Engineering Progressproductivity

a) Engineering Progress and Productivity Report

Figure 7-1 shows a typical format of an engineering progress and productivity report. The following is a brief explanation of this report:

1) Column A, physical completion (engineering only): evaluation of physical completion of drawings and documents, by engineering discipline and/or department, where work in progress is evaluated as per the following guide.

2) Column 5, weighted factor: based on budgeted hours for each discipline or department. This weighting will not change for minor revisions to the budget.

3) Column 6, weighted percent complete: physical completion multiplied by weighted factor (col. 4 x col. 5); addition to the bottom line total will give engineering progress.

4) Column 7, earned manhours: allocation of budgeted hours based on physical completion (col. 3 x col. 4).

5) Column 8, manhours expended: actual manhours charged to the work.

6) Column 9, productivity: actual manhours divided by earned or budgeted hours (col. 8 divided by col. 7).

7) Columns 10, 11 and 12: can be used if drawing and document performance data are required. However, physical completion and productivity are adequately evaluated using columns 1 to 9.

b) Guide to Completion of Design and Drafting

The stages of completion given in the following tables are a guide to determining the percentage of a specification or drawing completed. Each specification and drawing must be carefully examined before determining its percentage of completion.

This guide covers only drawings and specifications. There are other items (such as coordination and supervision) within the engineering scope which are not easily quantified. These items should be treated as "below-the-line" items and given the same measure of completion as the quantified work.

Figure 7-1. Engineering Progress & Productivity Report.

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G1NEERING PROGRESS & PRODUCTIVITY REPORT paw» project

1

2

3

4

5

6

7

a

9

10

11

12

Art:

WS.

factor

%

eabned hours

actual hours

productivity

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ACTUAL Hfta per owa

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Stages of Completion Complete

Specifications

Complete draft 20

Write specification

Check specification lssue for approval lssue for construction lssue revisions as required 35-100

Architectural Drawings

Complete sketches and general arrangements (GAs) Check specification lssue for approval 85

Issue for construction lssue revisions as required 35-100

Architectural Drawings

Complete sketches and general arrangements (GAs)

Issue sketches and GAs for approval as required 25

Complete drawing

Check drawing lssue for approval lssue for construction lssue revisions as required 95-'ICQ

Civil Drawings

Complete preliminary site plan (building locations and site elevation) lssue preliminary site plan for approval as required Complete design calculations Complete drawing lssue for approval lssue for construction lssue revisions as required 35-100

Concrete and Foundation Drawings

Complete design calculations 2b

Complete drawing

Check drawing lssue for approval lssue for construction

Issue revisions as required 95 100

Steel and Superstructure Drawings

Complete design calculations 2 5

Complete drawing 60

Check drawing lssue for approval

Percent

Stages of Completion Complete lssue for construction lssue revisions as required 95-100

Electrical Drawings

Complete design calculations 1 o

Complete drawing 75

Check drawing lssue for approval lssue for construction lssue revisions as required 95 -100

Instrumentation Drawings

Complete design calculations Si'i

Complete drawing

Check drawing lssue for approval lssue for construction lssue revisions as required 95 1 GO

Mechanical General Arrangement Drawings

Complete design calculations 1 o

Complete preliminary GA drawings lssue preliminary GA drawings for approval ¿0

Complete drawing

Check drawing lssue for approval lssue for construction lssue revisions as required 95-100

Mechanical and Piping Drawings

Complete design calculations 10

Complete drawing

Check drawing lssue for approval lssue for construction lssue revisions as required 95- i 00

Flow Sheet Drawings

Complete design calculations 40

Complete drawing

Check drawing lssue for approval lssue for construction lssue for revisions as required 95-100

c) Engineering Drawing Status Report

Figure 7-2 illustrates the typical format used for reporting the status of engineering drawings. This document provides source information for evaluating engineering progress. The individual drawing status will be evaluated by discipline squad leaders and spot-checked by the scheduling group/project manager. This report covers progress, the schedule, and manhours.

EQUIPMENT BID EVALUATION

Good evaluations and quality equipment/material bid tabulations are essential for effective project control. Engineers carrying out technical evaluations of vendor bids and who may be involved in vendor negotiations should be encouraged to review the estimate basis of equipment prior to any negotiation. Preference choices with accompanying cost premiums should be thoroughly investigated prior to submission for management approval. Compatibility with existing plant equipment, ease of maintenance and operating costs are appropriate requirements for equipment selection.

If there are no schedule restraints, commercial evaluations should follow the technical evaluation. This would ensure that purchasing personnel do not waste time with technically unacceptable bids.

If there are cost deviations involved in the technical review, these items should be brought to the cost engineer's/project manager's attention, If there are critical schedule requirements, the selection may not be to the lowest commercial bid.

CONSTRUCTION PROGRESS/PRODUCTIVITY

a) Construction Manhour Report

Figure 7-3 shows the typical format used for reporting man-hours and earned budget value. Progress is measured by budget manhours. A manhour prediction is based on the productivity to date versus the manhours spent to date. Productivity is derived from actual manhours expended versus budget hours earned. Indirect manhours should be shown separately. Indirect man-hours are not quantity based. It is recommended that an indirects budget or earned value be based on direct work progress and/or judgment of each major indirect manhour account.

T,OURcriBH BATE

ENGINEERING/DRAWING STATUS REPORT

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Figure 7-3. Construction Manhour Report.

CONSTRUCTION MANHOUR REPORT

HNMRY REPORT (PRIME ACCOUNT)

JOB NO: REPORT NO: UNIT: PERIOD:

DESCRIPTION

CLASS

NAHHOU

RS SPENT

BPGT. FOR WORK DONE

TOTAL BUDGET

C

PRODUCTIVITY

TOTAL PREDICTED flANHOURS

THIS

WEEK

TO DATE

THIS WEEK

TO DATE

COMPL.

THIS WEEK

FOUNDATIONS

HEATERS

TEMPORARY FACILITIES TOOLS î EQUIPMENT UNALLOCABLE

SUBTOTAL INDIRECT

b) Construction Earned Budget Report

Figure 7-4 shows an earned budget report that collates quantities as the work is completed and also predicts total quantities based on a field takeoff made from construction issue drawings. The measured quantities are then converted into an earned value of budget hours, which are then entered on the manhour report, as previously illustrated. The "predicted quantities" section of this report is a very important item. Early detection of quantity changes can occur if the field takeoffs are completed as soon as the construction issue drawings are received. There is the tendency to not carry out "immediate" quantity takeoffs as the field personnel are heavily overloaded most of the time. This tendency should be resisted as the takeoff process can provide important scope deviation information.

Figure 7-4.

EARNED BUDGET REPORT

Figure 7-4.

EARNED BUDGET REPORT

CONTINGENCY CONTROL AND RUNDOWN

a) A "Slush Fund"

Many project managers treat contingency as a "slush fund." This occurs when a project manager uses the contingency to balance the monthly trends. In such cases, it is quite common for the contingency to be "spent" well before the end of the project. Contingency is essentially for Unknowns. Unknowns only become known when commitments are made. It is at that time that the validity of the estimate becomes apparent.

b) Rundown Routine

The following method represents a typical rundown of contingency over the life of the project. The calculation process shows a rundown which is calculated on the basis of uncommitted and unspent costs and is computed as follows:

Cost Prediction Committed but Major Cost Center Uncommitted {%) Unspent {%)

a) Material and Equipment 10 5

b> Labor 20 15

c) Labor subcontracts 2.Q 15

Material and labor subcontracts e) Home office, engineering, and fee ! 0 5

f) Field indirects and temporaries 10 5 All other costs

Owner costs

This simple, but practical method covers risk on work yet to be committed and work committed but not yet paid for. Until the last and final invoice has been paid, there is still the risk that cost increases may occur. Construction labor and subcontracts are generally the most volatile items and therefore, carry the greatest contingency percentage. That is, the contingency would be about +/—10-15%. The maximum contingency that this method will develop is 13%. This would not be sufficient for a conceptual estimate. Alternatively, if the project only had a 10% contingency, then the above breakdown of percentages should be reduced.

c) Start-Up/Commissioning

A further consideration is the amount of contingency that is required at mechanical completion. This is to ensure that funds are available for late changes, commissioning accidents, start-up requirements, and final invoices/claims which were not anticipated. If funds have already been allowed in the estimate for this possibility, then this further "hold—back" would not be necessary.

CASH FLOW EVALUATION/CONTROL

a) General/Objectives

The major objective of cash advances and the bank handling procedure is to ensure that the project is funded by the responsible party, as per the contract. A cash flow forecast of a reimbursable-type contract is usually prepared for a one- to two-month period and then presented to the owner for cash advances on a biweekly or weekly basis. A good forecast should generate no more than a 5% excess requirement. This would be acceptable to most owners. Most forecasts are manually prepared and evaluate future expenditures for contract services, equipment and bulk materials, subcontracts and owner costs.

b) Documentation

As soon as practicable after the last day of each four-week period, contractor will prepare and submit to owner a complete statement of the amounts actually paid, including the proportionate amount of the contractor's copies of invoices, payrolls, bank statement and other documents to establish all costs as well as duly executed Waivers of Lien for each contractor and subcontractor.

c) Banking Arrangements

Any amount by which the advance payment to Contractor for such four-week period exceeds or is less than the amount of actual costs incurred for that four-week period shall be taken into account in ascertaining the advance payment for the next following four-week period.

Based on owner's prior agreement, contractor will arrange to utilize an agency interest-bearing account for advance payments and will transfer funds to an agency checking account as required to cover actual disbursements. Any interest received from such interest-bearing account, less any service costs, shall be paid or credited to owner.

VENDOR DRAWING CONTROL

A significant element of the engineering schedule is the timing of vendor drawings. For example, foundation design and piping design depend on vendor drawings for details of foundation bolts, bearing loads, nozzle orientation, pressure and capacity data.

An effective vendor drawing control system is essential for planning and scheduling engineering work. The bid tab evaluation should cover the issue of vendor drawings, and the successful vendor should be monitored thereafter to ensure compliance with promised or "need" dates. This is particularly necessary for critical vendor drawings.

A vendor material expediting program should also cover the supply and issue of vendor drawings. Schedule engineers should coordinate this effort with the expediting department. Figure 7-5 shows a typical format for control of critical vendor drawings. The same format can be identified separately. Vendor drawing control is usually the responsibility of the procurement department.

SUBCONTRACT COST CONTROL AND FORECAST

a) Summary Report

All subcontracts should be listed, in total, on the control form report shown in Figure 7-6. This form summarizes current cost and forecasted final value and identifies scope, claims and potential trends. The figures for each subcontract are independently developed.

b) Claims

Subcontractor claims will require careful attention. Claims, generally, will fall into the following categories:

1) Change in "original" quantities

2) Schedule delays — caused by the owner and/or the prime contractor

3) Drawing and material delays

4) Interference by others

5) Changes in site conditions or site regulations

Most subcontractors will greatly exaggerate adverse conditions and submit inflated claims. Consequently, it is essential

Figure 7-5. Control of Critical Vendor Drawings.

DATE

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