Project Management for Facility Constructions (eBook)

Alberto De Marco, MSc, PhDDr. Alberto De Marco is assistant professor of Project Management and Industrial Facilities at Politecnico di Torino. He also provides executive education in the area of Project Management at the University of Bozen, Università Cattolica Milan, and other institutions. He is appointed professor at the Sino-Italian campus in the Tongji University, Shanghai (China). In 2006, he was at the Massachusetts Institute of Technology as a visiting professor for the Project Management class.He worked as a post-doc scholar in the field of complexity science applied to system project management. Research and consulting activities are in fields of industrial and social facility construction management, facility management, financial planning, and public-private partnerships.He formerly worked as a project manager in France and Italy. He founded and directed a start-up company delivering IT solutions for construction industries.Alberto De Marco earned his M.Sc. in Building Engineering and Ph.D. in Construction Management from Politecnico di Torino. He attended part of his graduate education at the Ecole Nationale des Ponts et Chaussées in Paris.

Contents 5
Abbreviations and Acronyms 9
Abstract 11
Introduction 12
Road Map 13
Origin of the Book and Acknowledgments 14
What is New in This Second Edition of the Book 15
Contracting 16
1 Multiple-Project Management 17
Abstract 17
1.1 The Multiple-Project Environment 17
1.2 Project Portfolio Management 18
1.3 Program Management 19
1.3.1 Notion of Program Management 19
1.3.2 Grouping Projects 20
1.3.3 Defining Programs: Selecting and Prioritizing Projects 21
1.3.4 Developing Programs 23
References and Additional Resources 24
2 Contract Organization 25
Abstract 25
2.1 Roles in Construction Projects 25
2.2 Notion of Contracting 26
2.3 Delivery Systems 27
2.3.1 Design-Bid-Build 29
2.3.2 Construction Manager 30
2.3.3 Design-Build 32
2.3.4 Turnkey 34
2.3.5 Build-Operate-Transfer 34
2.3.6 Public-Private Partnerships 35
2.3.7 Summary of Delivery Systems 36
2.4 Payment Schemes 37
2.4.1 Time and Material 39
2.4.2 Unit Prices 40
2.4.3 Cost Plus Fixed Percentage Fee 41
2.4.4 Cost Plus Incentive Fee 43
2.4.5 Cost Plus Fixed Fee 43
2.4.6 Target Cost Plus Incentive Fixed Fee 45
2.4.7 Cost Plus an Award Fee 46
2.4.8 Guaranteed Maximum Price (GMP) 46
2.4.9 Firm Fixed Price 48
2.4.10 Summary of Payment Schemes 49
2.5 Award Methods 50
2.6 Selecting the Appropriate Contract Organization 52
References and Additional Resources 54
3 Contract Administration 56
Abstract 56
3.1 Introduction to Contract Administration 56
3.2 The Bid and Proposal Management Processes 57
3.3 The Contract Documents 58
3.4 Contract Bonds 61
3.5 Changes and Extra Work 62
3.6 Project Delays 63
3.7 Claims and Disputes 64
3.8 Project Close-Out 66
3.9 Integrated Project Delivery 66
References and Additional Resources 67
Human Resources 68
Part2 68
4 Project Management Organization 69
Abstract 69
4.1 The Organizational Challenge 69
4.2 Organizing the Firm for Project Management 70
4.3 Organizing the Project Team 74
4.4 People and the Project Manager 76
4.5 Agile Values, Principles and Teams 78
References and Additional Resources 81
5 Project Information and Communications Management 82
Abstract 82
5.1 Role of Information and Communications 82
5.2 Technologies and Systems for Project Management 83
5.2.1 Filing System 83
5.2.2 Individual Productivity Tools 83
5.2.3 Project Planning Software 84
5.2.4 Collaborative Workplaces 84
5.3 Communications Management 86
References and Additional Resources 86
Money 88
Part3 88
6 Project Feasibility 89
Abstract 89
6.1 Project Financial Engineering 89
6.1.1 Owner Financing 90
6.1.2 Project Financing 93
6.1.3 Contractor Financing 94
6.2 Financial Evaluation of Projects 95
6.2.1 Net Present Value 95
6.2.2 Choice of Discount Rate 99
6.2.3 IRR Versus NPV 99
References and Additional Resources 102
7 Planning and Scheduling 103
Abstract 103
7.1 Project Planning: Breakdown Structuring 103
7.1.1 Work Breakdown Structure—“What” 103
7.1.2 Organizational Breakdown Structure—“Who” 105
7.1.3 Cost Breakdown Structure—“How Much” 106
7.2 Deterministic Scheduling Principles 110
7.3 Scheduling Systems 111
7.3.1 Matrix Scheduling 111
7.3.2 Gantt Chart Scheduling 112
7.3.3 Network Diagramming 113
7.3.4 Line-of-Balance Scheduling 117
7.4 Critical Path Method 118
7.4.1 Float Ownership (Fisk 2003, P. 362–364) 122
7.5 Precedence Diagramming Method 123
7.6 Resource-Based Scheduling 125
7.6.1 Time-Cost Schedule Optimization with CPM 125
7.6.2 Resource Leveling 129
7.6.3 Heuristic Scheduling Approaches 130
7.7 Critical Chain Method 131
References and Additional Resources 132
8 Project Monitoring and Control 133
Abstract 133
8.1 The Monitoring Process 133
8.2 Measurement of Actual Progress 134
8.3 Performance Measurement: Earned Value Analysis 138
8.4 Earned Schedule 145
8.5 Forecasting Performance 146
8.6 Nonlinear Estimates at Completion 150
8.7 Project Reporting 151
8.8 Areas of Project Control 152
References and Additional Resources 154
Material Resources 156
Part4 156
9 Procurement Management 157
Abstract 157
9.1 Introduction to Procurement Management 157
9.2 Procurement Methods and Strategies for Managing the Construction Supply 157
9.3 The Procurement Process 160
References and Additional Resources 162
10 Site Management 163
Abstract 163
10.1 Management of Construction Equipment 163
10.2 Quality Management 164
10.3 Site Operations and Safety 166
References and Additional Resources 167
Uncertainty 168
Part5 168
11 Decision Making 169
Abstract 169
11.1 Introduction 169
11.2 Decision Analysis 170
11.2.1 Decision Trees 170
11.2.2 Expected Value 171
11.2.3 Utility Function 172
11.2.4 Notion of a Risk Premium 173
11.3 Multiple-Attribute Decision Making 175
11.4 Monte Carlo Simulation 177
References and Additional Resources 177
12 Probabilistic Scheduling 178
Abstract 178
12.1 Scheduling with Uncertainty 178
12.2 PERT 179
12.3 Simulations 186
12.3.1 Monte Carlo Simulations 186
12.3.2 GERT 189
References and Additional Resources 190
13 Risk Management 191
Abstract 191
13.1 Risk Identification 191
13.2 Risk Breakdown Structure 193
13.3 Risk Analysis 195
13.4 Risk Response 196
13.5 Contingency Management 199
References and Additional Resources 200
Index 201