Cost/Schedule Controls - Construction Contractor Planning for Fixed-Price Construction (Archived)

Suggested planning process includes:

Planning Guidance: Since limited time is available for planning and it would be very costly to plan each project from scratch, a company must maintain a family of data bases, policy documents, standard procedures, model plans and checklists to standardize and streamline the planning process. (SD-20, p. 6)

Fluor’s study indicates two influencers of project success: (SD-20, p. 16)

• Quality and depth of early planning by the PM group
• Execution by a strong PM group

Initial commitment to planning must come from top management. If top executives do not put their influence behind the planning process and create the environment to bring order out of disorder from their level down, the tasks of lower-level managers become more difficult and the planning process may be inefficient and meaningless. (SD-20, p. 8)

Figure 1 outlines who bears the risks in a construction project for each party. (SD-20, p. 17)

The research conducted a survey of general and project managers to determine reasons for project overruns resulting on the chart shown below. Interestingly, project managers see themselves in a reactive management role, having been handed the project, well planned or not. The senior managers understandably look at the proactive management role. (SD-6, p. 19)

Figure 4 provides a layout of the development of a construction plan from bid to project start. A top-priority item is development of WBS for the project, because this defines the project structure for work planning and control. (SD-20, p. 26)

Subcontract success includes (SD-20, p. 37):

1. Requesting quotations only from qualified, experienced, financially capable contractors
2. Defining the scope of work in sufficient detail so that subcontractor rights and duties are clearly understood
3. Requirements (specs, flow downs)
4. Milestone dates for start and completion of work
5. Deliverables, payment, definitions, insurance, guarantees

A major component of the planning process is the Project Execution Plan, whose many parts include the following: (SD-20, p. 47)

• Project organizational structure
• Work breakdown structure
• Subcontract plan
• Procurement plan
• Site development plan

Source Document 20, Construction Contractor Planning for Fixed-Price Construction

This source document includes many useful tools and checklists including:

• Pre-Bid Site Investigation Checklist (Appendix A)
• Subcontractor/Vendor Checklist (Appendix B)
• Materials Management Checklist (Appendix C)
• Contractor Facilities and Services Checklist (Appendix D)
• Project Controls Checklist (Appendix E)
• Checklist for Evaluating Risk for Fixed-Price Contracts (Appendix F)
• Quality Control Plan (Appendix G)
• Loss Control Plan (Appendix H)
• Project Responsibility Matrix (p. 43)
• Project Execution Plan (p. 47)