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Construction risk case study
Construction risk case study
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The construction industry is global, large, and often involves large capital expenditure. The rate of return is often lower in comparison to the risk involved. Delays are a major risk element and have financial impacts for both the Owner and Contractor. Compensation for delays largely depends upon delay analysis and apportionment. Delay analysis is a complex process and dispute resolution is time consuming and costly. Delays on construction projects are a universal phenomenon and most times are accompanied with cost and schedule overruns. Research reflects the debilitating effects on construction project parties including the owner, contractor, and consultant resulting in adversarial relationships, distrust, litigation, arbitration, cash-flow, and apprehension. Examples of owner caused delays include late issuance contract documents, correction of design errors and owner issued changes. Examples of contractor caused delays include poor planning, mismanagement, and utilization of inadequate or unskilled resources. Schedule delay analysis is used to identify, measure, and quantify the impacts of delays on projects. Delay analysis is typically performed utilizing critical path method (CPM) schedules. There are numerous position papers covering delay analysis including recommended techniques to quantify schedule delays. AACE International Recommended Practice (RP-29R-03) titled Forensic Schedule Analysis illustrates that there is no single method used for all types of delay analysis. Common methodologies of delay analysis include as-planned versus as-built, impacted as-planned, collapsed as-built, window analysis, and time impact analysis. Each of the technique has its own advantages and disadvantages. A) Planned versus A... ... middle of paper ... ...ospectively. h) Analyze back to back delay events with the schedule update containing the data date equal to the date of completion of the first delay event. This aids in analysis of concurrent events i) Review and approve TIA’s as quickly as possible since delay in approval decreases validity. CONCLUSION Time Impact Analysis is the most popular and favored delay analysis methodology. Effective use of TIA is challenged by planner expertise, accuracy of baseline schedule and updates, electronic data availability, specification requirements, multiple and concurrent delays, and masked schedule mitigation as discussed in this paper. Owners and planners must be knowledgeable regarding effective use and limitations of TIA application when specifying use of TIA for delay quantification. Alternate delay analysis methods may be required when use of TIA is not possible.
Nonetheless, establishing timing standards for the project, pertaining to an estimated date of completion, along with a schedule for conducting tests, is critical, according to information provided by the SANS Institute (source). For example, projects that exceed the estimated date of completion may become costly, and running tests during peak and/or critical hours may result in several technological inefficiencies for Alexander Rocco Corporation. Likewise, establishing future meetings or other form of communications for updates throughout the course of the project is also
Commonly, the level of control retained by the owner links with the level of risk, and those levels typically have an transposed relationship to the risk and control levels of the contractor (CMAA, 2012). Not all of these delivery methods is suited for every project. For each situation, there will be advantages and disadvantages in the use of any specific method. One needs to carefully assess the specific project requirements, goals, and potential challenges in order to establish the delivery method that offers the best opportunity for success (CMAA, 2012).
This process is aimed at ensuring the project being pursued has a potential of delivering by adhering to the allocated time, sticking to the budget and very important, meeting customers specifications (Mott McDonald, 2002). It involves assessing the projects at critical stages (also referred to as gates) in its lifecycle and thus assuring it can advance to the next stage successfully. This function is performed by an independent experienced team, after which they assure the Senior Responsible Owners that the project can progress successfully (National Academies US & National Research US, 2004). There are six critical stages (gateways) in the lifecycle of a project that the independent gateway review team will evaluate and thus provide th...
Assessing the time and financial impacts of CE’s involves strict time procedures, in which the contractor has to notify, implement and quote. Within the contract, to ensure these impacts are not assessed retrospectively, the contractor only has eight weeks once he becomes aware of a matter that may become a CE, to notify it. Time limits can be extended or shortened on agreement with the contractor and PM. However, if these limits are extended, both parties are entitled to the same time extension (Trebes and Mitchell, 2005).
Cost escalations in relation to a number of construction projects including DPS and WAPS were identified in September 2013 (Smith, 2013)
The inter-temporal relationship between every task was specified in advance so the impact of delay of a task on other tasks could be calculated.
It includes market sizing of upcoming project pipeline at most granular level and provides forward-looking analysis on top clients, contractors, consultants/ PMcs, other civil contractors / suppliers with their respective working or partnership model. Furthermore, it shows the new and recent trends in the industry and how it may impact the business decisions of the involved
Crucial to the successful outcome of any major highway construction and reconstruction projects is the ability to accurately plan, predict and control the construction process. Budget control, resource allocation and consequential impacts are some of the important factors that a scheduler needs to keep in mind while planning a highway construction project. Today, highway constructors need sophisticated project management tools to achieve their project goals on time. Project scheduling has tremendously helped constructors building construction for the past 20 to 30 years. However, traditional scheduling techniques used by buildings contractors cannot be applied to highway construction as the activities involved in highway construction are fundamentally different than those typically found on a building project.
Simpson, W. (2010). Project Planning and Control When Time Matters: Focus on Process to Synchronize and Drive Results. Production and Inventory Management Journal, 46(2), 26-43. Retrieved July 19, 2011, from ABI/INFORM Global. (Document ID: 2278162401).
The Construction industry in the US has faced some interesting changes throughout its progression. From economic instability during the housing market crash to amazing technological advances to reduce the need for construction workers and therefore the cost associated with newly built properties in the real estate market. Beginning with the first tools ancient man used to carve their niche in the soon to be global expansion of arguably one of the oldest trades in history, construction has a rich history of trial and error, analysis and engineering that covers a very necessary skill that directly affects everyone who seeks and finds shelter, a place to work or any aspect of public works and many
Lack of coordination between the project management team causes the project to work at a much slower rate than estimated.
The commonly used IE approaches to address the issue are heuristics, simulation, queueing theory and optimization. Most approaches either considers direct waiting cost or indirect waiting
Brooke (1997), explains Estimation as the technical procedure of anticipating the value of the project. Building construction estimation is the process of acquiring the construction value for the whole project before the project starts. Thus, construction attaining process depends hugely on financial management to sustain workability and smooth operations. The delay in construction is a global issue which is due to improper preparation of estimates and lack of drawings (Ajanlekoko, 1987). In accordance to Gkritza (2008), the source of delay in a project are identified to be in the initial stages, like bad quantification, errors in design and ground conditions. Thus, the purpose of a proper estimate is to foretell the cost needed to finish the
This paper explores what it takes to be a construction manager and the responsibilities of being a construction manager and the skills that a construction manager should have. It also explores what good construction managers do to have success on their construction projects and the steps that a construction manager must follow to end a project and meet their deadlines at the same
PMBOK guide defines TM as the “Use of available time and your own productivity along with the appropriate planning and management of the project schedule” highlighting the link between Time Management and productivity and its closely knit relationship to scope and cost areas. Max Wideman presents a wider definition for TM as the “function required to maintain appropriate allocation of time to the overall conduct of the project through the successive stages of its natural life-cycle, by means of the processes of time planning, time estimating, time scheduling, and schedule control.” Ultimately at it’s core however, TM is about time, its planning and control during all stages of the project. A further look into Wideman’s definition of TM by means of identifying its importance throughout the entire project life-cycle (Initiation, planning, execution, controlling and close-out) is required. It is hoped that by analysing how TM tools and techniques can positively and negatively effect the different stages of the Project life cycle a better understanding of productivity, TM and project success will result.