Overhead and Contingencies 476–4 Scheduling
A major underlying determinant of indirect costs associated
with a project is how long it will take to complete the project.
This length of time especially affects the estimator with
regard to project overhead items, wages paid to supervisory
and home office personnel, rental on trailers and toilet facil-
ities, and any guards, traffic directors, and barricading
required. It also affects the estimate in terms of how long
equipment will be required on the project.
Traditionally, the estimator assumes an approximate pro-
ject duration that is the basis for the estimated project over-
head costs. There are many computer programs such as
Microsoft Project, Suretrak (by Primavera), Primavera Con-
tractor, and Primavera P6, that are useful tools in sequencing
the construction process and assisting in developing the pro-
ject duration. When competitively bidding projects, this
process is time-consuming and expensive. The estimator and
the appropriate management personnel must make a choice
of how much time and cost should be expended in the esti-
mating phase of the project. The job site overhead costs often
impact whether a particular contractor is the low bidder. The
speed at which the project is constructed has a heavy impact
on the ultimate project cost. At minimum, a bar chart sched-
ule should be developed to estimate a reasonable project dura-
tion. One approach is to bring together proposed members of
the project team and have them develop this schedule. The
advantage of this approach is that the persons who are actually
going to direct the work in the field will have ownership and
input in the construction schedule. This cooperative effort
will reduce the conflict between the home office and the field
and will add credibility to the schedule.
However, if the work is being negotiated and the deci-
sion focuses not upon which contractor to select but upon
the economic feasibility of the project, then detailed network
schedules may be appropriate. In addition to forcing every-
one to think about the construction process, it shows the
owner that the contractor is serious about planning the pro-
ject and executing according to the plan.
The basics of scheduling the project can be broken into
four steps:- List all activities required for the completion of the pro-
ject. - Assign a duration to each of the activities listed in step 1.
It is most important that allof the times be reasonably
accurate. If the work is to be subcontracted, contact the
subcontractor for her input. - Write each activity and its duration on a “post-it” note
and have the construction team develop a network dia-
gram that shows the sequence in which the activities
will be performed. The most popular type of network
diagram used today is the precedence diagram. - Perform a forward pass calculation (this is a schedule
calculation) to determine the estimated project dura-
tion. If one of the commercially available scheduling
programs is available, the post-it network will become
the guide for entering the data.
It is beyond the scope of this textbook to show the complete
workings of computerized scheduling. By using a small
example, however, the basics can be explained. The small
office shown in Figure 6.3 will be used. Using those simple
drawings, the activity list in Figure 6.4 was developed.
FIGURE 6.3.Sample Office Building.