Course details

Overview ?

The Course

One of the most important phases in the success of project development is the planning phase. That’s why the management of a project begins at this critical phase where exceptionally realistic time and cost estimates are most needed to help the project manager realize the project’s deliverables. Good project planning not only saves time and money, but also increases the overall earned project value (quality, reliability, safety, etc.) for the amount of funding expended.

This course is comprised of three modules which can be booked as a training event, or as individual courses; Module 1 presents and examines the principles, tools and techniques used to develop schedules for both time and resources; Module 2 covers basic and advanced cost estimation techniques as well as the impact of risks that need to be considered to ensure the plan predicted is valid; and Module 3 Module presents and examines the implementation of the Value Engineering (VE) concept for maximizing project functionality, reliability and quality at the lowest possible cost.

The Structure

Module 1 - Project Scheduling & Contingency Planning Skills

Module 2 - Project Cost Estimating Skills

Module 3 - Value Engineering Skills

The Goals

Following the completion of this course, delegates will:

Gain knowledge of techniques used in project estimating, from the conceptual stage to the final detailed estimate
Understand the different types of estimates used to accurately and progressively estimate project costs
Understand the different types of contracts based on the distribution of risk between contracting parties
Gain knowledge of techniques used in resource planning and control
Understand the time-cost trade-offs
Identify risk sources and minimize their impact and learn how to sustain project momentum
Learn how to administer project documentation and reporting
Develop effective performance monitoring and control system
Effectively apply incentive arrangements to get the best results from the contract
Gather and organize information and cost relevant to the design aspects of the project
Demonstrate better understanding of the key functions performed by key components of the design
Critically assess and evaluate the relationships among key attributes such as cost, value and function
Report effectively to top management and project stakeholders in the context of proposing new design alternatives that improve the overall project value
Demonstrate proficiency in applying life-cycle costing principles
Objectively present a convincing case in support of certain design alternatives

The Process

The course is a mixture of speaker input, case studies and practice exercises which will be used to facilitate group discussion. Delegates will gain detailed knowledge of cost estimation and value engineering concepts and techniques by active participation in the exercise/training sessions. Through lectures, case studies and practical exercises, delegates will focus on key concepts, terms, and principles necessary for realistically estimating, controlling and optimizing project costs.

The Benefits

This course will provide delegates with a proven set of critical skills and techniques for the development a systematic and dynamic project schedule, reliable cost estimate, as well as the ability and skills to compare the costs of alternative strategies or technical approaches to ensure the most economical project at the desired level of quality.

The Results

Individuals and organisations will be better prepared in relation to how to manage the schedule, cost and design of their projects according to best practices. Individuals will learn how to adopt and apply a structured approach to time and cost estimation, budgeting and value engineering. This in turn will lead to having a consistent and streamlined schedule, cost and design management processes across the organisation.

The Core Competencies

Delegates attending this course will enhance their competencies in the following areas:

Ability to deliver projects on time and within budget
Understanding of what it takes to be a successful project manager
Skill and confidence to plan and control projects successfully and ability to sidestep the most common project management pitfalls and problems
Appreciation of the philosophy, framework, standards and approaches to the delivery of the projects
Developing an initial project budget for the owner
Determining project feasibility
Designing the project within the owner's budget
Evaluating alternative design concepts and project components
Preparing bids & cost proposals
Establishing project budgets
Determining the cost impacts of change orders
Developing appreciation of how to frame decisions and to develop decision hierarchies
Bringing Value Engineering into the organization’s business planning process
Identifying major roadblocks to creativity, and ways to mitigate them
Evaluating the results of a brainstorming session to develop the best value-adding scenario
Adhering to a structures sequence of logical steps to solve problems that eliminate unnecessary costs without compromising quality or functionality

The Programme Content

Module 1:

Project Scheduling & Contingency Planning Skills

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

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

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

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

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

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
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

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

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

Module 2:

Project Cost Estimating Skills

Cost Estimating Basics

The estimating life cycle
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 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

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

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

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 general conditions estimate
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 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 finalisation

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

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

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

Module 3:

Value Engineering Skills

Framework for Applying Value Engineering in Projects

What is Value Engineering? Why is it important?
Defining Value Engineering concepts and principles
Purpose of Value Engineering and Value Analysis
Strengths and Weaknesses of Value Engineering
How and When is Value Engineering applied?
Project definition and initiation
Project scope and charter development
Life-cycle costing techniques
Project stakeholders analysis and management
Identifying relationships between Value, Cost and Worth
Initiating Value Engineering Process
Overview of Different Value Engineering Phases
The Information Phase – steps and procedures
Developing Value Engineering Job Plan

The Function Analysis Phase - Expressing Project Functional Needs and Constraints

The need for Function Analysis in projects
Defining project constraints – relationships and tradeoffs
Conceptual project cost estimating techniques
Function-Cost-Worth Analysis
Developing FAST Diagrams to identify critical project components
The Technical FAST Model to perform project value analysis
Case Study
Cross-Functional Project Team Approach

The Creative Phase - Inspiring Creativity in Your Project Team

Creativity and Creative thinking within the project environment
Individual vs. Group thinking to improve the quality of project decisions
Creativity techniques as applied to optimize project value
Blocks to creativity within the project team
Brainstorm project solutions
Reaching consensus and leveraging the power of project team collaboration
Project risk perception and identification
Project prioritization process using the Delphi technique
The use of Force-field analysis in project problem solving
Output of the Creative Phase

The Evaluation Phase -Making Informed Project Decisions

Project ideas screening
Project evaluation methods
Quantitative evaluation using objective data
Subjective evaluation – project-related criteria weighting
Revisiting project life-cycle costing analysis
Incorporating inflation in project economic analysis
Performing project risk and scenario analyses
Risk Life-cycle simulation modelling - best and worst project cost scenarios
Pitfalls associated with the use of existing economic models
Incremental benefit-cost analysis for project evaluation
Effective Decision-making in project environment
Output of the Evaluation Phase

The Planning and Reporting Phases -Getting Results through Effective Communication

Develop and assess VE proposals to optimize project value
Develop action plans and assign project roles and responsibilities
Reporting VE findings to Senior Management and project stakeholders
Mastering oral presentation techniques & interpersonal skills
Strategies for project plan execution
Incorporating VE into the early project phases
Integrating VE with Continuous Improvement Techniques
Wrap-up

Day 1

Day 2

Day 3

Day 4

Day 5

Training Methodology

Project Cost Estimating Skills: Planning for Performance Excellence II

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