BT 258: PRE-CONTRACT

PLANNING AND CONTROL

COURSE EXAMINER: DR. E. ADINYIRA
DEPT. OF BUILDING TECHNOLOGY KNUST KUMASI -GHANA

Course outline

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Project planning and control procedures
Pre-tender planning
Pre-contract planning
Project planning and control techniques
Programming techniques
The Gantt Chart/The Bar Chart
Network Analysis
Project compression or crashing
Project resource allocation

Further References
1. Oxley, R. & Poskitt, J. (1996) Management Techniques Applied to
the Construction Industry. Blackwell Science, Oxford.

2. Harris F. & McCaffer R (2002) Modern Construction Management,
Blackwell Publishing, Oxford.

3. Calvert, R. E., Bailey, G. & Coles, D. (1995) Introduction to Building
Management, Newnes-Butterworth, Limited, London

4. Kwakye, A. A. (1997) Construction Project Administration in
Practice. Pearson Eeducation.

5. Pilcher, R (1976) Principles of Construction Management, McGraw-
Hill Book Company (UK) Limited, Maidenhead, Berkshire, England.





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Assessment Requirement
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Class quizzes 15%,

Assignments 15%,

End of bridging examinations - 70%.

Note!
Assignments must be done on an individual basis
unless otherwise specified by the examiner.

Cheating during class quizzes and bridging
examination will be severely punished
PROJECT PLANNING AND CONTROL
PROCEDURES

Project planning starts with the contractor deciding
whether to bid or not for a project and ends when a
successful project is delivered to the client.

Project planning and control within the contractors
outfit can be categorized under three (3) main
phases namely;

1. Pre-tender Planning phase.
2. Pre contract Planning phase.
3. Contract Planning phase.

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Pre-tender planning phase: all activities
undertaken from the time a project is known
up to the time that a bona fide tender is
submitted

Pre-contract planning phase: all activities
undertaken from the time of receipt of letter
of award up to the time of site possession.

Contract planning phase: begins from the
possession of the site to the handing over of
project.

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Pre-Tender Planning
Decision to tender:- carefully consider and assess the facts
surrounding the project, to ascertain ones chances of winning
the contract, as well as the projects viability and profitability.

The decision to tender should be the responsibility of
senior management.
Managing Director or one of the Directors.
Chief Estimator.
Contracts Manager.
Chief Buyer.
Office Manager.

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Information required for decision to tender

1. The client for the project.
2. The consultants for the project, i.e., architects,
quantity surveyors, structural engineers and services
engineers.
3. The location of the project.
4. The type and size of the project.
5. The value of the project.
6. The local authority within whose jurisdiction the
project is located.
7. Current work load.
8. Degree of competition.

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9. Market conditions, in terms of the availability of
contract works.
10. Availability of finance, especially from sources outside
the company.
11. The going interest rate.
12. Governments fiscal as well as monetary policies.
13. The current labour and materials supply markets.
14. Adequacy of tender information.
15. Time available for preparing and submitting tender.
16. Terms and conditions of contract.

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Pre-tender meeting:
Attendance:
General Manager/Director.
Chief Estimator.
Contracts Manager.
Planning Engineer.
Buyer.
Office Manager.
Job Estimator.
Purpose:
announce the companys participation in the bidding
process
plan the activities for the pre-tender stage (pre-tender
programme)
allocate responsibilities for the process

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Site Visit Reports
The site visit report should aim to collect the following data:
Access to site ,
Working space available for locating offices, canteens,
stores, materials etc.
Services available to site, i.e., electricity, water, telephone,
etc.
Concealed services, i.e. water, telephone, electricity.
Site security.
Details of damage to existing structures.
Nature of ground and conditions of trial holes.

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Local water table.
Nearest benchmark.
Availability of local labour, and local rates of pay.
Other contracts in the area and approximate completion
dates.
Other tendering in the area.
Availability of local suppliers, plant hire companies and
sub-contractors.
Availability of lodging accommodation.
Availability of transport services to site.
Restrictions due to site location.
Customs and festivals of the area.


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Methods Statement
A document that details out the selected method for each activity
that constitutes the project

Prepared by:
I. an estimator,
II. a planner, (prospective site manager) and
III. a work study officer.

The methods statement is the document on which all subsequent
pre-tender activities will be dependent for the preparation and
submission of a realistic tender figure.

The following activities of the pre-tender planning process can
only begin when the methods statement has been approved;
I. The preparation of the cost estimate.
II. The preparation of detailed pre-tender programme.

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METHODS STATEMENT
CONTRACT: SHEET NO.:
TENDER NO. : DATE: PREPARED BY:
Serial
No.
Operat
ion
Quant
ity
Method Seque
nce
Plant &
Labour
Outp
ut
Durati
on
Remarks
Format for Methods Statement
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ASSIGNMENT 1

A three storey residential property is to be built
on Accra Poly campus. Select a site on campus
for the location of this building and making
reasonable assumptions about size and other
perimeters, prepare a Pre-Tender Method
Statement for the sub-structure phase of the
project

Submission: 8
th
May, 2011
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Cost Estimate Preparation
The objective is to determine the total cost of the project
under consideration by calculating the cost of each item in the
bills of quantities and summing the cost to obtain the overall
project cost

Cost of each item would be made up of all, or some of the
following :
1. Materials costs.
2. Labour costs.
3. Plant costs.
4. Overhead costs.
5. Profit.

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Materials Costs
Ascertain quantity of materials per operation
1. Wastage.
2. Bulking factor.
3. Shrinkage factor.
4. Accessories and other deemed to be included items.
5. Laps.
6. Usage rates/covering capacities.

Determine the price at which they can be acquired and all
sources
1. Internal sources, i.e., the companys materials database
2. External source such as materials manufacturers, materials
distributors, builders merchants
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For external source a Materials Enquiries will have to be
prepared. The information to be provided in enquiries to
suppliers includes:

Quantity of material.
The specification of the material.
Address of the site.
The likely delivery programme.
Means of access.
Period for which the quotation is required to remain open for
acceptance.
Date by which quotation is to be submitted.
The name and contact telephone number and/or e-mail address, fax
number etc., of the contact person in the contractors organisation.

Quotations submitted by suppliers in response to enquiries
must be compared and a quotation selected for use in the
calculation of each unit rate
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Labour Costs
The cost element can be categorized under;
The work content component.
The price component.

Work Content Component determination helps in fixing of
the work periods or durations and is dependent on such
factors as;
1. The competence education, training and experience
of the worker(s).
2. The motivation of the workers.
3. The work environment both physical and
psychological in which he (they) operate(s).
4. The organizational capabilities of the
managers/supervisors; and so forth.



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The Price Component is determined by looking at the following:
1. Both the basic wage/salary paid to labour
2. All the statutory and non-statutory extra additions paid to labour
3. The total productive time worked by the labour

The all-in rate for labour is computed from the above and
applied to the work content component to obtain the cost of
labour for an item of work.

There might be the need to use a labour-only sub-contractor in
which case an invitation will have to be sent out.
Plant Costs
Calculated from the work content component of the plant and
the all-in rate of the plant

Plant items that are not owned by the company would have to
Be sourced from outside organizations or plant hire companies

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Overhead Costs
These costs can be divided into two main sections, namely;
Site overhead costs.
General office overhead costs.
Site overhead costs are computed from items allowed for in
the preliminaries bills
General overhead costs are computed by allowing for costs that
are related to, but not specific to the project under consideration.
Profit
Is a reward to the contractor for taking the risks of undertaking
the project.

The figure may be suggested by the estimating team but it is the
adjudication panel that decides on the final figure.


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Pricing of Preliminaries

Access to site.
Site staffing.
Site accommodation.
Mechanical plant.
Small tools.
Temporary services
water, electricity,
telephone, etc.
Welfare and safety
provisions.

Insurance for the works.
Attendances on sub-
contractors and
suppliers.
Cleaning site and
clearing rubbish.
Defects liability costs.
Provision for testing of
materials.
Scaffolding.

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Tender Adjudication
Adjudication is the action taken by management to convert an
estimate into a tender.

The process is undertaken by an adjudication panel which
consists of representatives of senior management and senior
members of the estimating team.

The decision of the adjudication panel is based on a report
prepared by the estimating team for the adjudication
exercise.


One of the key inputs of the adjudication report, is the
estimate finance statement
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Estimate Finance Statement is a simplified summary and
financial breakdown of the total cost anticipated for the project,
and involves the following:

Preliminaries.
Labour costs.
Material costs.
Mechanical plant and transport costs.
Sums to be included for nominated sub-contractors and
suppliers.
Sums to be included for the builders own sub-contractors.
Provisional sums and contingencies.

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Bills of quantities
Less Provisional Sums
Contingencies
Prime Cost Sums
Sub-contractors
Builders Own Costs
Staff on-costs
Telephone
Offices
Water for Works
Insurances
Scaffolds
Special Plant (Cranes, Hoist)
Travel Expenses

Overheads and Profit 10%
Prime Cost Sums
Add 2
1
/
2
%
Subcontractors
Add 2
1
/
2
%
Provisional Sums
Contingencies

600
2,500
125,605
300,555

15,000
208
3,750
800
11,500
4,000
7,000
1,700








Total of Tender
700,520



429,260
271,260







43,958
315,218
31,521
125,605
3,140
300,555
7,514
600
2,500
786,653
example of an estimate finance statement
The report to management for tender adjudication
should include:
A brief description of the project.
A description of the methods of construction.
Any major assumptions made in the preparation of the
estimate.
The estimate finance statement.
An assessment of the state of the design process and the
possible financial implications.
An assessment of the profitability of the project.
The time for which the tender is to remain open for
acceptance.
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The adjudication panel must consider the following during its
work:
1. Items included in the report to management.
2. The conditions of contract any risks inherent in the project and not
adequately covered by the contractor.
3. Review of the plant allocation within the preliminaries, including any
adjustments due to changes in the methods of construction.
4. Adjustment to the terms of quotations received from domestic sub-
contractors.
5. Cash flow of the project and its effect on current work in progress.
6. Review of the items covered by the site visit report in the light of
prevailing current conditions.
7. Final review of the allocation of monies to the contract preliminaries.
8. Assessment of the percentage allowance for general overheads.
9. Addition of profit percentage.

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PRE-CONTRACT PLANNING
At the pre-contract planning phase, the
following items must be subjected to further
analysis:
Site Visit Report.
Methods Statement.
Site Organisation Structure.
Sub-Contracting Arrangements.
Pre-Tender Programme.
Estimate Finance Statement.

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The Pre-Contract Meeting
The meeting must establish what further information is needed
for detailed planning purposes.

The notice of this meeting should carry the following
information .:


Client.
Clients address.
Address of job.
Value of Contract.
Contract period.
Anticipated commencement
date
Description of work.
Architect.
Quantity surveyor.
Consulting engineers.
Site manager.
Contracts manager.
Site foreman.

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The following are minimum information requirements for pre-
contract planning:
1. Fully Priced Bills of Quantities.
2. Schedule of Sub-Contractors.
3. Copies of all Enquiries and Estimates.
4. At least, 1:100 Scale Plan of all Floors.
5. At least, 1:100 Scale Elevations and Sections.

The need for further information should be communicated to
the consultant team.

The meeting is used by the contractor to pass over the
tender documentation from the estimating department to the
contracts department
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Drawings received for the project at all times must be
systematically registered.

Provision should be made in this register to record:
Title of Drawing or Description.
Drawing Reference Number.
From Whom Received.
Main Scale.
Date Received.
Number of Copies Received.
Date Distributed Within the Company.
Details of Distribution.
Provision for Details of Subsequent Amendments.

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Key Pre-contract planning issues:
Sub-Contractors
Nominated sub-contractors or specialist sub-contractors
Co-ordination of Specialist Work
Suppliers
Domestic Supplier.
Nominated Supplier
Pre-Contract Methods Statement
Pre-Contract Master Programme
Site Layout Planning
Requirement Schedules
Check List and Requisition for Starting New Contracts
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PROJECT PLANNING AND CONTROL
TECHNIQUES

A key elements of any planning process is programming.
Programming will determine when each activity in a plan will
start and end and is useful for control purposes.
The following are programme techniques commonly used in
the construction industry:
The Gantt Chart or The Bar Chart.
The Network Diagrams.
Line of Balance.
Time-chainage Diagrams
The recipient of the information should be considered in
selecting a suitable programme
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Programmes are prepared at various stages of a
project for different purposes and different
audiences
Design Stage
Project master schedule
Tender Stage
Pre-tender programme
Pre-contract Stage
Master programme
Subcontractors programme
Procurement programme
Contract Stage
Stage programme
Short term programme
As-built programme

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Developing a bar
chart

1. Decide on the most
appropriate time scale
for the programme
2. List the activities
involved
3. Obtain the duration for
the listed activities
4. Link the activities to
obtain logic for the
programme
5. Capture important
features such as
holidays, milestones,
resources and cost
information

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The advantages of Gantt chart include:

1. Easy to construct and understand.
2. Applicable at all stages of the project.
3. Clearly mimics the construction sequence.
4. Very popular with site staff.
5. Can be easily used to indicate progress of work.
6. Used for resource aggregation and analysis.
7. The relationship between a master programme and
subsidiary programmes is readily seen.
8. Requirements and key date symbols may be introduced.
9. Can serve as the basis of financial forecasting.

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The major weaknesses of the Gantt chart can be stated as
follows:
1. Its inability to portray the interdependencies that exist among the
activities that make up a project.
2. The Gantt chart is not able to identify the activities whose non-
completion time according to schedule will prolong the overall project
duration.
3. If there is delay in the overall project duration and it becomes necessary
to bring back the project time on course, the Gantt chart is unable to aid
the planning in the identification of the activities that close attention
must be paid to achieve that aim.
4. The starting time of activities comprising a project is arbitrarily
determined by the planner without recourse to subjecting such times to
rigorous analysis.
5. Complex useful analysis, such as project compression, cannot be carried
out using the technique.

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The Gantt Chart/The Bar Chart
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Recording Progress on Gantt Chart
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Activity Time
A
Quantity & Time
B
C
D

Time Line
E
F
G
1. Activity A started on time and completed on time.
2. Activity B started earlier than planned and was completed ahead of
schedule.
3. Activity C was started late and was completed later than scheduled.
4. Activity D was started earlier than scheduled, was completed today, but a
few days
behind the scheduled date.
5. Activity E started late, it is 50% complete and it is in progress.
6. Activity F started much earlier than scheduled and was complete a few
days before today.
7. Activity G has been scheduled to start a few days from today. It has not
been started.
Note
A cursor is used to indicate the position reached on the time scale.
The programme line is used to represent time and quantity of work, while
the time line is used to indicate the start and finish times for an operation.

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Network Analysis
Critical Path Method (CPM)
Critical Path Analysis (CPA),
Critical Path Scheduling (CPS)
Programme Evaluation and Review Technique (PERT)
Resource Allocation and Multiple Project Scheduling (RAMPS)
Least Cost Estimating and Scheduling (LCES)

Networks are drawn by using three symbols
Circle (other geometric figures) - represent events
Arrow - denotes an activity or operation
Broken arrow - represent a dummy


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Events
An event is a milestone or a point in time
It is used to indicate a point at which an operation is
completed or another can start
The following figures are used to represent events

Circle Square Triangle Oval-shaped

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Activity or Operation
An activity is a time and resource consuming element of the
network diagram
Length of the arrow bears no relationship to the time which
the activity takes,
Direction of the arrow simply indicates the direction of the
workflow.

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Straight
Curvilinear
Dummy
A dummy is pseudo-activity that does not consume time or
resources.

Dummy activities are used for 3 principal reasons:
1. To take care of the logic of the network diagram.
2. To give unique identification to activities in a network diagram.
3. To span the first event and other starting events of on-going
activities during the control phase of a project.

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Straight
Curvilinear


2 types of network diagrams:
1. Activity-on-the-Arrow (AOA) or Arrow Diagrams
2. Activity-on-the-Node (AON) or Precedence Diagram
Activity-on-the-Arrow Diagram
Activity is shown by an arrow
Event is show by a circle (other geometric shapes)
A dummy may or may not be required

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Activity-on-the-Node Diagram (Precedence Diagram)
Activities are denoted by boxes
Arrows are used to designate the inter-relationship between
activities
Dummy activities are used at the beginning of the diagram
A finishing dummy activity is used to end the precedence
diagram
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Construction of Activity-on-the-Arrow Diagram
Dependency (no event can be reached in a project before the
activity which immediately precedes it is accomplished)
(no activity can be started until the event which immediately
precedes it has been reached)
Networks must start from one event and end in one event
(avoid dangling activities)
The length of the activity arrow bears no relation to the
length of time that the activity takes.
An activity line can cross other activity lines in the network.
Avoid drawing of endless circles (looping/cycling) in network
diagrams is not allowed
Avoid the introduction of unnecessary dummies (redundancy)
in a network diagram
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Network diagrams are drawn from left to right with the time
scale unfolding towards the right hand side of the diagram.
Often a number of draft versions may have to be produced
before the final copy is produced.

To construct a network diagram, one will have to:
1. Identify the activities that constitute the project
2. Place each activity in the appropriate construction sequence
Each activity has to be considered in turn, and the following
three questions:
What activity must immediately precede this operation?
What activity can immediately follow this operation?
What activities can be taking place concurrently with this
operation?

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Project scheduling
Project scheduling is the assignment of time to each of the
activities that make up a project.
The circle that represents an event has been divided into
three segments and labelled as shown below.

Earliest Event Time
Latest
Event Time
Event
Number
1. Each event is given a unique number.
2. Events are numbered from left to right in a network diagram.
3. Events are numbered in such a way that as far as possible,
the number of the event at the head of each arrow is greater
than the number at the tail.
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10
20
60
50
80
90
100
70
40
30
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Earliest Event times
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Earliest and Latest Event Times
Critical Activities
An activity is critical if there is no flexibility in the time at
which it may be carried out. An activity is critical if:
1. The Earliest Event Time of the Tail Event is the same as the Latest
Event Time of the Tail Event.
2. The Earliest Event Time of the Head Event is the same as the Latest
Event Time of the Head Event.
3. The Event Time of the Head Event minus the Event Time of the Tail
Event minus Activity Duration is equal Zero.
The chain of critical activities from the start event to the
terminal event is the longest time path through the network
and is known as the critical path.
Each network diagram must have at least one critical path,
starting from the first event and ending in the last event.
Critical path can run through dummy activities (critical dummy
activity).

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Analysis of Network Diagrams
Event Slack = Latest Event Time - Earliest Event Time
It is the difference between the latest event time and the
earliest event time. The event slack at the head of an activity
is called Head Slack, and that of its tail activity is Tail Slack
Earliest Start Time (EST)
The earliest time at which an activity can be started is known
as its earliest start time. Since an activity cannot start until
the event from which its arrow emerges has been reached,
the earliest start time of an activity is therefore the earliest
time of the preceding event.
Earliest Finish Time (EFT)
The earliest finish time for an activity is the duration further
on from its earliest start time. Thus Earliest Finish Time =
Earliest Start Time + Activity Duration.

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Latest Finish Time (LFT) = Latest Time of the following event
Since an activity must finish before its terminating event can
be reached, the latest finish time must therefore be the latest
time of the terminating event.
Latest Start Time (LST) = Latest Finish Time - Activity Duration
The Latest Start Time of an activity is its duration before its
Latest Finish Time.
Float
This is the amount of spare time associated with an activity and can also
be defined as the time by which the activities can be delayed without
delaying the total duration of the project
Generally, an activity has float if the difference between its latest finish
time and its earliest start time is greater than its duration
Negative float is the time by which an activity must be reduced for the
project to meet the targeted completion date.


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Generally 4 types of float can be identified, namely;
1. Total Float,
2. Free Float,
3. Independent Float, and
4. Interfering Float.
Total Float
The total float associated with an activity is the total flexibility available in
the time within which it may be carried out without affecting the overall
time of the project. The total float of an activity is therefore the interval
between Latest Finish Time and the Earliest Start Time minus the Activity
Duration, i.e.,
Total float = LFT - EST - Activity Duration.
It is also equal to the difference between the Earliest and Latest Finish
times or to the difference between the Earliest and Latest Start times, i.e.,
Total Float = LFT - EFT or, Total Float= LST - EST.
Using the event times, Total Float of Activity = Latest Event Time of
Succeeding Event or Head Event - Earliest Event time of Preceding Event
or the Tail Event - Activity Duration


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Free Float
The Free Float associated with an activity is the flexibility in the time it
may be carried out, if all other activities are carried out at their Earliest
Start Times. That is, the time an activity can be delayed without delaying
any subsequent activity.

The total float for an activity is always larger than, or equal to its free float.

If the succeeding activity starts at its Earliest Start time, then the activity
under consideration has flexibility only to the extent that it could be
carried out in the time interval between its own Earliest Start Time and
the Earliest Start Time of the succeeding activity.
The Free Float is therefore this time interval minus the activity duration,
and is equal to the difference between the Earliest Start Time of the
Succeeding Activity and the Earliest Finish Time of the Activity concerned.

Using event time, Free Float = Earliest Event Time of the Succeeding Event
- Earliest Event Time of the Preceding Event - Activity Duration

Free Float = Total Float - Head Slack

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Independent Float
This is the amount by which an activity can be delayed or
expanded without affecting the preceding and succeeding
activity
Independent Float = Earliest Start Time of Succeeding Activity
- Latest Finish Time of Preceding Activity - Activity Duration
Independent Float = Earliest Succeeding Event Time - Latest
Preceding Event Time - Activity Duration.
Independent Float = Free Float - Tail Slack of the Tail Event.
Interfering Float
Interfering float is the float which when utilized will affect
subsequent activities and will thus result in the targeted
project duration being extended.
Interfering Float = Total Float - Free Float.


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Total float may include independent, free and
interfering float
Should additional resources be required on critical
activities they could be obtained from:
Activities with independent floats without affecting the
rest of the network
Activities with free float without affecting the float of
subsequent activities
Activities with interfering float only, which will affect the
float of the previous and subsequent activities


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Identification marks as shown below can also be used:

Calculations of Float Using Network Diagram
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Activity
Event Times
Total
Float
Free
Float
Ind.
Float
Int.
Float
Head Tail
Earlies
t
Latest
Earlies
t
Latest
10 20 7 8 0 0 1 0 0 1
10 30 8 8 0 0 0 0 0 0
10 50 6 11 0 0 5 0 0 5
20 60 11 12 7 8 1 0 -1 1
30 40 16 16 8 8 0 0 0 0
30 70 14 17 8 8 3 0 0 3
40 90 19 19 16 16 0 0 0 0
50 53 14 23 6 11 9 0 -5 9
50 60 11 12 6 11 6 5 0 1
50 70 14 17 6 11 5 2 -3 3
53 100 28 28 14 23 9 9 0 0
60 80 20 21 11 12 1 0 -1 1
70 90 19 19 14 17 5 5 2 0
70 100 28 28 14 17 3 3 0 0
80 100 28 28 20 21 1 1 0 0
90 100 28 28 19 19 0 0 0 0
Float Calculations Using Event Times
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Activity Duration EST EFT LST LFT Total
Float
Free
Float
Ind.
Float
Int.
Float
10-20 7 0 7 1 8 1 0 0 1
10-30 8 0 8 0 8 0 0 0 0
10-50 6 0 6 5 11 5 0 0 5
20-60 4 7 11 8 12 1 0 -1 1
30-40 8 8 16 8 16 0 0 0 0
30-70 6 8 14 11 17 3 0 0 3
40-90 3 16 19 16 19 0 0 0 0
50-53 8 6 14 15 23 9 0 -5 9
50-60 0 6 6 12 12 6 5 0 1
50-70 6 6 12 11 17 5 2 -3 3
53-100 5 14 19 23 28 9 9 0 0
60-80 9 11 20 12 21 1 0 -1 1
70-90 0 14 14 19 19 5 5 2 0
70-100 11 14 25 17 28 3 3 0 0
80-100 7 20 27 21 28 1 1 0 0
90-100 9 19 28 19 28 0 0 0 0
Float Calculations using Activity Times
Precedence Diagram
Activities are drawn on the nodes and arrows are used to
represent relationships.

Four types of relationships may be used, namely:
1. Finish-to-Start (FS) relationship.
2. Start-to-Start (SS) relationship.
3. Finish-to-Finish (FF) relationship.
4. Start-to-Finish (SF) relationship.

Precedence diagrams make provision for indicating Leads and
Lags

Leads are indicated as negative figures while Lags are indicated as
positive figures.


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Earliest
Start
Time
Activity
Description
Earliest
Finish Time
Latest
Finish
Time
Total Float Latest Start
Time
Activity No.
Duration
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Monitoring Progress with the Network Diagram
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3 8
8
7 14
17
5 6
11
9 14

23
4 16
16
10 19

19
11 28

28
2 7
8
6 11
12
1 0
0
8 20
21
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Activity
Days left for
completing on-going
activities
2-6 2
5-9 3
4-10 2
7-11 8
Activities Completed
1-2
1-5
1-3
3-7
5-7
On the 15
th
day of the project the following information has
been gathered on it.

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PROJECT COMPRESSION

The process of reducing overall project duration from its
normal duration to a specific duration is known as project
crashing or project compression.

Project durations can be reduced to:
its minimum possible duration
a specific duration
Effecting a reduction in project duration comes at extra
cost

It should be possible for obtain for any project the
minimum duration consistent with the minimum project
cost

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Activity Utilisation Data
Each activity that is part of a project can be undertaken in
countless number of ways, using varying
resource combinations,
gang sizes,
shifts/overtime work periods and
construction methods.
Each construction activity will have associated with it a
minimum possible duration normally known as the crash
duration, and a normal duration.
The detailed time and cost information which are obtained
from the works estimate for each project activity are known
as utility data.
If all activities are fully crashed, i.e., reduced to their
minimum possible durations, the result is called all-crash
solution.
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Cost slope is the incremental direct cost per
unit time, and it indicates the rate of change
in direct cost of an activity with reduction in
its duration.

The cost slope indicates the extra cost (both
direct and indirect) required to expedite an
activity per unit time.




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Crash Cost - Normal Cost
Cost Slope =
Normal Cost Duration - Crash Duration
Projects that are to be reduced to their Minimum Possible
Durations
Hint: continue to repeat the reduction process until it is no longer
possible to reduce the durations of the activities on any critical
path(s) in the network diagram.

Example
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Activity

(a)
Network duration
(weeks)
(b)
Minimum duration
(weeks)
(c)
Cost per unit
reduction ()
(d)
10 20 2 2 -
10 30 6 3 600
10 50 4 2 600
20 40 9 7 300
20 60 - - -
30 50 - - -
30 60 4 1 100
30 70 15 7 900
40 80 9 6 400
50 60 8 6 800
60 70 - - -
60 80 7 4 200
60 90 9 6 200
70 90 2 1 800
80 90 4 2 300
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Since the project duration can only be reduced by reducing
activities on the critical path, the following reductions on the
critical activities will be effected.

Activity 10 30 will be reduced from 6 weeks to 3 weeks
Activity 50 60 will be reduced from 8 weeks to 6 weeks
Activity 60 80 will be reduced from 7 weeks to 4 weeks
Activity 80 90 will be reduced from 4 weeks to 2 weeks
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Examination of the durations of the activities on the critical
path of the network diagram in Fig. 46 produced the following
results;

Activity 10 20 has a duration of 2 weeks, which is its
minimum duration, and can thus not be reduced any further.
Activity 20 40 has a duration of 7 weeks, which is its
minimum duration and can thus not be reduced any further.
Activity 40 80 has a duration of 6 weeks, which is its
minimum duration and can thus not be reduced any further.
Activity 80 90 has a duration of 2 weeks, which is its
minimum duration and can thus not be reduced any further.

The minimum possible duration of the project is 17
weeks.

Optimizing the cost of reduction
It is important to check that the duration of no activity has
been reduced unnecessarily
Find out if an activitys duration can be increased from its
present duration to a duration below its normal duration
without affecting the earliest event time of the activitys head
event.
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The Result of the Final Crashing of the Project
Cost Associated with the Reduction in Project Duration
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Activity
(a)
Normal
duration
(b)
Reduced to
(c)
No. of weeks
reduced by
(d) = (b) - (c)

(d)
Cost per unit
reduction

(e)
Total cost of
reduction

(f) = (d) x (e)
(f)
10 20 2 2 0 - 0
10 30 6 3 3 600 1,800
10 50 4 3 1 600 600
20 40 9 7 2 300 600
20 60 - - - - -
30 50 - - - - -
30 60 4 4 0 100 0
30 70 15 7 8 900 7,200
40 80 9 6 3 400 1,200
50 60 8 6 2 800 1,600
60 70 - - - - -
60 80 7 6 1 200 200
60 90 9 8 1 200 200
70 90 2 2 0 800 0
80 90 4 2 2 300 600
TOTAL 14,000
Projects that are to be reduced to Specific Durations or by
Specific Durations
Hint: rank the activities on the critical path in ascending order,
starting from the activity with the lowest cost per unit reduction
Example

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Activity

(a)
Normal
duration
(wks)

(b)
Minimum
duration
(wks)

(c)
Cost per unit
reduction

(d)
Activity
ranking

(e)
10 20 2 2 -
10 30 6 3 600
10 50 4 2 600
20 40 9 7 300
20 60 - - -
30 50 - - -
30 60 4 1 100
30 70 15 7 900
40 80 9 6 400
50 60 8 6 800
60 70 - - -
60 80 7 4 200
60 90 9 6 200
70 90 2 1 800
80 90 4 2 300
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Since the project duration is to be reduced from 25 weeks
to 18 weeks, there is a total of 7 weeks (25 weeks 18
weeks) of reduction to be made.
Dr. E. Adinyira 90
Activity


(a)
Normal
duration
(wks)
(b)
Minimum
duration
(wks)

(c)
Cost per unit
reduction

(d)
Activity
ranking

(e)
10 20 2 2 -
10 30 6 3 600 * 4
10 50 4 2 600
20 40 9 7 300
20 60 - - -
30 50 - - - * 1
30 60 4 1 100
30 70 15 7 900
40 80 9 6 400
50 60 8 6 800 * 5
60 70 - - -
60 80 7 4 200 * 2
60 90 9 6 200
70 90 2 1 800
80 90 4 2 300 * 3
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Activity

(a)
Normal
duration
(wks)
(b)
Minimum
duration
(wks)
(c)
Cost per unit
reduction ()
(d)
Activity
ranking
(e)
10 20 2 2 - O 1
10 30 6 3 600
10 50 4 2 600
20 40 9 7 300 O 2.5
20 60 - - -
30 50 - - -
30 60 4 1 100
30 70 15 7 900
40 80 9 6 400 O 4
50 60 8 6 800
60 70 - - -
60 80 7 4 200
60 90 9 6 200
70 90 2 1 800
80 90 4 2 300 O 2.5
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Three critical paths can be identified in the network diagram for
the project, namely;

10 50 60 90
10 30 50 60 90
10 30 70 90
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Activity

(a)
Normal
duration
(wks)
(b)
Minimum
duration
(wks)

(c)
Cost per unit
reduction

(d)
Activity
ranking

(e)
10 20 2 2 -
10 30 6 3 600
10 50 4 2 600 +2
20 40 9 7 300
20 60 - - -
30 50 - - -
30 60 4 1 100
30 70 15 7 900
40 80 9 6 400
50 60 8 6 800 +3
60 70 - - -
60 80 7 4 200
60 90 9 6 200 +1
70 90 2 1 800
80 90 4 2 300
Dr. E. Adinyira 95
Activity

(a)
Normal
duration
(wks)
(b)
Minimum
duration
(wks)

(c)
Cost per unit
reduction

(d)
Activity
ranking

(e)
10 20 2 2 -
10 30 6 3 600
10 50 4 2 600 +2
20 40 9 7 300
20 60 - - -
30 50 - - -
30 60 4 1 100
30 70 15 7 900
40 80 9 6 400
50 60 8 6 800 +3
60 70 - - -
60 80 7 4 200
60 90 9 6 200 +1
70 90 2 1 800
80 90 4 2 300
Data Table with Critical Activities Ranked (Path 10 50 60 90)
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Activity

(a)
Normal
duration (wks)
(b)
Minimum
duration (wks)

(c)
Cost per unit
reduction

(d)
Activity
ranking

(e)
10 20 2 2 -
10 30 6 3 600 2
10 50 4 2 600
20 40 9 7 300
20 60 - - -
30 50 - - -
30 60 4 1 100
30 70 15 7 900
40 80 9 6 400
50 60 8 6 800 3
60 70 - - -
60 80 7 4 200
60 90 9 6 200 1
70 90 2 1 800
80 90 4 2 300
Data Table with Critical Activities Ranked (Path 10 30 50 60 90)
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Activity

(a)
Normal
duration (wks)
(b)
Minimum
duration (wks)

(c)
Cost per unit
reduction ()
(d)
Activity
ranking

(e)
10 20 2 2 -
10 30 6 3 600 1
10 50 4 2 600
20 40 9 7 300
20 60 - - -
30 50 - - -
30 60 4 1 100
30 70 15 7 900 3
40 80 9 6 400
50 60 8 6 800
60 70 - - -
60 80 7 4 200
60 90 9 6 200
70 90 2 1 800 2
80 90 4 2 300
Data Table with Critical Activities Ranked (Path 10 30 70 90)
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Activity
(a)
Normal
duration
(weeks)
(b)
Reduced to
(weeks)
(c)
No. of weeks
reduced by
(d) = (b) - (c)
(d)
Cost per
unit
reduction

(e)
Total cost of
reduction
(weeks)
(f) = (d) x (e)
(f)
10 20 2 2 0 - 0
10 30 6 4 2 600 1,200
10 50 4 4 0 600 0
20 40 9 7 2 300 600
20 60 - - - - 0
30 50 - - - - 0
30 60 4 4 0 100 0
30 70 15 13 2 900 1,800
40 80 9 7 2 400 800
50 60 8 8 0 800 0
60 70 - - - - 0
60 80 7 4 3 200 600
60 90 9 6 3 200 600
70 90 2 1 1 800 800
80 90 4 2 2 300 600
TOTAL 7,000
RESOURCE ALLOCATION

Networks can be analysed from three closely
connected perspectives:

Time (i.e. to set work schedules and to find what
leeway exists)
Cost (i.e. to minimise the total cost of the project)
Resources (i.e. to formulate the distribution of
trades, equipment, etc, required for the various
activities)

For most projects resources needed will not always be
available in the right quantity and when required for
use on the project

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The resources available, which are usually limited, may be
required for a single project or for several projects running
simultaneously
A contractors must balance the requests for these resources
so that the load on them is as even as possible, and yet the
projects are each completed in the shortest possible time.

The procedure for doing this is to:
1. Analyse the requirements for each type of resource
according to its various activities, project by project and
period by period.
2. Analyse the total requirements for each particular resource,
period by period, assuming that each activity is started at the
earliest possible time.
3. Balance the resource requirements, when it is necessary, by
delaying the least critical activities.

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Conversion of Network Diagram into Bar Chart
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Resource Histogram
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The summation of the resources on the histogram per
period, i.e., hour, day, or week etc., is known as resource
aggregation.
Ideal resource demand pattern
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An attempt to move from an erratic resource
demand histogram to an ideal pattern is
known as resource smoothening.

The resource smoothening exercise is carried
out through the use of the floats available to
the non-critical activities in the project.

An over-allocation of the resource can be
resolved by using the floats available to
activities in a process is known as resource
levelling.
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Over-allocated Resource
Maximum Resource Level
TIME
Dr. E. Adinyira 107
CARPENTERS
MASONS
PLUMBERS
LABOURERS
TIME
TIME
TIME
TIME
R
E
S
O
U
R
C
E
Project planning computer software
There are several project planning computer
software that assist project planners to effectively
handle real-life resource planning activities

1. Microsoft Project
2. Primavera Sure Trak project Manager.


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