Earned Value:

BCWS: planned value (PV): baseline / BCWP: earned value (EV): work done/ ACWP: actual cost (AC) : money spent/ BAC:
budget at completion

 Cost Variance: CV = BCWP – ACWP = EV-AC (<0: overbudget, >0: under budget)
 Schedule Variance: SV = BCWP – BCWS = EV-PV (<0: behind schedule, >0: ahead schedule)
 Cost Performance Index: CPI = BCWP/ACWP = EV/AC (<1: overbudget, >1: underbudget)
 Schedule Performance Index: SPI = BCWP/BCWS = EV/PV (<1: behind schedule, >1: ahead schedule)
 Cost Estimate at Completion: EAC = BAC/CPI
 Estimate cost to complete: ETC = EAC – ACWP = EAC – ACWP = PV/CPI
 Estimate time to complete: ETC (t) = planned duration (PD) /SPI

Role of Project Manager: Leads, assists, analyzes assumptions, empowers the team, rewards, manages stakeholders, solves
problems, monitors, manages change, coordination, finalizes and approves plans, influences, ensures interaction, closes projects,
understands cultural differences.

Roles:

 Whiner: complain all the time and with respect to everything, accuse the others/project manager/company for those
problems and give the impression that the new project will not work out.
 PM Reaction: Listens to complains, find solutions, or draw the line.
 Know it all: Doesn’t accept ideas, explains in details, knows better than anyone, doesn’t allow interruptions.
 PM Reaction: Open to new information and ideas, be prepared, & know very well what s/he is talking about. The
PM can turn you into a mentor for issues in your area of competence
 Nothing Person: Doesn’t speak, doesn’t show verbal and non-verbal reactions, useless expressions.
 PM Reaction: S/he should try to persuade you to talk by questioning and discussions.
 No-Person: Agrees to nothing, interrupts the PM, disagrees with the plan.
 PM Reaction: Use you as a resource, leaving a door open, and acknowledging your good intent.

Schedule Management & Sequencing:

 The WBS developed in planning are divided into activities to produce the required deliverables
 The scope, management philosophy, & methodology should be specified
 Milestones: significant events within the project schedule to measure the progress of the project (not activities and don’t
have duration). A project with late milestones is a late project.

Types of dependencies: (the sequence of the activities is based on dependencies):

 Mandatory dependency (hard logic): Inherent in the nature of the work or is required by a contract
 Discretionary dependency: This the way an organization has chosen to have work performed. There are other ways it
could be done, but this is the one preferred by the organization. These can be changed and are very important when we
want to compress a schedule (fast track-a project)
 External dependency: Based on the needs or desires of a party outside the project: gov or suppliers)
 Internal dependency: This is based on the needs of project and the team can control them

 The same work can have multiple types of dependencies, and the project team identifies mandatory & discretionary
dependencies, whereas the project manager identifies internal and external dependencies.

 A lead may be used to indicate that an activity can start before its predecessor activity is completed, whereas a lag is
waiting time inserted between activities.

 Path Convergence: When an activity has two or more activities directly preceding
 Path Divergence: When an activity has two or more successor activities directly following it
 All activities after the start activity should be at least connected to one predecessor
 All activities before the finish activity should be connected to at least one successor

Estimating the schedule: the team members need the following:

 Activity list and activity attributes: Time required or leads and lags could be an attribute
 Assumption logs especially regarding constraints & lessons learned register from previous projects
  Resource breakdown structure: Categories of resources required for the project
 Resource requirements: Skill level of resources required to perform specific project work
 Project team assignments: The number and experience level of individual levels
 Resource calendars: To understand when experienced members are available
 Risk register: Threats that should be considered

Estimating Techniques:

 Relative sizing: Common on adaptive projects (story points rather than absolute time frames) & not predictive projects. It uses
previous completed work to estimate the future. (Not absolute estimate)
 One-Point Estimating: submit one-point estimate per activity, based on historical information or expert judgement.
 Analogous Estimating (Top-Down): Estimate the overall project and then estimate individual categories.
 Parametric Estimation: Developing mathematical equations using data from historical records which include, regression
analysis, learning curve, and heuristics.
 Affinity Estimating: grouping similar items into categories or affinities
 T-shirt sizing: high-level estimation technique that is applied during the early stages of adaptive projects which requires a map
the overall effort for the project (not detailed)
 User Story: The smallest unit of work in an agile framework. It’s an end goal, not a feature, expressed from the software user’s
perspective. A user story is an informal, general explanation of a software feature written from the perspective of the end user or
customer.

 Learning Curves: Our performance improves as we repeat activities; learning effect. Formula: y= A X−n,where y is the time to
complete the Xth repetition, A is the time required to complete the first iteration, X is the nb of the iteration, n is the learning rate.

Three-point estimating:

 Triangular distribution: Activity duration is (P+O+M)/3

 Beta distribution: Avg = (P+4M+O)/6, Standard deviation = (P-O)/6. The range = avg+/- Standard deviation

Preparing the schedule:

• After listing the activities and estimating their durations, schedule (bar chart or milestone lists) model can be prepared which
includes all the data needed to calculate the schedule: Activities, duration estimates, dependencies, leads and lags etc. The
approved schedule is called the baseline and becomes part of the project management plan.

Things needed: Historical records, lessons learned, calendar, categorized resources, resources availability, schedule management
plant and scope baseline, defined activities, millstone list, assumption log, estimates, list of risks.

Schedule Network Analysis:

• Critical path method determines the longest duration path through the network diagram, ES, EF, LS, & LF.

Float or Slack: as the amount of flexibility in the schedule (fluff), an there are 3 types:

• Total Float: The primary type of float. This is the amount of time an activity can be delayed without delaying the project end
date, while still adhering to any imposed schedule constraints.

• Free float: Free float is the amount of time an activity can be delayed without delaying the early start date of its successor(s)
while still adhering to any imposed schedule constraints

• Project Float: Project float (also referred to as positive float) is the amount of time a project can be delayed without delaying
the externally imposed project completion date required by the customer or management, or the date previously committed
by the project manager

Note: Activities on the critical path have zero float & a negative float indicates that the project schedule is not realistic or achievable.

Duration Total Float=Late Start-Early Start

Total Float=Late Finish-Early Finish
ES EF
Free Float=ES of Next Activity-EF of current activity
Activity Name
Float Fast Tracking: Involves taking critical path activities that were originally planned to be
done one after another and doing them instead in parallel for some or all of their duration.
LS LF Fast tracking often results in rework, increases risk, and requires more attention to
communication.
Crashing: Involves adding or adjusting resources to compress the schedule while maintaining the original project scope. Crashing
always results increased costs, and may increase risk. It trades time for money.

What If Analysis: When finalizing the schedule, understanding the impact of particular changes on the project schedule are needed.
Example: Monte Carlo: tells us the probability of finishing the project on a specific day or with a specific cost.

Cost Management Plan: Currency of estimates, accuracy and precision of the estimates, estimating techniques, rules of measuring
cost performance, costs guidance, cost change and thresholds control, funding decisions, monitoring spending, roles and
responsibilities for cost activities, documenting costs, fluctuations in resource costs & exchange rates guidelines

Estimate Project Cost: Estimates for all project activities and resources through combining the estimates into one-time phased
spending plan. The estimated costs include: labor, equipment, materials, training, management salaries, general office expenses
(overhead costs), quality efforts, risk efforts, project management activities, & physical spaces used directly for the project. Estimates
must always be based on the latest engineering documents, material takeoffs, & labor rates.

Types of Costs:

 Variable costs: Change with the amount of production work; materials, supplies, and wages
 Fixed costs: Do not change as production changes; setup, rent, utilities, etc.
 Direct costs: Costs directly attributable to the work on the project; team wages, team travel, recognition expenses, and costs of
materials used on the project
 Indirect costs are overhead items or costs incurred for the benefit of more than one project; taxes, fringe benefits, and janitorial
services.

Types of Materials:

• Equipment: big, expensive, and the labor to install them is minimal compared to their cost. Ex: Motors

• Bulk Materials: small, cheaper than equipment, they can be transported by a small truck. Their labor costs are nearly equal
to their material costs. Examples: Piping, cables, trays, concrete…

Top-Down Estimation:

 Advantages: quick, less costly to create, cost constraints in project initiating provides data to evaluate high-level project
feasibility, & overall project costs will be capped for a project analogous estimate
 Disadvantages: Less accurate, requires considerable experience to do well, does not consider differences between projects,
& estimates reflect a limited amount of information about the project or key deliverables.

Bottom-Up Estimation:

 Advantages: More accurate, gains buy-in from the team because the team creates estimates they can live with, based on a
detailed project and deliverables analysis, & provides a basis for control and management.
 Disadvantages: Takes time and money, Tendency for the team to pad estimates unless they understand the use of reserves,
requires that the project be defined and well understood, & requires time to break project deliverables into similar pieces.

Estimate Ranges:

 Rough order of magnitude (ROM) estimate: made during project initiating: -25 to 75 %.
 Budge estimate: narrow the range from ROM before. Budget estimate is in the range of -10 + 25 %.
 Definitive Estimate: As project planning progresses, the estimate will become even more refined. Some project managers
use the range of +/-10 %, while others use -5 to +10 %

Reserve Analysis: The risks we included reserves for might not occur so we have to take these reserves out. New risks might be
added and we need to utilize management reserves for those.

Characteristics of a project: Temporary, Defined Timeframe (schedule), scope, and resources (time, money, people)

Scope: the final product or deliverable of a project (defined before execution), changing it is avoided. (DETAILED)

Stakeholders: the owner or the client, construction contractor, operator, the designer.

The phases: Feasibility => design => construction => operations => decommissioning.
• Feasibility (FEED (Front-End-Engineering), PPP (Pre Project-Planning), or FEL (Front End Loading)): Define the project
scope, characteristics, execution strategy, team, & budget: Feasibility phase starts with the evaluation of the different options of
the project and ends with the project being authorized or eliminated.
At the end, business (top level as increasing profit and market goals) and project (specific) objectives should be clear.
• FEL has multiple phases and gates (gates are to ensure that work is being done with appropriate quality and is meeting the
requirements): FEL 1, GATE 1, DOCUMENTATION. FEL 3, GATE 2, DOCUMENTATION.

Public Policy: It is what the government choses to do or not to do a deliberate decision by government or an equivalent authority to
take action or non-action toward specific objectives. Media & international groups influence it.

Political agenda: A set of issues thought by the public or those in power to merit action by government which include current
political values, weight of custom and traditions, and impacts of events.

Steps for public policy formulation: Problem identification => policy formulation (steps and solutions) => policy adoption (line of
action? Set as official?) => policy implementation (applying in reality) => policy evaluation (challenges? Costs? Problems? Changes?
Results?)

Common with Ethics:

• A single contractor can do both engineering and construction (E+C)

• A separate contractor can handle engineering and construction (Split contracting)
• Procurement can be handled by the owner or by any of the two contractors
• EPC- Single Contract: A single entity handles Engineering, Procurement, and construction: this approach transfers a lot risk to
the contractor. It has a single bidding phase.
• Design Build: The owner also deals with a single point of contact. A single contractor handles the design and the construction
works. Unlike EPC, the contractor is generally handed concept drawings and more than functional specifications. The owner
plays a significant role in the commissioning and punching of the facility. Less risk is transferred to the contractor. It has a single
bidding phase.
• Split EP-C: A design contractor handles both the engineering & procurement. Another contractor handles the installation. Less
risk is handled by a single contractor. The owner is involved in the process. Has two bidding phases.
• Design Bid Build: Commonly referred to as the traditional approach. Common in architecturally driven projects. The owner
prepares the construction tender documents with the support of an architect/engineer. Has two bidding phases. The owner is more
involved than the Split contract method.
• EPCm: A single entity handles engineering, procurement, and construction management. That is a contractor prepares the design,
and purchases the major items and manages the progress on site. The EPCm does not CONSTRUCT the facility but provides
construction management services on site. It’s the owner’s representative.

Payments:

1. A lump sum contract (or stipulated sum contract): is the traditional means of procuring construction, and the most
common form of construction contract. A single ‘lump sum’ price for all the works is agreed before the works begin:
contractors undertake to be responsible for executing the complete contract work for a stated total sum of money. This is
generally appropriate where the project is well defined, when tenders are sought, and significant changes to requirements are
unlikely. This means that the contractor is able to accurately price the works they are being asked to carry out.

2. Re-measured: In re-measurable contracts, work will be carried out based on the pre-agreed unit rates. All the Payments will
be paid based on the actual work done after measuring the work done. So, the final value of the project will be derived based
on the unit prices and exact quantities. The contractor will provide their rates based on the BOQ supplied by the client.

3. Cost +: A cost-plus contract is an agreement to reimburse a company for expenses incurred plus a specific amount of profit,
usually stated as a percentage of the contract’s full price. They are used in construction where the buyer assumes some of the
risk but also provides a degree of flexibility to the contractor. The party drawing up the contract anticipates that the
contractor will deliver, and agrees to pay extra so that the contractor can make additional profit upon completion.

Standard form of contracts for contracts: FIDIC (Fédération Internationale des Ingénieurs-Conseils), JCT, AIA, EJCDC, etc.

Detailed Engineering: This is the first phase of execution in any project; It starts with a verification of the concept design or the
FEED package and it ends with the issuance of the IFC documents (Issued for Construction).

Stages of the engineering phase: Generally, we start with a concept design then go to the detailed engineering phase and finalized
with the final design. Engineering documents go through various review cycles. Typically, these occur at 30%, 60%, 90% and 100%.
As we progress through the phases more details are added to the documentation.