Watch the recording of our Free Broadcast with project controls expert Dr. Saleh Mubarak on Accelerating Construction Projects. The webinar was held on Nov 24th, 2015.
Michael Lepage:
I want to start by saying thank you so much for attending. Thank you for joining us today for this free broadcast – Acceleration of Construction Projects Added Cost or Cost Savings. I’m glad you guys could all join us.
Let me just start by saying that there’s a recent survey done by KPMG actually – has concluded that 75% of construction projects finishing in the last three years, finished significantly behind schedule and that’s what construction owners are reporting.
A lot of you are working in construction. A lot of you are working with software like Primavera P6 and it’s a very tough climate right now.
Timelines are getting shorter. Demands are higher. The red tape is getting thicker at all times. That’s why we’re here to understand the science behind Accelerating Construction Projects.
There actually is some science behind it and a proven scientific method to do it.
A little bit about me, most of you know who I am. I’m Michael, I’m the Chief Learning Officer here at Plan Academy. I know a lot of you read the blog and check out the tutorials and what not.
Once again, really thrilled to be able to hang out with you guys and introduce our special guest today. Here he is – Dr. Mubarak.
Saleh Mubarak, he is a renowned Project Controls Educator. He’s been a consultant, a speaker and an author. He’s an authority on Project Planning and Project Controls.
He’s been in the industry for a long time. It’s 26 years, I believe, if I’m not right Saleh? Don’t forget to unmute yourself Saleh.
Interesting enough, he was a member of the team that wrote the first Project Scheduling certification exam for PMI in 2007. I know a lot of you have taken PMI exams, perhaps your PMP or your PMPSP Scheduling and probably there are others.
Most recently, Dr. Mubarak has been teaching at Universities around the world but most recently in Qatar. I think we spelled Qatar wrong on this slide and I apologize for that.
But without further ado, I want to turn it over to Saleh who is going to give you an overall understanding of how Construction Project Acceleration works. Saleh, are you there?
Saleh Mubarak:
Good morning, good afternoon, good evening everyone. Glad that you all joined.
I was checking with Mike about an hour ago and it’s something that even with 26 years of experience, there is still some preparation you have to do for any project. My project today is speaking to you for this 40 minutes or so.
Sometimes Murphy’s Law works that yesterday I had a big hiccup with my computer. Windows would not let me go in and so on and I was in a panic mode and what would I do if I can’t operate my computer?
And that thought comes to our mind “What if the shipment does not arrive?” “What if this?” “What if that?” We all should have plan B and sometimes plan C.
As our host, Michael mentioned that many projects finished – not meeting the objectives that we did or the constraints we did – something went wrong either we’re late or over-budget or not meeting any contract condition that was stipulated in the contract.
In general, let’s start with this. I’m sure many of you have seen something like this – either the same or close to that – the trio, they always call them “the trio”. The cost, the time and the scope or quality where those are the sacred three that we need to keep.
But I disagree on calling them “the objectives”. I believe in every project there is a single objective.
That objective is to achieve the scope of the project – which could be a five-story office building, could be a residential villa, a shopping center, a hospital, a road, a bridge, a tunnel, a refinery project – whatever it is, that’s the objective – is to achieve.
However, everything else is a constraint. We should have the cost of this project not exceeding 50 million. We should have that project completed by December 21st 2017.
We should have a quality requirement that’s meeting the specifications in a contract – safety, environmental, public relations – all of these are requirements.
I have a separate presentation defining and measuring success where you put a weight on every one of these. Then you give yourself a grade on every criteria.
And the total grade tells you the degree of success – whether it’s 82, 76 or whatever it is – that created our own module. Measure success in a more objective way than you just subjectively say, “Well I give myself 8 out of 10,” or whatever subjectively.
Very quick review here. We’ll go into more details in the full seminar that we will offer myself and Michael. We’ll talk to you about it.
There are steps for creating a schedule and always like we say in the US, “Start with the right foot.”
A good schedule should start with a good preparation. The first step is to break down the project into well-defined activities. That’s an art by itself. That’s something that could make a big difference in the schedule.
The second one is determining activities durations. That’s again a sort of guesstimating game that you’re not absolutely sure.
But here’s the debate between deterministic people say, “That activity will take six days,” and probabilistic or stochastic people “Oh it’s going to take between four and eight,” and so on.
We’re always assume durations and correct ourselves as we progress.
The third one is defining the logic and relationship or interdependencies, predecessors, successors for activities.
And then we draw the network and perform the CPM calculations.
Probably, somebody would say, “You don’t draw it. Primavera does or Microsoft Project does.” Yes.
But I very much emphasize on the requirement that every scheduler has to be able to do that for a reasonable size. You draw the network and perform the CPM – all that is done by the computer – but with you, looking at the input and output. Make sure you are the human behind the screen behind the computer.
When you’re done, you review and analyze the schedule.
hose five steps take place before you start the project. Once you start the project, you start implementing the schedule.
Some people ask, “What do you mean ‘implement the schedule’?” I tell them I’ve seen many schedules printed on beautiful bar charts to be as decoration on the wall of the office trailer. They never follow them because they created them only to fulfill a contract requirement and then the contract goes on and on.
There is a human tendency that we don’t really follow this, we don’t care about that – until a dispute happens or a claim or something. I call that the “unbuckled seatbelt mentality or syndrome”.
That people who don’t wear the seatbelt ”Oh I’ve been driving cars or riding cars for seven years, 10 years nothing happened and I don’t buckle my seatbelt, nothing happens to me.”
Yes but when an accident happens, if somebody slams on his brakes and you fly out of the glass – at that point, you appreciate the importance of the seatbelt.
When the delay claim hits you at that time, you’ll appreciate the importance of good CPM schedules.
And then monitor and update that as you progress. You have to compare “as built” to “as planned”. Find any variances. Explain that those variances take remedy whenever and wherever required.
And then when the project is completed, you find that in the archives or the database. It’s not dead but it’s filed there. It’s sleeping there because you may need it later on. You may need that to get records.
I’ve seen cases where two years after, the project is completely finished. They have to go back to resolve certain issues.
What’s the Critical Path Method? It’s a scheduling technique networks for graphic display of the work plan. Network calculations determine when activities can be performed, the expected completion date of the project and the critical path of the project. That’s the definition of the Critical Path Method.
The importance of the Critical Path Method is that it made scheduling less subjective. You can’t say its 100% objective but it’s less subjective because you don’t say this activity will start on this date and finish on that date – no.
You decide what are the durations of the activities and what are the sequence – the predecessor and successor – and then the calculations determine when each activity will start and will finish.
The definition of the Critical Path – Michael, I’m trying this thing is covering my –
Michael:
Use the little orange arrow to push it. There’s a little orange arrow at the top and that should push –
Saleh:
I see it. Okay, great.
Michael:
There you go
Saleh:
This is great.
What’s the Critical Path? Actually I went through the definition several times and you’ll find that my definition is slightly different from the PMI. I’m not trying to say I’m better than the PMI but I believe my definition is better.
Maybe because when I think of the Critical Path Method, when I think of the activities and all these things, I’m thinking within the construction context only. As you all know, the PMI is very generic and had to be somewhat withered down. Again, I’m not speaking anything to belittle that PMI.
But when they cover all kind of industries from engineering, construction, IT, pharmaceutical, manufacturing – all of these things, they had to bring a common language that accommodates all of them.
My definition is “The longest continuous path in a network from start to finish. It represents the summation of the durations of activities and lags along that path taking into consideration calendars, constraints, resources and other impacting factors.”
You may ask, “What do you mean?” I mean, if you have two activities, one is 20 days, the other one is 22 days, which one is longer? Of course the 22 right.
Well not necessarily. What if the 22-day activity is on a five work-day-per-week calendar? The 20 day activity is on six day or the 22 is on the six day. The other one, the 20, will be longer than the 22.
We don’t look at the duration itself. We look at the timespan on a calendar – which one is longer – that’s the definition of longer. We don’t think of work period, we think of time units.
Some people define a Critical Path as the path with zero float. This is inaccurate. We will see when you have a negative float. But if you say it’s the path with the least float then you are right.
For every network, there must be at least one Critical Path but it could be more than that. We will see that when we start accelerating. Maybe we’ll start with one path then two then three then so on.
Float Definition. Total Float is the maximum amount of time an activity can be delayed from its early start without delaying the entire project.
Float is a very important thing. When we say “float” we mean the “total float” because there are other types of float. We’re not going to go into the free float, independent float, interfering float, restricting float, phantom float.
There are all kind of float but the total float is the most important one. It’s interesting. It’s controversial – from both technical and legal aspects.
Every time I go to a conference on construction management or project management, I’ll see a significant amount of papers or presentations on float –many of them by attorneys.
Now, when you sign a contract, every contract has an Imposed Finish Date. There are two dates that you have to re-consign.
The imposed finish date that the owner wants you to finish this project by this date and that date is stipulated in the contract and then they calculated one. The one that you calculate based on your own assumptions of durations and logic.
When you calculate the finish date from the start to finish – that’s the forward pass – and the forward pass would produce the calculated finish date and early dates and then you compare it to the imposed finish date.
There are two possibilities:
One that the imposed finish date is greater than the calculated finish date so the calculated finish date is the 15th of April 2017. The imposed by the contract is the 5th of May. Great! That will give you 20 days of extra float.
I call it Project Float or Management Float which is the float that doesn’t belong to a specific activity but belongs to the entire project.
However, if you fall into the second situation which is the imposed finish date is earlier or less than the calculated finish date, then your calculated finish date is not good enough. You need to accelerate the project and/or negotiate with the owner.
Here you have the situation where the calculated finish date is the 15th of April 2017 and the owner wants that project finished on the 31st of March. You have 15 days to crash on the project and you have to either crash the project or accelerate the project by those 15 days. OR negotiate with the owner say, “Mr. Owner, I cannot finish it on that date. Can you allow me to finish it on the 15th?”
We talk about Accelerating. Accelerating from what perspective or what point.
When you’re driving a car at 50 miles per hour and then you accelerate. Do you accelerate from the speed of 50 mph (mile per hour) or you accelerate starting from 20 mile per hour or from zero?
You have to define from what point you are accelerating. Well we are accelerating from that normal situation.
Again, here, we want to define a normal situation because my normal maybe different from your normal, from his normal or her normal. In this case, compare it to your own normal.
Accelerating a project is shortening the normal duration of the project schedule without reducing the original scope of work. If you would use the scope of work, that’s not acceleration. That’s scaling down the project.
Accelerating does not necessarily mean aiming for the shortest possible duration. You could but not necessarily.
Synonymous terms: Schedule compression, schedule crashing, schedule acceleration, time-cost tradeoff – this one is my favorite when cost is the number one issue. You have to look at the impact on cost of any change of the duration of the project – and also schedule time shortening. All of these are terms used to indicate this intake.
Project Schedule Acceleration can be either planned – this is before you start the project and you found like we just mentioned that the calculated finish date is not good enough. You need to cut it down so you need to accelerate the project before you started.
Or it could be something that’s decided after you started during the project. In this case, we call it “recovery schedule”.
What’s a recovery schedule? That you started normal but somehow you started slipping while you are progressing and presuming that it’s the fault of the contractor.
The owner says, “Mr. Contractor, I don’t see that you’re progressing as planned and I need a recovery schedule from you which means a change in your work plan that will enable you to finish on time.”
Why Accelerate Schedules? For some people it’s obvious “it’s not so obvious”. Let’s go into why we accelerate for owners and why we accelerate for contractors.
For owners, we accelerate the projects to make sure that the contractor’s finish date meet their deadline and to respond to market demand maximize profit. This is an important one because there is an opportunity in the market.
“I need to have this hotel finished, I need to have that office building finished as soon as possible because the economy is booming and there is an opportunity to rent it at a high rate of return then I need to accelerate to have it available to the consumers as soon as possible.”
Owners also accelerate for the convenience of the public. If you are a public agency or government and you have a project like one of the project, we’ll see a case study maybe 10, 15 minutes later.
They wanted to finish that road or bridge or tunnel or whatever it is for the convenience of the public.
They could play with the duration – accelerate or decelerate – to suit their cash flow as we will obviously when you accelerate your cash flow spikes up, even if it doesn’t cost you extra money.
Let’s say the project cost you $55 million dollars and the normal duration is 20 months. Now if you accelerate it from 20 months to 17 months that same $55 million, we’d be distributed over 17 months not 20 months, so it’s going to be more per month. But furthermore, the acceleration effort most likely will cost you additional money so that’s another reason to spike the cash flow.
But in some cases, in some unusual cases, you may want to decelerate which means stretch the project. Yes, it will cost you a little bit more in financing but that will also reduce the cash flow if your cash flow is short or long.
The fifth one – you may accelerate simply to reduce cost. You can tell me now “reduced cost, you just said, acceleration increases cost” but I’m going to show you now that to some extent – not all the way acceleration – but to some extent, it will reduce the cost.
For the contractor, they accelerate projects to meet the owner’s requirements or stipulate the dates. They accelerate projects to start other projects when the economy is booming.
Every contractor has a bonding capacity and they cannot bid on another project. If they have something in hand, they want to finish it quickly so they can bid on another project and maximize their profit.
Contractors also accelerate projects to avoid penalties, liquidated damages and/or get early finish bonus.
The fourth one – same as for the owners, they can do that simply to reduce cost and increase profit.
That last one, I will go over it in detail a little later.
Here is a case study. In 1994, January 1994, so it is almost 22 years ago. An earthquake of 6.7 magnitude caused heavy damage and high casualties in Northridge, California. The immediate major concern for Caltrans, which is the California Department of Transportation, it is the ministry of transportation in California, was to reopen the public highways in one of the nation’s busiest areas. Part of the damaged highways was two sections of the Interstate 10 in Santa Monica, which was a bridge.
The company C.C. Myers Incorporated of Rancho Cordova, California was awarded the contract to repair those sections. C.C. Myers bid was $14.7 million dollars at that time. You can probably double it now with the value of the money. That 14.7 was significantly below Caltrans estimated cost of 22.3 million dollars. The Caltrans engineers also estimated that it is going to take the contractor 140 days to finish the project, but they put both carrots and sticks here.
The liquidated damages were $205,000 dollars for each day of delay beyond 140 and $200,000 even bonus for each day of early finish, so if you finish in 139 days or 138 days but the contractor with very skillful and scientific acceleration was able to finish the project in 66 days only. That is 74 days ahead of the stipulated deadline. Multiply the 74 times 200,000, you are going to get $14.8 million dollars in bonus.
How did they achieve this? They worked around the clock putting large amount of resources in the project, large but steady amount, not large to the point of impeding the work or impacting safety or reducing productivity. Making this project the focus of the company, like drop everything and focus on this. What also helped was the cooperation between Caltrans and the contractor. Caltrans did its part to help push the project, assigning ten engineers on the days shift and four on call at night to inspect work and answer questions so they will not delay the contractor.
C.C. Myers may have gone in the process of expediting the schedule over their original budget while they have to pay it overtime. They have to pay for additional resources and so on but they obtained, like I said, $14.8 million dollars in bonus, which is slightly more than the contract itself. They were definitely ahead. I do not know how much extra money they spent in order for it to accelerate but I doubt if they spent more than $2 million dollars. We are talking about huge amount of profits.
And guess what? Caltrans was not unhappy with that big bonus because imagine being able to open the highway 74 days ahead. Tell the public, “It is not going to take 140 days. It just took a little over two months.” Everyone was happy and C.C. Myers was featured on ENR magazine.
Some of you are familiar with that Engineering News Records Magazine, which is very, very famous published by McGraw-Hill. That was one of the brightest response for a case study for project acceleration. When I was writing my book, the first edition, I contacted this company, I asked them for the documentation, and graciously they agreed. They sent me a full package like over 800 pages and I had to go over these and summarize them in my book.
Now my book is in the third edition. But the question is how important it is to finish on schedule? Well, I wish I can hear you but I almost can here you saying, “It is important.” My question, I know it is important, but is it equally important in all projects? And the answer is no. I classified the importance of finishing on schedule to five categories.
Category one is called critical. It is like a stadium for international event for the Olympics. You cannot finish one day late. No, you have to finish by the deadline no matter what. I have never heard of a country postponing the Olympics or the World Cup football or rugby or whatever. The stadium had to be finished on time.
The second category, very important is like a school building that has to open at the beginning of the academic year. It is very, very important but it is not catastrophic like the first one. I mean, you really, really want to have it done on time, on the due date, on time but if not maybe you can get some trailers or temporary building.
Third category is important. It is like hotel or shopping center that must finish before the high season if you have like the summer, the Christmas, the Eid, or whatever it is the high season so you can maximize your profit.
The fourth one is somewhat important like a commercial building, office building, and shopping center with no specific commitment. The original finish date was not to a high season so if you finish it in February, March let us say the contract was end of February so that is fine if I finish it in March. There is a loss of revenue but not loss of the revenue at the peak season.
The fifth one is not important. It’s like you are building a personal presence for yourself and you are living somewhere, so you do not care if you move next month or the month after. As time importance here goes less and less from category one to five, I can tell you the importance of cost is the other way around to less important. When you are in category one, how important is cost to you, well not much because finishing on time is very, very important so everything else is secondary.
While we go into the other extreme, number five, your own residence, how important is cost to you, very, very important. If I have to delay, the finish of my residence, my villa a month, so be it. Cost is more important.
The thing here that I always emphasize, especially after I came to the Middle East couple of years ago. I worked here in the Middle East both in the industry and as a professor. Now I resigned and went back to the US. I found that we have a problem here in not educating the owner enough.
You the contractor, you are supposed to be the professional, you know about your stuff and I know that the owner issues order or tells you what to do. But the owner is in general not educated. Your job is to educate the owner, to give him or her or them the options that you can do this at a cost of 45 million or you can do that at a cost of 43 and a half or whatever.
Mr. Owner I give you three choices. You make the decision. But owners, when they are not educated they always push for shorter duration. I found here that all the owners, like we say in America, they always crack the whip on you. Finish, finish, finish, I want you to finish. What you should do is, excuse me I have a dry throat so I have to drink every now and then. What you should do here is give him the option like I said, him or her or them whatever.
See how important it is for the owner to finish on time compared to the five cases mentioned previously, critical to not important. And then, answer the question, is it justified, the acceleration in this case, is it justified? Yes, no, or it depends.
What do I mean by it depends? It depends on the cost of the acceleration because I’m increasing my revenue by finishing early but at the same time I am spending more money. It does not make sense if I am spending more money than I am going to profit. It depends until I see how much it is going to cost me to accelerate and compare it with the expected revenue.
When you sit with the owner and ask the owner, “How important are time and money to you.” Of course, everyone will tell you time and money with like these two fingers. They are equally important. Let us say equally important, put them in the same level you say, “No, that is wrong. You can’t do that.” What you have to do is tell me is it time more important than cost? Or, is cost more important than time? This is the right way of explaining it.
You have to tell Mr. Owner, “Which one is more important to you, cost or time?” Having said that, now we make an educated decision on whether we are going to accelerate the project or not and if yes, by how much?
There is an entity here in the United States called The Construction Industry Institute, which is based in Austin, Texas. It is a consortium of academics and industry people and they have done an excellent job of research, practical research, and not just pure academic research. And they suggested more than 90 techniques for schedule compression but they clustered those techniques in groups depending on the phase or function of the project.
The first group, ideas to accelerate that are applicable to all phases of the project, from planning until close out. And then, the other groups are in certain phases, the first one, in the engineering phase which is the design phase. The third group is in the contractual approach when you are bidding or negotiating, before you sign on the contract, like for example choosing the type of contract, implementing the carrots and sticks in the contract and so on.
The fourth one in scheduling, when you build the schedule. The fifth one in materials management that is another important one. The sixth one in construction work management. The seventh one in the field labor management. Eight one in the start-up phase. All right? The earlier, the better. Time has to be animated, I forgot but that is okay.
Some of you have seen those curves before. The red curve represents the ability to influence the design. As you see here, let me bring my cursor, at the beginning here, that is the planning phase, the design phase, the execution or construction phase. Here is where the project finishes. At the beginning, you have high ability to influence design. Once things started happening, you lose that ability gradually until it gets zero at the end of the project.
Now the cost of the change is the other way around. At the beginning, it cost you very, very little, that cost of change increases as the project progresses, and it becomes very, very high towards the end. What does that tell you? The earlier, the better.
Concept of project acceleration. Looks like I have to accelerate the remainders of the slides.
In order to shorten the duration of the project, we need to shorten the duration of the longest path, which is the critical path. We do so by shortening the duration of an activity or activities along that path. As we shorten the critical path, it will tie at a certain point with the next longest path, so now we have 2 critical paths and then we have to shorten them both. As we do so, we tie with the 3rd critical path, and then the 4th, and then the 5th, and then we need to shorten all of them in order to shorten the duration of the project.
This is a project which takes 27 days, that is a 27 days. And as you see, the critical path is path number 4 which is the longest path. We have to shorten that path by 2 days, and once we do so, it is now 25 days. All of a sudden, path 5 becomes critical. Why? Because now it is the longest, it ties with the longest path. We have to shorten both of them, 4 and 5, and we shorten them by couple of days, now at 23. Now, they tie with path 3.
Now, we have 3 critical paths. We shorten them by 1 day and all of a sudden, they tie with path 6. We have 4 critical paths and then we have 5, and we keep doing that until we either crash it to the end where we cannot crash anymore or when we reach our objective.
Let us say our objective was 22 days, so we stop here we do not need to go all the way. What happens to the cost? And here’s the answer to the question I presented at the very beginning. The direct cost, as we accelerate, this is not time. The x-axis, this is the duration in days. We start right here, this is the normal duration and then we accelerate going form right to left.
The direct cost will increase at an increasing rate. It starts very little per day here but gets steep and very high here. Why? Because in order to crash one day here, it is very simple, we crash one at 50 on the critical path, we use the cheapest method. However, when we get to this point, maybe we have to crash 5, 6 paths, one activity on each of them. And then what makes things even worse that the cheap options ran out already.
We are stuck or left with only the expensive options so it is going to become very expensive here to crash per day compared to right here. What happens to the indirect cost? Well, for indirect cost, the overhead, it will decrease at a steady rate because we say, “Okay, it cost me $200 dollars per day in overhead”. All right? That is very steady.
If we combine them both, we find that the total cost start decreasing at the decreasing rate here until certain point. That certain point is the least cost duration associated with the least coast of the project and then the total cost starts increasing.
Why does this happen? Because in this segment, the savings were getting on overhead outweigh or they are bigger than the extra cost we are spending on the direct cost. But we switch a point here where the direct cost increased per day to the point that it is more than the savings in overhead. In this case, if cost is my objective, I have accelerated from this point to this point AND reduce the cost. All right?
But if my objective is time, I would either stop at certain point when I achieve my desired duration or go all the way to this point – this is the maximum compression. These three points that we addressed here, I will mention the three points in the next slide. This is an example of how we calculate the crashing in the beginning, before we do any crashing.
We say days cut is zero and the project is 25 days, the direct cost is the addition of the normal cost of all activities. The overhead cost is the multiplication of overhead per day, overhead cost per day times the duration and then the total cost is the summation of them. As we accelerate, we cut down.
Notice here the increased cost per day due to cutting down one day at a time. We cut down here one day at a time from 25 days to 24 to 23 to 22 to 21 to 20 to 19 to 18. However, it cost $40, $50, $100, $140, $165, $225, $270, while the overhead is constant at $120. We see the difference right here at this point. Here, we are still saving money. Here we are losing money because it is more than the overhead and that is why we have the normal duration is 25 days, normal cost $7950.
Least cost duration is 22 days so we will save money by cutting the duration from 25 to 22 at the cost of $7780. We are saving kind of $70. This is a small project.
The crash duration is 18 days, crash cost is $8100 and the three points are these. This is the normal duration with a normal cost. This is the optimum regarding the cost, which is the least cost duration and this is the crash duration with the crash cost.
Final thoughts. Project acceleration should be based on scientific and systematic principles. It is not random, dumping of extra resources on the site because if you do so, you will actually get adverse results. You will delay yourself, you will impede the production, and you will cause accidents, chaos, and so on.
Acceleration is not a race to set records. I usually show a couple of videos. One of them is building a house in the United States in less than 3 hours. The other one is building a 3-story hotel in China in 15 days. Probably some of you saw this.
This is not my objective. Those kinds of projects are done to set records. Our objective is not to be in the Guinness Book of Records but our objective is to have our project increases as much as possible. I forgot to mention something very important to you.
In addition to the bonus that C.C Meyers obtained from that project on the Northridge quake project, their reputation soared high and that reputation is money. When an owner, whether private or public with certain restrictions, needs somebody to finish the project on time, they would call companies like C.C Meyers that have reputation of finishing early. That is another thing.
Acceleration should be done only to the extent needed. If you cannot, if you are a contractor and economy is booming and you need to accelerate all projects, prioritize them, you may not be able to achieve all of them. Do an economic study of which one is more worth of acceleration or the combination of, maybe, two projects, three projects or even one project that would maximize your profit. Not all subcontractors/crews have to be pushed to accelerate only those on the Critical Path.
Contractor’s project acceleration without owner’s approval may lead to problems. I will tell you a story later on in the 8-hour seminar that lead if the contractor decided but did not inform the owner, this may lead to problems. Owner’s target finish date may be revised during construction but other parties have to be informed if the contractor obtained the extension due to change ordered, due to extreme weather or unforeseen conditions, designed errors, whatever it is, everyone in the project has to be informed of this change. There are often physical and practical limitations to how much you can accelerate.
And finally, unplanned or unorganized acceleration may result in delays, ,may result in higher cost or cash flow problems, quality issues, rework, more variation orders or change orders and claims, chaos, safety issues, strained relationships, internal with other parties, I mean internal within your own crews and workers and external with other parties.
Here is what I call the Contractor’s team and project’s team because often the contractor focuses only on his team. And actually, the contractor must think of the project’s team rather than his own team, which includes the design consultant, A/E is architect/engineer, owner, subcontractors, construction management, vendors, government such as the safety for regulation building enforcement and so on, financial institutions that lent us money, testing labs, other.
All of these are the project’s team because ignoring one of them could be a major source of delay. Like you are a contractor and accelerated your project but the government permit was not issued, so you cannot proceed.
Michael:
So with that, Saleh, we’ll sign off. Thank you everyone for Joining. It’s been a real pleasure hanging out with you.
Saleh:
Thank you.
