Contract / Construction

Management

November 2006

Presentation Outline
I.

Introduction
Project Management

II. Contract/Construction Management

Stage 1: Construction Period
Stage 2: Defects Liability Period

III. Project Controls

Schedule Control
Cost Control
Quality Control
Document Control

IV. Related and Arising Issues - IRAQ

I. Introduction
Project Management services for all project phases should be
provided through well established procedures/processes
Project Management activities span the life of projects beginning
with the conceptual design phase and ending with the defects
liability and occupancy phase

Project Management Approach

Initiate

Close Out

Monitor &
Control

Plan

Implement

Major Stakeholders
Client
Facility
Manager

Funding Agencies

Operators
Project Manager

End Users

Major
Major
Stakeholders
Stakeholders
Authorities

Supervision
Consultants
Construction
Contractors

Design
Specialized
Consultants

Consultants

Communication Chart
Authorities

Client
Facility Manager

Project
Manager

Funding Agencies
Operators/End Users

Expert
Consultants
Supervision
Consultants
Contractors
Design Consultants

Consultant
Quantity
Surveyor (CQS)

Project Managers Organisation Chart

Client
Client

Consultants
ConsultantsLocal
Local
Office
Office

Project
ProjectDirector
Director

Project
ProjectControl
ControlBoard
Board

Head
HeadOffice
OfficeSupport
Support
Project
ProjectManager
Manager

Construction
Construction
Manager
Manager
Package
Package
Engineer
Engineer

Contracts
Contracts
Manager
Manager
Contract
Contract
Administrator
Administrator

HSE
HSE
Manager
Manager

QA/QC
QA/QC
Manager
Manager

HSE
HSE
Engineer
Engineer

QA/QC
QA/QC
Engineer
Engineer

Administrative
AdministrativeSupport
Support

Project
Project
Controls
Controls
Manager
Manager
Cost
Cost
Controllers
Controllers

Planning
Planning
Engineers
Engineers

IT
ITSpecialist
Specialist

Document
Document
Controllers
Controllers

Technical
Technical
Manager
Manager
Technical
Technical
Team
Team

Contractors Organisation Chart

Contractors
Contractors
Representative
Representative
QA/QC Engineer
QA/QC Engineer

Project Area 1
Project Area 1
Manager
Manager

Subcontractors
Subcontractors

Surveyor
Surveyor
Manager
Manager

Site
Site
Surveyor(s)
Surveyor(s)

Technician(s)
Technician(s)

Procurement Manager
Procurement Manager

Project Area 2
Project Area 2
Manager
Manager

Planning & Doc Admin. & Logistics

Planning & Doc Admin. & Logistics
Manager
Manager
Manager
Manager

Warehouse
Warehouse
Dept.
Dept.
Site
Site
Engineer(s)
Engineer(s)

Planning
Planning
Engineer
Engineer

Material
Material
Engineer(s)
Engineer(s)

Document
Document
Engineer
Engineer

Technician(s)
Technician(s)

Services
Services
Dept.
Dept.

Admin.
Admin.
Dept.
Dept.

Contracting
Contracting
Manager
Manager

Financial
Financial
Manager
Manager

Accountant
Accountant

Cashier
Cashier

PM scope can cover:

Project Initiation & Studies
Period

Design Period

Tender & Contracting Period

Construction Period

Defects Liability Period

Manage the Construction

II. Contract/Construction Management

Stage 1: CONSTRUCTION PERIOD

Stage 2: DEFECTS LIABILITY PERIOD (DLP)

II. Contract/Construction Management

stage 1: construction period

Activity 1
Organization
and
Mobilization

Insurance Policies
Performance Security
Advance Payment Guarantee
Notice to Commence
Communication Procedures

II. Contract/Construction Management

stage 1: construction period

Activity 1
Organization
and
Mobilization

Activity 2
Planning and
Program

Monitoring Progress
Evaluating Performance
Project Management Software
Logic Network (CPM)
Short Construction Activities
Shop Drawings and Materials Submissions
Procurement Schedules
Quantity, Duration, Cost, Manpower and
Equipment
Resources Schedules and Histograms
Work Breakdown Structures (WBS)
Subcontractors Schedules

II. Contract/Construction Management

stage 1: construction period

Activity 1
Organization
and
Mobilization

Activity 2
Planning and
Program

Activity 3
Survey Check
and Material
Information

Verify Staked-Out Centerline, Traverse Points, Control Points and Bench Marks
Adequacy of Borrow Pits and Quarries
Planned Sources, Supply and Testing of Construction Materials

II. Contract/Construction Management

stage 1: construction period

Activity 1
Organization
and
Mobilization

Activity 2
Planning and
Program

Activity 3
Survey Check
and Material
Information

Activity 4
Plan for Site
Organization

Site Facilities Adequacy and Organization

Layout Plan for all Temporary Site Facilities
Check Site Accesses, Temporary Structures, Site Office, Accommodation, Laboratory,
Stocking Yards, Plant Facilities, Safety Measures, Service Roads, Parking Areas
Sufficiency, Adaptability, Interconnectivity, Suitability, Organization, Quality,
Performance, Non-Interference with Permanent Works

II. Contract/Construction Management

stage 1: construction period

Activity 1
Organization
and
Mobilization

Activity 2
Planning and
Program

Activity 3
Survey Check
and Material
Information

Activity 4
Plan for Site
Organization

Clearly Formulated, Well-Documented Method Statement: Method of

Construction, Resources, Safety Precautions, Operations Duration

Submission and Approval before Occurrence of Planned Early Start of

Activities

Activity 5
Construction
Methods

II. Contract/Construction Management

stage 1: construction period

Activity 1
Organization
and
Mobilization

Activity 2
Planning and
Program

Activity 3
Survey Check
and Material
Information

Activity 4
Plan for Site
Organization

Activity 5
Construction
Methods

Monitor Program, Construction Activities, Resources

Update and Revise Program

Activity 6
Time Control

Periodic Co-Ordination Meetings

Timely Shop Drawings and Samples Submission
Schedules of Materials and Shop Drawings Submissions and
Approvals tied to Program
Monitor Labor and Plant Productivity, Materials Deliveries
(Long-Lead Items), Identify Shortages
Labor, Plant or Materials Deficiencies
Identify Potential Variance: Scheduled v/s Actual Progress

II. Contract/Construction Management

stage 1: construction period

Activity 1
Organization
and
Mobilization

Activity 6
Time Control

Activity 2
Planning and
Program

Activity 3
Survey Check
and Material
Information

Activity 4
Plan for Site
Organization

Activity 5
Construction
Methods

Activity 7
Cost Control

Interim Payments
Cash-Flow Estimate
Implement Variation Orders
Control & Monitor Quantities and Variation Orders
w.r.t. Contract Price

II. Contract/Construction Management

stage 1: construction period

Activity 1
Organization
and
Mobilization

Activity 2
Planning and
Program

Activity 6
Time Control

Activity 4
Plan for Site
Organization

Activity 3
Survey Check
and Material
Information

Activity 7
Cost Control

Activity 8
Quality
Control

Project Quality Assurance/Quality Control Plan

Compliance with Safety and Environment Protection
Review and Approval of Materials and Shop Drawings
Inspection of Operations
Inspection and Testing of Materials and Plant

Activity 5
Construction
Methods

II. Contract/Construction Management

stage 1: construction period

Activity 1
Organization
and
Mobilization

Activity 6
Time Control

Activity 2
Planning and
Program

Activity 4
Plan for Site
Organization

Activity 3
Survey Check
and Material
Information

Activity 7
Cost Control

Activity 8
Quality
Control

Inspection of Work before Covering-Up

Completion of Outstanding Works and Performance during Defects Liability Period

As-Built Drawings and Operation and Maintenance Manuals

List of Outstanding Works prior to Taking-Over

Activity 5
Construction
Methods

II. Contract/Construction Management

stage 1: construction period

Activity 1
Organization
and
Mobilization

Activity 6
Time Control

Activity 2
Planning and
Program

Activity 3
Survey Check
and Material
Information

Activity 7
Cost Control

Activity 4
Plan for Site
Organization

Activity 8
Quality
Control

Activity 5
Construction
Methods

Activity 9
Site Meetings &
Record Keeping

Daily Record of Progress of Works

Kick-off Site Meeting: Procedures, Means of Communication, Methods for giving Approvals,
Instructions, Variation Orders, etc.
Regular Site Meetings: Monitor Performance and Progress based on Program, Discuss Problems,
Coordination Issues, etc.

II. Contract/Construction Management

stage 1: construction period

Activity 1
Organization
and
Mobilization

Activity 6
Time Control

Activity 2
Planning and
Program

Activity 3
Survey Check
and Material
Information

Activity 7
Cost Control

Activity 4
Plan for Site
Organization

Activity 8
Quality
Control

Daily Diary

Maintain Project Records in Classified and Retrievable Form

Activity 5
Construction
Methods

Activity 9
Site Meetings
and Record
Keeping

Maintain Up-To-Date Information Relevant to Progress, Performance, Quality, Quantities,

Resources & Cost

II. Contract/Construction Management

stage 1: construction period

Activity 1
Organization
and
Mobilization

Activity 2
Planning and
Program

Activity 6
Time Control

Activity 7
Cost Control

Activity 10
Monthly
Progress
Reports

Activity 4
Plan for Site
Organization

Activity 3
Survey Check
and Material
Information

Activity 8
Quality
Control

Executive Summary
Section One: General Information
Section Two: Progress Outline
Section Three: Schedules
Section Four: Resource Control

Activity 5
Construction
Methods

Activity 9
Site Meetings
& Record
Keeping

II. Contract/Construction Management

stage 1: construction period

Activity 1
Organization
and
Mobilization

Activity 2
Planning and
Program

Activity 6
Time Control

Activity 3
Survey Check
and Material
Information

Activity 7
Cost Control

Activity 10
Monthly
Progress
Reports

Activity 4
Plan for Site
Organization

Activity 8
Quality
Control

Activity 5
Construction
Methods

Activity 9
Site Meetings
and Record
Keeping

Section Five: Cost Control

Section Six: Quality Control
Section Seven: Contract Records
Section Eight: Progress Photographs

II. Contract/Construction Management

stage 1: construction period

Activity 1
Organization
and
Mobilization

Activity 2
Planning and
Program

Activity 6
Time Control

Activity 7
Cost Control

Activity 10
Monthly
Progress
Reports

Activity 4
Plan for Site
Organization

Activity 3
Survey Check
and Material
Information

Activity 8
Quality
Control

Activity 11
Claims and
Disputes

Activity 5
Construction
Methods

Activity 9
Site Meetings
& Record
Keeping

Identify Potential Claims

Settle Disputes or Differences

II. Contract/Construction Management

stage 1: construction period

Activity 1
Organization
and
Mobilization

Activity 2
Planning
and Program

Activity 7
Cost Control

Activity 6
Time Control

Activity 10
Monthly
Progress
Reports

Activity 4
Plan for Site
Organization

Activity 3
Survey Check
and Material
Information

Activity 8
Quality
Control

Activity 11
Claims and
Disputes

Activity 5
Construction
Methods

Activity 9
Site Meetings
& Record
Keeping

Implementation of Methods and

Procedures to Minimize the Potential
Financial and Time Impact of Claims

Settlement of time/cost claims

II. Contract/Construction Management

stage 1: construction period

Activity 1
Organization
and
Mobilization

Activity 2
Planning and
Program

Activity 3
Survey Check
and Material
Information

Activity 7
Cost Control

Activity 6
Time Control

Activity 10
Monthly
Progress
Reports

Activity 4
Plan for Site
Organization

Activity 8
Quality Control

Activity 11
Claims and
Disputes

Activity 5
Construction
Methods

Activity 9
Site Meetings
& Record
Keeping

Activity 12
Completion of
Works /
Taking-Over

Establish schedule for Testing and Commissioning

Witness Tests
Prepare List of Outstanding Works
Obtain Written Undertaking to Complete any Outstanding Work during DLP

II. Contract/Construction Management

stage 1: construction period

Activity 1
Organization
and
Mobilization

Activity 2
Planning and
Program

Activity 3
Survey Check
and Material
Information

Activity 7
Cost Control

Activity 6
Time Control

Activity 10
Monthly
Progress
Reports

Activity 4
Plan for Site
Organization

Activity 8
Quality
Control
Activity 11
Claims and
Disputes

Activity 5
Construction
Methods

Activity 9
Site Meetings
& Record
Keeping
Activity 12
Completion of
Works /
Taking-Over

Issue Taking-Over Certificate

Check Progressively As-built Drawings
Review Operations and Maintenance Manuals

II. Contract/Construction Management

stage 2: defects liability period

Activity 13
Inspection of
Works

Inspect and Verify that the Outstanding Works have been Satisfactorily Completed

Remedy Detected Defects

Final Taking-Over of Project at End of Defects Liability Period

II. Contract/Construction Management

stage 2: defects liability period

Activity 13
Inspection of
Works

Activity 14
Defects Liability
Certificate

Issuance of Defects Liability Certificate

II. Contract/Construction Management

stage 2: defects liability period

Activity 13
Inspection of
Works

Activity 14
Defects Liability
Certificate

Activity 15
Final Certificate
and Final Report

Final Statement submittal after Issuance of Defects Liability Certificate

Issuance of Final Certificate
Final Report

III. PROJECT CONTROLS

Scope
- Continuous monitoring of actual project performance (Time, Cost, Quality).
- Assessing performance and any needed corrective/preventive action.
- Maintaining accurate and updated information base through the projects cycle.

Project Controls
Time & Cost
-

Review time schedule/cash-flow estimate.

Review material submittals/shop drawings schedules.

Record delays and advise on recovery measures.

Project Controls
Time & Cost - BENEFITS
Project Controls of the project schedule will enable:
Baseline

Identifying Project WBS and Baseline Schedule

Identifying Critical Activities
Resources Requirements
Anticipated Cash Flow (S-Curve)

Progress and Update

Measuring Progress/Performance
Identifying delays and sources of delay (through further side analysis)
Assessing the need for rescheduling and determining which activities need to be
rescheduled

Changes

Potential effect of Variation Orders

Analyzing Contractors Claims for Extension of Time

PLANNING & SCHEDULING

- Critical Path Method (CPM)
- Critical Path Activities
- Logical Relationships
- Total Float (TF)
- Free Float (FF)
- Constraints
- Resources

REPORTS
Resources - Histograms

PLANNING & SCHEDULING

SCHEDULE COMPRESSION
Shortening the Project Schedule duration without reducing the project scope which
might increase the project cost.

SCHEDULE UPDATE
Starts with monitoring of the project activities, collecting key progress information
that would be translated into the following at the end of the reporting period (data
date, time now or as of date):
Actual Start of progressing/completed activities
Actual Finish for completed activities
% complete/remaining duration/expected completion date for progressing activities

The above information is entered into the Update Schedule and the schedule
calculation performed.
The Updated Schedule is compared to the Baseline Schedule
The Critical Path may change.

Progress Monitoring & Control

Baseline Vs. Updated Schedule

ESSENTIAL FACTORS
Construction Contract Documents to specify clearly
the requirements for the construction schedule:

Category of Software (by name or of similar capabilities)

Phasing
Milestones
WBS
Interface with other construction projects
Level of detail
Short activities duration, quantities and cost (based on BOQ), resources (labor and
equipment)
Activities to include submittal , approval and procurement of materials
Frequency of schedule update and reporting
Type of reports to be submitted (Logic Network, Bar Charts, Tabular, Labor
Histograms per trade and total, Equipment Histograms per equipment and total, Cost
in tabular, histogram and S-Curve formats, Earned Value)
Calendar

ESSENTIAL FACTORS
Project Calendars
A calendar of working days or shifts that establishes those dates on which activities
are worked, and nonworking days.
Nonworking days include holidays.
A project can have a unique calendar or multi-calendars.
Example: Activity with duration of 18 working days.

Progress Reporting

Cost Control
Review and process interim payments applications
Monitor quantities and variation orders
Monitor cash flow
Evaluate change/variations impact
Develop cost forecasts
Calculate the earned value
Develop, implement, update project cost
Monitor/Identify variances between actual/budgeted costs

Report
Cost (Value)
Histogram and S Curve

Earned Value
Specific technique for measuring performance of work based on activities costs
BCWS: Budgeted cost of work scheduled (Planned Value)
BCWP: Budgeted cost of work performed (Earned Value)
ACWP: Actual cost of work performed (Actual Cost)
Schedule Variance (SV) = BCWP BCWS
Cost Variance (CV) = BCWP ACWP

Schedule Index (SI) = BCWP/BCWS

Cost Index (CI) = BCWP/ACWP

Earned Value

Planned Value

(BCWS)

(BCWP)

CV

BCWP

(ACWP)

SV
BCWS

ACWP

Variation Order - Form

Quality Control
Quality is controlled through the following:
-

Timely inspections and testing of works, materials and production plants

Review and monitoring of Health, Safety and Environment (HSE) plan

Inspection of material sources and list of suppliers

Review and Approval of Materials and Shop Drawings

Review of As-Built drawings and O&M manuals

Submittal of certificates of guarantee

Involvement of third party for laboratory testing

Snag lists implementation

Submittal for approval of materials - Form

Request for Inspection - Form

QA/QC Auditing
Oversee QA/QC implementation
Oversee inspection/ testing process
Issue periodic audit reports

Document Control
Document Control in construction projects is the management
of contract documents and the incoming and outgoing
correspondence and their attachments and their flow to the
members of the management team for action or information.
Parties involved are commonly:
- Client
- Funding Agency
- Consultant
- Contractor
- Authorities
- Stakeholders
- Other

Document Control
Develop/Implement/Maintain Document Control system
to cover:
- Contract Documents
- Correspondence/Minutes of Meetings
- Site Correspondence/Reports
- Drawings Logs
- Submittals

Document Control
Global Report

Primavera Expedition

Project Documentation
- A referencing system for all project documents is
necessary to achieve proper document control and archiving.
- Referencing system applies to all documents and
correspondences.

Referencing System
Example of Drawings Numbering System

XXXXX

001-W 001

1 of 1
X of Y

Project Number

Serial No. (001)

Zone No. or Building No.

Discipline (Water Supply)

Project IT Network
Project IT Network
The project network should be prepared and maintained to serve as a
Common Operating Platform that will facilitate and expedite
management and flow of project documents/information among the
project parties.
Internet
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Stack - - S
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Module - P - S
Activ ity

SuperStack 3 Switch 3870 24-port

Unit

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Hardware Infrastructure
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Security

Software Platforms

Project
Management
Software

Local Area
Network
Backup
System

Client

Firewall

Internet
`

Consultants

Cabling

Intrusion
Prevention System

Project Control
Software
Contractor

General/Networking
Software

IV. Related and Arising Issues - IRAQ

Contract

Definition of Employer/Engineer/Contractor relationships, especially that the

independent role of the Engineer is not quite common in Iraq. Resolution needed
through policy and exposure through seminars and workshops.

Respect of design review phase in design-build contracts to avert problems that

hinder the projects progress during construction.

Respect of the maximum share of works that can be subcontracted as in the

Conditions of Contract.

Adherence to Contract requirements for approval of sub-contracts.

Familiarity with FIDIC/World Bank Contracts.

IV. Related and Arising Issues - IRAQ

Progress & Cost

Project schedule to be properly established and regularly updated by experienced

planners.

Response to fast track of construction projects is needed.

Adequate human resources and experienced staff to cover projects needs.

Delays in procurement of long-lead items.

Delays in possession of parts of Site that fall within sensitive areas.

Expediency to obtain permits.

IV. Related and Arising Issues - IRAQ

Progress & Cost

Centralization of decision-making on government construction projects.

Delays in processing certified payments.

Monthly submittal of progress reports.

Long procedures for approval of variation orders.

Financial back-up from Contractors head offices.

Cash Flow regular updates.

IV. Related and Arising Issues - IRAQ

Quality

Institution of comprehensive quality plan.

Application of Quality Control procedures:

- adherence to quality procedures
- materials conformity to Specifications
- difficulties associated with testing (central versus site laboratories)

Technical back-up from Contractors head offices.

IV. Related and Arising Issues - IRAQ

Document Control
Institution of integrated project document control.

Systematic use of proper forms.

THANK YOU