December 2010

SLQS JOURNAL
Project Control Practical Aspects
Sajeewa Amantha B.Sc.(QS) Hons. MRICS
Sajeewa is a Quantity Surveyor graduated from University of Moratuwa, Sri Lanka and currently working in
Manila, Philippines, for Australian managed project manegment organisation.

Introduction

The delivery of a project on time, to budget and at the

required quality are generally considered key performance
indicators of any project. How often do project managers
experience projects that are delivered on time, to budget
and at the required quality? Although most projects
are eventually completed more or less to specification,
they are not often on time and within budget. There is
an overabundance of reports on project overruns. Some
research reports indicate that approximately fifty precent
of construction projects encounter substantial time and
budget overrun. Some reports have even suggested that a
good rule of thumb is to add a minimum of fifty percent
to every first estimate of time and the budget. If this is
the case, the goals of on time and to budget would
be extremely difficult task for the Project Manager to
achieve.
The consequences of varying the project plan are apparent.
However, Project Managers need to understand what the
benefits and/or penalties are in terms of cost of delaying
a project. When a project is completed and the facility
commences its useful life, it commences generating
revenue from that point onward. Hence, any delays to
project completion influence revenue generation and
ultimately cash flows and return on investment.

The Project Control Manager is responsible for

establishment of an appropriate project control system for
the project. The key elements of a project control system
and scope of each task are discussed below in detail.

Project Control scope

A number of Project Managers believe that monitoring and

project control are the same thing, and that monitoring
revolves around budgets and plans. This is not the case.
Reports are for the Project Manager and Client to have
summary details on what has happened thus far on the
project. By implication, they deal with the history of
the project, no matter how recent. On the other hand,
control is taking action in response to these reports.
Monitoring is a key element of project control systems
and it is important to establish, for example, if the project
is performing in accordance with plans and budgets
with the sole purpose of invoking controls necessary to
re-establish the project. Therefore, monitoring exists to
establish the need to take corrective action, whilst there is
still time to take such action. Control on the other hand is
management, not paperwork. Control involves analysing
the situation, deciding what to do and actually doing it.

Project Control Plan

The discussion indicates the importance of having an

efficient and effective project control system in place to
ensure successful delivery of the project.

The Project Control Plan is the primary project control

document for a project. It exists as a subset of the Project
Management Plan as the framework for the control,
measurement and reporting of a Project.

This paper discusses the scope of project control in

general, to appreciate the importance of each task of the
project control system. It is important to understand the
effect that each individual task may have on the project
performance. An integrated project control approach
should be used as an ongoing monitor of project health.

The Project Control Plan should be developed to satisfy

both Corporate and Project reporting. The Corporate
section of the plan is to be reviewed at regular intervals
to ensure any corporate strategy changes are incorporated
into the plan. The Project plan shall be prepared at
the commencement of each Project and includes key

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information on the Project such as scope, definitions,
programming, meetings, reporting, procurement, and
auditing.
The Project Control Manager is the key person responsible
for the implementation of the Project Control Plan. The
Project Control Manager shall ensure that component
personnel are engaged to effect proper control and
reporting regimes over the project. The Project Control
Manager shall be authorised to operate within limits
required by the project control scope. On smaller projects,
the Project Control Managers role will be played by the
Project Manager and he or she is then will be responsible
for the implementation of the Project Control Plan.

Programme Management

A programme is a tool to monitor project performance in

terms of its time factor.
It is a critical requirement that the programming be
completed to the extent necessary for the proper planning,
control and reporting requirements. The networked
programmes are commonly used for the purpose and
Gantt chart formats are popular in the construction
industry because of their simplistic presentation and easy
readiness. Other forms of Programme (such as March
charts) may be used in addition, depending on the nature
of the Project.
The Programming software requirements may be as listed
in Project (Contracts) document and/or the Companys
choice. The Programme shall be developed in the initial
stage of the Project with available information and
then shall be reviewed regularly to introduce necessary
changes with information that is more realistic to reflect
planning changes and progress. The Programme must be
supported by analysis of determined activity durations
and dependency. The Programme may be developed
as resources loaded programmes or time duration
programmes depending on the nature of the Project and
Project (Contracts) requirements.
The level of detail shall be sufficient to enable effective
planning of the Project Works. The Programme shall be
developed at least at level four as a minimum and shall
clearly identify critical path(s) to completion(s). In
general, the Work Break-Down Structure shall reflect
the Project Cost Structure for better reporting and
interpretations.

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The Programme shall be updated at least weekly to

understand the Project status and this is a key performance
requirement that is required to determine the financial
health of the project.
The Project Control Manager needs to work closely with
the construction team and heads of other disciplines to
obtain the correct information to update the Programme
on a regular basis to ensure that the Project Programme
accurately reflects Project status and intentions.
The summary Programmes may be useful in reporting
to higher-level control and reporting (for corporate
reports).
Not all activities in a programme are critical to achieve
Project completion. The Project Control Manager
should understand the critical activities (areas) of the
Project Programme and should closely monitor those
areas/activities to understand how well those activities
are performed. A programme may have multiple critical
paths if the project is having different milestone dates
to deliver the project in different phases. The other vital
point the Project Control Manager should monitoris
that the programme critical path will be moving from
one area to another, depending on the performance of
different areas of the project. Thus, regular monitoring
is an essential function of programme control. Any time
slippages and gains of critical and closely critical activities
should be reported and necessary warning and corrective
measures introduced to the Programme.
The possible actions may have sometimes-critical impacts
on budget, quality, and/or time. The Project Control
Manager should evaluate actions which have zero or
minimal impact on project cost, time and quality. To look
at a simple example: assume that progress reports show
that a project has to absorb a delay to a deliverable on the
critical path. Most Project Managers will without much
thought reach options such as reducing the scope of the
deliverable, reducing the quality of deliverable, applying
additional resources (generally manpower and/or capital)
and rearranging the workload. Some of these options may
be constrained by logistical problems e.g. unavailability of
suitable labour to be assigned to a project when required.
However, in many cases, the Project Control Manager
has to use instinct as to deciding the appropriate course
of action. The basic point here is that logistical problems
and political thinking do exist within a project and the

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Project Control Manager should not ignore these facts
but should understand the implication of the action that
is about to be taken and not ignore the effect their action
will ultimately have on the final outcome of the project.

Project Cost Control

The Project budget should be developed at the initial

stage of the Project and reviewed and updated during its
progress to incorporate more realistic figures. The budget
should be structured in a manner that reflects the intended
manner of project execution. It should logically splits
costs according to activities and type of costs in a manner
that provides for meaningful feedback for assessment of
costs versus progress, and feedback for the estimators for
future use.
As the nature of the construction business is one where
productivity is largely measured by inputs of plant, labour
and subcontracts verses linear progress, activity codes
should generally include only these cost types. Materials
and indirect costs should be accounted for in other codes.
There will be activities where this does not apply and
discretion shall be used in these cases.
Project cost shall be allocated in a manner that reflects
the budget structure and intent. A costing map shall be
prepared for the project that describes the way the budget
costs have been allocated. This map will be used for
allocation of costs in a manner that reflects the budget.
A cash flow forecast shall be prepared based on the
project Budget and Programme detailing expenditure
and revenue.
The cash flow forecast shall be reviewed and updated
regularly to incorporate changes to the budget and
programme during the progress of the Project. The
impact of changes shall be clearly identified and reported
to relevant parties for their information, avoiding
any possible payment issues due to fund allocations
by financiers of the Project. The information may be
presented in worksheet form and in graphical format for
easy understanding.

Risk Management

Contract agreements are documents that describe

liabilities and responsibilities of parties to Contracts
in delivering different elements of the project. The
Agreements describe how parties share commercial and

other risks involved with the project in performing their

roles. These risks need to be understood by each party well
in advance. A risk management system should be in place
to respond to any risks that materialise whilst delivering
the project. A Risk register is a good tool the parties
should use in recording, monitoring, and introducing
necessary measures to the risks; each party is liable.
Though Contracts Conditions define each partys
responsibilities/liabilities it is common fact that parties
have different interpretations and opinion on the same
term of the Contract. This will lead to disputes among
parties and will adversely affect project performance.
Early identification of risks involved with the project and
monitoring them closely will minimise potential disputes
and improve project health.
It is apparent that some risks can be avoided or at least the
effects minimised if they are identified in early stages. The
risk register should include not only the risks identified
but also possible risk mitigation strategies and measures
introduced to avoid or minimise the effects. For example,
if the Project Control Manager identifies obtaining a tree
cutting permit from an environmental authority as a
risk which will affect the Project Programme, it is then
the Project Control Managers responsibility to suggest a
strategy to avoid or, if not possible, mitigate the negative
effects of this risk on the Programme.

Procurement Management

A materials procurement plan should be prepared for

the Project and this should highlight any long lead
items and their necessity to the Project Programme. The
procurement plan should be tailored to the size of the
Project and the value of the procurement.
In its simplest form, the Procurement plan may be a
worksheet (Spread sheet). The plan shall include details
of the materials to be purchased by package, details of
the potential vendors, engineering and construction
interfaces, latest date to make a formal order (in order
to meet the programme) and any contract requirements
(specific Vendors or prior approvals for vendor). The
decision on procurement will be made not only on price
and quality but also on availability and delivery time and
methods.
A sub-contract plan should be established by the
Project Control Manager and in general, this plan

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includes elements of the Works to be completed by
Package Contractor(s), latest date for commencement of
subcontract works and from that, a timeline established
for the procurement of subcontractors for each package.
The selection of subcontractor will be based on capacity,
availability, and price. Standard conditions of contract will
be used with any particular terms in preparing necessary
agreements for suppliers and package contractors.

works under Contract(s). The Project Control Manager

shall ensure that whenever an event occurs that may be
covered under an insurance policy that the insurer is
notified and evidence collated in support of a possible
claim. It is again good practice to establish and maintain
a register of insurance events detailing claim number,
policy, likely value, loss adjustment status and close out
status.

The expenditure approval authority matrix should be

prepared indicating limits of authority of all key members
of the Project, and this shall be strictly followed to avoid
later disputes on approved personnel.

Project Organisation

Contract Management

It is essential that adequate commercial controls are

established at the commencement of a Project. Underlying
the establishment of adequate controls is the need to
understand the functioning of Contracts. In particular,
a sound understanding of the operation of the Contracts
with respect to payment terms, notices (including any
time-bar provisions), change orders, delays, insurance
and dispute settlement procedures.
It is good practice to prepare a flow chart on the operation
of the Contract and brief the project team accordingly.
The commercial team may prepare pro-forma documents
for change orders, notices, schedule of change requests
/delays and claims and where required, these document
forms shall be agreed among the parties as information
flow. Any entitlements under the Contract Conditions
should be ensured by communicating messages to the
relevant party as appropriate in a timely manner.
The package contracts shall be managed in a similar
manner to the head Contract pursuant to subcontract
terms and conditions. The Project Control Manager shall
ensure that insurance obligations are met and certificates
of insurances obtained. A schedule of change requests
shall be established and maintained for all packages
contractors. The final forecast value of each package
contract shall be assessed and reviewed periodically to
ensure correctness. A provision of manpower, safety and
environmental statistics should be made a pre-requisite
to entitlement to any payment under the contracts as a
control measure
The Project Control Manager shall ensure that all required
insurances are in place prior to the commencement of

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The organisational charts clearly identify all positions of

the project. Organisational charts shall be prepared in
a format that suits the requirements of the Project and
these charts should be reviewed regularly and updated to
include changes taken place during the period.
The charts shall be developed for the purposes of
communicating project-reporting lines and identifying
key project personnel by name and position. Furthermore,
they will provide a tool for the management of personnel
and present labour resources on the project.

Meetings

Regular internal meetings and meetings with other parties

of the Project are vital in communicating project issues in
a timely manner.
All meetings shall be minuted and circulated among
participants to receive any comments and/or feedback
on the matters discussed and recorded in the minutes of
meetings.
The Engineering and Procurement meetings and
construction meetings shall be held weekly.
Internal Project Coordination will be held as determined
by the Project Manager and dependent on the size and
complexity of the project.
For major Projects, supervisory board meetings (corporate
level) may be conducted on a monthly basis.
Project coordination meetings are other essential meetings
for major projects where many parties are contracted to
deliver different elements of the project (civil, mechanical,
electrical etc). In these meetings, parties can discuss and
agree on their programme requirements, safety procedures
etc to avoid any future conflicts, which will affect overall
project performance.

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December 2010

Document Control

Manager shall review Contracts and determine reporting

requirements under Contracts and where possible internal
reports shall be used as the basis for Contracts report to
minimise unnecessary duplication of effort.

All correspondence and documents (incoming and

outgoing) go through document control
All correspondence and documents should have a
distinct identifying number
All documents should include a Revision Status to
enable the tracking of changes
A documented distribution matrix to ensure that
documents are effectively distributed to all personnel
requiring them
All correspondence and documents are approved
prior to issue
Registers are maintained for all correspondence and
document transmittals
Registers are reconciled on a regular basis with other
parties involved

The daily progress reporting is one of the key report

that should be maintained to record the progress of the
Project on a daily basis. These reports shall include, as
a minimum, daily progress verse daily planned progress,
deviation from programme in days for the day, summary
safety statistics, manning, equipment (in operations and
idling), issues, and mitigation strategies. A daily report
format should be prepared that will form the basis of
progress reporting to relevant parties of the project.

The Project Control Manager shall implement a file

security system that may include secured hard copy files
and access restrictions on electronic filers. A file access
authorisation matrix should be developed and maintained
for each project. IT administrators should administer
electronic file access restrictions in accordance with this
plan.

The monthly report is the primary report on the health of

the project. It is correct practice to agree on a fixed date
for project status (e.g.20th of each month). Submission
on time is a key performance indicator for personnel
involved in report preparation, review, and submission.
The monthly reports should includes details of Health,
Safety and Environment status, Engineering, Procurement
and Quality status, Progress/Programme status, manning
information, insurance and financial status.

The Project Control Manager shall implement a

document control system. The system should have the
characteristics of:

Whilst restricted access is not required for most project

files, it is essential that only personnel authorised to access
sensitive project files are permitted to do so. These files
will include financial records and reports, commercial/
claim records and personnel data of Project employees
including wages and salaries.

Project Audit Plan

The Project Control Manager shall prepare a Project Audit

Plan for the approval of the Project Supervisory Board.
The Audit shall be performed by corporate personnel or
third parties as required. The Audit plan shall include
financial auditing, total quality management auditing,
health, safety and environmental auditing and quality
control auditing.

Project Reporting

The Project Control Manager shall develop a reporting

matrix detailing type of report, due date, responsibility
of preparation and distribution list. The Project Control

Weekly financial and programme status reports are

common in many construction projects. The intention
of this report is to discover gross deviations from budget
and programme in a time frame enabling early corrective
actions to be taken.

The health, safety, and environment section in general

reports details of total man-hours achieved during
the reporting period including any loss hours due to
accidents. It usually includes accidents, near misses, and
damages. The monthly quality report shall focus on
quality control status. It is good practice to establish and
maintain registers for NCR, RFI, TQ and narrative on
QC issues. Monthly Engineering reports should detail
status of engineering using key performance indicators
as determined on the Engineering plan. This section
of the report in general records engineering percentage
completion, drawings, and reports at approved status and
engineering man-hours during the period.
A monthly procurement report is applicable to major
projects with significant procurement scope. The data
may be presented in a graphical form (typically Scurve) contrasting actual performance with planned

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performance. The procurement report shall also include
a copy of the procurement status and expediting status
reports and shall detail key issues and mitigation strategies
and a summary of risks and opportunities exists.

It is good practice to include an updated register for

change orders, including details of notice submission,
value, status (approval, pending), any extension of time
involvement with change order etc.

The programme report shall include actual performance

with planned performance by month and cumulatively.
The report shall discuss slippage and/or gaining of
programme, changes to critical paths, forecast completion
dates, key issues of programme achievement, mitigation
measures, summary risks and opportunities. The manning
report will comprise a manpower histograms/curve
detailing actual verses planned under categories of Project
Management, Construction Management, Construction
Services, and Package Contracts.

Summary

The monthly report should include a forecast cost at

completion that shall accurately reflect the Project
Control Managers view of the likely final cost. The
forecast should consist of a baseline estimate reflecting
the updated programme and actual /anticipated resources
levels to the anticipated end date. The report should
include a financial assessment of risks and opportunities
identified on the project that should be maintained in a
matrix with an assessment of costs on a best/likely/worst
outcome.

Many project control systems involve monitoring,

reporting and introducing necessary corrective actions to
maintain project cost and time targets. The project cost
control systems include monitoring and controlling of
budgets, cash flows, commercial risks, and management
of contracts. The programme control system involves
monitoring and controlling of project time, resources
and, procurement schedules. It will also monitor risks
associated with the programme and strategies to minimise
the effects.
Most Project Managers recognise the need for project
control as it applies to budgets and plans. However many
Project Managers fail to make the connection between
these two elements in responding to situations.
In order that lessons learned on each project are
communicated to the organisation to enable operating
practices and procedures to be improved, a Project Close
Out report will be generated.

Chichester Joinery Ltd v John Mowlem & Co plc (1987)

A quotation submitted by a sub-contractor was accompanied by their standard terms and
conditions. The main contractor sent a purchase order containing their own standard terms
which stated that any delivery made will constitute an acceptance of this order. Sub-contractors
delivered the work, but not until after they sent the main contractor a printed acknowledgement of
order, which stated that the order was accepted subject to the conditions overleaf.
Held that by accepting the joinery the main contractor had accepted the sub-contractors
conditions.

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