7 - Budget Review and Related Practices - Mdfsp09

8/3/2019 7 - Budget Review and Related Practices - Mdfsp09

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77 Budget Review & RelatedBudget Review & Related

Professor M.Professor M. AsemAsem AbdulAbdul--MalakMalak

ng neer ng anagement rogramng neer ng anagement rogramFaculty of Engineering and ArchitectureFaculty of Engineering and Architecture

American Universit of BeirutAmerican Universit of Beirut



Control of budget is exercised by ensuring that generated cost’

revised figure approved by the owner.

Budget review is concerned with the initial (purchase and,

weighed against maintenance and operation costs under anyvalue engineering exercise.

, ,..of installing or incorporating work items or products in thebuilt facility. The ease with which such installations take place

.



Illustrating the scaleand relationship of thepro ect componentsc emat c es gn

DesignDevelopment

Refinement of design;establishing scope,relationships, forms,

ConstructionDocumentation

s ze, an appearance othe project

Setting forth, in detail, therequirements for

construction of the project



Owner’s ConstructionOwner’s ConstructionBudgetBudget

Construction budget setby the Owner

c emat c es gn

DesignDevelopment


Construction budget checks and balances by the Owner



Detailed/DefinitiveEstimate

c emat c es gnEngineer’s

Estimate

DesignDevelopment

PreliminaryEstimate


Construction cost estimate reviews/updates by the Architect/Engineer



uestions to beuestions to beaddressedaddressed

c emat c es gn

DesignDevelopment1. Design Information???


.

Construction cost estimate reviews/updates by the Architect/Engineer



SD Estimate:SD Estimate:Governing FactorsGoverning Factors’

Functions/Areas Criteria/Standards

Systems/SizingScale/Massing

Estimate’s representation characteristics

$/m2 Combined Aggregation bysystem

Aggregation byfunction

wner s cr er a o accep ance

In conjunctionwith other

Rates vs.EstimateComprehensive

Cost Estimate Confirmation

deliverables



DD EstimateDD Estimate::Governing FactorsGoverning Factors’

????? ???????????????


????? ???????????????


????? ???????????????




CD Estimate:CD Estimate:Governing FactorsGoverning Factors’

????? ???????????????


????? ???????????????


????? ???????????????




Value En ineerin :Definition

It is the process through which it can be

ensured that the delivered facility has beendesigned with an overall (life-cycle based) costeffectiveness taken into consideration in

built facility and the systems serving such



Project

Financial Advisors

ManagementProfessionals

Owner Legal Advisors

TechnicalStaff

A/ E Consultant

on rac or



’ ’

Relevant AIA terms:Relevant AIA terms:

§§ 2.1.32.1.3 The Architect shall consider theThe Architect shall consider the valuevalue

of alternative materials, building systems andof alternative materials, building systems andequipment, together with otherequipment, together with otherconsiderations based on program, budgetconsiderations based on program, budget

an aes e cs n eve op ng e es gn oran aes e cs n eve op ng e es gn orthe Project.the Project.

r



’ ’

Project manager is to be expected to take an active roleProject manager is to be expected to take an active rolein overseeing the performance of the Architect’sin overseeing the performance of the Architect’s

pertaining to “value engineering”.pertaining to “value engineering”.

v r :v r :

. .. . alternative materials, building systems andalternative materials, building systems andequipment, together with other considerations basedequipment, together with other considerations basedon program, u ge an aes e cs n eve op ng eon program, u ge an aes e cs n eve op ng e

design for the Project.design for the Project.r



’ ’

Relevant FIDIC General Conditions of Contract forRelevant FIDIC General Conditions of Contract for

13.213.2 he Contractor ma at an time submit to thehe Contractor ma at an time submit to theEngineer a written proposal which (in the Contractor’sEngineer a written proposal which (in the Contractor’sopinion) will, if adopted, (i) accelerate completion, (ii)opinion) will, if adopted, (i) accelerate completion, (ii)

,,maintaining or operating the Works, (iii) improve themaintaining or operating the Works, (iii) improve theefficiency or value to the Employer of the completedefficiency or value to the Employer of the completed

or s, or v o erw se e o ene o e mp oyeror s, or v o erw se e o ene o e mp oyer

r



How Are These RolesHow Are These RolesExercisedExercised

Planning

ArchitectProject Manager

Contractor

Bidding

Design

Construction

O&M

Possibilities to consider Value Engineering prevail throughout the D-B-B process



Planning

Bidding

Design

Construction

O&M



e n ons



-

“Buildabilit is the extent to which the desi nof the building facilitates ease of construction,subject to the overall requirements for the

comp ete u ng



-

“Constructability is the optimum use of

construction knowledge and experience inplanning, design, procurement, and fieldoperations to achieve overall project

”

ons ruc on n us ry ns u e, – us n



Definition Fer uson -1989)

“Buildabilit is the abilit to construct a buildinefficiently, economically and to agreed qualitylevels from its constituent materials,

components, an su -assem es



-

“Constructabilit is the extent to which thedesign of the building facilitates ease of construction, subject to the requirements of

construct on met o s



Design

Bi ing

Construction

O&M



PM/CM

Financial Advisors

Pro essiona s

Owner Legal Advisors

TechnicalStaff

A/ E Consultant

on rac or s



’ ’

The Architect shall be the first participant toThe Architect shall be the first participant to

observe the issue of “constructability” as theobserve the issue of “constructability” as thedesign is being conceived and rendered.design is being conceived and rendered.

Observing “constructability” shall be made aObserving “constructability” shall be made arequirement in the Owner/Architect Agreement.requirement in the Owner/Architect Agreement.



’ ’

Project manager is to be expected to take an activeProject manager is to be expected to take an active

role in overseein the erformance of the Architect’srole in overseein the erformance of the Architect’sservices and in enforcing those agreement termsservices and in enforcing those agreement termspertaining to “Constructability”.pertaining to “Constructability”.

reviews, starting as early as possible into the projectreviews, starting as early as possible into the projectimplementation schedule.implementation schedule.



’ ’

instrumental in judging the degree to which theinstrumental in judging the degree to which the

desi n has been conceived withdesi n has been conceived with “constructability” in mind. “constructability” in mind.

he drawback lies in the mechanism throughhe drawback lies in the mechanism throughwhich the judgment of the Contractor may bewhich the judgment of the Contractor may be

..



Where Are These RolesWhere Are These RolesExercisedExercised

Planning

Architect

Project ManagerContractor

Bidding

Design

Construction

O&M

Possibilities to consider Constructability prevail throughout the D-B-B process



Considerations durinConsiderations durinPlanningPlanning

Constructability program is an integral part of project execution.

Project planning involves construction knowledge andexperience.

Early construction involvement is considered in development of contracting strategy.

Project schedules are construction-sensitive. Basic design approaches consider major construction methods. . Project team participants responsible for constructability are

identified early on. Advanced information technolo ies are a lied throu hout

project.



Considerations durinConsiderations durinDesign and ProcurementDesign and Procurement

Design and procurement schedules are construction sensitive.

es gns are con gure o ena e e c en cons ruc on.

Design elements are standardized.

Construction efficiency is considered in specification.

Module/preassembly designs are prepared to facilitatefabrication, transport, and installation.

,

material, and equipment. Designs facilitate construction under adverse weather

conditions.

Design and construction sequencing should facilitate system

turnover and start-up.



Desi n and rocurement schedules areconstruction sensitive

Procurement, other than for lead times, has moderate

segment of the overall schedule. Design is a complexand demanding process, but frequently is the most

ruit u area in optimizing t e entire project sc e u e.



Desi ns are confi ured to enable efficientconstruction

Simplicity is a desirable element of any constructabledesign. Flexibility for the field construction forces to

highly desirable. Sequencing of installation is as mucha design consideration as it is a procurement and

.skills should be minimized in all cases, along with onesthat are highly labor intensive.



Specific advantages of standardization include:

(1) increased productivity from repetitive fieldoperations,

,

(3) simplified material procurement,

4 sim lified materials mana ement

(5) reduced design time, and

(6) greater interchangeability of spare parts duringmaintenance operations.



Construction efficienc is considered inspecification development

Sufficient time is allowed to develop complete,cons s en , an error- ree spec ca ons. ar y ssought as one of the prime characteristics of a good

specification. A single construction specification coversall appropriate aspects of a single subject orcomponent. The cost saving potential of “or equal”

.

Specifications are maintained in order to include themost current cost-effective state-of-the-practiceec n ques an ma er a s.



Module/ pre-assembly designs are

,transport , and installat ion

Once the decision has been made to use modularization,

addressed during design and procurement to ensure theirsuccessful implementation. Designers should first consider where

the fabrication is to be performed. If the vendor’s shop is undercontrolled conditions, tolerances can be more stringent.Module/preassembly designs add requirements for transportingand handling large assemblies. These activities form a revised

scope for the project and introduce key physical or schedulerestraints based on the availability of transportation and handlingequipment. Finally, the installation method of modules must be

, ,and design of underground services and foundations.



Designs promote construction

, ,equipment

Specific issues that should be considered include:(1) sequencing of work,

(2) delivery schedules for major pieces of equipment,

(3) laydown areas on congested sites,

(4) e very rou es,

(5) use of permanent elevators for personnel lifts,

traversed later by heavy equipment, and

(7) type, location, and required opening size forequipment.



Design and construction sequencing

start-up

it is important that the overall start-up planningprocess begin early in the facility delivery process. The

-up problems that result in increased costs and delays.

The longer the overlap between the start-up phase andthe construction phase, the more important earlyintegration of start-up into the overall project planbecomes. Of e ual im ortance to inte rated ro ect

planning is the need to identify start-up requirementsthat have a direct impact on design, such as: special

, ,electrical power requirements.



Considerations durinConsiderations durinField OperationsField Operations

Constructability is enhanced w hen innovativeconstruction methods are utilized, which

(1)(1) the sequencing of field tasks,the sequencing of field tasks,

(3)(3) use of hand tools,use of hand tools,

(4)(4) use of construction equipment,use of construction equipment,

(5)(5) constructorconstructor--optional preoptional pre--assembly, andassembly, and(6)(6) postpost--bid constructor preferences relevant to thebid constructor preferences relevant to the

ayou , es gn, an se ec on o permanenayou , es gn, an se ec on o permanenmaterials.materials.

7 - Budget Review and Related Practices - Mdfsp09

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