time Impact of different types of contract

Dear Alex,



Thank you for explaining the definition of the "Value Engineering".



Acually, I am currently an AVS: "Associated Value Specialist" this is the first certification in the Value Engineering field certified by SAVE international. Once you completed 6 Value Engineering Studies, you can take another exam and become a VME. An AVS, is the key to leading a Value Engineering Study.



If I can assist, please let me know.



Best Regards,



Samer

Dear Alex,



It ok, no need to apologize :)



Samar might be a name of a town in phils, but in the Arabic language it is a verb: to stay up at night and have fun dancing and singing.



Keeping the tread into perspective, the impact of the different kinds of Contacts, the origin of CPM, Optimization Research, Decision Trees, PERT, etc was from the military field. Optimizing the resources and minimizing the time and cost.



Kind Regards from Jordan,



Samer

Hi Alex,



As you can see, Charlie has a lot of respect for Douglas MacArthur. What he doesn’t mention, however, is that Wendell Fertig was the person who built a force of 38,000 irregulars to conduct guerilla warfare against the Japanese while al MacArthur did was talk about it. MacArthur’s treatment of Fertig was very shabby and an indicator of one of the less pleasant aspects of MacArthur’s character, pettiness.



As for the Balangiga Affair, no-one comes out of that with any credit, an attack on, largely, unarmed men by the Phillipinos, and vicious reprisals by the Americans.



Chris Oggham

Samer



Sorry for pressing the wrong key



Thanks Charleston to correct me and thanks for the info as well.



Alex

Hi Alex,



Samar is an island in Philippines. It is a very big island. and it is divided into three provinces.



There is one town name after General Douglas MacArthur since when the General made his promises "I Shall Return", MacArthur landed near the Island of Samar. and eventually, liberated the Philippines from Japanese occupation during World War II.



Another town, Balanhiga, is famous and the inhabitant are proud to what was known as the "Balanghiga Massacer". This happen during the early 19th Century. The Americans patrols took rest in the town church. The mens folk dress like woman and pretend to attend mass. These actions took the Americans off guard and the townpeople just wipe out the whole American patrols. But what was brutal was the way of American reprisals. However, the townsfolk knew the Americans were comming and they fled to the mountains. To satisfy their effort, the Americans took the church bells as souvenier of their own folly.



Samer is Samer.



Cheers,

Happy Planning and Scheduling

Hi Samar,



Value Engineering - is a methodology use in contract to encourage work smarter and improve delivery turnaround time. And certainly it use with combination with some of the other contract terms, ie Design and Build, Lump sum, BOQ ...etc I came across a project contract specificed as a Value Engineering Contract because the contractor can submit design that can be differ from the design spec but if still achieve the same result, then the contractor keep the saving. ie if the design have 10 cameras to cover an tunnel, and if 9 camera can do the same job, the saving of 1 camera will be pocketed by the contractor.



And Alliance and JV is also a methodology use as a contract to implement projects. And each of this impact the time elements of the project.



To decide what type contract to use in a project is very important to determine scope and outcome as well as only looking at the time factor. Its a bit chicken and egg.



HTH



Regards



Alex

Hi Civilila,



It should go beyond the schematic design stage.



Some Design and Build contract even goes further than 30 percent of the design development.



Cheers,

Happy Planning and Scheduling

Dear Alex,



Value Engineering is not a "type of Contract". It is a process that is followed to maintain/improve the quality of the project and reduce the cost.



JV is also not a Contract type. It is an agreement between two or more parties to form one entity/side of the Contract.



With kind regards,



Samer

Dear All



IMHO What type of contract to use is very much driven by the scope of the project.



And out of the contract type I was disappointed not to see anything related to value engineering, alliance partners, JV ...



Alex

The design and build approach, in theory will shorten the duration from 64 months to 50 months.



why this is so??



because in the design and build, the design development phase will be part of the contract, so the contractor for design and build will be responsible for the 14 months design development phase.



so in design and build: Design phase - concept stage = 4 months, schematic stage = 6 months. Total for design phase is 10 months.



Tender phase = 4 months



Construction phase = 36 months



Total duration = 50 months



Cheers,

Happy Planning and Scheduling

Having establish a common parameter, we can now move on.



In EPC project for real estate development start with design, procurement/tender phase, and construction phase. The design phase has three stages: concept stage, schematic stage, and design development.



The conventional approach is to have start to finish meaning, design phase will finish before start of tender and finish tender before start of construction.



so let say, design phase will take you two years to finish: concept phase = 4 months, schematic phase 6 months, design development = 14 months, = 24 months or two years for design phase,



Then you will have tender phase of say 4 months,



then you will have construction phase,say, 36 months





the total duration = 64 months.



Cheers,

Happy Planning and Scheduling

I think Civilla is a little bit confuse on the way to explain the situation.



Basically, duration is dependent on the scope of works, the resource allocated, the budget, and the quality.



so it should be stated for example, the scope of work is the development of an island in the world, the resources should not be a problem since it is available with reasonable price, the budget is also available since it was already program from a loan from banks, quality is achievable.



Having that parameter, we can say what is the difference in time impact for FIDIC contract and CM design and build contract



Cheers

Happy planning and Schedulnig

Thanks, Samer. It doesn’t sound any better than in the US!



I’ll just repeat my observation that contract terms so often dictate that decisions that are best for the contractor are very bad for the customer. Effort really should be expended to create "win/win" scenarios for all stakeholders in the contract.

Dear Stephan,



We are running in Jordan all different kinds of Contracts at the same time;



1. Cost Plus

2. Lump Sum

3. Day works

4. BOQs



It depends on the type of organization and the experience of the customers with the best contract to run their business.



Best Regards,



Samer

Civilila’s question is certainly a bit hard to understand -- but it does bring up a subject that drives me nuts: the way that contracts are so often written to put customer and contractor at cross purposes!



So many Time & Material and Cost Plus contracts (and subcontracts!) incentivize the contractor to take longer and cost more! Without schedule incentives/penalties, the longer they go on and the more they cost, the better it is for the contractor and the team. And, at least in the U.S., it is Cost Plus contracts with zero schedule incentives or penalties that are very much the norm.



I was fascinated during one of the Presidential Debates to hear McCain actually urge as policy the abandonment of Cost Plus DoD contracts. Of course, that’s NOT going to happen (no contractor would ever be able to afford to risk a program with cutting edge R&D!). But certainly contracts that align the interests of customer (earlier deployment, lower cost)and contractor (greater profit) could easily be implemented if the contracts people on both sides had a better understanding of critical path theory and a willingness to track and reward project value and project profit.



What is the contract situation like in other countries? The emphasis on forensic schedule analysis suggests to me it’s not a lot better. Anyone? Anyone? Buehler?



Fraternally in PM,



Steve Devaux

Dear Civilila,



What Ben stated is clear.



In case you have a deadline that you need to deliver your project by, for whatever reasons, then this will be in your contract (any type), and after tendering you will see the results.



If you like the prices, you continue. Otherwise, you negotiate everything and get to know the reasons behind the high prices.



Best Regards,



Samer

Civilila,



Your question is rather difficult to understand...what I think your question means is how long should each phase of the project take, ie. the Design/Procurement/Construction. And how long should to sub-contract award period take?



If this is what you mean, then this is a very hard question to answer accuratly. You havent said what your planning to build which can determine how long the average time to build will be.



Contract award can take months if not years depending on the size and value of the project. It all depends on the varables in the contracts, price, delivery time, etc.



I think with these types of questions, you should be speaking with your project manager or project director. These types of issues are his/her responsability. They should then give you that info to input to schedule.



I hope this helped you.



Let me know if you need further help.



Regards

Ben Hall