•Work is the final expression or demonstration of management
•The work itself is the motivator
•The work trains
•Information is filtered
•Short term considerations win over long term
•Hard data wins over soft data
•No one will lose their job to raise productivity
Basic Elements
1. People
2. Materials
3. Place
4. Tools
5. Energy
6. Information
Support Groups
A. Tool Rooms
B. Warehouses
C. Personnel
D. Engineering / Planning
E. Equipment
Motivators
Significant Participation in Decision Making (Planning, Scheduling, Etc.)
2. Challenge of Running Work
3. Good Workmanship
4. Maintain Job Schedule
5. Building a Structure
6. Good Relationship with Crew
7. Feedback - Cost / Schedule / Progress
Journeymen
1. Participation - Methods / Tools Selection
2. Complete Work - Productive Day
3. Building a Structure
4. Social Relationships with Crew
Foremen
1. Unproductive / Unskilled Workmen
2. Poor Attitude of Workmen
3. Lack of Management Support (materials, Tools, Information, Equipment)
4. Union Problem
5. Inaccurate Feedback - Cost / Schedule
6. Unnecessary Paperwork
Demotivators
Journeymen
1. Poor Work Relationship with Crew
2. Unproductive Workmen in Crew
3. Poor Workmanship by Crew Member
4. Work Itself - Repetitious / Uninteresting
Key Sources of Constraint
Administration of Work-site
• Supplies Key Elements to the Crew
• Controlled by Management Through Support Groups
• Methods
• Controlled at Crew Level
• Set by Tradition, Special Plan, Machine, or Evolution
Problems With Formal Feedback
Does not show inadequacies or absence of plans, schedule, instructions, materials, tools, equipment, or suitable workspace.
2. Distorted in efforts to cover up mistakes and to carry good news to higher management.
3. Does not clearly fix individual responsibility for accomplishment or lack of it.
Problems With Informal Feedback
1. Distortions to cover up or to carry good news to higher management.
2. Inadequate or blocked channels for communicating.
3. Higher management’s inability or unwillingness to receive messages or to communicate downward in the hierarchy.
Typical Problems
1. Unplanned Work
• Cost and schedule not in control
2. Demotivated People
• Unimportant work
• Lack of sense of support
3. Untrained People
• O.J.T.
•Weak planning and problem solving
4. Ineffective Work
•Unplanned work done by demotivated people who don’t know how
•Constraints at all levels
5. Management Can’t Identify and Solve Problems
• No Data To Act On
Communication Of Management Commitment By Action At all Levels:
1. Improving the Flow of Data for Decision-Making
2. Removing Demotivators
3. Removing Productivity Constraints
4. Detail Planning
5. Training for Productivity
Change Order Impact on Project Schedule
Change order impact
Delay types
How delay can occur
Owner Caused
Architect/ Engineer
Contractor/ Subcontractor
Others
Effects of delay
Documentation of delay
Delay damages
Change order time impact
Difficulties in proving time impact
Time
Delay
Acceleration
Cost
Cost change
Productivity
Quality of work performed
Delay Types
Excusable delay of a project is one which extends the performance time but is not caused either by the contractual parties’ own fault or their negligence
EX: Unanticipated weather
Labor problems
Acts of god
Compensable Delay (impediments to the work) entitles one party to additional funds for extra costs as well as additional project time
Noncompensable Delay falls in the class of inexcusable delay
Compensable Delay (impediments to the work) entitles one party to additional funds for extra costs as well as additional project time
Noncompensable Delay falls in the class of inexcusable delay
Inexcusable Delay is one which in project actual conditions could have been avoided.
EX: contractor caused strike by pursuing an unfair labor practice
Contractor negligently set fire to temporary facilities
Difficult for owners to define because they rarely maintain a detailed construction schedule to pinpoint in excusable delay.
Concurrent delays – when there are two or more independent delays during the same time period.
Generally when concurrent delay consists of excusable and inexcusable delays, the excusable delay control, and neither the owner nor the contractor can use inexcusable delay to recover damages from the other.
How Delay Occur?
Owner caused delays
1.Failure to provide the project site
2.Late notice to proceed
3.Failure to provide entry to the project
4.Failure to provide right of way
5.Failure to provide construction pursuits
6.Failure to provide owner-furnished materials or components
7.Failure to provide owner furnished materials or components
8.Suspension of the work
9.Changes in design or construction requirements
10.Interfering with or obstruction of contractors on the project
11.Failure to accept the work
12.Requiring work to be done out of the normal sequence
13.Failure to coordinate separate prime contractors
14.Failure to make timely decisions
Architect/ Engineer Caused Delays
Defective plan and specifications (errors, omissions, lack of coordination)
Failure to provide drawings on schedule
Delay on review of shop drawings or approval of materials
Delay in charge orders
Stop work orders
Requiring work to be done out of normal sequence
Failure to coordinate prime contractors
Inadequate assistance
Failure to develop punchlist and to accept completed work in a timely manner
Burdensome punchlist
Failure to make timely decision
Contractor Caused Delays
1.Slow mobilization
2.Inadequate labor force
3.Failure to provide proper equipment
4.Poor workmanship
5.Failure to coordinate and manage
6.Accidents
7.Cash flow limitations
8.Bid shopping
9.Default, failure or abandonment
10.Failure to evaluate the site
11.Underbidding
12.Late materials and components delivery
13.Late submission or resubmission
Effect of Delays
Acceleration
Increase labor force
Work overtime
Accelerate material and delivery
Additional equipment
Additional supervision
Inefficiency
Increases Time Related Costs
Prevents Early Completion
Delay Damages Time/ Cost Sensitive Items
1.Job& Office Overhead
1.Contract Billings
2.Allocable Overhead
3.Unabsorbed Overhead = Daily overhead x Number of days of delay
2.Idle Labor and Equipment 50% of equipment ownership expense rate
Reduced Productivity
Escalation
Recover limited to the increased rate of material, labor and equipment
x
Total billings for actual contract period
Total overhead during contract period
=
Overhead allowable to the contract
Other Delay Costs
Lost opportunity
Costs of experts
Lost investment capital
Testing and laboratory costs
Lost revenue
Damaged reputation
Interest on retainage
Increased cost due to acceleration
Change Order Time Impact
Project completion date
Sequence for performing the work
Sustained production
Suspended work
Crew move out
Crew move out
Crew move back
Execute change order
Interference with other crews
Acceleration of remaining work
Difficulties in Proving The Change Orders Impact
Missing change orders documentation
Not a detail validated CPM model
Not timely documented schedule
Poor computer CPM software for data processing
Owner/Contractor lack of understanding of the CPM model during project development phase
Impact of Internal Risks: Construction Stage
High
Labor shortage
Ambiguity and contradiction of condition of contract
Financial problems of contractors
Medium
Delay in certifying and approve claims
changing Design
Inadequate and errors of information in site investigation
Low
Strike and labor dispute
Failure to construct as drawings and specifications
Unfair condition of contract
Low
Medium
High
Degree of Impact
Impact of External Risks : Construction Stage

High
Liquidity and expedition of government
Traffic Management
Late of government approval
Medium
Instability of government
Inconsistency of government policy
Public and people around site
Low
Tax imported material
Heavy rain
Economic and financial crisis
Low
Medium
High
Degree of Impact
Why Claims and Disputes
Technological complexity
Contract sophistication
Litigation attitude and knowledge
Competitive and tighter bid
Payment delays
Multi-party contract arrangement
Fast-track project
Legal progress
Documentations
Common Types of Claims and Disputes
1.Delays (time extension)
2.Differing site conditions
3.Defective plans and specification
4.Construction change or variations in works
Dispute Avoidance
Well developed work scope
Complete design and other contract documents
Proper documentation
Involvement of contractors from the early stage of the project (value engineering and constructability study)
Alternate dispute resolution methods
Alternate contract strategies
Quantified project manager and other management personnel to import projects
In-house lawyers to review contract documents