Cost/Schedule Overrun in Mega Construction Projects. Dr. George Jergeas P.Eng Department of Civil Engineering University of Calgary. Who am I. George F. Jergeas PEng BSc Civil Engineering MSc and PhD Construction Management Professor of Project Management
Dr. George Jergeas P.Eng
Department of Civil Engineering
University of Calgary
George F. Jergeas PEng
1. What accuracy of estimating and % of engineering definition?
2. How “Targets” are established?
3. How “Targets” are agreed to by the Owner and EPC contractor?
4. Suitability of methods employed?
5. Are project cost-schedule targets reliable? How verified, by whom?
6. What basis is specified for required EPC definition to support project budget approval, schedule, and sanction? Who sets?
7. Are the required deliverables and performance expectations for work during execution stage clearly defined, understood, accounted for in the targets, and mutually accepted? Are exceptions noted & quantified for potential risk/impact?
8. Are the cost-scheduling methodologies selected appropriate and capable of generating reliable targets given the level of scope definition & uncertainty? How reconciled?
9. Are scope uncertainties adequately captured & quantified for impact on cost-schedule targets? How done, by whom?
10. Are cost-schedule data representative of real-world conditions, given scope definition, and cost-scheduling methods employed? How applied/verified?
11. How are contractor/owner cost estimates & schedules reconciled prior to execution? How are deviations resolved/accepted, and resulting targets deemed to be achievable? By whom?
12. Are cost-schedule upper thresholds established, and overrun tolerances identified? What risk management practices are put in place to protect project targets, the owner & contractor?
A) Mechanical Completion and Start-up dates will be changed to reflect the delay in Engineering
B) Mechanical Completion and Start-up dates will not be changed
C) All remaining activities will be squeezed into a duration less than originally planned
D) The overlap of Engineering with Construction activities will be increased
Answer is B, C and D
1. Are the cost-estimates & schedule from planning stage suitably structured for management/control purposes during execution? If re-formatting is necessary, how are funds/activities accurately re-packaged, using what methods? How are variations accounted for & resolved? Who decides?
2. Are commitments made & monitored during execution with knowledge of budget provisions? Are controls in place to detect & manage significant variations
3. How well do teams/stakeholders interact. Mechanism to track relationship, manage issues
4. How are deliverables reviewed/ accepted. What is the process for acceptance? How is quality insured? How much how often do delays and/or re-work occur?
5. How well are risks & uncertainties managed & controlled during execution to keep the project on budget/ on-schedule? What methods are used?
6. How promptly and accurately are scope changes identified & captured. Is there an approval process in place? How significant are scope changes & variations on the overall project outcome
7. How is performance managed & progress managed? What practices are employed to keep project on track? How effective are they with the team?
#1 Pipe Rack - 15%
Long lead items
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Budget Actual Earned Diff.l