[ E-book ] Construction cost management

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  1. [notes ] CONSTRUCTION QUALITY CONTROL INSPECTION PROGRAM
  2. Construction Project Controls: Cost, Schedule, and Change Management
  3. Risk Management in Construction Projects   
  4.   [ E-book ] Construction cost management

 

 

 [ E-book ] Construction cost management

 

Contents

Part I Introduction
1
1 Introduction and overview
3
1.1 Setting the scene 3
1.2 Construction overview 3
1.3 Influential reports 5
1.4 Recommendations from professional bodies 6
1.5 Learning from case studies 7
1.6 Learning from project failures 10
1.7 Relevant observation 11
1.8 Conclusion 11
1.9 Questions 12
Bibliography 12
2 Reports and recommendations
14
2.1 Introduction 14
2.2 The Latham report,
Constructing the Team
(1994) 15
2.3 Levene Efficiency Scrutiny (1995) 17
2.4
Construction Procurement Guidance
, HM Treasury (1996) 17
2.5 Construction Industry Board (CIB) working groups (1996–1997) 19
2.6 The Egan report
Rethinking Construction
(1998) 20
2.7
Modernising Construction
, National Audit Office (2001) 22
2.8 The second Egan report,
Accelerating Change
(2002) 23
2.9
Achieving Excellence in Construction Procurement Guides
, Office of
Government Commerce (2003) 24
2.10
Improving Public Services through Better Construction
, National
Audit Office (2005) 24
2.11 Conclusion 25
2.12 Questions 25
Bibliography 26
Part II Management of the pre-contract stage
27
3 Selecting the consultants and contractors
29
3.1 Introduction 29
3.2 Selecting consultants 30
3.3 Selecting contractors by value 34
3.4 Construction Industry Research and Information Association
(CIRIA) Guide –
Selecting Contractors by Value
39
3.5 Two-stage tendering 41
3.6 FIDIC tendering procedures 41
3.7 Conclusion 44
3.8 Questions 44
Bibliography 45
4 Pre-contract cost management
46
4.1 Introduction 46
4.2 Cost estimating on engineering, manufacturing and process industries 47
4.3 Cost estimating on civil engineering projects 49
4.4 Cost estimating on building projects 52
4.5 General comments 57
4.6 Action after receipt of tenders 57
4.7 Conclusion 57
4.8 Questions 58
Bibliography 58
5 Cost management on PFI projects
59
5.1 Introduction 59
5.2 Structure of BOT projects 60
5.3 Case study: Nottingham Express Transit (NET) Light Rail 60
5.4 Factors leading to success on BOT projects 62
5.5 Risks and securities 62
5.6 Case study: Sydney SuperDome, Australia 63
5.7 The Private Finance Initiative (PFI) 64
5.8 The role of the cost consultant in PFI/PPP projects 69
5.9 Case study: Stoke-on-Trent Schools, UK 70
5.10 Conclusion 72
5.11 Questions 72
Bibliography 73
6 Contractor’s estimating and tendering
75
6.1 Introduction 75
6.2 Stage 1 – decision to tender 77
6.3 Stage 2 – determining the basis of the tender 77
6.4 Stage 3 – preparation of cost estimate 79
6.5 Stage 4 – commercial appreciation 84
6.6 Stage 5 – conversion of estimate to tender 85
6.7 Stage 6 – submission of tender 86
viii Contents
Contents ix
6.8 Conclusion 86
6.9 Questions 86
Bibliography 87
Part III Key tools and techniques
89
7 Value management
91
7.1 Introduction 91
7.2 What is value management? 91
7.3 Value planning (VP) 93
7.4 Metropolis United’s new football stadium 94
7.5 Value engineering (VE) 97
7.6 Value reviewing (VR) 98
7.7 Case studies 99
7.8 Conclusion 103
7.9 Questions 103
Bibliography 103
8 Risk management (RM)
105
8.1 Introduction 105
8.2 Risk identification 106
8.3 Risk analysis techniques 108
8.4 Risk register 114
8.5 Risk response 114
8.6 Strategic risk management 116
8.7 Case studies 118
8.8 Conclusion 119
8.9 Questions 120
Bibliography 120
9 Whole-life costing
122
9.1 Introduction 122
9.2 Understanding the relevance of whole-life costing (WLC) 123
9.3 The basic steps in whole-life costing (WLC) 123
9.4 Money, time and investment 125
9.5 Calculations 127
9.6 Problems with assessing whole-life costs 129
9.7 Whole-life value (WLV) 129
9.8 Conclusion 130
9.9 Questions 130
Bibliography 131
Part IV Procurement strategies
133
10 Organizational methods (part A)
135
10.1 Introduction 135
10.2 Traditional method 137
10.3 Design and build 140
10.4 Turnkey 146
10.5 Joint ventures 147
10.6 Consortium 149
10.7 Partnering 149
10.8 Conclusion 155
10.9 Questions 155
Bibliography 155
11 Organizational methods (part B)
157
11.1 Introduction: management methods 157
11.2 Management contracting 158
11.3 Construction management 161
11.4 Management contracting or construction management? 165
11.5 Reflections on the Scottish Parliament building 165
11.6 Design and manage 167
11.7 EC procurement rules 168
11.8 Achieving Excellence in Construction 168
11.9 The NHS Procure 21 guidelines 170
11.10 Highways Agency – overlying principles for future procurement 171
11.11 The 2012 London Olympics 172
11.12 Selecting the procurement route 173
11.13 Achieving Excellence in Construction methodology 174
11.14 Conclusion 174
11.15 Questions 176
Bibliography 176
12 Payment systems and contract administration
178
12.1 Introduction 178
12.2 Price-based, lump-sum plan and specification 179
12.3 Price-based, bills of quantities (BofQ) 180
12.4 Operational bills 183
12.5 Price-based, method-related bills 184
12.6 Price-based bills of quantities (BofQ) with milestone payments 184
12.7 Price-based activity schedules 186
12.8 Cost-based, cost-reimbursement contracts 188
12.9 Cost-based, target-cost contracts 189
12.10 Conclusion 192
12.11 Questions 193
Bibliography 193
Part V Management of the post-contract stage
195
13 Contractors’ cost-control and monitoring procedures
197
13.1 Introduction 197
13.2 Developing a cost-control system 198
13.3 Method 1: cost-value reconciliation (CVR) 199
13.4 Method 2: contract variance – unit costing 203
x Contents


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