UAA PM612 Project TIME Management

Peterson General Contractors

Peterson General Contractors was an established construction company doing work in Alaska. Peterson generally handled small to medium-sized commercial and industrial construction projects. Some recent projects, which the company had completed, were a 20,000 - square-foot factory building, a four-story office building, and a water filtration plant.

The company was now in the process of preparing a bid for a television station for the erection of a 225-foot high television antenna tower and the construction of a building adjacent to the tower which would be used to house transmission and electrical equipment. Peterson was bidding only on the tower and its electrical equipment, the building, the connecting cable between tower and building and site preparation. Drawings 1 and 2 in Appendix show site plans for the main building site and tower site. Transmission equipment and other equipment to be housed in the building were not to be included in the bid and would be obtained separately by the television station. The site for the tower was at the top of a hill to minimize the required height of the tower. The building was to be constructed at a slightly lower elevation than the base of the tower and near a main road. Between the tower and building was to be a crushed gravel service road and an underground cable. A fuel tank was to be installed above ground on a concrete slab, on the building site.

Prior to preparing the detailed cost estimates, Peterson’s project manager met with the company’s estimator and the project team to go over the plans and blueprints for the job. The project manger was tasked with preparing the bid for the project, based on the criteria developed by the owner of the company. The television station management was very concerned about the time factor and had requested that bids be prepared on the basis of normal time and cost for completing the job, and also for the fastest time for completing the job and the additional cost that this would entail. The result of the project team meeting was to determine that the activities as shown in Exhibit 1 would be necessary to complete the job. It was agreed that the project manager would prepare time and cost estimates for these activities.

In addition to determining the list of activities, the project manager and team members discussed in some detail how these activities could be sequenced since the list of activities in Exhibit 1 did not necessarily indicate the order in which the work could be performed. In the source of the discussion, the project manager made the following notes:

Survey work and procurement of the structural steel and the electrical cable and equipment for the tower can start as soon as the contract is signed.

Rough grading of the tower and building sites can begin after clearing and grubbing is completed.

Clearing and grubbing can be started as soon as the project is surveyed.

After the tower site is rough graded, and base for the connecting road is installed, the footings and anchors for the tower can be poured.

After the building site is rough graded, and the basement is excavated, the exterior footings can be poured.

The septic system can be installed any time after the building site is cleared and grubbed.

Construction of connecting road can begin after the clearing and grubbing is complete.

Exterior basement walls can be poured after exterior footings are finished.

Basement floor slab/footings have to go in after the exterior walls.

The fuel tank slab can go in anytime after the building site is rough graded.

Interior basement walls can be formed and poured after the basement slab is finished.

Floor beams can be poured as soon as the interior walls are complete.

Main floor slab and concrete block walls go in after the floor beams are complete.

Roof slab can go on after the block walls are up.

Interior Framing and Utilities can be completed as soon as the roof slab is on.

The fuel tank can be installed anytime after the slab is done.

Drain tile and storm drain for the building goes in after the exterior basement walls are up.

As soon as the tower footings and anchors are in and tower steel and electrical equipment are available, the tower can be erected.

Connecting cable in tower site can be put in as soon as the tower is up.

Main cable between the tower and building goes in after the connecting cable at

tower site is in and exterior basement walls are up.

The building interior can be painted, the fixtures installed & the cleaned up after the interior framing is compete.

Tower site can be finished graded as the connecting cable and main cable are in.

Clean-up tower site after finish grading is complete

Backfill around building after the storm drain and drain tile are in and after the main floor slab is complete.

Finish grade and surface building site after building is backfilled and main cable is in.

Clean-up building site after site is surfaced.

Complete grading/surface connecting road after main cable is in.

Following his meeting with the project team, the project manager prepared a time estimate for completing each task. This estimate is included under Exhibit 2. Fixed duration tasks are shown in days and effort driven tasks are shown in hours. The estimates were prepared based on the maximum number of resources that could efficiently work on the task being assigned to each task. The estimate would be combined with different work week durations to get the normal project duration and the fastest possible project duration. Estimated costs of direct materials used in construction and purchased equipment to be installed in the tower are shown in Exhibit 3.

The following are the resources available and the associated hourly costs:

NAME: Regular Rate: OT Rate Company limit

Carpenter $ 36.00 $ 49.00 3

Electrician $ 44.00 $ 60.00 4

Electrician Trainee 27.00 $ 36.00 1

Foreman $ 50.00 $ 50.00 4

Laborer $ 32.00 $ 44.00 8

Operator $ 38.00 $ 52.00 4

Survey Crew $ 73.00 $ 110.00 1

12G Grader $ 85.00 $ 85.00 2

D7 Dozer $ 160.00 $ 160.00 1

235 Excavator $ 185.00 $ 185.00 1

434 Compactor $ 75.00 $ 75.00 1

580 Backhoe $ 40.00 $ 40.00 1

966 Wheel Loader $ 95.00 $ 95.00 1

In addition, the project manger is paid $ 1,000/day for the duration of the project.

Company experience had shown that for this kind of job overhead costs could be expected to amount to 15 percent of the labor and equipment use cost. These overhead costs generally include: home office overhead, job site trailer, miscellaneous small tools, petroleum oil and lubricant (POL) supplies, mobilization/de-mobilization, financing costs as well as other such items. Using this information, the project manager prepared analyses for the job; one for the cost of doing the work at normal rate and one for the cost of doing the job in the shortest possible period of time. The start date chosen for the project will be March 1.

The standard work calendar for the project will be the typical Monday-Friday schedule, 40 hr work week schedule. Company experience has determined that a 60 hour work week (Monday to Saturday, 10 hours/day) was the maximum amount of time that workers could remain efficient. Furthermore, this schedule was found to reduce productivity by an average factor of 15%. That is, if a task normally took 100 hours at regular time, the same task would take 115 hours using a 60 hour week. The task would still be completed sooner (1.92 weeks Vs. 2.5 weeks). A 50 hour work week (Monday to Friday, 10 hours/day) results in a 5% average decrease in productivity. Tasks can either be completed using a 40, 50, or 60 hour week. Once a project is started using one of the schedules, it must be completed using that schedule. A combination of work schedules is not allowed.

The following standard holidays will also be given as time off:

Memorial Day

Independence Day

Labor Day

Thanksgiving

Christmas

New Years Day

Exhibit 4 contains information on resource allocations for the summary task activities. All tasks under each summary task have the same pool of labor assigned. Because of other projects currently under construction, the staffing levels may have to be restricted.

Exhibit 5 contains the actual start, finish and costs for the activities. It is broken down into three time periods and will be used for question 4.

Using the information given above and in the exhibits, answer the questions at the end of this handout.

Exhibit 1. List of Activities for Construction of Television Tower and Building:

Each task is assigned to a summary task which is in turn assigned to the project. This forms the work breakdown structure (WBS) for the project. The order that the tasks are presented in does not necessarily correspond to the actual order of the tasks.

Summary Tasks:

Project Start/Procurement (PS)

Site Work (SW)

Concrete Work (CW)

Utilities (UT)

Electrical Work (EW)

Finish Site Work (FS)

Finish Work (FW)

Tasks Assigned to Summary Task:

1. Sign Contract/Complete Sub Negotiations PS
2. Procure Electrical Equipment/Cable PS
3. Procure Steel for tower PS
4. Survey Project PS
5. Clearing and Grubbing SW
6. Rough Grade Building Site/Excavate Basement SW
7. Rough Grade Tower Site SW
8. Lay Base for Connecting Road SW
9. Pour Exterior Building Footings CW
10. Pour Concrete for Tower Footings and Anchors CW
11. Pour Exterior Basement Walls CW
12. Pour Basement Slab/Interior Footings CW
13. Pour Fuel Tank Slab CW
14. Pour Walls for Basement Rooms CW
15. Pour Concrete Floor Beams CW
16. Pour Main Floor Slab/Lay Concrete Block Walls CW
17. Pour Roof Slab CW
18. Install Fuel Tank UT
19. Install Building Septic System UT
20. Install Drain Tile and Storm Drain at Building Site UT
21. Erect Tower/Install Electrical Equipment EW
22. Install Connecting Cable in Tower Site EW
23. Install Main Cable Between Tower Site & Building EW
24. Backfill Around Building, Finish Grade and Surface FS
25. Backfill and Finish Grade Tower Site FS
26. Complete Grading/Surface Connecting Road FS

27. Lay Roofing FW
28. Complete Interior Framing and Utilities FW
29. Clean Up Building Site FW
30. Clean Up Tower Site FW
31. Paint Building Interior, Install Fixtures, & Clean FW
32. Obtain Job Acceptance FW

Exhibit 2. Television Tower and Building Construction Time Estimate

Note:

Fixed Duration Tasks are given in days

Resource Driven Tasks are given in hours

1. Sign Contract/Complete Sub Negotiations 5d
2. Procure Electrical Equipment/Cable 80d
3. Procure Steel for tower 120d
4. Survey Project 48h
5. Clearing and Grubbing 64h
6. Rough Grade Building Site/Excavate Basement 240h
7. Rough Grade Tower Site 120h
8. Lay Base for Connecting Road 232h
9. Pour Exterior Building Footings 336h
10. Pour Concrete for Tower Footings and Anchors 272h
11. Pour Exterior Basement Walls 88h
12. Pour Basement Slab/Interior Footings 24h
13. Pour Fuel Tank Slab 72h
14. Pour Walls for Basement Rooms 88h
15. Pour Concrete Floor Beams 96h
16. Pour Main Floor Slab/Lay Concrete Block Walls 120h
17. Pour Roof Slab 96h
18. Install Fuel Tank 40h
19. Install Building Septic System 120h
20. Install Drain Tile and Storm Drain at Building Site 24h
21. Erect Tower/Install Electrical Equipment 304h
22. Install Connecting Cable in Tower Site 64h
23. Install Main Cable Between Tower Site & Building 280h
24. Backfill around Building, Finish Grade and Surface 72h
25. Backfill and Grade Tower Site 64h
26. Complete Grading/Surface Connecting Road 64h
27. Lay Roofing 24h
28. Complete Interior Framing and Utilities 336h
29. Clean Up Building Site 24h
30. Clean Up Tower Site 40h
31. Paint Building Interior, Install Fixtures, & Clean up 152h
32. Obtain Job Acceptance 5d

Exhibit 3. Estimated costs of materials and equipment:

WBS Item Cost

PS Project Start/Procurement $ 457,125

a Tower Steel

b Electrical Cable/Equipment

SW Site Work $ 45,250

a Gravel

b Trucking/Material Disposal

c Hydroaxing Sub

d Other Materials

CW Concrete Work $ 27,350

a Concrete

b Form Rental

c Other Materials

UT Utilities $ 16,874

a Septic Tank/System Materials

b Fuel Tank

c Storm Drain Piping/Manholes

d Gravel Bedding

EW Electrical Work (Covered under PS)

FS Finish Site Work $ 11,187

a Crushed Gravel

FW Finishing Work $ 87,318

a Lumber

b HVAC Equiment

c Plumbing Fixtures

d Roofing

e Hardware

Exhibit 4. Resource allocation for selected activities:

The following resources presented below under each summary task represent the requirements for each task under the summary task. In other words, the pool of resources under each summary task must be assigned to each individual task under the summary task except PS. In addition to the resources presented below, a foreman will be required for each summary task and a superintendent will be required for each day of the project at $ 500/day.

Note: It must be stressed that this method of assigning resources is much simplified from what would actually be required. The resources assigned to each summary task are roughly those which would be required to complete the work under each summary task; however, each task would likely have a specific blend of resources chosen from those available under the summary task. This method allows seven different resource combinations rather than the 30 which would normally be required for a project of this type.

PS Project Start/Procurement

1. Survey crew (only for 4. Survey Project)

SW Site Work

3 Operators, 2 Laborers, 1 D7 Dozer

1 235 Excavator (1/4 time), 1 966 Wheel Loader (1/2 time),

1 434 Compactor (1/4 time)

CW Concrete Work

3 Laborers, 2 Carpenters

UT Utilities

1 Survey Crew. 2 Operators, 2 Laborers

1 D7 Dozer (1/2 time), 1 235 Excavator, 1 966 Wheel Loader (1/2 time)

EW Electrical Work

1 Operator, 2 Laborers, 2 Electricians, 1 Electrician Trainee

1 580 Backhoe

FS Finish Site Work

2 Operators, 2 Laborers

1 12G Grader, 1 966 Wheel Loader (1/2 time), 1 434 Compactor (1/2 time)

FW Finishing Work

2 Laborers, 2 Carpenters, 1 Electrician

(Not for 32. Obtain Job Acceptance)

Exhibit 5a – Period Ending June 1

Exhibit 5b – Period Ending October 1

Exhibit 5c – Period Ending December 4

Homework Questions:

1. Assuming unlimited company resources and using the constraints of the project, prepare Gantt and PERT Charts to answer the following questions:

A Working at a normal rate, in how many days can the job be completed? What should the bid be on this basis if Peterson attempted to obtain a profit of 10 percent before federal income taxes?

B What is the shortest possible time in which the job can be completed? What should the bid be on this basis if Peterson attempted to obtain a profit of 10 percent before federal income taxes?

Note: The tasks presented should be placed under the appropriate summary task to prepare a WBS. The resources and fixed costs should then be applied to the appropriate tasks based on the constraints presented in the project handout. In order to “crash” the schedule, it will be necessary to have the resources work overtime. This is accomplished using the task form. Round all work time to the nearest hour.

2. A If the job is obtained and the work is to be completed working at a normal rate, what portions of the work should be supervised most carefully to ensure that the job is completed on time? What portions of the work should be supervised most carefully if the contract is let on the basis of completing the job on the shortest possible time?

B If you were the television station management and felt that the estimated time for completing the job in the shortest possible period of time was still too long, what would you do?

C What will be the effect on the bid price for this project if Peterson is also working on several concurrent projects?

3. A How many units of each resource available to the project are required in order to maintain the fastest schedule derived from question 1B? Why does it not make sense to have this number of resources assigned to the project?

B By looking at the company resource limit under the project constraints, what are the strategies that can be used to reduce scheduling conflicts?

4 A Apply the company resource limit to the schedule obtained from Question 1B. Identify any conflict/scheduling problems and print resource usage graphs for the resources identified as being under staffed. Resource level the project by hand and then use the leveling command in the program. Compare how many days the project will take to be completed and the project cost using the two methods.

Note: Do not crash the tasks which become critical after leveling. Assume that no cost is applied to a summary task when there is no work being done: ie: No Foreman time.

B Why do they or do they not differ?

C What other costs could be incurred under the leveled projects which are not accounted for by the program?

D If you had your choice to have one more unit of an over allocated resource, which one would you choose and why?

5. Using the schedule from question 1B, input the actual start and finish dates given in Exhibit 5, Part A, and produce a progress report through June1. Generate a report which provides the BCWS, BCWP, ACWP, calculate the EAC and graph the SPI and CPI for the project. Identify if the project is on schedule and on budget.

6. Using dates given in Exhibit 5, Part B, produce a progress report through Oct 1. Generate a report which provides the BCWS, BCWP, ACWP, calculate the EAC and graph the SPI and CPI for the project. Identify if the project is on schedule and on budget.

7. Using the dates given in Exhibit 5, Part C, produce a progress report through December 1. Generate a report which provides the BCWS, BCWP, ACWP, and graph the SPI and CPI for the project. and graph the SPI and CPI for the project. Will the project finish on time and on budget? Explain.