Controlling Project Integration and Work

Earned value analysis (EVA) is a method of measuring project performance by comparing three quantities at a given date: the work planned, the work actually done and the money actually spent. It integrates scope, schedule and cost in one measure.

Basic terms

• BAC – budget at completion (total planned cost).
• PV (BCWS) – planned value: budgeted cost of work scheduled to date.
• EV (BCWP) – earned value: budgeted cost of work actually completed to date (= % complete × BAC).
• AC (ACWP) – actual cost of the work done to date.

Performance indicators

Use in control

• It gives an early warning of cost overrun and delay, before they become large.
• It tells whether the delay or overrun is a trend (CPI, SPI) and helps to forecast the final cost and date.
• It guides corrective actions: more resources, re-scheduling, value engineering, changes in methods.
• It gives an objective base for reports to the client and for payment.

Example

A road project has BAC = Rs 1,000,000. At the end of month 4: PV = Rs 400,000, work done is 35% so EV = Rs 350,000, and AC = Rs 380,000.

• CV = 350,000 − 380,000 = −30,000 (over budget).
• SV = 350,000 − 400,000 = −50,000 (behind schedule).
• CPI = 350/380 = 0.92 and SPI = 350/400 = 0.875.
• EAC = 1,000,000 / 0.92 = Rs 1,085,714.

The project is both over budget and late, so corrective action (more crews, better productivity, cost control) is needed.

Labour productivity

Labour productivity is the output of work done by labour in a unit of time, e.g. m³ of concrete or m² of plastering per man-day, or the ratio of output to labour input.

$$\text{Productivity} = \frac{\text{Output (quantity of work)}}{\text{Input (labour hours or man-days)}}$$

Measurement

1. Work sampling: many random observations of workers to find the percentage of productive, supporting and idle time.
2. Time study / stopwatch study: timing the activity for a standard cycle.
3. Output per man-hour comparison: actual quantity completed ÷ labour hours used, compared with norms in the rate analysis (e.g. DUDBC norms).
4. Productivity ratings and daily output records from site records and muster rolls.
5. Questionnaire or foreman delay survey to find reasons of delay.

Causes of low productivity

• Poor planning and scheduling, lack of drawings or materials, waiting for instructions.
• Unskilled or untrained workers, poor supervision.
• Low motivation, poor wages, delay of payment, unfair treatment.
• Bad working conditions: heat, rain, noise, poor site layout, no toilet or drinking water.
• Equipment breakdown, wrong tools, rework due to errors.
• Overtime fatigue, absenteeism, labour unrest and strikes.
• Poor communication between management and workers.
• Unsafe working conditions and accidents.

Control and improvement

1. Plan work properly and issue drawings, materials and tools on time.
2. Select and train workers; use skilled gang combinations.
3. Provide incentives, bonus and timely payment; recognise good work.
4. Improve working conditions: shade, safety gear, welfare facilities.
5. Use suitable equipment and better methods (pre-fabrication, standardisation).
6. Provide proper supervision and clear instructions; measure output daily and compare with norms.
7. Avoid excess overtime and keep a good relation with the labour union.
8. Reduce rework with quality control and good communication.

Material productivity is the efficiency with which construction materials are used; that is, the ratio of useful output (work completed) to the quantity of material consumed, including wastage. Higher material productivity means less waste, e.g. 1 m³ of masonry built with the standard number of bricks and mortar and not more.

Why material productivity control is necessary

• Materials are about 50–60% of the cost of a building, so small wastage gives large cost savings.
• It reduces wastage, theft, damage and over-ordering, so the budget is protected.
• It prevents shortage or delay in the schedule because stock levels are controlled.
• It keeps quality: correct mix, right grade and proper storage.
• It reduces rework and disposal cost and has less environmental impact.
• It gives a record against norms, which helps to compare actual with estimated consumption and to find the cause of overuse.
• It gives the client and contractor reliable data for payment, cost reports and future estimates.

Methods of control

1. Accurate quantity estimate and material schedules.
2. Purchase of the right quantity at the right time (EOQ, ABC analysis).
3. Correct storage and stacking, first-in first-out.
4. Issue by indent against requirement, with stock registers.
5. Comparison of actual use with standard consumption, and investigation of differences.
6. Reducing cutting wastes by standard sizes and prefabrication.
7. Security, supervision and training of workers.

Work (project) scope control is the process of monitoring the status of the project and product scope, managing changes to the scope baseline, and making sure that the work done is exactly the work defined in the contract, drawings and specifications, no more and no less.

What scope control involves

• Comparing the work done with the scope baseline (WBS, drawings, specifications, BOQ).
• Identifying scope creep (unapproved additions) and changes requested by the client, designer or contractor.
• Assessing the effect of every change on cost, time and quality.
• Approving or rejecting changes through a formal procedure, and updating the contract, programme and budget.

How scope can be achieved (controlled)

1. Define the scope clearly at the start: clear drawings, specifications, BOQ and WBS.
2. Set up a change control system: all variations in writing as variation orders, with approval by the authorised person before work starts.
3. Regular progress measurement: site measurements, measurement book entries and progress reports compared with the baseline.
4. Check deliverables against specifications and accept only completed and approved work.
5. Assess impact of each change: extra cost, time extension, resources.
6. Communicate changes to all parties and record them (site order book, meeting minutes).
7. Update documents: revise drawings, schedule, cost estimate and keep as-built drawings.
8. Corrective action for any unauthorised work.

Good scope control avoids cost overrun, delay, disputes and claims.

Assumptions: the cost of each activity is spread uniformly over its planned days (day 1 to day 7, activity cost counted per day shaded). The review is at the end of day 5.

Planned value (PV) at end of day 5

Earned value (EV) = % complete × budget

BAC = 5,000 + 10,000 + 15,000 + 7,000 + 6,000 + 2,000 = Rs 45,000.

Variances and indices

$$\begin{aligned} CV &= EV - AC = 23{,}800 - 25{,}500 = -1{,}700 \\ SV &= EV - PV = 23{,}800 - 25{,}500 = -1{,}700 \\ CPI &= EV/AC = 23{,}800/25{,}500 = 0.933 \\ SPI &= EV/PV = 23{,}800/25{,}500 = 0.933 \\ EAC &= BAC/CPI = 45{,}000/0.933 = 48{,}214 \\ VAC &= BAC - EAC = -3{,}214 \end{aligned}$$

Answer: PV = Rs 25,500; EV = Rs 23,800; AC = Rs 25,500; CV = −Rs 1,700; SV = −Rs 1,700; CPI = SPI = 0.93.

Comment: The project is over budget by Rs 1,700 and behind schedule by work worth Rs 1,700 (about 7%). Activity E is the main problem (30% done but 58% of its budget spent); B is also overspent. If the same trend continues, the final cost will be about Rs 48,214, i.e. Rs 3,214 above the budget. Corrective action is needed: speed up activities B, C and E, control the cost of E, and re-plan D and F.

Given: length = 8.7 km, duration = 1.5 years = 18 months, rate = Rs 1.5 million/km. Review after 6 months: work done = 2.3 km, actual cost = Rs 4.6 million.

Budget at completion

$$BAC = 8.7 \times 1.5 = 13.05\ \text{million}$$

Planned value (uniform progress): 6 of 18 months planned

$$PV = \frac{6}{18} \times 13.05 = 4.35\ \text{million}$$

(planned length = 8.7/3 = 2.9 km)

Earned value

$$EV = 2.3 \times 1.5 = 3.45\ \text{million}$$

Actual cost $AC = 4.6$ million

Variances and indices

$$\begin{aligned} CV &= EV - AC = 3.45 - 4.6 = -1.15\ \text{million} \\ SV &= EV - PV = 3.45 - 4.35 = -0.90\ \text{million} \\ CPI &= 3.45/4.6 = 0.75 \\ SPI &= 3.45/4.35 = 0.793 \\ EAC &= BAC/CPI = 13.05/0.75 = 17.4\ \text{million} \\ ETC &= EAC - AC = 12.8\ \text{million} \\ VAC &= 13.05 - 17.4 = -4.35\ \text{million} \end{aligned}$$

Percent complete = 3.45/13.05 = 26.4% against 33.3% planned.

Answer: PV = Rs 4.35 M, EV = Rs 3.45 M, AC = Rs 4.6 M, CV = −Rs 1.15 M, SV = −Rs 0.90 M, CPI = 0.75, SPI = 0.79, EAC = Rs 17.4 M.

Conclusion: The contractor is both over budget (it spends Rs 1.33 for every Rs 1 of work earned) and behind schedule (only 2.3 km against 2.9 km planned). If the trend continues, the final cost will be Rs 17.4 M, Rs 4.35 M above the budget, and the project will take longer than 18 months (about 18/0.793 = 22.7 months). The performance is poor; the client should demand a recovery plan, more resources and better management.

Assumptions: the cost of each activity is spread uniformly over its planned days (read from the bar chart). Review at the end of day 5. BAC = 6,000 + 15,000 + 10,000 + 4,000 = Rs 35,000.

Planned value at end of day 5

Earned value and actual cost

Results

$$\begin{aligned} CV &= EV - AC = 18{,}250 - 18{,}100 = +150 \\ SV &= EV - PV = 18{,}250 - 27{,}667 = -9{,}417 \\ CPI &= 18{,}250/18{,}100 = 1.008 \\ SPI &= 18{,}250/27{,}667 = 0.660 \\ EAC &= 35{,}000/1.008 = 34{,}712 \end{aligned}$$

Answer: PV = Rs 27,667; EV = Rs 18,250; AC = Rs 18,100; CV = +Rs 150; SV = −Rs 9,417; CPI = 1.01; SPI = 0.66.

Comment: Cost performance is fine, with a small saving of Rs 150 and CPI slightly above 1 (on A the cost is over, but B and C are under). However, the project is seriously behind schedule: only 66% of the planned work is done. Activity B (55% against 100% planned) and C (40% against 67%) are late. Since the cost is under control but time is not, the management should add resources or crews to B and C, or the following activity D will be delayed and the project will finish late.

Equipment productivity control is the systematic measurement, monitoring and improvement of the output of construction machines (excavators, dozers, loaders, cranes, mixers, trucks), so that the actual output per hour or per day matches, or goes above, the planned (standard) output at the least cost.

$$\text{Productivity} = \frac{\text{Work output (m}^3\text{ or m}^2)}{\text{Equipment hours}}$$

Main points

• Fix the standard output from the manufacturer's data, job conditions and efficiency factors.
• Record machine hours, working, idle and breakdown time (log books, hour-meter reading) and the output achieved.
• Compare the actual output with the standard and find the causes of the difference.
• Take corrective action:
  • Preventive maintenance and prompt repair to avoid breakdown.
  • Select the right size and type of machine, and balance fleets (e.g. trucks and excavator).
  • Skilled operators and training; proper fuel and spares.
  • Good site layout, haul roads and job planning to reduce waiting.
• It reduces cost per unit of work, avoids delay and protects the useful life of equipment.

Cost control is the process of monitoring actual project costs, comparing them with the budget (cost baseline), analysing variances and taking corrective actions so that the project is completed within the approved budget.

Steps

1. Prepare the cost baseline from the estimate and the work schedule (budget plan).
2. Record actual costs (labour, material, equipment, overhead) in the cost-code system.
3. Measure the work done (progress, earned value).
4. Compare actual cost with budget; find variances (CV, CPI).
5. Find the causes and decide corrective action.
6. Forecast the final cost (EAC) and update the plan.

Common techniques

• Earned value analysis and S-curves.
• Cost-coding and weekly or monthly cost reports.
• Control of material wastage, labour productivity and equipment use.
• Value engineering and change (variation) control.
• Procurement control and timely payments to avoid penalties.

Importance

• Prevents cost overrun and protects profit.
• Gives early warning, so action can be taken in time.
• Provides data for estimating future projects.

Example: if the steel cost is 20% above budget, the site engineer checks wastage and rates, and reduces cutting loss or renegotiates with the supplier.

Quality control (QC) is the set of inspections, tests and checks that make sure that construction work meets the specifications, drawings and codes. It is very important because:

1. Safety: weak concrete, poor steel or bad workmanship can cause failure of the structure and loss of life. Lessons from earthquakes such as Gorkha 2015 show this.
2. Durability and life: good materials and workmanship give a longer life with less maintenance.
3. Economy: it avoids rework, demolition, repairs and wastage; the cost of preventing defects is much lower than correcting them later.
4. Client satisfaction and reputation: the contractor gets repeat work and the owner gets a usable building.
5. Contract compliance: the work follows the specification and codes (NBC, IS), so payment is not withheld and disputes are fewer.
6. Time: fewer defects mean fewer delays and a smooth handover.
7. Legal protection: reduces liability for the defect period.
8. Uniformity: the same standard is kept in all parts of the work.

QC is performed by testing materials (cement, aggregates, steel, bricks), checking mixes and cube strength, inspecting each stage before covering (foundation, reinforcement), and keeping test records.