Insights | Adroit Consultants, LLC

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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Shortening the project longest path

Posted on June 17, 2018October 31, 2018 by Adroit

The critical path represents a project’s longest continuous sequence of activities in the project schedule. This path determines the earliest time that the project can be completed. To complete a project earlier than its originally-planned completion date, the project longest path is typically shortened. Shortening a project schedule may be costly and result in unintended consequences. For example, schedule compression may cause stacking of trades and ultimately result in loss of labor and equipment productivity. Nevertheless, project teams may choose to shorten a project schedule due to a variety of reasons such as catching up to achieve the planned dates that are affected by delays or due to a need to achieve some milestone dates earlier than expected.

Due to the potential impacts of schedule compression on the project, the project teams should use proper strategies to shorten the project longest path. In accelerating project activities, priority needs to be given to the critical activities because these activities drive the expected project completion date in the schedule. If a number of options exist, priority is typically given to those critical activities whose crashing is less costly. Improper implementation of acceleration plans may result in less than expected time savings, unexpectedly high costs of crashing, quality or safety issues, and loss of labor or equipment productivity. It is important to note, however, that acceleration is not the only option for shortening the longest path.

Depending on the type of the project and its scope of work, project teams may have a number of options to compress project schedules. The following table outlines some of the example methods in each of the main phases of engineering, contracting and procurement, and implementation:

Phase	Method	Method Description
Engineering	Constructability review and analysis	The review of designs to ensure designs can practically be implemented with cost-effective means and methods.
	Incorporate modular components in design	The incorporation of modular components in design to ensure less time is needed to be spent on the jobsite to implement these components.
	Reuse designs and plans	The reuse of previously-used design elements may result in saving design time and efforts.
	Incorporate standard or typical components in the design	The use of standard or typical designs may help the design team save time and efforts in implementing designs.
	Incorporate pre-engineered or on-the-shelf components in the design	The incorporation of pre-engineered or on-the-shelf components may reduce the need for designing new elements.
Contracting and procurement	Fast-tracking	The creation of an overlap between design and procurement or an overlap between procurement and implementation activities may result in time savings.
	Outsourcing	The assignment of work to outside entities instead of implementing all activities in-house may help to use in-house resources in more effective ways.
	Find alternative or equivalent modular products or systems	The use of alternative or equivalent products or systems may help to save time that would have otherwise been used to fabricate or supply items.
Implementation	Improve work sequence	The improvements to the work sequence or betterment of the work schedule may help project teams identify time saving opportunities.
	Shiftwork and overtime	Working overtime or working in periods other than daytime hours may help project teams make more progress in the same or shorter amounts of time.
	Expend more resources in the same or shorter time periods	The use of higher resource usage rates and spending more resources in the same or shorter time periods may help project teams increase progress achievements.
	Incentivized working schemes	The use of incentivized schemes may encourage project teams to complete activities in a shorter amount of time or work in a more effective manner.

Because of the potential impacts of schedule compression techniques on the project, the project teams should use proper strategies to shorten the project longest path. Acceleration is not the only option to shorten the longest path. If a project team is intended to shorten the project longest path, it is recommended that the team chooses the most appropriate strategies in each of the main phases of engineering, contracting and procurement, and implementation to ensure the schedule can properly be compressed using a cost-effective manner that fits the project needs.

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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.

Adverse effects of schedule deficiencies on claim administration

Posted on May 29, 2018October 31, 2018 by Adroit

Dr. Maryam Mirhadi, PMP, PSP

Project schedules provide a basis for communication, execution, monitoring and controlling, and reporting and offer a platform for measuring project progress and performance. In addition, courts bank on project schedules to assess time extensions or time-related compensation requests. As such, project time schedules are one of the key inputs without which many construction claims cannot properly be prepared or investigated. Construction contractors should give proper attention to preparing detailed and reasonable project schedules throughout the project to ensure the project schedules remain acceptable and reliable over the course of the project, and they reasonably represent the plans as well as the actual progression of work. Some of the main issues with project schedules, especially those that adversely affect claim administration efforts, are discussed in this brief article.

The project schedule needs to be continuously updated at reasonably short time intervals; otherwise, project schedules will not reflect the most current information about the actual progression of work on the project. Inaccurate updated schedules and the lack of updated schedules for some of reporting/updating cycles make claim administration challenging because the updated schedules may not contain all pieces of information that a claim investigation team is looking to find. Examples of these pieces of information include planned start and finish dates, actual start and finish dates to quantify the extent of delays, periods of disruption, and the key dependencies that drive critical path delays within each updating cycle. In particular, delays cannot properly be assessed without having accurate project schedules for all the key reporting/updating cycles especially for the cycles in which delays have negatively impacted the progression of work.

Project schedules should not only represent the plans going forward but also illustrate the actual progression of work. In doing so, if an impact prevents a contractor from being able to achieve certain planned dates, these impacts should properly be reflected in the schedule. For instance, if during a time analysis period, a change has impacted a contractor’s work sequence, the project schedule updated at the updating cycle immediately after the change should properly illustrate the impact of this change on the work. Otherwise, retroactively correcting the project schedules may be challenging due to reasons such as lack of access to accurate contemporaneous data or lack of authorization to make changes after the fact. Project schedules also need to be complete to ensure they include a right set of project activities and work packages, properly reflect the project scope of work, and outline all reasonable steps that need to be taken to complete the project scope of work in its entirety.

Depending on the nature of the work, a proper combination of physical, safety, resource, and preferential relationships can be used in defining activity relationships. It is important, however, to make sure that project schedules are free of logic deficiencies. Example logic deficiencies that may call the credibility of project schedules into question include incorrect logic, missing logic, logic loops, excessive or improper use of time lags/leads, and redundant activity ties. Logic deficiencies make the process of delay analysis challenging because a schedule that suffers from logic deficiencies cannot reasonably be used to assess the expected and actual sequence of work.

Resource loading project schedules allows for resource planning, resource tracking, and resource optimization. It also allows for adjusting the schedule based on resource constraints by performing resource smoothing or resource leveling. In a similar way, cost loading project schedules allows for the development of funding plans, budget consumption plans, and cost flows. Resource plans and budgeted costs are also important for claim investigation purposes because they specify how resources and costs were supposed to be expended over the course of the project and identify if certain changes, delays, or productivity factors have impacted these schemes. As such, resource plans and budgeted costs should be prepared at a reasonably detailed level; otherwise, they cannot provide an insight into the impact of change on the project. Properly documenting the basis of estimates and using proper cost breakdown structures are two other important considerations in budget and cost flow documentation. Whenever, a delaying event occurs or a condition adversely influences the project schedule, the contractor should re-assess the project schedule to ensure the schedule is adequately detailed to measure the adverse effect of the delaying event or the condition with a negative impact on the project schedule.

Many factors play a role in the successful use of project schedules in administering construction claims. However, the quality of project schedules is one of the main role players in facilitating successful management and resolution of construction claims. The accuracy of project schedules, their completeness and reasonableness, and proper use of resource- and cost-loaded schedules are some of the important considerations that need to be given to using project schedules in administering construction claims.

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Pricing Change Orders

Posted on May 26, 2018August 7, 2018 by Adroit

Maryam Mirhadi, Ph.D, PMP

Owners typically have the contractual right to make changes to the scope of work outlined in contracts. Since these changes impact contracts’ scope of work and they potentially have time, cost, and productivity implications, it is important to give proper consideration to pricing change orders.

Pricing is either backward or forward. Backward pricing is used when the pricing is partly or wholly based on the actual cost of a work performed. Forward pricing, however, is based on the estimated cost of work that is yet to be performed.

If the forward pricing approach is used to price change orders or change order requests, the estimated cost of work is prepared based on the projected cost of materials, systems, products and permanent equipment needed to execute the work plus the costs of resources that need to be acquired in implementing the scope of work. The first category of costs is associated with those items that remain as part of the facility or the system being implemented whereas the second category of costs referenced above is associated with project resources (including workforce, temporary equipment, tools, and machinery) that do not remain in the project but are necessary to accomplish project activities. It is recommended that practitioners differentiate between these two categories of costs to ensure the cost of project deliverables can be differentiated from the resource costs.

It is important to account for projected levels of productivity in pricing change orders because the resource usage rate needed to perform a changed work may differ from the resource usage rates required to implement a work under normal circumstances in which no change is introduced. For example, if changing a scope of work adversely impacts labor productivity, the estimated usage rate of workforce originally used to estimate the unimpacted work does not necessarily suffice to complete a changed (i.e., impacted) scope of work. As such, in pricing change orders, the effects of change on the original scope of work need to be assessed to adjust the estimates.

One of the techniques that can be effective in assessing the impact of a changed work is assessing the project cost flow. Cost flow and cash flow are often used interchangeably. It is important, however, to identify the purpose each of these tools intends to serve. A cost flow diagram shows the budgeted amount of money that is needed over time to make progress as planned. A cash flow diagram, on the other hand, provides the estimated sums of money to which a contractor has access over time. Assessing the project cost flow can help analyze excessive costs and overruns by comparing the budgeted (i.e., time-phased estimates) cost of performing the changed work with the sums of money originally needed to make progress as planned. This assessment can help identify the adverse effect of the change on the resource costs needed over time.

This assessment can be insightful only if the cost flow and estimates are prepared at a sufficiently detailed level. Otherwise, they cannot provide an insight into the impact of change because of the lack of granularity of the pricing data available. Properly documenting the basis of estimates and using proper cost breakdown structures are two other important considerations in budget and cost flow documentation. Detailed budgets or cost flows are prepared by relying on certain assumptions and information available at the time of preparing these estimates. These assumptions and information should properly be documented in a document, entitled “basis of estimate”, for future references.

Per the Federal Acquisition Regulation (FAR), cost estimates used in government contracts have to be reasonable, allocable, and allowable. Moreover, pricing data must be current, accurate and complete. The following excerpts from the FAR define reasonableness, allocability, and allowability of costs:

In defining the reasonableness of costs, Provision 31.201-3 of FAR states:

A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person in the conduct of a competitive business.

In defining the allocability of costs, Provision 31.201-4 of FAR states:

A cost is allocable if it is assignable or chargeable to one or more cost objectives on the basis of relative benefits received or other equitable relationship.

Per the FAR, a cost is allocable only if it:

(a) is incurred specifically for the contract; (b) benefits both the contract and other work, and can be distributed to them in reasonable proportion to the benefits received; or (c) is necessary to the overall operation of the business, although a direct relationship to any particular cost objective cannot be shown.

Per the FAR, the factors that need to be considered in determining whether a cost is allowable include the following:

Reasonableness
Allocability
Standards promulgated by the CAS Board, if applicable; otherwise generally accepted accounting principles and practices appropriate to the particular circumstances.
Terms of the contract
Any limitations set forth in this subpart

It is also important to differentiate between direct and indirect costs in pricing change orders and determine which types of direct or indirect costs have to be included to accurately prepare cost estimates. Typical direct costs of executing construction activities include direct labor and workforce, equipment, material, and services provided to each project activity. Direct costs can be assigned to specific project activities whereas indirect costs are intended to cover overhead expenses that are needed to manage, administer and support the work. Indirect costs are not typically assignable to particular project activities. General conditions costs support various aspects of the work and they are typically assigned at the project level, not at the activity level. Therefore, they are typically considered among the indirect costs unless a different definition of indirect costs is adopted.

Based on what was discussed above, it is important to give proper consideration to pricing change orders. The proper use of pricing approaches including backward or forward pricing is the first step towards properly pricing change orders. The other considerations is to identify the time, cost, and productivity impacts of changes on the original scope of work. Cost flow diagrams can assist in better identifying the impact of change on a project cost, schedule, and productivity. It is also important to ensure proper pricing and estimating practices are used to ensure estimates are reasonable, allocable, and allowable. An effective use of cost engineering techniques throughout the process plays an important role to ensure the estimates prepared for change orders are current, accurate and complete.

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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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Common mistakes concerning project risks

Posted on April 25, 2018November 3, 2018 by Adroit

Maryam Mirhadi, Ph.D., PMP, PSP

Project risks are uncertain events or conditions that may impact a project if they occur. It is important to note that this impact may be negative or positive. As such, project risk response strategies have to be used to deal with each of the project risks. Different risk response strategies may be used depending on whether the risk is negative or positive. Negative risks pose a threat; however, positive risks are to be treated as opportunities.

A Guide to the Project Management Body of Knowledge (PMBOK® Guide) –Sixth Edition, identifies the following as the five risk response strategies that can be used for managing negative project risks: avoidance, transference, mitigation, escalation, and acceptance strategies (PMI, 2017). The following table provides a short description and example for each of these risk response strategies:

Table 1. Risk-response strategies for managing negative risks

The PMBOK® Guide identifies the following as the five risk response strategies that can be used for managing positive project risks: exploiting, sharing, enhancing, escalation, and acceptance strategies (PMI, 2017). The following table provides a short description and example for each of these risk response strategies:

Table 2. Risk-response strategies for managing positive risks

Some of the common mistakes concerning project risks and risk response strategies include the following:

1- Risks are always negative: In fact, not all risks are negative. Although the word risk may have a negative connotation in conversations, risks are not always negative in project management. Risk is “any uncertain event or condition that, if it occurs, has a positive or negative effect on a project’s objectives” (PMI, 2017, p. 720). As such, risks may be negative (i.e., threats) or positive (i.e., opportunities).

2- All risks need to be mitigated: In fact, not all risks need to be mitigated. First, it is important to note that mitigating is a risks response strategy only for treating negative risks. This risk response strategy is not applicable to positive risks or opportunities. In addition, although risk mitigation is one of the main risk response strategies for treating negative risks, mitigation is not the only risk response strategy that can be used for treating negative risks. As shown in Table 1– Risk-response strategies for managing negative risks– aside from mitigation, four other risk response strategies also exist that may be used in response to negative risks.

3- Risks can be certain events or conditions: In fact, certain events or conditions for which no doubt or uncertainty exists should not be treated as risks. Definite, certain events are facts, not risks. For example, in case of “having inadequate time to complete the project”, if it is known that the time needed to complete the project is inadequate, this is not a project risk, instead, it is a fact. If uncertainty is not associated with an event or condition, it cannot be considered a risk anymore. To differentiate project risks from facts and to properly name project risks, it is recommended that project management practitioners always use the cause-risk- effect format to define risks. This format can be used as follows: [uncertain event or condition] may occur due to [the cause] which may result in [the effect]. Here is an example: The contractor may incur damages due to unforeseen site conditions which may result in project delays or disputes.

4- Other mistakes: The above-mentioned mistakes were some of the key mistakes made in defining risks or risk response strategies. However, other mistakes may also be made. Some examples include not accounting for contingency reserves or devising contingency plans as part of risk response plans, not assigning role and responsibilities in managing project risks, and not treating risk management as an ongoing process that needs to be performed throughout the project lifecycle.

In sum, many mistakes are made in defining project risks and identifying risk response strategies; however, the main ones include treating all project risks as negative events or conditions with an adverse effect on the project, treating mitigation as the only risk response strategy that can be imagined, and treating definite events or conditions as risks. A proper understanding of project risks and the strategies that can be used to manage project risks is necessary to ensure risks can successfully be managed. If project risks are left unmanaged, they have the potential to force the project to deviate from its plans or fail to reach its objectives.

Reference:

Project Management Institute [PMI]. (2017). A Guide to the Project Management Body of Knowledge (PMBOK ® Guide) (6th ed.). Newton Square, PA: PMI Publications.

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Changes that arise from design-related causes

Posted on March 26, 2018August 7, 2018 by Adroit

Dr. Maryam Mirhadi, PMP, PSP

Contract documents for a construction project consist primarily of the agreement, conditions of the contract, drawings and specifications, and any addenda issued to clarify, or modify the bidding or proposal documents before the contract for construction is signed. As such, construction drawings and specifications are parts of the legal documents of the agreement that are issued to delineate the requirements regarding the materials, products, systems, installation guidelines and procedures, standards and workmanship, and quality aspects involved with the execution of the work. This short article identifies some of the design-related factors that may result in change orders.

Defective specifications are examples of design-related issues that may result in contract modifications. An owner may specifically direct a contractor to make changes to the contract scope of work if it finds out that the specifications are defective. It is more likely, however, that defective specifications result in constructive changes. Incomplete or inaccurate specifications are examples of defective specifications.

Here are examples of changes that may occur due to design-related reasons:

Changes due to incomplete specifications: If specifications provide insufficient information necessary to implement the work outlined in the contract, they are considered incomplete. In addition, if specifications provide inadequate information in coordinating construction details between different design disciplines (e.g., structural, mechanical, electrical), specifications are considered incomplete. A complete set of specifications are intended to provide adequate information necessary to execute the work to achieve the project objectives set forth in the contract.

Changes due to design discrepancies: If the construction drawings associated with different trades are inconsistent, a design discrepancy exists between contract documents. In addition, differences and discrepancies among plans, specifications, and details or discrepancies between planned and actual equipment details may be indicative of design discrepancies that need to be rectified by issuing proper change orders.

Changes due to physical or technological constraints: Specifications may also be considered defective if a project design does not provide adequate space for fitting all the elements or does not meet physical or technological constraints that need to be considered in design and construction. Depending on the level of complexity of the issue, site conditions, and other technical and contractual requirements, resolving such issues may require changes in design, modification of requirements, and subsequently making minor or major adjustments on-site where appropriate.

Changes to satisfy regulatory requirements. Design documents are supposed to satisfy the requirements of applicable codes, standards, and regulations. Therefore, if the project team finds out that the project scope of work needs to be modified to properly satisfy regulatory requirements, a change order may be needed to ensure the requested change is properly reflected on design documents and implemented to satisfy regulatory requirements.

Latent conditions: Some changes are made due to differing site or subsurface conditions, unknown at the time of bidding. They are conditions within the project site that are materially different from what was shown on the contract documents or those that substantially differ from conditions that are obvious and apparent.

Other changes that occur due to design-related reasons may include changes due to a change in needs and expectations, changes made to address value engineering concerns, and modifications due to technology-related needs, and those due to errors and omissions. It is important to identify, properly document, and control changes over the course of projects to ensure project scope is managed in an effective manner, and to ensure time and cost overruns arisen from scope-related issues are minimized.

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Adverse effects of shiftwork on labor productivity

Posted on March 24, 2018August 7, 2018 by Adroit

Dr. Maryam Mirhadi, PMP, PSP

One of the factors with adverse effects on labor productivity is shiftwork. Shiftwork is defined as working other than regular daytime hours. Shiftwork is the most commonly utilized alternative to overtime; however, these two methods may be used together so that segregating the two may not be straightforward. It is also important to note that overtime and shiftwork adversely influence productivity in a generally similar way.

When work is performed on a shiftwork basis, labor productivity is adversely affected because of reasons such as stress on circadian rhythms, additional resource or preparation needs, or other factors such as additional coordination, labor, and supervision. These factors need to be considered when work on a shiftwork is scheduled to ensure informed decisions are made.

One of the key issues with shiftwork is its adverse effect on circadian rhythms. Circadian rhythms are the approximate 24-hour variations in bodily functions in individuals. The key cyclic changes that occur in bodily functions in individuals include sleep patterns, blood pressure, heart rate, and core body temperature. Bodily functions tend to increase right after awakening, increase in midafternoon, and then steadily decrease in the middle of the night. As such, those who need to perform on a shiftwork basis typically experience a degradation in performance.

Although the body of those individuals who perform on a shiftwork basis tend to adapt to night work, the circadian rhythm does not in fact completely shift and bodily adjustment periods tend to be long. Some indications that may suggest shiftwork has adversely affected an individual’s body include higher rates of accidents and error in performing tasks, fatigue, appetite loss, increased sickness rates, digestive problems, and other health problems.

Consequences of shiftwork are not limited to those effects that adversely affect the circadian rhythms of individuals who perform on a shiftwork basis. Other issues with shiftwork include the following:

1- The adverse effects of shiftwork on social interactions and negative effects on family life of those who perform on a shiftwork basis.

2- Dilution of supervision typically occur as a result of shiftwork because the supervising team may not use the same working pattern than the working pattern used by shift-working individuals.

3- Challenges in exchanging performance information among individuals who work in different shifts.

4- Higher work setup times. 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.

5- Work environment considerations: 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.

All of the above-mentioned factors adversely influence work performance in performing tasks that are implemented on a shiftwork basis. Moreover, successful implementation of the work that needs to be performed on a shiftwork basis typically requires additional resources to accommodate the shift project. Additional resources that are generally needed to support shiftwork can be categorized into the three main categories of labor, supervision and job-specific costs. Each of these categories are further discussed in the following:

1- Labor needs

Shiftwork typically requires hiring of additional personnel; however, it is important to note that, because of the learning curve effect, the efficiency level of new hires are typically lower than the efficiency of the current team members. In addition, employers need to pay for shift premium differentials, as needed. Other labor-related considerations that need to be given to shift-working include long bodily adjustment periods, especially for those individuals who are not used to shift-working, higher accident and error rates in performing shiftwork, higher likelihood of improper alcohol consumption before or during shiftwork, and poor attitude towards shiftwork.

2- Supervision needs

Adequate supporting and supervisory personnel are needed when a work is performed on a shiftwork basis. Establishing relationship between work shifts and proper hand-over process between shifts are also important to ensure the work smoothly progresses across different work shifts.

3- Job-specific needs

Examples job-specific needs that have to be evaluated include safety requirements, higher demands for air conditioning or heat equipment to perform shiftwork, and adequacy of equipment, tool, machinery, and material to ensure enough resources are available on-site to make progress as expected.

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, and the Construction Industry Institute (CII). 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). AACE categorizes the specialized studies related to overtime and shiftwork into the same category because these two areas overlap and the adverse effects of overtime and shiftwork on productivity are similar

One set of models that are often used to assess the adverse impact of shiftwork and/or working overtime on labor productivity is the work of Hanna and Haddad (2009), which is a modified version of the NECA study. The work of Hanna and Haddad (2009) proposes using macro and micro approaches. The macro approach is used for projects in which no specific overtime schedule is used whereas the micro approach is used in projects in which a fixed overtime schedule (e.g., such as six 10 hour days per week throughout a certain number of weeks) is utilized. Both models indicate that as the number of weekly hours worked increase, the labor productivity declines. The following two figures illustrate these two models:

(Adapted from the work of Hanna and Haddad (2009))

In Figure 1 a regression line is fitted to the data which plots the performance factor index (i.e., earned hours / actual hours) against the total hours worked per week. Figure 2 plots productivity against the number of weeks in which a fixed overtime schedule (e.g., such as six 10 hour days per week throughout a certain number of weeks) is utilized. Since this model uses Measured Mile Method (MMM) to calculate productivity loss in periods with and without overtime, the outcomes of the model are shown as MMM. These outcomes are compared against the NECA 1969 study.

In sum, shiftwork is one of the methods that are used to accelerate projects. It is important to note, however, that, similar to working overtime, shiftwork has adverse effects on labor productivity. 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. The methods used to assess the adverse effects of shiftwork on productivity overlap with the methods used to evaluate the loss of labor productivity due to overtime because the adverse effects of overtime and shiftwork on productivity are similar.

References:

AACE International (2004), Recommended Practice 25R-03 Estimating Lost Labor Productivity in Construction Claims, AACE International, Morgantown, WV.

Hanna, A. S., & Haddad, G. (2009). Overtime and productivity in electrical construction. In Construction Research Congress 2009: Building a Sustainable Future (pp. 171-180).

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Types of Change in Projects

Posted on October 24, 2017November 3, 2018 by Adroit

A variety of reasons may cause an increase or decrease in the amount of work from the scope of work specified in the original contract. These reasons result in either directed changes or constructive changes to the project’s scope of work. This article briefly describes each of these main categories of changes. It also outlines the potential implications of changes to a contract scope of work from the time, cost, and productivity perspectives.

In general, owners have the contractual right to make changes to the scope of work outlined in the original contract. Since owner changes impact contract scope of work and they potentially have time, cost, and productivity implications, it is important to identify various types of change in project scope of work and recognize potential effect of each type of change on project contracts. Examples of the most common changes include:

Changes in means and methods or material to be installed
Differing 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 systems
Changes in construction, prescriptive, proprietary, or performance specifications
Corrections made due to errors or omissions
Modifications as a result of the actions or inactions of third-parties

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

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

It is important to identify changes in a timely manner, especially in case of constructive changes whose effects are not explicit and readily recognizable. The reasons for each change need to properly be identified and documented in proper change management logs. Moreover, the effects and implications of each change need to properly be documented to ensure sufficient documentation and historical records are readily accessible to substantiate contractual entitlements. If your project has been affected by multiple change orders 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 change orders, Adroit will be able to assist in assessing these impacts. For more information, please contact us.

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