Project Management for Engineering and Construction Figure 6-24.


Escalation of "rate «ses" far a new time period.

Originally, the costs for direct labor and field indirects were developed by estimating the monetary rate chat would be appropriate at the point in cime when 507« if the costs were expended. A-s-sums all Chê construction costs are proportionally expended, as per the sketch, for this example.

With a three month schedule extension and the start of construction occur ing at Che previously planned date of six months, then the center of construction costs is now 13% months.

The general approach to Escalation, then, is to take 50% of the schedule slippage as th« "escalation time period1' and apply the appropriate escalation rate to the construction costs for chat time. A further adjustment may be appropriate escalation may nor apply to ioma minor fired costs (such as mobilization) which could occur in the originally planned time period.

Escalation • Total Construction Costs v. Escalation Rate x 3 aids.

Use -s a*-* technique for Engineer ins Costs.

Was this article helpful?

0 0
Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

Get My Free Ebook

Post a comment