Practice and Theory of

Schedule and Cost Control

Contents of the Lecture

This lecture will be given to the participants
who do not have enough knowledge of time
and cost control practices and theories
In this lecture the participants will gain a
basic knowledge of the use scheduling
techniques and control practices related to
contract administration approaches.

1
 Construction Project Management
What is project management?
It is the management processes through which the
Scope (the Works) stipulated in the specification is
completed within the Time and the Cost established
and with the Quality specified
First, the Scope and Quality is defined by the design
drawings and the specifications
Second, the completion Time will be decided through
the demands from ultimate users
Third, acceptable Cost will be established by the
contract between the Employer and the winning
contractor (winning bid)
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2
 5

International Construction Contracts

Typically require the submission of Bill of Quantities,
Unit Price breakdowns and detailed Construction
Schedules for approval by the Employer
The Schedules often are required to be “resource” and
“cost” loaded, that is, resources (labor, equipment, etc.),
quantities (the BOQ), and costs must be submitted for
each “schedule” activity
The submissions become binding on the parties.
Schedule Control thus is controlling time, productivity
and work resources
– Using these controls, the actual status of productivity and work
resources can be determined
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3
 Contractual Requirement- FIDIC 4th
Programme to be Submitted
14.1 The Contractor shall, within the time stated in Part II of these
Conditions after the date of the Letter of Acceptance, submit to the
Engineer for his consent a programme, in such form and detail as
the Engineer shall reasonably prescribe, for the execution of the
Works.
The Contractor shall, whenever required by the Engineer, also
provide in writing for his information a general description of the
arrangements and methods which the Contractor proposes to adopt
for the execution of the Works.
Revised Programme 14.2
If at any time it should appear to the Engineer that the actual
progress of the Works does not conform to the programme to
which consent has been given under Sub-Clause 14.1, the
Contractor shall produce, at the request of the Engineer, a revised
programme showing the modifications to such programme
necessary to ensure completion of the Works within the Time for
Completion. 7

Contractual Requirement- FIDIC MDB 2006

The Contractor shall submit a detailed time programme
to the Engineer within 28 days after receiving the notice
under Sub-Clause 8.1 [Commencement of Works].
The Contractor shall also submit a revised programme
whenever the previous programme is inconsistent with
actual progress or with the Contractor’s obligations.
Each programme shall include:
(a) the order in which the Contractor intends to carry out
the Works, including the anticipated timing of each stage
of design (if any), Contractor’s Documents, procurement,
manufacture of Plant, delivery to Site, construction,
erection and testing,
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4
Contractual Requirement- FIDIC MDB 2006
(b) each of these stages for work by each nominated
Subcontractor (as defined in Clause 5 [Nominated
Subcontractors],
(c) the sequence and timing of inspections and tests
specified in the Contract, and
(d) a supporting report which includes:
(i) a general description of the methods which the
Contractor intends to adopt, and of the major stages, in
the execution of the Works, and details showing the
Contractor’s reasonable estimate of the number of each
class of Contractor’s Personnel and of each type of
Contractor’s Equipment, required on the Site for each
major stage. 9

Contractual Requirement- FIDIC MDB 2006

Unless the Engineer, within 21 days after receiving a programme, gives
notice to the Contractor stating the extent to which it does not comply
with the Contract, the Contractor shall proceed in accordance with the
programme, subject to his other obligations under the Contract. The
Employer’s Personnel shall be entitled to rely upon the programme when
planning their activities.
The Contractor shall promptly give notice to the Engineer of specific
probable future events or circumstances which may adversely affect the
work, increase the Contract Price or delay the execution of the Works.
The Engineer may require the Contractor to submit an estimate of the
anticipated effect of the future event or circumstances, and/or a proposal
under Sub-Clause 13.3 [Variation Procedure ].
If, at any time, the Engineer gives notice to the Contractor that a
programme fails (to the extent stated) to comply with the Contract or to
be consistent with actual progress and the Contractor’s stated intentions,
the Contractor shall submit a revised programme to the Engineer in
accordance with this Sub-Clause.

10

5
 Schedule Control in International
Construction Contracts
The bases of Contract Administration are found in the
project management processes used for Schedule
Control and Cost Control.
Schedule Control, however, is not just controlling
time, but productivity and work resources
– Using these controls, the actual status of productivity and
work resources can be determined

11

The main Concept of Schedule Control

Schedule Control
１) Time Scheduling & Control
Is a function of establishing planning and control
elements related to time, such as the commencement
date, completion date, interim completion dates, etc.
２) Resource Scheduling & Control
Is a function of establishing planning and control of
work resources, such as, allocation and leveling of
work forces, plant & equipment, material, etc.

12

6
 Schedule Control based on FIDIC 87
 International Conditions of Construction Contract（FIDIC）.
Clauses related extension of time for completion
– Delays and cost of delay of Drawings. Clause 6 (4)
– Adverse Physical Conditions and Artificial Clause 12
Obstructions.
– Suspension of Work Clause 40
– Possession of Site Clause 42
– Extension of time for completion Clause 44
– Variations and change Clause 51
– etc.

 The time for completion shall be variable in cases where

the “Conditions” of Constructions Contract have changed
13

Schedule Control based on FIDIC 2006

 Clauses related extension of time for completion FIDIC）.

– Delays drawings or instruction: Sub-clause 1.9

– Right to access to the site Sub-clause 2.1
– Unforeseeable Physical Conditions Sub-clause 4.12
– Extension of time for completion Sub-clause 8.4
– Consequences of Suspension Sub-clause 8.9
– Variations Sub-clause 13.3
– etc.

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7
 Correlation between Cost Control, Schedule
Control and Contract Administration

Variations in resources Cost control

Variations appear in
Appearance of impact upon the
work progress caused by Cost
variations in planned resources
Correlative control
Contract Administration
Variations appeared in time
Appearance of impact upon the Schedule control
work resources caused by Variations appear in
variations in the planned work
progress the Schedule (time)
15

Project Management
Schedule control Schemes
１．Bar Chart
This scheme was found by Henry Gant
during time of the world war II, so it is
called Gant chart
２．Network planning
(Ｃ.Ｐ.Ｍ.；Critical Path Method)
This scheme was found in the USA in
the late 1950s.
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8
 １．Bar chart schedule control Chart

■ This method and chart is been suing commonly as a

communication scheme in construction projects .
■ It has the concept to show work activities with bars.
■ The chart tell you what work activates will be
executed and those starting and finishing times and
durations.
■ It also tells you sequences of work activates.

17

１．Bar chart
Garden project
Work items
Planning
design

Remove fences materials

Plants design/purchasing
Pond Excavation
Terrace foundation

gardening

18

9
 ２．Ｃ.Ｐ.Ｍ.；Critical Path Method

■This method will tell you not only what

work activates will be executed, those
starting and finishing times, durations and
sequences but also relation of each activities.
■It tells you what work activities flow will be
Critical in the project execution.

19

Garden project scheduling

Removing the fences
materials
4
２
Plants design gardening Finishing
and purchasing
6 9 10
４

Terrace
foundation 7

Pond
Planning design Excavation
1 2 3 5 8
２ ３

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 2016

10
 Network planning method

activity E activity Ｇ
3 5 6

activity Ａ activity C
1 2 4

Arrow Diagram
21

Fundamental knowledge of Arrow

Diagram （1）
The arrow means work Activity。
The number The flow mast be described form
indicated work left to write
sequence
Work activity title
Excavation area No.1
１ ２
10 Day
Duration
Ｅｖｅｎｔ or Ｎｏｄｅ

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11
 Fundamental knowledge of Arrow
Diagram （2）

Ａ C
1 2 4

After activity A finished, then activity B and activity

C will start
23

Fundamental knowledge of Arrow

Diagram （３）
E
3 5

Ａ C
1 2 4

If Ｂ has not finished Ｄ and Ｅ can not start.

When Ｂ has finished Ｄ and Ｅ can start separately
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12
 Fundamental knowledge of Arrow
Diagram （4）

E Ｇ
3 5 6

Ａ C
1 2 4

If activities Ｃ and Ｄ have not finished, activities Ｆ

can not be started
25

Fundamental knowledge of Arrow

Diagram （5）

E Ｇ
3 5 6

Ａ C
1 2 4

The activity G can not start untill the activity Ｅ and

activity Ｆ have finished.
26

13
 CPM.；Critical Path Method
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

Demolished Material
Re-movement (The arrow diagram)
4
２
Garden Plants Finishing
Procurement Planting
6 9 1
４ 0
Terrace Terrace
Foundation works
7

Pond
Planning Design Excavation
1 2 3 5 8
２ ３ 27

Float (Total Float; Free Float)

Total Float: Total Float is the time an activity can be delayed without delaying the
end time of the project
Total Float = Late Start – Early start; OR Late finish – Early Finish
Free Float: Free Float, if used, will not delay the early start of a succeeding activity.
Free Float = Early Start of the Successor – Early Finish of the activity under
consideration (predecessor)

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14
 Critical Path
The path comprise of the activities which all have ZERO
Total Float.
TF=0 d TF=0 d
7 14 15 21
Task B Task D
8 days 7 days TF=0 d
1 6 22 24
7 14 15 21
Task A Task F
6 days 11 15 3 days
7 10
1 6 Task C Task E 22 24
4 days 5 days

11 14 17 21
TF=4 d TF=6 d
The Longest path(s) through the network
29

Fundamental knowledge of the Arrow Diagram

-How to use the floating time-

Excavation (Name of activity)

１ ２
8 Day 2 Day

Required work duration float

The float can be used any time

within 10 days period of time
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15
Fundamental knowledge of the Arrow Diagram
- How to use the floating time -
The vertical dotted line has shows
１ only work sequence but not time

Excavation
２
3 Day

Form work Concrete work

３ ３
2 Day 2 Day
31

Find out the Critical Path

The work sequence has No float
Activity B Activity E Activity Ｇ
3 5 6
５ days ３ days

Activity Ａ Activity C
1 2 4
４ days ６ days

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17day
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16
 Changing the schedule
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17day
Activity D needs to bet 4 days
Activity E Activity Ｇ
Activity B
3 5 6
５ days ３ days

Activity Ａ Activity C
1 2 4
４ days ６ days

33

Changing the Critical Path

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
day
Activity Ｇ
Activity B Activity E
3 5 6
５ days ３

Activity Ａ Activity C
1 2 4
４ days ６ days

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17
 Changing the Critical Path Method
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
day
Activity Ｇ
Activity E
3 5 6
５ days ３ days

Activity Ａ Activity C
1 2 4
４ days ６ days

35

Back yard garden project

36

18
 Back yard garden project Plan

Pond
housing
Ａ Ａ
Trace
Ｂ Ｂ

Pond

37

Back yard garden project Section A-A

Trace

Pond
38

19
 Ｃ.Ｐ.Ｍ.；Critical Path Method
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

Demolished Material
Re-movement
4
２
Garden Plants Finishing
Procurement Planting
6 9 1
４ 0
Terrace Terrace
Foundation works
7

Pond
Planning Design Excavation
1 2 3 5 8
２ ３
39

Changing the schedule

The Concrete work will get delay 2 days

The Concrete work will get delay.

The schedule of Concrete work

has to change from 3 days to 5 days more.

40

20
 Changing the schedule
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

Demolished Material
Re-movement
4
２
Garden Plants Finishing
Procurement Planting
6 9 1
４ 0
Terrace Terrace
Foundation works
7

Pond
Planning Design Excavation
1 2 3 5 8
２ ３
41

Changing the Critical Path Method

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

Demolished Material
Re-movement
4
２
Garden Plants Finishing
Procurement Planting
6 9 1
４ 0
Terrace Terrace
Foundation works
7

Pond
Planning Design Excavation
1 2 3 5 8
２ ３
42

21
Project Management system
Time Management： CPM Program （Primavera P3)

43

Manpower allocation

(before)

44

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 Manpower Leveling

(after)

45

Resource Leveling

(before)
(after)

46

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1) Construction Schedule at Tender
A schedule is attached to the tender document
Construction Schedule at Tender shall be established
based on conditions that tender documents provided
(inquiry package) and are set by the Employer
It shall take account of any changed conditions that are
given to all bidders that are issued after the tender, or
in clarifications with the bidders
It shall not take into account any changed conditions
that are issued after the tender, but may take into
account conditions that change after the contract is
executed and as a result of negotiations
47

２）Contract Schedule

A schedule attached to the contract documents

The Schedule shall be a part of contract conditions
The Contract Schedule shall be fixed taking into
account changed conditions issued after the tender,
and through negotiations or clarifications
The schedule shall not take into account any
changed conditions that arise after the contract is
executed

48

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 ２）Contract Schedule

The construction schedule at Tender may become

the Contract Schedule, if there are no changed
conditions issued and agreed by the both parties in
negotiations or clarifications.
Contract Schedule shall be the basis of any claims
in the course of the contract, such as, for a time
extension and/or additional costs
Note: “It does not consider any changed
conditions and/or drawings after the negotiations
or clarifications have been completed and the
Contract executed
49

3) Master Schedule
After receipt of the notice to proceed, the contractor
shall confirm the actual conditions of the site etc., and
establish a “Master Schedule”.
The Master Schedule shall be established on the same
base as the Contract Schedule.
If the contractor found some matters that it believes are
different than or are a change from the conditions of the
contract, it will notify the employer in writing of such a
change, but the contractor shall not take such conditions
into account in establishing the Master and Contract
Schedules
The Contractor shall prepare a changed schedule to
account for such changes as are necessary and submit
the revised schedule to the employer for his approval
and acceptance with in the time set in the contract.
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 ４）Detailed Schedule & Method of
Statements
 Monthly and/or weekly schedules shall be
established for execution of the works
 Those schedules shall be established based on
the master schedule.
 It is essential that all schedules shall be
established on the same basis as the
conditions that existed at the tender stage.

51

Setting up items indicated in

Schedule control
Activities indicated in CPM (and the Work Breakdown Structure ;
WBS)
Work is itemized in units that do not require 80 hours of
effort until a result can be seen
Coordinate with contract pay items (BOQ) and cost
control items
The range must reflect such a level of detail that the
contractor can implement the work resources control
with certainty
These items must b e set so that a contractor can
considered observe the occurrence of contractual change
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 P-53

Develop Work Breakdown Structure (WBS)

1000 Housing Construction

1100 1200 1300 1400

Site Work Structure Systems Work Finishing

1101 1201 1202 1203 1301 1302 1401 1402

Site Sub- Super- Roofing Mec- Elec- Internal External
Preparation structure structure -hanical -trical Works Works

53

P-54

List of activities/tasks, durations, logic relationships and

required resources

54

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 Productivity values in construction
Productivity levels are calculated from the work force
level divided by the quantity of work done

Pw ＝Wf ／Wv ……………………… 1)

Pw = Productivity value (Man-Day, Equip.-Day / Unit)

(or Man-Hour, Equip.-Hour / Unit – the units that are measured
in international construction)
Wf = Work force volume (Man-Day or Equip.-Day)
Wv = Work done volume (Unit)

55

Man power daily report sheet

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 Equipment daily report sheet
EQUIPMENT DAILY REPORT

BULLDOZER

BULLDOZER

BULLDOZER

BULLDOZER

BULLDOZER
BULLDOZER

WL1 WHEEL LOADER

Report No.

MG1 12G-GRADER

MG2 14G-GRADER
Date ／ ／

SC1 SCRAPER
Section No.
Back Charge Code

NO CD NAME
Day Night

BD2 D-8

BD3 D-7

BD4 D-6

BD5 D-5

BD6 D-4
BD1 D-9
Shift

TOTAL
COST WORK
CODE DESCRIPTION
UNIT
QTY
SUB-CON CONTR.
NO DESCRIPTION

－
HR

－
HR

－
HR
REPORTED BY REMARKS ABBREVIATION
ID - NO. NO : NUMBER OF EQUIPMENT
CHECKED BY HR : WORKING HOURS
ID - NO.
57

１）Time Scheduling & Control

The following schedule of Key Dates are designated
in the contract document
１) Date of Commencement of Works
２) Completion Date
３) Interim Completion Date(s)
These Key Dates will be linked to Liquidated
Damages
Time scheduling and control is through control of
these key dates. Another words: control of the
contractual conditions related to time
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 Schedule control submitted by contractor

1) Construction Schedule at Tender

The schedule attached to the tender documents.
2) Contract Schedule
The schedule attached to the contract documents
3) Master Schedule
This is the schedule that is the basis of real execution
of the project
4) Detailed Schedule & Method of Statements
This schedule and the statement documents that are
established in accordance with the project execution.

59

Acquaintance and Confirmation as to

Schedule

Construction
Schedule at Contract
tender stage. Schedule Master
Schedul Detailed
e Schedule

Tender
clarification
Commencement
Contract works
Tender Negotiation Signing of
contract
Letter of
acceptance
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 Cost Accounting vs. Cost Control

Analysis of Cost Result

Cost Accounting
(arithmetic analysis)

Cost Control Analysis of Cost Process

Induction +Deduction
(statistical analysis)

To do a statistical analysis, a data collection and

integration system first must be established
３61

Cost control
Contract
Administration Schedule＆Execution Accounting

Work done＆ Income

Progress Reporting Overhead
Additional cost claim Labor cost
Subcontract claim Material cost
Labor daily report Subletting cost
Material daily report Equipment cost
Equipment daily report
Plant daily report
Equipment daily report

Cost Control based on Contract Administration

５ 62

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 Contract Cost control
Administration
Schedule＆Execution Accounting

Work done＆ Income

Progress report Overhead
Additional cost claim Labor cost
Subcontract claim Material cost
Labor daily report Subletting cost
Material daily report Equipment cost
Equipment daily report
Plant daily report
Equipment daily report

Cost Control based on Accounting 63

Cost Control Analysis Steps

Target Unit Price

Productivity Analysis
To Date Unit Price
To Complete Unit Price

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 Basic Principle of Schedule and Cost Control

Planning Measuring

Compare
Schedules Progress
Explain

Compare
Budgets Incurred Cost
Explain

Controlling
65

Integrated Schedule and Cost Control

Planning Measuring
Budgeted cost of
Work Schedules Work Performed = work performed
(BCWP)
Actual cost of
Budgeted Cost Actual Cost = work Scheduled
(ACWS)
Budgeted Cost of Actual Cost of
Work Scheduled Work Performed
(BCWS) (ACWP)

Controlling Projected Cost

Approved Budget
Budget at Forecast at
Completion (BAC) Completion 66

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 Project Control: Earned Value

Budget at
Actual Completion
Cumulative values

Cost (BAC)
(AC)
Planned Value (PV)

Schedule Cost Variance (EV-AC)

Variance
(EV-PV)

Earned Value (EV)

Data Date
Time
67

Performance Index
Cost Performance Index (CPI)
– CPI = EV / AC
– If CPI < 1: Cost Overrun
– If CPI > 1: Cost Underrun

Schedule Performance Index (SPI)

– SPI = EV / PV
– If CPI < 1: Behind Schedule
– If CPI > 1: Ahead of Schedule

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 Conclusion
The essence of Schedule Control is to establish
schedules and maintaining of schedules based
on the same philosophy from the Schedule at
the Tender to the Detailed Schedule.
Construction Schedules are not just guideline of
execution of works, they are the guideline of
execution of its contract.

69

Cost Control Practice

Results from Analysis

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 Cost Control analysis
Excavation work on the top of the hill shall be
implemented under the following conditions.

■ Total volume of excavation 100,000 m3

■ Work duration 25 calendar days
■ Control Budget $ 24,000,000

71

Step 1: Target Unit Price

Excavation volume 100,000 m3

duration 25 calendar days

■ Do not work on Sunday ＋1day contingency/month

What is actual work days?
■ What will be the work volume per day？
■ The total budget for this work is $24,000,000.
What is the Target Cost Unit Price?

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 Step 1: Target Unit Price
Excavation volume of 100,000 m3
duration of 25 calendar days

 Sunday ４days＋contingency１day
actual work days: 25-(4+1) = 20days
 The target productivity
100,000 m3 ／20 days ＝ 5,000m3／day
 The total budget for this work is $ 24,000,000.
the target unit price：
$24,000,000／100,000 m3 ＝ $ 240／m3
73

Step 2 : Productivity analysis

12 calendar days have passed since commencement of the
work. Work completed volume (To Date Volume) has
been 40,000m3 and the cost spent has totaled $10,800,000.

40,000m3
12days

■ What is the productivity for the To Date Work (m3/day)

■ If the work will be executed as experienced, how many
more days shall be required to complete all the work?
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 Step 2 : Productivity analysis
40,000m3 60,000m3
12 calendar days 18 calendar days

 To Date Work Productivity （m3/日）：

40,000 m3/10days ＝ 4,000 ｍ3/day＜5,000 ｍ3/day
 If the work continues to be executed as it to date,
how many days more will be required：
60,000 ｍ3／4,000 ｍ3/day＝15 days
Total calendar days = 15+(2+1) = 18 days

75

Step 3 : To Date Unit Price

40,000m3
12days

■ The total cost it has been spent for 40,000m3 of

excavation work was totally $10,800,000.
What is To Date Unit Price?
■ If the work will be executed as it has been, how
much will be spent to complete all the work?

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 Step 3 : To Date Unit Price

40,000m3
12 days

 To Date Cost is $ 10,800,000. To Date Unit Price is

$ 10,800,000 ／ 40,000 m3 ＝$ 270 ／ｍ3
 If the work will be executed as it has been, what total
cost shall be required to complete all the work
$ 10,800,000＋60,000 m3×$ 270 ／ｍ3＝$
27,000,000
77

Step 4 : To keep the original Unit Price

40,000m3 60,000m3
12days remaining days

■ When you use the original productivity （m3/day）

and carried out remaining work, how many days will
be required to finish the work.
■ When you use the Target Unit Price, how much cost
will be required for finishing the work.

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Step 5 : Theoretical To Complete Unit Price

40,000m3 60,000m3
12days

If you need to keep the original schedule, what is the

productivity ratio that is required to complete the
remaining work?
■ To Date Cost was $10,800,000. What is the cost to
complete?
■ What will be the Theoretical To Complete Unit Price?
79

Step 6 : to find out an appropriate

To Complete Unit Price

40,000m3 60,000m3
12days

■ Make a comparison for to find an appropriate To

Complete Productivity and a To Complete Unit Price.
■ What have you found?

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 Step 6 : to find out an appropriate
To Complete Unit Price
■ Productivity and Unit Price comparison
■ Target To Date Theo. To Compl.
Productivity 5,000m3/day 4,000 m3/day 6,000ｍ3/day
Unit price $ 240／ｍ3 $ 270／ｍ3 $ 220／ｍ3

Establish the appropriate To Complete

Productivity and To Complete Unit Price

81

Step 7 : Time extension and additional cost

■ After a careful study has been done, you find

that 3 days time extension and up to 10% cost
increase could be possible. Under this
condition, you need to do following analysis.
① Establish an acceptable To Complete
Productivity （m3/day）.
② What will be the To Complete Unit Price
under the condition of a 10% cost increase?
③ What will be the total cost for the completion
of all work?
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 Step 7 : Time extension and additional cost
40,000m3 60,000m3
days 13calendar days – (2+1)+3

① Time extension : 13calendar days – (2+1)+3=13days

60,000ｍ3/13days＝4,615 ｍ3/day
② Target cost + 10% increase ：
$ 240/m3 ×（5,000m3/day÷4,615m3/day）＝$ 260/m3
③ The total cost for completion of all the work
$ 10,800,000＋60,000 m3×$ 260 ／m3＝ $ 26,400,000

83

Step 7 : to set up a To Complete Unit Price

and To Complete Productivity

 To Complete Unit Price : $ 260／ｍ3

 Duration : 25＋3＝28days
 Total Cost : 24,000,000×1.1＝$ 26,400,000

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