Emad Elbeltagi
  • 185. Chapter 2: Contract Strategy ‫ﻋﻴﻮب ﻋﻘﺪ اﻟﺘﻜﻠﻔﺔ ﻣﻊ ﻧﺴﺒﺔ اﺳﺘﺮداد اﻟﻤﺼﺮوﻓﺎت‬ Lump sum or fixed-price contracts ‫3.5.2 ﻋﻘﻮد اﻟﺜﻤﻦ اﻟﻜﻠﻰ أو اﻟﺴﻌﺮ اﻟﺜﺎﻳﺖ‬Construction Management 27 Dr. Emad Elbeltagi
  • 186. Chapter 2: Contract Strategy ‫ﻣﺘﻰ ﻳﻨﺼﺢ ﺑﻠﺴﺘﺨﺪام ﻋﻘﺪ اﻟﺜﻤﻦ اﻟﻜﻠﻰ‬ ‫ﻋﻴﻮب ﻋﻘﺪ اﻟﺜﻤﻦ اﻟﻜﻠﻰ‬ Target cost contracts ‫4.5.2 ﻋﻘﻮد اﻟﺘﻜﻠﻔﺔ اﻟﻤﺴﺘﻬﺪﻓﺔ‬Construction Management 28 Dr. Emad Elbeltagi
  • 187. Chapter 3: Planning Chapter 3: Project Planning3.1 IntroductionPlanning is a general term that sets a clear road map that should be followed to reach adestination. The term, therefore, has been used at different levels to mean different things.Planning involves the breakdown of the project into definable, measurable, and identifiabletasks/activities, and then establishes the logical interdependences among them. Generally,planning answers three main questions: - What is to be done? - How to do it? - Who does it?In construction, for example, plans may exist at several levels: corporate strategic plans, pre-tender plans, pre-contract plans, short-term construction plans, and long-term construction plans.These plans are different from each other; however, all these plans involve four main steps: - Performing breakdown of work items involved in the project into activities. - Identifying the proper sequence by which the activities should be executed. - Activities representation. - Estimating the resources, time, and cost of individual activities.Detailed planning for tendering purposes and the preparation of construction needs to beconducted through brainstorming sessions among the planning team. The inputs and outputs ofthe planning process are shown in Figure 3.1. Contract information Activities Drawings Relationships among activities Specifications Method statement OUTPUTS INPUTS Available resources Responsibility PLANNING Bills of quantities Reporting levels Site reports Project network diagram Organizational data Activities duration Construction methods Activities cost Figure 3.1: Planning inputs and outputsPlanning requires a rigorous effort by the planning team. A planner should know the differentcategories of work and be familiar with the terminology and knowledge used in general practice.Also, the planning tem should seek the opinion of experts including actual constructionexperience. This helps produce a realistic plan and avoids problems later on site.Construction Management 29 Dr. Emad Elbeltagi
  • 188. Chapter 3: Planning3.2 Project Planning StepsThe following steps may be used as a guideline, or checklist to develop a project plan: 1. Define the scope of work, method statement, and sequence of work. 2. Generate the work breakdown structure (WBS) to produce a complete list of activities. 3. Develop the organization breakdown structure (OBS) and link it with work breakdown structure o identify responsibilities. 4. Determine the relationship between activities. 5. Estimate activities time duration, cost expenditure, and resource requirement. 6. Develop the project network.3.2.1 Work breakdown structure (WBS)The WBS is described as a hierarchical structure which is designed to logically sub-divide all thework-elements of the project into a graphical presentation. The full scope of work for the projectis placed at the top of the diagram, and then sub-divided smaller elements of work at each lowerlevel of the breakdown. At the lowest level of the WBS the elements of work is called a workpackage. A list of project’s activities is developed from the work packages.Effective use of the WBS will outline the scope of the project and the responsibility for eachwork package. There is not necessarily a right or wrong structure because what may be anexcellent fit for one discipline may be an awkward burden for another.To visualize the WBS, consider Figure 3.2 which shows a house construction project. House Civil Plumping Electrical Foundations Walls/Roof Piping H/C Water Wiring Fittings Figure 3.2: WBS and their descriptionAs shown in Figure 3.2, level 1 represents the full scope of work for the house. In level 2, theproject is sub-divided into its three main trades, and in level 3 each trade is sub-divided tospecific work packages.Figure 3.3 shows another example for more detailed WBS, in which the project WBS is dividedinto five levels:Construction Management 30 Dr. Emad Elbeltagi
  • 189. Chapter 3: PlanningLevel 1 Gas development projectLevel 2 Recovery unit 300 Process unit 400Level 3 Train 2 Train 1 Gas treating Separation and stabilizationLevel 4 Instrumentation Structural steel Civil Piping PipingLevel 5 fabrication Figure 3.3: Five levels WBS Level 1: The entire project. Level 2: Independent areas. Level 3: Physically identifiable sections fully contained in a level 2 area, reflect construction strategy. Level 4: Disciplines set up schedule. Level 5: Master schedule activities, quantity, duration.Example 3.1:The WBS for a warehouse is as follow:Foe more details, another two levels (third and fourth levels) can be added as shown below:Construction Management 31 Dr. Emad Elbeltagi
  • 190. Chapter 3: PlanningAccordingly, a complete WBS for the warehouse project can be shown as follow (Figure 3.4): Figure 3.4: Warehouse project WBSWBS and organizational breakdown structure (OBS)The WBS elements at various levels can be related to the contractor’s organizational breakdownstructure (OBS), which defines the different responsibility levels and their appropriate reportingneeds as shown in Figure 3.5. The figure, also, shows that work packages are tied to thecompany unified code of accounts. The unified code of accounts allows cataloging, sorting, andsummarizing of all information. As such, the activity of installing columns formwork of area 2,for example, which is the responsibility of the general contractor’s formwork foreman, has aunique code that represents all its data.WBS codingA project code system provides the framework for project planning and control in which eachwork package in a WBS is given a unique code that is used in project planning and control. Thecoding system provides a comprehensive checklist of all items of work that can be found in aspecific type of construction. Also, it provides uniformity, transfer & comparison of informationamong projects. An example of this coding system is the MasterFormat (Figure 3.6) which wasdeveloped through a joint effort of 8 industry & professional associations including:Construction Specifications Institute (CSI); and Construction Specifications Canada (CSC).Construction Management 32 Dr. Emad Elbeltagi
  • 191. Chapter 3: PlanningFigure 3.7 shows an example of the coding system using a standardize system as theMasterFormat. The Master format is divided into 16 divisions as follows: 1) General Requirements. 2) Site work. 3) Concrete. 4) Masonry. 5) Metals. 6) Woods & Plastics. 7) Thermal & Moisture Protection. 8) Doors & Windows. 9) Finishes. 10) Specialties. 11) Equipment 12) Furnishings. 13) Special Construction. 14) Conveying Systems. 15) Mechanical. 16) Electrical. WBS (Work elements) Project Area 1 Area 2 Area 3 …… Beams Columns Slabs …… superintendent Formwork Reinforcement Concreting …… Electrical Subcontractor OBS (Responsibility & reporting) Concrete foreman B Project manager superintendent Formwork contractor foreman Control account General Civil Subcontractor foreman Rebar superintendent Mechanical A Figure 3.5: WBS linked to the OBSConstruction Management 33 Dr. Emad Elbeltagi
  • 192. Chapter 3: PlanningCSI – Masterformat (Building Construction) Figure 3.6: MasterFormat coding ssytemConstruction ManagementConstruction Management 34 34 Dr. Emad Elbeltagi Dr. Eamd Elbeltagi
  • 193. Chapter 3: Planning Figure 3.7: An example of an activity coding systemProject activitiesThe building block (the smallest unit) of a WBS is the activity, which is a unique unit of theproject that has a specified duration. An activity is defined as any function or decision in theproject that: consumes time, resources, and cost. Activities are classified to three typs: Production activities: activities that involve the use of resources such as labor, equipment, material, or subcontractor. This type of activities can be easily identified by reading the project’s drawings and specifications. Examples are: excavation, formwork, reinforcement, concreting, etc. each production activity can have a certain quantity of work, resource needs, costs, and duration. Procurement activities: activities that specify the time for procuring materials or equipment that are needed for a production activity. Examples are: brick procurement, boiler manufacturing and delivery, etc. Management activities: activities that are related to management decisions such as approvals, vacations, etc.An activity can be as small as “steel fixing of first floor columns” or as large as “construct firstfloor columns”. This level of details depends on the purpose of preparing the project plan. In thepre construction stages, less detailed activities can be utilized, however, in the constructionstages, detailed activities are required. Accordingly, level of details depends on: planning stage,size of the project, complexity of the work, management expertise.Construction Management 35 Dr. Emad Elbeltagi
  • 194. Chapter 3: PlanningExample 3.2:Figure 3.8 shows a double-span bridge. Break the construction works of the bridge intoactivities. The plan will be used for bidding purposes. Hand rail Road base right Road base left Deck slab Precast beams Figure 3.8: Double span bridgeA list of the double-span bridge activities is shown in Table 3.1 Table 3.1: Activities of the double-span bridge Activity Description 10 Set-up site 14 Procure reinforcement 16 Procure precast beams 20 Excavate left abutment 30 Excavate right abutment 40 Excavate central pier 50 Foundation left abutment 60 Foundation right abutment 70 Foundation central pier 80 Construct left abutment 90 Construct right abutment 100 Construct central pier 110 Erect left precast beams 120 Erect right precast beams 140 Fill left embankment 150 Fill right embankment 155 Construct deck slab 160 Left road base 170 Right road base 180 Road surface 190 Bridge railing 200 Clear site3.2.2 Activities relationshipsIn order to identify the relationships among activities, the planning team needs to answer thefollowing questions for each activity in the project: - Which activities must be finished before the current one can start? - What activity(ies) may be constructed concurrently with the current one?Construction Management 36 Dr. Emad Elbeltagi
  • 195. Chapter 3: Planning - What activity(ies) must follow the current one?A circle of activity precedences will result in an impossible plan. For example, if activity Aprecedes activity B, activity B precedes activity C, and activity C precedes activity A, then theproject can never be started or completed. Figure 3.9 illustrates the resulting activity network. Figure 3.9: Example of a circle of activity precedenceExample 3.3:Suppose that a site preparation and concrete slab foundation construction project consists of ninedifferent activities: A. Site clearing (of brush and minor debris), B. Removal of trees, C. General excavation, D. Grading general area, E. Excavation for utility trenches, F. Placing formwork and reinforcement for concrete, G. Installing sewer lines, H. Installing other utilities, I. Pouring concrete.Activities A (site clearing) and B (tree removal) do not have preceding activities since theydepend on none of the other activities. We assume that activities C (general excavation) and D(general grading) are preceded by activity A (site clearing). It might also be the case that theplanner wished to delay any excavation until trees were removed, so that B (tree removal) wouldbe a precedent activity to C (general excavation) and D (general grading). Activities E (trenchexcavation) and F (concrete preparation) cannot begin until the completion of general excavationand grading, since they involve subsequent excavation and trench preparation. Activities G(install lines) and H (install utilities) represent installation in the utility trenches and cannot beattempted until the trenches are prepared, so that activity E (trench excavation) is a precedingactivity. We also assume that the utilities should not be installed until grading is completed toavoid equipment conflicts, so activity D (general grading) is also preceding activities G (installsewers) and H (install utilities). Finally, activity I (pour concrete) cannot begin until the sewerline is installed and formwork and reinforcement are ready, so activities F and G are preceding.Other utilities may be routed over the slab foundation, so activity H (install utilities) is notnecessarily a preceding activity for activity I (pour concrete). The result of our planning is theimmediate precedence shown in Table 3.2.Construction Management 37 Dr. Emad Elbeltagi
  • 196. Chapter 3: Planning Table 3.2: Precedence relations for Example 3.3 Activity Description Predecessors A Site clearing --- B Removal of trees --- C General excavation A D Grading general area A E Excavation for utility trenches B,C F Placing formwork and reinforcement for concrete B,C G Installing sewer lines D,E H Installing other utilities D,E I Pouring concrete F,GExample 3.4:Determine the relationships between activities of the project studied in Example 3.2. Table 3.3: Solution of Example 3.4 Activity Description Predecessors 10 Set-up site --- 14 Procure RFT --- 16 Procure P.C. Beams --- 20 Excavate left abutment 10 30 Excavate right abutment 10 40 Excavate central pier 10 50 Foundation left abutment 14, 20 60 Foundation right abutment 14, 30 70 Foundation central pier 14, 40 80 Construct left abutment 50 90 Construct right abutment 60 100 Construct central pier 70 110 Erect left P.C. Beams 16, 80, 100 120 Erect right P.C. Beams 16, 90, 100 140 Fill left embankment 80 150 Fill right embankment 90 155 Construct deck slab 110, 120 160 Left road base 140 170 Right road base 150 180 Road surface 155, 160, 170 190 Bridge railing 155 200 Clear site 180, 190Logical relationship considering resource constraintsFor efficient use of resources or in case of constrained resources, it might be beneficial toconsider the resources when determining the logical relationship among the activities that use thesame resources. For example, consider the case of construction a simple project consists of threeunits and each unit has three sequential activities (logical relationship). Table 3.4 shows thelogical relationship among these activities assuming unconstrained (resources are available withConstruction Management 38 Dr. Emad Elbeltagi
  • 197. Chapter 3: Planningany quantities) and constrained resources (only one resource unit is available form each resourcetype). Table 3.4: Logical relationships considering constrained and unconstrained resources Predecessors Predecessors Activity description (unconstrained resources) (constrained resources) A1 Excavate unit 1 - - B1 Concreting unit 1 A1 A1 C1 Brickwork unit 1 B1 B1 A2 Excavate unit 2 - A1 B2 Concreting unit 2 A2 B1, A2 C2 Brickwork unit 2 B2 C1, B2 A3 Excavate unit 3 - A2 B3 Concreting unit 3 A3 B2, A3 C3 Brickwork unit 3 B3 C2, B3Overlap or lagOverlap between activities (negative lag) is defined as how much a particular activity must becompleted before a succeeding activity may start. The absence of overlap means that the firstactivity must finish before the second may start. A negative overlap (lag) means a delay isrequired between the two activities (Figure 3.10) +ve overlap (-ve lag) -ve overlap (+ve lag) Figure 3.10: Overlap among activitiesExample 3.5:This case study is for a small 3 houses project. The main segments of a single house, theresponsibilities, and the logical relationship are identified as follows: - 11 work packages are involved: A and B (civil work, substructure), C, D, E, and F (civil work, superstructure), G (electrical, interior), H (electrical, exterior), I (mechanical, HVAC), J (mechanical, elevator), and K (mechanical, plumbing). - Substructure is supervised by Ahmed (activity A), and Ali (activity B). - Superstructure is supervised by Hossam (activities C and F) and Mona (activities D and E). - All electrical work is supervised by George. - HVAC and plumbing are supervised by Adam; elevator work is supervised by Samy. - Activities E and F follow activity B. - Activity C precedes activity G. - Activity I follows the completion of activity E. - The predecessors to activity K are activities H and I.Construction Management 39 Dr. Emad Elbeltagi
  • 198. Chapter 3: Planning - Activity D follows activity A and precedes activity H. - Activity J is preceded by activities F and G. 1. Create a WBS and OBS chart.Solution: From the available information, the relationship table, the network diagrams, and theWBS linked to an OBS are formed as shown below (Table 3.5 and Figure 3.11). Table 3.5: Logical relationships of Example 3.5 Activity Predecessors Start - A Start B Start C Start D A E B F B G C H D I E J F, G K H, I Finish J, K WBS (Work elements) Project Civil Elec. Mech House1 House1 House1 Sub Super Ahmed A OBS (Responsibility & reporting) Ali B G George H Project manager C Hossam F D Mona E I Adam K Samy J Figure 3.11: WBS and OBS of Example 3.5Construction Management 40 Dr. Emad Elbeltagi
  • 199. Chapter 3: PlanningTypes of activities relationshipsFour types of relationships among activities can be defined as described and illustrated below(Figure 3.12). Typically, relationships are defined from the predecessor to the successor activity. a) Finish to start (FS). The successor activity can begin only when the current activity completes. b) Finish to finish (FF). The finish of the successor activity depends on the finish of the current activity. c) Start to start (SS). The start of the successor activity depends on the start of the current activity. d) Start to finish (SF). The successor activity cannot finish until the current activity starts. a b c d Figure 3.12: Types of relationships3.2.3 Drawing the project networkA network is a graphical representation of the project activities and their relationships. A projectnetwork is a set of arrows and nodes. Before drawing the network, it is necessary to ensure thatthe project has a unified starting and ending point. The need for this start activity arises whenthere is more than one activity in the project that has no predecessors and the end activity isneeded when there is more than one activity that has no successors. Also, networks should becontinuous (i.e., each activity except the first and the last has both preceding and succeedingactivities).There are two ways that are commonly used to draw a network diagram for a project: 1. Activity on Arrow (AOA) representation. 2. Activity on Node (AON) representation3.2.3.1 Activity on arrow network (AOA)In this method, the arrows represent activities while the nodes represent the start and the end ofan activity (usually named as events) (Figure 3.13). The length of the arrow connecting the nodesConstruction Management 41 Dr. Emad Elbeltagi
  • 200. Chapter 3: Planninghas no significance and may be straight, curved, or bent. When one activity depends uponanother, both appear on the diagram as two arrows having a common node. Activity A Activity B i j j>i 5 10 A B 5 10 15 B depends on A A C 5 10 15 C depends on A and B B 5 15 B B depends on A C depends on A A C 5 10 15 5 15 A C B depends on A and B D depends on A and B B 10 D 5 15 Figure 3.13: Basic patterns of AOA diagramsThe following are some rules that need to be followed when constructing an AOA networkdiagram: - Each activity must have a unique i – j numbers, where i (the number at the tail of the arrow) is smaller than j (the number at the head of the arrow). - It is recommended to have a gap between numbers (i.e., 5, 10, 15, etc.). This will allow for accommodation of missed activities. - Avoid back arrows.In some situations, when more than one arrow leave the same node and arrive at another node,dummy activities must be used. The dummy activity is an activity with zero duration, consumesno resources, drawn as dashed lines, and used to adjust the network diagram. A dummy activityis also used when one activity depends upon two preceding activities and another activitydepends only upon one of these two preceding activities as shown in Figure 3.14.3.2.3.2 Activity on node network (AON)This method is also called the precedence diagram method. In this method, the nodes representactivities and the arrows represent logical relationships among the activities. If the arrow startsfrom the end side of an activity (activity A) and ends at the start side of another activity (activityConstruction Management 42 Dr. Emad Elbeltagi
  • 201. Chapter 3: PlanningB), then A is a predecessor of B (Figure 3.15). AON representation allows the overlap or lagrepresentation on the relationship arrows connecting activities. A C A C 5 15 20 5 20 25 D C depends on A and B B Dummy D depends on B only 25 B D 10 10 15 30 A A 5 15 5 15 B Dummy B 10 Incorrect representation Correct representation Figure 3.14: Use of dummy activity 10 Activity number 20 A B Activity name 10 20 B depends on A A B 10 30 40 C depends on A and B A C D D depends on C 20 B 30 C 10 20 B depends on A A B C depends on B D depends on B 40 D Figure 3.15: Basic patterns of AON diagramsConstruction Management 43 Dr. Emad Elbeltagi
  • 202. Chapter 3: PlanningComparison between AOA and AONWhile both networks can be used to represent a project network, there are some differencesbetween them: - There is no need for the use of dummy activities in AON representation. - AON are more easily to draw and to read. - In AOA, an activity can only start when all its predecessors have finished. - AON allows for overlap/lag representation. - AON allows for the representation of the four types of relationships while AOA allows only for the finish to start relationship.Example 3.6:Construct an AOA and AON networks for the activities listed in Table 3.6. Table 3.6 Data for Example 3.6 Activity Predecessors A - B - C A, B D C E C F D G D, EForming an AOA network for this set of activities might begin be drawing activities A, B and Cas shown in Figure 3.16 (a). At this point, we note that two activities (A and B) lie between thesame two event nodes; for clarity, we insert a dummy activity X and continue to place otheractivities as in Figure 3.16 (b). Placing activity G in the figure presents a problem, however,since we wish both activity D and activity E to be predecessors. Inserting an additional dummyactivity Y along with activity G completes the activity network, as shown in Figure 3.16 (c). Figure 3.16: AOA Network for Example 3.6Construction Management 44 Dr. Emad Elbeltagi
  • 203. Chapter 3: PlanningTo understand the drawing of the AON, some ordering for the activities may be necessary. Thisis done by placing the activities in a sequence step order. A sequence step may be defined as theearliest logical position in the network that an activity can occupy while maintaining the logicalrelationships. In this example, as there are two activities (activities A and B) has no predecessor,then a start activity is added to have one unified start activity (Start) for the project. Also, a finishactivity (Finish) is added as there are two activities without successors (activities F and G).Considering the data given in Table 3.6, sequence step 1 is assigned to the Start activity. Then,we take all activities on the list one by one and look at their immediate predecessors and thenassign a sequence step that equals the highest sequence step of all immediate predecessors plusone as given in Table 3.7. After all sequence step numbers have been assigned, the AONdiagram can be drawn. Table 3.7: Determining the sequence steps Activity Predecessors Sequence step (SS) Start - SS(Start)=1 A Start 2=SS(Start)+1 B Start 2=SS(Start)+1 C A, B 3=Highest of [SS(B), SS(A)] D C 4=SS(C)+1 E C 4=SS(C)+1 F D 5=SS(D)+1 G D, E 5=Highest of [SS(D), SS(E)] Finish F, G 6= Highest of [SS(F), SS(G)] Sequence step 1 2 3 4 5 6 Figure 3.17: An AON NetworkAON representation is shown in Figure 3.17, including project start and finish nodes. Note thatdummy activities are not required for expressing precedence relationships in activity-on-nodenetworks.Construction Management 45 Dr. Emad Elbeltagi
  • 204. Chapter 3: PlanningExample 3.7:Draw the AOA and AON networks for the project given in Example 3.5.SolutionThe AOA is given in Figure 3.18 and the AON is given in Figure 3.19 as shown below. D 10 25 A H B E I K 5 15 30 40 45 F C J G 20 35 Figure 3.18: AOA network A D H K Start B E I Finish F J C G Figure 3.19: AON networkConstruction Management 46 Dr. Emad Elbeltagi
  • 205. Chapter 3: Planning3.3 Estimating Activity Duration and Direct CostHaving defined the work activities, each activity has associated time duration. These durationsare used in preparing a schedule. For example, suppose that the durations shown in Table 3.8were estimated for a project. The entire set of activities would then require at least 3 days, sincethe activities follow one another directly and require a total of 1.0 + 0.5 + 0.5 + 1.0 = 3 days. Table 3.8: Durations and predecessors for a four-activity project Activity Predecessor Duration (Days) Excavate trench --- 1.0 Place formwork Excavate trench 0.5 Place reinforcing Place formwork 0.5 Pour concrete Place reinforcing 1.0All scheduling procedures rely upon estimates of the durations of the various project activities aswell as the definitions of the predecessor relationships among activities. A straightforwardapproach to the estimation of activity durations is to keep historical records of particularactivities and rely on the average durations from this experience in making new durationestimates. Since the scope of activities is unlikely to be identical between different projects, unitproductivity rates are typically employed for this purpose. The duration of an activity may beestimated as: Activity duration = quantity of work / number of crews x resource outputTypically, the quantity of work is determined from engineering drawings of a specific project.The number of crews working is decided by the planner. In many cases, the number or amount ofresources applied to particular activities may be modified in light of the resulting project planand schedule. Some estimate of the expected work productivity must be provided. Historicalrecords in a firm can also provide data for estimation of productivities.Having defined an activity duration, it means that the planner have already defined the number ofresources that will be employed in a particular activity. Knowing activity duration and resourcesemployed, it is simple to estimate the activity direct cost. Then, the three elements of an activity:duration, cost, and resources form what is called construction method. Some activities can beperformed using different construction methods. Where, its method will have its own resources,cost and duration.Example 3.8:If the daily production rate for a crew that works in an activity is 175 units/day and the total crewcost per day is LE 1800. The material needed for daily work is 4.5 units at LE 100/unit. a. Calculate the time and cost it takes the crew to finish 1400 units b. Calculate the total unit cost. Consider an eight hour work day.Construction Management 47 Dr. Emad Elbeltagi
  • 206. Chapter 3: PlanningSolution a. Duration (units of time) = Quantity / Production per unit of time x number of crews = 1400 / 175 x 1 = 8 days Cost (labor cost) = Duration (units of time) x crew cost per unit of time = 8 days x LE 1800 / day = LE 14400 Total direct cost = Le 14400 + 4.5 units of material x LE 100 / day x 8 days = LE 18000 b. Unit cost = total cost / quantity = LE 18000 / 1400 = LE 12.86 / unitSometimes the productivity of a specific crew expressed in man-hours/unit not units/day. Forexample, if the productivity is said to be 0.5 Man-hour/cubic meters, this means how long it willtake one labor to construct one unit. This way applied to any crew formation and work hours.Example 3.9:What is the duration in days to install 6000 square feet of walls shuttering if: a. Crew of 2 carpenters is used with output of 200 square feet/day b. Productivity is measured as 0.008 man-hour/square feet. Number of carpenters =3, and number of working hours/day = 8 hoursSolution a. Duration = 6000 / 200 = 3 days b. Total man-hours needed = 6000 x 0.008 = 48 man-hours (if one man used) Duration = 48 / 8 = 6 days (if one man used) Duration using 3 men = 6 / 3 = 2 daysExample 3.10: (use of several resources)The construction of a reinforced concrete wall involves placing 660 m3 concrete, fixing 50 toneof steel, and 790 m2 of formwork. The following information belongs to the jobs involved in thisactivity: - A 6 man concrete crew can place 16 m3 of concrete/day. - A steel-fixer and assistant can fix 0.5 ton of reinforcement/day. - A carpenter and assistant can fix and remove 16 m2 of shuttering/day.Calculate the duration of the activity considering the steel-fixer as the critical resource.Solution - using one steel-fixer: duration = 50 / 0.5 = 100 days - using one carpenter: duration = 790 / 16 = 49.4 days - using one concreting crew: duration = 660 / 16 = 41.25 days. Then, for a balanced mix of resources, use 2 steel-fixer crews, one carpenter crew, and cone concreting crew. Accordingly, the activity duration = 50 / 0.5 x 2 = 50 days.Construction Management 48 Dr. Emad Elbeltagi
  • 207. Chapter 4: Scheduling Chapter 4: Project Scheduling4.1 IntroductionIn chapter 3, the AOA and AON networks were presented, also the time and cost of individualactivities based were calculated. Yet, however, we do not know how long is the total projectduration. Also, we need to evaluate the early and late times at which activities start and finish. Inaddition, since real-life projects involve hundreds of activities, it is important to identify thegroup of critical activities so that special care is taken to make sure they are not delayed. Allthese statements are the basic objectives of the scheduling process, which adds a time dimensionto the planning process. In other words, we can briefly state that: Scheduling = Planning + Time.Scheduling is the determination of the timing of the activities comprising the project to enablemanagers to execute the project in a timely manner. The project scheduling id sued for: - Knowing the activities timing and the project completion time. - Having resources available on site in the correct time. - Making correction actions if schedule shows that the plan will result in late completion. - Assessing the value of penalties on project late completion. - Determining the project cash flow. - Evaluating the effect of change orders on the project completion time. - Determining the value pf project delay and the responsible parties.4.2 The Critical Path MethodThe most widely used scheduling technique is the critical path method (CPM) for scheduling.This method calculates the minimum completion time for a project along with the possible startand finish times for the project activities. Many texts and managers regard critical pathscheduling as the only usable and practical scheduling procedure. Computer programs andalgorithms for critical path scheduling are widely available and can efficiently handle projectswith thousands of activities.The critical path itself represents the set or sequence of activities which will take the longest timeto complete. The duration of the critical path is the sum of the activities durations along the path.Thus, the critical path can be defined as the longest possible path through the "network" ofproject activities. The duration of the critical path represents the minimum time required tocomplete a project. Any delays along the critical path would imply that additional time would berequired to complete the project.There may be more than one critical path among all the project activities, so completion of theentire project could be delayed by delaying activities along any one of the critical paths. Forexample, a project consisting of two activities performed in parallel that each requires three dayswould have each activity critical for a completion in three days. Formally, critical pathscheduling assumes that a project has been divided into activities of fixed duration and welldefined predecessor relationships. A predecessor relationship implies that one activity must comebefore another in the schedule.Construction Management 49 Dr. Emad Elbeltagi
  • 208. Chapter 4: SchedulingThe CPM is a systematic scheduling method for a project network and involves four main steps: - A forward path to determine activities early-start times; - A backward path to determine activities late-finish times; - Float calculations; and - Identifying critical activities.4.3 Calculations for the Critical Path MethodThe inputs to network scheduling of any project are simply the AOA or the AON networks withthe individual activity duration defined. The network scheduling process for AOA and AONnetworks, however, is different. To demonstrate these two techniques, let’s consider a simple 5-activity project, with activity A at the start, followed by three parallel activities B, C, and D;which are then succeeded by activity E. The AOA or the AON networks of this example arepresented in Figure 4.1. Detailed analysis of theses AOA or the AON networks are presented inthe following subsections. It is noted that the example at hand involves only simple finish-to-start relationships among activities. 5 B (3) d1 A (3) C (4) E (5) 1 3 9 11 D (6) d2 7 Activity (duration) i j (a - AOA) B (3) A C E (3) (4) (5) Activity (Duration) D (6) (b - AON) Figure 4.1: Network example4.3.1 Activity-on-node networks calculationsThe objective of arrow network analysis is to compute foe each event in the network its early andlate timings. These times are defined as:Construction Management 50 Dr. Emad Elbeltagi
  • 209. Chapter 4: SchedulingEarly event time (ET) is the earliest time at which an event can occur, considering the duration ofpreceding activities.Late event time (LT) is the latest time at which an event can occur if the project is to becompleted on schedule.Forward PathThe forward path determines the early-start times of activities. The forward path precedes fromthe most left node in the network (node 1 – Figure 4.2) and moves to the right, putting thecalculations inside the shaded boxes to the left.Each node in the network, in fact, is a point at which some activities end (head arrows cominginto the node), as shown in Figure 4.3. That node is also a point at which some activities start(tail arrows of successor activities). Certainly, all successor activities can start only after thelatest predecessor is finished. Therefore, for the forward path to determine the early-start (ES)time of an activity, we have to look at the head arrows coming into the start node of the activity.We then have to set the activity ES time as the latest finish time of all predecessors. 5 B (3) d1 1 A (3) 3 C (4) 9 E (5) 11 D (6) d2 7 Figure 4.2: Preparation for the forward path Predecessor 1 Successor 1 Predecessor 2 no. Predecessor 3 Successor 2 Figure 4.3: A node in an AOA networkIn our example, the forward path calculations are as follows:- We begin at node 1, the start node of the project, and assign it an early-start time of zero. Here, all activity times use an end-of-day notation. Therefore, the ES of activity A is zero means that activity starts at end of day zero, or the beginning of day 1 in the project.Construction Management 51 Dr. Emad Elbeltagi
  • 210. Chapter 4: Scheduling- We now move to node 3. This node receives one head arrow, and as such, it has one predecessor, activity A. Since the predecessor started on time zero and has 3 days duration, then, it ends early at time 3 (Early-Finish (EF) = Early-Start (ES) + d). Accordingly, the ES time of all successor activities to node 3 (activities B, C, and D) is time 3. This value is therefore, put in the shaded box on top of node 3, as shown in Figure 4.4. 6 3+3=6 Project ES+d=EF 5 start=0 0+3=3 B d1 14 0 3 3 9+5=14 A C E 1 3 9 11 d=3 4 5 D d2 9 6 6+0=6 3+4=7 or 7 9+0=9 9 3+6=9 Figure 4.4: Forward path calculations in AOA networks- We now move forward to successor nodes 5, 7, and 9. However, since node 9 is linked to nodes 5 and 9 by dummy activities, we begin with nodes 5 and 7. Node 5 receives one head arrow from its predecessor activity B, we evaluate the EF time of B as 6 (ES (3) + d (3)). Successor activities to node 5, therefore, can have an ES time of 6. Similarly, the ES time at node 7 is calculated as time 9.- Moving to node 9, we evaluate the EF times of its 3 predecessors (d1, C, and d2) as time 6, 7, and 9, respectively. Accordingly, the ES time of successor activities is the largest value 9. Notice that only the largest EF value of predecessor activities is used to calculate the ES of successor activities and all other values not used. As such, only ES values can be directly read from the calculations in Figure 4.4. EF values, on the other hand can be calculated as EF = ES + d.- We now move to the last node 11. It receives one head arrow, activity E which has an ES value of 9. The EF time of activity E, therefore =9 + 5 = time 14. Since node 11 is the last node, the EF of this node becomes the end of the project, reaching a total project duration of 14 days.Generally, for any activity x connecting between nodes i and j as shown in Figure 4.5, thecalculations as follows: ETi LTi ETj LTj ` x i j dx Figure 4.5: Activity timesConstruction Management 52 Dr. Emad Elbeltagi
  • 211. Chapter 4: Scheduling ETj = ETi + dx (4.1)In case of more than one arrow terminating at node j, then consider the largest value.Accordingly, ESx = ETi (4.2) EFx = ESx +dx (4.3)Backward PathThe backward path determines the late-finish (LF) times of activities by proceeding backwardfrom the end node to the starting node of the AOA network. We put the LF values in the rightside boxes adjacent to the nodes, as shown in Figure 4.6. For the example at hand, we do thefollowing: 6 9 9-0=9 9-3=6, 9-4=5, or 5 3-3=0 9-6=3 B d1 14 14 0 0 3 3 3 A C E 1 3 9 11 3 4 5 D d2 9 9 6 14-5=9 LF-d=LS 7 9 9 9-0=9 Figure 4.6: Backward path calculations in AOA networks- We begin at the last node of the network (node 11) and we transfer the early-finish value from the left box to be the late-finish (LF) value at the right side box.- We then move backward to node 9 which has only one tail arrow of activity E. With the LF time of E being time 14, its LS time becomes LS = LF - d = 14 – 5 = time 9. At node 9, therefore, time 9 becomes the LF time of the predecessor activities of this node.- Moving backward to predecessor nodes 5, and 7. Node 5 has one tail arrow of the dummy activity d1, and as such, the LF time value to be used at node 5 becomes 9. Similarly, the LF time value of node 7 becomes 9.- Moving to node 3, we evaluate the LS time of its 3 successor activities B, C, and D as 6, 5, and 3, respectively. The LF time at node 3, therefore, becomes the smallest value 3. With other LS values not used, the values in the calculation boxes, as such, directly show the LF times of activities. LS times can be calculated as LS = LF – d.- We now proceed to the first node in the network (node 1). It connects to one tail arrow of activity A. The LS time of A, therefore, is LS = LF – d = 3 – 3 = 0, a necessary check to ensure the correctness of the calculation.Construction Management 53 Dr. Emad Elbeltagi
  • 212. Chapter 4: SchedulingHaving Figure 4.5 again in mind and to generalize the calculations, for any activity x connectingbetween nodes i and j, the calculations as follows: LTi = LTj - dx (4.4)In case of more than one arrow leaving node i, then consider the smallest value.Accordingly, LFx = LTj (4.5) LSx = LFx -dx (4.6)Float CalculationsOnce forward path and backward path calculations are complete, it is possible to analyze theactivity times. First, lets tabulate the information we have as shown in Table 4.1. One importantaspect is Total-Float (TF) calculations, which determine the flexibility of an activity to bedelayed. Notice in Table 4.1 that some activities such as activity A has ES time = LS time, andits EF time = LF time, indicating no slack time for the activity. Other activities such as B canstart early at time 3 and late at time 6, indicating a 3-day of total float. Float calculations can beillustrated as shown in Figure 4.7 for any activity.Table 4.1: CPM results early Start Late Finish Late Start Early Finish Total Float Critical Activity Duration (ES) (LF) (LS) (EF) (TF) Activity A 3 0 3 0 3 0 Yes B 3 3 9 6 6 3 No C 4 3 9 5 7 2 No D 6 3 9 3 9 0 Yes E 5 9 14 9 14 0 Yes Name i duration = d j ET LT ET LT ES = ETi ETj LF = LTj ES EF=ES+d Total Float a) Activity is early d LF ES Total Float LS=LF-d b) Activity is late d LF d Free Float (FF) Total time available for the activity = LF - ES Figure 4.7: Float calculationsConstruction Management 54 Dr. Emad Elbeltagi
  • 213. Chapter 4: SchedulingFigure 4.7 shows two ways of scheduling each activity using its activity times. One way is toschedule it as early as possible (using its ES time). The other way is as late as possible (using itsLS time). The activity float can, therefore, be represented by the following relationships: Total Float (TF) = LF – EF (4.7) = LS – ES (4.8)Also, with the ES and LF times directly read from the boxes used in forward and backward pathcalculations, the total float can also be calculated as; TF = LF – ES – d. Using theserelationships, activities total floats are calculated as shown in Table 4.1.Another type of float often used in network analysis is the Free Float, which can be calculated as: Free Float (FF) = ETj – ETi – d (4.9) or FF = smallest ES (of succeeding activities) – EF (of current activity) (4.10)The free float defines the amount of time that an activity can be delayed without affecting anysucceeding activity. With free float available for an activity, a project manager knows that thefloat can be used without changes the status of any non-critical activity to become critical.Identifying Critical ActivitiesActivities with zero total floats mean that they have to be constructed right at their scheduletimes, without delays. These activities are considered to be critical. They deserve the specialattention of the project manager because any delay in critical activities causes a delay in theproject duration.One interesting observation in the results of CPM analysis is that critical activities form acontinuous path of the critical activities that spans from the beginning to the end of the network.In our example, activities A, D, and E (excluding dummy activities) are critical and the criticalpath is indicated by bold lines on Figure 4.6. Notice that among the 3 paths in this example (A-B-E; A-C-E; and A-D-e), the critical path is the longest one, an important characteristic of thecritical path. In real-life projects with many activities, it is possible that more than one criticalpath are formed. By definition, the length of these critical paths is the same.4.3.2 Precedence Diagram Method (PDM)Precedence Diagram Method (PDM) is the CPM scheduling method used for AON networks andit follows the same four steps of the CPM for AOA method.Forward PathForward path can proceed from one activity to the other; the process is as follow (Figure 4.8):Construction Management 55 Dr. Emad Elbeltagi
  • 214. Chapter 4: Scheduling- At activity A. It is the first activity in the network. We give it an early-start (ES) of 0 in the left top box. Adding the activity duration, we determine the EF time of the activity and we put it in the top right box. 3 6 B (3) 6, 7, or 9 0 3 3 7 9 14 A (3) C (4) E (5) Early start Ealry Finish 3 9 Name (duration) D (6) Late start Late finish Figure 4.8: Forward Path in PDM Analysis- We move forward to the succeeding activities B, C, and D. These three activities have only A as a predecessor with time 3 as its EF. As such, all the three activities can start as early as time 3 (ES = 3). Each activity, accordingly, has its own EF time based on its duration.- Moving forward to activity E. This activity has 3 predecessors (3 head arrows) of activities B, C, and D with their largest EF time being 9. The ES of activity E, thus, with becomes time 9. Adding its duration, the EF becomes time 14.To generalize the calculations consider Figure 4.9, of two activities i and j with relationshipfinish to start and overlap between them. Overlaps will have a positive sign, while lags will havea negative sign. The forward path calculations are as follows: ESi EFi ESj EFj overlapij i (di) j (dj) LSi LFi LSj LFj Figure 4.9: Activities times in PDM Analysis ESj = EFi - overlapij (4.11)In case of more than one activity precedes activity j then consider the maximum. Then, applyEquation 4.3 to calculate the early finish times.Construction Management 56 Dr. Emad Elbeltagi
  • 215. Chapter 4: SchedulingBackward PathOnce the forward path is finished, the backward path can start, moving from the last activity tothe first, putting the calculations in the bottom two boxes of each activity, as shown in Figure4.10. The process is as follows: 3 6 B (3) 6 9 0 3 3 7 9 14 A (3) C (4) E (5) 0 3 5 9 9 14 6, 5, or 3 Early start Early Finish 3 9 Name (duration) D (6) Late start Late finish 3 9 Figure 4.10: Backward path in PDM analysis- We start at the last activity E and we transfer the early-finish value to become the activitys late-finish (LF) time. Then, subtracting the activitys own duration, the late-start (LS) time is calculated as time 9 and put in the bottom left box of the activity.- Moving backward to activities B, C, and D all have one successor (activity E) with LS time of 9. The LF of all these activities becomes time 9. Each activity then has its own LS time, as shown in Figure 4.10.- Moving to activity A. The activity is linked to 3 tail arrows (i.e., has 3 successors) of activities B, C, and D. The LF of activity A, thus, is the smallest of its successors LS times, or time 3. Activity A then has LS equals zero.Considering Figure 4.9 again, the backward path calculations are as follows: LFi = LSj + overlapij (4.12)In case of more than one activity succeeds activity j then consider the minimum. Then, applyEquation 4.6 to calculate the late start times.Notice that by the end of the backward path, all activity times can be read directly from theboxes of information on the activity, without additional calculations. This also, makes it simpleto calculate the total float of each activity using the same relationships used in the AOA analysis,basically,Construction Management 57 Dr. Emad Elbeltagi
  • 216. Chapter 4: SchedulingIdentifying Critical ActivitiesCritical activities can also be easily determined as the ones having zero float times, activities A,D, and E. The critical path is then shown in bold as Figure 4.10. The PDM analysis, as explained,is a straight forward process in which each activity is considered as an entity that stores its owninformation.4.4 Time-Scaled DiagramsTime-scaled diagrams are used extensively in the construction industry. Such diagrams enableone to determine immediately which activities are scheduled to proceed at any point in time andto monitor field progress. Also, it can be used to determine resources need. The time scale usedin time-scaled diagrams can be either the calendar dates or the working periods (ordinary dates),or using both at the same time.The activities are represented as arrows that drawn to scale to reflect the activity duration itrepresents. The horizontal dashed lines represent total float for groups of activities and free floatfor the immediate activity to the left of the dashed line. The precedence of an activity is theimmediate activities before it or that linked to it through vertical dashed lines. The name and theduration of an activity are written above and below the arrow representing it respectively (Figure4.11). The ES, EF, and FF times of the activities can be easily read directly from the diagram.The TF for an activity is the smallest sum of succeeding FF on all paths. Accordingly, the LS andLF times can be easily calculated as follows: LSi = ESi + TFi (4.13) LFi = LSi + Di (4.14)The critical path can be easily determined as the continuous lines from the beginning to the endof the network with any dashed lines. The main advantage of this diagram I its simplerepresentation and it can be sued directly for determining resources need. However, itsdisadvantage is that it needs a great effort to be modified or updated. Also, it can not be used torepresent overlapping activities.Figure 4.11 shows the time-scaled diagram for the same 5-activities project solved previouslyusing AOA and AON networks. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 B 3 3 A C E 3 4 2 5 D 6 Figure 4.11: Time-scaled diagramConstruction Management 58 Dr. Emad Elbeltagi
  • 217. Chapter 4: SchedulingThe TF for activity A equals the smallest of the sum of the floats along all paths from the end ofactivity A to the end of the project. The float on path ABE = 3, path ACE = 2 and path ADE = 0,then the TF of activity A = 0. The calculations are shown in Table 4.2. Table 4.2 Time-scaled diagram calculations Activity ES EF FF TF LF=EF+TF LS=LF-d A 0 3 0 0 3 0 B 3 6 3 3 9 6 C 3 7 2 2 9 5 D 3 9 0 0 9 3 E 9 14 0 0 14 94.5 Schedule PresentationAfter the AOA and AON calculations are made, it is important to present their results in a formatthat is clear and understandable to all the parties involved in the project. The simplest form is theBar chart or Gantt chart, named after the person who first used it. A bar chart is a time versusactivity chart in which activities are plotted using their early or late times, as shown in Figures4.12 a and b. Early bar chart is drawn using the ES times of activities, while the late bar chart isdrawn using the LS times. Activity d=3 A ES = 0 d=3 TF=3 B ES=3 d=4 TF=2 a) C ES=3 d=6 D ES=3 d=5 E ES=9 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Time Activity d=3 A LF=3 TF=3 d=3 B LF=9 TF=2 d=4 b) C LF=9 d=6 D LF=9 d=5 E LF=14 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Time Figure 4.12: a) Early bar chat b) Late bar chartConstruction Management 59 Dr. Emad Elbeltagi
  • 218. Chapter 4: SchedulingThe bar chart representation, in fact, shows various details. Float times of activities, criticalactivities can be shown in a different color, or bold borders, as shown in Figure 4.12. The barchart can also be used for accumulating total daily resources and / or costs, as shown at thebottom part of Figure 4.13. In this figure, the numbers on each activity represent the number oflabors needed. Activity 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Time 2 2 2 A 2 2 2 B 1 1 1 1 C 3 3 3 3 3 3 D 1 1 1 1 1 E 6 6 Profile of the labor resource demand 5 4 4 3 3 2 2 1 1 2 2 2 6 6 6 4 3 3 1 1 1 1 1 Total labors Figure 4.13: Using bar chart to accumulate resourcesOne additional benefit of the bar chart is its use on site to plot and compare the actual progress inthe various activities to their scheduled times. An example is shown on Figure 4.13, showingactual bars plotted at the bottom of the original bars of the schedule.4.6 Criticisms to Network TechniquesThe CPM and PDM analyses for network scheduling provide very important information thatcan be used to bring the project to success. Both methods, however, share some drawbacks thatrequire special attention from the project manager. These drawbacks are:- Assume all required resources are available: The CPM calculations do not incorporate resources into their formulation. Also, as they deal with activity durations only, it can result in large resource fluctuations. Dealing with limited resources and resource leveling, therefore, has to be done separately after the analysis;- Ignore project deadline: The formulations of CPM and PDM methods do not incorporate a deadline duration to constrain project duration;Construction Management 60 Dr. Emad Elbeltagi
  • 219. Chapter 4: Scheduling- Ignore project costs: Since CPM and PDM methods deal mainly with activities durations, they do not deal with any aspects related to minimize project cost;- Use deterministic durations: The basic assumption in CPM and PDM formulations is that activity durations are deterministic. In reality, however, activity durations take certain probability distribution that reflect the effect of project conditions on resource productivity and the level of uncertainty involved in the project; and4.7 Solved ExamplesExample 3.1For the project data in Table 4.3, answer the following questions: a) Draw an AOA network of the project? b) Perform forward path and backward path calculations? c) What is the effect of delaying activity D by 3 days? Table 4.3: Data for Example 3.1 Immediate Activity Duration predecessor A 2 - B 6 A C 3 A D 1 B E 6 B F 3 C, D G 2 E, FSolution a, b) 8 or 8 8 10 2 or 3 14 or 8 12 B E 0 0 2 2 6 6 14 14 16 16 A D 1 G 1 2 5 6 2 2 C F 3 3 4 9 or 9 11 Critical 5c) Total float of activity D = LF – ES – d = 11 – 8 – 1 = 2.Construction Management 61 Dr. Emad Elbeltagi
  • 220. Chapter 4: Scheduling Then delaying activity D by 1 day more than its total float will cause a net delay in the whole project by 1 day to become 17 days.Example 3.2Perform PDM calculations for the small project below and determine activity times. Durationsare shown on the activities. I (2) B D G (4) (1) (1) A J L (1) (7) (2) C E H (1) (2) (1) F K (2) (4)Solution 7 9 I (2) 12 14 1 5 5 6 6 7 B (4) D (1) G (1) 1 5 5 6 6 7 9 or 9 or 12 or 14 7 0 1 7 14 14 16 A (1) J (7) L (2) 0 1 7 14 14 16 1 or 6 1 2 2 4 4 5 C (1) E (2) H (1) 6 7 7 9 9 10 7 or 8 5 or 4 ES EF 2 4 5 9Name (duration) F (2) K (4) LS LF 8 10 10 14 Critical pathConstruction Management 62 Dr. Emad Elbeltagi
  • 221. Chapter 4: SchedulingExample 3.3For the activities listed in the table below, draw the time-scaled diagram and mark the criticalpath. Determine the completion time for the project. Tabulate activities times and floats. Activity Duration Predecessor A 4 - B 4 A C 8 B D 3 C E 5 A F 2 B, E G 8 C, F H 5 D, G I 17 - J 10 G, ISolution 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 0 1 2 3 A B C D H 4 4 8 3 5 5 5 E 5 F G 1 2 5 8 I J 17 7 10 Activity ES EF TF FF LS LF A 0 4 0 0 0 4 B 4 8 0 0 4 8 C 8 16 0 0 8 16 D 16 19 10 5 26 29 E 4 9 5 0 9 14 F 9 11 5 5 14 16 G 16 24 0 0 16 24 H 24 29 5 5 29 34 I 0 17 7 7 7 24 J 24 34 0 0 24 34Construction Management 63 Dr. Emad Elbeltagi
  • 222. Chapter 4: SchedulingExample 3.4Perform PDM calculations for the small AoN network shown here. Pay special attention to thedifferent relationships and the lag times shown on them. B SS=2 (3) A C E (3) (4) (5) D FF=2 (6)Solution 0+2=2 2 5 B (3) SS=2 4 7 5, 7 or (9+2-5) 0 3 3 7 7 12 A (3) C (4) E (5) 0 3 3 7 7 12 4 or 3 or (4-2+3) 3 9 D (6) FF=2 ES EF 4 10 Name (duration) 12-2=10 LS LFConstruction Management 64 Dr. Emad Elbeltagi
  • 223. Chapter 5: Repetitive Projects Chapter 5: Scheduling of Repetitive Projects5.1 IntroductionThis chapter introduces new techniques for scheduling of multiple and linear projects thatinvolve a number of repetitive activities. These techniques include: the summary diagrams andthe line of balance (LOB). Examples of these projects are highways, pipelines, and high-risebuildings. The objective of the LOB technique is to determine a balanced mix of resources andsynchronize their work so that they are fully employed and non-interrupted. As such, it ispossible to benefit from repetition, and the crews will likely be able to spend less time andmoney on later units once they develop a learning momentum. Another benefit of the LOBtechnique is its interesting representation of the schedule, given the large amount of data for therepetitive units. This chapter introduces the summary diagrams calculations presented on AONnetworks and integrated CPM-LOB calculations that combine the benefits of CPM networkanalysis of a single unit and the LOB analysis and representation.5.2 Linear ProjectsLinear projects are projects involving repetitive activities. They take their name from either: (a)involving several uniform units of work such as multiple houses or typical floors in a building; or(b) being geometrically linear such as highway, pipeline, and utility projects. In both categories,however, some non-typical units could be involved such as a non-typical floor in a high-risebuilding or a non-standard station in a highway project. The activities in these non-typical unitsmay certainly involve higher or lower quantity of work than their counterparts in the typicalunits. To simplify the scheduling task in these situations, we can assume that the project iscomprised of (n) typical units, with the activities in each unit having average quantity of thework in all units. As the number of units in a project increases, eventually the project becomesmore complex and more challenging.5.3 Resource-Driven SchedulingAs we have seen in network scheduling, the basic inputs to critical-path analysis are theindividual project activities, their durations, and their dependency relationships. Accordingly, theforward-path and backward-path calculations determine the start and finish times of theactivities. The CPM algorithm, therefore, is duration-driven. Activities’ durations here arefunction of the resources that are required (rather than available) to complete each activity. TheCPM formulation, therefore, assumes that resources are in abundance and cannot be used todetermine what resources are needed in order to meet a known project deadline duration.Resource-driven scheduling, on the other hand, is different and is more focused on resources. Itsobjective is to schedule the activities (determine their start and finish times) so that a projectdeadline is met using predefined resource availability limits. The line of balance technique dealtwith in this chapter is a resource-driven schedule. Construction Management 65 Dr. Emad Elbeltagi
  • 224. Chapter 5: Repetitive Projects 5.4 Line of Balance (LOB) 5.4.1 Basic representation Let’s consider a medium-sized high-rise building of 40 typical floors. The construction of each typical floor involves various inter-related activities. If a CPM network is to be developed for the whole project, certainly it will be so complex and will be composed of copies of the activities in a single floor. A Bar Chart of the project will still be so complex and will not serve the purpose of a good communication tool between planners and execution personnel. A schedule representation that suits projects with repetitive activities is shown in Figure 5.1 between time on the horizontal axis and units on the vertical axis. This representation shows the following information: - Each sloping bar represents one activity (A, B, C, or D) in the project and the width of the bar is the activity duration of one unit, which is uniform along all units; - A horizontal line at any unit intersects with the activity bars at the planned start and finish times of the work in that unit; - A vertical line at any date (time) shows the planned work that should be completed/started before and on that date; - The slope of each activity represents its planned rate of progress and this is direct function of the number of crews involved in the activity. The slope of the last activity is the rate of delivery of the various units; and Project End Date 11Units . . A B C D . . Start Finish 4 7 11 13 14½ 16½ 19 22 5 3 Delivery rate 1 Time 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 Figure 5.1: LOB representation - The finish time of the last unit in the last activity represents the end date of the project. It is possible also to add more details to the basic LOB schedule as shown in Figure 5.2. The modified figure shows interesting information, as follows: Construction Management 66 Dr. Emad Elbeltagi
  • 225. Chapter 5: Repetitive Projects - The number of crews employed in each task is graphically represented with each crew indicated by a different pattern. As such, the movement of the crews from one unit to the other is shown; Buffer time 11Units . . A B C D . . 3 crews 4 crews 3 crews 3 crews 5 Crew 3 3 Crew 2 Crew 1 Time 1 Buffer time 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 Figure 5.2: LOB Schedule with crew details - The three crews employed in activity (A) have different work assignments. Crew 1 works in four units (numbers 1, 4, 7, and 10) and leaves site on day 12. Similarly, Crew 2 works on four units (numbers 2, 5, 8, and 11) then leaves site on day 13. Crew 3, on the other hand, works on three units only (numbers 3, 6, and 9) and leaves site on day 11; - Each crew moves to a new unit as soon as it finishes with the previous one, without interruption. As such, work continuity is maintained and the learning phenomenon can lead to some savings in cost and time; - To prevent interference among the sequential tasks of the LOB schedule in case an activity is slightly delayed, a buffer time may be introduced as shown, to act as a float time; - When a slower activity is to follow a faster activity (e.g., C follows B), the activity C can be scheduled starting from unit 1, immediately following the predecessor B. Since interference can happen at unit 1, buffer time may be added to the start of unit 1; - When a faster activity is to follow a slower activity (e.g., B follows A), the activity B needs to be scheduled starting at the top unit. If buffer time is to be added, it will be added at top. Notice that the start of unit 1 in activity B has been delayed to allow the task the proceed without interruption; - Changing the production rate (slope) of any activity changes the project duration. Even speeding one task may prove to be harmful to the project when the conflict point changes from bottom to top; and Construction Management 67 Dr. Emad Elbeltagi
  • 226. Chapter 5: Repetitive Projects- If speeding an activity or relaxing it may result in a delay in the project, a good scheduling strategy is to schedule the activities as parallel as possible to each other and also parallel to a desired project delivery.5.4.2 LOB CalculationsThe objective of using LOB is to achieve a resource-balanced schedule by determining thesuitable crew size and number of crews to employ in each repetitive activity. This is done suchthat: (1) the units are delivered with a rate that meets a pre-specified deadline; (2) the logicalCPM network of each unit is respected; and (3) crews’ work continuity is maintained. Theanalysis also involves determining the start and finish times of all activities in all units and thecrews’ assignments.The CPM-LOB formulation that achieves the above objective involves four main issues, whichare discussed in the next sections: - Crew synchronization and work continuity equation; - Computation of a project delivery rate that meets a given deadline duration; - Calculating resource needs for critical and non-critical activities; and - Drawing the LOB schedule.Crew synchronizationA simple relationship between the duration taken by a crew in one unit (D) and the number ofcrews (C) to employ in a repetitive activity can be derived from the illustration in Figure 5.3. Inthis figure, we have a 5-unit activity and 3 crews to use. Only one crew is assumed to work in asingle unit and the crew spends time (D) on the unit before moving to another unit. Crew 2 5 Units Crew 1 4 Crew 3 3 Crew 2 2 No. of Crews (C) = 3 Crew 1 R 1 Time 0 1 2 3 4 5 6 7 D = 3 days Figure 5.3: Crew synchronizationHaving 3 crews available for this activity, it is possible to schedule their movements in and outof each unit, as shown in the figure, so that they are not interrupted and the work progresses at arate (R). For that work synchronization to happen, the following simple relationship applies: Construction Management 68 Dr. Emad Elbeltagi
  • 227. Chapter 5: Repetitive Projects Number of Crews (C) = D x R (5.1)In the example shown, C = 3; D = 3 days; then, R becomes 1 unit/day, according to Equation 5.1.Therefore, it is possible to achieve work continuity given any change in the number of crews (C)or crew formation (affects D) by adjusting the rate of progress (R). For example, if 4 crewsbecome available, we can apply the same Equation 5.1 to determine a faster progress rate of 1.25units/day. Crew 3 Units 3 Crew 2 2 1 R Crew 1 R 1 0 1 2 3 Time D/C D/C D/C Figure 5.4: Deriving Equation 5.1Driving the relationship of Equation 5.1 is simple. By enlarging part of Figure 5.3 and dividingthe duration (D) among the (C) crews, the slope of the shaded triangle in Figure 5.4 becomes: R = 1 / (D / C) (5.2)and the time D/C becomes: D/C=1/R (5.3)Both equations lead to our formulation of C = D x R. Equation 5.2 also means that workcontinuity is achieved by shifting the start of each unit from its previous one by a time D/C or1/R. This shift also has another practical meaning. Since each crew has part of its duration non-shared with other crews, the chance of work delay is reduced when two crews need the sameequipment, or other resource, such as a crane on site.Meeting a deadline durationA basic objective in CPM-LOB calculation is to meet a given deadline for finishing a number of(n) repetitive units; each has its own CPM network of component activities. Using the illustrationin Figure 5.5, it is possible to formulate a strategy for meeting the deadline by calculating adesired rate of delivery (Rd) for the units, as follows: Construction Management 69 Dr. Emad Elbeltagi
  • 228. Chapter 5: Repetitive Projects n Units . . . n-1 2 R 1 Time T1 = CPM Duration of Unit 1 TL = Project Deadline Duration Figure 5.5: Calculating a desired rate of delivery Rd = (n – 1) / (TL - T1) (5.4)where, TL is the deadline duration of the project and T1 is the CPM duration of the first unit. Thedelivery rate determined from Equation 5.4 is, in fact, the minimum rate required to meet thedesired deadline. Any higher rate can expectedly produce shorter project duration, however,more crews may need to be used and the schedule can be more costly.Calculating resource needsOnce a minimum delivery rate (Rd) is calculated, it is desirable to enforce this rate on theschedule of the repetitive activities to determine the resources needed to complete the project ontime. Equation 5.4, therefore, needs to be applied particularly to the critical activities, which arethe sequential tasks that take the longest path in the CPM network of each unit. Non-criticalactivities, on the other hand, have float (TF) times and as such, we can afford to relax themaccording to their float times to reduce cost. It is, therefore, possible to modify Equation 5.4 andgeneralize it to determine a desired rate (Ri) for any repetitive task (i), as follows: Ri = (n – 1) / (TL - T1) + TFi (5.5)The physical meaning of Equation 5.5 is illustrated in Figure 5.6. In this figure, a 5-unit projectis shown with each unit consisting of a simple four-activity network. Three of the four activitiesA, B, and C are sequential and each has 5-days duration. The fourth activity D runs parallel to Band has a duration of 2 days only. Accordingly, A, B, and C are critical activities while activityD is non-critical with Total Float (TF) of 3 days. As shown in Figure 5.6, the slopes of activitiesA, B, and C are the same and are steep up. The slope of activity (D), on the other hand, has beenrelaxed by simply starting unit 1 of task D as early as possible while starting the last unit as lateas possible (notice the difference in the CPM networks of the first and the last units). In thismanner, simple analysis of the slope of activity D in the figure leads us to the formulation ofEquation 5.5. Using this approach, the relaxation of non-critical activities can be performedwithout violating any logical relationships or crew work continuity requirements. Construction Management 70 Dr. Emad Elbeltagi
  • 229. Chapter 5: Repetitive Projects TF = 3 D (2) A (5) B (5) C (5) Unit n A B D C n-1 (TL - T1 ) + TFD TL - T1 Unit 1 A (5) B (5) C (5) D (2) TF = 3 Figure 5.6: Utilization of float in LOB calculationsWith the desired rates calculated for the individual activities, a generalized form of Equation 5.1can be used to determine the necessary number of crews (Ci) to use in each activity (i), asfollows: Ci = Di x Ri (5.6)Another important consideration is that, in most cases, the number of crews calculated usingEquation 5.6 is not an integer value. Since a fraction of a crew is not possible, the number ofcrews (Ci)’s has to be rounded up to determine the actual number of crews (Cai)’s. As aconsequence to that, the actual rates of progress in the activities (Rai)’s need to be adjusted, asfollows: Cai = Round Up (Ci) (5.7) Rai = Cai / Di (5.8)Equations 5.5 to 5.8, therefore, become the basis of integrated CPM-LOB calculations.Drawing the LOB ScheduleA LOB schedule becomes simple to draw when all activities run with an exactly similar rate (i.e.,activities run parallel to each other). However, due to the rounding of number of crews inEquation 5.4, the activities’ actual rates (Rai)s calculated using Equation 5.5 will not be parallel.Drawing the LOB schedule as such requires extra care as conflict points, either at the top unit orat the first unit, will be introduced due to the difference in progress rates from one activity to theother. As explained earlier, sometimes speeding an activity will cause a net delay in the wholeproject, if work continuity is to be maintained. Therefore, some non-critical activities may endup being delayed even in some situations violating the logical relationships or becomes critical Construction Management 71 Dr. Emad Elbeltagi
  • 230. Chapter 5: Repetitive Projectsthemselves. Also, in some situations, the end schedule may slightly extend beyond the deadline.In this case, a simple approach to use is to re-schedule the project with a deadline duration that isslightly (one or two days) shorter than originally desired. Unit 5 4 A B C D 3 Critical Activities 2 Crew 1 Time 1 0 2 4 6 8 10 12 14 16 18 20 2 Earliest start 3 Latest finish line of all line of all E successors Predecessors 4 Non-Critical Activity 5 with its Boundary Lines Figure 5.7: Alternative LOB representationTo draw the LOB schedule using the activities actual rates (Rai)s, we need to proceed in aforward path, following the logical relationships in the CPM network. When an activity isconsidered, its predecessors are first examined to identify their largest finish times, which arethen considered as a boundary on the start of the current activity. Drawing the schedule by handis simple when the network is small and can be done with varying levels of detail as shown inFigures 5.1 and 5.2.In terms of presentation, showing all the activities on the same grid results in a crowded scheduleand can be confusing even for a small network. Two interesting approaches can be used tocircumvent this problem. One approach is to draw the critical path on one grid and draw theother paths, each on a different grid. The benefit of drawing these paths is to help visualize thesuccessor/predecessor relations for any given task, and accordingly facilitate any desired changesto rates or crews. The second approach is to extend the LOB representation to show the non-critical activities on a mirrored grid as shown in Figure 5.7.5.4.3 Example ApplicationNow, let’s describe the systematic CPM-LOB procedure and apply it to a complete example.Consider a subcontractor involved in a 5-unit housing project. The CPM network of the activitiesin a single unit is shown in Figure 5.8. Construction Management 72 Dr. Emad Elbeltagi
  • 231. Chapter 5: Repetitive Projects D(8) 2 3 E(4) A(4) B(6) F(10) H(8) I(6) 1 4 5 6 9 C(2) G(16) K(10) J(6) 8 7 Figure 5.8: AOA network of a single unitActivity durations, in days, are shown inside the brackets. The contractor signed a contract withthe developer to finish all the work in 50 days. Calculate and draw a LOB schedule. Also,determine how many crews are needed and show on the LOB schedule how the crews movefrom one unit to the other.SolutionStep1: CPM calculations for a single unit: In this step, we determine the duration of a single unit and identify the critical path. As shown in Figure 5.12, the CPM duration (T1) of a single unit is 32 days and the critical path is B - G - K. 4 14 12 22 D(8) 2 3 A(4) E(4) 6 6 16 18 24 26 32 32 B(6) F(10) H(8) I(6) 00 0 0 1 4 5 6 9 C(2) G(16) K(10) J(6) 8 7 2 16 22 22 Figure 5.9: CPM Calculations for a single unitStep 2: LOB calculations: In this step, apply the continuity equation (Equation 5.1) to determine the number of crews, and then determine the actual rate of progress in each activity. The calculations are shown in Table 5.1. Given that a project duration (TL) of 50 days is desirable, the 32 days taken by the first unit (T1) will leave only 18 days (TL - T1) to deliver the remaining 4 (i.e., n – 1) units. This gives a rate of delivery (4/18 = 0.222 units per day) or simply one unit every 4.5 days. As discussed before, this rate will be applied to the critical activities as a desired rate required to meet the deadline. Non-critical activities will have smaller rates depending on their float times (column 4 of Table 5.1). Construction Management 73 Dr. Emad Elbeltagi
  • 232. Chapter 5: Repetitive Projects Table 5.1: LOB calculations Activity Total Desired Rate Required Actual Actual Duration Float (R) = Crews Crews Rate Activity (D) (TF) (n-1) / (TL-T1+TF) (C) = D x R (Ca) (Ra) = Ca / D A 4 10 0.143 0.572 1 0.25 *B 6 0 0.222 1.332 2 0.333 C 2 14 0.125 0.250 1 0.5 D 8 10 0.143 1.144 2 0.25 E 4 10 0.143 0.572 1 0.25 F 10 2 0.200 2 2 0.2 *G 16 0 0.222 3.552 4 0.25 H 8 2 0.200 1.6 2 0.25 I 6 2 0.200 1.2 2 0.333 J 6 14 0.125 0.75 1 0.167 *K 10 0 0.222 2.22 3 0.3 TL = deadline duration = 50 days; T1 = CPM duration of a single unit; * = Critical activityStep 3: Draw the LOB Schedule: In this step, we draw the LOB schedule, starting with the critical path. First, we construct an empty grid and then plot the activities one by one as a four-point parallelogram (Figure 5.10). The two points on the left side represent the line connecting the start times of all units while the right side line connects the finish times. We start with activity B, the first critical activity. The first unit starts at time 0 (lower-left point) since this is the first activity in the path. The finish time of the first unit (bottom- right point), therefore, is at time 6 since the activity has a duration of 6 days. Knowing the two bottom points of B, the top two points are then determined, considering the actual progress rate of this activity (R = 0.333, see Table 5.1). As discussed earlier, each unit starts after (1/R) days from the start of its previous unit. Therefore, the last unit (unit 5) starts after 4 x (1/0.333) days from the start of unit 1 (12 + 0) = day 12 (Figure 5.10). The finish time of unit 5 (top-right point) then becomes 12 + 6 (duration) = day 18. Once an activity is plotted, we proceed with its successor, activity G in our case. Since G depends only on B, its start is bounded only by the finish line of activity B, which is the line between day 6 on unit 1 and day 18 on unit 5. Now, since G has a slower progress rate (0.25) than the boundary line (0.333), we can start the first unit of G (lower-left point) right after the work in activity B has finished, which is day 6 (notice that conflict point is at bottom). The finish of unit 1 (lower-right point of G), then, becomes day 22 (starts at day 6 + a duration of 16 days). Following that, similar to what we did for activity B, we can plot the top two points, considering the progress rate of activity G. Construction Management 74 Dr. Emad Elbeltagi
  • 233. Chapter 5: Repetitive Projects 12 18 22 38 48 5 Unit 4 B G K 3 Crew 2 2 Crew 1 Time 1 0 5 10 15 20 25 30 35 40 45 50 6 22 24.67 34.67 Figure 5.10: LOB schedule for the critical path 32 38 C J Finish Finish of J of G 0 2 8 22 Figure 5.11: Determining the boundary line on activity KAfter plotting activity G, we continue with activity K. Since K depends on both G and J, the startof K has to be bounded by the largest finish times of G and J. For G, the finish times areconnected by the line between day 22 on unit 1 and day 38 on unit 5. For J, on the other hand,simple calculations have to be made to determine its finish times. As illustrated in Figure 5.11, Jfollows C and has a slower rate than C. Then, without doing any calculations for C, we sketchthe duration of C as 2 days, then proceed with J at unit 1 with 6 days duration, then we draw thesloped line of J’s finish times, from day 8 to day 32, which are smaller than those for activity G.As such, the start of activity K is bounded by day 22 on unit 1 and day 38 on unit 5.Activity K has a higher progress rate than that of its boundary line, and as such, is expected tohave a conflict point at top unit. Therefore, we start plotting that activity starting from the topunit and then subtract the slope of this activity to determine the start of unit 1 (lower point), asshown on Figure 5.10. Following that process, we can see that the project is planned to end atday 48, thus meeting the 50-day deadline. Also, after drawing the lines representing the activitieson the LOB schedule, it is possible to show the activities’ crew assignments and their movementalong the different units. Activity B in Figure 5.10, for example, shows the work assignments forits two crews. Each crew can be given a different pattern or color to be easily identified. Construction Management 75 Dr. Emad Elbeltagi
  • 234. Chapter 5: Repetitive ProjectsNow consider the path connecting activities A-D-E-I and will use the same procedure describedfor drawing the LOB schedule of the critical path. Activities A, D and E are sequential, have nomore than one predecessor, and have identical progress rates. As such, they can be easily plottedas shown in Figure 5.12. Activity I on the other hand has two predecessors, E and H. The finishline of activity E is shown in Figure 5.12 and spans from day 16 till day 32. The finish line ofactivity H, however, can be calculated considering the B-F-H path, as illustrated in Figure 5.13.Accordingly, the start of activity I is bounded by activity H (not activity E). Now, since theactivity being considered (I) has a higher progress rate (0.333) than its boundary line (0.25), weneed to draw the activity starting from the top point at day 44. The resulting LOB schedule ofthis path (Figure 5.12) extends the project duration till day 50, which still meets the schedulinggoal. The significance of this change in project duration is that the critical path has also changedfor unit 5 (all other units end before day 48). This change in the critical path is due to therelaxation of the slopes of non-critical activities and the rounding of the crew numbers. Asdemonstrated by this example, extra care has to be taken when drawing the LOB schedule todetermine the planned project duration. 16 20 28 32 44 50 5 Unit 4 A D E I 3 2 Time 1 0 5 10 15 20 25 30 35 40 45 50 4 12 16 32 38 Figure 5.12: LOB schedule for path A-D-E-I 36 44 B F H Finish of H 0 6 16 28 Figure 5.13: Determining the boundary line on activity IExample 5.1The activities involved in the construction of one kilometer of a pipeline are given together withtheir estimated durations in the table below. The project consists of 10 similar kilometers. Construction Management 76 Dr. Emad Elbeltagi
  • 235. Chapter 5: Repetitive ProjectsCalculate the number of crews needed for each activity if the deadline for completing the projectis 40 days and draw the LOB schedule. Assume one day buffer time between activities. Table 5.2: Data for Example 5.1 Activity Duration Preceding Activity name no. (days) activities 1 Locate and clear 1 - 2 Excavate 3 1 3 String pipe 1 1 4 Lay pipe 4 2,3 5 Pressure test 1 4 6 Backfill 2 5SolutionFigure 5.14 shows the CPM calculations for a single unit of the project. In this step, wedetermine the duration of a single unit and identify the critical path.Note that the one day buffer time is set as a lag between activities. 0 1 2 5 6 10 11 12 13 15 -1 2 (3) -1 4 (4) -1 5 (1) -1 6 (2) 1 (1) 0 1 2 5 6 10 11 12 13 15 -1 -1 2 3 3 (1) 4 5 Figure 5.14: CPM calculations for Example 5.1 T1 = 15 day TL= 40 day N = 10 units Ri = (n-1) / TL - T1 + TFi = 9 / (25 + TFi) Construction Management 77 Dr. Emad Elbeltagi
  • 236. Chapter 5: Repetitive Projects Table 5.3: LOB calculations for Example 5.1 Duration Total Cai = Activity Ri = 4 / (25+TFi) Ci =Di x Ri Rai = Cai / Di Di Float Round up Ci 1 1 0 0.36 0.36 1 1 2 3 0 0.36 1.08 2 0.667 3 1 2 0.333 0.333 1 1 4 4 0 0.36 1.44 2 0.5 5 1 0 0.36 0.36 1 1 6 2 0 0.36 0.72 1 0.5No. of units 9 10 11 12 15.5 18.5 24 28 29 30 40 4210 1 3 2 4 5 6 1 0 1 2 3 5 6 10 20 21 22 24 Time Figure 5.15: LOB for Example 5.1 Construction Management 78 Dr. Emad Elbeltagi
  • 237. Chapter 6: Resources Management Chapter 6: Resources Management6.1 Introduction As we have seen in network scheduling, the basic inputs to critical-path analysis are theindividual project activities, their durations, and their dependency relationships. Accordingly, theforward-path and backward-path calculations determine the start and finish times of theactivities. The CPM algorithm, therefore, is duration-driven. Activities’ durations here arefunction of the resources that are required (rather than available) to complete each activity. TheCPM formulation, therefore, assumes that all the resources needed for the schedule are available.This assumption, however, is not always true for construction projects. Under resourceconstraints, the schedule becomes impractical, cost and time are not accurate, and resources maynot be available when needed. In order to deal with such issue, a proper management of availableresources is required to adjust the schedule accordingly.When a project plan is first devised it is likely that the plan will identify peaks of resourcerequirements. However, given the finite nature of resource availability, it may be impractical tomeet such peak resource needs. Ideally, there should be an even demand for resources over theentire project duration, with a smooth increase at the beginning of a project and a smoothdecrease at the end. Given the limited nature of resources, consideration should be given to theproject resource requirements; the project plan should be refined when necessary so that it ispractical.6.2 Resource DefinitionThe first step in resource management is to decide exactly what resources are consideredimportant enough to be managed. While the most resource used is people or workers (such aswelders or carpenters), it may also include other resources such as machines (such as anexcavator or loader), space on a project where space is restricted and where this restriction limitsthe amount of other resources which can be deployed at any one time, financial resources(money) that are needed to perform the required work, or materials needed to accomplishdifferent activities. Generally, a resource can be defined as any thing (labor, equipment, material,money, etc.) that is needed to have the work done.Often resources are specified in terms of the number of units of resource required, e.g., 5 weldersor 3 computer programmers. Alternatively, resources may be specified in terms of the hours ordays that a specific resource is required, e.g., 40 welder-hours or 24 man-days.Resources may be considered as consumable, such as materials that may be used once and onceonly, or non-consumable, such as people, which may be used again and again. The way in whichconsumable resources are used is not critical as long as they are used efficiently. However, theway in which non-consumable resources are used can have a significant impact on the project.Resource management is therefore mainly concerned with non-consumable resources.Construction Management 83 Dr. Emad Elbeltagi
  • 238. Chapter 6: Resources ManagementAlso, resources may be classified according to their importance to key resources, secondaryresources and general resources. Key resources are the most important, expensive and non-available resources in the project such as skilled labors, or equipment. These types of resourceswill have a great attention in the resource scheduling process. Secondary resources are thoseresources which have no constraints on their availability, such as normal labor. Generalresources are defined as those resources that are used by all or most of the activities on theproject such as site overheads. General resources will not be included in the resourcemanagement described later.6.3 Resource ManagementThe most important resources that project managers have to plan and manage on day-to-daybasis are people, machines, materials, and money. Obviously, if these resources are available inabundance then the project could be accelerated to achieve shorter project duration. On the otherhand, if these resources are severely limited, then the result more likely will be a delay in theproject completion time. In general, from a scheduling perspective, projects can be classified aseither time constrained or resource constrained.Resource leveling (smoothing)A project is classified as time constrained in situations where the project completion time can notbe delayed even if additional resources are required. However, the additional resource usageshould be no more than what is absolutely necessary. Accordingly, the primary focus, forpurposes of scheduling, in time constrained projects is to improve resource utilization. Thisprocess is called resource leveling or smoothing. It applies when it is desired to reduce the hiringand firing of resources and to smooth the fluctuation in the daily demand of a resource, as shownin Figure 6.1. In this case, resources are not limited and project duration is not allowed to bedelayed. The objective in this case is to shift non-critical activities of the original schedule,within their float times so that a better resource profile is achieved. Resource Resource Resource limit Time Time Resource profile with high Resource profile with no resource fluctuation and fluctuation (Ideal usage) and exceeding limit below resource limit - Project time: constrained - Resources: unconstrained - Objective: even resources usage Figure 6.1: Resource leveling (smoothing)Construction Management 84 Dr. Emad Elbeltagi
  • 239. Chapter 6: Resources ManagementResource schedulingOn the other hand, a project is resource constrained if the level of resource availability cannot beexceeded. In those situations where resources are inadequate, project delay is acceptable, but thedelay should be minimal. The focus of scheduling in these situations is to prioritize and allocateresources in such a manner that there is minimal project delay. However, it is also important toensure that the resource limit is not exceeded and the technical relationships in the projectnetwork are respected.6.4 Resource AllocationResource allocation, also called resource loading, is concerned with assigning the requirednumber of resources identified for each activity in the plan. More than one type of resource maybe assigned to a specific activity. For example, fixing steel plates on a bridge deck may requiredifferent types of resources such as: welders, laborers and a certain type of welding machine.From a practical view, resource allocation does not have to follow a constant pattern; someactivities may initially require fewer resources but may require more of the same resourcesduring the later stages of the project.6.5 Resource Aggregation (Loading)After each activity has been assigned its resources, the next step is to aggregate the resourcesused by all activities. Resource aggregation is simply the summation, on a period-by-periodbasis, of the resources required to complete all activities based on the resource allocation carriedout previously. The results are usually shown graphically as a histogram. Such aggregation maybe done on an hourly, daily, or weekly basis, depending on the time unit used to allocateresources. When a bar chart is used, the resource aggregation is fairly simple andstraightforward. For a given bar chart, a resource aggregation chart can be drawn underneath thebar chart. However, a separate graph will be required for each resource type.An example is shown in Figure 6.2, where, for a particular resource, the required resource unitsfor each time period are written on the bar chart. The total number of resource units for each timeperiod can then be summed and a resource aggregation or load chart can be produced aspresented underneath the bar chart. Thus, having a project scheduling is necessary to facilitatethe bar chart drawing.The non critical activities, activities which are not on the critical path, do not have fixed startingand finishing times but are constrained by the earliest and latest starting and finishing times. Thissituation offers the planner chance for adjusting the demand for resources. Figure 6.3 illustratessuch situation, which shows the resource aggregation when the activities scheduled on their earlytimes and late times. It can be seen that the resource requirements that arise when both earliestand latest start times are considered are different. The shaded area represents the resourcesrequired by the critical activities, as these activities have a fixed position because their earlytimes equal their late time. Figure 6.3 shows, also, the accumulation of resources at thebeginning of the project when the activities scheduled on their early time. On the other hand, theresources accumulate at the end of the project when the activities scheduled on their late times.Construction Management 85 Dr. Emad Elbeltagi
  • 240. Chapter 6: Resources Management Figure 6.2: Resource aggregation Figure 6.3: Resource aggregation chart showing resource requirements associated with earliest and latest times along with highlighted resource requirements for critical activitiesConstruction Management 86 Dr. Emad Elbeltagi
  • 241. Chapter 6: Resources Management6.6 Resource Leveling (Smoothing)As shown in Figure 6.3, the problem of resource fluctuation appears after the initial schedulingof the project without considering the resources. The peaks and valleys in the resource profileindicate high day-to-day variation in the resource demand. Resource smoothing is the processthat attempts to determine a resource requirement that is "smooth" and where peaks and valleysare eliminated. For example, even if 7 units of a given resource are available at any one time,utilizing 5 of these units each week is preferable than using 4 units for the first week, 7 the next,2 the next and so on. Even if there is no limit to the amount of any one resource available, it isstill desirable that resource usage is as smooth as possible. Given that the resource requirementsof those activities on the critical path are fixed, some order or priority needs to be established forselecting which activity and which particular resource associated with this activity should begiven priority in the smoothing process.Resource leveling heuristics shift non-critical activities within their float times so as to moveresources from the peak periods (high usage) to the valley periods (low usage), without delayingthe project (i.e., area underneath the resource profile remains constant). Usually, projectmanagers may prefer having a desired resource profile in which the resource usage starts withlow values and then the resources are build up till its maximum values and starts to decrease asthe project approaches its end as shown in Figure 6.4. 12 10 Resource units 8 6 4 2 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Time Figure 6.4: Preferred resource usage6.6.1 Method of Moments for Resource SmoothingThe method of minimum moment is well known heuristic algorithm for smoothing resourceprofiles. The Minimum Moment Algorithm has been used as a heuristic approach to calculate ameasure of the fluctuations in daily resource demands. This is represented in Figure 6.5, whereHistogram 1 and Histogram 2 are two alternative resource histograms, both having a total area of40 resource days (i.e., equal total resource demands). Histogram 1 is an ideal one with a constantConstruction Management 87 Dr. Emad Elbeltagi
  • 242. Chapter 6: Resources Managementdaily demand of 4 resource units, no day-to-day resource fluctuations, and the resource will bereleased after day 10. Histogram 2, on the other hand, exhibits high resource fluctuation withdaily demand in the range of 2 to 6 resource units, and the resource will not be released until theend of day 12. The moment (Mx) of both histograms around the horizontal axis (days) are 160and 166, respectively, representing a better resource leveling of Histogram 1. Histogram 1: Mx = 160 Histogram 2: Mx = 166 Figure 6.5: Moment calculations of resource histogramThe moment Mx is calculated by summing the daily moments, as follows: n  1 M x = ∑  (1 x Re source Demand j ) x 2 Re source Demand j  (6.1) j = 1 Where, n is the working-day number of the project’s finish date. Or, for comparison reasons,equation (1) becomes: nM = ∑ ( Re source Demand )2 ( 6 .2 ) x j j =1Having the moment calculations defined, a project manager may use them as to minimize the Mxto reduce daily resource fluctuations.6.6.2 Heuristic Procedure for Resource SmoothingThis section describes another way to smooth resource profile using some heuristic rules. Thismethod can be summarized in the following steps:Construction Management 88 Dr. Emad Elbeltagi
  • 243. Chapter 6: Resources Management - Prepare a complete activity schedule. - Draw a bar chart of the project under study based on ES timing of the activities. - Critical activities to be drawn first (as these activities will not be moved). - Write the resource usage above each bar of the related activity. - Draw the FF as dashed line beside the upper side of the bar and the TF beside the lower side. - Aggregate (determine the resource sum) the resources in each time period. - Calculate the total usage of resources = ∑ unit period usage. - Calculate the average resource usage = ∑ usage / utilization period. - Shift non-critical activities within their FF first, then their TF to decrease the peaks and raise the valleys. - Revise activities floats. - Aggregate resources in each time period after shifting any activity. - When shifting activities, it is preferred to start with the activities that have no successors, as shifting these activities will not affect other activities. Also, by shifting these activities, a float will be created for its predecessors. - Shift activities only that will enhance the resource profile.Example 6.1The activities involved in the construction of a certain project are given in Table 6.1. Oneresource type will be used during the contract. Determine minimum level of the resourcerequired to complete the project. Table 6.1: Data for Example 6.1 Activity Duration (Weeks) Predecessors Resource (units/week) A 0 - 0 B 2 1 0 C 5 1 2 D 3 1 2 E 2 2 1 F 6 2 2 G 6 3 3 H 6 4 1 I 4 4 0 J 2 5, 6 4 K 7 6, 7 2 L 3 2, 8 2 M 2 2, 8, 9 4 N 2 10, 11, 12, 13 0SolutionThe project network is shown in Figure 6.6 with the activity timings and project completion timeof 20 weeks. Table 6.2 shows the activities timings and floats.Construction Management 89 Dr. Emad Elbeltagi
  • 244. Chapter 6: Resources Management 2 4 E (2) 14 16 0 2 2 8 8 10 B (2) F (6) J (2) 3 5 5 11 16 18 0 0 0 5 5 11 11 18 18 20 A (0) C (5) G (6) K (7) N (2) 0 0 0 5 5 11 11 18 18 20 0 3 3 9 9 12 D (3) H (6) L (3) 6 9 9 15 15 18 3 7 9 11 I (4) M (2) 12 16 16 18 Figure 6.6: Precedence network of Example 6.1 Table 6.2: Activities times and floats of Example 6.1 Activity ES EF FF TF A 0 0 0 0 B 0 2 0 3 C 0 5 0 0 D 0 3 0 6 E 2 4 4 12 F 2 8 0 3 G 5 11 0 0 H 3 9 0 6 I 3 7 2 9 J 8 10 8 8 K 11 18 0 0 L 9 12 6 6 M 9 11 7 7 N 18 20 0 0Figure 6.7 shows the bar chart and the resource histogram of the project and the weekly usage ofthe resources and the total usage of 90 resource units. As shown in the resource histogram, theConstruction Management 90 Dr. Emad Elbeltagi
  • 245. Chapter 6: Resources Managementpeak resource usage is 13 units and the minimum usage is 2 units. The total resource usageequals 90 units with utilization period of 18 weeks. Then, the average resource usage equals 5units (=90/18=5). 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 C, 2 G, 3 K, 2 N, 0 B, 0 D, 2 E, 1 F, 2 H, 1 I, 0 J, 4 L, 2 M, 4 4 4 7 6 5 6 6 6 8 13 9 4 2 2 2 2 2 2 ∑= 90 Units 14 13 12 11 10 9 8 7 6 5 4 3 2 1 0 Time 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Figure 6.7: Bar chart and resource histogram before leveling of Example 6.1The resource demand on weeks 9, 10, and 11 is high, while it is low in weeks 13 through 18.Accordingly, the solution process will try to sift the resources from that peak period to the periodof low usage. The following activities will be shifted:Construction Management 91 Dr. Emad Elbeltagi
  • 246. Chapter 6: Resources Management - Activity M has a free float of 7 weeks. Shifting activity M by 7 weeks will reduce the peak usage of the resource on weeks 10 and 11 and increase the usage on weeks 17 and 18. Also, shifting activity M will give chance for preceding activities to be shifted. - Activity J can be shifted by 6, however it has 8 weeks free float. By shifting activity J, the free float of both activities E and F are changed. - Shift activity L by 2 weeks to optimize the resource usage. The free float of activity will be changed to 2 weeks. - Next, shift activity E by 10 weeks to improve the resource usage. - Shift activity H by 2 weeks. - Finally, shift activity F by 1 week.The heuristic procedure for leveling project resource is shown in Figure 6.8. In each step, theresources are aggregated to ensure that shifting an activity improves the resource utilization. Theresource histogram for the leveled project is shown in Figure 6.9. 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 C, 2 G, 3 K, 2 N, 0 B, 0 D, 2 E, 1 F, 2 H, 1 I, 0 J, 4 L, 2 M, 4 4 4 7 6 5 6 6 6 8 13 9 4 2 2 2 2 2 2 ∑= 90M (7 weeks) -4 -4 +4 +4 4 4 7 6 5 6 6 6 8 9 5 4 2 2 2 2 6 6J (6 weeks) -4 -4 +4 +4 4 4 7 6 5 6 6 6 4 5 5 4 2 2 6 6 6 6L (2 weeks) -2 -2 +2 +2 4 4 7 6 5 6 6 6 4 3 3 4 4 4 6 6 6 6E (10 weeks) -1 -1 +1 +1 4 4 6 5 5 6 6 6 4 3 3 4 5 5 6 6 6 6H (2 weeks) -1 -1 +1 +1 4 4 6 4 4 6 6 6 4 4 4 4 5 5 6 6 6 6F (1 week) -2 +2 4 4 4 4 4 6 6 6 6 4 4 4 5 5 6 6 6 6 Figure 6.8: Applying heuristic procedure for resource levelingConstruction Management 92 Dr. Emad Elbeltagi
  • 247. Chapter 6: Resources Management Units 7 6 5 4 3 2 1 0 Time 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Figure 6.9: Resource histogram for Example 6.1 after levelingExample 6.2The activities involved in the construction of a small project are given in Table 6.3. The resourceusage for each activity is shown in Table 6.32. Smooth the resource so that a preferred resourceusage is obtained. Table 6.3: Data for Example 6.2 Activity Duration (Weeks) Predecessors Labors (units/week) A 3 - 9 B 5 - 6 C 1 - 4 D 1 A 10 E 7 B 16 F 6 B 9 G 4 C 5 H 3 C 8 I 6 D, E 2 J 4 F, G 3 K 3 H 7SolutionThe precedence network of the project is shown in Figure 6.10 with the activity timings andproject completion time of 18 weeks.Construction Management 93 Dr. Emad Elbeltagi
  • 248. Chapter 6: Resources Management 3 4 D (1) 11 12 0 3 5 12 12 18 A (3) E (7) I (6) 8 11 5 12 12 18 0 0 0 5 5 11 11 15 18 18 A (0) B (5) F (6) J (4) End (0) 0 0 0 5 8 14 14 18 18 18 0 1 1 5 4 7 C (1) G (4) K (3) 9 10 10 14 15 18 1 4 H (3) 12 15 Figure 6.10: Precedence network of Example 6.2Figure 6.11 shows the bar chart and the resource histogram of the project and the weekly usageof the resources. 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 B, 6 E, 16 I, 2 A, 9 C, 4 D, 10 F, 9 G, 5 H, 8 J, 3 K, 7 19 28 28 29 18 32 32 25 25 25 25 19 5 5 5 2 2 2 Figure 6.11: Bar chart and resource aggregation of Example 6.2Construction Management 94 Dr. Emad Elbeltagi
  • 249. Chapter 6: Resources ManagementTo achieve a resource profile with less resource load at the beginning and build up towards themiddle of the project and decreases towards the end, the following activities will be shifted: - Shift activity K by 11 weeks, this activity has a free float 11 weeks. - Shift activity H by 11 weeks (it has 11 weeks free float). - Activity A will be shifted by one week, accordingly, activity D will e shifted by one week. This is because activity A has no free float. - Shift activity F by 3 weeks and accordingly, activity J will be shifted 3 weeks because activity F has no free float. - Finally, shift activity G by 3 weeks.The heuristic procedure for leveling project resource is shown in Figure 6.12. In each step, theresources are aggregated to ensure that shifting an activity improves the resource utilization. Theresource histogram for the leveled project is shown in Figure 6.13. 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 B, 6 E, 16 I, 2 A, 9 C, 4 D, 10 F, 9 G, 5 H, 8 J, 3 K, 7 19 28 28 29 18 32 32 25 25 25 25 19 5 5 5 2 2 2 K (11 weeks) -7 -7 -7 +7 +7 +7 19 28 28 29 11 25 25 25 25 25 25 19 5 5 5 9 9 9 H (11 weeks) -8 -8 -8 +8 +8 +8 19 20 20 21 11 25 25 25 25 25 25 19 13 13 13 9 9 9 A (1 week ) -9 +9 D (1 week) -10 +10 10 20 20 20 21 25 25 25 25 25 25 19 13 13 13 9 9 9 F (3 weeks) -9 -9 -9 +9 +9 +9 J (3 weeks) -3 -3 -3 +3 +3 +3 10 20 20 20 21 16 16 16 25 25 25 25 19 19 13 12 12 12 G (3 weeks) -5 -5 -5 +5 +5 +5 10 15 15 15 21 21 21 21 25 25 25 25 19 19 13 12 12 12 Figure 6.11: Solution of Example 6.2Construction Management 95 Dr. Emad Elbeltagi
  • 250. Chapter 6: Resources Management 30 25 Units 20 15 10 5 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Time (weeks) Figure 6.12: Resource histogram after leveling of Example 6.26.7 Scheduling Limited ResourceShortage of resources is a major challenge for construction projects. Often, the number of skilledlabor is limited, a related equipment has to be returned as soon as possible, and / or a limitedrequire our special consideration. Scheduling under these resource constraints becomes acomplex problem, particularly when more than one resource is limited. Activity 2 2 2 A 1 1 1 B 2 2 2 2 C 2 2 2 2 2 D 2 2 2 E 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Time periods 2 2 5 3 3 2 2 2 2 2 2 2 2 2 Resource usage 6 5 5 Resource available 4 men /day 4 3 3 2 2 2 1 Figure 6.13: Resource needed exceed resource limitConstruction Management 96 Dr. Emad Elbeltagi
  • 251. Chapter 6: Resources ManagementThe technique that deals with limited resources has been referred to as "resource-scheduling" and"resource-constrained scheduling”.The problem of resource-constrained scheduling appears after the initial netwrok analysis isconducted and a bar chart is drawn. A resource conflict occurs when at any point in the scheduleseveral activities are in parallel and the total amount of required resource(s) exceeds theavailability limit, for any of the resources required in these parallel activities. The situation isillustrated in Figure 6.13 with activities A, B, and C that, at time period 3, require 5, while 4 areonly available per day.The simple solution to that situation is that we can prioritizing the parallel activities, given theresource to higher priority activities and delay the others until the earliest time the resourcebecome available again. Notice that if we delay an activity at time period 3, to solve thesituation, we may end up with another resource conflict later in time. Continuing with identifyingnext conflict points and resolving them, determines the new schedule and the new projectduration. Accordingly, the objective in such situation is to delay some activities so that theresource conflict is resolved and the project delay is minimized.Various models were developed in an attempt to answer this question, and thus optimizeresource-scheduling decisions. Early efforts used mathematical optimization, dynamicprogramming, and linear programming. These models, however, were applicable only to verysmall size problems. On the other hand, heuristic solutions for this problem have beendeveloped. Heuristic solutions, in general, use simple rules of thumb to provide approximate butgood solutions that are usable for large scale problems. An example of these rules of thumb isthat the resource can be assigned to activity (ies) having smaller total float values than others(indicating a desire not to delay the critical and close-to-critical activities). Figure 6.14 show anexample where priority was assigned to the activities having least total float when conflict arises. Resource Activity 2 A 2 B 1 C 1 D 2 E Resource limit = 2 2 2 4 4 1 1 2 2 Resource Activity 2 A 2 B 1 C 1 D 2 E 2 2 2 2 1 1 2 2 2 2 Figure 6.14: Resource scheduling using least TF ruleConstruction Management 97 Dr. Emad Elbeltagi
  • 252. Chapter 6: Resources ManagementThese heuristic rules are based mainly on activity characteristics. The two most effective andcommonly used heuristic rules are the least total-float (LTF) and the earliest late-start (ELS).These two rules have been proven to provide identical results, with the ELS rule beingadvantageous compared to the LTF rule. This is because the value of the late-start derived fromthe original CPM calculations, unlike the total-float, need not to be changed every time anactivity is rescheduled due to insufficient resource availability. As such, the ELS rule can beapplied with much less computational effort than the LTF rule, and accordingly has been used asa basis for the resource scheduling. Draw the CPM network and calculate the late start (LS) values of all activities Current Time = 0 Select eligible activities (activities having their predecessors completed, in addition to any continuing ones) Sort eligible activities in an ascending order according to their LS values and pick the first activity Available res. NO > Required res.? Delay this Current time = Lowest YES activity finish time of the eligible activities Select next Start this activity and eligible activity adjust the resource pool NO All eligible activities are scheduled? YES All NO activities are scheduled? YES End Figure 6.15: Resource scheduling procedure using the ELS ruleConstruction Management 98 Dr. Emad Elbeltagi
  • 253. Chapter 6: Resources ManagementThe resource scheduling procedure using the ELS is outlined in Figure 6.15. It starts from theproject start time and goes through cycles of identifying eligible activities according to thenetwork logic.6.8 Case StudyThe procedure described earlier will be demonstrated on a case study project having 20 activitiesand each activity uses 6 resources with their limits given in Table 6.4. It is required to schedulethe project so that the daily resource requirements do not exceed the resource limits. Table 6.4: Case study data Daily Resource Requirements Activity Duration (days) Predecessors R1 R2 R3 R4 R5 R6 (1) (2) (3) (4) (5) (6) (7) (8) (9) A 6 ---- 5 2 2 2 7 4 B 3 ---- 3 5 2 3 9 6 C 4 A 2 4 4 2 3 1 D 6 ---- 5 4 3 5 5 4 E 7 A, B 3 5 2 3 8 0 F 5 C 4 1 4 9 2 5 G 2 D 4 1 4 3 9 8 H 2 A, B 5 5 4 0 9 1 I 2 G, H 3 2 4 3 4 2 J 6 F 1 5 4 6 7 3 K 1 C, E 3 3 2 4 5 1 L 2 E, G, H 3 2 2 8 3 4 M 4 I, K 2 2 2 2 4 8 N 2 F, L 1 4 4 3 4 1 O 3 L 5 5 4 6 2 3 P 5 J, M, N 3 2 3 4 7 8 Q 8 O 4 5 4 2 3 4 R 2 D, O 5 3 3 3 7 8 S 6 P, R 2 4 6 2 3 4 T 2 Q 1 6 2 7 5 2 Daily Resource Limits 7 10 10 16 18 13The CPM network of the case study is shown in Figure 6.16, indicating project duration of 32days, without considering the resource limits (constraints). Applying the heuristic procedure toconsider resource constraints resulted in the manual solution given in Table 6.5, with 49 daysproject duration. In Table 6.5, the first 10 columns represent the activities’ data, while the last 2columns are the scheduling decisions made at each cycle.Construction Management 99 Dr. Emad Elbeltagi
  • 254. Chapter 6: Resources Management Figure 6.16: Precedence network of the case study projectAccording to the project network of Figure 6.16, activities A, B, and D are at the start of theproject and thus they become eligible for scheduling at current time = 0 (beginning of theproject), as shown in the first cycle of Table 6.5. The eligible activities were sorted by their late-start values (the criteria used for assigning resources, as shown in column 9). Considering thesethree activities in their priority order, available resources were enough to start activity A, but theremaining amounts of resources were not enough for either B or D. As such, activity A wasscheduled to start at time 0 and to end at time 6 (duration = 6 days), while activities B and Dwere delayed till the earliest time more resources became available (day 6).At day 6, activity A was finished, and as such, all its immediate successors become eligible forscheduling (unless they have other unfinished predecessors), in addition to B and D which weredelayed in the previous cycle. After sorting and considering these activities one-by-one, B and Ccould start, while D was delayed. The process, therefore, was continued at day 9 which is thefinish time of activity B (C was scheduled to finish at day 10). The third cycle at day 9, as such,included 4 eligible activities: activity C (continuing till day 10); activity D (delayed fromprevious cycle); and two more activities (E and H, which immediately follow B).Decisions for these activities were made as shown in Table 6.5 and the process was continuedthrough all the cycles until all activities were scheduled (project duration = 49 days; a 17-dayextension beyond the original CPM duration of 32 days). Notice that at any cycle, the totalamount of resources used by the starting and continuing activities is less than or equal to theresource availability limit.Construction Management 100 Dr. Emad Elbeltagi
  • 255. Chapter 6: Resources ManagementTable 6.5: Solution of the case study project ResourcesTime Eligible Late Finish Activities R1=7 R2=10 R3=10 R4=16 R5=18 R6=13 Start Duration Decision Time (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) A 5 2 2 2 7 4 0 6 Start 6 0 B 3 5 2 3 9 6 6 3 Delay - D 5 4 3 5 5 4 7 6 Delay - B 3 5 2 3 9 6 6 3 Start 9 6 C 2 4 4 2 3 1 6 4 Start 10 D 5 4 3 5 5 4 7 6 Delay - C 2 4 4 2 3 1 6 4 Continue 10 D 5 4 3 5 5 4 7 6 Start 15 9 E 3 5 2 3 8 0 9 7 Delay - H 5 5 4 0 9 1 13 2 Delay - D 5 4 3 5 5 4 7 6 Continue 15 E 3 5 2 3 8 0 9 7 Delay - 10 F 4 1 4 9 2 5 10 5 Delay - H 5 5 4 0 9 1 13 2 Delay - E 3 5 2 3 8 0 9 7 Start 22 F 4 1 4 9 2 5 10 5 Start 20 15 G 4 1 4 3 9 8 13 2 Delay - H 5 5 4 0 9 1 13 2 Delay - E 3 5 2 3 8 0 9 7 Continue 22 G 4 1 4 3 9 8 13 2 Start 22 20 H 5 5 4 0 9 1 13 2 Delay - J 1 5 4 6 7 3 15 6 Delay - H 5 5 4 0 9 1 13 2 Start 24 22 J 1 5 4 6 7 3 15 6 Start 28 K 3 3 2 4 5 1 16 1 Delay - J 1 5 4 6 7 3 15 6 Continue 28 I 3 2 4 3 4 2 15 2 Start 26 24 K 3 3 2 4 5 1 16 1 Start 25 L 3 2 2 8 3 4 17 2 Delay - I 3 2 4 3 4 2 15 2 Continue 26 25 J 1 5 4 6 7 3 15 6 Continue 28 L 3 2 2 8 3 4 17 2 Delay - J 1 5 4 6 7 3 15 6 Continue 28 26 L 3 2 2 8 3 4 17 2 Start 28 M 2 2 2 2 4 8 17 4 Delay - M 2 2 2 2 4 8 17 4 Start 32 28 N 1 4 4 3 4 1 19 2 Start 30 O 5 5 4 6 2 3 19 3 Delay - M 2 2 2 2 4 8 17 4 Continue 32 30 O 5 5 4 6 2 3 19 3 Start 33 O 5 5 4 6 2 3 19 3 Continue 33 32 P 3 2 3 4 7 8 21 5 Delay - P 3 2 3 4 7 8 21 5 Start 38 33 Q 4 5 4 2 3 4 22 8 Start 41 R 5 3 3 3 2 8 24 2 Delay - Q 4 5 4 2 3 4 22 8 Continue 41 38 R 5 3 3 3 2 8 24 2 Delay - R 5 3 3 3 7 8 24 2 Start 43 41 T 1 6 2 7 5 2 30 2 Start 43 43 S 2 4 6 2 3 4 26 6 Start 49Construction Management 101 Dr. Emad Elbeltagi
  • 256. Chapter 6: Resources ManagementExample 6.3The activities of a project along with their durations, predecessors and resource used are given inTable 6.6. If resource 1 is limited to 8 units and resource is limited to one unit, determine theactivities schedule start and finish times so that the weekly resource usage does not exceed theresource limits. Table 6.6: Data of Example 6.3 Duration Resource (units/week) Activity Predecessors (Weeks) R1≤8 R2 ≤1 A 4 - 3 0 B 6 - 6 1 C 2 - 4 0 D 8 A 0 1 E 4 D 4 1 F 10 B 0 1 G 16 B 4 0 H 8 F 2 0 I 6 E, H 4 1 J 6 C 5 1 K 10 G, J 2 0SolutionThe project network is drawn and the activities timings are calculated giving a projectcompletion time of 32 weeks without considering the resource limits. 0 4 4 12 12 16 A (4) D (8) E (4) 10 14 14 22 22 26 6 16 16 24 24 30 F (10) H (8) I (6) 8 18 18 26 26 32 0 0 0 6 6 22 22 32 32 32 Start (0) B (6) G (16) K (10) End (0) 0 0 0 6 6 22 22 32 32 32 0 2 2 8 C (2) J (6) 14 16 16 22 Figure 6.17: Precedence diagram of Example 6.3Construction Management 102 Dr. Emad Elbeltagi
  • 257. Chapter 6: Resources ManagementThe solution will be arranged in the Table below (Table 6.7). Table 6.7: Solution of example 6.3 Resources Current Eligible Duration ELS Decision Finish time time activities R1 ≤8 R2 ≤1 0 B 6 1 6 0 Start 6 A 3 0 4 10 Delay - C 4 0 2 14 Delay - 6 G 4 0 16 6 Start 22 F 0 1 10 8 Start 16 A 3 0 4 10 Start 10 C 4 0 2 14 Delay - 10 G 4 0 16 - Continue 22 F 0 1 10 - Continue 16 C 4 0 2 14 Start 12 D 0 1 8 14 Delay - 12 G 4 0 16 - Continue 22 F 0 1 10 - Continue 16 D 0 1 8 14 Delay - J 5 0 6 16 Delay - 16 G 4 0 16 - Continue 22 D 0 1 8 14 Start 24 J 5 1 6 16 Delay - H 2 0 8 18 Start 24 22 D 0 1 8 - Continue 24 H 2 0 8 - Continue 24 J 5 1 6 16 Delay - 24 J 5 1 6 14 Start 30 E 4 1 4 22 Delay - 30 E 4 1 4 22 Start 34 K 2 0 10 22 Start 40 34 K 2 0 10 - Continue 40 I 2 0 6 26 Start 40Then, the project completion time is 40 weeks with activities timing as given below: Schedule Schedule Schedule Schedule Activity Activity start finish start finish A 6 10 G 6 22 B 0 6 H 16 24 C 10 12 I 34 40 D 16 24 J 24 30 E 30 34 K 30 40 F 6 16Construction Management 103 Dr. Emad Elbeltagi
  • 258. Chapter 7: Tine-Cost Trade-Off Chapter 7: Project Time-Cost Trade-Off7.1 IntroductionIn the previous chapters, duration of activities discussed as either fixed or random numbers withknown characteristics. However, activity durations can often vary depending upon the type andamount of resources that are applied. Assigning more workers to a particular activity willnormally result in a shorter duration. Greater speed may result in higher costs and lower quality,however. In this section, we shall consider the impacts of time and cost trade-offs in activities.Reducing both construction projects’ cost and time is critical in today’s market-driven economy.This relationship between construction projects’ time and cost is called time-cost trade-offdecisions, which has been investigated extensively in the construction management literature.Time-cost trade-off decisions are complex and require selection of appropriate constructionmethod for each project task. Time-cost trade-off, in fact, is an important management tool foovercoming one of the critical path method limitations of being unable to bring the projectschedule to a specified duration.7.2 Time-Cost Trade-OffThe objective of the time-cost trade-off analysis is to reduce the original project duration,determined form the critical path analysis, to meet a specific deadline, with the least cost. Inaddition to that it might be necessary to finish the project in a specific time to: - Finish the project in a predefined deadline date. - Recover early delays. - Avoid liquidated damages. - Free key resources early for other projects. - Avoid adverse weather conditions that might affect productivity. - Receive an early completion-bonus. - Improve project cash flowReducing project duration can be done by adjusting overlaps between activities or by reducingactivities’ duration. What is the reason for an increase in direct cost as the activity duration isreduced? A simple case arises in the use of overtime work. By scheduling weekend or eveningwork, the completion time for an activity as measured in calendar days will be reduced.However, extra wages must be paid for such overtime work, so the cost will increase. Also,overtime work is more prone to accidents and quality problems that must be corrected, so costsmay increase. The activity duration can be reduced by one of the following actions: - Applying multiple-shifts work. - Working extended hours (over time). - Offering incentive payments to increase the productivity. - Working on week ends and holidays. - Using additional resources.Construction Management 104 Dr. Emad Elbeltagi
  • 259. Chapter 7: Tine-Cost Trade-Off - Using materials with faster installation methods. - Using alternate construction methods or sequence.7.3 Activity Time-Cost RelationshipIn general, there is a trade-off between the time and the direct cost to complete an activity; theless expensive the resources, the larger duration they take to complete an activity. Shortening theduration on an activity will normally increase its direct cost which comprises: the cost of labor,equipment, and material. It should never be assumed that the quantity of resources deployed andthe task duration are inversely related. Thus one should never automatically assume that thework that can be done by one man in 16 weeks can actually be done by 16 men in one week.A simple representation of the possible relationship between the duration of an activity and itsdirect costs appears in Figure 7.1. Considering only this activity in isolation and withoutreference to the project completion deadline, a manager would choose a duration which impliesminimum direct cost, called the normal duration. At the other extreme, a manager might chooseto complete the activity in the minimum possible time, called crashed duration, but at amaximum cost. Cost Crash duration & Crash cost Normal duration & Normal cost Time Figure 7.1: Illustration of linear time/cost trade-off for an activityThe linear relationship shown in the Figure 7.1 between these two points implies that anyintermediate duration could also be chosen. It is possible that some intermediate point mayrepresent the ideal or optimal trade-off between time and cost for this activity. The slope of theline connecting the normal point (lower point) and the crash point (upper point) is called the costslope of the activity. The slope of this line can be calculated mathematically by knowing thecoordinates of the normal and crash points. Cost slope = crash cost – normal cost / normal duration – crash durationAs shown in Figures 7.1, 7.2, and 7.3, the least direct cost required to complete an activity iscalled the normal cost (minimum cost), and the corresponding duration is called the normalConstruction Management 105 Dr. Emad Elbeltagi
  • 260. Chapter 7: Tine-Cost Trade-Offduration. The shortest possible duration required for completing the activity is called the crashduration, and the corresponding cost is called the crash cost. Normally, a planner start his/herestimation and scheduling process by assuming the least costly option Cost Crash duration & Crash cost Normal duration & Normal cost Time Figure 7.2: Illustration of non-linear time/cost trade-off for an activity Cost Crash duration & Crash cost Normal duration & Normal cost Time Figure 7.3: Illustration of discrete time/cost trade-off for an activityExample 7.1A subcontractor has the task of erecting 8400 square meter of metal scaffolds. The contractor canuse several crews with various costs. It is expected that the production will vary with the crewsize as given below:Construction Management 106 Dr. Emad Elbeltagi
  • 261. Chapter 7: Tine-Cost Trade-Off Estimated daily production Crew size Crew formation (square meter) (men) 166 5 1 scaffold set, 2 labors, 2 carpenter, 1 foreman 204 6 2 scaffold set, 3 labors, 2 carpenter, 1 foreman 230 7 2 scaffold set, 3 labors, 3 carpenter, 1 foremanConsider the following rates: Labor LE96/day; carpenter LE128/day; foreman LE144/day andscaffolding LE60/day. Determine the direct cost of this activity considering different crewsformation.SolutionThe duration for installing the metal scaffold can be determined by dividing the total quantity bythe estimated daily production. The cost can be determined by summing up the daily cost of eachcrew and then multiply it by the duration of using that crew. The calculations are shown in thefollowing table. Crew size Duration (days) Cost (LE) 5 50.6 (use 51) 51 x (1x60 + 2x96 + 2x128 + 1x144) = 33252 6 41.2 (use 42) 42 x (2x60 + 3x96 + 2x128 + 1x144) = 33936 7 36.5 (use 37) 37 x (2x60 + 3x96 + 3x128 + 1x144) = 34632This example illustrates the options which the planner develops as he/she establishes the normalduration for an activity by choosing the least cost alternative. The time-cost relationship for thisexample is shown in Figure 7.4. The cost slop for this activity can be calculates as follow:Cost slope 1 (between points 1 and 2) = (33936 – 33252) / (51 – 42) = 76.22 LE/dayCost slope 2 (between points 2 and 3) = (34632 – 33936) / (42 – 37) = 139.2 LE/day 34800 34600 3 34400 34200 Cost (LE) 34000 2 33800 33600 33400 1 33200 33000 30 35 40 45 50 55 Duration (days) Figure 7.4: Time-cost relationship of Example 7.1Construction Management 107 Dr. Emad Elbeltagi
  • 262. Chapter 7: Tine-Cost Trade-Off7.4 Project Time-Cost RelationshipTotal project costs include both direct costs and indirect costs of performing the activities of theproject. Direct costs for the project include the costs of materials, labor, equipment, andsubcontractors. Indirect costs, on the other hand, are the necessary costs of doing work which cannot be related to a particular activity, and in some cases can not be related to a specific project.If each activity was scheduled for the duration that resulted in the minimum direct cost in thisway, the time to complete the entire project might be too long and substantial penaltiesassociated with the late project completion might be incurred. Thus, planners perform what iscalled time-cost trade-off analysis to shorten the project duration. This can be done by selectingsome activities on the critical path to shorten their duration.As the direct cost for the project equals the sum of the direct costs of its activities, then theproject direct cost will increase by decreasing its duration. On the other hand, the indirect costwill decrease by decreasing the project duration, as the indirect cost are almost a linear functionwith the project duration. Figure 7.5 illustrates the direct and indirect cost relationships with theproject duration. Project cost Project duration Figure 7.5: Project time-cost relationshipThe project total time-cost relationship can be determined by adding up the direct cost andindirect cost values together as shown in Figure 7.5. The optimum project duration can bedetermined as the project duration that results in the least project total cost.7.5 Shortening Project DurationThe minimum time to complete a project is called the project-crash time. This minimumcompletion time can be found by applying critical path scheduling with all activity durations setto their minimum values. This minimum completion time for the project can then be used toConstruction Management 108 Dr. Emad Elbeltagi
  • 263. Chapter 7: Tine-Cost Trade-Offdetermine the project-crash cost. Since there are some activities not on the critical path that canbe assigned longer duration without delaying the project, it is advantageous to change the all-crash schedule and thereby reduce costs.Heuristic approaches are used to solve the time/cost tradeoff problem such as the cost-lopemethod used in this chapter. In particular, a simple approach is to first apply critical pathscheduling with all activity durations assumed to be at minimum cost. Next, the planner canexamine activities on the critical path and reduce the scheduled duration of activities which havethe lowest resulting increase in costs. In essence, the planner develops a list of activities on thecritical path ranked with their cost slopes. The heuristic solution proceeds by shorteningactivities in the order of their lowest cost slopes. As the duration of activities on the shortest pathare shortened, the project duration is also reduced. Eventually, another path becomes critical, anda new list of activities on the critical path must be prepared. Using this way, good but notnecessarily optimal schedules can be identified.The procedure for shortening project duration can be summarized in the following steps: 1. Draw the project network. 2. Perform CPM calculations and identify the critical path, use normal durations and costs for all activities. 3. Compute the cost slope for each activity from the following equation: cost slope = crash cost – normal cost / normal duration – crash duration 4. Start by shortening the activity duration on the critical path which has the least cost slope and not been shortened to its crash duration. 5. Reduce the duration of the critical activities with least cost slope until its crash duration is reached or until the critical path changes. 6. When multiple critical paths are involved, the activity(ies) to shorten is determined by comparing the cost slope of the activity which lies on all critical paths (if any), with the sum of cost slope for a group of activities, each one of them lies on one of the critical paths. 7. Having shortened a critical path, you should adjust activities timings, and floats. 8. The cost increase due to activity shortening is calculated as the cost slope multiplied by the time of time units shortened. 9. Continue until no further shortening is possible, and then the crash point is reached. 10. The results may be represented graphically by plotting project completion time against cumulative cost increase. This is the project direct-cost / time relationship. By adding theConstruction Management 109 Dr. Emad Elbeltagi
  • 264. Chapter 7: Tine-Cost Trade-Off project indirect cost to this curve to obtain the project time / cost curve. This curve gives the optimum duration and the corresponding minimum cost.Example 7.2Assume the following project data given in Table 7.1. It is required to crash the project durationfrom its original duration to a final duration of 110 days. Assume daily indirect cost of LE 100. Table 7.1: Data for Example 7.2 Normal Crash Activity Preceded by Duration (day) Cost (LE) Duration (day) Cost (LE) A - 120 12000 100 14000 B - 20 1800 15 2800 C B 40 16000 30 22000 D C 30 1400 20 2000 E D, F 50 3600 40 4800 F B 60 13500 45 18000SolutionThe cost slope of each activity is calculated. Both the crashability and the cost slope are shownbeneath each activity in the precedence diagram. The critical path is B-C-D-E and the projectduration in 140 days. Project total normal direct cost = sum of normal direct costs of all activities= LE 48300. 0 120 140 140 A (120) End (0) 20 140 140 140 0 0 20@100 20 60 60 90 90 140 Start (0) C (40) D (30) E (50) 0 0 20 60 60 90 90 140 10@600 10@60 10@120 0 20 20 80 B (20) F (60) 0 20 30 90 5@200 15@3001. The activity on the critical path with the lowest cost slope is D, this activity can be crashed by 10 days. Then adjust timing of the activities.Construction Management 110 Dr. Emad Elbeltagi
  • 265. Chapter 7: Tine-Cost Trade-Off 0 120 130 130 A (120) End (0) 10 130 130 130 0 0 20@100 20 60 60 80 80 130 Start (0) C (40) D (20) E (50) 0 0 20 60 60 80 80 130 10@600 10@120 0 20 20 80 B (20) F (60) 0 20 20 80 5@200 15@300 A new critical path will be formed, B-F-E. New Project duration is 130 days. The project direct cost is increased by 10 x 60 = LE 600. Project direct cost = 48300 + 600 = LE 489002. At this step activity E will be crashed, as this activity lies on both critical paths. Activity E will be shortened by 10 days. 0 120 120 120 A (120) End (0) 0 120 120 120 0 0 20@100 20 60 60 80 80 120 Start (0) C (40) D (20) E (40) 0 0 20 60 60 80 80 120 10@600 0 20 20 80 B (20) F (60) 0 20 20 80 5@200 15@300Accordingly, all activities will b turn to critical activities. New Project duration is 120 days. The project direct cost is increased by 10 x 120 = LE 1200. Project direct cost = 48900 + 1200 = LE 501003. In this step, it is difficult to decrease one activity’s duration and achieve decreasing in the project duration. So, either to crash an activity on all critical paths (if any), otherwise, choose several activities on different critical paths. As shown, activities A and B can be crashed together which have the least cost slope (100 + 200). Then, crash activities A nd B by 5 days.Construction Management 111 Dr. Emad Elbeltagi
  • 266. Chapter 7: Tine-Cost Trade-Off 0 115 115 115 A (115) End (0) 0 115 115 115 0 0 15@100 15 55 55 75 75 115 Start (0) C (40) D (20) E (40) 0 0 15 55 55 75 75 115 10@600 0 15 15 75 B (15) F (60) 0 15 15 75 15@300 New Project duration is 115 days. The project direct cost is increased by 5 x (100 + 200) = LE 1500. Project direct cost = 50100 + 1500 = LE 516004. In this final step, it is required to decrease the duration of an activity from each path. The duration of activity A will be crashed to 110 days, C to 35 days, and F to 55 days. Thus, achieving decreasing project duration to 110 days. Also, increase in the project direct cost by 5 x (100 + 600 + 300) = LE 5000 0 110 110 110 A (110) End (0) 0 110 110 110 0 0 10@100 15 50 50 70 70 110 Start (0) C (35) D (20) E (40) 0 0 15 50 50 70 70 110 5@600 0 15 15 70 B (15) F (55) 0 15 15 70 10@300 Duration (days) Direct cost (LE) Indirect cost (LE) Total cost (LE) 140 48300 14000 62300 130 48900 13000 61900 120 50100 12000 62100 115 51600 11500 63100 110 56600 11000 67600Construction Management 112 Dr. Emad Elbeltagi
  • 267. Chapter 7: Tine-Cost Trade-Off 80000 70000 60000 50000 Cost (LE) 40000 30000 20000 10000 0 100 110 120 130 140 150 Project duration (days)Example 7.3The durations and direct costs for each activity in the network of a small construction contractunder both normal and crash conditions are given in the following table. Establish the least costfor expediting the contract. Determine the optimum duration of the contract assuming theindirect cost is LE 125/day. Table 7.2: Data for Example 7.1 Normal Crash Activity Preceded by Duration (day) Cost (LE) Duration (day) Cost (LE) A - 12 7000 10 7200 B A 8 5000 6 5300 C A 15 4000 12 4600 D B 23 5000 23 5000 E B 5 1000 4 1050 F C 5 3000 4 3300 G E, C 20 6000 15 6300 H F 13 2500 11 2580 I D, G, H 12 3000 10 3150SolutionThe cost slope of each activity is calculated. Both the crashability and the cost slope are shownbeneath each activity in the precedence diagram. The critical path is A-C-G-I and the contractduration in 59 days.Construction Management 113 Dr. Emad Elbeltagi
  • 268. Chapter 7: Tine-Cost Trade-Off 20 43 D (23) 24 47 0 12 12 20 20 25 27 47 47 59 A (12) B (8) E (5) G (20) I (12) 0 12 14 22 22 27 27 47 47 59 2@100 2@150 1@50 5@60 2@75 12 27 27 32 32 45 C (15) F (5) H (13) 12 27 29 34 34 47 3@200 1@300 2@40 1. The activity on the critical path with the lowest cost slope is G, this activity can be crashed by 5 days, but if it is crashed by more than 2 days another critical path will be generated. Therefore, activity G will be crashed by 2 days only. Then adjust timing of the activities. 20 43 D (23) 24 47 0 12 12 20 20 25 27 45 45 57 A (12) B (8) E (5) G (18) I (12) 0 12 14 22 22 27 27 45 45 57 2@100 2@150 1@50 3@60 2@75 12 27 27 32 32 45 C (15) F (5) H (13) 12 27 27 32 32 45 3@200 1@300 2@40 A new critical path will be formed, A-C-F-H-I. New contract duration is 57 days. The cost increase is 2 x 60 = LE 120. 2. At this step the activities that can be crashed are listed below: Either A at cost LE 100/day Or C at cost LE 200/day Or I at cost LE 75/day Or F & G at cost LE 360/day Or H & G at cost LE 100/ dayConstruction Management 114 Dr. Emad Elbeltagi
  • 269. Chapter 7: Tine-Cost Trade-Off Activity I is chosen because it has the least cost slope, and it can be crashed by 2 days. Because this is last activity in the network, it has no effect on other activities. 20 43 D (23) 24 47 0 12 12 20 20 25 27 45 45 55 A (12) B (8) E (5) G (18) I (10) 0 12 14 22 22 27 27 45 45 55 2@100 2@150 1@50 3@60 12 27 27 32 32 45 C (15) F (5) H (13) 12 27 27 32 32 45 3@200 1@300 2@40 New contract duration is 55 days. The cost increase is 2 x 75 = LE 150. Cumulative cost increase = 120 + 150 = LE 270 3. Now, we could select A or both H & G, because they have the same cost slope. Activity A is chosen to be crashed. This will change the timings for all activities, but no new critical path will be formed. 18 41 D (23) 20 43 0 10 10 18 18 23 25 43 43 53 A (10) B (8) E (5) G (18) I (10) 0 10 12 20 20 25 25 43 43 53 2@150 1@50 3@60 10 25 25 30 30 43 C (15) F (5) H (13) 10 25 25 30 30 43 3@200 1@300 2@40 New contract duration is 53 days. The cost increase is 2 x 100 = LE 200. Cumulative cost increase = 270 + 200 = LE 470 4. Now, activities H & G can be crashed by 2 days each. A new critical path A-B-D-I will be formed.Construction Management 115 Dr. Emad Elbeltagi
  • 270. Chapter 7: Tine-Cost Trade-Off 18 41 D (23) 18 41 0 10 10 18 18 23 25 41 41 51 A (10) B (8) E (5) G (16) I (10) 0 10 10 18 20 25 25 41 41 51 2@150 1@50 1@60 10 25 25 30 30 41 C (15) F (5) H (11) 10 25 25 30 30 41 3@200 1@300 New contract duration is 51 days. The cost increase is 2 x 100 = LE 200. Cumulative cost increase = 470 + 200 = LE 670 5. At this stage, the network have three critical paths. The activities that can be crashed are listed below: Either C&B at cost LE 350/day Or F, G & B at cost LE 510/day Activities C & B are chosen because they have the least cost slope. 16 39 D (23) 16 39 0 10 10 16 16 21 23 39 39 49 A (10) B (6) E (5) G (16) I (10) 0 10 10 16 18 23 23 39 39 49 1@50 1@60 10 23 23 28 28 39 C (13) F (5) H (11) 10 3 23 28 28 39 1@200 1@300 New contract duration is 49 days. The cost increase is 2 x 350 = LE 700.Construction Management 116 Dr. Emad Elbeltagi
  • 271. Chapter 7: Tine-Cost Trade-Off Cumulative cost increase = 670 + 700 = LE 1370Now, there is no further shortening is possible.The contract duration and the corresponding cost are given in the table below. Duration Direct cost X 1000 LE Indirect cost x 1000 LE Total cost x 1000 LE 59 36.50 7.375 43.875 57 36.62 7.125 43.745 55 36.77 6.875 43.645 53 36.97 6.625 43.595 51 37.17 6.375 43.545 49 37.87 6.125 43.995 50 Total cost 40 Direct cost LE x 1000 30 20 10 Indirect cost 0 48 50 52 54 56 58 60 Time (days)Construction Management 117 Dr. Emad Elbeltagi
  • 272. Chapter 8: Project Finance Chapter 8: Project Finance and Contract Pricing8.1 IntroductionIn the previous chapters, techniques for project planning, scheduling, resources management, andtime-cost trade off have been introduced. This chapter will deal with project cash flow to predictthe actual flow of money during the contract duration. Also, this chapter will introduce themeans for finalizing a contract price. A projects cash flow is basically the difference between theprojects income and its expense. The difference between a companys total income and its totalexpense over a period of time is the company cash flow.8.2 Contract Cash FlowAt the project level, a project’s cash flow is the difference between the project’s expense andincome. At the construction company level, the difference between company’s total expense andits total income over a period of time is the company’s cash flow. Cash flow = Cash in – Cash out = Income - ExpenseForecasting cash flow is necessary for a construction company for the following reasons: - To ensure that sufficient cash is available to meet the demands. - It shows the contractor the maximum amount of cash required and when it will be required. Thus, the contractor can made arrangements to secure the required cash. - It provides a reliable indicator to lending institutions that loans made can be repaid according to an agreed program. - It ensures that cash resources are fully utilized to the benefit of the owner and investors in the company.The three main ingredients in determination of cash flow are: - Expenses (cash out) which represents the aggregate of the payments which the contractor will make over a period of time for all resources used in the project such as labor, equipment, material, and subcontractors. - Income (cash in) that represents the receipts a contractor will receive over a period of time for the work he/she has completed. - Timing of payments: in cash flow analysis, we are interested in the timing of payments related to the work done by the contractor.8.2.1 Construction Project CostsIn preparing the cash flow for a project, it is necessary to compute the costs that must beexpended in executing the works using activities durations and their direct and indirect costs.The principal components of a contractors costs and expenses result from the use of labors, Construction Management 118 Dr. Emad Elbeltagi
  • 273. Chapter 8: Project Financematerials, equipment, and subcontractors. Additional general overhead cost components includetaxes, premiums on bonds and insurance, and interest on loans. The sum of a projects directcosts and its allocated indirect costs is termed the project cost.The costs that spent on a specific activity or project can be classified as; - Fixed cost: costs that spent once at specific point of time (e.g., the cost of purchasing equipment, etc.) - Time-related cost: costs spent along the activity duration (e.g., labor wages, equipment rental costs, etc.) - Quantity-proportional cost: costs changes with the quantities (e.g., material cost)Project direct costsThe costs and expenses that are incurred for a specific activity are termed direct costs. Thesecosts are estimates based on detailed analysis of contract activities, the site conditions, resourcesproductivity data, and the method of construction being used for each activity. A breakdown ofdirect costs includes labor costs, material costs, equipment costs, and subcontractor costs.Activities’ direct costs are estimated as presented previously in chapter 3.Project indirect costsOther costs such as the overhead costs are termed indirect costs. Part of the company’s indirectcosts is allocated to each of the companys projects. The indirect costs always classified to:project (site) overhead; and General (head-office) overhead. Project overhead Project overhead are site-related costs and includes the cost of items that can not be directly charged to a specific work element and it can be a fixed or time-related costs. These include the costs of site utilities, supervisors, housing and feeding of project staff, parking facilities, offices, workshops, stores, and first aid facility. Also, it includes plants required to support working crews in different activities. A detailed analysis of the particular elements of site-related costs is required to arrive at an accurate estimate of these costs. However, companies used to develop their own forms and checklists for estimating these costs. Sit overhead costs are estimated to be between 5% - 15% of project total direct cost. General overhead The costs that can not be directly attributed a specific project called general overhead. These are the costs that used to support the overall company activities. They represent the cost of the head-office expenses, mangers, directors, design engineers, schedulers, etc. Continuous observations of the company expenses will give a good idea of estimating reasonable values Construction Management 119 Dr. Emad Elbeltagi
  • 274. Chapter 8: Project Finance for the general overhead expenses. Generally, the general overhead for a specific contract can be estimated to be between 2% - 5% of the contract direct cost.The amount of the general overhead that should be allocated to a specific project equals: Project direct cost x general overhead of the company in a year Expected sum of direct costs of all projects during the yearHaving defined the direct costs, indirect costs, then the project total cost equals the sum of bothdirect and indirect costs.When studying cash flow, it is very important to determine the actual dates when theexpenditures (cost) will take place. At that time, the expenditures will renamed as the expenses.Figure 8.1 illustrate the difference between the costs and the expenses. As shown in the figure,they are the same except the expenses are shifted (delayed) tan the costs. LE x 1000 700 600 500 Cost 400 300 Expense 200 100 0 Time 0 2 4 6 8 10 Figure 8.1: Project cost and expense curvesExample 8.1Consider the construction of 8-week foundation activity with operation cost of LE8800. Theoperation cost is broken down into the following elements: - Labor LE1600 paid weekly - Plant LE4000 paid weekly after 4 weeks credit facility - Materials LE800 paid weekly after 5 weeks credit facility - Subcontractors LE2400 paid weekly after 3 weeks credit facilityDetermine the expenses (cash out) of this activity.Solution Construction Management 120 Dr. Emad Elbeltagi
  • 275. Chapter 8: Project FinanceA time-scaled plan is developed for this activity for the payments for labor, plant, material, andsubcontractors. The cot will be plotted weekly with the delay specified in Example 8.1. Weeks Operation 1 2 3 4 5 6 7 8 9 10 11 12 13 Labor - 200 200 200 200 200 200 200 200 Plant - - - - 500 500 500 500 500 500 500 500 Material - - - - - 100 100 100 100 100 100 100 100 Subcontractors - - - 300 300 300 300 300 300 300 300 Total payment - 200 200 500 1000 1100 1100 1100 1100 900 900 600 100 (Expense)8.2.2 The S-CurveThe curve represents the cumulative expenditures of a project direct and indirect costs over timeis called the S-curve as it take the S-shape as shown in Figure 8.2. In many contracts, the ownerrequires the contractor to provide an S-curve of his estimated progress and costs across the life ofthe project. This S-shaped of the curve results because early in the project, activities aremobilizing and the expenditure curve is relatively flat. As many other activities come on-line, thelevel of expenditures increases and the curve has a steeper middle section. Toward the end of aproject, activities are winding down and expenditures flatten again (Figure 8.2). The S-Curve isone of the most commonly techniques to control the project costs. 100 85 Cost 50 15 Time 0 5 10 15 20 Figure 8.2: A sample S-curveAn S-curve for a project can be developed using the following steps: - Constructing a simple bar chart for all the tasks of the project. Construction Management 121 Dr. Emad Elbeltagi
  • 276. Chapter 8: Project Finance - Assigning costs to each task using task duration. - Plotting the cumulative amounts of expenditures versus time by smoothly connecting the projected amounts of expenditures over time.Example 8.2Consider the project shown in Figure 8.3. The costs of activities are assumed as shown in Table8.1. The indirect costs of tasks are calculated considering a daily cost of LE500. It is required todraw the S-curve of the total cost of the project. 4 14 12 22 D(8) 2 3 A(4) E(4) 6 6 16 18 24 26 32 32 B(6) F(10) H(8) I(6) 0 0 1 4 5 6 9 C(2) G(16) K(10) J(6) 8 7 2 16 22 22 Figure 8.3: Project network of Example 8.2 Table 8.1: Cost data of Example 8.2 Direct Indirect Total Activity Duration Cost Cost Cost A 4 2,000 2,000 4,000 B 6 9,000 3,000 12,000 C 2 3,000 1,000 4,000 D 8 12,000 4,000 16,000 E 4 18,000 2,000 20,000 F 10 15,000 5,000 20,000 G 16 8,000 8,000 16,000 H 8 20,000 4,000 24,000 I 6 9,000 3,000 12,000 J 6 9,000 3,000 12,000 K 10 5,000 5,000 10,000SolutionThe S-curve is calculated based on the projects bar chart and the expenditures of each activity.As illustrated in Figure 8.3, the eleven activities of this project are scheduled across a 32-daytime span. A bar chart representation of these activities is drawn in Figure 8.4 showing the totalcosts associated with each activity above each activitys bar. The figure shows the total Construction Management 122 Dr. Emad Elbeltagi
  • 277. Chapter 8: Project Financeexpenditures and the cumulative bi-daily expenditures across the life of the project. The S-curveof the cumulative expenditures over time is plotted in Figure 8.5. Time (days) 12000 4000 16000 20000 16000 24000 12000 12000 10000 Cost (x LE000) 10 10 12 14 10 10 16 16 8 8 8 8 6 6 6 2 Cumulative cost 10 20 32 46 56 66 82 98 106 114 122 130 136 142 148 150 (x LE1000) Figure 8.4: Project bar chart of Example 8.2 160 140 Cumulative Cost (X $1000) 120 100 80 60 40 20 0 10 34 8 5 12 7 16 9 20 24 28 32 Time (days) Figure 8.5: The S-Curve for the Example Project Construction Management 123 Dr. Emad Elbeltagi
  • 278. Chapter 8: Project Finance8.2.3 Project Income (Cash-in)The flow of money from the owner to the contractor is in the form of progress payments.Estimates of work completed are made by the contractors periodically (usually monthly), and areverified by the owners representative. Depending on the type of contract (e.g., lump sum, unitprice, etc.), these estimates are based on evaluations of the percentage of total contractcompletion or actual field measurements of quantities placed. Owners usually retain 10% of allvalidated progress payment claims submitted by contractors. The accumulated retainagepayments are usually paid to the contractor with the last payment. As opposed the expensespresented in Figure 8.1 with smooth profile, the revenue will be a stepped curve. Also, when thecontractor collects his/her money it is named project income (cash in) as shown in Figure 8.6. LE x1000 800 700 600 500 Revenue 400 Income 300 200 100 0 Time 0 2 4 6 8 10 Figure 8.6: Project revenue and income curvesThe time period shown in Figure 8.6 represents the time intervals at which changes in incomeoccur. When calculating contract income it is necessary to pay attention to the retention and/orthe advanced payment to the contractor if any. Retention Retention is the amount of money retained by the owner from every invoice, before a payment is made to the contractor. This is to ensure that the contractor will continue the work and that no problems will arise after completion. This retainage amount ranges from 5% to 10% and hold by the owner from every invoice till the end of the contract. The whole amount will be paid to the contractor at the end of the contract. Advanced payment This is amount of money paid to the contractor for mobilization purposes. Then, it is deducted from contract progress payment. Applying this strategy improves the contractor cash flow and prevents him/her from loading the prices at the beginning of the contract. This Construction Management 124 Dr. Emad Elbeltagi
  • 279. Chapter 8: Project Finance strategy, however, may be used only in projects that require expensive site preparation, temporary facilities on site, and storage of expensive materials at the beginning of the project.8.2.4 Calculating Contract Cash FlowHaving determined the contract expenses and income as presented in the previous section, it ispossible to calculate the contract cash flow. If we plotted the contract expense and income curvesagainst each other, then the cash flow is the difference between the points of both curves. Figure8.7 shows the cash flow of a specific contract. The hatched area represents the differencebetween the contractor’s expense and income curves, i.e., the amount that the contractor willneed to finance. The larger this area, the more money to be financed and the more interestcharges are expected to cost the contractor. Cumulative cost (LE) Expense Overdraft Income Time 1 2 3 4 5 6 7 8 Figure 8.7: Cash flow based on monthly paymentsThe contractor may request an advanced or mobilization payment from the owner. This shifts theposition of the income profile so that no overdraft occurs as shown in Figure 8.8. Cumulative Cost (LE) Expense Income Advanced payment Time 0 1 2 3 4 5 6 7 8 Figure 8.8: Effect of advanced payment on improving cash flow Construction Management 125 Dr. Emad Elbeltagi
  • 280. Chapter 8: Project FinanceIn case of less number of payments (two or three payments) along the contract period, this willlead to increase the overdraft as shown in Figure 8.9. Cumulative Cost (LE) Expense Income Time 0 1 2 3 4 5 6 7 8 Figure 8.9: Effect of receiving two payments on cash flowForm the previous study, the factors that affect the project finance (cash flow) are and shouldconsidered when calculating the cash flow: - The project bar chart (project schedule). - Activities’ direct and indirect cost. - Contractor method of paying his/her expenses. - Contractor’s markup (mainly the profit margin). - Retention amount and its payback time. - Time of payment delay by owner. - Advanced or mobilization payment.The cash flow calculations are made as described in the following steps: - Perform project schedule and determine project and activities timing. - Draw bar chart based on early or late timings. - Calculate the cost per time period. - Calculate the cumulative cost. - Adjust the cost according the method of paying it to produce the expenses. - Calculate the cumulative revenue (revenue = cost x (1 + markup)). - Adjust the revenue based on the retention and delay of owner payment to determine the income. - Calculate the cash flow (cash flow = income – expense) at the contract different times.Example 8.3To illustrate the steps of cash flow calculations, consider the same project presented in Figure8.3. The total cost of the activities is presented in Table 8.1. Construction Management 126 Dr. Emad Elbeltagi
  • 281. Chapter 8: Project FinanceIn this project, the markup equals 5% and the contractor will pay his expenses immediately.Retention is 10% and will be paid back with the last payment. The calculations will be madeevery 8 days, i.e., the contractor will receive his/her payment every 8-days (time period).Owner’s payment is delayed one period, while the contractor will submit the first invoice afterthe first period. No advanced payment is given to the contractor.SolutionThe project revenue of each activity is calculated as revenue = cost (1 + markup) as shown inTable 8.2. The activities timing is presented in Example 8.2. Table 8.2 Project cost and revenue Activity Duration (day) Total Cost (LE x 1000) Total Revenue (LE x 1000) A 4 04.00 04.20 B 6 12.00 12.60 C 2 04.00 04.20 D 8 16.00 16.80 E 4 20.00 21.00 F 10 20.00 21.00 G 16 16.00 16.80 H 8 24.00 25.20 I 6 12.00 12.60 J 6 12.00 12.60 K 10 10.00 10.50By summing up the activities cost and revenue, then the contract total cost equals LE 150,000and the total revenue equals LE 157,500. By considering that both the cost and the revenue areevenly distributed over the activities durations. The calculations are presented as shown in Figure8.10. The calculations will be made every 8-days period.As shown in Figure 8.10, the project duration is divided into four periods each one equals 8 days.In addition, one period is added after project completion. Simple calculations are then performedwith the top four rows showing the project expenses. The next five rows for income, and the lastrow for cash flow. As shown, after summing up the costs it became direct expenses to thecontractor as there is no delay in paying them.The expected owner payments are then added up to from the project revenue. The retention issubtracted from the owner payment and will be paid back to the contractor with the last payment(row 7 in Figure 8.10). Then, the revenue is delayed by one period to form the contractorincome. The calculations in the last row are the difference between the project income andproject expense. Having two values in some periods shows the sudden change of the cash flow asthe contractor receives more payments from the owner. For example, in the second period, justbefore the contractor receive his/her payment the cash flow was (0 – 98,000 = - 98,000 LE). Asthe contractor receives a payment of LE 43,470, the cash flow improves and becomes -54,530(43,470 – 98,000). Construction Management 127 Dr. Emad Elbeltagi
  • 282. Chapter 8: Project Finance Time (days) 1000/day 2000/day 000/day 2000/day 2000/day 5000/day 2000/day 1000/day 3000/day 2000/day 2000/day 1000/day1. Cost/2 days x LE1000 10 10 12 14 10 10 16 16 8 8 8 8 6 6 6 2 - - - -2. Cost each period x 46 52 32 20 -LE10003. Cumulative cost x 46 98 130 150 150LE10004. Cumulative Expense 46 98 130 150 150x 10005. Revenue = row 3 x 48.3 54.6 33.6 21 -1.056. Revenue - retention = 43.47 49.14 30.24 18.90 -row 5 x 0.97. Retention x LE1000 - - - - 15.758. Cumulative revenue x 43.47 92.61 122.85 141.75 157.50LE10009. Cumulative income x - 43.47 92.61 122.85 157.50LE100010. Cumulative cashflow x LE1000 = row 9 -46 -98/-54.53 -86.53/-37.39 -57.39/-27.15 -27.15/+7.5– row 4 Figure 8.10: Cash flow calculations of Example 8.3 As seen from Figure 8.10, the maximum overdraft money (maximum cash) is LE 98,000 and will be needed at the 16th day of the project. Thus shows the importance of studying the contract cash flow. Accordingly, the contractor can made his arrangements to secure the availability of this fund on the specified time. Figure 8.11 shows the contract expense and income curves. These curves will be needed to calculate the contractor cost of borrowing or investment of the overdraft money (area between expense and income). Figure 8.12 shows the contact net cash flow. Construction Management 128 Dr. Emad Elbeltagi
  • 283. Chapter 8: Project Finance 160 150 140 Area = LE 10,000 130 x 1 period (8-days) 120 110 100 LE x1000 90 80 70 60 50 40 30 20 10 0 0 1 2 3 4 5 6 Time (period) Figure 8.11: Expense and income curves for Example 8.3 0 1 2 3 4 5 6 30 10 -10 LE x 1000 -30 -50 -70 -90 -110 Time (period) Figure 8.12: Contract net cash flowConstruction Management 129 Dr. Emad Elbeltagi
  • 284. Chapter 8: Project Finance8.2.5 Minimizing Contractor Negative Cash FlowIt is very essential to the contractor to minimize his/her negative cash flow because this mayhinder him/her during performing the contract due to lack of financial resources. Among theprocedures the contractor may follow to minimize negative cash flow is: - Loading of rates, in which the contractor increases the prices of the earlier items in the bill of quantities. This ensures more income at the early stages of the project. However, this technique might represent a risk to the contractor or the owner. - Adjustment of work schedule to late start timing in order to delay payments. In this case, the contractor should be aware that in this case in delay might happen will affect the project completion time and may subject him/her to liquidated damages. - Reduction of delays in receiving revenues. - Asking for advanced or mobilization payment. - Achievement of maximum production in the field to increase the monthly payments. - Increasing the mark up and reducing the retention. - Adjust the timing of delivery of large material orders to be with the submittal of the monthly invoice. - Delay in paying labor wages, equipment rentals, material suppliers and subcontractors.8.2.6 Cost of Borrowing (Return on Investment))Cash requirements (negative cash flows) during a project result in a contractor either having toborrow money to meet his/her obligation or using funds from the company reserves, which myhave been more profitably if employed elsewhere. Accordingly, there should be a charge againstthe project for the use of these funds.One of the methods to determine the amount of interest to be charged during a contract is tocalculate the area between the expenses and income curves. To simplify the calculations, the areais calculated in terms of units of LE x time period (money x time). The time may be in days,weeks, months, etc. The underneath the expense curve is considered as negative area (negativecash), while the area above the expense curve is considered positive area (positive cash). Thetotal net number of area units is calculated and multiplied by the value of the unit and the resultis multiplied by the interest rate or rate of investment. Cost of borrowing = net area x interest rate (8.1)Note that, the interest rate should be calculated in the same time period as the time period of theunit areas. For example, if the units’ areas are calculated in LE.month, then the interest arteshould be in months.Example 8.4Consider example 8.3, it is required to calculate the cost of borrowing if the interest rate is 1%every time period (8-days). Construction Management 130 Dr. Emad Elbeltagi
  • 285. Chapter 8: Project FinanceSolutionReferring to Figure 8.11, the approximate number of unit areas between the expense and theincome curves equals 24 units. Each unit equals LE 10,000 time period.Then, the cost of borrowing = 24 x 100000 x 0.01 = LE 2400.This value must be added to the contract price.Example 8.5The expense and income curves for a specific contract are shown in Figure 8.13. Duringconstruction, money will be borrowed from the bank as required at an interest rate of 15% peryear. Income from project earns an interest of 12% per year. Calculate the net interest to becharged to the project. 90 80 70 2 60 LE x1000 50 40 30 1 20 10 0 0 1 2 3 4 5 6 7 8 9 10 Time (month) Figure 8.13: Cash flow diagram for Example 8.5Solution - Each square represents LE 10000 month - Note that the interest rate is given per year and the square area is measured in month, then, it is required to calculate the interest per month by dividing by 12.Negative area, area 1 (income curve below expense curve) - No. of negative squares = 5.7 - Interest charge = 5.7 x 10000 x 0.15 / 12 = LE 712.5 Construction Management 131 Dr. Emad Elbeltagi
  • 286. Chapter 8: Project FinancePositive area, area 2 (income curve above expense curve) - No. of positive squares = 0.6 - Interest charge = 0.6 x 10000 x o.12 / 12 = LE 60Net interest to be charged to the project = 712.5 – 60 = LE 652.5Example 8.6Table 8.3 shows a contractor’s project budget and profit distribution for a newly awardedcontract. The contractor will receive monthly payment less 10% retention and will be paid to thecontractor one month later. Half the retention is released on project completion and the other halfis released six months later. To reduce administrative costs, the owner proposed to the contractorthat measurements and payments be made every two months with a delay of one month beforethe contractor receives payment. It is required: - Prepare graphs of cumulative cash out and expenses for both monthly and bi-monthly measurements. Assume an average payment delay of one month of the contractor’s cost. - Calculate the maximum amount of capital needed to execute the project with monthly and bi-monthly measurements. - Calculate the cost of borrowing for extra funding needed, if the measurement is made bi- monthly. Given that the investment rate is 15% per annum. Table 8.3: Budgeted value and profit distribution of Example 8.6 Month 1 2 3 4 5 6 7 8 9 10 Value of work each month (LE x1000) 3 4 5 8 8 8 7 6 5 2 Profit (% of value) 15 15 10 10 10 10 10 10 5 5SolutionThe calculations of the project’s cash in and cash out passed on monthly and bi-monthlymeasurements are presented in Table 8.4. As shown, the time scale of Table 8.4 is 16 months. Asgiven in the example, the project duration is 10 months, and half of the retention will be paidafter six month of project completion. The total project value is LE 56,000. Then the totalretention is LE 5,600 (0.10 x 56,000).The cumulative expense and income curves are shown in Figure 8.14. - The maximum cash needed in case of monthly measurement is LE 6850 at month 6 and 7 immediately before payment is received as shown in row k of Table 8.4. - The maximum cash needed in case of bi-monthly measurement is LE 14050 at month 7 immediately before payment is received as shown in row l of Table 8.4.The extra fund required to finance the project if measurements and payments are made every twomonths is represented by the shaded area on Figure 8.14. Construction Management 132 Dr. Emad Elbeltagi
  • 287. Chapter 8: Project FinanceTable 8.4: Cash in and cash out calculations of Example 8.6 a. Month 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 b. Monthly value of work (LE 3 4 5 8 8 8 7 6 5 2 - - - - - - x1000) c. Monthly value – retention = 0.9b 2.7 3.6 4.5 7.2 7.2 7.2 6.3 5.4 4.5 1.8 - - - - - - (LE x1000) d. Retention (LE x 1000) - - - - - - - - - - 2.8 - - - - 2.8 d. Cumulative value (LE x 1000) 2.7 6.3 10.8 18 25.2 32.4 38.7 44.1 48.6 50.4 50.4 50.4 50.4 50.4 50.4 50.4 e. Cumulative income on monthly - 2.7 6.3 10.8 18 25.2 32.4 38.7 44.1 48.6 53.2 53.2 53.2 53.2 53.2 56 measurements (LE x1000) f. Cumulative income on bi- monthly measurements (LE - - 6.3 6.3 18 18 32.4 32.4 44.1 44.1 53.2 53.2 53.2 53.2 53.2 56 x1000) g. Profit (% of value) 15% 15% 10% 10% 10% 10% 10% 10% 5% 5% - - - - - - h. Cost = b(1-g) (LE x1000) 2.55 3.4 4.5 7.2 7.2 7.2 6.3 5.4 4.75 1.9 - - - - - - i. Cumulative cost (LE x1000) 2.55 5.95 10.45 17.65 24.85 32.05 38.35 43.75 48.5 50.4 - - - - - - j. Cumulative expense (LE x1000) - 2.55 5.95 10.45 17.65 24.85 32.05 38.35 43.75 48.5 50.4 50.4 50.4 50.4 50.4 50.4 k. Cash flow monthly -2.55 -32.5 -4.15 -6.85 -6.85 -6.85 -5.95 -5.05 -4.4 -1.8 0 2.8 2.8 2.8 2.8 5.6 measurements = e - j (LE x 1000) 0.15 0.35 0.35 0.35 0.35 0.35 0.35 0.35 0.1 2.8 l. Cash flow bi-monthly -5.95 -11.35 -14.05 -11.35 -6.3 0 -2.55 -4.15 -6.85 -5.95 -4.4 2.8 2.8 2.8 2.8 5.6 measurements = f - j (LE x 1000) 0.35 0.35 0.35 0.35 2.8 Construction Management 133 Dr. Emad Elbeltagi
  • 288. Chapter 8: Project Finance 60 55 50 45 40 35 Cash out Cash in (bi-monthly) LE x1000 30 25 20 15 Cash in (monthly) 10 5 0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Time (month) Figure 8.14: Cash out and cash in based on monthly and bi-monthly measurement intervalsThe extra financed area (shaded area on Figure 8.14) = 2.7 x 1 + (10.8 – 6.3) x 1 + (25.2 -18.0) x 1 + (38.7 – 32.4) x 1 + (48.6 – 44.1) x 1 = 2.7 + 4.5 + 7.2 + 6.3 + 4.5 = 25.2 x 1000 LE.monthInterest charge of extra funding = 25.2 x 1000 x 0.15 / 12 = LE 315.8.3 Project Cash FlowThe project cash flow deals with the whole life of the project not the construction period only.Thus, project cash flow studies the project finance from the feasibility studies phase till theoperation phase. In this case, the time is much longer than that of the contract. At the early stageof a project, the project experience negative cash flow as there is no income in these stages. Inthe operation stage, the revenue will increase than the expenses. Atypical project cash flow isshown in Figure 8.15. When comparing the economics of projects, the cumulative cash flowprovides indicators for such comparison as payback period, profit, and the maximum capital.These indicators called the profitability indicators. Construction Management 134 Dr. Emad Elbeltagi
  • 289. Chapter 8: Project Finance Cumulative cash flow Payback period Profit Project duration Maximum capital Figure 8.15: Typical project cash flow8.3.1 Project Profitability Indicators Profit It is the difference between total payments and total revenue without the effect of time on the value of money. When comparing alternatives, the project with the maximum profit is ranked the best. Maximum capital It is the maximum demand of money, i.e., the summation of all negative cash (expenditures). The project with minimum capital required is ranked the best. Payback period It is the length of time that it takes for a capital budgeting project to recover its initial cost, where the summation of both cash out and cash in equals zero. When comparing alternatives, the project with the shortest payback period is ranked the best.Example 8.7Two projects A and B have annual net cash flows as show in Table 8.5. Assume all cash flowsoccur at the year-end. Establish the ranking of the projects in order of attractiveness to thecompany using: a. Maximum capital needed b. Profit c. Payback period Table 8.5: Net cash flow of Example 8.7 Year 1 2 3 4 5 6 7 8 Project A (LE x 1000) -10 -40 -30 20 60 20 15 30 Project B (LE x1000) -30 -80 30 50 10 20 40 40 Construction Management 135 Dr. Emad Elbeltagi
  • 290. Chapter 8: Project FinanceSolutionThe cumulative cash flow is first calculated as shown in Table 8.6. Table 8.5: Cumulative cash flow of Example 8.7 Year 1 2 3 4 5 6 7 8 Project A (LE x 1000) -10 -50 -80 -60 0 20 35 65 Project B (LE x1000) -30 -110 -80 -30 -20 0 40 80The cumulative cash flow of projects A and B are shown in Figure 8.16. From the figure thefollowing indicators are drawn: 100 80 65 50 Project A 0 0 2 4 6 8 -50 -80 Project B -100 -110 -150 Figure 8.16: Cumulative net cash flow of Example 8.16 - Maximum capital: project A (LE 80,000) is better than project B (LE 110,000) because it needs less capital. - Profit: Project B (LE 80,000) is more profitable than project A (LE 65,000). - Payback period: Project A (5 years) is better than project B (6 years) because is has shorter payback period.8.4 Discounted Cash FlowThe value of money is dependent on the time at which it is received. A sum of money on handtoday is worth more than the same sum of money to be received in the future because the moneyon hand today can be invested to earn interest to gain more than the same money in the future.Thus, studying the present value of money (or the discounted value) that will be received in thefuture is very important. This concept will be demonstrated in the following subsections. Construction Management 136 Dr. Emad Elbeltagi
  • 291. Chapter 8: Project Finance8.4.1 Present ValuePresent value (PV) describes the process of determining what a cash flow to be received in thefuture is worth in todays pounds. Therefore, the Present Value of a future cash flow representsthe amount of money today which, if invested at a particular interest rate, will grow to theamount of the future cash flow at that time in the future. The process of finding present values iscalled Discounting and the interest rate used to calculate present values is called the discountrate.To illustrate this concept, if you were to invest LE 100 today with an interest rate of 10%compounded annually, this investment will grow to LE 110 [100 x (1 + 0.1)] in one year. Theinvestment earned LE 10. At the end of year two, the current balance LE 110 will be investedand this investment will grow to LE 121 [110 x (1 + 0.1)]. Accordingly, investing a currentamount of money, P, for one year, with interest rate (r) will result in a future amount, C using thefollowing equation. C = P. (1 + r) (8.2)If P is invested for n years then the future amount C will equals. C = P. (1 + r )n (8.3)In contrary to the Equation 8.3, the present value (the discounted value), P, of a future some ofmoney, C, that will be received after n years if the discount rate is r is calculated as follow: P = C / (1 + r )n (8.4)For example, the present value of $100 to be received three years from now is $75.13 if thediscount rate is 10% compounded annually.Example 8.8Find the present value of the following cash flow stream given that the interest rate is 10%.Solution Construction Management 137 Dr. Emad Elbeltagi
  • 292. Chapter 8: Project Finance8.4.2 Net Present Value (NPV)Net present value (NPV) is the summation of all PV of cash flows of the project, where expensesare considered negative and incomes are considered positive. A project will be consideredprofitable and acceptable if it gives a positive NPV. When comparing projects, the project withthe largest (positive) NPV should be selected.Example 8.9The Table below illustrates the net cash flow of two projects over 5 years. Using the NPV, whichproject would you prefer if the discount rate 10%. Year 0 1 2 3 4 5 Project A (LE ) -1000 500 400 200 200 100 Project B (LE ) -1000 100 200 200 400 700SolutionProject A:Project B:From the results of the NPV, project A should be chosen since it has the larger NPV.8.4.3 Internal Rate of Return (IRR)The internal rate of return (IRR) of a capital budgeting project is the discount rate (r) at whichthe NPV of a project equals zero. The IRR decision rule specifies that a project with an IRRgreater than the minimum return on capital should be accepted. When choosing amongalternative projects, the project with the highest IRR should be selected (as long as the IRR isgreater than the minimum acceptable return of capital). The IRR is assumed to be constant overthe project life.Example 8.10Calculate the IRR for both projects presented in Example 8.9, and compare among them usingthe resulted IRR. Assume the return on capital equals 10%.SolutionProject A: Construction Management 138 Dr. Emad Elbeltagi
  • 293. Chapter 8: Project FinanceProject B:Both projects are acceptable as they produce IRR grater than the return (cost) on capital.However, when comparing them, Project A should be chosen since it has the higher IRR.8.5 Finalizing a Tender PriceThe total price of a tender comprises the cost and the m