Types of risks in construction

Risk in construction is fully integrated with every facets of construction life cycle. Construction risk may put a threat to an organization’s success and debar to achieve the project objectives in terms of time, cost, quality, safety and environmental sustainability.

With construction risks construction projects may experience with ill defined scope, design and constructability issues and mismanaged vendors. This leads to a clear time-cost quality gaps.

Risks related to contractors

Inappropriate construction program planning
Insufficient program scheduling
Inventive design or contractors
Lack of knowledge in planning construction programs
Lack of coordination between project participants
Non availability of sufficient professionals and managers
Non availability of sufficient amount of skilled labor
Incidence of dispute exists in most
Serious noise pollution caused by construction
General safety accident occurrence

Risks related to subcontractors

An item of work is separated with the following five subdivisions In the total quantity method:

Low management competency of subcontractors
Without competent management skills, If subcontractors cannot successfully manage their resources to meet the needs from several concurrent construction sites.

The construction risks can be categorized in the following ways.

Technical Risks

Imperfect design.
Insufficient site investigation.
Ambiguity over the source and accessibility of materials.
Suitability of specifications.

Logistical Risks

Accessibility of resources - mainly construction equipments, spare parts, fuel and labor.
Accessibility of adequate transportation facilities.
Construction Risks

Indecisive production of resources.
Weather and seasonal implications.
Industrial relations problems.

Financial Risks

Price rises.
Accessibility and fluctuation in foreign exchange.
Interruption in Payment.
Repatriation of funds.
Local taxes.

Political Risks

Constraints on the accessibility and employment of expatriate staff.
Customs and import restrictions and procedures.
Difficulties in disposing of plant and equipment.
Insistence on use of local firms and agents.

20 Key Risks in Construction

Rigid project schedule
Design variations
Unnecessary approval procedures in administrative government departments
Incompatible construction program planning
Low management capability of subcontractors
Deviations of construction programs
High performance/quality expectations
Insufficient program scheduling
Variations by the client
Imperfect approval and other documents
Unfinished or inaccurate cost estimate
Lack of harmonization between project participants
Non availability of sufficient professionals and managers
Non availability of sufficient amount of skilled labor
Bureaucracy of government
General safety accident occurrence
Inadequate or insufficient site information (soil test and survey report)
Incidence of dispute
Price inflation of construction materials
Serious noise pollution caused by construction

Posted by Rajib Dey
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Global Associates
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Overview of construction scheduling techniques

The construction industries should form accurate construction schedule techniques to ensure the effective coordination of work.

The mostly used scheduling techniques in construction project is described below :-

Bar Charts and Linked Bar Charts
Network Analysis and Critical Path Method
Line of Balance
Q Scheduling

Bar Charts and Linked Bar Charts

Bar chart is nothing but a simple graphical method of scheduling activities in construction management to commune between management and employees about the accomplishment of the work on a given day. It is also known as Gantt Chart. Bar charts can be generated by a variety of software programs.

A typical Bar chart contains activities with the start, duration and finish of each activity exposed as a bar plotted to a time scale. The level of detail of the activities depends on the proposed use of the schedule.

The bar charts are also utilized for computing the necessary resources for the project. To put in the resources to every activity and total them vertically is known as resource aggregation. In order to estimate the work content regarding man-hours and machine hours, bar charts and resource aggregation charts are very much useful.

The linked bar chart illustrates the links between an activity and its preceding activities which should be completed prior the starting of this activity.

The bar chart includes a two dimensional chart. The x-axis of the chart represents the project timeline and y-axis contains a list of specific activities to be accomplished for completing the project. These activities are typically listed in order of earliest start on the project. The bar chart consists of bars which demonstrate the planned (and/or actual) start and end times for each task. In view of the fact that the tasks are generally organized from earliest to latest, most bar charts illustrate a pattern of bars that commence in the upper left of the chart and go on to bars that complete the project displayed in the bottom right of the chart.

Among the various methods available the least expensive methods is to employ the spreadsheet software programs.

Activities are listed on the Bar Chart in to the sequence that the activity should be completed. "Activity 1" becomes visible at the top of the y-axis. The length of Activity 1 is comparative to the required time for finishing the task.

Given below some checklist for generating effective Bar Charts:
Label the x-axis in working days or weeks
Use "ticks" to show working weeks or months
Y-axis shows the start of the project at time = 0
Skip lines between bars
Print the activity name above each bar, if possible
Free Online Bar Chart Construction Schedule


GNetwork Analysis and Critical Path Method

Network analysis produces more pragmatic models of the proposed work with its logic diagram. The following steps are applied for producing a network:

Listing of activities
Producing a network showing the logical relationship between activities
Assessing the duration of each activity, producing a schedule, and determining the start and finish times of each activity and the available float
Assessing the required resources

Now-a-days two popular forms of network analysis namely activity on the arrow and activity on the node are available in construction management practice. The latter now frequently described a precedence diagram. Each of these approaches offers virtually the same facilities and it seems largely a matter of preference which is used.

A critical path method refers to a network of events. Here e one of them linked to the following activities. Each activity is represented as a node on the network, and connecting lines are drawn to represent the time schedule to complete that activity.

The Critical Path Method schedule comes up with all work specified in the Contract Documents as well as all probable activities of subcontractors, vendors, suppliers and all other parties related with construction project.

Through the Critical Path Method(CPM), calendar days are ascertained and activities are allocated with an early date, first date that an activity can start; late start, specifying the last possible date that this activity must be started to avoid delays in the overall construction process; early finish, the earlier date that the proposed activity will be completed; and the late finish, that is the last date the activity must be completed without affecting the start of the next one, and subsequently affecting the entire construction schedule.

A critical path method represents a graphical view of the project. It will help you to have the required time for accomplishing an activity and find out the activities that may be critical if not performed within the specified time of a project.

A critical path method schedule must be completed using the following steps:

Identify the activities
Determine the sequence of the activities
Producing a network showing the logical relationship between activities
Assessing the duration of each activity, producing a schedule and Enter the completion time for every activity listed on step 1
Identify the critical path or the longest possible path to complete all activities
One important and valuable component is the CPM update progress, allowing to track closely the performance and time used to complete the activities

The network of activities should start at the time of all activities have been defined and interdependence of activities has been analyzed. All critical work sequence is linked with logical coordination and planning requirements. The CPM format must be based on calendar days as their main planning unit. Working days should be avoided when planning or preparing a critical path method schedule.

Line of Balance

The Line‐Of‐Balance Scheduling Technique(LOBST) can be termed as a linear scheduling method that permits the balancing of the operations such that each activity is continuously and efficiently performed in each consecutive unit.

Line of Balance scheduling technique (LOB) is nothing but a planning technique to allocate the resources to restrain the repeated operations for a project.

The line of balance technique is useful for construction work mostly to house building, jetty work, road works and high-rise construction. Consequently the Line-of-Balance diagram is an essential communication and productivity analysis tool for projects that have repetitive work areas.

In the context of construction projects, the LOB technique offers two main advantages:

It gives the ability to the project managers to verify whether they will be able to meet the schedule in the middle of a project, if they continue working as they have been.
It exposes process bottlenecks, allowing the project manager to focus on those points responsible for slippage.

Arrow and Precedence Diagramming are capable to model these types of schedules efficiently. The Line-of-Balance (also known as the Vertical Production Method) is a graphical technique to be applied together with Arrow or Precedence Diagrams.

In the Line-of-Balance diagram, the x-axis represents (as in the bar chart) the timeline of the project. The y-axis identifies the work areas that define the project. The blank chart is the starting point for the Line-of-Balance schedule.

Q Scheduling

Q. Scheduling is known as quantitative scheduling. In this technique quantities are accomplished at different locations of the construction project form the elements of the schedule. Q. Scheduling trades pass all the way through the diverse sections of the project in a queue sequence. No intervention between two activities is permitted at the same location. It is obtained mainly from the Line of balance technique making some amendments to allow for a varying volume of repetitive activities at different segments or locations of the construction project.

The Q Scheduling is the solitary scheduling technique that exposes a relation among the sequence of performing a job and the incurable cost.

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Construction Hard Cost

Hard Costs are similar to tangible assets that must be acquired for completing your construction project. Hard costs are mostly consisted of the actual construction costs occurred for creating the project. In general, hard costs are easily quantifiable and can be determined with such certain that usually they are detailed by an experienced estimator. In general, hard costs relate to any part of the work or costs associated with the actual project.

Hard cost should include physical items like Land Cost/Value, Site Prep/Grading, Building Structure, Septic tank/Well, Landscape, Inventory, Contingency, Construction Contract, Change Orders, Cost overruns etc.

Building Structure- Hard costs within a structure should include all labor and material necessary for completion of the whole building or structure.

Site- Hard cost within the site will include all utilities underground, aerial, water systems, drains, fire, paving, grading, etc.

Landscape – Hard costs in landscaping works should include grass, lawns, trees, mulch, shrubs, fertilizer, and every other material found in the construction of the projects based on the architectural drawings.

Contingency- Contingency denotes to the reserved amount of money taking into consideration all estimated unforeseen conditions affecting construction process. Like an amount contingency is not measurable, it is being estimated from historical data between a five and ten percent of the total project costs for new projects and between 10 and 20 percent for remodeling projects.

Change Orders- Change orders will fall under the building structure item in the hard costs. Some builders segregate this item from building structure for accountability process, but it also takes all additional expenses associated with construction projects.

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Global Associates
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Types of Construction Estimates

Numerous estimating techniques prevail in the market and these can be categorized in the following ways :-

1. Conceptual estimates
2. Detailed estimates

Conceptual estimates
Basic parametric sizes are used for the type of building to reach an order of magnitude estimate. Quantitites do not play a large role. Historical Ratios are used to establish a cost per unit. Basic scopes for trades are established.

Detailed Estimate
A detailed estimate is the most accurate form of estimate. This type of estimate is set up to find out the quantities and costs of everything for a project. These types of estimates help contractor to complete a construction successfully. A detailed estimate is arranged in the following two ways :-

(a). Unit quantity method
(b). Total quantity method.

Unit Quantity Method
In this method, the work is segregated into as many operations or items as per requirements. A unit of measurement is settled on. The total quantity of work under each item is extracted in the suitable unit of measurement. Every item is evaluated and exercised with the total cost per unit quantity. After that the cost per unit quantity is multiplied by the number of units to determine the total cost for the item. As for instance, at the time of preparing the cost of a building work, the quantity of brickwork in the building is gauged by cubic meters. The total cost along with cost of materials. labor, plant, overheads and profit per cubic meter of brickwork is generated and after that the predictable cost of brickwork is calculated by multiplying this unit cost by the number of cubic meters of brickwork in the building.

The benefit of this method is that the unit costs on different jobs are instantly comparable and that the total estimate can be rectified effortlessly for variations in quantities.


Total Quantity Method
An item of work is separated with the following five subdivisions In the total quantity method:
(I) Materials
(II) Labor
(III) Plant
(IV) Overheads
(V) Profit.

The total quantities of each kind or class of material or labor are established and multiplied by their individual unit cost. The cost of plant, overhead expenses and profit are decided In the same way. The costs of all the five sub-heads are added to provide the estimated cost of the item of work.

There is also the detail of material waste factors, delivery/shipping, handling, storage, and taxes. Along with labor crew size and makeup, productivity, safety, wage rates, tools and equipment. Equipment also has type/size selection, fuel, delivery, mobilization/demobilization, operator, maintenance, replacement value, rent/buy, and licensing.

UniFormat, Master Format, WBS (work breakdown structure) are all integral parts of providing any of these types of estimates.

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Business Development
Global Associates
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Vu360 - An exclusive software to View, Markup and Takeoff Project Documents

Vu360 is a free internet-tethered digital document viewer that facilitates contractors to easily update and annotates blueprints on construction documents and generate detailed & accurate estimates to communicate RFIs. The application also helps subs or other project team members to review plans from remote sites.

The application is built up with Microsoft .net framework and can be incorporated with BB-Bid’s online plan rooms and other online products. The application can also be utilized to takeoff .pdf and .till document.

Vu360 is amalgamated with The Blue Book Network’s search tools in order to effortlessly find and spec products, materials and equipment in addition to message contractors and suppliers.

Vu360 contains an in-built web-browser, making it your window and entrance to all the construction information needs.

Some exclusive features of Vu360:

Capability to view PDF, TIFF and all HTML Web pages

Markup and Takeoffs contains Counts, Linear, Square Foot, Volume etc.

The quantities are exportable to Excel or XML

Capability to rapidly communicate information through email or PDF

Keyword Search help you to search the specification book and your own markups

Incorporated with BPM Select to quickly obtain detailed information on products

Integrated with thebluebook.com to quickly obtain information from subcontractors and suppliers

Download now
http://www.thebluebook.com/2011/index.php?id=16#Instructions

Posted by Rajib Dey
Business Development
Global Associates
A pioneer company in construction estimating
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Supply Chain Environmentalism - A new method to reduce the carbon emmission

Now-a-days Supply Chain Environmentalism can be termed as a new approach that has been embraced by some of the world’s biggest companies to make out and decrease the financial impact of environmental impacts all through the supply chain.

Supply Chain Environmentalism can create a protection against cost increases related with environmental impacts and the companies can get the ability to make a distinction of their products as being more sustainable.

Supply Chain Environmentalism can make effect on the competitiveness of the companies in the commodity marketplace by treating carbon dioxide (CO2) content as a differentiator for same-priced commodity products.

The companies can take the following steps to make their supply chains greener, more competent and cost effective.

Just make changes to your product design – reduce weight to make disassemble easier. Innovation or new technologies can shorten the supply chain by eliminating components and ingredients.

Make more efficient production steps, reduce energy use, and limit use of pollutants and toxic materials.

Reuse waste products and heat from the manufacturing processes and switch to natural gas.

Select green supplies as they provide effect on the carbon implications of bringing products to market.

Trim down sourcing, assembly and distribution concerning markets, travel distances and corresponding fuel use can be reduced.

Remove needless requirements, that may decrease efficiency, in your service-level agreements.

Make your package designs more improved in order to reduce the burden of recycling or eliminating packaging materials at the end of the chain.

Make plan for effective reverse supply chain activity for the products that are retrieved from the market for upgrade, refurbishment, recycling or disposal to decrease unacceptably high waste and energy costs later.

Make proper plan for distribution routes and select the right transportation modes as rational routes can factor in the true costs and carbon implications.

Posted by Rajib Dey
Business Development
Global Associates
A pioneer company in construction estimating
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Newly launched measurement grouping tools for for pavement maintenance contractors.

Go iPave recently released measurement grouping tools which will facilitate USA based contractors to group any measurements alongwith asphalt, concrete, edging, sidewalks, turf etc. efficiently.

Go iPave makes the measuring bidding process smooth for pavement maintenance and service contractors as the contractors can now easily visualize specific surfaces in bid proposals, precisely calculate job costs and materials. Besides the contractors can save measurement groups to a workspace file for future reference and modification.

By utilizing the measurement grouping tools the Pavement maintenance contractors will get the ability to know the total quantity of asphalt they are working with, how long are all of the sidewalks and how much edging are they going to prep for?

Key Benefits:
• Group measurements by asphalt, concrete, sidewalks, turf and mulch
• Boostup efficiency while identifying all surface types included in bid proposal
• Smoothly allocate job costs and materials needed for each surface type/measurement group
• Simplify proposals by saving measurement groups to individual spreadsheet tabs
• Provide customers with detailed bids outlining exact surface type measurements like concrete and asphalt

Posted by Rajib Dey
Business Development
Global Associates
A pioneer company in construction estimating
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