CONSTRUCTION CONTRACTS & CONTRACTING

NATIONAL INSTITUTE OF CONSTRUCTION MANAGEMENT AND RESEARCH - PUNE

CONSTRUCTION CONTRACTS & CONTRACTING

Assignment -5(Five) NCP-26

VEDULA SRIKANT BHARADWAJ SODE-PDPCM-28-061155752101

DATE:Contents

11.PROJECT IDENTIFICATION AND FEASIBILITY:

31.1RECOMMENDATION / SUGGESTION:

32.THE PROJECT DEVELOPMENT PROCESS:

32.1.PROJECT MANAGEMENT ORGANIZATION

4Figure 1: Basic Ingredients in Project Management

62.2.PROJECT PLANNING AND CONTROL:

7Figure 2: Basic Components Of Project

82.3.CONTROL OF PROGRESS ON SITE:

82.4.PROJECT WORK BREAKDOWN:

9Figure3 :The Project Environment

92.5.COSTING ACTIVITY:

113.THE PROJECT COST:

113.1.CALCULATION OF AVERAGE EARNINGS:

11Table 1: Calculation of Average Earnings.

113.2.CALCULATION OF CONSTRUCTION COST:

11Table 2: Calculation of Construction Cost.

113.3.THE CRITICAL PATH METHOD

144.CONCLUSION:

145.BILIOGRAPHY / READINGS:

1. PROJECT IDENTIFICATION AND FEASIBILITY:Project is a mission, undertaken to create a unique facility, product or service within the specified scope, quality, time and costs. Project can also be defined as organization and performance of resources such as men, money, machinery, materials, space and technology into logical sequence of activities.

Most projects start with a need to have a new facility long before designers start designs and drawing of the projects and certainly before field construction work can commence. Elements of this phase include:

A. Conceptual analysis

B. Technical and feasibility studies and

C. Environmental impact reports.

Here, our project is to build a cricket stadium outside a mega city over a piece of land in 16 months.

Hockey is our national game but cricket is more popular. Day by day craze for cricket is soaring not only in old aged or middle aged people but youngsters and teenagers, boys and girls-everybody is taking keen interest to watch cricket either to watch on TV screen or at cricket stadium.

5 Days test cricket is the oldest form of the game. So many people like to watch this sort of game because it is said that test cricket is real test for cricketers. Due to its long time (5 days) few people would like to go to the stadium to enjoy it.

Then came more exciting cricket called one dayers or limited overs matches. It became popular very quickly because of its short time and more excitement and uncertainties till the last ball of the game.

Some business minded people revolutionized the idea of shorter games viz 20T or 20- 20 over matches. Its real excitement. In only few overs batsmen hit lot of runs. Showering fours and sixes tense the bowlers nerves but beat the heart throbs of the cricket lover spectators. Commercialization of the game is also eye-catching. Now the beauty and glamour is added to the game. Cheer leaders are the dancers (mostly beautiful girls wearing short clothes) who encourage batsmen to hit more and more runs or bowlers to take more wickets. Indian Cricket League (ICL) and Indian Premiere League (IPL) are new tournaments which are becoming more and more popular.

Meanwhile technology was improving and become part of the game. Before there was only TV and newspapers, but now we have internet. We have digital cameras with extra zoom, stump vision cameras, speedometers to check the speed of the ball thrown by the bowlers, digital sound systems, graphics systems, all the necessary data of the past cricket comes on the screen within a few seconds. These all aspects strengthen the idea that cricket will live and it is part of our lives.

Stadium is to be built near the megacity. Resources will be available easily. Machinery and manpower will be available at ease. Infrastructure facilities are there so the roads and transportation, electricity, water, and materials will be available easily.

Market is highly competitive and we are living in the era of Advertising and marketing. So many companies would like to sponsor matches. Lot of money can be generated through giving rights to the television channels for broadcasting of the matches. Not only this, sponsors are ready to pay money for their logos on the uniform of the cricketers. Money can be generated through the advertising hoardings on the ground boundary. There is no doubt that commercialization and glamour will draw more and more cricket spectators to the stadium to watch their favorite cricketers in action as well as beautiful girls or cheer leaders.

1.1 RECOMMENDATION / SUGGESTION:

After going through all these aspects we can conclude that building a cricket stadium outside the megacity will be beneficial project not to the cricket lovers only but as a profit making business also.

2. THE PROJECT DEVELOPMENT PROCESS:

From conceptualization to implementation the stages in the development of construction project (here cricket stadium) fall into broadly consistent patterns but time and degree of emphasis each project takes on its own a unique character.

An idea of a project passes through six phases before it become a reality: Conceptualization

Engineering and design

Procurement Construction Commissioning

Operation and maintenance

2.1. PROJECT MANAGEMENT ORGANIZATION

Generally, project management is distinguished from the general management of corporations by the mission-oriented nature of a project. A project organization will generally be terminated when the mission is accomplished. According to the Project Management Institute, the discipline of project management can be defined as follows:

Project management is the art of directing and coordinating human and material resources throughout the life of a project by using modern management techniques to achieve predetermined objectives of scope, cost, time, quality and participation satisfaction.

By contrast, the general management of business and industrial corporations assumes a broader outlook with greater continuity of operations. Nevertheless, there are sufficient similarities as well as differences between the two so that modern management techniques developed for general management may be adapted for project management.

The basic ingredients for a project management framework may be represented schematically in Figure -1. A working knowledge of general management and familiarity with the special knowledge domain related to the project are indispensable. Supporting disciplines such as computer science and decision science may also play an important role. The representation in Figure -1 reflects only the sources from which the project management framework evolves.

Figure 1: Basic Ingredients in Project Management

Specifically, project management in construction encompasses a set of objectives which may be accomplished by implementing a series of operations subject to resource constraints. There are potential conflicts between the stated objectives with regard to scope, cost, time and quality, and the constraints imposed on human material and financial resources. These conflicts should be resolved at the onset of a project by making the necessary tradeoffs or creating new alternatives. Subsequently, the functions of project management for construction generally include the following:

1. Specification of project objectives and plans including delineation of scope, budgeting, scheduling, setting performance requirements, and selecting project participants.

2. Maximization of efficient resource utilization through procurement of labour, materials and equipment according to the prescribed schedule and plan.

3. Implementation of various operations through proper coordination and control of planning, design, estimating, contracting and construction in the entire process.

4. Development of effective communications and mechanisms for resolving conflicts among the various participants.

The Project Management Institute focuses on nine distinct areas requiring project manager knowledge and attention:

1. Project integration management to ensure that the various project elements are effectively coordinated.

2. Project scope management to ensure that all the work required (and only the required work) is included.

3. Project time management to provide an effective project schedule.

4. Project cost management to identify needed resources and maintain budget control.

5. Project quality management to ensure functional requirements are met.

6. Project human resource management to development and effectively employ project personnel.

7. Project communications management to ensure effective internal and external communications.

8. Project risk management to analyze and mitigate potential risks.

9. Project procurement management to obtain necessary resources from external sources.

2.2. PROJECT PLANNING AND CONTROL:

Planning is the basic function of the management. Planning is concerned with how and when to achieve the predetermined objectives. Planning sets all other functions of management viz. organizing, staffing, directing, motivating, coordinating etc.The main objectives of planning are listed below:

Analysis

Anticipation

Scheduling resources

Co-ordination and control

Production of data

All effectively managed projects involve the preparation of the project plan. This is the fundamental document that spells out what is to be achieved, how it is to be achieved, and what resources will be necessary. In Projects and Trends in the 1990s and the 21st Century, author Jolyon Hallows says, "The basic project document is the project plan. The project lives and breathes and changes as the project progresses or fails." The basic components of the project, according to Hallows, are laid out in the figure below

Figure 2: Basic Components Of Project "With the plan as a road map, telling us how to get from one point to another," says Hallows, a good project manager recognizes from the outset that a project plan is far more than an academic exercise or tool for appeasing upper management. It is the blueprint for the entire scope of the project, a vital document which is referred to frequently, often update on-the-fly, and something without which the project manager cannot proceed."

Space for basic toilet and washing facilities is limited in small tunnels. There is not enough space for toilet and washing facilities on the in the tunnel. A system for cleaning and maintaining the toilets is essential.

Messing facilities, with a supply of cold potable water is also required. Along with welfare, first aid provisions must be available to match the requirements of the project.2.3. CONTROL OF PROGRESS ON SITE:Without control planning loses much of its value. It must be applied continuously to update the plans and to enable reconsideration of the workload in the light of what has already taken place. Control involves comparing the actual achievement with the plans. If a programme is to be really effective as a control document, it must represent time and quantity of work carried out.

Progress can be recorded on planning charts that clearly indicate what is happening and where corrective action needs to be taken.

Weekly and monthly meetings are invaluable in helping to control progress. The action necessary for correcting underproduction will be considered and the best solution will then be incorporated into the programme for the next period.

No one should arrive home from work less healthy than when they left home to go to work.2.4. PROJECT WORK BREAKDOWN:

Work within each phase to identify the events or tasks, and their associated subtasks.

Define everything that needs to be done; this is called the work breakdown structure: The Work Breakdown Structure (WBS)

The WBS has become synonymous with a task list. The simplest form of WBS is the outline, although it can also appear as a tree diagram or other chart. Sticking with the outline, the WBS lists each task, each associated subtask, milestones, and deliverables. The WBS can be used to plot assignments and schedules and to maintain focus on the budget.

Figure3 :The Project Environment 2.5. COSTING ACTIVITY:

Cost estimating is one of the most important steps in project management. A cost estimate establishes the base line of the project cost at different stages of development of the project. A cost estimate at a given stage of project development represents a prediction provided by the cost engineer or estimator on the basis of available data. According to the American Association of Cost Engineers, cost engineering is defined as that area of engineering practice where engineering judgment and experience are utilized in the application of scientific principles and techniques to the problem of cost estimation, cost control and profitability.

The costs of a constructed facility to the owner include both the initial capital cost and the subsequent operation and maintenance costs. Each of these major cost categories consists of a number of cost components.

The capital cost for a construction project includes the expenses related to the initial establishment of the facility:

Land acquisition, including assembly, holding and improvement

Planning and feasibility studies

Architectural and engineering design

Construction, including materials, equipment and labor

Field supervision of construction

Construction financing

Insurance and taxes during construction

Owner's general office overhead

Equipment and furnishings not included in construction

Inspection and testing

The operation and maintenance cost in subsequent years over the project life cycle includes the following expenses:

Land rent, if applicable

Operating staff Labor and material for maintenance and repairs

Periodic renovations

Insurance and taxes

Financing costs

Utilities

Owner's other expenses 3. THE PROJECT COST:3.1. CALCULATION OF AVERAGE EARNINGS:Sl. NoCapacity of spectators Average Cost of Tickets In `No. Of Matches Per YearAverage No. Of Spectators Per MatchEarnings form the Match Tickets In `Per Year Earnings from matchEarnings form the Match Tickets in 5 Years

180000.00100.004.0060000.006000000.0024000000.00120000000.00

Table 1: Calculation of Average Earnings. 3.2. CALCULATION OF CONSTRUCTION COST:

Sl.NoTotal Area Of Development in SqmAverage Construction Cost Per Sqm in

`.Total Construction Cost

`.

120000.006000.00120000000.00

Table 2: Calculation of Construction Cost.This cost will be covered in 5 years exactly.

(Note: Other income from the broadcasting rights to the TV channels, hoarding advertising, fees from sponsors etc.will is different than this ticket income.)

3.3. THE CRITICAL PATH METHODThe most widely used scheduling technique is the critical path method (CPM) for scheduling, often referred to as critical path scheduling. This method calculates the minimum completion time for a project along with the possible start and finish times for the project activities. Indeed, many texts and managers regard critical path scheduling as the only usable and practical scheduling procedure. Computer programs and algorithms for critical path scheduling are widely available and can efficiently handle projects with thousands of activities.

The critical path itself represents the set or sequence of predecessor/successor activities which will take the longest time to complete. The duration of the critical path is the sum of the activities' durations along the path. Thus, the critical path can be defined as the longest possible path through the "network" of project activities, as described in Chapter 9. The duration of the critical path represents the minimum time required to complete a project. Any delays along the critical path would imply that additional time would be required to complete the project.

There may be more than one critical path among all the project activities, so completion of the entire project could be delayed by delaying activities along any one of the critical paths. For example, a project consisting of two activities performed in parallel that each requires three days would have each activity critical for a completion in three days.

Formally, critical path scheduling assumes that a project has been divided into activities of fixed duration and well defined predecessor relationships. A predecessor relationship implies that one activity must come before another in the schedule. No resource constraints other than those implied by precedence relationships are recognized in the simplest form of critical path scheduling.

To use critical path scheduling in practice, construction planners often represent a resource constraint by a precedence relation. A constraint is simply a restriction on the options available to a manager, and a resource constraint is a constraint deriving from the limited availability of some resource of equipment, material, space or labor. For example, one of two activities requiring the same piece of equipment might be arbitrarily assumed to precede the other activity. This artificial precedence constraint insures that the two activities requiring the same resource will not be scheduled at the same time. Also, most critical path scheduling algorithms impose restrictions on the generality of the activity relationships or network geometries which are used. In essence, these restrictions imply that the construction plan can be represented by a network plan in which activities appear as nodes in a network, as in Figure 9-6. Nodes are numbered, and no two nodes can have the same number or designation. Two nodes are introduced to represent the start and completion of the project itself.

The actual computer representation of the project schedule generally consists of a list of activities along with their associated durations, required resources and predecessor activities. Graphical network representations rather than a list are helpful for visualization of the plan and to insure that mathematical requirements are met. The actual input of the data to a computer program may be accomplished by filling in blanks on a screen menu, reading an existing datafile, or typing data directly to the program with identifiers for the type of information being provided.

With an activity-on-branch network, dummy activities may be introduced for the purposes of providing unique activity designations and maintaining the correct sequence of activities. A dummy activity is assumed to have no time duration and can be graphically represented by a dashed line in a network. Several cases in which dummy activities are useful are illustrated in Fig. 10-1. In Fig. 10-1(a), the elimination of activity C would mean that both activities B and D would be identified as being between nodes 1 and 3. However, if a dummy activity X is introduced, as shown in part (b) of the figure, the unique designations for activity B (node 1 to 2) and D (node 1 to 3) will be preserved. Furthermore, if the problem in part (a) is changed so that activity E cannot start until both C and D are completed but that F can start after D alone iscompleted, the order in the new sequence can be indicated by the addition of a dummy activity Y, as shown in part (c). In general, dummy activities may be necessary to meet the requirements of specific computer scheduling algorithms, but it is important to limit the number of such dummy link insertions to the extent possible.

Figure 4: Critical Path Method 4. CONCLUSION:

This cricket stadium will be profitable for all the parties say sponsors, spectators, cricket association etc.

5. BILIOGRAPHY / READINGS:

1. Construction Project Management Techniques, Published by NICMAR, 2008.2. Chris Hendrickson and Tung Au, project Management for Construction,

3. Fundamental Concepts for Owners, Engineers, Architects and Builders, First Published by Prentice Hall, USA, 1989, Second edition 2000.