RICS- APC- Final Assessment 2008
Critical Analysis Report
CRITICAL ANALYSIS REPORT
10th March 2008
Submitted By
T N Padmakumar; RICS 1107062
Counsellor/Supervisor
Antony Murphy FRICS
Session 1 , 2008
RICS- APC- Final Assessment 2008
Critical Analysis Report
CONTENTS
1.
INTRODUCTION
.03
2.
THE PROJECT
.04
2.1
2.2
2.3
3.
PROJECT PARTICULARS
PROJECT TEAM
PROJECT DESCRIPTION
CRITICAL ANALYSIS
3.1
3.2
3.3
3.4
3.5
3.6
.06
KEY ISSUES
MY ROLE IN THE PROJECT
BACKGROUND OF THE ISSUE
OPTIONS AVAILABLE
SELECTED OPTION,REASON & IMPLEMENTATION
CRITICAL APPRAISAL & REFLECTIVE ANALYSIS
4.
CONCLUSION
.15
5.
APPENDICES
.16
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RICS- APC- Final Assessment 2008
1.0
Critical Analysis Report
INTRODUCTION
This Critical Analysis Report is prepared and presented as part of my documentation
to fulfill the requirements of the Final Assessment of Professional Competence
(APC) of the Royal Institution of Chartered Surveyors (RICS). The Report
discusses how I presented the delays and how an Acceleration Claim was put
up for the Bukhadra Substation Project in Dubai while working with Arabian
Construction Company(ACC).
ACC is a multinational Construction Company engaged in multi billion valued
Construction Projects all over the middle east. My tenure with ACC includes
involvement in various Projects like the Conference Palace Hotel Project in
Abudhabi, The Rose Rotana Tower Project in Dubai, The Dubai Gate Tower
Project in Dubai and The Bukhadra Substation Project.
2.
2.1
THE PROJECT
Project Particulars
The Project included the turnkey job of Supply, Installation, testing and
commissioning of 400/132KV Bukhadra Substation Project in Dubai.
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2.2
Critical Analysis Report
Project Team
The Client for the Project was the Dubai Water & Electricity Authority (DEWA). The
Project was awarded to AREVA TD SA, France as a Turnkey EPIC Contract.
AREVA TD SA is the world leader in manufacturer of Substation equipments,
transformers and Generators. Arabian Construction Company(ACC) was locally
appointed by AREVA to undertake the civil construction and electromechanical
works in the Project. The Project Consultants were Mott Macdonald and the QS
Consultants engaged by AREVA were DG Jones & Partners.
2.3
Project Description
The Works awarded to Arabian Construction Company (ACC) included the Civil and
Electromechanical works associated with the construction of 400/132 KV
Substation buildings, Control building, Transformer bays and infrastructure
works.
The Contract was awarded by AREVA to ACC on a non Standard Form of Contract
drafted in line with the FIDIC Conditions of Contract 1987. As the design was
not completed and considering the fast track nature of work the Contract was
awarded based on a Bill of approximate quantities with payment on remeasurement. Time being the essence of the Contract, liquidated damages for
delay were stipulated in the Contract in failing to achieve the Milestone
requirements as noted below:
Complete Construction and provide access to;
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Transformer Areas
: May 31, 2005
400KV GIS Building
: July 4, 2005
132 KV GIS Building
: June 28, 2005
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RICS- APC- Final Assessment 2008
Control Building
Full Completion of Works
Critical Analysis Report
: July 15, 2005
: January 10, 2006.
A baseline programme and planned labour histogram was part of the Contract
documents.
3.
CRITICAL ANALYSIS
3.1
Key Issue
To Collect data, analyse, contractually establish and submit an Acceleration Claim
for the Project.
3.2
My Role in the Project
During the time I was the Senior Quantity Surveyor in ACC Dubai Office supervising,
advising and assisting the respective Site Quantity Surveyors, at various ACC
sites in Dubai, in their QS duties and Contract Administration functions.
Considering the trust in me, having properly administered the QS functions at the
multi million prestigious Conference Palace( Emirates Palace) Hotel Project,
ACC Management entrusted me to handle the Acceleration issue at the
Bukhadra Project.
My position in the Project team organogram is as attached at Appendix A.
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3.3
Critical Analysis Report
Background of the Issue
The Project site was handed over to ACC and work started as scheduled. AREVA
was responsible for providing the design and preparation of Construction
drawings for the Project based on the Client issued Project documents. Article
31 of the executed Agreement expressly states that AREVA has to provide ACC
with Approved for Construction drawings two weeks prior to planned date of
concerned activity.
ACC completed the mobilisation works within the stipulated date. Excavations for
Building foundations were done, but to further with the structural works
Approved for Construction drawings were required. The works could not be
started as the structural drawings were not received from AREVA.
The delay in receipt of the Approved for Construction drawings was brought to the
notice of AREVA, within a period of 28 days. ACC started mitigating the delay by
re-organising its labour, engaging them in works which could be progressed at
site.
'Approved for Construction' structural drawings for the buildings were issued after a
delay of 45 days, thereby delaying the activity start.
I advised Management that ACC is entitled for an extension of time as it was a Client
induced delay. A revised program of work was prepared, based on the
submitted Clause 14 programme. The Extension of Time request with particulars
were prepared and submitted to AREVA for their approval.
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Critical Analysis Report
AREVA rejected the extension of time request.
My opinion to Management in this scenario was to accelerate the job and complete
it within the set milestone dates. I advocated that as per prevailing Contract
Practices ACC is entitled for all costs associated with accelerating the Project.
Subsequently notice was provided to AREVA stating that the action of AREVA
and the rejection of the entitled extension of time will be considered as an
Acceleration Order.
3.4
Options Available
I attended meetings and discussions with the Site team about the approach and
methods to be adopted in accelerating the project. In addition to the accepted
method of adding extra labour and overtime working the various options in
construction technology were also discussed. Accordingly Acceleration
measures were taken up at site.
The various options available for me in arriving at the costs associated with
increased manhours were :
1.
Measured Mile Method
2.
Earned Value Analysis Method
3.
Comparative work study Method
4.
Comparable Project Study
5.
From Recovery schedule
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6.
Total Cost Method
7.
Actual labour cost method
Critical Analysis Report
Each of the available option is discussed in detail below.
1. Measured Mile Method
- Rejected option
In the Measured Mile method the labour productivity of each of the work activity at
the accelerated period is compared with the labour productivity for similar
activity done at a normal period. Labour Productivity is defined as the craft
hours necessary to finish one unit of the work activity. Comparing the craft hours
the excess hours incurred during the acceleration period can be arrived at. The
excess labour hours can be converted to extra cost incurred.
Unfortunately we had to reject this option since the entire project activities had to be
accelerated and as there was no normal period available in the project for a
comparison.
2. Earned Value Analysis Method
Rejected option
In the earned value analysis method the physical quantity of work completed is
multiplied by the budgeted unit labour rate to arrive at the Earned Value for the
work done. This is compared to the actual cost of labour incurred. The
difference is claimed as the extra cost incurred in acceleration.
This method had to be rejected as this is entirely based on a theoritical approach.
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3. Comparative work study
Critical Analysis Report
Rejected option
In this method an estimate of the labour productivity of a work element during the
acceleration period is to be compared with a different but almost similar work
element in the same project for which labour productivity figures are available
and which had been done at a normal period. Example is the comparison of
labour productivity of Mass Concrete to that of RCC( making necessary
adjustments).
This is an approximate method and hence rejected.
4. Comparable project study.
- Rejected option
In a comparable project study method the labour productivity of an element of work
recorded from a previous similar project is used to study the decrease in labour
productivity of the project under consideration. Thereby the excess labour cost
incurred is assessed.
Even this method was rejected as the company was not having a similar project with
the same project parameters executed in the near past.
5. Extra labour calculated from Recovery Schedule
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Rejected option
RICS- APC- Final Assessment 2008
Critical Analysis Report
The extra labour cost incurred due to the acceleration can be calculated comparing
the Contract Baseline program and the prepared Recovery programme for each
activity along the critical path. Labour productivity tables for each work item can
be used to calculate the estimated labour cost on a normal situation. This cost is
enhanced by the ratio of schedule compression to arrive at the estimated
increased
costs to be incurred. A sample calculation is as shown in the table below:
EXTRA LABOUR TIME &COST:
Note: It is assumed that 50% of the extra time required by labour will be achieved by Extra labour and other 50% by overtime work.
CONTROL BUILDING
Activity
Duration as per Base programme:30 days
Duration as per Recovery programme:16 days
Foundation
Extra labour at normal rate
Sub Activity
BOQ
Qty
(A)
(B)
RCC
Foundation
Unit
Overtime Labour
Lab
output/
unit
qty(Hrs)
Lab. Hrs as
per
Planned/
Base
Programme
Lab hrs
calculated
for
recovery
Extra
Lab
hours
Lab.
Hours
Labour
Rate
Extra
Amount
for
Labour
Lab.
Hours
Labour
Rate
Extra
Amount
for
Labour
(D)
(E=BxC)
(F*30/16)
(H=G-E)
(I=H/2)
(K)
(M=IXK)
(N=H/2)
(O)
(P=NXO)
400
m3
6.28
2512
4,710.00
2,198.00
1,099.00
7.54
8,286.46
1,099.00
11.31
12,429.69
Reinforcement
107048
kgs
0.055
5887.64
11,039.33
5,151.69
2,575.84
8.09
20,838.57
2,575.84
12.14
31,270.73
Waterproofing
806
m2
0.4
322.4
604.50
282.10
141.05
8.09
1,141.09
141.05
12.14
30,533.29
EXTRA LABOUR COST INCURRED FOR FOUNDATION ACTIVITY
76,346.76
This option was discarded as it was totally a theoretical approach based on
assumed labour productivity from a general experience and from published
labour productivity tables. Hence this method does not depict and can deviate
from the actual situation of this particular project.
6.
Total Cost Method
Rejected option
All costs incurred are divided by the units of work completed during acceleration
period. A Similar calculation is done for a different period of time. Calculations
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1,712.35
45,813.47
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Critical Analysis Report
are then made to remove the cost of materials, equipment, and subcontract
costs, Once done the remainder is labour cost. The labour cost thus arrived for
the normal period and accelerated periods are compared and used for the
calculation of extra cost.
7. Labour Cost Method
Selected option
In the labour cost method the actual labour craft hours engaged is compared with
the scheduled craft hours in the labour histogram provided in the Contract and
for the period of acceleration. The extra labour craft hours incurred in
accelerating the work is thus arrived at.
3.4
Selected option, reasons and its implementation
This option was selected due to the following reasons:
-
Gives a better and actual quantification of the Costs incurred
More Employer care can be exercised since this method is based on
actual labour hours engaged and hence chances of error are less.
Is the best option considering the Contractual aspect of keep up of
contemporary records.
Since actual labour engaged is analysed these data can further be
used for Project Cost Control.
The presence of site records duty attested by the Client/Engineer at
site helps to prove the case and claim.
As actual labour cost at site is used for purpose of claim lost labour
productivity issues need not be claimed seperately in this method.
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Critical Analysis Report
The challenges for me included :
-
Establishing the entitlement
Collection, retrieval and analysis of data & information.
Costing of the acceleration.
Referring the Conditions of Contract and timely correspondence with AREVA it was
established that the situation was an excusable delay. An entitlement for
extension of time was justified as per Contract Codnitions. In order to avoid
Liquidated damages set by the Contract Milestones and since the EOT was not
approved by
AREVA it was proved that ACC had no other option other than to proceed with a
Constructive Acceleration. A proposed recovery schedule was also prepared and
submitted. As the acceleration was necessitated by a default from AREVA all
associated costs in following the Agreement was to be on their account.
I started scrutinizing site records and collecting every data available. A teamwork
option was adopted with close communications with the Site Quantity Surveyor ,
the Project Manager, Construction Manager and other Project team members. I
insisted the Site team to keep a proper documentation of site activities and keep
records of daily resources engaged at site. Proper proof of damages was of
prime importance and hence emphasis was made for formulating the same all
along the project progress.
From the Site records daily labour engaged, work executed etc were collected. The
Construction team was advised to get AREVA authorisations and signatures on
the daily reports.
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Critical Analysis Report
The costs incurred for acceleration of works due to each of the following actions
were investigated and calculated.
Extra Labour Engaged to accelerate the project:
Comparing the labour histogram available with the executed Agreement
category/craft wise labour required to be engaged during each month of the
acceleration period was calculated. This was compared with the actual labour
engaged during the same period and the difference in labour was arrived at.
Utilizing my experience in estimating costs I established the craft wise labour rates
from the basic labour wages by adding for the expenses on housing,
transportation, uniforms, insurance etc.
A Sample calculation done for the Labour rates are as shown below:
LABOUR SALARY DETAILS
AIR FARE
LEAVE SALARY
END OF SERVICE
VISA
MEDICAL
INSURANCE
LABOUR CAMP
TRANSPORT
OTHER ALLOWANCES
TOTAL COST
HOURLY RATE
2218.13
525
13,348.1
3
1750
1050
1050
1800
600
1200
400
1000
3300
1050
26548.13
9.34
LABOUR(25)
7575
1584.38
375
9,534.38
1750
750
750
1800
600
1200
400
1000
3300
750
21834.38
7.68
SAFETY CLOTHING
HOLIDAYS
10605
TOTAL
FRIDAYS
MASON(35)
STAFF
ANNUAL SALARY
TOTAL 2842 HRS /YEAR
The craftwise extra labour hours engaged was multiplied with the labour rate to
arrive at the cost incurred in additional labour. Measurement of works as
completed were done with the assistance of Site QS and variation in quantity
worked out. Costing of the variation and extra works were done from which
labour costs in variations were arrived at. The labour engaged in variation was
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Critical Analysis Report
deducted from the additional labour cost to arrive at the labour engaged in
accelerating the work. A sample calculations is as below;
CALCULATION OF ACCELERATION CLAIM
ACTUAL LABOUR ENGAGED AGAINST ESTIMATED LABOUR
MANHOURS AS LABOUR HISTOGRAM IN CONTRACT
MANHOURS ON SITE
TRADE
Carpenters
Oct04
Nov-04
Dec-04
Jan-05
Feb-05
Mar-05
Apr-05
May05
TOTAL
630
17040
27528
37200
28672
13144
8400
5456
138070
RATE/
HR
AMOUNT
9.34
1,289,573.80
LABOUR AS PER HISTOGRAM(PLANNED)
1,289,573.80
ACTUAL MANHOURS ON SITE
1. Normal Working days
MANHOURS ON SITE
TRADE
OctMayNov-04
Dec-04
Jan-05
Feb-05
Mar-05
Apr-05
04
05
Labour 10 hrs working upto Dec 20th,13 Hrs working from Dec 21st to Feb 20th and 12 hrs working for rest of Feb,March,April & May2005.
upto
20th
upto
21st
20th
-31st
20th
-28th
Carpenters
630
3880
10840
14092
38415
29705
27420
46656
58320
56376
TOTAL
286334
RATE/
HR
AMOUNT
9.34
2,674,359.56
ACTUAL LABOUR FOR THE PERIOD
2,674,359.56
EXTRA LABOUR( CARPENTERS)
1,384,785.76
Detailed calculations are attached at Appendix B
Extra Supervision Charges:
Added supervision was required to properly manage the increased labour force.
Supervising staff had to work on the increased overtime hours. The extra
supervision and the additional hours worked were recorded and claimed.
Extra Machinery engaged in acceleration
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Critical Analysis Report
Extra machinery and hand tools had to be provided at site in order to cope up with
the increased labour working at different areas. Moreover to further increase
productivity heavy rollers were used for compaction of excavations and backfills
in place of hand operated machinery. Due to more work men doing same job at
different locations extra machinery and scaffolding were needed. Hence the
same were properly recorded and claimed for.
Extra Cost to Vendors for expediting Supplies/ Work
Vendors were contacted and various procurement options were studied to expedite
material supplies. Subcontract works were required to be accelerated to meet
the targeted completions. The Subcontractors were instructed to submit their
claim if any for expediting their work including proper justifications &
documentations. These documentations were kept for further inclusion in the
Claim.
Changed method of working & Work sequence
Various work methods had to be changed at site in order to accelerate the works.
Examples were; Solid block work permanent forms were used in substructure
concrete works in order to gain time spent in concrete setting times and timber form
work stripping times. Similarly the sequence of work was re- scheduled in order to
compress the period of actual construction. Extra cost incurred were calculated and
accounted for in the Claim. My exposure to the situation increased my knowledge in
Construction technology and Project planning.
Each of the above item was analysed in detail and presented to Consultant/Client in
a submission with Entitlement Section specifying the reasons for delays,
mitigation actions taken by ACC, Recovery status and a Claims Section
quantifying the effect.
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Critical Analysis Report
. 3.6 Critical Appraisal & Reflective Analysis
The selected option was the best option considering the project scenario and
Contract documents. Yet the following problem was faced while evaluation of the
same by the Consultants.
In the labour histogram included with the Contract (which was used as a basis for
labour cost during normal situation) labour to be engaged per month was
specified in numbers. Normal working hours were considered as 8 hrs/day in our
claim. The
Consultants came up with the counter claim that the normal working hours in Dubai
is 10hrs/day and the claim needs to be revalued based on that. We had no
document to prove our stand.
Hence it is noted that in all future projects our consideration of 8 hrs/day working
should be noted in the Labour histogram submitted.
Experience and Competance Gained:
The involvement in this Project helped me in attaining extra experience and
improving my competancy in the following areas;
- Ethics, Professional identity & Accountability
-
Collection, retrieval and analysis of information and data
Oral, Written and Graphic Communications
Self Management & Team work
Contract practice & Contract Administration
Information technology and computers
Construction technology
Measurement and Costing of Works
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-
4.0
Critical Analysis Report
Project cost control and Cost Monitoring works
CONCLUSION
My involvement in various complex projects during the past 23 years of my career
has gained me the ability to professionally handle and resolve Commercial,
Contractual, Procurement and Cost related issued.
I am sure that my education and further experience/professional competancy that I
got from the various projects along with my commitment to adhere and follow the
ethics and conduct rules of RICS will help me in providing a successful
professional contribution to all my future assignments/ projects.
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