Embed Size (px)
DESCRIPTION
Among trade contractors, meeting the labor budget is at best a strain. Some surveys show that but for change orders and buy-outs, the craft contractor would be hard pressed to make profit on its jobs. With a ripple of a trend of owners pre-purchasing equipment and material, leaving the contractor to be only a labor contractor, the challenge of managing field labor intensifies. Documentation, believe it or not, is one of the tools for enhancing the probability of making one's labor budget. This webinar is a brief overview of the role of documentation in labor (and therefore profit) management.
Citation preview
The Role of Documentation&
The Key to Labor Management
www.frisbygroup.org
©Tom N. Frisby 2012
Power Point Presentation by: Mendi Arnold
2
The Role of the Project Team
1. Meet or Beat Budget2. Comply with Contract3. Protect contract from encroachment by others4. Be contractor of choice in the future
The Performance on this project governs future opportunities
5. Continue to get betterThose who don’t will be called “ex‐contractors”. Those who do have another 40 years ahead of them.
6. Do things you don’t like to do!
The Operative Word is TEAMTEAM
1 + 1 = 1 (UNITY)Then 1 + 1 = 3
(SUM PLUS ARITHMETIC)
Must be ONE OFFICE operation
NOT
Home Office
Field Office
4
AssistantAssistantEach Person is Assistant forAssistant for Someone Else
The project manager is assistant assistant for the field: to provide information, resources, and tools on a timely basis.
The superintendent is assistant forassistant for the foreman: foreman: to provide them the planning, information, goals, and tools they need to execute the work; and assistant for the project managers: to provide status, contract variances, and early warning signals they need to perform their jobs.
The president is assistant for everyone: to provide management tools, training, etc.
5
Trust
Trust is the glue.glue.The gravity gravity which creates a real company
6
If the foregoing principles do not exist, then If the foregoing principles do not exist, then nothing which follows will have any meaningnothing which follows will have any meaning
7
Your Risk Your Risk ‐‐ LaborLabor
Labor is a function function of:
•Activities within within your control
•Activities caused caused by othersothers
8
Labor Risk Labor Risk WithinWithin Your Control
If the other team fails to show up, would you still lose the ball game?
9
Productivity in the FieldIntroductionThere are many factors that affect project profits. However, it is generally
accepted that the area with the most influence and the most risk is that of on‐site labor costs. This is the area we will be focusing on in the course.
Typical SituationAs shown in Figure 1‐1 in a series of 22 productivity studies, carried out by Kerry
O’Brien in Ontario, using the work sampling technique it was found that mechanical and electrical tradesmen were only spending, on average, 32% of their day performing fully productive work.
The balance of their day was spent as follows: 26% Ineffective activities 20% Material handling 15% Indirect operations 7% Miscellaneous activitiesThese groupings are described in more detail in figure 1‐2.
10
Productivity in the FieldProductivity in the Field
DIRECT INSTALLATIONDIRECT INSTALLATION
Actual Direct Installation
On‐Site Pre‐Fab Operations
Testing Operations
INDIRECT OPERATIONSINDIRECT OPERATIONS
Set‐up Operations
Talk About Job
Receiving Instructions
Planning Job
Tools‐Get Out, Set Up, Put Away
MATERIAL HANDLINGMATERIAL HANDLING
Unload Truck
Hoisting
Move Materials and Tools to Installation Area
INEFFECTIVE ACTIVITIESINEFFECTIVE ACTIVITIES
Late Start, Early Finish
Early Lunch, Late Return
Coffee Breaks
Other Rest Periods
Absenteeism
Turnover
MISCELLANEOUSMISCELLANEOUS
Get Coffee for Crew
Other
Figure 1‐2: Work Sampling Categories
11
Lost Man Hours Per Craftsman Per Week
Due to Rework vs. Project Completion Stage
0
1
2
3
4
5
6
7
8
25% 50% 75% 100%
Lost man hoursper craftsmanper weekLo
st M
an Hou
rs
Percent Complete
12
Labor Risk – Within Your Control
“KnowKnow the right thing to. Assure others others know the right thing to do.
Do the right thing! (execute) Document Document that you did.”
13
Labor Risk – Within Your Control
Nail down the scope of work scope of work (SOW).
Even in design build a SOW baseline flowing from request for proposal (RFP), to in‐
house design, to estimate, to proposal, to subcontract, to job set up, and to budget is
needed.
Field staff should not be left guessing as to what is in or out of the SOW.
14
Labor Risk – Within Your Control
Establishment of targets and production flow production flow through your own schedule; review of, evaluation of and input to the general contractor (GC) schedule.
Input should be in writingMonthly update input should be in writing
Elements of job site planningScheduling is about establishing targets, meeting targets, establishing targets, meeting targets, and figuring out how to do a better job of it.Labor cost reports should provide adequate breakdown for establishing meaningful targets and division of labor as for measuring measuring performance against those targets.This is a corporate issue which needs to be resolved with field participation.
15
Labor Risk – Within Your Control
Planning Meetings::InternalInternal – maintain minutes! You have a duty to plan and coordinate, to exercise control over your own production flow.
How to Avoid Waste Focus Meetings:Focus Meetings:With key personnel to figure out how to improve, how to work around problems. Also becomes important in pre‐qualification proposals.
Project Planning Meetings:Project Planning Meetings:Input should include “subject to work area being available”; “subject to receipt of answer RFI# ___ by _________”, etc.
Warning:Warning:If you provide dates, durations and miss your own dates, miss your own dates, you have set up your report card to get failing grades.failing grades.
16
Labor Risk – Within Your Control
Written NotificationsWritten NotificationsReview contracts to determine written notice written notice requirements.requirements.Comply! Many of these requirements are jurisdictional jurisdictional and strictly enforced, strictly enforced, meaning you may lose all rights to a remedy unless you meet the requirements of the clause.It is important to inform the GC or owner of:
The issue issue which gives rise to the claimThe contractual contractual basis for your claimAt least the impacts impacts (had to work overtime) that resultedYour intent to recover costs intent to recover costs therefore
17
Labor Risk – Causes By Others
You have control control over protecting yourself from impact to labor by others.
First, as indicated, read read the general contract and subcontracts to determine notice notice requirements.
Second, comply strictly comply strictly with those requirements
Third, begin the process of demonstrating demonstrating to someone who doesn’t want to pay you and will try to get out of paying you the cost impact cost impact that occurred as a result of the change, disruption or variance from production flow.
Remember, total cost is a dog that won’t hunt!
18
Labor Risk – Causes By Others
Impacts to production flow are algebraic not arithmetical!Impacts to production flow are algebraic not arithmetical!
Productivity is, among other things, a product of tasks which arProductivity is, among other things, a product of tasks which are:e:
ConsistentConsistent Repeatable, uninterruptedRepeatable, uninterrupted
Variations which cause interference, disruption, lack of uniformVariations which cause interference, disruption, lack of uniformity ity and/or increase the cost of production.and/or increase the cost of production.
Learning curveLearning curve Stop & goStop & go MovementMovement CrowdingCrowding Sequence changesSequence changes Material handlingMaterial handling ReworkRework
19
Factors Affecting Productivity
20
BUT: The following charts are not adequate. It takes field BUT: The following charts are not adequate. It takes field records, performance measurement (measured mile, records, performance measurement (measured mile, earned value, and rate of production) to prove impact.earned value, and rate of production) to prove impact.
0
5
10
15
20
25
30
35
10 20 30 40 50 60
100 MEN
200 MEN
300 MEN
P er cen
tag e Lo ss of P
r od u
ctivit y
Percent Overmanned
21
Effect of Congestion of Trades on Productivity
0
2
4
6
8
10
12
14
16
5 10 15 20 25 30 35
Percent Congestion ofTrades
P er cen
t Lo ss o f Prod u
c ti vi ty
Percent Congestion of Trades
22
Construction Operations Orientation / Learning Chart
100
90
80
70
60
50
40
30
20
10
1 2 3 4 5 6 7 8
Time (Hours)
*100 Represents the productivity rate required to maintain scheduled progress
Theo
retical produ
ctivity
scale
23
Effect of a Disruption on Learning Curve
0
10
20
30
40
50
60
70
80
90
2 4 6 8 10 12 14 16 18 20
Learning Curve
Time Unit
Number of Units
DISRUPTION
24
Effect of Remobilization on Productivity
45
40
35
30
25
200 5 10 15 20
Length of stoppage (8 hour work days)
Percen
t loss of produ
ctivity
25
The NECA Manual of Labor Units
Manhours 1Man Days Men Months % Manhours500 62 2 6 2 8.00 40
1,000 125 3 8 3 6.50 651,250 158 4 8 3 6.50 812,500 313 6 10 4 5.00 1255,000 625 8 16 5 4.00 200
10,000 1,250 11 23 7 3.50 35015,000 1,875 14 27 8 2.75 41520,000 2,500 15 34 10 2.25 45030,000 3,750 17 44 12 1.75 52540,000 5,625 25 45 12 1.75 78550,000 7,500 30 50 14 1.45 87075,000 9,400 35 54 15 1.35 1,010100,000 12,500 38 65 18 1.25 1,250125,000 15,650 40 78 21 1.15 1,445150,000 18,750 45 83 22 1.00 1,500200,000 25,000 58 86 23 0.95 1,900250,000 33,000 70 90 24 0.85 2,120300,000 3,750 80 94 26 0.84 2,520
1Based on 6 Hour Day 2Based on 40 Hour Week
THE NECA MANUAL OF LABOR UNITSEXTENDED DURATION OF ELECTRICAL CONSTRUCTION JOBS
BEYOND A NORMAL JOB PERIODEXTRA LABOR HOURS CONSUMED
Base Estimated Electrical Contract Time
Optimum Average
Crew2Crew Weeks
Normal Related Construction Project
Duration
Effect of Extended DurationIncrease of Base Estimated
Labor Per Month of Extended Duration
26
Labor Risks – Causes By OthersIn‐houseStrategyMeeting Before NTP
BaselineSchedule
Kick OffMeeting
President Attends
Identify“Impact”
Record in Daily Diary
PM Reads& Tracks
Set Up New Code?
Plan Meeting with
GC to Discuss
WrittenNotification
InputSchedule
Track Impact on
Productivity
Finalize CostProposal
Take Pictures
Review Contract RequirementsAs‐built Pictures
27
Occurrence ReportDate:________ Job No.________
Location of Occurrence: (Floor___) (Reference Drawing ________)______________________________________________________OCCURRENCE:Change Order______________ Third Party ________________
(Owner, Owner’s Rep, etc.)Precedent Trade:____________ Subcontractor/Supplier________Access_____________________ Weather____________________Awaiting Decision____________ In House____________________Description of Occurrence:__________________________________________________________________________________________________________________________________________________________________________________________________Impact of Occurrence (CPM activity affected):_____________________________________________________________________________________________________________________________Labor Cost Code Affected:_________________________________Pictures _____yes _____noParties Aware of Issue (List) _____________________________________________________________________________________Verbal Instructions Received:____________________________________________________________________________________Field Action Required: ________________________________________________________________________________________________________________________________________________
28
4. Change of Method of Operation
D. Production Rates
3. Stand‐by
2. Movement
Actual Production RateBudgeted Production RateCost Code Number and Work Activity
1. Added
C. Equipment
2. Insufficient Ratio
1. Added
B. Supervisor
10. Additional Clean‐up
9. Additional Material Handling
8. Sequence Change
7. Stand‐by
6. Movement (Demob./Remob.)
5. Morale
4. Crew Stacking
3. Learning Curve Affected
2. Overtime
1. Added Manpower
A. Crew
CommentsNoYesItem
Impact ChecklistImpact Checklist
29
Requests for Time Extensions – Federal Construction Projects A contract duration is just that: contract duration. That duration remains the
obligation of the contractor until such time as the contracting officer changes it, or it is changed by a legal venue on appeal.
What this means is that the contractor, when confronted with an excusable delay (compensable or non‐compensable), should always:
Request a time extension:In writingWithin the time limits prescribed by the contractProviding documented justification for the requestDemonstrating that the critical path has been moved out by the act or omission of the government. (I like to submit daily reports and other field records such as minutes of meetings, et al to completely substantiate my position; I also will demonstrate the degree to which my own acts did or did not contribute to the delay and the extent to which I have attempted to mitigate any damages)Requesting that the Contracting Office issue a mod extending theduration of the contract
30
If the Contracting Officer does not respond to my request, I can do one of several things:
Notify him that as he has not responded, that I will accelerate in attempting to meet the original contract schedule or
Because of impossibility of meeting the original contract schedule due to the acts/omissions of the government as set forth in my request for a time extension, this is notification that I am entitled to the additional time and I consider the contract schedule has been constructively extended and that I will submit cost for the delay at a later time. Also, I will ask for a status of the condition of the government funding to assure that I can get paid if I incur additional cost as result of the delay.
If the government does nothing and does not send me letters telling me I am behind and does not threaten liquidated damages, I can hopefully rely on my lawyer to use the doctrine of waiver which would at least let me off the hook for default termination and liquidated damages. But I don’t want to rely on waiver.
I want to emphasize the importance of notice, effectively updating the schedule and showing the impact to the critical path, and having daily reports which are consistent with the causes of the delay and the delay itself.
31
Daily DiariesRemember
If you don’t write it down, it didn’t happen. If what you write down isn’t accurate, it can be used against you. If daily reports are not read and used by management, they are
garbage and shouldn’t take up field supervisors time. If you want to do your company in, then don’t give written notice
or maintain good field records. What you write down is discoverable.
“Unimpeachable witness” if: Written company policy UsedUsed for managing Accurate Complete Good & Bad Objective; No name calling
32
Labor Cost Reports Written policy
Adequate description
Adequate for selling targets and monitoring key activities –Performance as well as man hours
By building
By floor
Rework
Material handling
Trends
33
How to Handle – What If’s The General Contractor does not update the project schedule
effectively (It is just a billing schedule and not really used to manage the project).
The General Contractor states to you that, “There are plenty of places for you to work so you are not being damaged because the perimeter walls have not been installed.”
The General Contractor states: “The critical path has not been extended so you are not entitled to a claim for delay.”
The General Contractor states: “You didn’t meet your own dates.” or “You haven’t manned up to the job as you should have.”
The General Contractor says: “Well you have been on the job a year now and never complained about the schedule before.”
34
The General Contractors says: “Under the contract, we have the right to direct where your crew work, when, and how many hours.”
The General Contractor says: “I don’t buy that working overtimecauses a loss of productivity and I don’t buy into those studies. Show me from field records that your productivity was impacted.”
The General Contractor tells you: “You have to add 25 men by next week or we will supplement your crew and back charge you!”
