Cost Composition in Spider Project

Daniel,

I don’t understand why do you plan to use space or material leveling for simulating equipment mobilization.

Spider Project models resource production at the moments or on activities when they become available and then these resources can be used on project activities.

So I don’t see the need for material leveling in this specific case. It can be used for modeling limited productivity of the asphalt plant but it does not make sense to use it for modeling of resource mobilization.

Unit Price Contract | Practical Law

• Unit price contracts are commonly used on: Public works projects, Engineering projects, Horizontal construction, such as roads.
• They are best suited for construction work consisting of repetitive tasks that are easily measured.

Implementation of Earned Value Management in Unit-Price Payment Contracts | Journal of Management in Engineering | Vol 33, No 3

• We do not use Earned Value Management in any type of contract but if not enough it should be noted it is particularly unsuitable in Road Construction as they are typically unit-price contracts.
• However, evidence indicates that EVM is not typically implemented by contractors when the payment agreement is based on unit-prices.

Unbalanced Bidding - Government Contracting - Cohen Seglias

• Unbalance bidding on unit price contracts happens, it can be a reason for disqualification of a Bidder.

Tips and Tricks on Unit Price Contracts | 4castplus

• While it makes sense to track variance of quantities in unit price contracts, it makes no sense to control costs based on initial estimated quantities, cost tracking must be done on unit cost basis.
• Once the project is underway, it becomes critical for the contractor to be able to accurately capture their costs; and report those costs on a per-unit basis so that they know if they’re making a profit.
• Productivity metrics can help you analyze how well your crews are performing. It is a critical part of successfully managing unit price projects once they’re underway.

At home most contractors use unit-price costing and productivity tracking to control construction project costs, no matter if the contract is fixed price or unit cost. Usually, in our jobs many activities share repetitive tasks that are easily measured so it makes sense to pay attention to unit costs spannig all acticvities that share repetitive tasks. Quantity is the glue that makes cost meaningful. Unit costs is what we use to price our fixed price as well as unit price bids. Cost per activity is of not much use for use for us for cost control, in any case of use for cash flow.

Perhaps it would help if a Unit Costing Table is made available. Here Spider should be able to track unit cost and unit production rates for repetitive tasks that span many activities. Fields could be as per columns on the suggested tables. The implementation is a challenge I believe Spider developers can overcome. At home we would still use our financial system but it can be an improvement for others who prefer unit costing within the scheduling tool.

Cost Loading in Spider Project is usually done using Reference-books.

If activity and resource types were defined then unit costs (usually contractual) can be assigned from the Reference-books, resource hour cost is taken from the Reference-book, resource assignment cost can be taken from the reference-book also if payment depends on the volume of work done.

Contractors usually manage two budgets - one is contractual based on contractual unit costs or fixed costs of project activities, the second is based on resource work cost with additional indirect cost component that is calculated by formula as some percent of the total expenses or the cost of workforce (depends on the company standards).

Using both budgets it is easy to understand what profit can be achieved.

Payments can be entered or imported from another tool to understand what amounts were done but still not paid. Payments are usually delayed and are done for completed activities, not just for volumes done. So Spider calculation of the cost of the work performed does not mean that the same sum will be paid. But it helps to undertsand who owns to whom and what amounts that can be helpful for contract management.

It is hard to believe the clearing of 2.5 million m2 does is not impacted and do not impact other activities. As per your schedule it takes 330 days, it is a very long duration activity.

If in between two road sections a bridge must be required to be built, a road contractor is not to delay the before and after road segments, he might work both segments at the same time the bridge is built, the clearing at both sides at the same time. I expect such situation to happen in a long road construction job.

* We do not cost load our schedule for cost control. We use our accounting system for unit job costing. Our estimators use unit costs, difficult or impossible to get meaningful unit cost with activity-based costing. As if not enough, distributing cost data among activities can be very challenging and time consuming; an everyday example can be the purchase and delivery of bricks where a single truckload is to be distributed among many activities, what a mess.

* While we do not cost load our schedules, unless at gunpoint, in such case cost loading should be done after the schedule activities and logic is approved. If latter on you have to split the activity into segments all cost distribution work will be lost.

* We do not cost load our schedules for payment purposes, it is crazier but shit happens. For scheduling hauling activities we use volume of work using loose measure but for payment of these activities BOQ cost codes and quantities must be in bank measure. Bank measure vs Loose measure is of concern, if difference is high someone might be stealing or soil properties data was wrong, in rare cases consolidation might be the cause.

OWN.718. The Great Divorce: Cost Loaded Schedule Updating - PDF Free Download

* We do not cost load our schedules for EVM, we do not use it unless at gunpoint.

(PDF) Earned value method as a tool for project control

* We only cost load our schedules in the rare case financial constraints are relevant. To my knowledge a function only Spider Project can tackle.

It makes all sense for your planning software to provide all cost functions, you never know when someone at the top of the food chain will require such cost loading.

Daniel,

if the results are the same as the spreadsheet I suppose it is good. I agree with Rafael, cost loading at the resource level is not worth it. I preffer to enter the activity budget, resorces, hour rates or volume rates of resources and compare the budget to the real estimated cost.

Best regards,

Bogdan

Too much details into cost loading might divert attention away from the schedule logic.

Road Construction is mostly driven by earthwork activities, but earthwork per segment is not a constant, distance to disposal area is not constant, progress in between stations is not constant. For some road segment cut-to-fill will require no howling for others it might, different segments with different howling distance will require different number of trucks. 

Wise selection of planning segments is key for good planning. Earthwork information is on the Mass Diagram, if you miss it most probably the schedule will be wrong.

Because of the topsoil stripping area, without looking at the drawings, I expect it to be a relatively long road, requiring many road segments, with some bridges, some access and exit road segments.

Best Regards, Rafael

COST LOADING AT THE RESOURCE LEVEL IS TOO GRANULAR

COST LOADING AT THE ACTIVITY LEVEL IS LESS GRANULAR

- But misses meaningful volumes of work when multiple volumes of work are to be considered.

BETTER IF USING A DRIVING PRODUCTIVITY TYPE ACTIVITY AND A FEW HAMMOCKS WHEN MULTIPLE VOLUMES OF WORK MUST BE CONSIDERED

- If you use separate activities the software might schedule the activities to happen at different times; to keep them together can be a nightmare, especially with multiple calendars and resource leveling.

- If using hammocks you can keep the activities to happen in sync. If resource leveling delays any hammock then the software will issue a warning for you to take care of the issue.



NOT CONSIDERING RESOURCES WHEN SCHEDULING WOULD BE NUTS BUT WE FIND USING CPM FOR JOB COSTING AS WELL AS FOR PAYMENT APPLICATIONS IS NOT A GOOD IDEA.

https://www.semanticscholar.org/paper/The-Great-Divorce%3A-Cost-Loaded-…

- We find simplified cost loading for the purpose of financial resource constraining of much value, "no ticky, no laundry".

Daniel,

you need 2 formulas, one for number of resources, one for workload of resources.

I suggest you create a temporary user field in which you will copy-paste the total cost of resources, then you fill the number of resouces with 1 and load with 100 and perform schedule and cost calculations.

The formulas for number of resources should look like if (User field value/Cost component Value != 1, RoundUp(User field value/Cost component Value), 1).

Perform schedule and cost calculation again. The resulted costs should be higher than the costs for 1 resource with 100 load.

The second formula is for the workload and it should look like User field value/Cost component value. This should adjust the workload in order to set the cost at decimal value. However you may get workloads such as 23.42309432984320%.

This can work from a arithmetical point but it makes little scense from a resource loaded schedule...no resource will work 23.42309432984320% x 8h/day = 1.873847546387456 h.

Best regards,

Bogdan

Daniel,

If you want to do it the way you did it you have to change workloads, look at resource assignment IEP017 under ”Spread and compactation in waste disposal area (Multi-Resource)”, if you change the workload to 12.50 then Spider and Excel numbers are the same.

Best regards,

Bogdan

Daniel,

it looks like initial data contains three activities with different volumes measured in different units (m2, m3) and productivity, and so with different duration.

You assigned all crews to one activity and used the productivity of only one crew.

I suspect that the work time of different crews is not the same.

733k             Estimate

820k             Model

87k              diff

11.87%        diff %

Average profit on construction jobs is less than 10%, this difference is unacceptable.

It is a single activity schedule, interesting if several hundred/thousands of activities, even more when updating actual values for comparison against budget.

Good Luck.