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ForumForumProject Control...Project Control...Cost Engineerin...Cost Engineerin...Cost control techniques on Direct Hire projects Cost control techniques on Direct Hire projects
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 4/8/2010 8:05 AM
 

Is any body experienced with cost control a construction project under Direct Hire basis? Do you do it by foreman crew or by superintendant level? to calculate the performance and man-hours spent vs the actual production rate?

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 4/8/2010 8:06 AM
 

I am not sure what you are asking but in my experience in direct hire work, the General Foremen (GF) are included in craft hours and wage rage calculations. Above GF, such as Superintendents, are considered Construction Management personnel. It is the same for productivity (both budget productivity and production rates) - only the craft hours of GF's and below are included.

My own definitions are; Budget productivity = earned hours / actual hours Production rate = hours / quantity installed (e.g.; 3hr/lineal meter of pipe)

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 4/8/2010 8:07 AM
 

There are two types of direct hire work. Fixed price and cost reimbursable. In the fixed price direct hire jobs I've been involved in, productivity analysis is at the upmost sensitive level and made public to only those who need to know. Names of foremen and superintendents are never used and reporting is at the activity code level only. In any case, I would discourage publishing anything below this level.

I use man-hours or $/quantity to evaluate performance. This can be applied to both budget, actual and forecast information. For example, 100 Mhs/300 Units = .333Mhs per Unit. This makes forecasting much easier when you go to estimated remaining or additional quantities. For example, I add 150 Units = .333 X 150 = 50 Mhs.

Hope this helps.......

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 12/3/2010 7:47 PM
 
The Basis for all Projects be Direct Hire or Tender Bid Projects the process moving from the Estimation Stage based on pricing done on detailed rate analysis, followed by internal valuation wherein the nett price is agreed upon within the project team with the project manager, this forms the Projects Budget within which the PM should complete the works.

Putting in place measures  for capturing actuals - Materials/Manpower/Machinery Utilization on the project is foremost for getting a good cost control system established on the project.

As a contractor on cost control it benefits to measure the cost variance in detail

Cost Variance a direct measure of profitability on project: How Much Value of Work in Generated (BCWP) - How Much is Actually Spent to Generate that Value(ACWP/ATD), +Ve/-Ve Value denotes project is Under/Over  budget

Detailed process of measuring and monitoring the expended resources using established reporting structure/forms contributes significantly towards effective/ optimum utilization of the resources and minimize plant and manpower resource idling and material wastage on projects.

Where possible it is always better to drill down to the detailed levels for cost measurement and control. On Manpower you should segregate the Manpower Type by their Trade and Specific Rates. Have the Production Rate  determine the Budgeted Estimated Manhour for individual Manpower based on Work Scope/Qty then measure actual work done and actual manhour spent to do that work.

For Analysis : Upto Reporting Period

Planned Completion : 60 %

Actual Work Done : 50%

Total Manhour = 2000 Mhrs

Planned Manhour = 1200 Mhrs

Performance/ Earned Manhour = 1000 Mhrs

Actual Manhour Spent = 1400 Mhrs

Schedule Variance = -200
Cost Variance = -400

The Principle remains the same at resource level/ activity level or taken at project level
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Work that gets planned gets done on time
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