ADJUSTMENT OF CONTRACT SUM

Definition;

The contract sum is the price agreed with the contractor and entered into the contract. The

contract sum should be calculated and checked very carefully as errors are deemed to have been accepted

by both parties.

Process of Adjustment of Contract Sum

The Certificate adjustments of Contract Sum were introduced for the purpose of adjusting the

amount of the contract price. The total contract price shall be adjusted to take into account any additional

or lack of the total contract price.

The things that cause the total contract price should be adjusted as follows: -

i. Changes to contracts

ii. Claims by contractors for losses and / or additional expenses.

iii. Costs associated with labor or construction materials testing and exposure to work.

iv. Fees and charges for fixed connection to a public sewer, water, and regular electricity and

connectivity to transfer and water supply and sewerage electricity.

v. Measurement of in depth work temporarily in bills of quantities.

vi. Adjustment for prime cost sum and provisional sum.

vii. Adjusted for price fluctuations of construction materials and so on.

Procedurs Of Adjustment of Contract Sum

1.  The total contract price adjustment certificate must be prepared and remove when the total

contract price should be adjusted. It covers variation order.

2. All items in the certificate must be properly filled.

3. The date of the certificate must be stated once the PP signed it.

4. Details of the calculation of the adjustment must be appended except for adjustments due to

changes in work.

5. Adjustment of the Contract Sum certificate must be signed by the PP and the original shall be

issued to the contractor. Other copies will be distributed to all parties listed in the certificate

includes the following parties: -

i. Senior Treasury Accountant or other payment authority.

ii. Quantity surveyors and other parties involved.

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Generally;

The contract allows the Contract Sum to be adjusted due to the following circumstances:-

a) Variations orders issued during construction

b) Finalization of Prime Cost Sum

c) Finalization of Provisional Sum

d) Finalization of Provisional quantities

e) Calculation of variation of prices

f) Adjustment of errors made in the bills of quantities

g) Items under the contract but not executed without any APK omission

h) Approved claims

The adjustment of the Contracts Sum for the above is made by issuing JKR-PHK form.

1) Variations Orders

Every issuance of JKR-APK must be followed by the finalized through Form JKR-

HPK, even if there is no difference between the provisional amount and the final

value of the Variation works.

The adjustment is made as soon as variations works is completed.

Variations may include:

a) Alterations to the design.

b) Alterations to quantities.

c) Alterations to quality.

d) Alterations to working conditions.

e) Alterations to the sequence of work.

Variations may also be deemed to occur if the contract documents do not properly

describe the works actually required.

Variations may not (without the contractors consent):

a) Change the fundamental nature of the works.

b) Omit work so that it can be carried out by another contractor.

c) Be instructed after practical completion.

d) Require the contractor to carry out work that was the subject of a prime cost

sum.

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Government Procedure

Any V.O. for government project shall strictly follow standard procedure are as

follows:

KPK – Kelulusan Perubahan Kerja

APK – Arahan Perubahan Kerja

PHK – Pelarasan Harga Kontrak

KKS – Kiraan Kuantiti Sementara

KPK

As an official document regarding to related V.O involved

Including costing for indications either addition /omission

Require approval from board of tender Approval before proceed with

APK.

Only S.O. to signed for applications

APK

Continuity of board approval on V.O, APK are required.

Consist of instructions to be carried out by the Contractor

Any claim due to this VO will be highlighted in this form.

S.O and Contractor to signed (if agreed)

PHK

After finalized the APK, new contract sum will be adjusted accordingly

All collective APK will be summarized

Endorsement and agreement from both parties are required

KKS

Any VO involved with anticipated quantity related to provisional qty.

As an estimated quantity/cost for client approval.

After completions, all provisional quantity will be finalized by preparing

PHK

2) Adjustment of Prime Cost Sums

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A prime cost sum (sometimes referred to as a  PC sum) is an allowance usually

calculated by the cost consultant for the supply of work or materials to be provided

by a contractor or supplier that will be nominated by the client. The allowance is

exclusive of any profit mark up or attendance (such as material

handling, scaffolding and rubbish clearance etc) by the main contractor.

In Construction the term PC sum is often confused with Provisional Sum. Whilst

both terms are associated to allowances being made for a specific activity or item,

there are distinct differences in these two terms. PC Sums are normally associated

with an average cost of a specific item whereas Provisional Sums are estimated

allowances. Let's look the usage of these two terms in the Construction environment.

Check that the works is awarded to the nominated sub-contractor / supplier. Omit the

original PC Sum and add the awarded NSC’s/NS’s contract sum and profit and

attendance which is allowed in Contract.

The final adjustment is made after completion of works and final coat is ascertained.

PC Sums that are not used shall be deducted from the Contract Sum.

PC Sum or otherwise referred to as Prime Cost Sum reflects the material allowance

being made in the rate for a specific item. A quoted rate normally consists of

Material, Labour, Plant and mark-up (profit + overheads). By using the PC sum

reference the builder identifies what material sum he has allowed for in his rate. This

is normally done when the specification of the item has not yet been clarified (for

example finishes, tiles, taps, light fittings, etc.). The builder would allow a reasonably

accepted average cost for that item which is generally based on the builders past

experience. Care must be taken in analyzing these allowances as builders understand

the impact this has on their price and could make below average allowances in order

to present the lowest bid.

3) Adjustment of Provisional Sums

A provisional sum is an allowance, usually estimated by the cost consultant, that

inserted into tender documents for a specific element of the works that is not yet

defined in enough detail for tenderers to price. This, together with a brief description,

allows tenderers to apply mark up and attendance costs within their

overall tender price and make allowance for the work in the contract programed.

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An example of a situation where a provisional sum might be appropriate is when

work is required below an existing structure, where the ground conditions cannot be

determined until the existing structure is demolished and the ground opened up.

Provisional sums can be 'defined' or 'undefined':

a) Defined provisional sums are considered to have been accounted for within

the contractor's price and programed. In effect the contractor is taking

the risk that their estimate will be sufficient.

b) Undefined provisional sums are not accounted for in the contractor's price

and programed. This means that the client is taking the risk for the works and

the contractor  may be entitled to an  extension of time and

additional payments.

The final cost of a construction contract may be influenced by provisional sums and

quantities. A provisional sum is a nominated amount of money, usually estimated by

a Quantity Surveyor, where the exact scope and cost of specific work cannot be

determined at the start of the contract, such as for removal of rock.

It is included in the original contract sum, but is monitored carefully so that the sum

can be adjusted as required. The provisional sum may be used for work carried out by

subcontractors or for materials and components to be provided by suppliers, or for

schedule of rates works, where an agreed price rate has been reached (e.g. $30/sq. for

plastering existing damaged walls). These items are included where no firm price can

be obtained or the full extent of the work cannot be determined at the time the

building contract is let.

The final adjusted contract sum will vary from the original contract sum when the

expenditure against these items differs from that nominated in the contract document.

Provisional sums and quantities should be kept to a minimum to minimize budget

variations.

Omit the original Provisional Sum and add the amount approved in accordance to the

current procedures for utilizing of Provisional Sums.

The adjustment is made after completion of works and final cost is ascertained.

Provisional Sums that are not used shall be deducted from the Contract Sum.

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Let's look at an example:

Supply and lay 300 x 300mm Tiles (PC Sum $25/m2)       200m2      

$42.45/m2       $8,490.00

The above item clearly identifies the amount allowed for tiles is $25/m2 and the total

rate inclusive of labour, waste and mark-up amounts to $42.45/m2. That means that

the Client can buy or select tiles to the value of $25/m2 without it having any effect

on the Contract Price. This also mean that if a lower priced tile is selected the

Contract Price reduces with the same margin or vice versa.

The use of PC sums are very popular in the Home Builders market as Clients with

limited building knowledge understand this concept and enjoy having control over

this selection process during the final construction stages of their new home.

4) Re-measurement of Provisional Quantities

Where the quantities of the Works are stated as “provisional” in the bill of quantities, such

quantities are the estimated quantities which shall not be taken as the actual and the correct

quantities of the works to be executed by the contractor in the fulfillment of his obligations

under the contract. The amount to be paid to the contractor shall be ascertained by re-

measurement of the work as it is actually executed

If the actual quantities are more than provisional quantities in the bill of quantities, approval

from “Jawatankuasa Tambahan Kuantiti sementara” using form JKR-KSK is required.

The value of such work executed by the contractor shall be set off against the amount for the

work in the bills of quantities, and the balance shall be added to or deducted from the

Contract Sum as the case may be.

5) Variation of Prices

The variation of Prices exercise must be carried out in every Interim Payment, and

the final adjustment is made after the whole of the Works is completed.

The Civil Works ensure the adjustment made must not exceed the quantities allowed

in Contract.

The valuation and circulation must be in accordance with the Special Provisions to

the Conditions of Contract.

The net total of any such increases or decreases shall be added to or deducted from

the Contract Sum as the case may be.

Fluctuations :

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Inserted in a Building / Infra contract

o Definition : Adjustment for increase or decrease in the cost of labor/material

after date of tender

o Assessment of the value of fluctuations is progressive and cumulative total

added to each valuations

o Two method of assessment:

- The Orthodox Method and NEDO price adjustment formula.

• The Orthodox Method – Based on information’s supplied by the Contractor in respect of the

amounts and values of labor and materials used on the works

– Material based on schedule of basic rates of the principal materials

agreed at the time of tendering

– This schedule shall incorporate in BQ and form of basis of

calculations.

– Contractor to produce all invoices and QS to extract the quantity and

prices.

– Labour is based on examination of the Contractor r time sheet to

determine the number of hour worked.

– The net increase in wage rates is obtained from information's

published by the “Jabatan Perangkaan & Statistik Negara.”

• NEDO price adjustment formula

– Quicker and easier method

– Based on monthly indices published in monthly bulletins

– The work is divided into

• Work category or

• Works group (combinations of work categories into weighted work groups)

– A base month is established at the time of tender are submitted. A

base index for any work category/group is the index shown on the

list for the base month.

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– L = F x M E

– where:

– L = The value of increase or decrease payable or deductible in respect of the balance due or to become due and payable to the contractor;

– F = The amount of the balance due or to become due and payable to the contractor (excluding the value of L', and any works dealt under Prime Cost Sums, Provisional Sums, value of steel reinforcement bar.

– L = F x M E

– where:

– Where the Mechanical and Electrical (M&E) works in respect of seven (7) main components are executed by the Contractor, the value of the M&E works shall also be excluded) after deducting the amount in respect of Preliminaries and items based on actual costs or current prices;

– M = The aggregate total amount of increases or decreases payable under the above provisions in respect of all the previous interim payments made;

– E = The corresponding cumulative total of all the previous Effective Value of Works.

Area to Cover by Price Fluctuations (Based on latest Government Circular

KEMENTERIAN KEWANGAN MALAYSIA : SURAT

PEKELILING PERBENDAHARAAN BIL. 3 TAHUN 2008 )

a) Building Works

b) Civil Engineering Works

c) Mechanical and Electrical Works

Calculation of Adjustments

The increase or decrease payable or deductible shall be calculated by

multiplying the Effective Value of Works by a factor referred to as

Fluctuation Factor which shall be ascertained from the product of the

relevant Recovery Factor and the difference between the relevant Current

Index and the Base Index, divided by the Base Index as follows:

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Fluctuation = Recovery x Current Index – Base Index

Factor Factor Base Index

Figure 1

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Figure 2

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Figure 3

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Figure 4

Figure 5

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6) Errors in Bills of Quantities

Any error in description or quantity or omission of works from the bill of quantities shall not

vitiate the Contract but shall be added to or deducted from the Contract Sum as the case may

be.

7) Items not executed wothout any APK.

Any item under the contract not executed by the contractor without any instruction from the

SO shall be deducted from the Contract Sum.

8) Approved Contractual Claims.

The amount of contractual claims approved by the Claim Comitee, or Ministry of Finance,

shall be added to the Contract Sum.

FINAL ACCOUNT

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1.0 Work Process

The post contract stage of a building contract starts immediately after the contract is awarded. As

a member of the project team, a quantity surveyor (QS) works closely with other team members to ensure

the project will be delivered in accordance with the terms and conditions of the contact and within the

cost limit. The post contract quantity surveying services are: cost control and monitoring, certification of

payments to the contractor and valuation of variations and settlement of the final accounts.

Final accounts settlement shall be completed in three distinct stages starting from the

commencement of the measurement period. Progress of achieving each stage is closely monitored and

recorded. The final accounts process actually starts at the commencement of the post contract stage. QS

Liaises with the project team and the contractors to collect and collate information required for valuation

of variations and, where practicable, to agree the valuation as soon as these variations are issued.

Contractual provision

– Either before or within a reasonable time after practical completion, Contractor should send document related to preparing final account

– Subject to Contractor compliance to this obligations, the QS shall prepare Final Account within the provision time frame of final measurement and valuation as stated in the appendix

– When the Final Account complete, the Arch/S.O. shall send a copy to Contractor and relevant extract to each NSC.

Sum to be deducted;

– Prime cost sum and amount in respect of sub con & associated Contractor profit

– Provisional sums and value of works described as provisional

– Variations that are omission including omission of any other works carried out under changed condition as a result of variations

– Amount allowable to employer under fluctuations clauses

– Any other amount that is required by the Contract to be deducted from Contract Sum.

Sum to be added ;

– Total amount of NSC finally adjusted in accordance with relevant sub con conditions

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– Where Contractor has tendered for the works, that was have been performed by NSC and the tender accepted, the amount of tender suitably adjusted.

– Any amount due to the Nominated supplier, including cash discount.

– The contractor profit on the amount referred as above.

– Any amount payable by S.O. relating to statutory fees and charges, setting out the works, opening up and testing, remedial works where the Arch/S.O authorized payment

– Addition due to variations including addition for other works carried out under change condition as a result of variations.

– The value of works against provisional sums or provisional quantity included in the Contract Bill.

– Any amount payable by S.O. by way of reimbursement for direct loss and expense.

– Any amount expended by the Contractor as a result of loss damage by fire or other perils where the risks are insured by the employer and Contractor are entitle to reimbursement.

– Any amount payable to the Contractor under fluctuations clause

– Any other amount that is required by the Contract to be added to the Contract Sum.

2.0 Preparation of Final Accounts

The area to be cover under preparations of Final Account

– Variations

– Re-measurement of provisional quantity in the Contract Bills

– NSC account

– Nominated supplier account

– Loss and expense caused by disturbance of the regular process of the works

– Fluctuations of rates and labour (where applicable)

Final Account procedure

– Original contract Sum as starting point

– The bulk of Final Account consist measured work priced at the original bill rates.

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– If Contractor has reason to doubt accuracy any of the original billed items, he can request QS on work concern to be measured on site

– All relevant item must be shown separately

– When preparing final account, QS should give Contractor or his rep opportunities to be present when measurements and details are taken or recorded

– So, the document will prepared in full liaison with Contractor

– From the draft final account, anticipated expenditure can be prepared

– This in to enable the account to be finalized fairly soon after work complete as well as interim payment to the Contractor represent realistic assessment of the value of work performed.

– Delay in settlement of the Final Account represents additional cost to the Contractor related to the financial commitment.

– The S.O/QS have a contractual responsibility to keep the date stipulated in contract for complete the account with all necessary supporting data provide by Contractor

– Any Addition to the original contract sum complete with KPK, APK and PHK

– Any Omission to the original contract sum complete with KPK, APK and PHK

– New Contract Sum will take after adjustment on addition and/or omission.

Final Certificate

– The Arch/S.O to issue Final Certificate within three (3) month of the end of defect liability period or of completion of making good defects.

– The amount of the final certificate is the difference between the total of final account and the amount previously stated due under interim certificate.

– The payment shall be made within 28 days or any other period stipulated in the contract after issuance of Final certificate

– The final certificate provides conclusive evidence that the quality of material and standard workmanship are to the reasonable satisfaction of the Arch/S.O.

– All term and condition with regards to the adjustment of the contract sum have been implemented.

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Quantity Surveyors can deal with the final account preparation, submission & subsequent

agreement on behalf of consultants such as architects including both private and public sector clients.

A final Accounts service which that provided to consultants and clients ensures the following:-

Clear statement showing the contract sum followed by all necessary adjustments to that

sum

Prepared in accordance with the terms and conditions of the relevant contract e.g. JCT

standard building contract

All items fully assessed and adjustments made for variations, provisional sums, re-

measured works etc.

Work carried out on a day works basis is included

Loss and expense claims / reimbursement accurately assessed and included

Fluctuations where applicable are included

Confirmation of the contractor's agreement to final account figure is obtained in writing

Architect issues final certificate for final payment to main contractor

Final Account Preparation Procedure (consultant)

Quantity Surveyors prepare the final account in the manner that is best suited for the

particular project with the original contract sum as the starting point. An important part of the

contractor's quantity surveyor's work is the agreement of the final account. Under the terms of the

contract the private quantity surveyor is responsible for its preparation, but in reality the best

approach is for both the client's quantity surveyor and the contractor's quantity surveyor to work

together to produce an agreed account.

A Final Account in construction contracts is the agreed statement of the amount of money

to be paid at the end of a building contract by the employer to the contractor. A final account

brings about a sense of finality to the negotiations leading up to the agreement of the Final

Account between the parties to the contract.

A Quantity Surveyor ensures that in accordance with common practice both Employer

(or the Employer’s representative) and the Contractor sign the Final Account Statement to signify

that the Final Account figure represents the full and final settlement of all claims etc. The

settlement of the final account negotiations between the contractor, and the architect or quantity

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surveyor will in due course trigger the issue of the final account statement and ultimately, enable

the architect to issue the final certificate.

Under the terms and conditions of the contract the contractor is to provide the architect or

quantity surveyor with all documents necessary for the final account preparation not later than 6

months after practical completion. Within 3 months of receipt of these documents the architect or

quantity surveyor is to prepare and ascertain the final account sum and send this to the contractor.

The bulk of the final account will generally consist of measured work priced at the

original billed rates. If the contractor's quantity surveyor has reason to doubt the accuracy of any

of the original billed items, he can make a request to the quantity surveyor for work concerned to

be measured on-site. 

The adjustment of the contract sum in the final account normally falls under several

relevant items, although the quantity surveyor must have regard to all the matters listed in

the standard form of contract and conditions. The contract conditions tabulate all the matters that

shall be dealt with in the final account in order to adjust the contract sum in accordance with the

conditions.

Sums to be deducted:

1. Prime cost sums and amounts in respect of named subcontractors and associated contractor's profit;

2. Provisional sums and the value of work for which approximate quantities are included in contract

bills;

3. Variations that are omissions;

4. Amounts allowable to the employer under the fluctuations clauses;

5. Any other amount that is required by the contract to be deducted from the contract sum.

Sums to be added:

1. The total amounts of nominated subcontracts finally adjusted in accordance with the relevant

subcontract conditions;

2. Where the contractor has tendered for work that was to have been performed by a nominated

subcontractor and his tender has been accepted, the amount of the tender suitably adjusted;

3. Any amounts due to nominated suppliers, including cash discounts of 5 per cent, but excluding

VAT;

4. The contractor's profit on the above amounts 1,2 & 3;

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5. Any amounts payable by the employer relating to statutory fees and charges, opening up and testing,

royalties and patent rights, and insurances;

6. The value of work carried out against provisional sums or approximate quantities included in the

contract bills;

7. Any amounts payable by the employer to the contractor by way of reimbursement for direct loss/and

or expense arising from matters materially affecting the regular progress of the works;

8. Any amount expended by the contractor as a result of loss or damage by fire or other perils where

the risks are insured by the employer and the contractor is entitled to reimbursement;

9. Any amount payable to the contractor under the fluctuations clauses;

10. Any other amount that is required by the contract to be added to the contract sum.

All relevant items must be shown separately in the final account, and the net amount of each

variation and amounts due to each nominated subcontractor and nominated supplier listed. When

preparing the final account the quantity surveyor should give the contractor's quantity surveyor the

opportunity to be present when measurements and details are taken or recorded, so that the document is

prepared in full liaison with the contractor.

Delays in the settlement of the final account represent additional cost to the contractor and in the

majority of cases the employer is anxious to know his ultimate financial commitment. The architect and

the quantity surveyor have a contractual responsibility under the contract to keep to the date stipulated in

the contract for completion of the final account and the contractor should produce every assistance in the

prompt provision of subcontractors and supplier’s accounts, agreement of measurement and prices, and

the supply of all necessary supporting data.

Final account-contractor

A Quantity Surveyors offer to undertake all works entailed to settle the final account. We are

involved in the final account preparation, submission & subsequent agreement on behalf of both main

contractors and sub-contractors.

  Our Final Accounts services which we provide to both main contractors and sub-contractors

ensure the following:-

All work executed by the contractor including variations, provisional sums and quantities, day

works etc. are accurately assessed and included

Claims for loss/expense and fluctuations included

Accurate final payment is received at the appropriate time for all work executed on site including the

above items

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Confirmation of the employers agreement to final account figure is obtained in writing

Architect issues final certificate for final payment to main contractor

3.0 The Problem faced by the firm

1. Changing drawing last minutes by the Architect due to site condition or Client’s

requirements. We cannot expect to not having a changing along this construction process.

When the new drawing had been issued, the Qs have to revise or re-measurement the

drawing again.

2. Variation Orders (VO) are often a cause of contract conflicts and may lead to negotiation,

mediation / arbitration. It includes changing in design, quantities, quality, working

conditions, and sequence of work.

3. Include both by main contractor and consultants, such as contractors’ delay in submitting

claims and failure to follow the procedure as stipulated in the contract agreement.

4. The contractor fails to agree with the valuation of work. The disagreement may cause

delay in certifying the amount of final account.

5. Problem with the contractor is that they do not keep the records properly to claim the

final payments.

6. The contractor delay in submitting claims.

7. The clients or main contractor overpay to the contractor, this happen when the Qs slightly

verify by not looking into work progress or wrong quantities. So when the auditing spot

check, the claims are overpaid.

8. Besides that, problem can occur due to maintenance items in the contract documents

where the contractors still have not been paid after the expire of the defect liability period

(LAD). Any forms of contract including PWD203, PAM, FIDIC and other states that

final account will be paid after the LAD. These factors slightly give the implication to the

delay or problems in preparing or closing final accounts.

9. Adjustment contract sum, there will be additional or omit the tender price, mostly

because of the variation order (VO).

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10. There a rate that the contractor had to follow in certain specification but the contractor

normally put the item rate uncertain because of strategies.

The Solution

1. Prepare detailed change order proposals to reduce the time associated with the

construction administrator regarding the change order.  Price and schedule analyses

should be enclosed in the proposed change orders.

2. Document the file. While the contractor may be confident, even certain, that the change

order will be signed, it can never be too sure. When in doubt, document the file. When

not in doubt, document the file. So the contractor has sent its letter memorializing why

the change order is necessary and detailing its efforts to get it signed without delaying the

work. If the contractor proceeds, it may not get paid for that work. If it doesn’t proceed,

it may be in breach of its contract and face a lawsuit for construction delays. The

practical approach is to submit the detailed proposed change order, enclose within the

submission the documents showing the changes (e.g., the architect’s revisions), and

specify that the project will be delayed, through no fault of the contractor, until the

change order is signed.

3. Beware of field orders.   The architect issues these orders to clarify specifications, deal

with technical execution problems, or resolve site access difficulties.  The architect has

the authority to order minor changes in the work not involving adjustment in the contract

sum or extension of the contract time and not inconsistent with the parties’ intent.  Such

changes shall be done in writing and shall bind the owner and contractor.   If the field

order increases costs or time, it should lead to a change order.

4. Require that someone with authority to sign off on change orders remain at the site.

5. The client or main contractor must verify the claim that the sub-contractor had submitted

together with the consultant to verify the work progress within 1 month period so that

when next claim submitted it does not gave the Qs to handle so many claims.

6. Held a meeting at least twice a week to solve small problem that occur at site, the

management and company financial as well so every problem they can give an

alternative to solve problem especially the variation order that commonly happen.

7. If the client overpay, the must have a re-measurement together with the supporting

document .After that, tally the amount and quantity with consentience together.

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4.0 Monitoring mechanism established by the firm

1. Monitoring Cash Flow- Balancing the 3 elements which is taken by the project manager

allows for the successful planning, resourcing and execution of a project.

2. Review actual site practices and processes to control expenditure for materials, labour

plant/machinery and subcontractors.

3. During the project, the actual revenue and expected are tracked on the cash flow chart to

monitor the performance of the project. Differences and variances are identified and

necessary measure taken to bring the financial performance back on track

4. Coordination - External relationship and information; communicating with, coordinating

with, and influencing related management units, stakeholders and clients;

5. Coordination - Internal relationship, including the use of inter-unit committees within the

same management systems and communicating with other individuals

6. Leadership - Defining objectives and goals and making them clear, real and important to

the management team.

7. Planning - The strategic plan, to establish relationships and evaluate the tensions and

constraints between the mission, the clients and the socio-economic environment. The

strategic plan should be developed from a consideration of alternatives and risks; and

8. Planning - The performance plan, which is to define the scope of operations, the quality

of output and cost/benefit standard. The performance plan must balance and relate the

availability of materials and financial resources, technology, information, skills and time,

with the products and services of the activity in order to produce specific outcomes. It

must also establish progressive performance indicators.

9. Control of Performance -    Establishing norms for the level of goal pressure and time

emphasis, as well as the level of delegation and control of details;   Monitoring physical,

financial, accounting and social effects; and Periodic evaluation of performance at

indicator events and timely adjustment of plans.

10. Contract and Procurement Management - Purchase and sequencing of delivery of project

materials in non-haphazard manners, managing changes as an aspect of performance

optimization.

Conclusion

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Scope/Quality

The scope of a project (often called the Scope of Work) is a clear, specific statement as to what has been

agreed to be performed/achieved in a particular project. In other words, the scope expressly lays out the

functions, features, data, content, etc. that will be included in the project at hand. You could also say that

the scope clearly expresses the desired final result of a project.

Resources/Cost

This second element of the Triple Constraint is known as either Resources or Cost. Resources always cost

money so the two are interchangeable in many ways. When we talk about the cost of a project, we are

talking about what needs to be applied or assigned to the project in terms of money and effort in order to

make things happen. This can be resources like manpower/labor, it can be materials needed for the job,

resources for risk management and assessment or any third party resources that might need to be secured.

Time/Schedule

Time, in project management, is analyzed down to its smallest detail. The amount of time required to

complete each and every component of a project is analyzed. Once analysis has taken place, those

components are broken down even further into the time required to do each task. Obviously from all of

this we are able to estimate the duration of the project as well as what and how many/much resources

need to be dedicated to that particular project.

References

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1 Zakaria, Z., Ismail, S. and md. Yusof, A. (2014). Modelling the determinations Influencing the

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