The Value Engineering (VE) Process and Its Uses in Various Development Phases of a Construction Project

Posted on May 20, 2022May 20, 2022 by Adroit

Amin Terouhid, Ph.D., PE, PMP, VMA

Abstract

This article describes the value methodology, explains how this methodology can be used in various development phases of a construction project and identifies the benefits of value engineering and value analysis studies in various stages of a construction project. The construction process is typically divided into the five essential development phases of planning, conceptual design, detailed design, construction, and close-out. Value studies are conducted in each of these development phases with a slightly different set of objectives. This article will discuss the types of values studies that are performed in each phase and discuss some of the key considerations necessary to perform such studies.

Introduction

“The Value Methodology (VM) is a systematic process used by a multidisciplinary team, led by a qualified VM Facilitator, to improve the value of a project, product, process, service, or organization through the analysis of functions (SAVE International, 2020, p. 2).

The Code of Federal Regulations defines Value Engineering (VE) analysis as the “systematic process of reviewing and assessing a project by a multidisciplinary team not directly involved in

the planning and development phases of a specific project that follows the VE Job Plan and is conducted to provide recommendations for:

(1) Providing the needed functions, considering community and environmental commitments, safety, reliability, efficiency, and overall lifecycle cost (as defined in 23 U.S.C. 106(f)(2));

(2) Optimizing the value and quality of the project; and

(3) Reducing the time to develop and deliver the project.” (The Code of Federal Regulations (CFR): Title 23 CFR Part 627.3 Highways, 2020)

Although the value methodology (VM) is often referred to as value engineering, value analysis and value management, these terms are often used in a slightly different way. The term VA is typically used when the VM applies to an existing application (e.g., manufacturing or construction project) whereas VE applies the VM to a new project. Nevertheless, these terms overlap, and the use of more than one term might be appropriate in some cases. Therefore, the terms value methodology, value engineering, value analysis, and value management are often used interchangeably. Yet, no single term is universally accepted. The community of practitioners seems to struggle to use a consistent approach in using a single term. In this article, the term value methodology is used throughout for consistency. What is important to note, however, is that value improvement is the main focus irrespective of the specific term used.

Since enhancing the value of a project, product, process, service, or organization is central to value enhancement efforts, it is important to first define the term “value”. Value is typically defined as an “expression of the relationship between the performance of functions relative to the resources required to realize them” (SAVE International, 2020, p. 153) which is expressed as:

Value = (Function Performance) / Resources

The more we gain in equivalent money, usefulness, or a fair return on services, goods, or products while spending fewer resources, the more overall value is gained. A correct understanding of the term “function” is critical to the definition above. Function is the primary or intended purpose that a project or scope element aims to serve. In value studies, the value team can perform function analysis by:

Assessing the functions of key project components and evaluating alternative solutions that satisfy functional requirements
Appraising value-enhancing, cost-saving, and/or time-saving opportunities

Say a value team is investigating a highway project with certain elements such as a turn lane and a frontage road. To perform function analysis, the team can investigate how the turn lane can have the same function but in a way that the overall cost decreases. For example, the function of a turn lane in a highway project is to allow for shifting traffic to the left. In a highway project, a turn lane can serve the same function if the original concept remains unchanged, but the team shifts the westbound turn lane to the ramp further west to avoid the Right of Way acquisition. As another example, the function of a frontage road is to divert traffic. A frontage road may serve the same function if the team decides to re-use existing frontage roads in specific segments of the highway versus reconstructing them in their entirety.

In construction, the value methodology is used to improve a construction project by optimizing costs while maintaining or improving quality and performance. The use of value methodology has a wide range of benefits for construction projects. The key benefits include:

Applying the value methodology facilitates reaching time and cost objectives,
Assists in saving time and cost with assessing the project function and different alternatives, and
Aids in improving the construction performance.

Various Development Phases of a Construction Project

The development phases of projects that follow a process-based approach are typically organized using the following steps (PMI, 2021, p. 171):

Initiation: In this stage, a new project or a new phase of an existing project is defined. To achieve this objective, authorization is obtained to commence the project or phase.
Planning is required to establish the scope of the project, refine the project objectives, and establish the course of action needed to achieve the project objectives.
This stage aims to complete the scope of work established in the previous development state to meet the project requirements.
Monitoring and controlling. These processes, which are performed concurrently within the execution, are needed to monitor, review, and control the work progress that is made to achieve project objectives. They help to evaluate the performance of the project team in completing the scope of work. Project monitoring and controlling help the project team to compare the project performance with what was planned to ensure deviations are identified and proper actions are taken to minimize deviations. The outcome of project monitoring and control is typically a series of action plans / corrective actions to better achieve the project objective.
In the end, closing steps are taken to formally complete or close the project. The closing phase may involve different aspects/components. Examples include project document updates, final product transition, a final report, and organizational process asset updates. Some of the main activities during the closing phase include financial/payment closeout, releasing resources, documenting lessons learned, administrative closures and conducting project reviews.

The construction process, however, is often divided into a different set of steps as an organizing structure. They are typically divided into the following essential development phases:

Planning,
Conceptual design (as part of preconstruction),
Detailed design,
Construction, and
Close-out.

Value studies are conducted in each of these development phases with a slightly different set of objectives. A typical value study is conducted according to a Job Plan which is a” sequential approach for applying the Value Methodology, consisting of the following eight phases: 1) Preparation, 2) Information, 3) Function Analysis, 4) Creativity, 5) Evaluation, 6) Development, 7) Presentation, 8) Implementation” (SAVE International, 2020, p. 153). Each value study aims to address each phase in the VE Job Plan; however, the level of analysis performed, and efforts spent in each VE Job Plan phase may be adjusted not only based on the needs of each project but also based on the needs of the project’s current development phase.

In the following section, the main focuses of value studies in each of the typical development phases of construction projects are identified and the details of such studies are discussed:

Value Studies in Various Development Phases of a Construction Project

It is important that value studies are conducted at the right times. To achieve this objective, the value team needs to be aware of the benefits of value studies in each of the development phases of a project, and determine what parts or types of studies can be performed in each stage. As noted in the VM Guide, “oftentimes projects are too far along in their development when a VM study is performed. A VM study performed for a project that is 95 percent designed, and nearly ready for construction will not fully realize the benefits of VM had the VM study been performed at the 10 – 15% design level” (SAVE International, 2020, p. 145).

In theory, value studies can be applied to any construction project irrespective of its current development phase. However, as noted above, the earlier these studies are performed, the more effective their outcomes are expected to be. Nevertheless, the main focuses of value studies in each of the typical development phases of construction projects are slightly different.

The main focuses of value studies in each of the following essential development phases of a construction project are described below:

1- Planning

The application of value studies starts during the planning phase of a construction project. During this phase, the scope of the project is established, project objectives are refined, and the course of action needed to achieve the project objectives is recognized. In this phase, the ability to influence changes in design is relatively high and the cost and effort needed to implement those changes are relatively low. Because the ability to influence changes in design is relatively high in the planning phase, value studies can be conducted with minimal concerns about incurring undue expenses for a redesign. Therefore, value studies conducted during the planning stage have a remarkable potential for enhancing value. The value study can bring a fresh outside view of alternate solutions from other similar projects (Cullen, 2021).

In the early stages of the planning phase, value scoping can be performed to determine the mission and direction of the value proposal. Such studies can establish the scope and mission of value studies. Once value scoping is delineated, value studies can start to be implemented. These efforts can help the project owner establish their requirements and define needs and expectations that value studies can satisfy.

2- Conceptual design

Conceptual design is characterized by a large number of design alternatives and a continuous, evolutionary change to the design which requires iterative cycles of idea generation and evaluation. In the early phases of conceptual design, the alternatives evaluation is performed to assess available possibilities and form a basis for design. In this phase, the design has not been frozen yet and design alternatives are being considered. Since the majority of budgetary costs will be committed by project sponsors once the design is frozen, many opportunities are still available during the conceptual design phase to influence the design and reduce or avoid unnecessary costs. The earlier in the design phase value studies are conducted, the greater the opportunities will be to reduce or avoid unnecessary costs. For instance, changing the geometry or boundaries of a highway is much easier in the early stages of the design work than changing them in the later stages of the design.

3- Detailed design

As previously noted, the design is evolved in the early stages of the design work. However, as the design is further developed, the design is solidified and it is ultimately frozen during the detailed design phase. Once the design is frozen, the final design is achieved. This design stage is characterized by the efforts focused on the preparation of final construction plans and detailed

specifications for the performance of construction work.

The detailed design phase is the phase in which most value studies are initiated when the design has at least made it to the schematic stage. Most public agencies require at least one value study to be conducted at the design stage on projects over a certain dollar amount. Value studies are often conducted after the completion of the design process. It is important to note, however, that such studies are preferred to be conducted before the design is complete to allow the design team to incorporate the option of using alternative materials and methods. The Federal Highway Administration (2021) defines VE analysis as a systematic process of review and analysis of a project, during the concept and design phases. According to SAVE International, “typically, 70 percent of costs are committed by the time the design is frozen” (SAVE International, 2020, p. 146). According to Anderson et al. (2007), “value engineering is most successful when it is performed early in project development. A value engineering study should be performed within the first 25—30% of the design effort prior to selecting the final design alternative” (p. A-165).

The use of the value methodology mindset throughout the design phase can help the project team benefit from the advantages of value studies while maintaining project requirements. In this phase, formal value studies are typically conducted in value workshops by an experienced, multi-disciplinary team of subject matter experts (SMEs) prior to freezing the design. Formal value studies are typically conducted by a team led by someone highly experienced in leading value studies and workshops, usually a Certified Value Specialist (CVS) who ensures the value methodology process is properly used throughout the study. The workshop typically takes three to four days but may take longer depending on the project size and specific needs of the project and/or expectations of project stakeholders. The time and effort spent on the workshop have an insignificant impact on the final project schedule and redesign costs.

Typically, in the initial phases of detailed design, a team of independent SMEs, a value methodology facilitator, and often project stakeholders is formed to attend a workshop to conduct value studies in accordance with a Value Engineering (VE) Job Plan. As previously noted, Job plan is a systematic action plan for performing value studies and documenting the outcomes in an organized manner.

To follow the action plan delineated in the VE Job Plan, the following phases are completed one after another (SAVE International, 2020):

Preparation: in this phase, preparatory activities are performed to reach common ground among the members of the value team while facilitating team building.

Information: project information including scope, objectives, project commitments, and constraints are collected and shared among the members of the value team. In this phase, value team members aim to identify various aspects of the project which are most likely to yield value improvement. To achieve this objective, the team members will utilize a variety of tools and techniques including cost engineering techniques, FAST (Function Analysis Systems Technique), expert judgement and information gathering techniques to identify opportunities for value improvement. These opportunities will be the focus areas of the VE/VA team going forward.

Function Analysis: the project is analyzed to understand the required functions of various scope elements. To achieve this objective, the value team collaborate and achieve consensus as to the needed functions. This phase serves as an essential component of each value study, and aims to evaluate each selected element (i.e., opportunity for value improvement) to determine its basic and secondary functions. It also aims to assess the costs of the element and the way the costs are distributed among its functions.

In this phase, the FAST diagramming technique is used extensively to perform function analysis. This analysis allows a multi-discipline team to collaborate and achieve consensus as to the needed functions (basic and secondary functions along with other functions such as all-time functions), in preparation for generating innovative ideas about how best to achieve the intended functions. In this phase, the team’s collaboration and interactions play central role in identifying functions and assessing value improvement opportunities. The team members collaborate and achieve consensus as to the needed functions in preparation for generating innovative ideas about how best to achieve the intended functions. In this phase, the team’s collaboration and interactions play central role in identifying functions and assessing value improvement opportunities.

Creativity: the value team generates ideas on ways to accomplish the required functions while enhancing the project’s performance, quality, and/or lower project costs. In this phase, the facilitator encourages the members of the value team to use brainstorming techniques to think creatively to generate ideas. The intent is for them to individually and collectively, come up with creative ideas and creatively identify value improvement opportunities by accounting for the functions identified in the previous phase.

Evaluation: Evaluate VE recommendations and select feasible ideas for development. During this phase, the value team aims to reduce the list of ideas to those most reasonable and feasible by analyzing advantages and disadvantages of each idea. To achieve this objective, a variety of techniques are used to evaluate and prioritize ideas. Examples of these techniques include weighting techniques and life-cycle cost assessment techniques. The facilitator plays a key role in facilitation discussions among the team members to assess the viability and reasonableness of value improvement ideas.

Development: Develop the selected alternatives into fully supported recommendations. The phase involves the advancement of the VE/VA team’s ideas to the level of value improvement recommendations. The selected recommendations will ultimately be presented as the outcomes of the value study. In this phase, the value team uses a variety of techniques to further develop the ideas. Examples include:
Diagramming,
Sketching,
Perfuming calculations,
Preparing graphics,
Furnishing reports,
Reaching out to other specialists or stakeholders to obtain supplemental information, and
Present the selected recommendations as to the outcomes of the value study.

In doing so, each team member will contribute to a written report. In general, the value study team will also prepare and deliver a brief presentation at the completion of the study to present the recommendations and share their findings with the executive decision team and other project stakeholders.

Presentation: In this phase, the outcome of the development phase will be presented on the final study day to project stakeholders and decision-makers who were not directly engaged in value studies. In this phase, the members of the value team collaborate and interact with each other to develop the agreed-upon recommendations for presentation to the project stakeholders and the executive decision team. Team members will present value improvement recommendations in their areas of practice or expertise. They present value improvement recommendations they personally assessed and developed during the study. This information will be incorporated into the final report.

Implementation: This phase focuses on determining the disposition of the value recommendation and validating its impact on the value of the project.

The above-noted steps outlined the main phases of a Job Plan that needs to be followed like an action plan to achieve the objectives of a value study. The following section explains how value studies might be used during the construction phase.

4- Construction

During the construction phase, value studies may still be conducted in different forms. The need for conducting value studies arises during the construction phase primarily in the following two situations:

Often a value study performed in the previous development phases of a construction project identifies that further studies should be performed on certain elements of the project scope of work once the work has further progressed. For example, a new construction material is often identified by a value study in the conceptual design phase as a material that potentially results in cost savings. However, such decisions cannot often be finalized unless further investigation is performed during the construction phase to ensure the new material has the characteristics that the design requires.

Often a construction contractor identifies elements of the scope of work that can be improved if a value study is performed. In some cases, performing such studies is among the contractual requirements. Because of its potential benefits, some government agencies or project owners have made value studies a required component of construction projects. For example, incentive clauses of some construction contracts often allow for sharing cost savings between a contractor and project owner if the contractor performs a value study and find creative ideas for alternative ways to accomplish the required functions of a work element. Examples of these contract clauses include the value engineering incentive clauses and the value program requirements clauses.

Value engineering incentive clauses are utilized for soliciting contractor or vendor inputs. To do so, their inputs as obtained in the form of a change proposal using a mechanism that is referred to as a value engineering change proposal (VECP). The VM Guide defines VECP as a “change submitted by a contractor, pursuant to a contract provision, to improve the value of the project or product under contract. VECPs are a vehicle to incentivize contractor innovation and are commonly used in public sector contracts” (SAVE International, 2020, p. 139)

The Code of Federal Regulations defines VECP as a “construction contract change proposal submitted by the construction contractor based on a VECP provision in the contract. These proposals may improve the project’s performance, value and/or quality, lower construction costs, or shorten the delivery time, while considering their impacts on the project’s overall life-cycle

cost and other applicable factors.” (The Code of Federal Regulations (CFR): Title 23 CFR Part 627.3 Highways, 2020) On some projects, the bidders can suggest alternative means and methods and design features to meet the goals of the project at a lesser cost and/or time of performance.

Cost savings resulting from approved and implemented VECPs are typically shared (i.e., typically a 50-50 sharing rule is used unless the contract parties agree otherwise) between the project owner and contractor. According to SAVE International, an “acceptable VECP must

meet two tests: it must require a change in some contract provision, and it must reduce the contract price. A complete VECP should contain information similar to a VM

proposal” (SAVE International, 2020, p. 148).

Value program requirements clauses are slightly different. Such clauses aim to ensure continuous consideration of potential innovations and improvements over the course of the project. Value program requirements clauses require the construction contractor to conduct value studies that are going to be funded by the owner as a separate line item of work under the contract. They may still allow for incentive sharing for each proposal but typically the contractor’s proportion of cost savings is smaller than under an incentive provision because the cost of such studies is typically paid by the project owner.

5- Close-out

During the closeout phase, the outcomes of value studies performed over the course of the project are documented and lessons learned are recorded. In addition, organizational process assets are updated based on historical records of value studies, and administrative closures are taken place.

Conclusion

This article described the value methodology, explained how this methodology can be used in various development phases of a construction project, and identified the benefits of value studies in various stages of a construction project. It was explained that the construction process, is typically divided into the five essential development phases of planning, conceptual design, detailed design, construction, and close-out. Value studies are conducted in each of these development phases with a slightly different set of objectives. A typical value study is conducted according to a Job Plan, and each value study aims to address each phase in the VE Job Plan; however, the level of analysis performed, and efforts spent in each VE Job Plan phase may be adjusted not only based on the needs of each project but also based on the needs of the project’s current development phase.

List of References

Anderson, S. D., Molenaar, K. R., & Schexnayder, C. J. (2007). Guidance for cost estimation and management for highway projects during planning, programming, and preconstruction (Vol. 574). Transportation Research Board.

Cullen, S. W. (2021). Value Engineering. Whole Building Design Guide. https://www.wbdg.org/resources/value-engineering

FHWA. (2021). The Value Engineering (VE) Process and Job Plan. https://www.fhwa.dot.gov/ve/veproc.cfm

PMI. (2021). The Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Seventh Edition. Project Management Institute.

SAVE International. (2020). VM Guide: A Guide to the Value Methodology Body of Knowledge.

The Code of Federal Regulations (CFR): Title 23 CFR Part 627.3 Highways. (2020). Office of the Federal Register, National Archives and Records Administration. https://www.govinfo.gov/content/pkg/CFR-2020-title23-vol1/pdf/CFR-2020-title23-vol1.pdf

Variation and Variation Orders: Important Considerations

Posted on March 27, 2019March 27, 2019 by Adroit

Introduction

A variety of reasons may increase or decrease the amount of work required by a contract. These increases or decreases are either directed or constructive. This article briefly describes each of these main categories of variation. It also outlines the potential implications of variations and variation orders from the time and cost management perspectives.

In general, owners have the contractual right to make changes to the work outlined in the original contract. The terms variations, modification, and changes are often used interchangeably.

Variation types

Since variations not only impact contract scope of work but also they potentially have time and cost implications, it is important to identify various types of variations and recognize potential effect of each type of variation on contracts. Examples of the most common variations include:

Changes in means and methods or material to be installed
Differing or unforeseen site conditions not envisioned in the original contract price
Modifications that change the planned work sequence as originally envisioned
Changes to the scope of work due to constructability issues or conflicts between work elements
Changes in plans and specifications
Corrections made due to errors or omissions
Modifications as a result of the actions or inactions of third-parties

Directed variations

A directed variation is issued when the owner specifically directs the contractor to make a change. This type of variation may or may not affect the contract price. A directed variation that influences only the schedule is an example of a directed variation with no effect on the contract price. As another example, a directed variation that impacts a project’s configuration, work sequence, or space requirements may adversely influence labor and equipment productivity on-site. A directed variation with cost impact may reduce or add the contract price. Directed variations are typically not complicated because the owner specifically directs the contractor to make a change and as such, directed variations are easier to deal with.

Constructive variations

Constructive variations, on the other hand, occur as a result of non-owner-directed events that implicitly necessitate a variation. Unlike directed variations, the owner does not specifically direct the contractor to make a change in case of a constructive variation. Instead, as a result of non-owner-directed events or actions or inactions of the owner, the contractor is forced to modify the scope specified in the contract or incur additional costs. Typically, constructive variations are not easy to recognize because they generally occur due to non-owner-directed events or circumstances. In addition, in case of a constructive variation, the owner does not typically have an explicit acknowledgment of a variation to the original scope of work set forth in the contract. Examples of the most common types of constructive variations include:

Verbal communications that implicitly necessitate making changes
Deficient drawings or specifications
Ambiguity in architect-provided responses to information requests
Differing site conditions
Over-inspection

Implications

Although deductive variations exist, variations typically increase contract prices. This increase is due to increases to direct material, labor, and equipment prices. Nevertheless, the impacts of variations are often not limited to direct costs. Variations often result in the loss of efficiency and as such, the adverse effects of variations need to closely be examined to ensure their consequences are fully evaluated.

Conclusion

It is important to identify variations in a timely manner, especially in case of constructive variations whose effects are not explicit and readily recognizable. The reasons for each variation need to properly be identified and documented in proper tracking logs. Moreover, the effects and implications of each variation need to properly be documented to ensure sufficient documentation and historical records are readily accessible to substantiate contractual entitlements.

Author: Dr. Maryam Mirhadi, PMP, PSP | CEO and Principal Consultant

If your project has been affected by multiple variations or variation order and they have adversely affected labor or equipment productivity on-site, or if you are interested to investigate the extent of time and cost impacts due to variation orders, Adroit will be able to assist in assessing these impacts. For more information, please contact us.

UAVs (i.e., Drones) and Their Applications in Construction

Posted on November 18, 2018 by Adroit

One of the emerging technologies in the construction industry is the use of unmanned aerial vehicles (UAVs) or drones. In recent years, the use of UAVs in the construction industry is becoming more commonplace and a variety of applications for these devices have started to emerge. Some of the applications of UAVs in the construction industry include project monitoring, project status reporting, surveying, generating maps, and inspection activities.

UAVs significantly facilitate site monitoring of large construction projects by capturing real-time or as-built data. Additionally, as Liu et al. stated in their article, pictures, and videos that UAVs capture help to collect progress data, monitor and control safety practices, and perform inspection, especially for the areas that are hard-to-reach and are not easy to be inspected (as cited in Ham et al., 2016). Some examples of the tools that can be attached to UAVs include high-resolution cameras, RFID readers and laser scanner (Moud et al., 2018).

Despite their several advantages, UAVs may expose their users to some negative risks. In addition, the use of UAVs may be challenging under certain circumstances. For real-time project monitoring and control, UAVs need to collect large amounts of visual data in one single flight. This collected data then needs to be processed, analyzed, and linked to construction elements and activities. Some of the other challenges that users may encounter in using UAVs include independent path planning, the security of UAVs and their in-flight information that is collected, and data collection configuration management to ensure all needed information has properly been captured.

UAVs have also direct and indirect safety hazards for construction site workers. An example of direct hazards of UAVs for construction work include objects that may fall as the result of the collision of a UAV with an element onsite. UAVs may also pose hazards on-site in an indirect manner such as distracting workers due to the movement and sound of UAVs on a construction site (Moud et al., 2018, Ham et al., 2016).

Overcoming technical and managerial challenges that are associated with the use of UAVs in the construction industry requires the use of inter-disciplinary approaches that focus on the applications of these devices in construction and evaluation of particular uses of these devices in construction-related activities. As an example, UAVs are able to recognize the key construction elements and some of their attributes based on a 3D model of a construction site or a facility. Incorporating the data that UAVs collect on a construction site into Building Information Modelling (BIM) platforms may significantly facilitate the process of data analysis, may help reduce safety hazards and/or negative risks associated with using UAVs.

Unmanned aerial vehicles (UAVs) or drones are increasingly used in the construction industry for project monitoring, project status reporting, surveying, generating maps, inspection activities, and many other applications. A familiarity with the capabilities of these devices and assessing both the threats posed by these devices and the opportunities that they bring about are important to ensure these devices are used in the most effective manner on construction sites.

References

Ham, Y., Han, K. K., Lin, J. J., & Golparvar-Fard, M. (2016). Visual monitoring of civil infrastructure systems via camera-equipped Unmanned Aerial Vehicles (UAVs): a review of related works. Visualization in Engineering, 4(1), 1.

Moud, H. I., Shojaei, A., Flood, I., Zhang, X., & Hatami, M. (2018, July). Qualitative and Quantitative Risk Analysis of Unmanned Aerial Vehicle Flights over Construction Job Sites. In Proceedings of the Eighth International Conference on Advanced Communications and Computation (INFOCOMP 2018), Barcelona, Spain (pp. 22-26).

Author: Maryam Mirhadi, Ph.D., PMP | CEO and Principal Consultant

A critical comparison between CPM and LSM

Posted on September 4, 2018September 4, 2018 by Adroit

In a previous article (Diagrams to illustrate repetitive construction activities), we identified the main diagrams that construction project practitioners use to illustrate repetitive construction activities. In that article, we described the two main classes of linear scheduling methods (LSM) and line of balance (LOB) techniques that are used in linear projects.

Below, we are going to provide a critical comparison between the critical path method (CPM) and linear scheduling method (LSM). As a deterministic network model, the CPM method uses duration estimate for project activities to determine the longest duration path for the project and to identify the earliest and latest dates for schedule activities based on the use of forward- and backward-pass network calculations, respectively. LSM schedules, however, use velocity diagrams representing each activity. The schedule format may provide the planned and actual production rates on a time-scaled format. The main differences between the CPM and LSM methods can be summarized as follows:

	Critical Path Method (CPM)	Linear Scheduling Method (LSM)
Application	Although this method is typically used in non-linear projects, it can also be used in linear construction projects.	It is used in linear construction projects, where the majority of the work is made up of highly repetitive activities. In these projects, a set of project activities are repeated in each location for the entire length of the work. Once a project activity is started and/or ended in one location, it is repeated in another location.
Accuracy	With using forward and backward network calculations, the CPM method determines the expected project completion with accuracy.	The LSM allows for accurately planning and scheduling of project activities from the perspectives of both time and location.
Uncertainty in activity durations	With some modifications, the CPM method can change to Program Evaluation and Review Technique (PERT) which allows for randomness by introducing uncertainty to activity duration estimates (i.e., using optimistic, most likely, and pessimistic durations to calculate the expected time for schedule completion).	The current forms of LSM do not allow for randomness in activity durations.
Uncertainty in activity relationships	With some modifications, the CPM method can change to Graphical Evaluation and Review Technique (GERT) that allows for conditional and probabilistic treatment of logical relationships (i.e., depending on the outcome of the predecessor activities, succeeding activities may or may not be performed).	The current forms of LSM do not allow for conditional and probabilistic treatment of logical relationships.
Critical path	The CPM identifies the critical path based on forward and backward network calculations.	The LSM algorithm identifies the controlling activity path (CAP) which can be considered a path with the same function as the critical path in the CPM method. The LSM also identifies location criticality.
Spatial aspects	It might be inadequate for effective planning and scheduling of linear construction projects because it does not account for work locations or spatial aspects and does not effectively model project activities that are repetitively performed.	It uses velocity diagrams representing each activity, accounts for work locations or spatial aspects, and effectively models project activities that are repetitively performed.
Readability and usefulness	The CPM method becomes convoluted in complex projects because of the high number of project activities and activity dependencies. This complexity makes it difficult for practitioners to effectively use, communicate, and understand project CPM schedules in complex projects.	The LSM method is easy to understand and an effective tool to communicate the project time objectives with all team members including those individuals who lack an in-depth knowledge of project planning and scheduling.
Ease of use and development	Computer programs have significantly facilitated the use and development of CPM schedules; however, software programs have become complicated and require extensive training.	The LSM is intuitive and can easily be produced with or without the use of computer programs. However, the limited number of computerized implementation platforms restricts the use of this method in large projects.
Ease of updating	Computer programs have significantly facilitated the process of updating CPM schedules; however, updating complex CPM schedules may become challenging due to the increased number of activity, activity dependencies, activity constraints, activity calendars, and resource calendars in these schedules.	Updating an LSM schedule is typically simple and intuitive.

References:

Mirhadi M. and Terouhid, A. (2018). AACE International Recommended Practice 91R-16 (RP 91R-16): Schedule Development. AACE International (The Association for the Advancement of Cost Engineering). Retrieved from https://web.aacei.org/docs/default-source/toc/toc_91r-16.pdf?sfvrsn=2

Adroit Consultants, LLC (2018). Diagrams to illustrate repetitive construction activities. Retrieved from https://www.adroitprojectconsultants.com/2018/08/06/diagrams-to-illustrate-repetitive-construction-activities/

A sustainable construction practice to avoid the risk of Legionnaires’ disease

Posted on August 15, 2018 by Adroit

Facility managers and many other stakeholders are increasingly interested to find out more about effective water management strategies in buildings and facilities to prevent Legionella Infection. Legionnaires’ disease is a severe respiratory disease caused by the bacterium Legionella pneumophila. The bacteria may also cause a less serious illness that is referred to as Pontiac fever. Legionnaires’ disease is similar to other types of pneumonia, with common symptoms such as cough, fever, shortness of breath, muscle aches, and headaches, or less common symptoms such as nausea, diarrhea, and confusion. This bacteria is found in both potable and non-potable water systems (DOH, 2018a). The key question is how the risks associated with this infection can be managed.

Although the need for more effective water management strategies became more apparent in 2015 when the American Society of Heating, Refrigeration, and Air Conditioning Engineers (ASHRAE) released Legionella standard, ANSI/ASHRAE 188-2015, cases of Legionella infection are still being reported. For example, in a recent case, the New York State Department of Health announced that individuals who were guests at the Watkins Glen Harbor Hotel between July 16, 2018 and August 1, 2018 or those who were in proximity to the hotel’s pool and spa may have been exposed to Legionella bacteria (DOH, 2018b).

ANSI/ASHRAE 188-2015 is one of the main standards that define the main considerations in building water systems to manage the risks associated with Legionella infection. To implement effective water management strategies, potential risks associated with the water management systems need to be identified, assessed, and managed properly. Although risks are typically classified into positive and negative risks, this article focuses on negative risks or threats. Negative risks are any potential events or conditions that may adversely impact asset management objectives. A proper application of risk assessment techniques makes facilities less vulnerable to potential risks arisen from Legionella bacteria. Addressing issues after the fact usually costs significantly higher compared to the amounts paid for implementing risk response strategies. Therefore, using risk management practices are important not only to protect facilities and water management systems from detrimental risks but also to ensure that facility owners, such as commercial buildings, do not incur costs due to unmanaged risks.

Risk management consists of the key processes of planning for risk management, identification, assessment, response planning (i.e., risk treatment), and risk control. To make facilities less vulnerable to potential risks arisen from Legionella bacteria, risk response strategies need to be identified for all potential risks that may arise. Risk response strategies are the actions that can be taken in case of a risk occurrence. In general, four classes of risk response strategies exist. As shown in Table 1, these classes include risk avoidance, risk transfer, risk mitigation, and risk acceptance:

Table 1. Risk-response strategies for managing negative risks

Risk response strategy	Description
Avoid	Eliminate the risk
Transfer	Transfer the risk to a third party
Mitigate	Reduce the probability or impact of the risk
Accept	Accept the risk by taking no actions or, at most, setting aside contingency to offset the adverse effect of the risk

Risk acceptance and risk transfer are not typically among the risk response strategies that facility managers can choose to treat the risks associated with Legionnaires’ disease; otherwise, facility managers will not be able to satisfy the requirements of various standards, codes, and regulations. As such, the only two viable risk response strategies that facility managers can rely on in managing the risks associated with Legionnaires’ disease are risk mitigation and risk avoidance. To implement risk mitigation strategies, they need to reduce the probability or impact of the risk by adopting proper building water management practices. These include strategies such as keeping water at an appropriate temperature and free of impurities and verifying the effectiveness of building water management plans.

To implement risk avoidance strategies, facility managers need to eliminate the risk. Some of the building water management strategies that, to a large extent, eliminate the risk of Legionnaires’ disease, can be classified under the risk avoidance (i.e., risk elimination) category. Although these risks cannot entirely be eliminated, these strategies can play important roles in minimizing the likelihood of the risk occurrence. One of the strategies that can be classified as a risk avoidance strategy is the use of geothermal heat pumps (GHPs) in buildings. GHPs are also known as GeoExchange, earth-coupled, ground-source, or water-source heat pumps. Instead of using the outside air temperature as the exchange medium, GHPs use the constant temperature of the earth as the exchange medium. During the winter, the ground is warmer than the air above it whereas, during the summer, the ground is cooler than the air. GHPs take advantage of this characteristic of the earth by exchanging heat with the earth through a ground heat exchanger (DOE, 2018). If geothermal exchangers are incorporated during the building design process and used in place of cooling towers in buildings, they can eliminate the need for a recirculated water system that uses evaporative cooling for rejecting the heat to the air. Other benefits of GHPs include high energy efficiency, durability, and high energy efficiency (EPA, 2018). Because cooling towers, evaporative condensers, and fluid containers have been identified as one of the main sources of dispersing water-dispersed diseases such as Legionellosis disease, eliminating the need for a recirculated water system can be an effective sustainable construction strategy to avoid the risk of Legionellosis disease.

For more information about building water, risk assessment, and Legionella services that Adroit provides, please visit the following page or contact us:

Building Water and Legionella Services

References:

Department of Energy [DOE] (2018). Geothermal Heat Pumps. Retrieved from https://www.energy.gov/energysaver/heat-and-cool/heat-pump-systems/geothermal-heat-pumps

Department of Health [DOH] (2018a). Legionnaires’ Disease. Retrieved from https://www.cdc.gov/legionella/

Department of Health [DOH] (2018b). New York State Department of Health Warns of Potential Exposure to Legionella Bacteria in Schuyler County. Retrieved from https://www.health.ny.gov/press/releases/2018/2018-08-09_legionellosis.htm

The United States Environmental Protection Agency [EPA] (2018). Geothermal Heating and Cooling Technologies. Retrieved from https://www.epa.gov/rhc/geothermal-heating-and-cooling-technologies

Effective Water Management Strategies to Prevent Legionella Bacteria

Posted on August 11, 2018August 11, 2018 by Adroit

Government agencies, water management professionals, healthcare facility managers, and many other stakeholders are increasingly interested to find out more about effective water management strategies to prevent Legionella Infection. Legionnaires’ disease is a severe respiratory disease caused by the bacterium Legionella pneumophila. This bacteria is found in both potable and non-potable water systems. The need for more effective water management strategies became more apparent in 2015 when the American Society of Heating, Refrigeration, and Air Conditioning Engineers (ASHRAE) released Legionella standard, ANSI/ASHRAE 188-2015 after a consensus was reached among government agencies and industry groups concerning the general approach to preventing and controlling Legionnaires’ disease.

ANSI/ASHRAE 188-2015 identified some of the important considerations in managing water management systems to ensure proper strategies are in place to prevent and control Legionnaires’ disease. In 2015, an outbreak of Legionnaires’ disease was identified as the cause of death for 12 individuals in the South Bronx in the City of New York. This outbreak also sickened about 120 people in the same area. Several cooling towers in the affected areas tested positive for legionella. In response to this outbreak, building owners and facility managers in New York are now required to register cooling towers, evaporative condensers, and fluid containers with the Department of Buildings. After this outbreak, the Centers for Disease Control and Prevention (CDC) also reported about the increased number of Legionnaires’ disease cases and highlighted the importance of more effective building water management.

To implement effective water management strategies, potential risks associated with the water management systems need to be identified, assessed, and managed properly. Although risks are typically classified into positive and negative risks, this article focuses on negative risks or threats. Negative risks are any potential events or conditions that may adversely impact asset management objectives. A proper application of risk assessment techniques makes facilities less vulnerable to potential risks arisen from Legionella bacteria. Addressing issues after the fact usually costs significantly higher compared to the amounts paid for implementing risk response strategies. Therefore, using risk management practices are important not only to protect facilities and water management systems from detrimental risks but also to ensure that facility owners, such as commercial buildings and hospitals, do not incur costs due to unmanaged risks. Risk management consists of the key processes of planning for risk management, identification, assessment, response planning (i.e., risk treatment), and risk control. The following are some of the recommended practices to ensure risk management practices are properly used for water systems in buildings and facilities:

a) Establish water management program (WMP)

Many benefits can be gained by timely establishing a water management plan (also known as water management program [WMP]) even if an audit is not forthcoming. ANSI/ASHRAE 188-2015 can be used as a guideline and a reference but other recommended practices need to be considered to determine the best strategies that can be used to protect the occupants and users of buildings and facilities against Legionnaires’ disease because cooling towers, evaporative condensers, and fluid containers have been identified as one of the main sources of dispersing water-dispersed diseases (e.g. Legionellosis).

b) Follow your WMP and improve as needed

Property owners and facility managers protect themselves against legal and non-legal risks and expenses if they, not only prepare but also implement water management programs to demonstrate they have exercised standards of care in preventing diseases associated with water systems. Any WMP needs to be reviewed on a regular basis to identify the areas for improvements and adjust the strategies as needed.

c) Compliance with rules and regulations

In New York, compliance with portions of ANSI/ASHRAE 188-2015 is mandatory. Other states have also started to adopt more measures in this regard to protect public safety. Therefore, it is good practice for property owners and facility managers to use proactive water management measures to ensure that their facilities meet and exceed the minimum requirements established by consensus-based standards and guidelines. Examples include ANSI/ASHRAE standard 188-2015, Legionellosis: Risk Management for Building Water Systems, and NSF Standard 453-2016.

d) Use of proper liability insurance coverage

Another protective measure that property owners can adopt is to ensure that their liability insurance provides adequate coverage against the Legionella claims.

e) Use internal audits for quality assurance

Quality assurance and quality control are two aspects of quality management, and both are important to ensure proper tools, techniques, and practices are used to effectively manage water systems in buildings and facilities. Quality assurance has an important role, similar to the role of the quality control; however, it may be considered a more fundamental need because it focuses on providing confidence that requirements will be satisfied. In other words, quality assurance ensures that proper water management systems, practices, and procedures are in place and followed.

To implement effective water management strategies, potential risks associated with the water management systems need to be identified, assessed, and managed. A proper application of risk management techniques makes facilities less vulnerable to potential risks arisen from Legionella bacteria. This article identified some of the recommended practices to ensure risk management practices are properly used for water systems to prevent and control Legionnaires’ disease, especially because cooling towers, evaporative condensers, and fluid containers have been identified as one of the main sources of dispersing water-dispersed diseases (e.g. Legionellosis). These practices include establishing water management program (WMP), following WMPs and improving them as needed, compliance with rules and regulations, using proper liability insurance coverage, and using internal audits for quality assurance. Using risk management practices are important not only to protect facilities and water management systems from detrimental risks but also to ensure that facility owners, such as commercial buildings and hospitals, do not incur costs due to unmanaged risks associated with Legionnaires’ disease.

For more information about building water, risk assessment, and Legionella services that Adroit provides, please check out the following page or contact us:

Building Water and Legionella Services

Diagrams to illustrate repetitive construction activities

Posted on August 6, 2018August 7, 2018 by Adroit

Dr. Maryam Mirhadi, PMP, PSP

Project planning and scheduling professional may use different project scheduling methods and techniques for different projects depending on the type, size, and nature of projects. Repetitive scheduling techniques are used is in linear construction projects. In linear construction projects, the majority of the work is made up of highly repetitive activities. In these projects, a set of project activities are repeated in each location for the entire length of the work. Once a project activity is started and/or ended in one location, it is repeated in another location. Examples of linear construction projects include pipeline projects, highway construction, highway resurfacing and maintenance, airport runway construction and resurfacing tunnels, mass transit systems, and railroads. Because of the highly repetitive nature of the work, high-rise building projects are also often identified as linear in nature.

One of the important considerations in the planning of linear construction projects is to identify a location for the working crew to move to in a manner that its work does not interfere with the work of any other construction crew. Therefore, production rates have to be coordinated to prevent a preceding process from overtaking its succeeding process(s).

Traditional project planning and scheduling methods such as the critical path methods are typically inadequate for effective planning and scheduling of linear construction projects because these planning and scheduling methods do not account for work locations or spatial aspects and do not effectively model project activities that are repetitively performed. Due to such shortcomings, other methods such as line of balance (LOB), vertical production method (VPM), time couplings method (TCM), the repetitive project modelling (RPM), repetitive construction (REPCON), and the repetitive scheduling method (RSM) have been proposed in the literature to better satisfy the planning and scheduling needs of linear construction projects. The various repetitive scheduling techniques can be categorized into the two main classes of linear scheduling methods (LSM) and line of balance (LOB) techniques.

Line of balance techniques use three key types of charts to illustrate repetitive construction activities. These charts are objective chart, production plan, and progress chart. LOB was first used in the manufacturing industry. It starts with the end product and the ultimate output quantity and schedule in mind. This information is documented in the production plan and it is then used to establish a cumulative plan that delineates how much work ought to be delivered over time. This cumulative plan then becomes the objective chart against which the actual progress is measured using the progress chart. An example objective chart that is used in the line of balance method is shown in the figure below.

LSM schedules, however, use velocity diagrams representing each activity. The schedule format may provide the planned and actual production rates on a time-scaled format. A typical LSM diagram represents time along the X-axis (i.e., horizontal axis) and some measure of repetitive units along the Y-axis (i.e., vertical axis). This diagram also includes lines that represent all the linear activities that are involved in the completion of the repetitive units. A linear activity is a project activity that progresses along a physical path. This path is represented by the location axis in the LSM. Over the course of the project and at any point of progress along this path, the activity is completed up to that point. For instance, consider an activity that involves rough grading before finish grading in a road construction project. In this example, as the path is rough-graded, the rough-grading activity is complete up to that point of progress along the path. Once the path is rough-graded at any location, no need exists anymore to go back and rough-grade the location. Therefore, any location along the path that is behind the current work location is a work-front for succeeding activities (e.g., finish grading) to be performed. An example LSM diagram is shown in the figure below.

In a future article, further considerations in developing the linear scheduling and line of balance techniques will further be described.

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Considerations in developing phasing plan in subway rehabilitation projects

Posted on July 7, 2018August 7, 2018 by Adroit

Maryam Mirhadi, Ph.D., PMP, PSP

Subway station rehabilitation/renovation projects, also known as subway rehabilitation projects, are among the projects with special needs. These projects have special characteristics that differentiate them from other types of construction projects. The most important characteristics of subway rehabilitation projects from a project planning perspective are the need to account for the schedule of diversions, utility/infrastructure relocations, piggybacking opportunities, special permits, flagger availability, and work train availability.

Because of the special characteristics of subway rehabilitation projects, some considerations for scheduling these projects shall be applied with special attention and emphasis. The following provides key considerations for planning and scheduling of these projects. This list is not meant to be comprehensive. Instead, it identifies some of the key considerations that need to be given to the planning and scheduling of subway rehabilitation projects.

Identify the activities that cannot be implemented during normal service hours (e.g., the activities that need diversion of train services). Examples include activities on the platform edge and activities on, under, or near tracks. If a project involves working on several stations on the same line, the stations that are between two immediate switches can utilize the same diversion (by piggy-backing on each other). Under these circumstances, diversion-related tasks should be scheduled properly to maximize efficiency.
Having multiple diversions on one line and between different switches is called double-heating. If the stations are not between two immediate switches, diversions are not usually scheduled at the same time to avoid double-heating and ensure train service interruptions are minimized.
Determine the preliminary number and type of the required diversions, work-trains, and other special services for the project. This determination will help the construction team consider diversions, work-trains, and other special services as project resources. This approach helps the construction team to identify the resources that are constrained. By using proper resource management strategies such as resource planning and optimization, the construction team can ensure it obtains access to these special services when the project needs these services.
Review the special services identified with operations departments to ensure availability. If the requested diversions cannot be accommodated during required timeframes, the scope of work, design requirements, alternative construction methods, job phasing, or the project timeline should be reviewed and revised based on the available diversion plans. In addition to time, budget, and resource constraints, the availability of diversions is one of the major constraints that impact subway rehabilitation projects.
Identify the areas and equipment that cannot concurrently be closed or taken out-of-service in each subway station to ensure of continuous and safe operation of the station. Examples include entrance stairs, platform stairs, mezzanine areas, elevators, and tracks. For instance, if two elevators in one station exist and upgrading both elevators are in the project scope of work, working on the two elevators at the same time may not be permitted.
Identify hazardous materials such as lead, asbestos, and mercury. Performing abatement operations might be necessary before the commencement of work in areas in which hazard may be present. In these cases, direct communication and coordination between the client, contractor, and environmental agencies is crucial to identify the proper course of actions. In addition, removal of these materials during the construction phase may require special permits and equipment for which contractors should plan in advance.
Identify the long-lead and client-furnished items. With respect to long-lead items, an opportunity may exist to fast-track some activities by creating an overlap between the design and procurement activities for the long-lead items. Moreover, early order placement for long-lead items plays an important role in making sure that long-lead items will be delivered to the project in a timely manner. In addition, the construction management needs to properly identify the client-furnished items and account for the possibility of receiving these items later than expected.
Identify the activities that are supposed to be executed in areas that are not under the authority of the construction team. Examples include utility relocations or working in a public street. In addition, it should be determined if these activities require additional permits (e.g., DOT permits). The project team should be aware that these tasks have the potential to delay the project to a great extent because the project team usually has little control on expediting the permit application, inspection, or review processes.

In sum, from a project planning perspective, some of the key characteristics of subway rehabilitation projects that differentiate these projects from many other construction projects include the need to account for the schedule of diversions, utility/infrastructure relocations, piggybacking opportunities, special permits, flagger availability, and work-train availability. As such, some considerations for planning and scheduling of these projects shall be applied with special attention and emphasis. This article briefly discussed some of these requirements.

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Strategies to Minimize the Adverse Effects of Shiftwork

Posted on June 16, 2018August 7, 2018 by Adroit

Dr. Maryam Mirhadi, PMP, PSP

Shiftwork is defined as working other than daytime hours. Shiftwork is the most commonly utilized alternative to overtime. Despite its potential benefits in accelerating a construction schedule, shiftwork is considered among the factors with adverse effects on labor productivity in construction.

Some of the key issues with shiftwork include its adverse effect on circadian rhythms, dilution of supervision, challenges in exchanging performance information among individuals who work in different shifts, the adverse effects of shiftwork on social interactions, and higher work setup times. A number of studies address the adverse effects of shiftwork on productivity. Some of the key studies include the Bureau of Labor Statistics, the Business Roundtable, NECA 1969 study, the Construction Industry Institute (CII), and the works of Hanna et al. (2008 and 2009). The American Association for Cost Engineering (AACE) has identified some of the recommended specialized studies that can be used to evaluate the adverse effects of shiftwork on productivity (AACE, 2004).

Despite these negative effects, construction contractors use shiftwork as a way to accelerate construction schedules. But the question is what strategies are effective in minimizing the adverse effects of shiftwork on construction work. Some of these strategies include the following:

1- Refrain from shiftwork for those who are more susceptible to health problems: Construction contractors should refrain from scheduling shiftwork for those employees who are susceptible to health problems. Workers older than 50 years or pregnant women are examples of these individuals.

2- Use rapid rotations: Instead of weekly or monthly cycles, construction contractors are encouraged to consider rapid rotations in scheduling shiftwork. The use of rapid rotations in scheduling shiftwork is recommended because rapid rotations do not significantly disrupt sleep patterns of those individuals who work on a shiftwork basis. Three examples of rapid rotation shiftwork systems are shown in the following tables (Kodak, 1986):

3- Overlap consecutive shifts in part: By providing some overlap between consecutive shifts, construction contractors can overcome the challenges in exchanging performance information among individuals who work in consecutive shifts. That way, the arriving crews become aware of what has been performed by the previous crews. To achieve this objective, construction contractors can ask the foreman of the first shift to stay one or two hours longer or the foreman of the arriving crews to arrive earlier to the extent practically needed for coordination purposes.

4- Assign independent tasks to consecutive shifts: Different shift-working teams tend to work with the same set of tools, machinery, and equipment; therefore, work setup times are typically higher when multiple teams (instead of one team) use the same set of tools, machinery, and equipment. In addition, extra time is needed in shiftwork for the process of hand-over and transition from one shift to another if the work of consecutive shift are dependent. To overcome these challenges, construction contractors can assign tasks that are totally independent from the tasks performed by the previous shift to minimize the interdependency of shifts and reduce the materials and tools that are commonly used by two consecutive shifts.

5- Properly select the work assigned to a second shift: Construction contractors should assign to shiftwork only tasks that are on the project critical path or those work elements that are justified to be accelerated. Proper selection of work assigned to a second shift also includes assigning tasks that are less demanding from the supervision or engineering support perspectives to ensure progress can be made without waiting for supervision or engineering support that may not be readily available during shiftwork periods.

6- Make proper work environment accommodations: Since shiftwork is performed in hours other than daytime hours, work environment considerations need to be identified. Examples include natural lighting vs. artificial lighting and additional demands for air conditioning. Studies have shown that safety is significantly improved by providing an adequate amount of artificial lighting. Moreover, working in places in which work environmental considerations have been taken into account help employees work in a more efficient and effective manner.

In sum, despite the negative effects of shiftwork, construction contractors use shiftwork as a way to accelerate construction schedules. Nevertheless, construction contractors are recommended to use effective strategies to minimize the adverse effects of shiftwork on construction work. Examples of these strategies include refraining from shiftwork for those who are more susceptible to health problems, using rapid rotations, overlapping consecutive shifts in part, assigning independent tasks to consecutive shifts, properly selecting the work assigned to a second shift, and making proper work environment accommodations.

References:

AACE International (2004), Recommended Practice 25R-03 Estimating Lost Labor Productivity in Construction Claims, AACE International, Morgantown, WV. Can be retrieved from https://web.aacei.org/docs/default-source/toc/toc_25r-03.pdf?sfvrsn=4

Kodak, E. (1986). Ergonomic design for people at work. Volume, 2, 20-30.

Hanna, A. S., Chang, C. K., Sullivan, K. T., & Lackney, J. A. (2008). Impact of shift work on labor productivity for labor-intensive contractor. Journal of construction engineering and management, 134(3), 197-204. Can be retrieved from https://goo.gl/CPR9wm

Hanna, A. S., & Haddad, G. (2009). Overtime and productivity in electrical construction. In Construction Research Congress 2009: Building a Sustainable Future (pp. 171-180). Can be retrieved from https://ascelibrary.org/doi/abs/10.1061/41020(339)18

To learn more about the adverse effects of shiftwork on labor productivity, please read this article.

If you’d like to learn more about Adroit’s construction management services, call 1.352.327.8029 or contact us using this form.

Waiver language in contracts may obstruct recovery of damages

Posted on April 25, 2018August 7, 2018 by Adroit

Dr. Maryam Mirhadi, PMP, PSPS

Project risks are treated in a variety of ways. Contract documents are among the key mechanisms that parties to a contract may use to transfer a risk to another party, accept a risk, or select other risk response strategies to treat the risk. The use of waiver language in contract documents is one way to achieve this objective. Waiver language is increasingly incorporated in various contract documents such as contracts, payment releases, and change order or directive forms. The intent of waiver or disclaimer language is to constrain a contractor’s entitlement to compensation for resultant damages that are not expressly identified as compensable in the executed change order.

Therefore, it is important that contractors closely examine contract documents to identify which risks they are taking by entering into a contract or by accepting to include certain waiver language in the contract documents. This close examination becomes more important if a contractor intends to reserve its right to seek compensation for resultant damages. One of the other reasons that highlight the importance of close examination of waiver language in contract documents is that the impact of some changes on a contractor’s productivity or performance is not readily apparent. In these cases, a contractor may be able to evaluate these damages or assess their actual cost impact only after executing the work. If so, it is likely that the contractor has already been asked to execute a variety of contact documents containing some form of waiver language. Therefore, contractors are generally advised to exercise caution to the extent possible and adjust the contract language to avoid unintended consequences.

One of the mechanisms to achieve this objective is to use conditional phrases. An example provision that uses a conditional phrase may be as follows:

The amount of the individual change is in full satisfaction of the changed work and the contractor waives any claim for further compensation for cumulative impact costs unless the contractor expressly reserves that right and no other change concurrently impacts the scope of work.

It is imperative that construction contractors seek legal and expert advice prior to executing contract forms that contain some types of a waiver or release language to determine the best strategies that can be used to avoid unintended consequences of waiver language to the extent possible. Contractors are typically advised to avoid executing overarching waiver provisions.

The second strategy that a contractor may choose to pursue if a client requires the contractor to sign a contract form with some types of overarching waiver or release language is to engage in bilaterally negotiations that aim to include alternative language or adjustments to language as appropriate. These alternative language or adjustments are project-specific conditions or language that the contractor creatively phrases to appear on the contract document or forms, and they may entitle the contractor to reserve, at a minimum, a portion of the contractor’s rights to recover proper damages under defined circumstances.

Accepting a unilateral change order that pays for most of the costs without signing the documents that contain overarching waiver language is another strategy that prudent contractors may pursue if the magnitude of consequential impacts justifies the use of this strategy.

If the contract permits the contractor to carry out the changed work without a settled change order, the fourth strategy that contractors may choose to pursue instead of executing documents that contain overarching waiver language is to complete the work without formally signing the change order form and at the same time use the capacities of the contact dispute clause to seek payments to the extent contractually allowed.

Prudent contractors should closely examine contract documents to identify which risks they are taking by entering into a contract or by accepting to include certain waiver language in the contract documents. They are also advised to use any of the four main strategies discussed above if they are asked to execute forms that contain overarching waiver language to avoid the negative risks of waiver and release language and mitigate their potential impact to the extent practically feasible.

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