Planning, Scheduling and Cost Estimation Skills for Public Sector Projects

Course Overview

The late delivery of projects has become the scourge of project professionals worldwide. Countless numbers of projects undertaken by organizations in the private and public sectors significantly overrun the project schedule and budget, and as a consequence fail to achieve the organization's financial and strategic objectives, often with sizable increases in costs and substantial financial losses to the organization. Why?

This is due mainly to the failure of many project professionals to successfully apply the tools and techniques of modern project planning, scheduling, and control to their projects. Likewise, the development of reliable cost estimates during the design and early conceptual stages of a proposed project is of critical importance to the success of the project.

The decision to proceed with a project is often based almost exclusively on early conceptual cost estimates, and these estimates provide the basis for the cash flow projections and forecasts used during the project feasibility study. Unreliable cost estimates can result in significant cost overruns later in the project life when it is too late to contain them.

In addition to the potential financial losses suffered by the organization, many such projects subsequently fail to deliver the required quality of outcomes intended for the project as a direct consequence of poor estimating. Budgeting inaccuracies inevitably result in lower-quality workmanship and materials.

The estimating techniques and processes covered in this course will provide delegates with the necessary skills to forecast accurately the anticipated costs of projects with a focus on budget estimates, estimates for pre-construction services, estimating contractor and sub-contractor work, estimating general conditions, pricing self-performed work, estimating negotiated contracts, and performing lump sum and unit-price estimates.

This course will significantly enhance the skills and knowledge of delegates and improve their ability to properly plan and schedule their projects, as well as perform estimates at both the conceptual and detailed levels, and compare feasible alternatives quickly and efficiently.

Course Objectives:

At the end of this course, the participants will be able to:

Integrate scope, time, resources and cost management into a dynamic, manageable plan
Develop project network diagrams for CPM and advanced PERT calculations to identify schedule and cost risks
Maintain continuous project performance and delivery control
Estimate and allocate project costs and resources
Measure, forecast and control project performance by employing earned value techniques
Accelerate the schedule when required by adverse circumstances
Manage and mitigate schedule, cost, scope, and resource risks associated with the project
Develop a line of balance schedules and velocity diagrams for repetitive or recurring work
Benefit from the financial effects of the learning curve on recurring work
Develop a project recovery plan for budget and schedule overruns
Produce clear and concise project progress reports
Integrate all relevant project elements into a cohesive and comprehensive cost estimate
Prepare budget estimates that will enable the owner-organization to make informed decisions as to the feasibility of a potential project
Compare the costs of alternative strategies or technical approaches to ensure the most economical project at the desired level of quality
Structure of the contract compensation arrangement to provide the highest level of incentives to complete the project on schedule and within the determined budget
Keep accurate control of the progressive budgeting process based on the various stages of design
Prepare accurate budget estimates through the programming phase, the schematic design phase, and finally the design development phase
Understanding the most appropriate contracting structure to ensure the desired project results
Apply proper risk analysis to effectively mitigate risks at minimal costs, and to determine appropriate contingencies for residual risks
Obtain the skills required to prepare and manage the bidding process
Prepare lump-sum, unit-price, cost plus, and time-and-materials estimates and contracts

Course Content:

Unit 1: Project Scope Planning and Definition (Fundamentals):

Scope Planning
Work Breakdown Structures (WBS)
Work Packages
Statement of Work (SOW) - Technical Baseline
Scope Execution Plan
Triple Constraints - Time, Cost, Scope
Project Quality Issues
Project Risk Analysis
Project Deliverables
Resource Requirements

Unit 2: Project Schedule Planning and Critical Path Method:

Precedence Network Diagramming
Job Logic Relationship Chart
Critical Path Analysis
Project Float Analysis
Lead and Lag Scheduling
Activity Duration Estimation
Milestone Charts
Gantt Chart - Schedule Baseline
Project Estimating Processes
Production and Productivity Planning
Resource and Cost Allocation
Unit 3: Resource Allocation and Resource Levelling:
Management of Resources
Planning and Scheduling Limited Resources
Resource Allocation Algorithms for Resource Prioritisation
Solving Resource Contention
Resource Levelling when Project Duration is Fixed
The Brooks Method of Resource Allocation
Increasing the Workforce
Solving Interruptions to the Schedule
Scheduling Overtime

Unit 4: Accelerating the Project Schedule:

Circumstances Requiring Project Acceleration
Time-Cost-Scope Trade-off
Project Time Reduction
Direct Project Costs
Indirect Project Costs
Options for Accelerating the Schedule
Crashing the Schedule - How?
Pre-Accelerated Schedule
Developing a Crash Cost Table
Acceleration in Practice
The Optimal Acceleration Point
Gantt Chart for Accelerated Schedule
Network Activity Risk Profiles
Additional Considerations
Multiple Critical Paths
Project Cost Reduction

Unit 5: Project Contingency Planning:

Program Evaluation and Review Technique (PERT)
Path Convergence Analysis
Solving the Path Convergence Problem
Network Risk Profile Types
Normal Distribution
PERT, Probability and Standard Deviation Formulae
Calculating the Standard Deviation
Standard Deviation for Critical Path
Z-Values: The Probability of Project Completion at a Required Date
True Critical Path
Network Activity Risk Profiles
Application: Estimating Project Duration

Unit 6: Line of Balance Scheduling - The Planning of Recurring Activities:

Preparing a Line of Balance Schedule
Velocity Diagrams and Linear Scheduling
Velocity Diagram Production Rate Calculations
Linear Sequence of Activities as a Series of Velocity Diagrams
Balancing the Schedule
Calculations for a Line of Balance Schedule
Line of Balance Formulae
Target Units per Week
Determining Crew Size
Actual Rate of Output
Time to Complete One Activity
Elapsed Time for Recurring Activity
The slope of Line from Activity Start to Activity Finish
Balanced Project Schedule without Buffers (Finish-Start)
Inserting Buffers
Comparison of Unbalanced with Balanced Schedules
Measuring Planned Progress on Schedule
Velocity Diagram Reflecting Expected Conditions
Actual Progress and Work Conditions
Variable Conditions

Unit 7: Project Execution Management, Control and Reporting:

Progress Tracking and Monitoring
Project Cost Management
Earned Value Control Process
Schedule Variances
Cost Variances
Progress Control Charts - Trend Analysis
Schedule and Cost Variance Forecasting
Labour Management and Cost Control
Materials Management and Cost Control
Earned Value Analysis
Earned Value Reporting

Unit 8: Project Recovery Plan Development:

Project Variance Analysis and Quantification
Schedule Performance Index (SPI)
Cost Performance Index (CPI)
Setting Schedule and Cost Control Limits
Project Recovery Data Assessment
Schedule and Cost Recovery Analysis
Schedule and Cost Recovery Plan
Project Recovery Baselines and Controls

Unit 9: Cost Estimating Basics:

The estimated life cycles
Phases of the Design Process
Programming phase
Schematic design
Design development
Construction documents
Estimating accuracy by phase
Conceptual Cost Estimates
Rough Order of Magnitude Estimates (Broad Scope Estimates)
Assemblies cost estimates
Cost indices
Semi-detailed Estimates (Narrow Scope Estimates)
Definitive Estimates (Detailed Scope Estimates)
Basic procedures
Lump-sum contracts
Unit-price contracts
Cost-plus contracts
Cost-plus contract with the guaranteed maximum price (GMP)
Time-and-Materials contracts
Bid method
Negotiated method
Quantity take-off
Types of construction contracts
Procurement methods
Pre-construction services
Risk Analysis and Contingencies

Unit 10: Broad Scope Cost Estimating Techniques:

Adjustments to Project Cost for Broad Scope Estimates
PERT Project Cost Analysis
PERT Unit Cost Estimates
Formulae for Cost Estimating
The Normal Distribution Curve
Z-Value Table
The Probability of Project Completion Within Budget
Estimating Project Unit Cost by Using the Standard Deviation
Estimating the Project Unit Cost at a Required Probability
The Probability of Completing the Project at a Required Cost
PERT vs Standard Deviation & Z-Values
Adjustments to Estimates Based on Previous Projects
Adjustments for Time
Review: Future Value of Money
Review: Present Value of Money
Equivalent Annual Interest Rate
Index to Adjust for Time
Equivalent Compound Interest
Location Index for Construction
Adjustments for Location
Adjustments for Size
Combined Adjustments
Economic Price Adjustment
Estimating Durations based on the Learning Curve Effect
Estimating Costs Based on the Learning Curve Effect
Unit-Cost Adjustments
Learning Curves

Unit 11: Budget Estimating Process:

Estimating by design phase
Programming budget estimates
Schematic design budget estimates
Design development budget estimates
Estimating pre-construction services
Request for proposal
Development of pre-construction services estimate
Pre-construction services contract
Budget control log

Unit 12: Bid Contract Estimating Process

Pre-estimate activities
Estimating process
Solicitation of lump-sum bids
Order-of-Magnitude estimates
Work Breakdown Structure
Estimating team
Scheduling the estimating work
Subcontractors and major suppliers
Estimating forms
Accuracy and error prevention
Pricing self-performed work
Recap sheet
Materials
Labour
Applying pricing factors
Summary recap
Subcontractor work
Project summary schedule
Alternative techniques
Elements of the estimate of the general condition
Final document review
Completing the bid summary
Final mark-ups
Sales tax
Validating the estimate
Estimating subcontractor work
Estimating General Conditions
Completing the estimate

Unit 13: Unit Price Estimates:

Unit price bid forms
Direct cost estimation
Materials
Labour
Indirect labour
Subcontractors
Recap summary sheet
Direct-to-indirect cost factor
Mark-up determination
Variation-in-quantity contract provision
Risk analysis
Bid finalization

Unit 14: Negotiated Contract Estimating:

Guaranteed Maximum Price Estimates
Contract procurement process
Documents
Strategies
Estimating process
Contingencies
Fee determination for negotiated contracts
Reimbursable versus Non-reimbursable costs
Home office overhead
Risk evaluation
Fee structure
Cost savings split
Strategies for Responding to the Request for Proposal
Documents to be included with the Request for Proposal
General Contractor Interview and selection process
Negotiated subcontracts
Cost proposals for negotiated contracts

Unit 15: Contract Types and Compensation Arrangements:

Risk distribution in contracting
Project risk profiles
Contract types according to risk distribution
Fixed Price Contracts
Firm Fixed Price
Fixed Price with Economic Adjustment
Incentive Contracts
Fixed Price Incentive
Cost Plus Incentive
Cost Reimbursement
Cost Plus Award Fee
Cost Plus Fixed Fee
Cost-Plus Contracts
Time-and-Materials

Unit 16: Narrow Scope Cost Estimating Techniques:

Power-sizing techniques (Capacity Ratios)
Factor estimates
Cost estimating relationships (CER)
Design-to-cost-estimates
Target cost estimates
Adjusting for Project Type and Quality Level
Features Determining the Quality Level (Grade) of a Structure
Adjusting for Quality Level by Using a Costing Publication
Economic Constraints
Parametric Cost Estimating
Analysis of Estimating Accuracy

Targeted Groups:

Project Managers
Project Cost Estimators
Cost Controllers
Project Planners
Contract Professionals
Project Procurement Staff
Individuals who are interested in Project Initiation, Project Estimating and Budgeting, and Development