Oh

my 5 years old thread is still alive, rafeal as usual  passionate about bashing EVM :)

 

Gents,

P3 is not the complete tools for Project Management Information System (PMIS), you were dealing with Cost control right and need of EVMS to measures project performance. Upgrade your PMIS to P6, this is fit to help project managers in monitoring and controlling as well as cost control process, identifying cost performance index (CPI) either your project is on- cost, behind or over cost. Track your schedule variances, schedule performance index (SPI) either your project are Behind or on schedule. So, this component helps you to measure your project against performance measurement baseline. It can help you also to forecast the budget completion of project Estimate at completion (EAC) and Estimate to Complete (ETC).

 

Have a nice day,

-rowstone

It’s been my pleasure. I truly enjoyed my time in Algeria and expect to return one day, if not for work, for vacation. I still keep in contact with many of our project team. All the best to you and your family.

I personally don’t find cost control difficult when one uses a process. By it’s nature, EPC has more risk. With unit priced work, in my opinion, management needs to be concerned with productivity as well as quantities being installed. Less than planned productivity may cause delay to other subcontractors or follow-on activities and potentially cause slippage to the project end date. Any increases in project duration result in increased cost of general conditions (project management and running the site) and may result in liquidated damages. Similary, my formula for profit on unit priced work is a little different. Profit = Unit Selling Price the sum of (Unit Subcontractor Cost + Unit indirect costs + Unit company Overhead, General and Administrative costs). Indirect costs include costs such as subcontractor management and supervision, quality control, safety, etc.

Yes, the junior planner was local. With the experience gained, now he not so junior.

As for profit rate, I have see between 3 and 12%; however, it is often a function of company requirements for return on investment and the desire to win the job over the competition. One theory states the greater the risk, the greater the profit should be. In a competitive environment the question is how much profit can I estimate and still win the job.

This is Tom, not James.

The contract was a lump sum design-build; however, most activities were defined by unit prices. So the quantities and unit prices established the majority of the contract price. While nobody wanted extras, they were a fact of life for getting the overall project built. For us, the contract price was established with using the drawings and descriptifs from the esquisse phase of design.
The project management team was local with exception of the Engineering Manager (US) and the Project Controls Manager/Senior Planner (UK). The project site was 20 minutes from our head office, so everyone but the construction manager and his support team were based out of the office. Visits by project staff located in the head office staff were made to the site at least weekly.
The quantity surveryor and material control were located on site and supervised by the Construction Manager. A scheduler was also site and attended weekly production / coordination meetings with the CM and superintendents for the major trades. Month reports were prepared and analyzed by the head office staff.
Sorry for my process description to seem long, it is actually very abbreviated. We also did not start the project that way - we evolved into over several months. But it worked well once we took lead in planning the works for ourselves and our subcontractors.

Hi Morph,

I’ll try to keep my reply focused on your basic questions; however, I’ve come to believe that you cannot separate work process and control from the context of the team’s culture. While profit for companies (non-government)in the west translates into dollars, I sensed the PDG of our Algerian JV viewed "profit" as including economic benefit to the employees (job security) and to the local suppliers as well as improvement of the country’s infrastructure. With that in mind "cost control" on unit price work was most importantant to the owner so he had an idea of what the cost at completion would be because we had target budgets set in the contract. Additionally, the owner needed to know when the job was going to be complete. Here’s how we did it:
1)We assigned an experienced full-time quantity surveyor for quantifying all work activites from the unit price listing. This helped to identify items of work that were missing from the unit price listing. The missing items list was submitted with forecast quantities to the owner, prices negotiated, and then added to the contract.
2) With self-performing the work, even when cost overruns will just be written off, production control is critical to forecasting completion of work. With the WBS established, our project planner, loaded the work activity list into P3. Quantities, crew-sizes, and production rates were loaded for each activity.
3) Our Superintendents prepared daily reports to document events of their crews for the day to include resources used for the day (number of men by type - such as Dump Truck Operator or laborer - and equipment), materials delivered, inspections performed, testing, etc. The report was distributed to the Site Manager, Quantity Surveyor, Planner, Qaulity Control Supervisor and Site Safety Supervisor. (Yes we had a copier on site to simplify sharing of info, but we could have just posted the reports for all to see).
4) Our quantity surveyor used the daily report info to ensure all activities in progress were progressed. Some items required same day verification of installed quantitites (for example, underground piping) and some installed items were measured at the end of the week. As a minimum we progressed active activities weekly. Material consumption was based on material delivery tickets.
5) Each week, the quantity surveyor used his original take-off and compared it to work installed. As you noted, we often found the quantities actually installed exceeded our original take-off because of work not shown on the drawings. The quantity remaining to install was updated. If you don’t do this you will find you can achieve more than 100% progress. So progress was calculated as Installed Quantity divided by the sum of Installed Quantity plus Remaining to be Installed.
6) Each month, the quanity surveyor prepared the backup data sheets for our monthly progress invoice and walked the job with the owner for verification of installed works.
7) The planner used to the daily report to extract Actual start and Actual completion dates for activities in the schedule. The planner used the monthly progress reports to update installed works based on quantities. Actual progress was compared against the baseline to see if our forecast production rate was valid. If not, an analysis was performed to determine why - did we not have the number of resources planned, etc. The results of the analysis went to the Construction Manager and Project Manager for discussion on how we were going to address the issue - accept slippage, get more manpower, work more days, etc. Based on the decision taken by the Project Manager, the team responded accordingly, the schedule updated. And yes, at times we kept the completion date fixed which drove resource requirements beyond what was available, but that’s what Ops wanted to see. So they saw what they wanted, but we knew what the solutions were.

Sorry for this to be long. I hope this gives you some ideas. And your English is far better than my Arabic or French combined. :)

Mekaoui,

To give a good response to your question relative to EVMS, is your company self-performing all works or subcontracting? Being your in Algeria, is it safe to think your contract is unit priced rather than lump sum?

You only control costs at the point of commitment not afterwards.
Work out how you want the system to do first with a user spec, then look at your existing set up, work out what the important gaps are, do some process re-engineering on system to ensure it is as efficient as possible, then implement changes in your current system to fix the gaps and then finally look around for the best fit software for you needs (which could be P3, accounting upgrage, or not).
Treat it as a project, Client - specs - method statements -implementation - sign off acceptance