PROJECT SCHEDULING

UNIT-V
PROJECT SCHEDULING

Prepared by
G Narender M.tech
Assistant professor
Anurag Engineering College
Ananthagiri, Kodada
Syllabus
Project scheduling – PERT – CPM, Resource
levelling, Construction claims, Dispute and Project
closure – Source of claim – Claim management –
Dispute resolution – Arbitration – Construction
closure – Contract closure – Documentation.
Introduction
 The main objective of construction management is to
complete a prescribed quantum of work within specified
time at a previously estimated cost.
 In order to achieve this objective, planning is necessary.
 In the process of planning, one method and sequence of work
is selected from various possible ways in which a project can
be executed.
 This requires a clear definition of all activities that have to be
carried out in order to complete the job
Project Scheduling
 Scheduling is the determination of the time required for the
execution of each activity and the sequence in which the
activities have to be carried out.
 Scheduling is required not only for construction activities but
also for the resources like men, material, machinery and
money.....
 Controlling is the process in which differences between the
planned and the actual performance are reviewed after the
project has begun.
 Controlling is required both for the physical progress of work
and the project cost.
Continue.......,
Although bar charts are used in a number of projects for
planning, scheduling and controlling the work, their utility is
limited due to the following reasons:
 The bar chart does not show clearly the inter-relationships of
all activities.
 When a delay occurs in a large project, many activities tend
to be crashed unnecessarily as it is almost impossible to
remember which activities in the bar chart are
interdependent.
 Bar charts do not indicate critical areas of work.
Network Techniques
 Network Techniques are effective tools for planning,
scheduling and controlling construction jobs.
 The PCGI, BPE, IRC and many other professional
organisations have been advocating the use of network
techniques for project management.
 These techniques provide a rational approach to the planning
and controlling of construction works.
 The application of such techniques is inevitable when there is
a constraint on resources.
Different Types of Network Techniques
 The two commonly used network techniques are PERT and
CPM.
 CPM- Critical Path Method
 PERT- Programme Evaluation and Review Technique.
 While essentially both are identical, there are some minor
differences between the two techniques.
Comparison of PERT and CPM
PERT CPM
 PERT is event oriented  CPM is activity oriented
 The time estimates for
 Single time estimates are
activities are probabilistic.
The three types of time used for the various
estimates are used for each activities i.e. the time
activity: (i) estimates are deterministic
Optimistic time (to) (ii)
Pessimistic time (tp) (iii)
Likely time (tl) or most
likely time (tm)
Comparison of PERT and CPM
PERT
 PERT is used for pioneering
type of projects i.e. projects
which are the first of their
own kind and where prior
data about activity times is
not available.
 PERT lays emphasis on
reducing project completion
time without cost
constraint.
CPM
 CPM is used for repetitive
types of projects where the
time estimates for various
activities are either known or
can be determined fairly or
accurately
 CPM places emphasis upon
optimising allocation of
resources and minimising
overall project cost.
PERT
Programme Evaluation and Review
Technique (PERT)
 PERT was developed by engineers of the United States Navy
while working on the Polaris Missile Programme during 1957-
58.
 Since then, PERT has been in use for various research and
development projects which are non-repititive in nature.
 Such projects are characterised by an extreme degree of
uncertainty both in the development of the system and in the
time of duration of various activities.
 Three time estimates are used to determine the expected or
average time of each activity.
 The expected time forms the basis of PERT networks.
Computation of Expected Time
 The three time estimates used in PERT are described below:
 Optimistic Time Estimate(to) is the shortest possible time
for completing an activity if everything proceeds as planned
without any problem i.e. the activity is performed under
ideal conditions.
 Most Likely Time Estimate (tm or tl) is the time for
completing an activity under normal conditions. In this case,
conditions are not ideal and minor mishaps may occur.
Computation of Expected Time
 Pessimistic Time Estimate (tp) is the maximum time
required to complete an activity under abnormal or
extremely adverse conditions in which everything goes
wrong. The estimate, however, does not include catastrophes
such as fires, earthquakes, floods etc.
Computation of Expected Time
The average or expected time, te, is calculated as a weighted average of the three
estimates,

te = (𝑡o+ 4𝑡m + 𝑡p)

6
Where
te= expected time of the activity
to= optimistic time
tm or tl = most likely time
tp= pessimistic time

Followed by Problems/Network diagrams_ _ _ _ _ _ _ _ _ _ _ _ _

Refer Textbook. Construction Project Management by Kumar Neeraj Jha – Pearson
Education
Computation of Expected Time
In order to measure the uncertainty associated with the
estimate of duration of an activity, the standard deviation (St)
and the variance Vt are determined, which in PERT are
defined as:

𝑆t = (𝑡p − 𝑡o) /6

𝑉t = (𝑆t)2
NUMERICAL PROBLEMS
Advantages of PERT
 PERT are very useful in large, complex studies where
overlooking details may create unresolvable problems.
 PERT fecilitates identification of the critical path and makes
this visible.
 It incorporates risk analysis in project network.
 PERT determines critical activities in the project.
 PERT determines the most economical schedule for a fixed
project duration.
CPM
Critical Path Method (CPM)

 CPM was developed in 1956, in the USA, by a team of

engineers working for Dupont Corporation and Remington
Rand.
 The method was successfully tried for the construction of a
chemical plant in USA.
 Presently this method is widely used world wide in business
and industry.
 In India, CPM is being increasingly used for project
management by a number of private and public organisations.
 Critical Path Method (CPM)
 Critical Path Method (CPM) is a procedure for using network
analysis to identify those tasks that are on the critical path i.e.,
where any delay in the completion of these tasks will lengthen
the project timescale, unless action is taken.
 In CPM, the whole project consists of a number of clearly
recognizable jobs or operations called activities.
 Activities are usually the operations which take time to carry
out, and on which resources are expended.
 CPM networks are generally used for repetitive type projects or
for those projects for which fairly accurate estimate of time for
completion of each activity can be made.
Critical Path Method (CPM)

CPM is mostly used for construction projects to address the

following main issues:
 How long will the entire project take to complete? CPM
formally identifies tasks that must be completed on time for the
whole project to be completed on time.
 Which activities determine total project time? It identifies
which tasks can be delayed for a while if resource needs to be
reallocated to catch up on missed tasks. It helps to identify the
minimum length of time needed to complete a project.
 Which activity times should be shortened, if possible, or in
other words, how many resources should be allocated to each
activity?
Critical Path Method (CPM)

The following steps are needed in CPM:

 List the activities and relationships
 Create a start node
 Draw arrows from start node to the first activity’s node
 Sequentially arrange all activities from ‘Start’
 Repeat process from successors for all activities
 Check if there is any relationship that is missing
Advantages of CPM
 Management control becomes easy.
 Allows tracking of critical activities.
 It encourages discipline.
 Provides a visual presentation of the project.
 It identifies most critical elements and more attention can be
paid on those activities.
Limitations of CPM
 CPM is not suitable for the projects which cannot be broken
into discrete activities with known completion times. For
example, on a new project, activity durations may be hard to
estimate.
 Some comments say that it takes too much to identify all
activities and inter relate them to get multiple project paths.
 CPM stops working in practical situations in which employees
are often re-allocated across projects and activities. This
reallocation changes activity completion time and disrupts the
CPM plan.
 Identifying a single critical path is difficult to determine parallel
paths with similar durations.
 NUMERICAL
PROBLEMS ON
CPM
 FORMULAE
USED IN CPM
Critical Path Method (CPM)

Followed by Problems/Network diagrams_ _ _ _ _ _ _ _ _ _ _ _ _

Refer Textbook. Construction Project Management by
Kumar Neeraj Jha – Pearson Education
Resource Allocation/Levelling
Resource Allocation/Levelling
 Resources include physical variables such as men
(skilled/unskilled labour, technical/supporting staff etc.),
Materials, plant/machinery, finance and space.
 When there is a constraint on resources and competing
demands are made by various activities for the same resource, a
systematic method of resource allocation/levelling assumes
great importance.
 Resource allocation usually involves a "trade-off" or
compromise in view of the competing demands as availability of
resources is generally restricted.
 Large fluctuations in the demand for resources may cause
problems in project execution.
Resource Allocation/Levelling
 Project activities have, therefore, to be scheduled in such a
manner that the demand for various resources is fairly
uniform over the entire project duration.
 For a given project, a scaled version of the network is drawn,
adopting earliest start times for all activities.
 Using this network, cumulative requirement of various
resources is determined for each unit time
(day/week/month etc.) of the project duration.
Resource Allocation/Levelling
 Histograms are prepared for cumulative resource
requirements which clearly depict fluctuations in the demand
over time.
 Large variations in the demand for various resources call for
resource allocation/levelling.
 Each activity consumes resources. In a project, many
activities may have to be undertaken simultaneously.
 The requirement of resources for undertaking a number of
activities simultaneously may exceed the available resources.
Resource Allocation/Levelling
 When demand for a particular resource exceeds it's
availability, levelling is carried out by delaying some of the
non-critical activities which have float.
 In this process, the float is utilised by delaying the activities to
cut down the demand for the particular resource.
 The process of resource allocation/levelling is explained with
the help of Example 4.11.
Construction Claims
Construction Claims
Claim
 During the execution of a project, several issues arise that cannot be
resolved among project participants. Such issues typically involve
contractor requesting for either time extension or reimbursement of an
additional cost, or sometimes both.
 Such requests by the contractor are referred to as ‘Claim’.
 If the owner accedes to the claim of contractor and grants him extension
of time or reimbursement of additional cost, or both, the issue is sorted
out.
 However, if the owner does not agree to the claim put out by contractor
and there are differences in the interpretations, the issue takes the form
of a ‘dispute’.
Sources of Claim

 As mentioned, the claim may arise due to the owner or the

contractor. The claim may be on account of any one of the
following causes:
 There may be defects and loopholes in the contract document.
 There may be delay in release of areas as per contract.
 The owner may desire to get the work done at a faster pace
than is required by the contract document.
 There may be delay in supply of power, water, and other
materials from the owner.
 There may be hold on works due to delay in release of drawings
and other inputs.
Sources of Claim

 There may be delay in release of payments to the contractor.

 The scope of work may be substantially modified by the owner.
 There may be levy of liquidated damages (LD) on the
contractor.
 There may be delay on the part of contractor in completion of
works due to inadequate mobilization of labour, material and
plant.
 There may be loss of profit and investment to the owner due to
delays caused by the contractor.
 Construction claims can also arise on account of inclement
weather.
Claim Management

 The major issues in claims and disputes are identification of

issues and the party responsible for the claim, and ascertaining
the time and cost impact of the claim. The party raising the
claim has to notify the claims, once they have been identified.
Claim Identification
 The contractor studies the instructions in the form of drawings
as well as oral or written instructions provided by the
owner/engineer. If it contains extra works, the same is read
against the provision of the contract.
Claim Management
Claim Notification
 After it is established by the contractor that it is an extra
work, the contractor is required to inform the engineer
within the time frame and clarify extra rates for the same.
Claim Substantiation
 The Contractor has to fully establish the claim including his
entitlement under the contract, giving reference to the
relevant clauses.
Claim Management
Decision of Engineer/Owner
 The owner/engineer is supposed to convey his decision on
the claim to the contractor within a time frame specified in
the contract.
Further Action by Contractor
 The contractor has to refer the claim for adjudication if
provided, within a specific time frame after receiving the
decision from the engineer, if the same is being disallowed.
Some Guidelines to Prepare the Claims
 It is always preferable to link the claim to contract provisions.
 Prepare the base for its establishment.
 Indicate intention and submit it within the time frame
provided in the contract.
 Submit with all backup documents, calculations, etc.
 Be fair in projecting the figures and do not inflate.
Dispute
Dispute
 Indian Arbitration Act 1940
 Disputes may arise between the contractor and the owner
because of several factors such as recovery on account of
alleged delays, defective work, or excess consumption of
materials etc.
 Dispute can be defined as the misunderstanding between the
two employees, two partners of an organisation or between two
different organisations.
 The disputes can be settled through litigation in a court of law
or, where the contract permits, through arbitration.
Disputes in construction industry
 Disputes in business is very common and unavoidable thing. In
the construction industry there is no exception for the disputes.
 Disputes may arise when the misunderstanding occurs between
the workers or officers in the organization or between the two
competitive organizations.
 Disputes in constructions, when not resolved immediately,
becomes very expensive in terms of finances, personnel, time,
and opportunity costs.
 So, it is better to solve any type of disputes as fast as possible to
prevent huge losses.
 Generally, different types of disputes may occur at different
situations.
Causes of Disputes
 The geneses of many disputes often lie in the contract
document itself. It is often observed that tenders are hastily
made and sufficient attention is not paid to ensure that all the
required information and details are appropriately
incorporated in the tender document.
 The documents are internally consistent, i.e., there is no
contradiction in the provisions of general conditions, special
conditions and drawings, specifications, where required, are
available incompleteness, inaccuracy and inconsistency of
information are only part of the reasons for disputes in a
construction project.
Causes of Disputes
Incorrect Ground Data:
 Such data includes information about ground conditions,
depth of groundwater table, rainfall and temperature data,
availability of power and water, etc.
 The estimates of a contractor are based on the ground data
provided with the tender documents
 Any difference between the ground reality during execution
and the conditions provided in the contract could easily be
the reason for disputes
Causes of Disputes
Use of Faulty and Ambiguous Provisions and/or Language in
Contracts:
 The language of the contract should be clear and such that it is not open
to different interpretations.
 Use of ambiguous language and/or provisions could open a floodgate of
avoidable litigation.
 It is also important that the contract clearly lays down specific
procedures that are to be adopted in the event of contingencies.
 absence of appropriate provisions to handle technical inspections
by the client or owner, or third parties, could become a source for
litigation
 ill-defined or a vaguely defined hierarchy of documents that will
be deemed to prevail in the event of a dispute could be a cause for
dispute
Causes of Disputes
Deviations
 The contract should be so designed that there are as few
extra items and/or deviations as possible.
 the scope of work in any contract should be unambiguously
defined
Causes of Disputes
Unreasonable Attitudes
 It should be borne in mind that in order to complete the work
professionally, it is important that the parties involved resort to
unilateral action to preserve an environment of mutual trust.
 both the client and the contractor need to have a professional approach
to the project, including areas where there could be disagreement on
interpretation, etc.
 Measures such as suspension of the contract or invoking of clauses
related to imposition of liquidated damages should be resorted to only
in the most extreme cases.
 Delays in payment of bills should also be avoided to ensure that the
contractor does not get cash-strapped, which will obviously affect his
ability to perform.
Causes of Disputes
Contractor Being of Poor Means
 It is important that the contractor identified to do a job
possesses the required human, financial and technical
resources.
 In the absence of any of these, it is very likely that the
contractor will look for an escape route for leaving the
project, and may try to force a suspension or determination
(termination) of the contract, or take the matter into
arbitration/litigation to cut his losses.
Causes of Disputes
Unfair Distribution of Risk
 This could be a major reason for not only avoidable litigation
but also increase in the cost of the project.
 Indian contracts typically are heavily loaded against the
contractor, who obviously tries to cover the risks he is
‘forced’ to take by either hiking the rates, or taking an
approach of ‘crossing the bridge when we come to it’,
DISPUTE AVOIDANCE Vs DISPUTE
RESOLUTION
 an appropriate strategy for dispute avoidance and dispute
resolution needs to be drafted, and put in place even before
the onset of works in a project.
 Given that the client or the owner usually takes the lead in
drafting contracts, the onus is largely on him to ensure that
both dispute avoidance and dispute resolution are adequately
addressed in the contract.
 the important reasons as listed above are appropriately taken
care of, the possibility of disputes can be largely minimized.
DISPUTE AVOIDANCE Vs DISPUTE
RESOLUTION
 Contracts need to be drawn up with a professional mindset,
and a fair distribution of risk between the contractor and the
owner.
 Special care needs to be taken in drafting dispute-prone clauses
and identifying potential neutral agencies, which could be
called upon to mediate any dispute.
 It may be considered advisable to provide for a binding
mechanism for alternate dispute resolution (ADR), which
could include constitution of dispute review board (DRB),
comprising persons drawn from the contractor’s and the
owner’s sides, which should meet periodically to review any
pending or potential dispute.
Mechanisms of Dispute Resolution
Apart from the normal legal process, emphasis here is on the
alternative dispute resolution mechanisms generally available
in construction contracts.
Such mechanisms could include
 Negotiation
 Mediation
 Conciliation
 Arbitration
Mechanisms of Dispute Resolution
Negotiation
 This could refer to a focused discussion on the dispute among
the engineers from all interested parties, with the intention of
resolving differences without the involvement of third parties,
 this is an informal process in the legal sense
 if an agreement is reached through the process, it may have the
usual legal significance
 The negotiation process is fast and does not involve additional
expenses
 The discussions are held between the parties across the table in
a cordial and peaceful atmosphere.
Mechanisms of Dispute Resolution
Mediation and Conciliation
 Mediation and conciliation are essentially an informal process in
which the parties are assisted by one or more neutral third parties
in their efforts towards settlement.
 These mediators do not sit in judgement but try to advise and
consult impartially with the parties with the object of assisting in
bringing about a mutually agreeable solution to the problem.
 They have no power to impose an outcome on disputing parties.
 Mediation and conciliation are voluntary in the sense that the
parties participate of their own free will, and a neutral third party
simply assists them in reaching a settlement.
Mechanisms of Dispute Resolution
 The process is private, confidential and conducted without
prejudice to any legal proceedings.
 The process is non-binding unless an agreement is reached
 once an agreement is reached, and the parties have signed it,
the document (or the understanding) is as binding as any other
agreement would be.
 Although the process is largely informal, the following could
be identified as parts or stages in a mediation process.
 In the pre-mediation stage, there has to be a basic agreement
among the parties to the mediation process, including the
identification of a mediator
Mechanisms of Dispute Resolution
 Mediation could be direct or indirect, and could involve
meeting(s) with parties, presentation(s) being made by them,
putting together of facts, negotiations and a settlement
 mediation is an informal process, it has certain inherent
advantages over the more formal and legal process.
 it could be a lot less time-consuming
 involve lesser costs
 the outcome could be more satisfying to the parties
 It also opens channels of communication, and could contribute
greatly to preserving or enhancing a professional relationship.
Arbitratio
n
Arbitration
 Arbitration is the process of hearing and determination of a
dispute by an impartial referee selected or agreed upon by
the parties concerned.
 The Indian Arbitration Act was enacted in 1940 and provides
for arbitration in the following three cases:
 Arbitration without intervention of a court: The
owner and the contractor enter into an an arbitration
agreement in advance or after the dispute has arisen. The
dispute is settled through arbitration according to the Act.
Arbitration
 Arbitration with intervention of a court: When the
owner and the contractor having entered into an arbitration
agreement are unable to proceed further in terms of the
agreement the court's intervention is sought for settlement
of the dispute.
 Arbitration in lawsuits: When a dispute is the subject
matter of a lawsuit pending in a court, both parties may
agree to settlement of the dispute through arbitration in
terms of the Act.
Arbitration
 The Indian Arbitration Act 1940 does not control the
conduct of the owner and the contractor in deciding the
form of the arbitration agreement.
 The Act does not prescribe the procedure to be adopted by
the arbitrator for conducting the proceedings.
 The Act does not provide for interference with the award
given by the arbitrator.
Need for Arbitration
 Disputes may arise between the contractor and the owner
because of several factors such as recovery on account of
alleged delays, defective works or excess consumption of
materials etc. misrepresentation of Project plans,
specifications and contract clauses are bound to come up
during the progress of the work.
 The only way of solving such situations is through law courts
or arbitration.
Arbitrator
 Arbitrator is a person chosen by the parties to solve the
disputes between them.
 When both the parties are agreed this person as a judge, he is
known as "sole arbitrator".
 When each party has their own arbitrator, he is called as "
joint arbitrator". For joint arbitrator an umpire is selected
with the consent of both parties.
Qualifications of an Arbitrator
 An arbitrator must be expert in the particular branch of
profession and matter in dispute.
 He should not be related to any of the parties.
 He must be impartial, unbiased and free from I'll feelings
against any of the parties.
 He must have unquestionable character, high integrity and
unshakeable faith in the justice.
 For engineering project, an arbitrator should be a person not
below the rank of superintending engineer. Preferably, he
must be provided by the high court.
Advantages of Arbitration
 The advantages of settling disputes through arbitration
instead of litigation in the courts are as under:
 Cost: Arbitration is less expensive than litigation.
 Speed: Disputes are settled much faster(usually within four
months) through arbitration as compared to lawsuit in the
courts.
 Convenience: Arbitration hearings are fixed considering
the convenience of the concerned parties.
Advantages of Arbitration
 Technical knowledge: Both parties have the distinct
advantage of appointing arbitrator(s) having technical
knowledge and expertise in construction.
 Informality: arbitration proceedings are conducted in a
relatively informal atmosphere observing certain minimum
prescribed legal formalities.
 Proceedings in private premises: unlike proceedings in
court which are exposed to the general public, arbitration
proceedings are held in private premises. Business interest and
reputation of the parties will, therefore, not suffer.
 Finality of award: the award given by the arbitrator is final. It
can only be challenged on questions of law or arbitrator (s).
Arbitration Clause
In view of the advantages of arbitration, most of the construction
contracts incorporate a suitable arbitration clause in the
agreement. Following are the main provisions of the arbitration
clause:
(i) All disputes or claims arising out of or relating to the contract,
or the breach thereof, will be settled through arbitration in
accordance with the Indian Arbitration Act, 1940.
(ii) The parties may agree to the appointment of a single arbitrator
or each party may nominate an arbitrator and the two nominated
arbitrators may mutually select an umpire.
(iii) The parties will mutually agree regarding the sharing of
arbitration fees and expenses.
Arbitration Clause
(iv) The arbitration proceedings will be conducted by the
arbitrator(s) in accordance with laid down procedures at
mutually convenient dates and places.
(v) In the event of a difference of opinion between the two
arbitrators concerning the award, the matter will be referred to
the umpire and his decision will be final.
(vi) The arbitration award will be final and binding upon both
parties.
SOME DO'S AND DON’TS TO AVOID
DISPUTE
 ‘Don’t set up ego barriers in settling disputes during the course of
work.’
 Negotiated contracts have fewer claims than lump-sum contracts.
 Most owner's engineers tend to assume that the contractors have
covered all risks while quoting.
 Highlight the areas not covered in the quotation.
 Study contract conditions and local laws thoroughly.
 Educate and train staff to act early at the lower level so that
disputes do not escalate and rise to the highest decision-making
level.
 Do not pile up claims to the end, which result in the owner’s
engineer also getting hemmed in. Settle them early, before the
amount looks big.
SOME DO'S AND DON’TS TO AVOID
DISPUTE
 Good claims-management practice means:
 Eliminating risks to the extent possible before entering into
contract, and
 During the course of work, to have variation orders settled
without elevating them to the status of claims.
 ‘Be careful how the law of the land interprets ‘no damages
clause’ in favour of the owner.’
SOME DO'S AND DON’TS TO AVOID
DISPUTE
 Provide analysis and documentation early, and not at the end.
 Relate every claim to the project schedule drawn up in the beginning. The
base plan should be prepared right at the beginning of the contract, and this
should not be lost sight of either mentally or physically. Keep a copy of the
original schedule in your cash box or bank locker so that it is not lost.
 Concurrent delays cannot be seen from bar chart. It is better to use CPM
network so that the floats are known. Do the CPM network right in the
beginning of the project. ‘You can build a project without CPM but you
cannot build delay-claim without it.’ Update the CPM network through
periodical monitoring so that you can prove delays, as the onus of proof is
on the contractor.
 Claim is a three-legged table:
 Liability, which means contractual facts
 Causation, which means connection
 Damages, which means claims presented
SOME DO'S AND DON’TS TO AVOID
DISPUTE
 Submissions should be understandable by the arbitrator. If available,
enclose periodical progress photographs, which can speak volumes.
 Do not lose credibility by submitting untenable or exorbitant claims.
 Have the submissions examined by your own people, or experts. ‘You
never have a second chance to make the first impression.’
 Have your claims settled during the course of execution when you have
leverage.
 While negotiating international contracts, suggest a formula from
outside the country, preferably a neutral country, to settle the disputes.
 Suggest a mediator from a neutral country to advise during the course of
contract
Project Closure
Here’s how to navigate the project
management closure process.
What is project closure?
The project lifecycle consists of five groups:
 Initiating process group
 Planning process group
 Executing process group
 Monitoring and controlling process group
 Closing process group
 The closing phase of project management is the final phase of
the project lifecycle.
 This is the stage where all deliverables are finalized and
formally transferred, and all documentation is signed off,
approved, and archived.
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The project closure process ensures that:
 All work has been completed according to the project plan
and scope.
 All project management processes have been executed.
 You have received final sign-off and approval from all parties.
 The project management closure process also gives the team
the opportunity to review and evaluate the project’s
performance to ensure future projects’ success.
Importance of closing a project
 At first glance, it might seem like completing the first four
phases of the project lifecycle would be all you need to do to
tie up your project and call it good.
 However, without a formal closing process, you risk letting
crucial details fall through the cracks, which can result in
confusion, a never-ending project, dissatisfied clients, and
even liability issues.
Project closure helps avoid:
 Repeating mistakes on future projects and objectives
 Having final products or deliverables without dedicated
support and resources
 Failing to identify the team or individuals who will own and
maintain the solution following final delivery
 Creating liability issues resulting from incomplete payments,
contracts, or deliverables
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 By officially closing a project, you minimize risks, increase
client satisfaction, and ensure all parties are on the same
page.
 In other words, project closure is a process you can’t afford
to skip.
7 Steps to closing a project
 The closing phase of project management involves several
steps. Work through the following checklist to ensure your
project is successfully completed.
1. Formally transfer all deliverables
 The first step to closing out your project is to finalize and
transfer the project deliverables to the client.
 Go through your project plan to identify all deliverables and
make sure they have been fully completed and handed off.
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2. Confirm project completion
 Next, confirm the project is complete. It’s not enough to declare a
project done yourself.
 Each person involved needs to agree on the project’s completion before
you can formally close it out and move on.
 If you skip this step, you may continue to receive (and be charged for)
change requests by the client.
 To confirm the project’s completion, you will need to obtain approvals
for the project deliverables (i.e., all stakeholders must agree that you
delivered on all parts of the project plan) with official sign-offs from the
project stakeholders.
 Be sure to document this step so you have proof that the project close
was formally signed off.
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3. Review all contracts and documentation
 Once you have completed the project hand-off and received
approvals from the clients, you can begin closing out your
contracts.
 Review all the project documentation to ensure all parties have
been paid for the work and there are no outstanding invoices.
4. Release resources
 Formally release resources from the project, including
suppliers, contractors, team members, and any other partners.
 Notify them of the end of the project, confirm any final
payments or obligations, and officially release them so they are
free to work on other projects.
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5. Conduct a Post-mortem/Project Review
 A post-mortem or project review is one of the most valuable steps of
the project closure process.
 This is a time to review the successes, failures, and challenges of the
project and identify opportunities for improvement going forward.
 As you begin your post-mortem, conduct a performance review of the
project.
 In other words, calculate the project’s performance in terms of cost,
schedule, and quality.
 Consider these questions:
 Did you stay on budget?
 Did the team members involved manage their time wisely?
 Were there issues with the quality or compromises along
the way?
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 Next, conduct a survey or hold a meeting with the project
management team to get feedback on how the project went.
 These individual answers will help paint a more comprehensive
picture of the project’s performance. Have your team consider
the following questions:
 What went well?
 What were the challenges or failures?
 How well did the team communicate?
 Did the team follow the outlined processes and plan?
 Was the client satisfied with the results?
 What would you change or improve for future projects?
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 With the project performance and feedback in mind, you can
then identify lessons learned and opportunities for the future.
 Pro tip: Visuals can help you better analyze team performance
as well as any roadblocks along the way, so you can execute
projects better and faster in the future.
 Keep in mind that the goal of a post-mortem is not to assign
blame for any mistakes.
 Instead, it is a learning opportunity for everyone to improve on
future projects.
 Document your project review with the performance
measurement, feedback, and improvement plan.
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6. Archive documentation
 Once you’ve completed your project post-mortem, you can
finalize all documentation (contracts, project plans, scope
outline, costs, schedule, etc.) and index them in the company
archives for later reference.
 Be sure to keep clear notes on the project’s performance and
improvement opportunities so you can easily reference and
implement them on similar projects in the future.
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7. Celebrate
 Finally, don’t forget to celebrate! The end of a project is a big
accomplishment and represents the culmination of many hours
of hard work and dedication from a team of contributors.
 An end-of-project party is a great way to acknowledge your
team’s hard work and increase morale.
 Plus, a happy team is more likely to work with you in the future
so you can build on your past successes and become a more
effective unit going forward.
 Once the paperwork is filed, and the reviews are over, kick
back and take time to celebrate the successful close together—
you’ve earned it!
Project Closure
 Project Closure is a process of completing and documenting all
the construction tasks required to complete the project.
 A poor project closure leaves the client unsatisfied and may
prove to be a cause for not getting repeat business.
 Thus, project closure should be meticulously planned.
 Project closure consists of a number of tasks.
 The project closure phase can be divided into the following
broad headings:
 Construction closure
 Financial closure
 Contract closure
 Project manager’s closure
 Lessons learned from the project
CONSTRUCTION CLOSURE
 This involves preparation of the project punch list, which is a
list of deficiencies identified during the combined inspection
of constructed facilities by the representatives of client,
contractor, consultant and architect.
 During the regular inspection also, deficiencies are reported
to the contractor by the architect, the consultant, and the
client’s representative.
 The punch list is prepared usually towards the end of the
project when all major construction activities are
completed.
CONSTRUCTION CLOSURE
 The punch list is formally handed over to the contractor,
who takes steps to rectify the deficiencies thus pointed out.
 There may be a situation in which some of the deficiencies
pointed out in the punch list may not be part of the contract,
and the contractor in such cases usually asks the owner for
extra payment.
Certificate of Substantial Completion
 For a contractor, obtaining the certificate of substantial
completion is an important milestone event as it ends the
contractor’s liability for liquidated damages (LD).
 Substantial completion refers to a situation in which
the project is sufficiently completed.
 In other words, even though some minor deficiencies may be
present (all the deficiencies pointed out in the punch list may
not have been attended to), the constructed facility can now be
used for its intended function.
Certificate of Occupancy
 This is usually issued by the municipality under whose
jurisdiction the project location falls.
 It indicates that the constructed facility complies with the
entire codal requirement and is safe to be occupied.
 Fire- and elevator-related inspection by municipal
authorities is required before the certificate of occupancy is
issued.
Demobilization or Release of
Resources
 This consists of demobilization (release) of resources such as
staff and workers, and is as important as their mobilization.
 The closure of office, removal of unused materials lying in
store, and disconnecting water, electricity and sewerage lines
are all part of the demobilization process.
FINANCIAL CLOSURE
 Financial closure consists of writing applications for final
payment, release of various bank guarantees, and settlement of
any change order issued by the client.
 Final Payment
 The contractor has to apply for the release of final payment
after he has attended to all the deficiencies pointed out in the
punch list. The request for release of retention money is also
made.
 Release of Various Bank Guarantees
 During the course of execution of project, the contractor
submits a number of bank guarantees to the owner. A written
request is made to the client to release the bank guarantees.
CONTRACT CLOSURE
 Construction contract usually specifies the requirement of
contract closure and, thus, the contractor should prepare a list
of requirements for contract closure as per the contract
between him and the owner.
 Submission of As-built Drawings
 During the project execution process, due to site constraint
there might be some changes in the as-built facility from that as
specified in the contract drawings.
 it is very important to prepare the as-built drawings by
estimating the actual dimension and condition of the
constructed facility.
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 The as-built drawings of all the trades such as civil, electrical
and mechanical disciplines should be compiled and submitted
to the owner.
 Submission of Operation and Maintenance Manual
 Modern projects involve a number of mechanical and electrical
appliances—for example, elevator, cooling tower, air-handling
unit and diesel-generator set.
 The manufacturers of these appliances provide operation and
maintenance manual associated with these appliances
 These should be handed over to the owner.
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 Submission of Warranties
 It is the duty of the contractor to collect all the warranties
and guarantees from vendors, subcontractors and suppliers,
and submit these to the owner.
 Submission of Test Reports
 During the execution of project, a number of tests are
conducted on materials, appliances and systems that are
installed in the project.
 The test records need to be compiled and submitted to the
owner for future reference.
PROJECT MANAGER’S CLOSURE
 This includes tasks such as preparation of an as- built
estimate, analysis of actual cost versus estimated cost,
analysis of items where cost overrun was high etc.
 conduct of meetings with external agencies such as client,
architect and consultants for understanding their feedback
on various project management aspects.
 Meetings with own staff and subcontractor should also be
held to get their feedback on various issues.
LESSONS LEARNED FROM THE
PROJECT
 This involves collection and compilation of all records
associated with the project, and preparing archives of
important project records.
 It also involves documenting the important issues faced in the
project and their resolution.
 This helps in planning for such type of issues in the early stages
of other projects.
 Did the project meet its requirements and objectives?
 Was the customer satisfied?
 Was the project schedule met?
 Was the project completed within the stipulated cost?
 Was the level of achieved quality acceptable?
 Were the risks identified and appropriately mitigated?
 What better ways can be employed to improve project execution and its
management?
Conclusion
Project scheduling
– PERT (Programme Evaluation and Review Technique)
– CPM (Critical Path Method)
Resource allocation/levelling
Construction claims
– Source of claim
– Claim management
Dispute
– Dispute resolution
– Arbitration
Project Closure
– Construction closure
– Contract closure
– Documentation.