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Understanding and Managing Project Costs Session 7. Review of Session 6. Labor Cost is the combination of wages, fringe benefits, and taxes Labor cost variances are caused by: Environmental conditions Management errors Subcontractor delay Supplier delay Owner/Architect delay

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Presentation Transcript
review of session 6
Review of Session 6
  • Labor Cost is the combination of wages, fringe benefits, and taxes
  • Labor cost variances are caused by:
    • Environmental conditions
    • Management errors
    • Subcontractor delay
    • Supplier delay
    • Owner/Architect delay
    • Unforeseen delays

An AGC Construction Learning Tool

subcontractor delay
Subcontractor Delay
  • Subcontractor not available for work activities
  • Subcontractor not prepared for the work activity
  • Subcontractor without appropriate labor or size of crew
  • Subcontractor performance of defective work

An AGC Construction Learning Tool

subcontractor delay4
Subcontractor Delay
  • Late inspection of subcontractor’s work
  • Unsafe subcontractor work practices
  • Subcontractor disruption of work activities

An AGC Construction Learning Tool

cost impact by subcontractors
Cost Impact by Subcontractors
  • Exclusions, non-covered work
  • Additional non-compensated work by subcontractor
  • Additional work required by your crew
  • Subcontractor default

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managing subcontractors during the bid period
Managing Subcontractors During the Bid Period
  • Cover all areas with subcontractor bids
  • Exclude non-responsible subcontractors
  • Carefully analyze subcontractors and their relationship to the work
  • Note:The bid period is short and chaotic. Estimators try to avoid problems, but some slip through.

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managing subcontractors during buy out prior to award of subcontracts
Managing Subcontractors during “Buy-Out” (prior to award of subcontracts)
  • Include all subcontract work in the project subcontracts
  • Don’t duplicate work in subcontracts
  • Include all special clauses and requested exclusions in subcontracts
  • Write scope statement to be understood by field management

An AGC Construction Learning Tool

managing subcontractors during buy out prior to award of subcontracts8
Managing Subcontractors during “Buy-Out” (prior to award of subcontracts)
  • Supply the subcontractor with the following information:
    • List of submittals and shop drawings required, and when they are required
    • Construction schedule showing their work
    • Notification of pre-construction meeting

An AGC Construction Learning Tool

managing subcontractors prior to the start of their work
Managing Subcontractors Prior to the Start of Their Work
  • Meetings
    • Notify of all applicable meetings
    • Provide meeting minutes
    • Update on progress and changes
  • Advise on schedule progress
  • Conduct an on-site orientation meeting

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subcontractor orientation
Subcontractor Orientation
  • Jobsite storage of material and equipment
  • Location for trailers
  • Jobsite access, parking
  • Jobsite security issues
  • Subcontractor’s schedule
  • Coordination with other work
  • Safety program
  • Introduction to key jobsite personnel

An AGC Construction Learning Tool

activity subcontractor orientation
Activity: Subcontractor Orientation
  • Topics for Orientation:
    • Jobsite access
    • Storage of material
    • Schedule for work
    • Weather protection
    • Coordination with other work
    • Safety
    • Jobsite security
    • Clean-up
    • Communication channels

An AGC Construction Learning Tool

activity subcontractor orientation12
Activity: Subcontractor Orientation
  • Subcontracts to Examine:
    • Structural steel, joist and deck erection
    • Roofing, roof insulation, and flashing
    • Building electrical
    • Building plumbing
    • Overhead doors
    • Windows/storefront
    • Painting

An AGC Construction Learning Tool

managing subcontractors while they are on the job
Managing Subcontractors While They Are on the Job
  • Meeting at start of work between superintendent and subcontractor foreman:
    • Quality of work expected
    • Coordination with other work
    • Expectations for clean-up
    • Hours of work
    • Security aspects
    • Safety program
    • Access and equipment usage

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documenting subcontractors
Documenting Subcontractors
  • Document subcontractor activity
  • Document material delivery to site
  • Document when subcontractors are not available
  • Document in reports and with photographs

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changes to subcontracts
Changes to Subcontracts

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managing subcontractors before they leave the jobsite
Managing Subcontractors Before They Leave the Jobsite
  • Discussion between superintendent and subcontractor foreman:
    • Inspection of work, plan for remedial work
    • Work remaining to be completed, plan to complete it
    • Acceptance of finishes by other subs
    • Cleaning of work, and waste disposal
    • Protection of work in place

An AGC Construction Learning Tool

managing subcontractors before they leave the jobsite17
Managing Subcontractors Before They Leave the Jobsite
  • Discussion between superintendent and subcontractor foreman:
    • Delivery of spare materials and parts
    • Delivery of O&M materials and instruction
    • Schedule for any additional work
    • Arrange for completion of punch list work

An AGC Construction Learning Tool

activity case study subcontractor management
Activity: Case Study, Subcontractor Management
  • Building envelope needs to be complete by October 7 to avoid interference with Tenant Improvements Contract
  • Read subcontractor action descriptions
  • Discuss, in groups, what could have been done to avoid the problems

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activity case study subcontractor management19
Activity: Case Study, Subcontractor Management

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using on the job what you learned today
Using on the Job What You Learned Today
  • Jobsite Assignment
    • What costs have subcontractor problems caused on your project?
    • Who had to pay for the costs?
    • What delays were caused by subcontractors? What costs due to delay?
    • What portion of your time do you spend managing subcontractors?
    • Would communicating your expectations reduce subcontractor problems?

An AGC Construction Learning Tool

using on the job what you learned today21
Using on the Job What You Learned Today
  • To get ready for Session 8:
    • Read Session 8
    • What risks are being taken with your current job?
    • What costs can occur from these risks?
    • How are the risks being managed on your project?

An AGC Construction Learning Tool