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RICS- APC- Final Assessment 2008

Critical Analysis Report

CRITICAL ANALYSIS REPORT


10th March 2008

Submitted By
T N Padmakumar; RICS 1107062

Counsellor/Supervisor
Antony Murphy FRICS

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RICS- APC- Final Assessment 2008

Critical Analysis Report

CONTENTS

1.

INTRODUCTION

.03

2.

THE PROJECT

.04

2.1
2.2
2.3

3.

PROJECT PARTICULARS
PROJECT TEAM
PROJECT DESCRIPTION

CRITICAL ANALYSIS
3.1
3.2
3.3
3.4
3.5
3.6

.06

KEY ISSUES
MY ROLE IN THE PROJECT
BACKGROUND OF THE ISSUE
OPTIONS AVAILABLE
SELECTED OPTION,REASON & IMPLEMENTATION
CRITICAL APPRAISAL & REFLECTIVE ANALYSIS

4.

CONCLUSION

.15

5.

APPENDICES

.16

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1.0

Critical Analysis Report

INTRODUCTION

This Critical Analysis Report is prepared and presented as part of my documentation


to fulfill the requirements of the Final Assessment of Professional Competence
(APC) of the Royal Institution of Chartered Surveyors (RICS). The Report
discusses how I presented the delays and how an Acceleration Claim was put
up for the Bukhadra Substation Project in Dubai while working with Arabian
Construction Company(ACC).

ACC is a multinational Construction Company engaged in multi billion valued


Construction Projects all over the middle east. My tenure with ACC includes
involvement in various Projects like the Conference Palace Hotel Project in
Abudhabi, The Rose Rotana Tower Project in Dubai, The Dubai Gate Tower
Project in Dubai and The Bukhadra Substation Project.

2.

2.1

THE PROJECT

Project Particulars

The Project included the turnkey job of Supply, Installation, testing and
commissioning of 400/132KV Bukhadra Substation Project in Dubai.

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2.2

Critical Analysis Report

Project Team

The Client for the Project was the Dubai Water & Electricity Authority (DEWA). The
Project was awarded to AREVA TD SA, France as a Turnkey EPIC Contract.
AREVA TD SA is the world leader in manufacturer of Substation equipments,
transformers and Generators. Arabian Construction Company(ACC) was locally
appointed by AREVA to undertake the civil construction and electromechanical
works in the Project. The Project Consultants were Mott Macdonald and the QS
Consultants engaged by AREVA were DG Jones & Partners.

2.3

Project Description

The Works awarded to Arabian Construction Company (ACC) included the Civil and
Electromechanical works associated with the construction of 400/132 KV
Substation buildings, Control building, Transformer bays and infrastructure
works.

The Contract was awarded by AREVA to ACC on a non Standard Form of Contract
drafted in line with the FIDIC Conditions of Contract 1987. As the design was
not completed and considering the fast track nature of work the Contract was
awarded based on a Bill of approximate quantities with payment on remeasurement. Time being the essence of the Contract, liquidated damages for
delay were stipulated in the Contract in failing to achieve the Milestone
requirements as noted below:
Complete Construction and provide access to;

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Transformer Areas

: May 31, 2005

400KV GIS Building

: July 4, 2005

132 KV GIS Building

: June 28, 2005


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RICS- APC- Final Assessment 2008


Control Building
Full Completion of Works

Critical Analysis Report


: July 15, 2005
: January 10, 2006.

A baseline programme and planned labour histogram was part of the Contract
documents.

3.

CRITICAL ANALYSIS

3.1

Key Issue

To Collect data, analyse, contractually establish and submit an Acceleration Claim


for the Project.

3.2

My Role in the Project

During the time I was the Senior Quantity Surveyor in ACC Dubai Office supervising,
advising and assisting the respective Site Quantity Surveyors, at various ACC
sites in Dubai, in their QS duties and Contract Administration functions.

Considering the trust in me, having properly administered the QS functions at the
multi million prestigious Conference Palace( Emirates Palace) Hotel Project,
ACC Management entrusted me to handle the Acceleration issue at the
Bukhadra Project.

My position in the Project team organogram is as attached at Appendix A.

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3.3

Critical Analysis Report

Background of the Issue

The Project site was handed over to ACC and work started as scheduled. AREVA
was responsible for providing the design and preparation of Construction
drawings for the Project based on the Client issued Project documents. Article
31 of the executed Agreement expressly states that AREVA has to provide ACC
with Approved for Construction drawings two weeks prior to planned date of
concerned activity.

ACC completed the mobilisation works within the stipulated date. Excavations for
Building foundations were done, but to further with the structural works
Approved for Construction drawings were required. The works could not be
started as the structural drawings were not received from AREVA.

The delay in receipt of the Approved for Construction drawings was brought to the
notice of AREVA, within a period of 28 days. ACC started mitigating the delay by
re-organising its labour, engaging them in works which could be progressed at
site.

'Approved for Construction' structural drawings for the buildings were issued after a
delay of 45 days, thereby delaying the activity start.

I advised Management that ACC is entitled for an extension of time as it was a Client
induced delay. A revised program of work was prepared, based on the
submitted Clause 14 programme. The Extension of Time request with particulars
were prepared and submitted to AREVA for their approval.
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Critical Analysis Report

AREVA rejected the extension of time request.

My opinion to Management in this scenario was to accelerate the job and complete
it within the set milestone dates. I advocated that as per prevailing Contract
Practices ACC is entitled for all costs associated with accelerating the Project.
Subsequently notice was provided to AREVA stating that the action of AREVA
and the rejection of the entitled extension of time will be considered as an
Acceleration Order.

3.4

Options Available

I attended meetings and discussions with the Site team about the approach and
methods to be adopted in accelerating the project. In addition to the accepted
method of adding extra labour and overtime working the various options in
construction technology were also discussed. Accordingly Acceleration
measures were taken up at site.
The various options available for me in arriving at the costs associated with
increased manhours were :
1.

Measured Mile Method

2.

Earned Value Analysis Method

3.

Comparative work study Method

4.

Comparable Project Study

5.

From Recovery schedule

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6.

Total Cost Method

7.

Actual labour cost method

Critical Analysis Report

Each of the available option is discussed in detail below.

1. Measured Mile Method

- Rejected option

In the Measured Mile method the labour productivity of each of the work activity at
the accelerated period is compared with the labour productivity for similar
activity done at a normal period. Labour Productivity is defined as the craft
hours necessary to finish one unit of the work activity. Comparing the craft hours
the excess hours incurred during the acceleration period can be arrived at. The
excess labour hours can be converted to extra cost incurred.

Unfortunately we had to reject this option since the entire project activities had to be
accelerated and as there was no normal period available in the project for a
comparison.

2. Earned Value Analysis Method

Rejected option

In the earned value analysis method the physical quantity of work completed is
multiplied by the budgeted unit labour rate to arrive at the Earned Value for the
work done. This is compared to the actual cost of labour incurred. The
difference is claimed as the extra cost incurred in acceleration.

This method had to be rejected as this is entirely based on a theoritical approach.


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3. Comparative work study

Critical Analysis Report

Rejected option

In this method an estimate of the labour productivity of a work element during the
acceleration period is to be compared with a different but almost similar work
element in the same project for which labour productivity figures are available
and which had been done at a normal period. Example is the comparison of
labour productivity of Mass Concrete to that of RCC( making necessary
adjustments).

This is an approximate method and hence rejected.

4. Comparable project study.

- Rejected option

In a comparable project study method the labour productivity of an element of work


recorded from a previous similar project is used to study the decrease in labour
productivity of the project under consideration. Thereby the excess labour cost
incurred is assessed.

Even this method was rejected as the company was not having a similar project with
the same project parameters executed in the near past.

5. Extra labour calculated from Recovery Schedule

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Rejected option

RICS- APC- Final Assessment 2008

Critical Analysis Report

The extra labour cost incurred due to the acceleration can be calculated comparing
the Contract Baseline program and the prepared Recovery programme for each
activity along the critical path. Labour productivity tables for each work item can
be used to calculate the estimated labour cost on a normal situation. This cost is
enhanced by the ratio of schedule compression to arrive at the estimated
increased

costs to be incurred. A sample calculation is as shown in the table below:

EXTRA LABOUR TIME &COST:


Note: It is assumed that 50% of the extra time required by labour will be achieved by Extra labour and other 50% by overtime work.
CONTROL BUILDING

Activity
Duration as per Base programme:30 days

Duration as per Recovery programme:16 days

Foundation

Extra labour at normal rate

Sub Activity

BOQ
Qty

(A)

(B)

RCC
Foundation

Unit

Overtime Labour

Lab
output/
unit
qty(Hrs)

Lab. Hrs as
per
Planned/
Base
Programme

Lab hrs
calculated
for
recovery

Extra
Lab
hours

Lab.
Hours

Labour
Rate

Extra
Amount
for
Labour

Lab.
Hours

Labour
Rate

Extra
Amount
for
Labour

(D)

(E=BxC)

(F*30/16)

(H=G-E)

(I=H/2)

(K)

(M=IXK)

(N=H/2)

(O)

(P=NXO)

400

m3

6.28

2512

4,710.00

2,198.00

1,099.00

7.54

8,286.46

1,099.00

11.31

12,429.69

Reinforcement

107048

kgs

0.055

5887.64

11,039.33

5,151.69

2,575.84

8.09

20,838.57

2,575.84

12.14

31,270.73

Waterproofing

806

m2

0.4

322.4

604.50

282.10

141.05

8.09

1,141.09

141.05

12.14

30,533.29
EXTRA LABOUR COST INCURRED FOR FOUNDATION ACTIVITY

76,346.76

This option was discarded as it was totally a theoretical approach based on


assumed labour productivity from a general experience and from published
labour productivity tables. Hence this method does not depict and can deviate
from the actual situation of this particular project.

6.

Total Cost Method

Rejected option

All costs incurred are divided by the units of work completed during acceleration
period. A Similar calculation is done for a different period of time. Calculations
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1,712.35
45,813.47

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Critical Analysis Report

are then made to remove the cost of materials, equipment, and subcontract
costs, Once done the remainder is labour cost. The labour cost thus arrived for
the normal period and accelerated periods are compared and used for the
calculation of extra cost.

7. Labour Cost Method

Selected option

In the labour cost method the actual labour craft hours engaged is compared with
the scheduled craft hours in the labour histogram provided in the Contract and
for the period of acceleration. The extra labour craft hours incurred in
accelerating the work is thus arrived at.

3.4

Selected option, reasons and its implementation

This option was selected due to the following reasons:


-

Gives a better and actual quantification of the Costs incurred

More Employer care can be exercised since this method is based on


actual labour hours engaged and hence chances of error are less.

Is the best option considering the Contractual aspect of keep up of


contemporary records.

Since actual labour engaged is analysed these data can further be


used for Project Cost Control.

The presence of site records duty attested by the Client/Engineer at


site helps to prove the case and claim.

As actual labour cost at site is used for purpose of claim lost labour
productivity issues need not be claimed seperately in this method.

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Critical Analysis Report

The challenges for me included :


-

Establishing the entitlement

Collection, retrieval and analysis of data & information.

Costing of the acceleration.

Referring the Conditions of Contract and timely correspondence with AREVA it was
established that the situation was an excusable delay. An entitlement for
extension of time was justified as per Contract Codnitions. In order to avoid
Liquidated damages set by the Contract Milestones and since the EOT was not
approved by
AREVA it was proved that ACC had no other option other than to proceed with a
Constructive Acceleration. A proposed recovery schedule was also prepared and
submitted. As the acceleration was necessitated by a default from AREVA all
associated costs in following the Agreement was to be on their account.

I started scrutinizing site records and collecting every data available. A teamwork
option was adopted with close communications with the Site Quantity Surveyor ,
the Project Manager, Construction Manager and other Project team members. I
insisted the Site team to keep a proper documentation of site activities and keep
records of daily resources engaged at site. Proper proof of damages was of
prime importance and hence emphasis was made for formulating the same all
along the project progress.

From the Site records daily labour engaged, work executed etc were collected. The
Construction team was advised to get AREVA authorisations and signatures on
the daily reports.

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Critical Analysis Report

The costs incurred for acceleration of works due to each of the following actions
were investigated and calculated.

Extra Labour Engaged to accelerate the project:


Comparing the labour histogram available with the executed Agreement
category/craft wise labour required to be engaged during each month of the
acceleration period was calculated. This was compared with the actual labour

engaged during the same period and the difference in labour was arrived at.
Utilizing my experience in estimating costs I established the craft wise labour rates
from the basic labour wages by adding for the expenses on housing,
transportation, uniforms, insurance etc.

A Sample calculation done for the Labour rates are as shown below:

LABOUR SALARY DETAILS

AIR FARE

LEAVE SALARY

END OF SERVICE

VISA

MEDICAL

INSURANCE

LABOUR CAMP

TRANSPORT

OTHER ALLOWANCES

TOTAL COST

HOURLY RATE

2218.13

525

13,348.1
3

1750

1050

1050

1800

600

1200

400

1000

3300

1050

26548.13

9.34

LABOUR(25)

7575

1584.38

375

9,534.38

1750

750

750

1800

600

1200

400

1000

3300

750

21834.38

7.68

SAFETY CLOTHING

HOLIDAYS

10605

TOTAL

FRIDAYS

MASON(35)

STAFF

ANNUAL SALARY

TOTAL 2842 HRS /YEAR

The craftwise extra labour hours engaged was multiplied with the labour rate to
arrive at the cost incurred in additional labour. Measurement of works as
completed were done with the assistance of Site QS and variation in quantity
worked out. Costing of the variation and extra works were done from which
labour costs in variations were arrived at. The labour engaged in variation was

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Critical Analysis Report

deducted from the additional labour cost to arrive at the labour engaged in
accelerating the work. A sample calculations is as below;

CALCULATION OF ACCELERATION CLAIM


ACTUAL LABOUR ENGAGED AGAINST ESTIMATED LABOUR
MANHOURS AS LABOUR HISTOGRAM IN CONTRACT
MANHOURS ON SITE
TRADE
Carpenters

Oct04

Nov-04

Dec-04

Jan-05

Feb-05

Mar-05

Apr-05

May05

TOTAL

630

17040

27528

37200

28672

13144

8400

5456

138070

RATE/
HR

AMOUNT

9.34

1,289,573.80

LABOUR AS PER HISTOGRAM(PLANNED)

1,289,573.80

ACTUAL MANHOURS ON SITE


1. Normal Working days
MANHOURS ON SITE
TRADE

OctMayNov-04
Dec-04
Jan-05
Feb-05
Mar-05
Apr-05
04
05
Labour 10 hrs working upto Dec 20th,13 Hrs working from Dec 21st to Feb 20th and 12 hrs working for rest of Feb,March,April & May2005.
upto
20th
upto
21st
20th
-31st
20th
-28th
Carpenters

630

3880

10840

14092

38415

29705

27420

46656

58320

56376

TOTAL

286334

RATE/
HR

AMOUNT

9.34

2,674,359.56

ACTUAL LABOUR FOR THE PERIOD

2,674,359.56

EXTRA LABOUR( CARPENTERS)

1,384,785.76

Detailed calculations are attached at Appendix B


Extra Supervision Charges:
Added supervision was required to properly manage the increased labour force.
Supervising staff had to work on the increased overtime hours. The extra
supervision and the additional hours worked were recorded and claimed.

Extra Machinery engaged in acceleration


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Critical Analysis Report

Extra machinery and hand tools had to be provided at site in order to cope up with
the increased labour working at different areas. Moreover to further increase
productivity heavy rollers were used for compaction of excavations and backfills
in place of hand operated machinery. Due to more work men doing same job at
different locations extra machinery and scaffolding were needed. Hence the
same were properly recorded and claimed for.

Extra Cost to Vendors for expediting Supplies/ Work


Vendors were contacted and various procurement options were studied to expedite
material supplies. Subcontract works were required to be accelerated to meet
the targeted completions. The Subcontractors were instructed to submit their
claim if any for expediting their work including proper justifications &
documentations. These documentations were kept for further inclusion in the
Claim.

Changed method of working & Work sequence


Various work methods had to be changed at site in order to accelerate the works.
Examples were; Solid block work permanent forms were used in substructure
concrete works in order to gain time spent in concrete setting times and timber form
work stripping times. Similarly the sequence of work was re- scheduled in order to
compress the period of actual construction. Extra cost incurred were calculated and
accounted for in the Claim. My exposure to the situation increased my knowledge in
Construction technology and Project planning.

Each of the above item was analysed in detail and presented to Consultant/Client in
a submission with Entitlement Section specifying the reasons for delays,
mitigation actions taken by ACC, Recovery status and a Claims Section
quantifying the effect.

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Critical Analysis Report

. 3.6 Critical Appraisal & Reflective Analysis

The selected option was the best option considering the project scenario and
Contract documents. Yet the following problem was faced while evaluation of the
same by the Consultants.
In the labour histogram included with the Contract (which was used as a basis for
labour cost during normal situation) labour to be engaged per month was
specified in numbers. Normal working hours were considered as 8 hrs/day in our
claim. The

Consultants came up with the counter claim that the normal working hours in Dubai
is 10hrs/day and the claim needs to be revalued based on that. We had no
document to prove our stand.
Hence it is noted that in all future projects our consideration of 8 hrs/day working
should be noted in the Labour histogram submitted.

Experience and Competance Gained:


The involvement in this Project helped me in attaining extra experience and
improving my competancy in the following areas;
- Ethics, Professional identity & Accountability
-

Collection, retrieval and analysis of information and data

Oral, Written and Graphic Communications

Self Management & Team work

Contract practice & Contract Administration

Information technology and computers

Construction technology

Measurement and Costing of Works

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-

4.0

Critical Analysis Report

Project cost control and Cost Monitoring works

CONCLUSION

My involvement in various complex projects during the past 23 years of my career


has gained me the ability to professionally handle and resolve Commercial,
Contractual, Procurement and Cost related issued.
I am sure that my education and further experience/professional competancy that I
got from the various projects along with my commitment to adhere and follow the
ethics and conduct rules of RICS will help me in providing a successful
professional contribution to all my future assignments/ projects.

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